Palm Springs City Council
February 27, 2025

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:
• Note 1 - Summary of Significant Accounting Policies
• Note 9 - Claims and Judgments
• Note 10 - Defined Benefits Pension Plan
• Note 11 - Other Postemployment Benefits ("OPEB")
• Note 19 - Subsequent Events
The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit's financial statements taken as a whole.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report.

We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 31, 2024.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Item 3A - Page 217
To the Honorable Mayor and the Members of the City Council of the City of Palm Springs
Palm Springs, California

Other Matters
We applied certain limited procedures to the Management's Discussion and Analysis ("MD&A"), Budgetary Comparison Schedules, the Schedules of Changes of in Net Pension Liability and Related Ratios, the Schedules of Contributions - Pensions, the Schedules of Changes in Net OPEB Liability and Related Ratios, and Schedules of Contributions - Other Postemployment Benefits, which are Required Supplementary Information ("RSI") that supplement the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on the Combining and Individual Fund Financial Statements, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, .and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

We were ·not engaged to report on the Introductory and the Statistical Sections, which accompany the financial statements but are not RSI. We did not audit or perform other procedures on this other information and we do not express an opinion or provide any assurance on it.

Restriction on Use
This information is intended solely for the information and use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,
Santa Ana, California

ATTACHMENT C

Item 3A - Page 218
Item 3A - Page 219
City of Palm Springs
Palm Springs, California
Independent Auditors' Report
on Compliance with Requirements Applicable
to the Passenger Facility Charge Program
For the Year Ended June 30, 2024
THE  PUNGR_OUP
ACCO Ut,;TANTS 6.. ADVISORS
Item 3A - Page 220
Independent Auditors' Reports:

City of Palm Springs
Passenger Facility Charge Program
For the Year Ended June 30, 2024
Table of Contents
Report on Compliance with Requirements Applicable to the Passenger Facility Charge Program: Report on Internal Control Over Compliance, and Report on the Schedule of Passenger Facility Charges Collection and Expenditures - Cash Basis .................................. I Schedule of Passenger Facility Charge (PFC) Collections and Expenditures - Cash Basis ...................................... 5 Notes to Schedule of Passenger Facility Charge (PFC) Collections and Expenditures - Cash Basis ....................... 7 Schedule of Findings and Questioned Costs .............................................................................................................. 8 Item 3A - Page 221
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Item 3A - Page 222
200 E. Sandpointe Avenue, Suite 600
Santa Ana , Califomia92707
www.pungroup.cpa

INDEPENDENT AUDITORS' REPORT ON COMPLIANCE WITH
REQUIREMENTS APPLICABLE TO THE PASSENGER FACILITY CHARGE PROGRAM; REPORT O INTERNAL CO TROL OVER COMPLIANCE; AND REPORT ON SCHEDULE OF

PASSENGER FACILITY CHARGES COLLECTION AND EXPENDITURES
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, California
Report on Compliance for Passenger Facility Charge Program Opinion on Compliance
We have audited the City of Palm Springs, California's (the "City') compliance with the type of compliance requirements described in the Passenger Facility Charge Audit Guide for Public Agencies , issued by the Federal Aviation Administration (the "PFC Audit Guide"), for the year ended June 30, 2024.

In our opinion, the City complied , in all material respects, with the types of com pliance requirement s referred to above that are applicable to the City's passenger facility charge program for the year ended June 30, 2024.

Basis for Opinion
We conducted our audit of compliance in accordance with audit ing standards generally accepted in the United States of America ("GAAS"); the standard s applicable to financial audits contained in Government Auditing Standards ("Government Auditing Standards ") , issued by the Comptroller General of the United States , and the PFC Audit Guide. Our respons ibilities under those standar ds and the PFC Audit Guide are further described in the Auditor's Responsibilities for the Audit of Compliance sect ion ofour report.

We are required to be independent of the City and to meet our other ethical respons ibilities, in accordance wit h relevant ethical requirements relating to our audit. We believe that the audit evidence we have obta ined is sufficient and appro priate to provide a basis for our opi nion. Our audit does not provide a legal of the City's comp liance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation , and maintenance of effective internal control over complian ce with the requirement s of laws, statutes , regulations, rules, and provisions of contrac ts or grant agreeme nts applicable to the City's passenger facility charge program .

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX ooc, Item 3A - Page 223
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, California

Auditors' Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. 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, Government Auditing Standards, and the PFC Audit Guide will always detect material noncompliance when it exists. The risk of not material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material ifthere is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of the government program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the PFC Audit Guide, we:
• exercise professional judgment and maintain professional skepticism throughout the audit. • identify and assess the risks of material noncompliance, 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 City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the PFC Audit Guide, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with the compliance requirement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with the compliance requirement that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditors' Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 2 Item 3A - Page 224
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, California

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the PFC Audit Guide.

Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Passenger Facility Charge Collections and Expenditures We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We have issued our report thereon dated December 31, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming our opinions on the City's financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Passenger Facility Charges Collections and Expenditures - Cash Basis is presented for purposes of additional analysis as required by PFC Audit Guide and is 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 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 Schedule of Passenger Facility Charge Collections and Expenditures - Cash Basis is fairly stated in all material respects in relation to the basic financial statements as a whole.

Santa Ana, California
Dec em her 31, 2024
3 Item 3A - Page 225
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4 Item 3A - Page 226
City of Palm Springs
Passenger Facility Charge Program
Schedule of Passenger Facility Charge Collections and Expenditures - Cash Basis For the Year Ended June 30, 2024
Adjusted
Beginning
Balance
Descri tion Unliquidated PFC
Cash receipts and disbursement
month ended July 31, 2023 $
Cash receipts and disbursement
month ended August 31, 2023
Cash receipts and disbursement
month ended September 30, 2023
Cash receipts and disbursement
month ended October 31, 2023
Cash receipts and disbursement
month ended November 30, 2023
Cash receipts and disbursement
month ended December 31, 2023
Cash receipts and disbursement
month ended January 31, 2024
Cash receipts and disbursement
month ended February 28, 2024
Cash receipts and disbursement
month ended March 31, 2024
Cash receipts and disbursement
month ended April 30, 2024
Cash receipts and disbursement
month ended May 31, 2024
Cash receipts and disbursement
month ended June 30, 2024
See Notes to the Schedule of Passenger Facility Charge Collections and Expenditures. 5 10,376,020
10,744,078
11,080,988
11,496,462
12,014,135
12,635,669
12,899,559
13,575,625
14,209,165
15,044,846
15,605,882
16,279,500
PFC
Collections
$ 340,184 $
317,695
364,745
480,459
578,168
607,788
629,614
585,047
787,334
506,561
617,626
396,774
$ 6,211,995 $
Interest
Received
31,086
36,366
51,519
39,909
43,366
59,602
46,452
48,993
48,404
54,475
55,992
87,537
603,700
Item 3A - Page 227
City of Palm Springs
Passenger Facility Charge Program
Schedule of Passenger Facility Charge Collections and Expenditures - Cash Basis (Continued) For the Year Ended June 30, 2024
Bond
Description Payment
Cash receipts and disbursement
month ended July 31, 2023 $ $
Cash receipts and disbursement
month ended August 31, 2023
Cash receipts and disbursement
month ended September 30, 2023
Cash receipts and disbursement
month ended October 31, 2023
Cash receipts and disbursement
month ended November 30, 2023
Cash receipts and disbursement
month ended December 31, 2023 (403,500)
Cash receipts and disbursement
month ended January 31, 2024
Cash·receipts and disbursement
month ended February 28, 2024
Cash receipts and disbursement
month ended March 31, 2024
Cash receipts and disbursement
month ended April 30, 2024
Cash receipts and disbursement
month ended May 31, 2024
Cash receipts and disbursement
month ended June 30, 2024 (2,093,5001
$ (2,497,000) $
1 Unliquidated PFC are collections that have not been applied to approved PFC projects.

See Notes to the Schedule of Passenger Facility Charge Collections and Expenditures. 6 Expenditures Transfers Ending Balance
Total Total Unliquidated PFC 1
(3,212) $ $ 10,744,078
(I 7,151) 11,080,988
(790) 11,496,462
(2,695) 12,014,135
12,635,669
12,899,559
13,575,625
(500) 14,209,165
(57) 15,044,846
15,605,882
16,279,500
14,670,311
(24,405) $
Item 3A - Page 228
City of Palm Springs
Passenger Facility Charge Program
Notes to the Schedule of Passenger Facility Charge Collections and Expenditures For the Year Ended June 30, 2024
Note 1-Basis of Presentation
The accompanying Schedule of Passenger Facility Charge Collections and Expenditures - Cash Basis (the "Schedule") includes all the Passenger Facility Charges ("PFC") Program's collections, interest received, bond payment, expenditures, and transfers paid by the City of Palm Springs from July!, 2023 through June 30, 2024. This schedule is presented on the cash basis of accounting, which is a comprehensive basis of accounting other than accounting principles generally accepted in the United States of America.

The information in this Schedule is presented for purposes of additional analysis as specified in the Passenger Facility Charge Audit Guide for Public Agencies, issued by the Federal Aviation Administration. Therefore, some amounts presented in this Schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements of the City.

PFC expenditures may consist of approved capital projects costs, administrative costs and bond financing costs, if requested in application. Eligible expenditures not requested or approved in the application are not applied against PFC collection. The accompanying Schedule includes the eligible expenditures that have been applied against PFC collection for the year ended June 30, 2024.
7 Item 3A - Page 229
City of Palm Springs
Passenger Facility Charge Program
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2024
Section I - Summary of Auditors' Results
A. Current Year Findings and Questioned Costs - Passenger Facility Charge Program No findings or questioned costs were noted on the City's compliance with requirements of the passenger facility charge program for the year ended June 30, 2024.

B. Prior Year Findings and Questioned Costs - Passenger Facility Charge Program No findings or questioned costs were noted on the City's compliance with requirements of the passenger facility charge program for the year ended June 3 0, 2023.
8 ATTACHMENT D

Item 3A - Page 230
Item 3A - Page 231
City of Palm Springs
Housing Successor
Palm Springs, Calif omia
Housing Successor Compliance and
Independent Auditors' Report
For the Year Ended June 30, 2024
THE II PUNGR_OUP
ACCO UN TANTS & AD VI SO R.S
Item 3A - Page 232
Independent Auditors' Report:

City of Palm Springs
Housing Successor
Table of Contents
Report on Compliance for the Honsing Successor; Report on Internal Control Over Compliance; and Report on the Schedule of Excess Surplus ........................................................ I Schedule of Excess Surplus ................................................................•................................................................ 4 Item 3A - Page 233
200 E. Sandpointe Avenue , Suite 600 /o"WIIII
Santa Ana, Californ ia 92707 ~
www.pungroup.cpa ~
REPORT ON COMPLIANCE FOR THE HOUSING SUCCESS OR; REPORT ON INTERNAL CONTROL OV ER COMPLIAN CE; A D R EPORT ON THE SCHEDULE OF EXCESS SURPL US Indep endent Auditors ' Report
To the Honorabl e Mayor and the Members of the City Council of the City of Palm Springs
Palm Springs, California
Report on Compliance for the Housing S uccesso r
Opinion on Complian ce for the Housing Successor
We have audited the City of Palm Springs Housing Successor 's (the "Housin g Successor") com pliance with the type of com pliance requirements described in the California Health and Safety Code sections applicable to the fonner Redevelopment Agency's Housing Successor for the year ended June 30, 2024.

In our opinion, the Housing Successor complied , in all material respects, with the compliance requirements referred to above that are appl icable to Housing Successor for the year ended June 30, 2024.

Basis for Opinion
We conducted our aud it of com pliance in accorda nce w ith auditing standard s genera lly accepted in the United States of America ("GAAS"); the standards applica ble to financial audits contain ed in the Government Auditing Statements ("Gove rnment Auditing Standards") issued by the Comptrolle r Gene ral of the U nited States; and California Health and Safety Code sections app licab le to the Housin g Succes sor (the "Healthy and Safety Codes"). Our responsib ilities under those standards and the Health and Safety Codes are further described in the Auditors' Responsibilitie s for the Audit of Compliance section of our report.

We are required to be independent of the Housing Successor and to meet our othe r eth ical responsibi lities, in accordance with relevant eth ical requirements relating to our audit. We believe that the audit evide nce we have obtained is suffic ient and appropriate to provide a basis for our opinion. Our audit does not provide a legal detenninati on of the Housi ng Successor's comp liance with the comp lianc e requirements refe rred to above.

Responsibiliti es of Management for Compliance
Manage ment is responsible for compliance with the requirements referred to above and for the design , implementat ion, and maintenance of effective internal control over compliance with the requir ements of laws, stat utes, regulations , rules, and provisions of contracts or grant agreements applicable to the Housing Successor's gove rnment programs.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX OOCD Item 3A - Page 234
To the Honorable Mayor and the Members of the City Council of the City of Palm Springs
Palm Springs, California

Auditors' Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the Housing Successor's compliance based on our audit. 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, Government Auditing Standards, and the Health and Safety Codes will always detect material noncompliance when it exists. The risk ofnot detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the Housing Successor's compliance with the requirements of the government program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Health and Safety Codes, we:
• exercise professional judgment and maintain professional skepticism throughout the audit. • identify and assess the risks of material noncompliance, 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 Housing Successor's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • obtain an understanding of the Housing Successor's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Health and Safety Codes, but not for the purpose of expressing an opinion on the effectiveness of the Housing Successor's internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance, such that there is a reasonable possibility that a material noncompliance with a compliance requirement will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the section above and was not designed to identify all deficiencies in internal control over compliance that might be material weakness or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above.

However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified.
2 Item 3A - Page 235
To the Honorable Mayor and the Members of the City Council of the City of Palm Springs
Palm Springs, California

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on Health and Safety Codes. Accordingly, this report is not suitable for any other purpose. ·
Report on the Schedule of Excess Surplus
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Palm Springs, California as of and for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated December 31, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Excess Surplus is presented for purposes of additional analysis and is 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 financial statements and certain other procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Excess Surplus is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Santa Ana, California
December 31, 2024
3 Item 3A - Page 236
City of Palm Springs
Housing Successor
Schedule of Excess Surplus
For the Year Ended June 30, 2024
I.ow and Moderate
Housing FunW
All Project Area
July I, 2023
Opening Fund Balance
Less: Unavailable Amounts:
$ 18,416,658
Land held for resale
Loans receivable
Available Housing Successor Funds
Limitation (greater of$ l,000,000 or four years deposits) Aggregate amount deposited for last four years:

Greater amount
2022-2023
2021-2022
2020-2021
2019-2020
Total
Computed Excess Surplus
4 $ (86,253)
$
(17,277,484)
7,768,385
353,073
32,228
189,614
8,343,300
$
(17,363,737)
1,052,921
8,343,300
(7,290,379)

ATTACHMENT E

Item 3A - Page 237
Item 3A - Page 238
City of Palm Springs
Public Financing Authority
(A Component Unit of the City of Palm Springs, California) Palm Springs, California
Independent Auditors' Reports and
Basic Financial Statement s
For the Year Ended June 30, 2024
THE  PUNGllOUP
!\Cl.O U I A "ITS & AD \ ISORS
Item 3A - Page 239
City of Palm Springs Public Financing Authority
Basic Financial Statements
For the Year Ended June 30, 2024
Table of Contents
Independent Auditors' Reports:

Report on the Audit of the Financial Statements ........................................................................................... I Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................................... 5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position ........................................................................................................................... 9 Statement of Activities .............................................................................................................................. I 0 Fund Financial Statements:

Balance Sheet ............................................................................................................................................ 11 Reconciliation of the Governmental Fund Balance Sheet to the Government-Wide Statement of Net Position ........................................................................................... 12 Statement of Revenues, Expenditures, and Change in Fund Balance ....................................................... 13 Reconciliation of the Government Fund Statement of Revenues, Expenditures, and Change in Fund Balance to Government-Wide Statement of Activities ................................................... 14 Notes to the Basic Financial Statements ................................................................................................... 19 Supplementary Information:

Combining Balance Sheets by Bond Program Fund ......................................................................................... 29 Combining Statements of Revenues, Expenditures, and Changes in Fund Balances by Bond Program Fund ...................................................................................................... 30 Item 3A - Page 240
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Item 3A - Page 241

INDEPENDENT AUDITORS' REPORT
To the Board of Director s
of the City of Palm Springs Public Financing Authority
Palm Springs, California
Report on the Audit of the Financial Statement s
Opinions
200 E. Sandpointe Avenue, Suite 600
Santa Ana, California 92707
www.pungroup.cpa
We have audited the financ ial statem ents of the gove rnmental activ ities and each majo r fund of the City of Palm Springs Public Financing Authority (the "Authority") , a component unit of the City of Palm Sprin gs, California (the "City"), as of and for the year ended June 30, 2024 , and the related notes to the financial statem ents, which collectively compri se the Authority 's basic financial statements as listed in the table of contents.

In our opinion, the accompa nying financ ial statement s referr ed to above present fairly, in all material respects, the respective financial position of the govern menta l activities and each major fund of the Authority as of June 30, 2024, and the respec tive changes in financia l position thereof for the year then ended in accordanc e with accounting principles generally accepted in the United States of America .

Basis for Opinion s
We conducted our audit in accordance with aud iting standard s generally accepted in the United States of America ("GAAS ") and the standard s applicable to financial audit s contained in Government Auditing Standards, issued by the Comptroller Genera l of the United States ("Government Auditing Standards") . Our responsibilities under those standards are furthe r described in the Audito rs' Responsibilities for the Audit of the Financial Statemen ts section of our report. We are requi red to be independent of the Authority and to meet our other eth ical respon sibilities, in accordance with the relevant ethical requirement s relating to our audit. We believe that the audit ev idence we have obtai ned is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As descri bed in Note I, the fina ncial state ments present only the City of Palm Springs Publ ic Financing Author ity and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2024, the changes in its financia l position, or where a pplicable, its cas h flow s for the yea r then ended in accordance with accounting princip les generally accepted in the United States of Ame rica. Our opinion is not modified with respect to this matte r.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOEN IX 000 Item 3A - Page 242
To the Board of Directors
of the City of Palm Springs Public Financing Authority
Palm Springs, California

Responsibilities of Management/or 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 Authority'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.

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 Authority'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 Authority'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.
2 Item 3A - Page 243
To the Board of Directors
of the City of Palm Springs Public Financing Authority
Palm Springs, California

Required Suppleme11tary I11formatio11
Management has omitted the Management's Discussion and Analysis and the budgetary comparison information that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Suppleme11tary I11formatio11
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority'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 Reporting Required by Govemme11t Auditi11g Sta11dards In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2024 on our consideration of the Authority's internal control over financial reporting and on our tests of its compliance with certain provisions oflaws, 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 Authority'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 Authority's internal control over financial reporting and compliance.

Santa Ana, California
December 31, 2024
3 Item 3A - Page 244
200 E. Sandpolnte Avenue, Suite 600
Santa Ana, Califomia92707
www.pungroup .cpa (g
REPORT ON lNTERNAL CONTROL OVER FINANCIAL REPORTCNG AND ON COMPLIA CE AND OTHER MATTERS BASED O A AUDIT OF FlNANCIAL STATEMENTS PERFORMED IN

ACCORDANC E WITH GOVERNMENT AUDITING STANDARDS
Independent Audito rs' Report
To the Board of Director s
of the City of Palm Springs Public Financing Authority
Palm Spr ings, California
We have aud ited, in accordance with the aud iting standard s gene rally accepted in the United States of America and the standards applicab le to financial audit s conta ined in Government Auditing Standards issued by the Comptro ller General of the Unite d States ("Governmen t Auditing Standards"), the financia l statemen ts of the governme ntal activities and each major fund of the City of Palm Springs Public Financing Autho rity (the "Authority "), a compone nt unit of the City of Palm Springs , Californ ia (the "City "), as of and for the year ende d June 30, 2024, and the related notes to the financial statement s, wh ich collect ively compri se the Authority' s basic finan cial stateme nts, and have issued our report thereon dated December 3 1, 2024.

Report on Interna l Co ntrol Over Financial Reporting
In plann ing and perfonning our audit of the financ ial statements, we considered the Authority 's internal control over financia l reportin g ("internal contr ol") as a basis for designing aud it procedure s that are appropriate in the circum stance s for the purpose of express ing our opinions on the financial state ments, but not for the p urpose of expre ss ing an opinion on the effectivenes s of the Authority' s internal control. Accord ingly, we do not expre ss an opinion on the effectiveness of the Authority 's interna l control.

A deficiency in internal control exists when the design or opera tion of a control does not allow mana gement or employees , in the norma l course of perfonning their assigne d func tions, to prevent, or detect and correct, misstate ments on a timely basis. A material weakness is a deficiency , or a combination of defici encies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity's financial statements wi ll not be prevented , or detec ted and corrected on a t imely basis. A significant deficiency is a deficiency, or a combination of deficiencies , in internal control that is less seve re than a materi al weakne ss, yet i mportant enough to merit atte ntion by those charged with gove rnance.

Our consideration of internal control was for the limited purpo se described in the first para graph of this section and was not designed to identify all deficiencie s in internal control that might be material weakne sses or significant deficie ncies. G iven these limitation s, dur ing our aud it we did not identify any defi ciencies in internal con trol that we con sider to be mate rial weaknesse s. Howeve r, material weaknesses or significant defic iencie s may exist that were not identified.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX 000 Item 3A - Page 245
To the Board of Directors
of the City of Palm Springs Public Financing Authority
Palm Springs, California

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Santa Ana, California
December 3 1, 2024
6 Item 3A - Page 246

BASIC FINANCIAL STATEMENTS
7 Item 3A - Page 247
City of Palm Springs Public Financing Authority
Statement of Net Position
June 30, 2024
ASSETS
Current Assets:

Restricted cash and investments
with fiscal agent
Loans receivable, current
Interest receivable
Total current assets
Noncurrent Assets:

Loans receivable, noncurrent
Total noncurrent assets
Total assets

DEFERRED OUTFLOWS OF RESOURCES
Deferred charges from refunding
Total deferred outflows of resources

LIABILITIES
Current Liabilities:

Interest payable
Bonds payable, due within one year
Total current liabilities
Noncurrent Liabilities:

Bonds payable, due in more than one year
Total noncurrent liabilities
Total liabilities

NET POSITION
Restricted for debt services
Total Net Position
See accompanying Notes to the Basic Financial Statements. 9 $
$
Governmental
Activities
5,779
7,835,000
265,792
8,106,571
74,095,000
74,095,000
82,201,571
3,403,367
3,403,367
265,792
7,835,000
8,100,792
74,649,323
74,649,323
82,750,115
2,854,823
2,854,823
Item 3A - Page 248
Function/Program
Expenses:

Interest and fiscal charges
Total expenses
General Revenue
Interest revenue
Total revenue
Change in net position
Net Position:

Beginning of year
End of year
City of Palm Springs Public Financing Authority
Statement of Activities
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements. 10 Governmental
Activities
$ 2,165,464
2,165,464
1,943,333
1,943,333
(222,131)
3,076,954
$ 2,854,823
Item 3A - Page 249
City of Palm Springs Public Financing Authority
Balance Sheet
June 30, 2024
ASSETS
Restricted cash and investments
with fiscal agent
Loans receivable
Interest receivable
Total assets

FUND BALANCE
Restricted for debt services
Total fund balance
See accompanying Notes to the Basic Financial Statements.

II
General Fund
$ 5,779
81,930,000
265,792
$ 82,201,571
$ 82,201,571
$ 82,201,571
Item 3A - Page 250
City of Palm Springs Public Financing Authority
Reconciliation of the Governmental Fund Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2024
Total Governmental Fund Balance
Long-term debt is 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 ofNet Position:

Deferred charges on bond refunding
Bonds payable
Bonds premium
Interest on bonds payable
Net position of governmental activities
See accompanying Notes to the Basic Financial Statements. 12 $ 3,403,367
(81,930,000)
(554,323)
(265,792)
$ 82,201,571
(79,346,748)
$ 2,854,823
Item 3A - Page 251
Revenues:

Interest on loans
Interest on investments
· Total revenues
Expenditures:

Debt service:

Principal retirement
City of Palm Springs Public Financing Authority
Statement of Revenues, Expenditures, and Change in Fund Balance For the Year Ended June 30, 2024
Interest and fiscal charges
Total expenditures
Change in fund balance
Fund Balance:

Beginning of year
End of year
See accompanying Notes to the Basic Financial Statements. 13 General Fund
$ 1,933,509
9,824
1,943,333
7,755,000
1,956,144
9,711,144
(7,767,811)
89,969,382
$ 82,201,571
Item 3A - Page 252
City of Palm Springs Public Financing Authority
Reconciliation of the Governmental Fund Statement of Revenues, Expenditures, and Change in Fund Balance to Government-Wide Statement of Activities For the Year Ended June 30, 2024
Net change in fund balance of the governmental fund
Long-tenn liabilities were reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources.

Therefore, long-tenn liabilities were not reported as expenditures in the governmental fund:

Principal retirement
Amortization of premium
Amortization of deferred charges on refunding
Changes in interest payable
Change in net position of governmental activities
See accompanying Notes to the Basic Financial Statements. 14 $ 7,755,000
189,379
(413,683)
14,984
$
$
(7,767,811)
7,545,680
(222,131)
Item 3A - Page 253

NOTES TO THE BASIC FINANCIAL STATEMENTS
15 Item 3A - Page 254
City of Palm Springs Public Financing Authority
Index to the Notes to the Basic Financial Statements
For the Year Ended Jone 30, 2024
Note 1-Summary of Significant Accounting Policies ........................................................................................ 19 A. Financial Reporting Entity .......................................................................................................................... 19 B. Basis of Accounting and Measurement Focus ............................................................................................ 19 C. Investments Valuation ................................................................................................................................. 20 D. Loans Receivable ........................................................................................................................................ 20 E. Long-term Debt.. ......................................................................................................................................... 20 F. Net Position ................................................................................................................................................. 20 G. Fund Balance .............................................................................................................................................. 20 H. Use of Estimates .......................................................................................................................................... 20 Note 2 - Cash and Investments ............................................................................................................................. 21 A. Investments Authorized by Debt Agreements ............................................................................................ 21 B. Risk Disclosures .......................................................................................................................................... 21 Note 3 - Loans Receivable ..................................................................................................................................... 22 A. 2015 Loan ................................................................................................................................................... 22 B. 2017 Loan ................................................................................................................................................... 22 C. 2021ALoan ................................................................................................................................................ 22 D. 2021B Loan ................................................................................................................................................. 22 Note 4 - Long-Term Debt ...................................................................................................................................... 23 A. 201 5 Lease Revenue Refunding Bonds ...................................................................................................... 23 B. 2017 Lease Revenue Refunding Bonds ................................................. : .................................................... 24 C. 2021 Lease Revenue Refunding Bonds, Series A ....................................................................................... 25 D. 2021 Lease Revenue Refunding Bonds, Series B ....................................................................................... 26 17 Item 3A - Page 255
Tltis page intentionally left blank.
18 Item 3A - Page 256
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements
For the Year Ended Jone 30, 2024
Note 1-Snmmary of Significant Accounting Policies
The basic financial statements of the City of Palm Springs Public Financing Authority (the "Authority") have been prepared in conformity 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 Authority's significant policies:

A. Financial Reporting Entity
The Authority was created by a joint exercise of powers agreement between the City of Palm Springs (the "City") and the former Community Redevelopment Agency of the City of Palm Springs on February 1, 1991.

The purpose of the Authority is to provide, through the issuance of debt, financing necessary for various capital improvements. The Authority is a component unit and an integral part of the reporting entity of the City.

Administrative and related normal business expenses incurred in the day-to-day operations of the Authority are provided by the City and are not included in the accompanying basic financial statements. Such expenses are insignificant to the Authority's operations.

The funds of the Authority have been included within the scope of the financial statements of the City because the City Council is the governing board and has financial accountability over the operations of the Authority.

Only the financial activity of the Authority is included herein and these financial statements, therefore, do not purport to represent the financial position or results of operations of the City.

B. Basis of Accounting and Measurement Focus
Govemmelll-Wide Financial Statements
The Government-Wide Financial Statements are presented on an "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all the Authority's assets and 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 are not included in these statements.

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 and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Change in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance.

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.

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. The primary revenue source susceptible to accrual is investment income associated with the current fiscal period and has been recognized as revenues of the current fiscal period. Expenditures are recorded in the accounting period in which the related fund liability is incurred. 19 Item 3A - Page 257
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Governmental Fund Financial Statements (Continued/
Reconciliations of the fund financial statements to the Governmental-Wide Financial Statements are provided to explain the differences.

The Authority reports the following major governmental fund:
 General Fund - The General Fund is used to account for and report all financial resources not accounted for and reported in another fund. The Authority only has General Fund.

C. Investments Valuation
Investments in nonparticipating interest earning contracts (including investment agreements) are reported at cost, and all other investments at fair value. Investments in money market funds are not categorized in the fair value measurement levels.

D. Loans Receivable
Loans receivables consist of advances from the Authority to the City for the financing of various projects. These advances are considered loans to the City for financial reporting purpose.

E. Long-Term Debt
Bond premium and discounts are deferred and amortized over the life of the bonds. Bonds payable are reported net of applicable bond premium or discount. Gains or losses from refunding are deferred and amortize over the shorter of the life of the refunded debt or the life of the refunding debt and are reported in deferred inflows or deferred outflows ofresources.

F. Net Position
In the statement of net position, the net position is classified as restricted for debt service. This consists of funds held by trustee for the repayment of debt principal or interest or as reserve.

G. Fund Balance
In the governmental fund financial statements, the Authority reports a restricted fund balance for debt service that is externally imposed by creditors.

H. Use of Estimates
The preparation of financial statements in conformity 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.
20 Item 3A - Page 258
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 2 - Cash and Investments
At June 30, 2024, the Authority's investments are held by fiscal agents totaling $5,779. Fiscal agents are mandated by bond indentures as to the types of investments in which debt proceeds can be invested.

A. Investments Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the investment policy of the City. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk.

B. Risk Disclosures
Interest Rate Risk
Authorized Investment Type
U.S. Treasury Obligations
Local Agency Bonds
Federal Agencies
Bankers' Acceptances
Commercial Paper
Medium-term Corporate Notes
Money Market Mutual·Funds
Mutual Funds, investing in eligible securities
Local Agency Investment Fund (lAIF)
Maximum
Maturity
5 years
5 years
5 years
180 days
270 days
5 years
90 days
n/a
n/a
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the Authority manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Investments in money market funds are due within one year.

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. Presented below is the minimum rating required by (where applicable) the California Government Code, the City of Palm Springs, or debt agreements, and the actual rating as of year-end for each investment type. The U.S. treasury securities are not analyzed since they are not deemed to have credit risk. The Authority's investments in money market funds are rated AAA.

Concentration of Credit Risk
The investment policy of the City contains no limitation on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There were no investments in any one issuer that represent 5% or more of the total Authority investment. 21 Item 3A - Page 259
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements (Continned)
For the Year Ended June 30, 2024
Note 2 - Cash and Investments (Continued)
B. Risk Disclosures (Continued)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposit or will not be able to recover collateral securities that are in the possession ofan outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty ( e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. For investments identified herein as held by bond trustee. the bond trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investments on behalf of the reporting government.

Note 3 - Loans Receivable
A. 2015Loan
On December 1, 2015, the Authority issued $5,680,000 Lease Revenue Refunding Bonds. The proceeds from the issuance were used to refund the 2002A Certificates of Participation, which were used to fund City's capital projects related to the downtown parking structure. The City agrees to pay semiannual payments for the 2015 Loan. Repayments which commenced on November 1, 2016, are payable each May 1 and November I, in amounts sufficient to pay the principal and interest coming due on the 2015 Bonds. The outstanding balance for the 2015 Loan at June 30, 2024, is $2,620,000.

B. 2017 Loan
On June 13, 2017, the Authority issued $9,970,000 Lease Revenue Refunding Bonds, Series 2017. The proceeds were advanced to the City to refinance 2007 Loan and to finance the improvements consisting of the City's police department headquarter, cogeneration plan, and municipally owned golf course. The City agrees to pay semiannual payments for the 2017 Loan. Repayments which commenced on November 1, 2017, are payable each May 1 and November 1, in amounts sufficient to pay the principal and interest coming due on the 2017 Bonds.

The outstanding balance for the 2017 Loan at June 30, 2024 was in the amount of $3,330,000.

C. 2021A Loan
On April 28, 2021, the Authority issued $33,495,000 Federally Taxable Lease Revenue Refunding Bonds, 2021 Series A. The proceeds were advance to the City to refinance 2012B Loan, which was used to finance the downtown revitalization project. The City agrees to pay semiannual payments for the 202 lA Loan. Repayments which commenced on December 1, 2021, are payable each June 1 and December 1, in amounts sufficient to pay the principal and interest coming due on the 2021 A Bonds. The outstanding balance for the 2021 A Loan at June 30, 2024 was in the amount of $27,675,000.

D. 2021B Loan
On November 3, 2021, the Authority issued $55,500,000 Lease Revenue Refunding Bonds, 2021 Series B. The proceeds were advanced to the City to refinance the 2012A and 2014A Loan, which was used to refinance prior loans for the convention center project. The City agrees to pay semiannual payments for the 2021B Loan.

Repayments which commenced on May 1, 2022, are payable each May 1 and November 1, in amounts sufficient to pay the principal and interest coming due on the 2021 Series B Bonds. The outstanding balance for the 2021B Loan at June 30, 2024 was in the amount of$48,305,000.
22 Item 3A - Page 260
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended Jone 30, 2024
Note 3 - Loans Receivable (Continued)
Future loan payments to be received are as follows:

Year Ending June 30,
2025
2026
2027
2028
2029
2030-2034
2035-2036
Total
Principal
$ 7,835,000
8,000,000
8,195,000
7,150,000
6,560,000
35,130,000
9,060,000
$ 81,930,000
Interest Total
$ 1,866,611 $ 9,701,61 I
1,718,520 9,718,520
1,560,473 9,755,473
1,377,815 8,527,815
1,241,004 7,801,004
3,884,607 39,014,607
268,689 9,328,689
$ 11,917,719 $ 93,847,719
Note 4 - Long-Term Debt
The following is summary of changes in long-term liabilities for the year ended June 30, 2024:

Balance Ba1ance Due within Due in More
July I, 2023 Additions Deletions June 30, 2024 One Year Than One Year Public Borrowings:

A.
2015 Lease Revenue Refunding Bonds $ 3,190,000 $ $ (570,000) $ 2,620,000 $ 590,000 $ 2,030,000 Unamortized premium 339,190 (83,856) 255,334 255,334
2017 Lease Revenue Refunding Bonds 4,365,000 (1,035,000) 3,330,000 1,055,000 2,275,000 Umnnortized premium 404,512 (105,523) 298,989 298,989
2021A Lease Revenue Refunding Bonds 30,220,000 (2,545,000) 27,675,000 2,560,000 25,115,000 20218 Lease Revenue Refunding Bonds 51,910,000 (3,605,000) 48,305,000 3,630,000 44,675,000 Total long-term debt $ 90,428,702 $ $ (7,944,379) $ 82,484,323 $ 7,835,000 $ 74,649,323 2015 Lease Revenue Refunding Bonds
On December I, 2015, the Authority issued $5,680,000 Lease Revenue Refunding Bonds. The proceeds from the issuance were used to refund the 2002A Certificates of Participation, which were used to fund capital projects related to the downtown parking structure. Interest on the bonds range between 2.0% to 5.0% and the final maturity date is November I, 2027.

The total bonds outstanding at June 30, 2024, is $2,620,000 including $255,334 ofunamortized premium.

The outstanding bonds contain a provision that if any event of default should occur, the Trustee, as assignee of the Authority, may elect to terminate the lease agreement and may re-enter and re-let the leased property and may enforce the lease agreement and hold the City liable for all lease payments on an annual basis while re­ entering and reletting the leased property. Alternatively, the Trustee may elect to terminate the lease agreement and may re-enter and re-let the leased property and seek to recover all costs, losses or damages caused by the City's default.
23 Item 3A - Page 261
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements (Con tinned)
For the Year Ended June 30, 2024
Note 4- Long-Term Debt (Continued)
A. 2015 Lease Revenue Refunding Bonds (Continued)
Future debt service payments are as follows:

Year Ending
June 30, Principal
2025 $ 590,000
2026 630,000
2027 690,000
2028 7I0,000
Total $ 2,620,000
B. 2017 Lease Revenue Refunding Bonds
Interest Total
$ 116,250 $ 706,250
85,750 715,750
52,750 742,750
17,750 727,750
$ 272,500 $ 2,892,500
On June 13, 2017, the Authority issued $9,970,000 Lease Revenue Refunding Bonds, Series 2017 to defease the outstanding balance of the Refunding Lease Revenue Bonds, Series 2007. The Lease Revenue Refunding Bonds, Series 2017 accrues interest payable semiannually on November I and May I of each year at rates between

2.00% and 4.00%. Principal is due annually on May I of each year ranging from $895,000 to $1,160,000 and the final maturity date is May I, 2027.

The City reduced the aggregate debt service payments by $1,436,326 over the remaining maturity period of the 2017 Lease Revenue Refunding Bonds to obtain an economic gain of$1,324,695 (difference between the present values of the debt service payments on the old and new debt). The bond refunding has deferred outstanding refunding charges of$41,258 atJune 30, 2024.

The outstanding bonds contain a provision that if any event of default should occur, the Trustee, as assignee of the Authority, may elect not to terminate the lease agreement and may re-enter and re-let the leased property and may enforce the lease agreement and hold the City liable for all lease payments on an annual basis while re­ entering and reletting the leased property. Alternatively, the Trustee may elect to terminate the lease agreement and may re-enter and re-let the leased property and seek to recover all costs, losses or damages caused by the City's default.

The total bonds outstanding at June 30, 2024, is $3,330,000 including $298,989 of unamortized premium.

Future debt service payments are as follows:

Year Ending
June 30, Principal Interest Total
2025 $ 1,055,000 $ 143,750 $ 1,198,750
2026 1,115,000 91,000 1,206,000
2027 1,160,000 46,400 1,206,400
Total $ 3,330,000 $ 281,150 $ 3,611,150
24 Item 3A - Page 262
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 4- Long-Term Debt (Continued)
C. 2021 Lease Revenue Refunding Bonds, Series A
On April 28, 2021, the Authority issued 2021 Federally Taxable Lease Revenue Refunding Bonds, Series A in the amount of $33,495,000 to advance refund the outstanding 2012 Lease Revenue Bonds, Series B. Interest on the bonds is payable semiannually on June I and December I of each year commencing on December I, 2021 at rate rages from 0.231% to 2.733%. Principal is due annually on June I of each year ranging from $740,000 to $6,020,000 and the final maturity date is June I, 2034. The principal balance of the outstanding bond at June 30, 2024 was $27,675,000.

The City reduced the aggregate debt service payments by $4,366,004 over the remaining maturity period of the 2012 Lease Revenue Bonds, Series B, to obtain an economic gain of$4,31 l,217 (difference between the present values of the debt service payments on the old and new debt). The bond refunding has deferred outstanding refunding charges of$544,639 at June 30, 2024.

The outstanding bonds contain a provision that if any event of default should occur, the Trustee, as assignee of the Authority, shall have the option (i) without terrninating the lease agreement, to collect each installment of rent as it become due regardless of whether or not the City has abandoned the leased property, or to exercise any rights of re-entry upon and to release the leased property, or (ii) to terrninate the lease agreement and release the leased property. The City remains liable, if the leased property is not relet, to pay the full amount of the rent to the end of the terrn of the lease agreement or, if the leased property is relet, to pay any deficiency in rent that results therefrom. In the event of any default, there is no available remedy of acceleration of lease payments which have not become due and payable under lease agreement. The City will only by liable for lease payments on an annual basis, and the Trustee may be required to seek a separate judgment in each fiscal year for the fiscal year's defaulted lease payments. In the event the Trustee elects to terrninate the lease agreement, such leased property may be relet for the remaining terrn of the lease agreement.

Future debt service payments are as follows:

Year Ending
June 30, Principal Interest Total
2025 $ 2,560,000 $ 573,198 $ 3,133,198
2026 2,590,000 545,806 3,135,806
2027 2,625,000 512,913 3,137,913
2028 2,665,000 470,650 3,135,650
2029 2,715,000 421,881 3,136,881
2030-2034 14,520,000 1,156,257 15,676,257
Total $ 27,675,000 $ 3,680,705 $ 31,355,705
25 Item 3A - Page 263
City of Palm Springs Public Financing Authority
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 4- Long-Term Debt (Continued)
D. 2021 Lease Revenue Refunding Bonds, Series B
On October I 4, 2021, the Authority issued 2021 Federally Taxable Lease Revenue Refunding Bonds, Series B, in the amount of$55,500,000. The proceeds from the issuance were used to advance refund the outstanding 2012 Lease Revenue Bonds, Series A, and 2014 Lease Revenue Refunding Bond, Series A.

Interest on the bonds is payable semiannually on May I and November I of each year .commencing on May I, 2022, and the Bonds mature on November I, 2035. The principal balance of the outstanding bonds at June 30, 2024 was $48,305,000.

The City reduced the aggregate debt service payments by $3,222,083 over the remaining maturity period of the 2012 Lease Revenue Refunding Bonds, Series A and 2014 Lease Revenue Refunding Bond, Series A, to obtain an economic gain of $2,736,148 ( difference between the present values of the debt service payments on the old and new debt). The bond refunding has deferred outstanding refunding charges of $2,8 I 7,470 at June 30, 2024.

The 2012 Lease Revenue Bonds was fully redeemed on September 16, 2022. As of June 30, 2024, 2014 Lease Revenue Refunding Bonds, Series A, had outstanding balance in the amount of $39,075,000.

The outstanding bonds contain a provision that if any event of default should occur, the Trustee, as assignee of the Authority, shall have the option (i) without terminating the lease agreement, to collect each installment of rent as it become due regardless of whether or not the City has abandoned the leased property, or to exercise any rights of re-entry upon and to release the leased property, or (ii) to terminate the lease agreement and release the leased property. The City remains liable, if the leased property is not relet, to pay the full amount of the rent to the end of the term of the lease agreement or, if the leased property is relet, to pay any deficiency in rent that results therefrom. In the event of any default, there is no available remedy of acceleration of lease payments which have not become due and payable under lease agreement. The City will only be liable for lease payments on an annual basis, and the Trustee may be required to seek a separate judgment in each fiscal year for the fiscal year's defaulted lease payments. In the event the Trustee elects to terminate the lease agreement, such leased property may be relet for the remaining term of the lease agreement.

Future debt service payments are as follows:

Year Ending
June 30, Principal Interest Total
2025 $ 3,630,000 $ 1,033,413 $ 4,663,413
2026 3,665,000 995,964 4,660,964
2027 3,720,000 948,410 4,668,410
2028 3,775,000 889,415 4,664,415
2029 3,845,000 819,123 4,664,123
2030-2034 20,610,000 2,728,350 23,338,350
2035-2036 9,060,000 268,689 9,328,689
Total $ 48,305,000 $ 7,683,364 $ 55,988,364
26 Item 3A - Page 264

SUPPLEMENTARY INFORMATION
27 Item 3A - Page 265
City of Palm Springs Public Financing Authority
Combining Balance Sheets
by Bond Program Fnnd
June 30, 2024
2015 2017 2021A 202IB
Lease Revenue Lease Revenue Lease Revenue Lease Revenue Refunding Refunding Refunding Refunding
Bonds Bonds Bonds Bonds Total
ASSETS
Restricted cash and investments
with fiscal agent $ 84 $ 1,361 $ 3,638 $ 696 $ 5,779
Loans receivable 2,620,000 3,330,000 27,675,000 48,305,000 81,930,000 Interest receivable 21,833 23,958 47,766 172,235 265,792 Total assets 2,641,917 3,355,319 27,726,404 48,477,931 82,201,571

FUND BALANCES
Restricted for debt services 2,641,917 3,355,319 27,726,404 48,477,931 82,201,571 Total fund balances $ 2,641,917 $ 3,355,319 $ 27,726,404 $ 48,477,931 $ 82,201,571 29 Item 3A - Page 266
City of Palm Springs Public Financing Authority
Combining Statements of Revenues, Expenditures, and Changes in Fund Balances by Bond Program Fund
For the Year Ended June 30, 2024
2015 Lease 2017 Lease 2021 Series A 2021 Series B
Revenue Revenue Lease Revenue Lease Revenue
Refunding Refunding Refunding Refunding
Bonds Bonds Bonds Bonds Total
Revenues:

Interest on loans $ 139,800 $ 159,960 $ 584,678 $ 1,049,071 $ 1,933,509 Interest on investments 715 1,391 3,997 3,721 9,824
Total revenues 140,515 161,351 588,675 1,052,792 1,943,333 Expenditures:

Debt service:

Principal retirement 570,000 1,035,000 2,545,000 3,605,000 7,755,000 Interest and fiscal charges 145,251 164,382 588,620 1,057,891 1,956,144 Total expenditures 715,251 1,199,382 3,133,620 4,662,891 9,711,144 Changes in fund balances (574,736) (1,038,031) (2,544,945) (3,610,099) (7,767,811) Fund Balance:

Beginning of year 3,216,653 4,393,350 30,271,349 52,088,030 89,969,382 End of year $ 2,641,917 $ 3,355,319 $ 27,726,404 $ 48,477,931 $ 82,201,571 30 ATTACHMENT F

Item 3A - Page 267
Item 3A - Page 268
City of Palm Springs
Palm Sprin gs, California
Independent Accountants' Report on
Applying Agreed-Upon Procedures to
Appropriation s Limit Schedule
For the Year Ended June 30, 2024
THE II

PUN GROUP

ACCO U NTANTS & ADV ISORS
Item 3A - Page 269

INDEPENDENT ACCOUNTANTS' REPOR T ON

APPL YING AGREED-UPON PROCEDURES
To the Hono rable Mayor and the Members of the City Council of the City of Palm Springs
Palm Springs, California
200 E. Sandpointe Avenue, Suite 600 /8"1111
Santa Ana, Califomia92707 ~
www.pungroup.cpa ~
We have performed the proced ures enumerated below to the accompany ing appropr iation limit of the City of Palm Springs , California (the "City") for the year ende d June 30, 2024. The management of the City is responsible for the Appropriations Lim it Schedule.

The City has agreed to and ack nowledged that the proced ures performed are appropriate to mee t the intended purpo se in meet ing the requirement s of Section 1.5 of Article XIII-B of the Califo rnia Constitution, which was agreed to by the City and the League of Californ ia Cities (as prese nted in the public ation entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution). This report may not be suitable for any other purpose. The procedures performed may not address all the items of interes t to a user of this report and may not meet the needs of al l users of this report and, as such, users are responsible for determining whether the procedu res performed are appropriate for their purposes.

The procedures and assoc iated findin gs are as follows:

I. We obtained the comp leted worksheets used by the City to calcu late its appropr iations limit for the yea r ended June 30, 2024, and verified that the limit and annual calculation factors were adopted by resolution of the City Council. We also verified that the populat ion and inflation options were selected by a recorded vote of the City Cou ncil.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriat ions Limit Schedule, we added the prior year's limit to the total adjustm ents, and agreed the resu lting amount to the curre nt year's limit.

Finding: No exceptio ns were noted as a resu lt of our procedu res.

3. We verified the current year informati on presented in the acco mpan ying Appropriations Limit Schedule to correspondi ng informat ion in works heets used by the City.

Finding: No exceptions were noted as a result of our procedure.

4. We verified the approp riation s limit presen ted in the accompa nying Appropriations Limit Schedule to the appropriations limit adop ted by the City Council.

Finding: No exceptions were noted as a result of our procedure.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX 000 Item 3A - Page 270
To the Honorable Mayor and the Members of City Council
of the City of Palm Springs
Palm Springs, California

We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the accompanying Appropriations Limit Schedule.

Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of the City Council and the management of the City and is not intended to be and should not be used by anyone other than these specified parties. However,. this report is a matter of public record and its distribution is not limited.

Santa Ana, California
December 2, 2024
2 Item 3A - Page 271
City of Palm Springs
Appropriations Limit Schedule
For the Year Ended June 30, 2024
Amount Source
A. Appropriations Llrnit from FY2022-2023 $ 206,705,983 Prior year appropriation adopted by the City B. Adjustment Factors:

1. Growth in City Population 0.9983 California Department ofFinance

2. Per Capita Cost of Living converted to a ratio 1.0440 California Department of Finance

3. Adjustment Factor 1.0422 (Bl' B2)
C. Annual Adjustment Increase $ 8,728,201 ((B3-1))' A)
D. Other Adjustments
I. Loss responsibility(-) NIA

2. Transfer to private(-) NIA

3. Transfer to fees(-) NIA

3. Assumed responsibility (+) NIA
E. Total Adjustments $ 8,728,201 (C+D)
F. Appropriations Limit FY2023-2024 $ 215,434,184 (A+E) See Accompanying Notes to Appropriations Limit Schedule. 3 Item 3A - Page 272
City of Palm Springs
Notes to the Appropriations Limit Schedule
For the Year Ended Jnne 30, 2024
Note 1 - Purpose of Limited Procedures Review
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July I, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to agreed upon procedures in connection with the annual audit.

Note 2 - Method of Calculation
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July I, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.

Note 3 - Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the jurisdiction's own population or the annual percentage change in population of the county where the jurisdiction is located. The factor adopted by the City for the year ended June 30, 2024, represents the annual percentage change in population for the City.

Note 4 - Inflation factors
A California governmental agency may use as its inflation factor either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the California Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change oflocal nonresidential construction. The factor adopted by the City for the year ended June 30, 2024, represents the annual percentage change in per capital personal income.

Note 5 - Other Adjustments
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer ofresponsibility for municipal services to, or from, another government agency or private entity. The City had no such adjustments for the year ended June 30, 2024. 4 ATTACHMENT G

Item 3A - Page 273
Item 3A - Page 274
City of Palm Springs
Measure D Sales Tax Fund
Palm Springs, California
Independent Accountan~s' Report
On Applying Agreed-Upon Procedures to
Ordinance No. 1945,
Imposing a Transaction and Use Tax
Administered by the California Department of Tax and Fee Administration
For the Year Ended June 30, 2024
THE II
PUNGitOUP
IICCO U'l Tlll'-TS & ADVISORS
Item 3A - Page 275

INDEPENDENT ACCOUNTANTS ' REPORT

ON APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Spri ngs, California
200 E. Sandpointe Avenue, Suite 600 '9'1111
Santa Ana, Califomia92707 \!-a
www.pungroup .cpa g
We have performed the proced ures enumerated below related to the City of Palm Springs , California's (the "City") compli ance with the Measure D Sales Tax Fund (the "Measure D") in accordan ce with Ordinance No. 1945, Imposing a Transaction and Use Tax administered by the California Department of Tax and Fee Admini stration (the "CDTF A") for the year ended June 30, 2024. The City 's management is responsib le for its comp liance with those specific requ irements.

The City's management has agreed to and acknow ledged that the procedures performed are appropriate to meet the intended purpose of assisting users in determining whether the entity com plied with the spec ified requirements. This report may not be suitable for any other purpose. The procedure s performed may not address all the items of interest to a user of this report and may not meet the need s of all users of th is report and, as such, users are responsible for determ ining whether the procedures performed are appropriate for their purposes.

The proce dures and associated findings are as follows:

1. We verified Measure D tax revenues are collected by the C DTFA and rem itted to the City on a mont hly basis. Cash receipts from Measure D are recorded in a separate genera l ledger account in the City 's General Fund when received. We also verified no significan t deficiencie s or material weaknesses were identified on the City's financial state ment audit. We inspected the general ledger and noted the Measure D tax revenue is used for General Fund expenditures.

Finding : No excep tion noted based on procedur es perform ed.

2. We traced I 00% of the sales tax remittance advices from the CDTF A to the general ledge r and verified the collection and recording of Measure "D" tax revenue s is accu rate.

Finding: No exception noted based on procedure performed.

3. We verified the City used the Measu re D tax revenue for general gove rnmenta l purpose s, such as fire and police protection , paramedic service , community programs (such as add ress ing homele ssness, and providing senior and youth services) , street, park and public facility clean ing, repair and maintenance, police and fire equipment, and other unfund ed public needs.

Finding : No exception noted based on procedure s performed.

4. We verified the City has completed its annual financial state ment audit performed by an independent certified public accounting firm and includ ed revenues and expendit ures related to measure "D" in the fiscal yea r in acco rdance with Sect ion 14 and Section 15 of the ordinance.

Finding : No excep tion noted based on procedure s performed.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX 000 Item 3A - Page 276
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, California
Page2
We were engaged by the City's management to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the compliance with specified requirements. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of City Council and the management of the City and is not intended to be and should not be used by anyone other than those specified parties.

Santa Ana, California
December 2, 2024

ATTACHMENT H

Item 3A - Page 277
Item 3A - Page 278

CITY OF PALM SPRINGS, CALIFORNIA
Report on Agreed-Upon Procedures
Applied to Measure A - Local Streets and Roads
Fiscal Year Ended June 30, 2024
Item 3A - Page 279
Conrad
Independent Accountant's Report
On Applying Agreed-Upon Procedures
The Board of Commissioners
Riverside County Transportation Commission
Riverside, California
We have performed the procedures enumerated below on Measure A - Local Streets and Roads Program of the City of Palm Springs, California ("City") as of and for the year ended June 30, 2024.

Riverside County Transportation Commission ("RCTC") has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose whether the City was in compliance with the Measure A - Local Streets and Roads Program grant terms and conditions for the year ended June 30, 2024. Additionally, RCTC and the City have agreed to and acknowledged that the procedures performed are appropriate for their purposes. This report may not be suitable for any other purpose. The procedures performed may not address all of the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and related findings are as follows:

1. Obtain the 2009 Measure A (Ordinance 02-001) compliance requirements. Western County jurisdictions are required to participate in the Transportation Uniform Mitigation Fee ("TUMF") program and in the Multi-Species Habitat Conservation Plan ("MSHCP") which are administered by the Western Riverside Council of Governments ("WRCOG") and the Western Riverside County Regional Conservation Authority ("RCA"), respectively.

Coachella Valley jurisdict ions are required to participate in the TUMF program administered by the Coachella Valley Association of Governments ("CVAG"). Indicate participation in TUMF and/or MSHCP programs.

Finding: No exceptions were noted as a result of applying this procedure. The City participates in the TUMF program administered by CVAG.

2. Obtain the City's approved 5-Year Capital Improvement Plan ("CIP") from RCTC for the fiscal year ended June 30, 2024.

Finding: No exceptions were noted as a result of applying this procedure.

3. Obtain a detailed general ledger and balance sheet from the City for the fiscal year ended June 30, 2024.
a. Identify the amount of Measure A cash and investments recorded at June 30, 2024.

Compare amount to Measure A fund balance and provide an explanation for any difference greater than 25% fund balance.
23161 Lake Center Drive, Suite 200, Lake Forest, CA 92630  T: (949) 552-7700  www.conradllp .com 1 Item 3A - Page 280
Board of Commissioners
Riverside County Transportation Commission
Riverside, California
Finding: Measure A cash and investments were $11,857,911 at June 30, 2024. The difference between Measure A cash and investments of $11,857,911 and fund balance of $13,253,238 is $1,395,327 or 11 % of the fund balance. b. Identify amounts due from other funds.

Finding: There were no amounts due from other funds at June 30, 2024. c. Identify the components of ending fund balance for Measure A activity.

Finding: Ending fund balance for Measure A activity was restricted in the amount of $13,253,238 at June 30, 2024.
i. Identify the existence of any restatement of Measure A fund balance and inquire of management as to the reason for any restatement.

Finding: We noted a restatement of Measure A fund balance at June 30, 2023 of $33,800. The restatement was due to the following adjustments.

Fund balance per FY 2023 final report
Fair value adjustment FY 2023
Reversal- FY 2023 CVAG Mesquite loan (Note)
FY 2023 CVAG Mesquite loan payment
Fund balance for FY 2023 - Restated
$ 9,770,962
(12,958)
(10,421)
(10,421)
$ 9,737,162
Note: In FY 2023 CVAG Mesquite loan was incorrectly credited to the expenditure account. Therefore, this entry was posted to reverse the incorrect entry. ii. Compare ending fund balance to total revenues for the current year and prior two years. If ending fund balance is greater than sum of total revenues for the three­ year period, inquire of management as to the reason(s) for the accumulation of fund balance.

Finding: No exceptions were noted as a result of applying this procedure. The City's ending fund balance did not exceed the cumulative total revenues for the 3- year period as illustrated below.

Revenue for year ended June 30, 2024
Revenue for year ended June 30, 2023
Revenue for year ended June 30, 2022
Total Revenue for the 3-year period
Fund balance for year ended June 30, 2024
2 $ 6,848,856
4,078,995
8,293,069
$ 19 220 920
$ 13 253 238
Item 3A - Page 281
Board of Commissioners
Riverside County Transportation Commission
Riverside, California

4. Obtain an operating statement for Measure A activity for the fiscal year ended June 30, 2024 (see Exhibit A), including budget amounts.
a. Review the revenues in the operating statement.
i. Inquire of management as to what fund was used to record Measure A revenues received from RCTC and document total revenues for the fiscal year ended June 30, 2024.

Finding: The City accounts for Measure A revenue in its Measure A Improvements Fund ("Fund #134"). The City recorded total revenues in the amount of $6,848,856 for the fiscal year ended June 30, 2024.
ii. Obtain a listing of Measure A payments made from RCTC to the City. Compare the Measure A revenues recorded by the City to the listing of payments made by RCTC.

Finding: We identified no variances between the Measure A revenues recorded by the City and the RCTC Measure A payment schedule, which totaled $3,236,275. iii. Determine the amount of interest allocated to Measure A activity for the fiscal year ended June 30, 2024.

Finding: The City allocated interest in the amount of $376,086 to the Measure A activity for the fiscal year ended June 30, 2024.
b. Review the expenditures in the operating statement.
i. Inquire of management as to what fund is used to record Measure A expenditures and document total expenditures for the fiscal year ended June 30, 2024.

Finding: The City accounts for Measure A expenditures in its Measure A Improvements Fund ("Fund #134"). The City recorded total expenditures in the amount of $3,332,780 for the fiscal year ended June 30, 2024. ii. Select expenditures for testing that comprise at least 20% of total Measure A expenditures.

Finding: The City recorded Measure A expenditures in the amount of $3,332,780.

We selected $780,743 or 23% for testing.

1. For the expenditures selected for testing, compare the dollar amount recorded in the general ledger to the supporting documentation.

Finding: No exceptions were noted as a result of applying this procedure. 3 Item 3A - Page 282
Board of Commissioners
Riverside County Transportation Commission
Riverside, California

2. For the expenditures selected for testing, review the 5-Year CIP and note whether the projects claimed were included in the 5-Year CIP and whether they constitute allowable costs.

Finding: Expenditures selected for testing were included in the 5-Year CIP and were allowable costs. No exceptions were noted as a result of applying this procedure.
iii. Inquire of management as to the nature of any transfers (in and out) recorded in the Measure A Fund. For any transfers out, determine if nature of transfer out was included in the 5-Year CIP.

Finding: We noted no transfers in or out recorded in the Measure A Fund. No exceptions were noted as a result of applying this procedure. iv. Inquire of management as to the amount of general or non-project-related costs, if any, included in expenditures. If indirect costs exceed 8% of Measure A revenue, inquire of management as to the basis for indirect costs charged to Measure A. If indirect costs are identified, determine if such costs are included in the 5-Year CIP.

Finding: Per discussion with management, there were no indirect costs recorded for the fiscal year ended June 30, 2024.
v. Inquire of management as to the amount of debt service expenditures recorded in the Measure A fund and determine if such costs are included in the 5-Year CIP.

Finding: There were no debt service expenditures recorded in the Measure A Fund that were noted as a result of applying this procedure.

1. Compare the debt service expenditures to prior year amount. If debt service expenditures have increased or decreased at least 25%, inquire of management as to the reason for the change in debt service expe,nditures.

Finding: There were no debt service expenditures recorded in the Measure A Fund that were noted as a result of applying this procedure.

5. Obtain from RCTC a listing of jurisdictions that participate in the Western County or Coachella Valley TUMF programs.
a. If the jurisdiction is a participant in the TUMF program, select at least one disbursement for validation as to the amount remitted to WRCOG or CVAG, as applicable.

Finding: We selected one disbursement of $285, 155 for validation. The payment selected for testing indicated that the TUMF is collected and remitted to CVAG as required.
4 Item 3A - Page 283
Board of Commissioners
Riverside County Transportation Commission
Riverside, California
b. Indicate the total amount of TUMF fees collected and remitted during the fiscal year ended June 30, 2024.

Finding: The total amount of TUMF collected was $503,935 and the amount remitted during the fiscal year ended June 30, 2024, was $506,759. The variance of $2,824 is illustrated below.

Total TUMF recorded for FY 2024
Amount under collected by City
TUMF reconciled
Collected
$ 503,935
2,824
$ 506.759
Remitted
$ 506,759
$ 506.759
The $2,824 variance between the TUMF collected and remitted was due to the City under collecting TUMF in the amount of $2,824. The City was notified by CVAG regarding the short fall on May 6, 2024 and the under collection was remitted to CVAG on May 9, 2024.

6. Obtain from RCTC a listing of jurisdictions that participate in the Western County MSHCP program.
a. If the jurisdiction is a participant in the Western County MSHCP program, select at least one disbursement for validation as to the amount remitted to RCA.

Finding: The City is not a participant in the Western County MSHCP program. b. Inquire of management as to the existence of any fees collected in prior years that were not remitted to RCA by the end of this fiscal year.

Finding: The City is not a participant in the Western County MSHCP program. c. Indicate the total amount of Western County MSHCP fees collected and remitted during the fiscal year.

Finding: The City is not a participant in the Western County MSHCP program.

7. Obtain from RCTC the Maintenance of Effort ("MOE") base year require111ent, including its supporting detail calculations for the City, and the carryover amount allowed as of the beginning of the fiscal year.
a. Obtain from the City a calculation of its current year MOE amount in a format similar to its base year calculation. See Exhibit B.

Finding: No exceptions were noted as a result of applying this procedure. b. Compare the current year MOE amounts from the General Fund to the general ledger.

Finding: No exceptions were noted as a result of applying this procedure. 5 Item 3A - Page 284
Board of Commissioners
Riverside County Transportation Commission
Riverside, California
c. Scan the General Fund general ledger to determine if there were any transfers in to fund any MOE amounts.

Finding: No transfers in were noted as a result of applying this procedure. d. Compare the amount of current year MOE expenditures to the MOE base requirement and add any excess to, or subtract any deficiency from, the carryover amount.

Finding: We noted that current year MOE expenditures of $5,672,702 were greater than the MOE base requirement of $1,498,732 resulting in an excess of $4,173,970 for fiscal year ended June 30, 2024.
e. If the amount of discretionary funds spent is less than the MOE base requirement ("MOE deficiency") determine the amount of any prior year MOE carryover using the information obtained from RCTC and reduce the MOE deficiency by any available MOE carryover to determine an adjusted current year expenditure amount.

Finding: No exceptions were noted as a result of applying this procedure. The City's discretionary funds spent in the fiscal year ended June 30, 2024, exceeded the MOE base year requirement.

The City's MOE carryover at June 30, 2024 is calculated as follows:

MOE excess at July 1, 2023
Current year MOE expenditures
Less: MOE base requirement
Excess MOE for fiscal year ended June 30, 2024
MOE excess at June 30, 2024
$49,903,383
5,672,702
(1.498. 732)

4.173.970
$ 54 077 353
We were engaged by RCTC to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not, conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively on the Measure A - Local Streets and Roads Program compliance. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.

We are required to be independent of RCTC and the City to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
6 Item 3A - Page 285
Board of Commissioners
Riverside County Transportation Commission
Riverside , California
This report is intended solely for the information and use of the Board of Commissioners and management of RCTC and the City Council and management of the City of Palm Springs and is not intended to be, and should not be, used by anyone other than these specified parties.

Lake Forest, California
December 2, 2024
7 Item 3A - Page 286
Revenues:

Measure A Sales Tax

CITY OF PALM SPRINGS, CALIFORNIA
Measure A Operating Statement
For the Fiscal Year Ended June 30, 2024
(Unaudited)
Budget
$ 2,700,000
Measure A Sales Tax - Agua Caliente Band of Cahuilla Indians Coachella Valley Association of Governments 5,178,780
Investment income
Total revenues 7,878,780
Expenditures:

Construction and maintenance 28,919,887
Total expenditures 28,919,887
Excess/(deficiency) of revenues over/(under) expenditures $ (21,041,107) 8 EXHIBIT A
Variance From
Final Budget
Favorable
Actual (Unfavorable)
$ 3,236,275 $ 536,275
456,547 456,547
2,779,948 (2,398,832)
376,086 376,086
6,848,856 (1,029,924)
3,332,780 25,587,107
3,332,780 25,587,107
$ 3,516,076 $ 24,557,183
Item 3A - Page 287
FY 2023/24 Construction and Maintenance Expenditures
(Rounded to nearest dollar)

CITY OF PALM SPRINGS, CALIFORNIA
Measure A MOE calculation
For the Fiscal Year Ended June 30, 2024
(Unaudited)
ProJect Expenditures Included In General Ledger Total Cost General Fund Measure A ConstNctlon:

Street reconstruction (2603185-800001
' ' ' Communitv sidewalks 12603190-800001 546,041 548,041 Maintenance:

Street maintenance 11006515- 2,644,605 2,644,605
Siona I maintenance & reoalr 11002000-40105 rs1 Francis\\ 580,000 580,000 Sidewalk c!eaninntdowntown (1006520- 1,935,564 1,935,564 Street liaht ooeration and overhead 11006530-4 1,900,056 1,900,056 Streets slurrv seal /2616515-501061
Engineering/Administrative Ovediead Not Allocated to
Sn&>cific Pro;ects 11002000-401051: 365 857 365857
Exnendlture Totals s 7,974,123
'
7,974,123 s
Deductions ror Special Consideration (Deductions Must

EXHIBITS
Funding Breakdown
Federal Slat• Citv Funds Other
$ - $
'
s
- $ - $ - $ - s
Also Be Included In Project Expenditures Above): Total Project Cost General Fund State Reason Why Project Expenditure Should Be Deducted from MOE Construction:

Maintenance:

Sidewalk cleanina/downtown s 1,935564 s 1,935,564 Costs included in Decartment 6520 are not related to maintenance of street liohUno.

Engineering/Administrative Ovelhead Not Allocated to
5,...cfflc Proiects: 365 857 365857
Deduct Totals $ 2,301,421 s 2,301.421
TotalGFE)penditures S 7,974,123
Less: Dedl.ciions {2 301,421)
MOE CunentYear 5,672,702
MOE base year requirement --~'-'·"=732=
MOE excess for fiscal year ended June 30, 2024 _, ___ 4._1_73_._970= 9 ATTACHMENT I

Item 3A - Page 288
Item 3A - Page 289
Measure J Capital Projects Fund
of the City of Palm Springs
Palm Springs, California
Financial Statements and
Independent Auditors ' Reports
For the Year Ended June 30, 2024
THE II
PUNGR.OUP
ACCO U'-ITA l'.TS & ADVI SORS
Item 3A - Page 290
Measure J Capital Projects Fund of the City of Palm Springs For the Year Ended Jone 30, 2024
Table of Contents

FINANCIAL SECTION
Independent Auditors' Report:

Report on the Audit of the Financial Statements .................................................................................................. I Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .............................................. : ........................................... 5 Fund Financial Statements:

Balance Sheet ............................................................................................................................................................. 9 Statement of Revenues, Expenditures, and Change in Fund Balance ...................................................................... 10 Notes to the Financial Statements ............................................................................................................................ 13 Supplementary Information:

Schedule of Revenues, Expenditures, and Change in Fund Balance -Budget and Actual ..................................... 19 Item 3A - Page 291

INDEPENDENT AUDITORS' REPORT
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, Californ ia
Report on the Audit of the Financial Statements
Opinion
200 E. Sandpointe Avenue , Suite 600 ~
Santa Ana, Califomia92707 ~
www.pungroup.cpa g
We have audited the financial stateme nts of the Measure J Capita l Projects Fund (the "Fund") of the City of Palm Springs (the "City"), as of and for the year ended June 30, 2024, and the related notes to the financial statement s as listed in the table of contents.

In our opinion, the accom panying financia l state ments referred to above present fairly, in all mate rial respects, the financ ial position of the Fund as of June 30, 2024, and the change in financia l position for the yea r then ended in accordance with accoun ting principles generally accepted in the United States of America.

Basis for Opinion
We conducted our audit in acco rdance with auditing standard s generally accepted in the United State s of Amer ica ("GAAS") and the standard s applicab le to financia l audits contained in Government Auditing Standards, issued by the Comptro ller General of the United States ("Government Auditing Standards" ) . Our responsibilitie s under those standards are further described in the Auditors' Responsib ilities for the Audit of the Financial Statement s sect ion of our report. We are required to be independent of the City and to meet our other eth ical respo nsibi lities, in accordance with the relevant ethical requirements relating to out audit. We believe that the aud it evidence we have obtained is sufficie nt and approp riate to provide a basis for our audit opi nion.

Emphasis of Matter
As discussed in Note I, the financ ial stateme nts present on ly the Fund and do not purport to, and do not present fair ly the financ ial position of the City a s of June 30, 2024, the change s in its financ ial position, or, where app licable, its cash flows for the year then ended in accordance with accounting principles generally acce pted in the United State s of America. Our opinion is not modified with respect to this matter .

Responsibilities of Management for the Financial Statements Manage ment is responsible for the preparation and fair prese ntation of these financia l statement s in acco rdance with account ing principle s g enerally accepted in the United States of America , and for the design, impleme ntation, and maintenance of internal control relevant to the preparation and fair presentation of financial statem ents that are free from mater ial misstatement, whether due to fraud or error.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOENIX 000 Item 3A - Page 292
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, California

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 opinion.

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.

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.

Supplementary Information
Our audit was conducted for the purpose of forming opinion on the financial statements that collectively comprise the Fund's basic financial statements. The Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual is 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 Schedule of Revenues, Expenditures, and Change in Fund Balance - Budget and Actual is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
2 Item 3A - Page 293
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, California

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 31, 2024, 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
December 31, 2024
3 Item 3A - Page 294
This page i11le11lio11ally left blank.
4 Item 3A - Page 295
200 E. Sandpointe Avenue, Suite 600 ~
Santa Ana, Califomia92707 ~
www.pungroup.cpa {g

REPORT ON INTE RNAL CONTROL OVER FINANCIAL REPORTING A DON COMPLIANCE AND

OTHER MATTERS BASED O A AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNME N T AUDITING STANDARDS
Independent Auditors' Report
To the Honorabl e Mayor and Member s of the City Counci l of the City of Palm Springs
Palm Springs, California
We have audited , in accordance with the auditing standard s genera lly accepted in the United States of America and the sta ndards appl icable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statemen ts of the Measure J Capital Project s F und (the "Fund") of the City of Palm Springs (the "City"), as of and for the year ended June 30, 2024, and the related notes to the financial statemen ts and have issued our report thereon dated December 31, 2024.

Report on Interna l Control Over Financial Reporting
In planning and perform ing our audit of the financial stateme nts, we cons idered the City's internal control over financia l reportin g ("internal control ") as a basis for designing audit procedures that are appropriate in the circumsta nces for the purpose of express ing our opinion on the financ ial state ments , but not for the purpose of expressi ng an opinion on the effectiveness of the City's internal control. Accordingly, we do not exp ress an opin ion on the effectiveness of the City's internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or emp loyees, in the normal course of performing their assigned functions, to prevent , or detect and correct, misstate ments on a timely basis. A material weakness is a defic iency, or a combination of deficiencie s, in internal contro l, such that there is a reasonable possibility that a mater ial misstatement of the City's financial statements will not be prevented , or detected and corrected, on a timely basis. A significant deficiency is a deficiency , or a combinat ion of deficienc ies, in internal control that is less seve re than a material weakness, yet important enough to merit attention by those charged with governance.

Our cons ideration of interna l control was for the limited purpose descr ibed in the first paragraph of this section and was not designed to identify all deficienci es in internal control that might be material weaknesses or significant deficienc ies. Given these limitat ions, during our audit we did not identify any deficiencies in internal contro l that we consider to be material weakness. However, material weaknesses or deficiencies may exist that were not identified.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOEN IX 000 Item 3A - Page 296
To the Honorable Mayor and Members of the City Council
of the City of Palm Springs
Palm Springs, California

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the financial statements of the Fund are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Santa Ana, California
December 3 I, 2024
6 Item 3A - Page 297

FUND FINANCIAL STATEMENTS
7 Item 3A - Page 298
Measure J Capital Projects Fund of the City of Palm Springs Balance Sheet
June 30, 2024
Assets
Cash and investments
Due from California Department of Tax and Fee Administration Interest receivable
Total assets
Liabilities and Fund Balances
Liabilities:

Accounts payable
Accrued payroll
Total liabilities
Fund Balance:

Assigned
Total fund balance
Total liabilities and fund balance
See accompanying Notes to the Financial Statements.
9 $
$
$
$
42,930,103
3,667,436
l03,927
46,701,466
3,193,509
2,334
3,195,843
43,505,623
43,505,623
46,701,466
Item 3A - Page 299
Measure J Capital Projects Fund of the City of Palm Springs Statement of Revenues, Expenditures, and Change in Fond Balance For the Year Ended June 30, 2024
Revenues:

Taxes
Use of money and property
Total revenues
Expenditures:

Current:

Public works
Capital outlay
Total expenditures

EXCESS OF REVENUES OVER EXPENDITURES
Other financing sources (uses):

Transfers in
Transfers out
Total other financing sources (uses)

NET CHANGE IN FUND BALANCE
Fund Balance:

Beginning of year
End of year
See accompanying Notes to the Financial Statements.
lO
$ 21,490,339
1,519,503
23,009,842
692,130
15,602,020
16,294,150
6,715,692
853,306
(3,133,700)
(2,280,394)
4,435,298
39,070,325
$ 43,505,623
Item 3A - Page 300

NOTES TO THE FINANCIAL STATEMENTS
II
Item 3A - Page 301
Measure J Capital Projects Fund of the City of Palm Springs Notes to the Financial Statements
For the Year Ended Jone 30, 2024
Note 1- Summary of Significant Accounting Policies
Reporting Entity
The Measure J Capital Projects Fund (the "Fund") of the City of Palm Springs, California (the "City") is used to account for the activities of Measure J. Measure J is a local revenue measure passed on November 8, 201 I, to maintain local community services and economically revitalize the downtown area. These funds are general purpose revenues that have no restrictions placed upon them. A majority of voters must approve the decision to impose, increase or extend a general tax. Measure J includes a "sunset provision", causing the tax to expire at the end of its twenty-five (25) years.

The Fund is a governmental fund of the City, and the accompanying financial statements are included in the City's basic financial statements.

The accompanying financial statements are for the Measure J Capital Projects Fund only and are not intended to fairly present the financial position of the City or the results of its operations.

Basis of Presentation
The accompanying financial statements present only infonnation pertain to the Fund and are not intended to present the financial position, changes in financial position, or cash flows of the City in confonnity with accounting principles generally accepted in the United States of America ("U.S. GAAP").

The financial statement presentation follows the recommendations promulgated by the Governmental Accounting Standards Board ("GASB") commonly referred to as U.S. GAAP. GASB is the accepted standard-setting body for establishing governmental accounting and financial reporting standards.

Measurement Focus and Basis of Accounting
In the accompanying financial statements, the Fund is presented using the "current financial resources" measurement focus. This means that only current assets and current liabilities are generally included on their balance sheet. The statement of revenues, expenditures, and change in fund balance present increases (revenues) and decrease (expenditures) in net current assets.

The activities of the Fund are recorded in a capital projects fund and accounted for using the modified accrual basis of accounting. Capital projects funds are used to account for the financial resources that are restricted, committed, or assigned to expenditure for capital outlays, including the acquisition or construction of capital facilities and other capital assets. Under the modified accrual basis of accounting, revenues are recognized when they become susceptible to accrual (i.e. both measurable and available). Measurable means that the amount of the transaction can be estimated, or otherwise detennined. Available means the funds are collectible within 60 days after year-end. Expenditures are generally recognized when the related liability is incurred.

Cash and Investments
The Fund's cash balance was pooled with various other City funds for deposit and investment purposes. The share of each fund in the pooled cash account was separately maintained and interest income was apportioned to the participating funds based on the relationship of their average quarter-end cash balances to the total of the pooled cash and investments.
13 Item 3A - Page 302
Measure J Capital Projects Fund of the City of Palm Springs Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 1 - Summary of Significant Accounting Policies (Continued) Receivables and Payables
All receivables are shown net of an allowaoce for uncollectible.

Classification of Fund Balance
All fund balance in the Fund is assigned.

Assigned - amounts that are constrained by the City's intent to be used for specific purposes, but are neither restricted nor committed. The governing council has authorized the City Maoager to assign the fund balance.

The City Council may also assign the fund balance as it does when appropriating the fund balance to cover a gap between estimated revenue and appropriations in the subsequent year's appropriated budget. Unlike commitments, assignments generally do not exist temporarily. In other words, an additional action does not normally have to be taken for the removal of the assignment. The authority for assigning the fund balance is expressed by the City Maoager or the appointed designee based on the City's approved policies.

Budget and Budgetary Accounting
The City Council establishes budgets for capital projects funds, which are budgeted on a project-length basis. The City Council approves 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. All supplemental appropriations, when required during the period, are also approved by the City Council. Intradepartmental budget traosfers are approved by the City Maoager. Encumbrances are estimates of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in governmental funds. Encumbraoces are closed out at the end of each fiscal year.

Use of Estimates
The preparation of financial statements in accordaoce with accounting principles generally accepted in the United States of America requires maoagement to make estimates aod assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Note 2 - Cash and Investments
The Fund's cash aod investments are pooled with the City of Palm Springs in the amount of$42,930,103. Each fund's share of the pooled cash account is separately accounted for, aod investment income is allocated to all participating funds based on the relationship of their month-end cash balaoces to the total of the pooled cash and investments.

Information regarding the authorized types of deposits and investments, the type of risks (i.e. credit, interest rate, custodial, etc.) and other disclosures associated with the Fund's pooled cash and investments is included in the City's basic financial statements, which are available at 3200 East Tahquitz Canyon Way, Palm Springs, California 92262 or on the City's website.

Note 3 - Commitments and 'Contingencies
The Fund is subject to litigation arising in the normal course of business. In the opinion of legal counsel there is no pending litigation, which is likely to have a material adverse effect on the finaocial position of the Fund. 14 Item 3A - Page 303
Measure J Capital Projects Fund of the City of Palm Springs Notes to the Financial Statements (Continued)
For the Year Ended June 30, 2024
Note 4 - Risk Management
The Fund is covered under the City of Palm Springs' insurance policies. Therefore, the limitations and self-insured retentions applicable to the City also apply to the Fund. Additional information on coverage and self-insured retentions can be obtained by contacting the City of Palm Springs.

Note 5 - Transfers
The Fund transferred $3,133,700 to the City's Debt Service Fund to provide funding for debt service. The City's Capital Projects Fund transferred $853,306 to capital improvement project costs. 15 Item 3A - Page 304
Tl,is page i11te11tionally left hlank.
16 Item 3A - Page 305

SUPPLEMENT ARY INFORMATION
17 Item 3A - Page 306
Measure J Capital Projects Fund of the City of Palm Springs Statement of Revenues, Expenditures, and Change iu Fund Balance - Budget and Actual For the Year Ended June 30, 2024
Variance with
Final Budget
Bud~eted Amounts Positive
Ori~inal Final Actual (Negative)
Revenues:

Taxes $ 22,520,046 $ 22,520,046 $ 21,490,339 $ (1,029,707) Use of money and property 250,000 250,000 1,519,503 1,269,503 Total revenues 22,770,046 22,770,046 23,009,842 239,796 Expenditures:

Current:

Public works 750,000 1,391,098 692,130 698,968
Capital outlay 26,762,557 58,477,214 15,602,020 42,875,194 Total expenditures 27,512,557 59,868,312 16,294,150 43,574,162

EXCESS OF REVENUES OVER
(UNDER) EXPENDITURES (4,742,511) (37,098,266) 6,715,692 43,813,958 Other Financing Sources (Uses):

Transfers in 853,306 853,306
Transfers out (3,133,700) (3, I 33, 700) (3,133,700)
Total other financing sources (uses) (3,133,700) (3,133,700) (2,280,394) 853,306 NET CHANGE IN FUND BALANCE $ (7,876,211) $ (40,231,966) 4,435,298 $ 44,667,264 Fund Balance:

Beginning of year 39,070,325
End of year $ 43,505,623
19 Item 3A - Page 307
This page intentionally left bla11k,
20 ATTACHMENT J

Item 3A - Page 308
Item 3A - Page 309
City of Palm Springs
Palm Springs , California
Single Audit and
Independent Auditors' Reports
For the Year Ended June 30, 2024
THE [I
PUNGR.OUP

ACCO U NTANTS & ADV ISORS
Item 3A - Page 310
City of Palm Springs
Single Audit and Independent Auditors' Reports
For the Year Ended June 30, 2024
Table of Contents
Independent Auditors' Reports:

Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................ 1 Report on Compliance for Each Major Federal Program; Report on Internal Control Over Compliance; and Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance .............................................................................. 3 Schedule of Expenditures of Federal Awards ............................................................................................................ 7 Notes to the Schedule of Expenditures of Federal Awards ........................................................................................ 9 Schedule of Findings and Questioned Costs ............................................................................................................ 1 O Item 3A - Page 311
This page intentionallyJeft hlank.

Item 3A - Page 312
200 E. Sandpointe Avenue, Suite 600
Santa Ana, Califomia92707
www.pungroup .cpa ~
REPORT ON lNTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND

OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORM ED IN

ACC ORDANC E WITH GOVERNM ENT AUDITING STANDARDS
Independent Auditors ' Report
To the Hono rable Mayor and the Member s of City Counci l of the City Palm Spring s
Palm Springs, California
We have audited, in accor danc e with the aud iting s tand ards general ly acce pted in the United States of America and the standard s applicab le to financial audits conta ined in Government Auditing Standards issued by the Com ptro ller General of the United States ("Government Auditing Standards"), the financial state ment s of the governmental activities, the business-type activities, each majo r fund, and the aggregate remaining fund information of the City of Palm Springs, California (the "City") , as of and for the year ended June 30, 2024 , and the related notes to the financia l statements , wh ich co llective ly comprise the City's basic financial state ments, and have issued our report thereon dated December 3 1, 2024.

Report on Internal Control Over Financial Reporting
In plann ing and performing our audit of the financ ial statements , we considered the City's intern al contro l over financial reporting ("inte rnal control ") as a basis for design ing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion s on the financ ial statements, but not for the purpose of express ing an opinio n on the effectivenes s of the C ity's intern al cont rol. Accordingly , we do not express an opin ion on the effectivene ss of the City's internal control.

A deficiency in internal control exists whe n the design or operation of a control does not allow management or employees, in the norma l course of perfonning their assigned function s, to prevent , or detect and correct, misstateme nts on a timely basis. A material weakness is a deficiency , or a combi nation of deficiencies , in internal control, such that there is a reasonable possib ility that a material misstatem ent of the City's financial statements will not be prevented , or detected and corrected , on a timely basis. A significant deficiency is a defic iency, or a combination of defici encies, in interna l control that is less seve re than a material weakness , yet important enoug h to merit attentio n by those charged with governance.

Our cons ideration of internal control was for the limited purpo se described in the first parag raph of this s ection and was not des igned to identify all deficiencie s in internal control that might be material weakne sses or significant deficiencies. Given these limitation s, during our audit we did not identify any deficiencies in internal control that we consider to be material weakness. Howeve r, material weakne sses or significant deficiencies may exist that were not identi tied.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOEN IX OOCD Item 3A - Page 313
To the Honorable Mayor and Members of City Council
of the City of Palm Springs
Palm Springs, California

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City's fmancial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity's internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Santa Ana, California
December 3 I, 2024
2 Item 3A - Page 314
200 E. Sandpointe Avenue, Suite 600
Santa Ana, Califomia92707
www.pungroup .cpa
REPORT ON COMPLIANCE FOR EACH MAJOR FEDERAL PROGRAM ;
REPORT ON INTERNAL CONTROL OVER COMPLIANCE; AND REPORT ON THE

SCHEDULE OF EXPEND ITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE Independent Auditors' Report
To the Honorabl e Mayo r and the Members of City Council of the C ity of Palm S prings
Palm Springs, California
Report on Compliance for Each Major Federa l Program
Opinion on Each Major Federal Program
We have audited the City of Palm Springs , California 's (the "City ") compliance with the types of com pliance requirements identified as subject to aud it in the 0MB Compliance Supplement that cou ld have a d irect and material effect on each of the City's major federal program s for the year ended June 30, 2024. The City 's major federa l prog rams are identified in the s ummary o f the a uditor s' results sect ion of the accompanying Schedule of Findings and Question ed Costs.

In o ur opi nion, the C ity compli ed, in all material respects, with the compli ance r eq uirements refe rred to above that cou ld have a direct and material effect on each of its major federal programs for the year ended June 30, 2024.

Basis fo r Opinion on Each Major Federal Program
We conducted our audit of c omp liance in acc ordanc e w ith auditing s tandard s generally acce pted in the United S tates of America ("GAAS "); the standard s appli cab le to financial aud its contained in Government Auditing Standards, issued by the Comptro ller General of the United State s ("Govern ment Auditing Standards" ), and the audit requirements o f Title 2 U.S. Code of Federa l R egulations Part 200, Uniform Administrative Requirements , Cost Principles, and Audit Requirements for Federal A wards ("U niform Guidance"). Our responsibiliti es under those standard s and the U niform Guidan ce are further d esc ribed in the Audit ors' Responsibilities for the Audit of Complian ce section of our report .

We are requir ed t o be independent of the C ity and to meet our other eth ical responsibiliti es, in acco rdance wit h releva nt ethi cal req uirements relating to our audit. We believe that the a udit evidence we have obtai ned is sufficient and approp riate to provide a basis for our opinion on complian ce for each major federal program. Our audit does not provide a legal determination of City 's compliance with the compli ance requir ements referred to above.

Responsibilities of Managemen t for Compliance
Manage ment is respons ible for compli ance with the requirements refe rred to above and for the design , implementati on, and maint enance o f effec tive internal control ove r complian ce with the requi rements of laws, statu tes, regulations, rules, and provisions of contracts or gran t agree ments applicable to City 's federal program s.

ORANGE COUNTY • SAN DIEGO • SACRAMENTO • WALNUT CREEK • LAS VEGAS • PHOEN IX OOCD Item 3A - Page 315
To the Honorable Mayor and Members of City Council
of the City of Palm Springs
Palm Springs, California
Page2
Auditors' Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City's compliance based on our audit. 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, Government Auditing Standards, and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material, if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City's compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, and the Uniform Guidance, we:
• exercise professional judgment and maintain professional skepticism throughout the audit. • identify and assess the risks of material noncompliance, 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 City's compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • obtain an understanding of the City's internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control Over Compliance
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal control over compliance was for the limited purpose described in the Auditor's Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 4 Item 3A - Page 316
To the Honorable Mayor and Members of City Council
of the City of Palm Springs
Palm Springs, California

Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.

Accordingly, this report is not suitable for any other purpose.

Report on the Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City's basic financial statements. We issued our report thereon dated December 31, 2024, which contained unmodified opinions on those financial statements. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by Uniform Guidance and is 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 Schedule of Expenditure of Federal Awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Santa Ana, California
December 31, 2024
5 Item 3A - Page 317
17,is page intentionally left blank.
6 Item 3A - Page 318
City of Palm Springs
Schedule of Expenditures of Federal Awards
For the Year Ended June 30, 2024
Assistance
Federal Grantor/Pass -Through Grantor Listing Federal
__________ P'-'r'-'og=r•=m=--"Ti'-'1t=l•'-----------'N~u=m=be=r- Grant Identification Numh!r fapenditures J1.S. Demrhnent of Housing and Urhm De,-elorxnent
CDBG - Fntitlement/Special Purpose Grants Cluster
Direct Programs:

Community Development BlockGrant/Fntitlement Grants
Community Development Block Grant/Entitlenrnt Grants
Community Development Block Grant/Entitlerrent Grants
Conmunity Development Block Grant/Entitlement Grants
Total CDBG-Fntitlement/Special PurlX)Se Grants Cluster

14.218

14.218

14.218

14.218
B-19-MC-06-0561
B-20-MC-06-0561
B-22-MC-06-0561
B-23-MC-06-0561
Total U.S. Deptrtment of Housing and Urban Dewlopnent
U.S. Demrtment of.Justice
D;rect Program:

Edward Byrne Me100rial Justice Assistance Grant Program U.S. Demrtment of Transportation
Airport lmprou~ment Program:

Direct Programs:

Airport Improvement Program
COVI0-19 -Airport hqlrovement Program
COVID-19-Airport hq:lrovement Program
Airport Improvement Program
Airport Improvemmt Program
Airport Improvement Program
Airport Improvement Program
Total Airport lmprou:ment Program
Passed through the California Department ofTransportation:

Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program) Highway Planning and Construction (Federal-Aid Highway Program)

16.738

20.106

20.106

20.106

20.!06

20.106

20.106

20.!06

20.205

20.205

20.205

20.205

20.205

20.205

20.205

20.205

20.205

20.205

20.205
Total Highw.iy Planning and Construction (Federal-Aid Highw.iy Program) High\\ny Safety Cluster:

Passed through California Office a/Traffic Safety:

State and Commmity Highway Safety
State and Commmity Highway Safety
Total Highway Safety Cius ter
Passed through California Office ofTraffic Safety:

Minimum Penalties for Repeat Offenders for Driving While Intoxicated Minimum Penalties for Repeat Offenders for Driving While Intoxicated

20.600

20.600

20.608

20.608
15PBJA-22-G{.02079-JAGX
Total U.S. De111rtment of Justice
3-06-0181-058-2020
3-06-0181-062-202 I
3-06-0181-063-2022
3-06-0181-064-2022
3-06-0181-065-2022
3-06-0181-066-2022
3-06-0181-067-2023
BRL0-5282(017)
BR-NBIL(502)
BHLS-5282(040)
BR-NBIL(513)
BRLS-5282(042)
BHLS-5282(041)
HSIPL-5282(046)
HSIPLN-5282(047)
HSIPL-5282(048)
HSIP-5282(049)
HSIPL-5282(051)
Pf23138
PT24141
Pf23138
Pf24141
$ 17,344
645
281,697
428,156
727,842
727,842
18,358
18,358
47,250
274,782
1,121,560
162,175
53,059
64,531
975,480
2,698,837
8,449,156
37,526
23,686
720,579
52,911
48,403
268,661
1,841,004
4,633
34,582
8,552
11,489,693
5,841
47,104
52,945
70,771
42,275
Total Minimum Penalties for Repeat Offenders for Drhing While Intoxicated 113,046 See accompanying Notes to the Schedule of Expenditures of Federal Awards. 7 Total U.S. Depirtment of Transportation --'-14"',3"'5-'4,e.52:clc_ (Continued)
Item 3A - Page 319
City of Palm Springs
Schedule of Expenditures of Federal Awards (Continued)
For the Year Ended Jone 30, 2024
Assistance
Federal Grantor/Pass ~ Through Grantor Listing Federal
__________ .:_P.:_;ro::,g,.,_r=am"'-'T'-'il::;le:..._ ___________ .!.N::•c:m"be=.r:.._ Grant Identification Number Expenditures U.S. Demrtment of Homeland Security
Passed through County of Riverside Emergency Management Department Homeland Security Grant Program
See accompanying Notes to the Schedule of Expenditures of Federal Awards. 8 97.067 2022-0043 356,236
Total US. Dep:1rtment of Homeland Security 356,236
Total Expmditures of Federal Affllrds $ 15,456,957
(Concluded)
Item 3A - Page 320
City of Palm Springs
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2024
Note 1 - Reporting Entity
The financial reporting entity, as defined by the Governmental Accounting Standards Board ("GASB") Codification, consists of the primary government, which is the City of Palm Springs, California (the "City"), organizations for which the primary government is financially accountable, and other organizations for which the nature and significance of their relationship with the primary government are such that exclusion would cause the City's financial statements to be misleading or incomplete.

Note 2 - Summary of Significant Accounting Policies
Basis of Accounting
Funds received under the various grant programs have been recorded within the General Fund, special revenue funds and enterprise fund of the City. The City utilizes the modified accrual basis of accounting for the General Fund and special revenue funds and the accrual basis of accounting for the enterprise funds. The accompanying Schedule of Expenditures of Federal Awards (the "Schedule") is presented in accordance with the requirements of Title 2 U.S.

Code of Federal Regulations ("CFR '') Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (the "Uniform Guidance"). Therefore, some amounts presented in the Schedule may differ from amounts presented in, or used in, the preparation of City's basic financial statements.

Schedule of Expenditures of Federal Awards
The accompanying Schedule presents the activity of all federal financial assistance programs of the City. Federal financial assistance received directly from federal agencies, as well as federal financial assistance passed through the State of California Department ofTransportation, the State of California Department ofTraffic Safety and the County of Riverside Emergency Management Department. The Schedule was prepared from only the accounts of various grant programs and, therefore, does not present the financial position or results of operations of the City.

Indirect Cost Rate
The City did not elect to use the I 0% de minim is cost rate. 9 Item 3A - Page 321
City of Palm Springs
Schedule of Findings aud Questioned Costs
For the Year Ended June 30, 2024
Section I - Summary of Auditor's Results
Financial Statements
Types of report the auditors issued on whether the financial statements audited were prepared in accordance with GAAP:

Internal control over financial reporting:
• Material weakness(es) identified?
• Significant deficiency(ies) identified?
Noncompliance material to financial statements noted?
Federal Awards
Internal control over major federal programs:
• Material weakness(es) identified?
• Significant deficiency(ies) identified?
Type of auditors' report issued on compliance for major federal programs:

Any audit findings disclosed that are required to be reported in accordance with 2 CFR 200.516(a)?
Identification of major federal programs:

Assistance Listing
Numbers Name of Federal Program or Cluster
Unmodified
No
None Reported
No
No
None Reported
Unmodified
No
Federal
Expenditures

20.205

20.106
Highway Planning and Construction (Federal-Aid Highway Program) Airport Improvement Program
$ 11,489,693
2,698,837
Total Expenditures of All Major Federal Programs
Total Expenditures ofFederal A wards
Percentage ofTotal Expenditures ofFederal A wards
Dollar thresho_ld used to distinguish between type A and type B programs:

Auditee qualified as low-risk auditee in accordance with 2 CFR 200.520? 10 $ 14,188,530
$ 15,456,957
$750,000
No

91.79%
Item 3A - Page 322
City of Palm Springs
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
Section II - Financial Statement Findings
A. Cnrrent Year Findings -Financial Statement
No current year findings were noted.

B. Prior Year Findings - Financial Statement
Finding 2023-001 Internal Control and Compliance over Year-End Closing, Bank Reconciliation, and Investment Reports
Condition:

Since the commencement of the audit, 44 adjusting journal entries were provided by the City and 16 audit adjustments were proposed.

In addition, during our testing of September 2022 and December 2022 bank reconciliations, we noted that variance exceeds the allowable variance of 1-2% for the general checking account. Moreover, there was no evidence of review of the bank reconciliation for the general checking and general store museum accounts for December 2022.

We also noted that the monthly investment report for the months of August 2022 to June 2023 were not submitted to the City Council as required for monitoring compliance with all Federal, State, and local laws governing the investment of public funds and City's investment policy.

Recommendation:

We recommended the City implement policies and procedures to complete year-end closing activities and subledger reconciliations in a timely manner to minimize the need for material correcting entries during audits and implement a formal review process for bank reconciliations to ensure thoroughness and accuracy, thereby mitigating the risk of errors and variances exceeding allowable limits. We further recommend the City enhance its monitoring controls and follow its investment policy to timely submit the monthly investment reports to ensure compliance with the City's investment policy.

Status:

Finding resolved during the year ended June 30, 2024.

II
Item 3A - Page 323
City of Palm Springs
Schedule of Findings and Questioned Costs (Continued)
For the Year Ended June 30, 2024
Section III-Federal Award Findings and Questioned Costs A. Current Year Findings and Questioned Costs-Major Federal Award Program Audit No current year findings were noted.

B. Prior Year Findings and Questioned Costs-Major Federal Award Program Audit Finding: 2023-002 Reporting - Internal Control and Compliance over Reporting Identification of the Federal Program:

Assistance Listing Number:

Assistance Listing Title:

Federal Agency:

Pass-Through Entity:

14.218
Community Development Block Grants/Entitlement Grants
U.S. Department of Housing and Urban Development
NIA
Federal Award Identification Number: B-19-MC06-0561, B-20-MC06-0561, B-22-MC06-0561 Assistance Listing Number:

Assistance Listing Title:

Federal Agency:

Pass-Through Entity:

20.106
Airport Improvement Program
U.S. Department of Transportation
NIA
Federal Award Identification Number: 3-06-0181-060-2021, 3-06-0181-061-2021, 3-06-0181-062-2021, 3-06-0181-063-2022
Condition:

During the audit, we noticed that three out of four quarters of PR29 for CDBG and one out of four quarters of PR29 for CDBG-CV were not filed within the deadline and noted below:

Reporting Period Grantee Submission
PR29 Report (Fnd Date) Deadlines
CDBG September 30, 2022 October 30, 2022
CDBG December 31, 2022 January 30, 2023
CDBG March 31, 2023 April 30, 2023
CDBG-CV September 30, 2022 October 30, 2022
Additionally, we noticed that the following SF-45 were not filed timely:

Grant Number
3-06-0181-060-202 l
3-06-0181-061-2021
3-06-0 I 81-062-2021
3-06-0181-063-2021
Recommendation:

Reporting Period
(Fnd Date)
September 30, 2022
September 30, 2022
September 30, 2022
September 30, 2022
Grantee Submission
Deadline
December 31, 2022
December 31, 2022
December 31, 2022
December 31, 2022
Filed Date
November 3, 2023
July 27, 2023
July 24, 2023
November 3, 2022
Filed Date
June 27, 2023
June 27, 2023
June 27, 2023
June 27, 2023
We recommended the City improve its communication and monitoring controls to ensure all required reports are prepared and submitted timely. Furthermore, we recommend the City to review and update internal policies and procedures to ensure awareness of federal grant reporting requirements and ensure timely compliance reporting obligations throughout the grant lifecycle.
12 Item 3A - Page 324
City of Palm Springs
Schedule ofFiudiugs and Questioned Costs (Continued)
For the Year Ended Jone 30, 2024
Section m - Federal Award Findings and Questioned Costs (Continued) B. Prior Year Findings and Questioned Costs- Major Federal Award Program Audit (Continued) Finding: 2023-002 Reporting - Internal Control and Compliance over Reporting (Continued) Status:

Finding resolved during the year ended June 30, 2024.
13 Item 3A - Page 325
This page intentionally left blank.
14 CITY COUNCIL STAFF REPORT

DATE: FEBRUARY 27, 2025 BUSINESS & LEGISLATIVE

SUBJECT: GENERAL FUND, CAPITAL, AND AIRPORT MID- YEAR FISCAL YEAR 2024-25 BUDGET UPDATE

FROM: Scott C. Stiles, City Manager

BY: Department of Finance and Treasury
Department of Engineering
Department of Aviation

SUMMARY:

This item will provide City Council with an update on General Fund revenues and expenses, Capital, and Airport Fund revenue and expenses, for the first half of the Fiscal Year 2024-25.

RECOMMENDATION:

Receive and File.

STAFF ANALYSIS:

GENERAL FUND:

General Fund Revenue Highlights
The General Fund ended the first two quarters of the fiscal year with total revenue at $53.7 million. This is down 5% from the first two quarters of FY24 largely due to lower transient occupancy tax (TOT) and utility user tax as compared with last year. A portion of this decline was offset by increases in property tax and permits, fines & fees , and interest income. These other sources of revenue brought an additional $1.2 million year- over-year and is shown in Table 1 on the following page. Mid-Year highlights are presented below:

• Transient Occupancy Tax (TOT) on cash basis is down from FY24 21% from $14.9 million in FY24 to $11.8 million in FY25. However, the reconciliation from cash bases to modified accrual per end of December 2024 indicates the TOT is down from FY24 by a moderate 6%. The City expects this trend to continue for the remainder of FY25.

Item 3B - Page 1
City Council Staff Report
February 27, 2025 -- Page 2
Mid-Year Fiscal Year 2024-25 Budget Update

• Property tax is up 5% over prior year at the end of the first half. The City will receive two more large distributions of property tax in the 3rd and 4th quarters of the fiscal year.
• Sales tax revenue in FY25 is down 5% from FY24, from $8.9 million in FY24 to $8.5 million. Sales Tax as well as TOT is received mostly during the last six months of the fiscal year. This explains the below average achievement of budget at 27% (23% for TOT) in the first six months of the fiscal year. • Motor Vehicle in Lieu Tax shows zero revenue for Q1 and Q2 of FY25 and FY24, because this tax revenue is received in February and June of each year from the County of Riverside. The payment received in February 2025 is approximately 9% or $0.3 million higher than last year.
• Utility Users Tax (UUT) continues the slight downward trend and is down 16% from FY24, from $6.4 million in FY24 to $5.4 million in FY25. • Interest revenue continues to grow due to a strong portfolio having above average returns and is up 11% from FY24, from $1.8 million in FY24 to $2.0 million in FY25.

TABLE 1

2025 2025 2025 2024 2025 Achieved
Q1 Q2 Total YTD Total YTD 2025 vs 2024 Revised Budget % Transient Occupancy Tax 3,867 7,900 11,767 14,980 (3,213) 51,123 23% Property Tax 0 12,643 12,643 12,047 597 34,636 37%
Sales and Use Tax 2,298 6,214 8,512 8,979 (468) 32,062 27% Utility Users Tax 2,026 3,371 5,397 6,404 (1,007) 15,230 35% Motor Vehicle in Lieu Tax 0 0 0 0 0 6,696 0%
Franchise Fee 0 638 638 626 12 4,770 13%
Cannabis Tax 121 333 454 1,128 (673) 1,507 30%
Other Taxes 202 292 495 746 (251) 7,832 6%
Permits, Fines, and Fees 2,805 4,314 7,118 6,671 448 14,065 51% Interest Income 1,106 924 2,030 1,823 206 3,624 56%
Miscellaneous Income 763 3,846 4,609 2,988 1,622 4,274 108% Total Revenue $13,188 $40,476 $53,664 $56,392 ($2,728) $175,818 31% City Admin & Economic Developmen 1,586 2,473 4,059 3,048 1,011 8,959 45% General Government 4,448 4,909 9,357 9,582 (225) 17,941 52% Developmental Services 3,310 3,919 7,229 7,387 (158) 16,300 44% Tourism and Community Support 1,589 2,323 3,911 4,263 (352) 8,793 44% Library 711 923 1,634 1,486 148 3,617 45%
Parks and Recreation 1,806 2,251 4,058 3,495 563 10,042 40% Police Department 10,577 11,770 22,347 21,970 377 44,584 50% Fire Department 6,860 7,583 14,442 13,378 1,065 29,623 49% Public Works 2,832 3,715 6,547 5,370 1,176 14,491 45%
Transfers to Other Funds 5,823 5,823 11,646 10,979 667 15,160 77% Miscellaneous Expense 0 1,976 1,976 1,659 317 1,642 120% Total Operating Expenses $39,543 $47,665 $87,207 $82,617 $4,590 $171,151 51% Operating Surplus/Deficit ($26,355) ($7,189) ($33,544) ($26,225) ($7,318) $4,666 Amounts in Thousand USD
Item 3B - Page 2
City Council Staff Report
February 27, 2025 -- Page 3
Mid-Year Fiscal Year 2024-25 Budget Update

General Fund Operating Expense Highlights
The General Fund ended the first two quarters of the fiscal year with total operating expenses of $87.2 million. This is up approximately 6%, or $4.6 million, from FY24.

Mid-Year highlights are presented below:

The increased expenses over the previous year are mainly due to the following:
• Salary and Benefit expenses are up approximately 10% in the first half of FY25 compared to FY24, largely due to the continued hiring of staff in the current fiscal year and scheduled salary increases with staff labor unions. Salary and benefits at mid-year FY24 were approximately $43.4 million compared to FY25 at $47.6 million, accounting for $4.2 million of the total expense variance at mid-year. • Utilities & Insurance expenses are up 15% in the first half of FY25, largely due to increase in insurance ($0.3 million), electricity & water ($0.1 million), and communications ($0.1 million).

General Fund Non-Operating Income and Expenditures
The General Fund Non-Operating income and expenditures are gains or expenses from sources not related to the typical activities of the City, are generally not recurring, and are therefore considered separately. The activity for non- operating income and expenditure is shown in Table 2 below. Mid-Year highlights are presented below:

• Grant Revenue is down 94% in the first half of FY25, mainly due to the large grants received in FY24 for the project 22-05 Navigation Center ($4.4 million) and project 23-04 Cannabis Equity Grant ($1 million).
• Grant Expense is down 69%, due to high activity for project 22- 05 Navigation Center ($5.2 million) in FY24.
• Council Set Aside Expense is up 90% in the first half of FY25. Main contributor for this increase is the payment to Monarch Apartments in the amount of $2.2 million.

TABLE 2

2025 2025 2025 2024 2025 A chieved
Q1 Q2 Total YTD Total YTD 2025 vs 2024 Revised Budget % Grant Revenue 20 335 355 6,412 (6,058) 10,530 3%
Grant Expense (837) (1,296) (2,134) (6,794) 4,660 (12,993) 16% Transfers from Other Funds 0 0 0 0 0 5,000 0%
Council Set Aside Expense (1,579) (834) (2,414) (1,269) (1,145) (9,448) 26% Total Non-Operating ($2,397) ($1,796) ($4,193) ($1,650) ($2,542) ($6,912) 61% Amounts in Thousand USD
Item 3B - Page 3
City Council Staff Report
February 27, 2025 -- Page 4
Mid-Year Fiscal Year 2024-25 Budget Update

General Fund Full-Year Forecast

TABLE 3
General Fund Budgetary Highlights

Revenue Highlights

• Transient Occupancy Tax is forecasted to be just over $47 million. This is 6% down from last year. It is important to note that the TOT revenue has been at an unusually high level for the last three years. Staff feels TOT revenue has settled and FY25 will be a base year.
• Property Tax is forecasted to end FY25 at $38 million and this is 6% over last year.

Secured Property Tax on real estate represents over 90%, and Unsecured Property Tax on personal property the remaining 10% for FY25. Unsecured Property Tax has grown significantly from $0.3 million in FY23 to $1.3 million in FY24 and is expected to be close to $2 million this year.

• Sales Tax is forecasted to end the year with $28.5 million revenue, which is about 5% down from FY24. Furthermore, it appears that Sales Tax revenue, like TOT revenue, was unusually high for the last three years. Therefore, staff feels that sales tax revenue has settled and FY25 will be a base year.
2025 2025 2025 2025 FY25 FY25 Achieved
Q1 Q2 Q3F Q4F FCST Revised Budget %
Transient Occupancy Tax 3,867 7,900 15,383 20,150 47,300 51,123 93% Property Tax 0 12,643 13,315 12,291 38,250 34,636 110%
Sales and Use Tax 2,298 6,214 7,995 11,993 28,500 32,062 89% Utility Users Tax 2,026 3,371 2,241 3,362 11,000 15,230 72% Motor Vehicle in Lieu Tax 0 0 2,678 4,018 6,696 6,696 100% Franchise Fee 0 638 1,653 2,479 4,770 4,770 100%
Cannabis Tax 121 333 421 632 1,507 1,507 100%
Other Taxes 202 292 2,923 4,384 7,801 7,832 100%
Permits, Fines, and Fees 2,805 4,314 2,779 4,168 14,065 14,065 100% Interest Income 1,106 924 638 956 3,624 3,624 100%
Miscellaneous Income 763 3,846 11 17 4,637 4,274 108%
Total Revenue $13,188 $40,476 $50,037 $64,449 $168,150 $175,818 96% City Admin & Economic Development 1,586 2,473 2,175 2,724 8,958 8,959 100% General Government 4,448 4,909 4,255 4,391 18,002 17,941 100% Developmental Services 3,310 3,919 4,303 4,767 16,299 16,300 100% Tourism and Community Support 1,589 2,323 2,249 2,350 8,511 8,793 97% Library 711 923 857 1,118 3,610 3,617 100%
Parks and Recreation 1,806 2,251 2,844 3,136 10,038 10,042 100% Police Department 10,577 11,770 10,410 11,896 44,653 44,584 100% Fire Department 6,860 7,583 7,033 8,229 29,705 29,623 100% Public Works 2,832 3,715 3,880 4,063 14,490 14,491 100% Transfers to Other Funds 5,823 5,823 1,757 1,757 15,160 15,160 100% Miscellaneous Expense 0 1,976 0 0 1,976 1,642 120%
Total Operating Expenses $39,543 $47,665 $39,763 $44,431 $171,402 $171,151 100% Operating Surplus/Deficit ($26,355) ($7,189) $10,274 $20,018 ($3,252) $4,666 -70% Amounts in Thousand USD
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Mid-Year Fiscal Year 2024-25 Budget Update

• Utility Users Tax is projected to end at $11 million, down from a revised budget of $15.2 million, or approximately a 28% shortfall.
• Cannabis Tax is expected to close FY25 at $1.5 million, which is down by 50% of the original budget and 38% down from last year. This is the result of the reduction of the tax rate to 5% from 10% in May 2024.

Operating Expense Highlights
• Developmental overview shows that most departments are expected to stay within revised budget. Tourism and Community Support is forecasted at 3% below revised budget, due to the budgeted annual amount for the Visitor Center that is included in the Tourism budget already.

Compared to last year, total operating expenses are down by 9%, mainly due to the following:
o Transfers to Other Funds ( -54%), transfer out for Plaza Theater in FY24 ($12.5 million)
o Developmental Services (-29%), large Navigation Center expenses in FY24 for $7 million.
• Salaries & Benefits are forecasted at $95 million and are up 5.5% compared to FY

24. As stated earlier, this increase is due to continued hiring of staff and the scheduled salary increases with staff labor unions.

General Fund Non-Operating Income and Expenditures

TABLE 4

Non-Operating Highlights

• Grant Revenue/Expense Forecast includes the carry forward from FY24 of the Retail Theft Grant awarded to the Police Department ($4.6 million). • Transfers from Other Funds is the transfer of $5 million from Internal Service Fund to General Fund, as passed at City Council Meeting on June 27, 2024. • The Council Set Aside annual expense is forecasted at $6.1 million. This contains the following programs:
o Affordable Housing ( Tenant Based Rental & Utility Assistance, Monarch Non-Operating 2025 2025 2025 2025 FY25 FY25 Achieved
Income/Expenses Q1 Q2 Q3F Q4F FCST Revised Budget %
Grant Revenue 20 335 6,105 4,070 10,530 10,530 100%
Grant Expense (837) (1,296) (6,516) (4,344) (12,993) (12,993) 100% Transfers From Other Funds 0 0 2,000 3,000 5,000 5,000 100% Council Set Aside Expense (1,579) (834) (903) (2,814) (6,131) (9,448) 65% Total Non-Operating ($2,397) ($1,796) $686 ($88) ($3,594) ($6,912) 52% Amounts in Thousand USD
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Apartments, Rent Registry, Desert Highland Gateway ) forecasted at $4.7 million
o Homeless Programs ( Homeless Cool/Warm Centers ) forecasted at $0.4 million
o Climate ( Turf Conversion, Desert Water Authority MOU, EV Chargers ) forecasted at $1 million
All Council Set Aside are projected to be spent in full, except for a small balance in the sustainability fund by the end of FY25.

General Fund Balance Development and Reconciliation

The following table depicts a roll forward of the General Fund balance:

TABLE 5

FY24 FY25
Actuals Audited FCST
Beginning Fund Balance 153,685,766$ 147,988,092$
Total Revenues 181,682,091 168,149,660
Total Expenses 187,190,509 171,401,613
Operating Surplus/(Deficit) (5,508,418) (3,251,953) Grant Revenue 17,929,542 10,529,687 Grant Expense (14,942,182) (12,993,227) Transfers From Other Funds - 5,000,000 Council Set Aside Expense (3,176,617) (6,130,788) Non-Operating Surplus/(Deficit) (189,256) (3,594,328) Total Surplus/(Deficit) (5,697,674) (6,846,281) Ending Fund Balance 147,988,092$ 141,141,812$
Ending Fund Balance Reconciliation:

PERS Future Cost Reserve ($6m p.a.) 40,250,000 46,250,000 Affordable Housing Reserve ($3m p.a.) 6,166,762 9,166,762 Airport Reserve (Measure D) 1,195,623 1,445,623 Minimum Fund Balance (20% of OpEx) 37,438,102 34,280,323 Unassigned Funds 62,937,605 49,999,104
Total General Fund Balance 147,988,092$ 141,141,812$ General Fund Fund Balance
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Mid-Year Fiscal Year 2024-25 Budget Update

Looking Ahead

The City is anticipating the following assumptions for the FY26/27 budget cycle:

• Fiscal Year 25 is looking like a new base year.
• Major revenue lines will likely be flat to small growth in FY26. • Salaries and Benefits expected to climb in FY26 by approximately 5% or $5 million.

CAPITAL UPDATE
There are seven (7) funds that make up the main funding sources for the 5- year capital improvement project plan managed by the City Engineering Department. A description of each fund is below (projects included in the descriptions are described later in the report):

Capital Fund – This fund is used for many different capital projects with a focus on streets and bridges. The revenue received is largely from Caltrans as it funds almost 90% of all major road and bridge projects. Additional revenue is federal revenue that supports th e Highway Safety Improvement Program (HSIP) and the various cycles. HSIP funds are used for prevention of traffic fatalities and serious injury’s focusing on safety improvements, such as improved intersections, pedestrian crossings, and traffic signal upgrades. Revenue varies annually based on projects but is projected to be around $20 million in FY25. Current expenditures are largely for those HSIP programs as well as the many bridge projects currently underway.

Measure J – Measure J is a 1% local sales tax that generates approximately $21.5 million annually. The tax is a general tax; however, the focus of the many Measure J Commissions has been to use these funds largely for infrastructure capital projects within the City. The Commission for Measure J is made up of 9 voting members and 2 alternates. The Commission will recommend projects for the dollars to be used in the bi-annual budget that is ultimately approved by the City Council. Current funds are being used for the Main Library Renovation, annual Street Maintenance, the new CAD/RMS system for public safety, and a portion of the Pickleball Court expansion.

Road Maintenance and Rehabilitation Fund (RMRA) - This special revenue fund accounts for revenue received through the SB1 RMRA known as the new Gas Tax. It is apportioned to eligible cities and counties by formula to be used for road maintenance, rehabilitation, and critical safety projects. Current annual revenue received is approximately $1.2 million , and current projects being supported by this fund include a portion of the annual slurry seal street maintenance program and HSIP Cycle 8.

Gas Tax – This revenue, which is also restricted to street construction and improvements, is approximately $1.1 million annually. The revenue comes from the annually escalating tax on every gallon of gas , is deposited in the states Highway Users Tax , and distributed monthly to cities and counties. Current projects funded by the Gas Tax include a portion of Item 3B - Page 7
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the annual slurry seal street maintenance program.

Measure A – The local measure was initiated by Riverside County in 1988 and renewed in 2009. The renewal in 2009 extended the measure to sunset in 2039. This measure is a .5% sales tax restricted for transportation projects. Revenue received from this tax is approximately $3.7 million annually. Measure A is also the recipient of funds received by the Coachella Valley Association of Governments (CVAG). CVAG will contribute 7.5% of the project cost for approved road and bridge projects. This revenue varies an nually depending on the projects. Revenue received in FY24 was $2.3 million. Current projects being funded by Measure A are the Ramon Road Bridge, S. Palm Canyon at Tahquitz Creek Bridge, and the Pedestrian Master Plan.

Drainage Fund – The revenue from this fund is used to support improvements to the underground storm drain lines such as levees, surface retention basins and open channels.

This will provide flood control for the City. The City adopted a schedule of drainage fees that i s collected as an impact fee on new development whenever vacant land will be improved and thus generating increased stormwater run -off. Annual revenue varies depending on new development. In FY24 revenue was approximately $210,000 but has exceeded $600,000 in recent years. Current projects being funded are a portion of the Storm Drain Line 20 project.

Quimby Fund – This special revenue fund is a result of the City adopting the Quimby fee in accordance with the Quimby Act approved by the State of California. The fee is collected on all residential development in- lieu of dedicated parks and recreation land within the development. Revenue is collected as building permits are issued and will vary based on development but has been consistently around $400,000 in the past few years. Current projects being funded by the Quimby fee are a portion of the Demuth Dog Park improvements and a portion of the Pickleball Court expansion.

Projected Revenues and Expenditures for FY25 are shown in Chart 1 on the following page:

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CHART 1

The City’s Capital funds facilitate the funding of critical projects , that both increase the quality of life for the residents, ensure for the critical safety of city infrastructure, as well as ensuring the public can carry out their day -to-day functions . A listing of major ongoing projects is shown in detail below in Chart 2.

CHART 2

Indian Union Pacific Railroad Bridge - Widening of the bridge over the Union Pacific Railroad track on Indian Canyon Drive from Train Station Road to Garnet Rd. This will match the 6-lane roadway constructed by Caltrans for the Indian Canyon/I-10 interchange.

Main Library Renovation - Complete restoration of the Main Library and the JC Frey building located in Sunrise Park. The library will locate to a temporary location while construction is taking place.
2025 2025 2025 2025 F Y25
Revenue Q1 Q2 Q3F Q4F Forecast
Capital 8,091,507 569,277 6,564,327 5,075,037 20,300,148 Measure J 1,818,858 5,227,443 5,522,694 8,818,627 21,387,623 RMRA 228,753 345,200 326,280 335,740 1,235,973 Gas Tax 262,852 394,427 231,746 263,087 1,152,112 Measure A 335,742 753,664 1,496,672 2,982,320 5,568,397 Drainage 70,629 63,293 102,292 105,251 341,465 Quimby 278,272 109,272 98,000 110,000 595,544 Total Revenue 11,086,613 7,462,576 14,342,012 17,690,062 50,581,262 Capital Project Expense
Capital 4,718,432 10,087,542 6,964,000 6,341,216 28,111,191 Measure J 5,751,919 2,794,752 1,255,018 3,199,281 13,000,970 RMRA 976 651,982 361,945 482,209 1,497,112 Gas Tax 33,000 516,808 533,697 525,253 1,608,759 Measure A 187,180 894,555 894,555 894,555 2,870,845 Drainage 246,655 421,653 334,154 135,000 1,137,462 Quimby 19,367 70,072 200,041 400,081 689,562 Total Capital Project Expense 10,957,530 15,437,364 10,543,409 11,977,595 48,915,899 Surplus/(Deficit) 129,082 (7,974,788) 3,798,603 5,712,466 1,665,363 Project Name Expense Budget Funding Source Status
Indian Union Pacific RR Bridge 14,309,297 59,784,356 Capital/WWTP Under Construction, expected completion late 2026 Library Renovation 2,004,190 40,000,000 Measure J Under Design, expect to bid in April-May 2025 Ramon Road Bridge 668,414 33,348,036 Capital/Measure A Completing Right of Way Phase, expect bid mid 2026 Plaza Theatre Renovation 13,525,979 32,000,000 Capital/General Fund/Measure J Under Construction, expected completion October 2025 S. Palm Canyon Tahquitz Creek Bridge 239,030 14,888,386 Capital/Measure A Under Construction, expected completion late 2026 Storm Drain - Line 20 12,023,415 13,469,940 Capital/Drainage Completed South Palm Canyon Bridge 87,630 7,957,963 Capital/Measure A/Gas Tax Expect bid April-May 2025 Street Maintenance - Slurry 1,451,535 5,147,504 RMRA/Measure A/Gas Tax Completed This Years Project Pedestrian Streets Master Plan 345,051 4,500,000 Capital/Measure A/Measure J Ongoing - Multiple Projects HSIP Cycle 8 Traffic Signal Improvement 3,565,858 4,322,965 Capital/RMRA Completed Public Safety CAD RMS 151,452 2,750,000 Measure J RFP to be issued soon Top Projects
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Mid-Year Fiscal Year 2024-25 Budget Update

Ramon Road Bridge - Widen the Ramon Road bridge over the Whitewater River located about 1 mile east of Gene Autry Trail. The bridge will be widened from 4 lanes to 6 lanes, the same size as the road on either side of the bridge.

Plaza Theatre Renovation – Complete restoration of the Plaza Theatre in downtown Palm Springs. Plaza Theatre Foundation contributed $14 million to the renovation and agreed to a $10 million note payable to the City.

S. Palm Canyon Tahquitz Creek Bridge - South Palm Canyon Bridge widening over the Tahquitz Creek Channel. A new, wider, 4 land bridge to be built and the existing bridge demolished.

Storm Drain – Line 20 - Construct reinforced concrete pipe storm drain main line, catch basins, and connector pipes to connect to existing storm drain line 20 built by Riverside County. East/West line will be on Ramon Road from El Cielo to Farrell. North/South line will be on Farrell from Ramon to Tahquitz Canyon Way.

Street Maintenance – Slurry - An annual project managed by the City Engineers department, slurry seal is a thin seal placed on roadways to preserve and extend the life of a road.

Pedestrian Streets Master Plan - Project that identified 37 distinct locations for pedestrian safety mitigations through lane reconfiguration, bike lanes, crossings, and sidewalk gap closures. Current projects being funded are the S. Palm Canyon and Racquet Club Road Lane reconfigurations.

HSIP Cycle 8 Traffic Signal Improvements - Modify the traffic signals at 14 intersections for improved visibility, install advanced dilemma zone detection for high-speed approaches, and add protected left turn phasing.

Public Safety CAD/RMS - A Computer Aided Dispatch System (CAD) is a complex computer and communication system that allows for the coordination, status and control of public safety personnel and equipment when responding to emergency calls for service. A requirement for an effective CAD system includes a Records Management System (RMS).

Looking Ahead
• Continuation of major road and bridge projects:
o Indian Canyon under construction
o South Palm Canyon at Tahquitz under construction
o South Palm Canyon at Arenas Canyon under construction o 2025-2026 $6 million Paving Project under construction o Gene Autry Wind Wall under construction
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o Indian Canyon Sewer from Garnet to Tramview Road under construction o City Wide Sign Inventory and Replacement underway
• N ew projects:
o Pickleball at Demuth Park
o Library Renovation Project
o Dog Parks, Parking Lot, and Restroom construction at Demuth Park o S. Palm Canyon and Racquet Club Road Reconfiguration Design Completion • O ther new and significant projects:
o Fire Station Number 1 Renovation/Expansion
o Swim Center Renovation
o Yearly Traffic Calming Projects underway

PALM SPRINGS INTERNATIONAL AIRPORT
The City of Palm Springs operates Palm Springs International Airport (PSP) as a vital transportation hub and economic driver for the region. Managed as an enterprise fund, the Airport functions as a self -sustaining business entity, ensuring that its financial activities remain independent from the City’s general fund. PSP's financial structure is organized into four key categories: Customer Facility Charge, Passenger Facility Charge, General Airport Operations, and Airport Capital Projects, each supporting various aspects of the Airport’s infrastructure, operations, and long-term development initiatives.

A consolidated schedule of the Airport funds showing revenues and expenses year-to- date versus FY25 year-to-date on December 31, 2024, are shown in Table 6.

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Mid-Year Fiscal Year 2024-25 Budget Update

TABLE 6

Airport Revenue Highlights

The combined Airport revenue funds ended the first two quarters of the fiscal year with total revenue at $33.8 million Table 6 . This is an increase of 50% from the first two quarters of FY24 due to an interdepartmental fund transfer from the Airport Operations Fund to the Airport Capital Project fund in the amount of $7.2 million to help fund capital projects. Mid-year highlights are presented below:

The Customer Facility Charge (CFC) Fund experienced a 1% increase compared to the previous year, aligning with the 2% growth in total passenger traffic, reflecting steady demand for rental car services relative to overall airport activity.

• The Passenger Facility Charge (PFC) Fund is forecasted to end FY25 at $6.5 million which is approximately 7% higher than the FY24. • The General Airport Operations Fund experienced a 28% increase for the first half of FY25 when compared to FY24, primarily attributed to the increases in the non- airline revenue which includes public parking, ground transportation, terminal and other concessions, rental cars, and ground rents.

Airport Expense Highlights

The combined Airport expenses ended the first two quarters of the fiscal year with total expenses of $30.7 million. This is an increase of approximately 90% from FY24, but with a net surplus of $3.0 million. Mid-year highlights are presented below:

2025 2025 2025 2024 2025 vs 2024 2025 Achieved
Q1 Q2 TOTAL YTD TOTAL YTD Budget %
Total Revenue 13,318.6$ 20,475.4$ 33,794.0$ 22,592.3$ 11,201.8$ 195,369.6$ 17.3% Licenses & Permits 55.7 110.3 166.0 98.1 67.9 159.0 104.4% Charges for Services 7,655.7 11,642.1 19,297.8 14,900.6 4,397.2 68,734.2 28.1% Customer Facility Charges 434.3 1,831.1 2,265.4 2,237.3 28.2 9,011.5 25.1% Passenger Charges 404.0 1,560.1 1,964.1 2,116.9 (152.8) 6,575.5 29.9% Fines & Forfeitures 1.4 1.4 2.8 0.6 2.1 6.5 42.5% Interest Revenue 1,119.8 1,065.5 2,185.3 1,272.6 912.7 698.0 313.1% Miscellaneous 25.7 530.3 556.0 47.7 508.3 202.5 274.6% Capital Proj Federal Grants - 112.6 112.6 510.2 (397.6) 67,994.5 0.2% Transfers In 3,622.0 3,622.0 7,244.0 - 7,244.0 41,988.0 17.3% Total Expense 11,708.6$ 19,030.6$ 30,739.2$ 16,157.0$ 14,582.2$ 291,922.3$ 10.5% Administration 1,519.8 1,826.6 3,346.4 2,749.5 596.9 9,495.9 35.2% Airport IT 178.8 237.5 416.3 193.8 222.5 1,111.0 37.5% Law Enforcement 738.9 1,117.5 1,856.4 1,739.3 117.1 3,220.0 57.7% Aviation Security 68.3 184.9 253.2 80.3 172.9 2,051.1 12.3% Airside Operations 984.0 1,843.2 2,827.2 2,742.1 85.1 6,280.1 45.0% Rescue - Fire 1,067.8 1,511.8 2,579.5 1,966.6 612.9 5,076.6 50.8% Landside Operations 244.0 745.4 989.4 760.9 228.5 2,917.9 33.9% Grounds Maintenance 93.7 150.3 243.9 221.4 22.5 675.4 36.1% Terminal Building Ops 1,386.8 2,247.3 3,634.1 2,078.0 1,556.0 11,544.9 31.5% Other Expenses 1,804.6 5,544.0 7,348.7 3,624.9 3,723.7 232,561.4 3.2% Transfers Out 3,622.0 3,622.0 7,244.0 - 7,244.0 16,988.0 42.6% Surplus/(Deficit) 1,610.0$ 1,444.8$ 3,054.8$ 6,435.3$ (96,552.6)$ Amounts in thousands
Item 3B - Page 12
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Mid-Year Fiscal Year 2024-25 Budget Update

• Personnel Costs - Airport salaries and benefits increased due to the addition of 14 positions; including the creation of the landside division, which were necessary to support operational growth, enhance regulatory compliance, and improve customer service.
• Contractual Services – Expenses rose due to increased aviation worker screening requirements, runway pavement rehabilitation, and infrastructure improvements, ensuring compliance with FAA and TSA regulations.

• Capital Project Planning – The airport experienced higher costs related to the design and planning phases of capital projects, essential for infrastructure expansion and long-term facility modernization.

Airport Budget Full-Year Forecast

TABLE 7

Airport Budgetary Highlights

The combined Airport revenue totals at mid- year is 4 6% of the total FY25 budget. The Airport expects the projected revenues to end FY25 at $88.0 million, this is an increase of 34% when compared to prior FY24.

2025 2025 2025 2025 2025 2025 Achieved
Q1 Q2 Q3F Q4F FORECAST BUDGET %
Total Revenue 13,318.6$ 20,475.4$ 26,602.9$ 28,593.0$ 88,990.0$ 195,370.0$ 46% Licenses & Permits 55.7 110.3 77.0 113. 0 356.0 159.0 224% Intergovernmental - - - 5,064.3 5,064.3 - Charges for Services 7,655.7 11,642.1 18,252.0 13,039.0 50,588.8 68,734.2 74% Customer Facility Charges 434.3 1,831.1 3,021.4 3,669.3 8,956.1 9,011.5 99% Passenger Charges 404.0 1,560.1 2,000.0 2,500.0 6,464.1 6,575.5 98% Fines & Forfeitures 1.4 1.4 2.0 2.0 6.8 6.5 104% Interest Revenue 1,119.8 1,065.5 1,120.0 1,060.0 4,365.3 698.0 625% Miscellaneous 25.7 530.3 37.0 527.0 1,120.0 202.5 553% Capital Project Grants - - 1,093.6 1,618.5 2,712.0 - Capital Proj Federal Grants - 112.6 1,000.0 1,000.0 2,112.6 67,994.5 3% Transfers In 3,622.0 3,622.0 - - 7,244.0 41,988.4 17% Total Expense 11,708.6$ 19,030.6$ 14,711.6$ 21,883.6$ 67,334.4$ 291,922.3$ 23% Administration 1,519.8 1,826.6 1,646.9 3,164.5 8,157.8 9,495.9 86% Airport IT 178.8 237.5 193.7 273.2 883.2 1,111.0 79% Law Enforcement 738.9 1,117.5 619.1 1,200.5 3,676.1 3,220.0 114% Aviation Security 68.3 184.9 134.0 316.4 703.5 2,051.1 34% Airside Operations 984.0 1,843.2 955.7 3,282.3 7,065.2 6,280.1 113% Rescue - Fire 1,067.8 1,511.8 966.0 1,684.0 5,229.5 5,076.6 103% Landside Operations 244.0 745.4 376.3 1,089.9 2,455.6 2,917. 9 84% Grounds Maintenance 93.7 150.3 130.0 225.4 599.3 675.4 89% Terminal Building Ops 1,386.8 2,247.3 1,655.9 3,135.9 8,425.9 11,544.9 73% Other Expenses 1,804.6 5,544.0 4,193.0 4,368.8 15,910.5 232,561.4 7% Transfers Out 3,622.0 3,622.0 3,841.0 3,142.6 14,227.6 16,988.0 84% Surplus/(Deficit) 1,610.0$ 1,444.8$ 11,891.3$ 6,709.4$ 21,655.6$ (96,552.3)$ Amounts in thousands
Item 3B - Page 13
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Mid-Year Fiscal Year 2024-25 Budget Update

Revenue Highlights

• The Customer Facility Charge Fund is forecasted to be just $8.9 million. This is less than a 1% decrease than last year.
• The Passenger Facility Charge Fund is forecasted to end the year with $6.4 million, which is an increase of about 7% over last year.
• The Operations Airport Fund is projected to end FY25 at $50.6 million, which is 15% higher than FY24.

The total passenger forecasts indicate that passenger traffic for the rest of the year is expected to have a slight increase of 1% when compared to FY24. Enplaned passengers are the primary air traffic metric in the industry to measure airport "output" or "production," as many airport revenues, including parking, terminal concessions, and rental car privilege fees, are driven directly by passenger volume. Likewise, passenger volume is a primary driver of operating expenses.

In connection with the calculation of FY25 airline rates and charges, the Airport forecast enplaned passenger traffic of 1.635 million, or essentially flat versus FY24. While actual fiscal-year-to-date enplaned passenger traffic through December (i.e., 6 months) was 3.1% lower than the same period in FY24, schedule data published by the airlines for the second half of the year show that departing seats are scheduled to increase by 6.2%, reflecting new service by new entrant airlines Flair, Frontier, and Porter. Applying historical load factors to the scheduled seat data indicates that the 1.635 million or 3.27 million total passengers forecast (Chart 3 ) is still appropriate at this time for planning purposes for FY25.

The Airport continuously monitors industry trends by reviewing changes in airline schedules on a weekly basis, in addition to reviewing leading revenue indicators such as PFC receipts.

The Airport is evaluating the changing industry outlook in connection with the preparation of its operating budget for FY26.

CHART 3
Item 3B - Page 14
500,000
450,000
400,000
350,000
300,000
250,000
200,000
150,000
100,000
50,000
...,:s-4.

Total Passengers Trend at PSP
~ .,, ~<. ,I;- ,I;- ,,,<A ,,,,-4. ,IS' ~~ ~,,,-4. "'"' ~ ~ 6-0 ~ ~ "'v ,v ~,,, '?-Q ...,v '?-v ,._,,; 0 ,,.., r.f ...,,,, "e9 c.,"'Q ~o <:)<,; - FY2023 - FY2024 - FY2025(A) - - FY2025(F)
City Council Staff Report
February 27, 2025 -- Page 15
Mid-Year Fiscal Year 2024-25 Budget Update

Expense Highlights
The combined Airport expense totals at mid- year is 24% of the total FY25 budget. The corresponding expenses for the pushed-out projects and a portion of the transfers out will be deferred to the next budget cycle. The airport intends to transfer out approximately $7.2 million from the General Airport Operations fund to fund the Airport Capital Projects fund, at the end of the fiscal year.
• The revenue shortfall is attributed to a decrease in the average spend per passenger on concessions, primarily due to ongoing food and beverage and retail renovations.

However, the airport anticipates that all 12 food and beverage and retail locations will be fully operational by the end of FY25, which is expected to enhance concession revenue moving forward.
• The airport now operates under a new Airport Use and Lease Agreement with the airlines, which stipulates that 50% of the net profits from the General Airport Operations Fund are shared between the airport and the Signatory Airlines. Based on current projections, the airport anticipates a settlement of approximately $5.0 million with the signatory airlines at the end of FY25. • The airport is anticipating a reduction in the amount of grants received due to the expectation that some projects will not be reimbursed as initially planned through the Bipartisan Infrastructure Law.

Looking Ahead
• Advancing Airport Enhancements – The airport will continue making improvements through the Federal Aviation Administration (FAA) Airport Improvement Program (AIP) and the Master Planning process, ensuring alignment with the Airport Strategic Plan to support future growth and operational efficiency. • International Service and Trade Expansion – Ongoing discussions and feasibility studies for a Federal Inspection Site (FIS) to accommodate international service, along with collaboration with Customs and Border Protection (CBP) for staffing requirements continue. Additionally, efforts are underway to expand the Foreign Trade Zone (FTZ) to enhance regional economic opportunities. • Parking System Upgrades – A Parking Access and Revenue Control System (PARCS) upgrade will introduce new database and hardware systems, enabling passengers to conveniently pay for public parking via QR codes, improving the overall parking experience.
• Enhanced Wayfinding and Signage – The airport will continue roadway signage replacements and drafting design standards for wayfinding to improve navigation and accessibility throughout the airport, including concessions standards. • Rental Car Operations and Traffic Flow Study – An analysis of the temporary rental car relocation and roadway traffic study will be conducted to optimize efficiency and enhance passenger and vehicle flow within the airport.

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Mid-Year Fiscal Year 2024-25 Budget Update

These initiatives reflect the airport’s ongoing commitment to enhancing passenger experience, operational efficiency, and long-term strategic growth while fostering continued collaboration with local, federal, and industry partners.

Airport Capital Projects Fund

The Airport Capital Projects fund is for the airport’s various capital projects. The airport maintains a five- year Capital Program that is intended to address critical improvements.

The Capital Program includes capital improvement projects that address federal security requirements, airfield safety, environmental remediation, terminal upgrades, and development. The Airport intends to receive approximately $5.0 million in Airport Improvement Program (AIP) grant funds from the Federal Aviation Administration (FAA) in FY25 to fund capital projects. The remaining projects will be funded out of the Airport Capital Projects fund balance.

A partial list of major projects funded by the Airport Capital Projects Fund are shown below in Chart 4.

CHART 4

Aircraft Rescue & Firefighting Truck - Use for emergencies to assist with evacuation of passengers.

Automated Vehicle Identification - Upgrade existing Automatic Vehicle Identification system with state -of art technology for ground transportation services like Taxi, Transportation Network Companies and commercial transportation.

Project Name Expense Budget Funding Source Status
1 Aircraft Rescue & Firefighting Truck 1,127,610 1,500,000 Airport Complete 2 Automated Vehicle Identification 276,384 300,000 Airport Complete 3 Common Use 2,296,478 3,003,373 Airport Complete 4 Electric Vehicle Chargers (80) 295,708 300,000 Airport / AIP Grant Complete 5 Exit Lane Replacement 145,696 264,679 Airport In Progress 6 Hot Spot Study 179,802 179,802 Airport / AIP Grant Complete 7 Main Terminal Flooring Replacement (Desig 29,282 41,500 Airport In Progress 8 Master Plan 1,261,998 2,275,816 Airport / AIP Grant In Progress 9 Outbound Baggage Handling System (Design 1,801,418 3,547,349 Airport / AIP / PFC In Progress 10 Public Restrooms (Design) 231,137 236,429 Airport In Progress 11 Taxiway Rehabilitation W & A1 (Design) 484,838 571,158 Airport / AIP Grant In Progress 12 Wayfinding Design Standards 136,271 659,650 Airport In Progress 13 Wi-Fi Wireless Equipment 448,165 650,000 Airport In Progress 14 Wildlife Hazard Assessment 132,625 133,892 Airport / AIP Grant Complete Top Projects
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Mid-Year Fiscal Year 2024-25 Budget Update

Common Use - Airport common use allows multiple airlines to share ticket counters and gates at the Bono and Agua Caliente Concourses, optimizing space and operational efficiency.

Electric Vehicle Chargers (80) - Project in coordination with SCE to install 80 electric car chargers at the public parking lot #B. The EV Chargers have been purchased.

Exit Lane Replacement - Replace the current two revolving doors that exit from the courtyard (sterile) area.

Hot Spot Study - A hot spot study was conducted at PSP to identify areas with a high risk of runway or taxiway incursions, enhancing safety and operational efficiency.

Main Terminal Flooring Replacement (Design) - Replace all carpet at the main terminal of the airport with Terrazzo flooring.

Master Plan - PSP's long -term strategic document that guides the development and growth of airport facilities, infrastructure, and operations to meet future demand while ensuring efficiency and compliance with regulatory requirements.

Outbound Baggage Handling System (Design) - Expand, replace and remodel the existing outbound baggage handling system.

Public Restrooms (Design) - Complete design for renovation of the restrooms through expansion, upgrades to finishes, implementation of best-in-class amenities.

Taxiway Rehabilitation W & A1 (Design) - The Taxiway Rehabilitation W & A1 (Design) project involves the planning and engineering of necessary pavement and infrastructure improvements to enhance safety, efficiency, and compliance with FAA standards for aircraft movement areas.

Wayfinding Design Standards - Create new signage and wayfinding design standards for PSP.

Wi-Fi Wireless Equipment - The Wi -Fi upgrade in the terminal and courtyard will enhance connectivity, improve passenger experience, and ensure faster, more reliable internet access throughout the airport.

Wildlife Hazard Assessment - A Wildlife Hazard Assessment evaluates potential wildlife risks at the airport, identifying mitigation strategies to enhance aviation safety and reduce wildlife-aircraft conflicts.

ALIGNMENT WITH STRATEGIC PLANNING:

This item aligns with City Council Strategic Priority 4D, Good Governance.

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Mid-Year Fiscal Year 2024-25 Budget Update

FISCAL IMPACT:

None.

REVIEWED BY:

Director of Finance: Kristopher J. Mooney
City Engineer: Joel Montalvo
Airport Administration Manager: Victoria A. Carpenter
Executive Director of Aviation: Harry Barrett Jr., A.A.E.

City Manager: Scott Stiles

ATTACHMENTS:

None.

Item 3B - Page 18

CITY COUNCIL STAFF REPORT
DATE: FEBR
UARY 27, 2025 BUSINESS & LEGISLATIVE
SUBJECT: INTRODUCTION OF ORDINANCE ENTITLED, “AN ORDINANCE FROM:

BY:

OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CAL
IFORNIA, AMENDING CHAPTER 2.45 OF THE PALM SPRINGS
MUNICIPAL CODE REGARDING THE HUMAN RIGHTS COMMISSION”
Scott C. Stiles, City Manager
Jerem
y Hammond, Deputy City Manager
SUMMARY:

The Cit
y of Palm Springs has adopted Chapter 2.45 of the Palm Springs Municipal Code to establish and define the actions of a Human Rights Commission. This report provides the City Council with the opportunity to review and consider adopting updates to this Chapter of the Municipal Code.

RECOMMENDATION:

1. Waive the reading of the ordinance text in its entirety and read by title only; and

2. Introduce on first
reading Ordinance entitled “AN ORDINANCE OF THE CITY

COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING CHAPTER 2.45 OF

THE PALM SPRINGS MUNICIPAL CODE REGARDING THE
HUMAN RIGHTS COMMISSION.”
BACKGROUND:

At the
City Council meeting of May 23, 2024, the Council discussed some concerns regarding the Commission and a potential lack of direction and involvement from the City Council. The City Council believed it was necessary to intervene and help facilitate a process to reimagine the Commission. Following a robust discussion, the Council voted to limit the work of the Human Rights Commission to focus solely on an update to the mission and goals of the Commission leading to a revision of the Municipal Code. The Council also directed that the Commission take on no new business, rather focus solely on providing input to a subcommittee of the City Council on this matter.

At the November 21, 2024 City Council meeting, the Council discussed findings from the HRC Council Subcommittee and heard oral testimony from members of the public. The Item 3C - Page 1
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February 27, 2025 -- Page 2
Human Rights Commission - Ordinance
Council directed staff to prepare a draft ordinance revising Chapter 2.45 of the Palm Springs Municipal Code. In light of the current evolving political climate i n the country, there was much support to retain a human rights focus rather than a human services focus. There was discussion and support for eliminating the role of the Commission as mediators and investigators. There was also support to augment the human rights component with social services, but being clear that human rights is the main focus of the Commission. At the meeting, Council also directed staff to return with an item authorizing the Commission to resume taking up new business. At the December 12, 2024 meeting, the Council authorized the Commission to resume taking up new business.

STAFF ANALYSIS:

Cit
y staff and a subcommittee of the City Council met with the Human Rights Commission multiple times over many months to discuss the current and future role of the Commission.

Staff and the commission reviewed models from other jurisdictions that have robust Human Rights Commissions like the City and County of San Francisco, West Hollywood, San Diego and New York City. The City’s existing ordinance has significant overlap with some of these other municipalities, but the current code lacks substantial inclusion of any reference to human services. The current code also provides a role for the Commission to mediate disputes, however the disposition of these complaints is more appropriate and sometimes legally advantageous to be addressed in other venues.

After a deeper review of the existing code and an analysis of all of the feedback received, it is apparent that many provisions of the existing code are appropriate to address the current and evolving human rights needs of the community. While important to address a human services component, it is not necessary to substantially revise the current code and change the focus. Instead, it will be important to incorporate available human services and ensure the community is aware of available services while re taining the focus on current and evolving human rights. This can be done in a variety of ways including the education of the Commission about available services and regularly interfacing with these organizations at meetings and community events. The proposed revisions eliminate the Commission duties involving mediation and reconciliation. The revisions also include the addition of social programs and consultation with local non - profit organizations as part of their duties . The Commission will also be tasked with promoting citizen participation by all members of the community. Staff has worked with the City Attorney to prepare Attachment A, an ordinance to amend Section 2.45 of the City of Palm Springs Municipal Code.

ENVIRONMENTAL ASSESSMENT
:

The req
uested City Council action is not a “Project” as defined by the California Environmental Quality Act (CEQA). Pursuant to Section 15378(a), a “Project” means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. According to Section 15378(b), a Project does not include: (5) Organization Item 3C - Page 2
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February 27, 2025 -- Page 3
Human Rights Commission - Ordinance
or administrative activities of governments that will not result in direct or indirect physical changes in the environment.

ALIGNMENT WITH STRATEGIC PLANNING:

This ac
tion meets the Strategic Plan Major Theme:
- F orward-thinking governance
- Focus on issues that most impact quality of life
FISCAL IMPACT:

This ac
tion is not anticipated to have any significant fiscal impact.

REVIEWED BY:

Deputy City Manager:

City Manager: Teresa Gallavan for Scott C. Stiles
ATTACHMENTS:

A. Ordinanc
e to Revise Municipal Code Section 2.45 Human Rights Commission Jeremy Hammond
Item 3C - Page 3
ATT

ACHMENT A
Item 3C - Page 4
ORDINANCE NO. ____

AN ORDINANCE OF THE CITY OF PALM SPRINGS ,
CALIFORNIA, TO ADOPT CHAPTER 2.45 “HUMAN RIGHTS
COMMISSION” TO TITLE 2 SUPERSEDING THE EXISTING
CHAPTER 2.45 “HUMAN RIGHTS COMMISSION” OF THE

PALM SPRINGS MUNICIPAL CODE

City Attorney’s Summary

This Ordinance will provide clarity and consistency to Chapter

2.45 of the City’s municipal code, repealing and replacing the current language with updated language to clarify the role of the City’s Human Rights Commission.

WHEREAS, the City of Palm Springs (“City”) adopted an ordinance to establish the Human Rights Commission in 1992; and

WHEREAS, since the establishment of the Hum an Rights Commission the City has been a national leader in protecting human rights; and

WHEREAS, the City has adopted various ordinances updating Chapter 2.45 of the City’s municipal code to safeguard the right and opportunity of all persons to be free from all forms of discrimination as defined; and

WHEREAS, the City Council of the City of Palm Springs wishes to repeal and replace Chapter 2.45 of the City’s municipal code as attached for consistency and clarity purposes;

THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Chapter 2.45 of Title 2 entitled “Human Rights Commission” is hereby deleted in its entirety and replaced with Chapter 2.45 “Human Rights Commission” as evidenced in the attached Exhibit A.

SECTION 2. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision will not affect the validity of the remaining portions of this ordinance. The City Council declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional.

SECTION 3. The Mayor shall sign and the City Clerk shall certify to the passage and adoption of this Ordinance and shall cause the same, or the summary thereof, to be Item 3C - Page 5
Ordinance No. _____

published and posted pursuant to the provisions of law and this Ordinance shall take effect thirty (30) days after passage.

PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS _____ DAY OF ______________, _________.

RON DEHARTE
MAYOR

ATTEST:

BRENDA PREE, MMC

CITY CLERK

Item 3C - Page 6
Ordinance No. _____

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF PALM SPRINGS )

I, BRENDA PREE, City Clerk of the City of Palm Springs, California, do hereby certify that Ordinance No. ____ is a full, true, and correct copy, and was introduced at a regular meeting of the Palm Springs City Council on _________ and adopted at a regular meeting of the City Council held on __________ by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this ______ day of ______________, _________.

BRENDA PREE, MMC

CITY CLERK
Item 3C - Page 7
City of Palm Springs, CA
§ 2.45.005 § 2.45.160

EXHIBIT A

CHAPTER 2.45

HUMAN RIGHTS COMMISSION
§ 2.45.005. Public Policy.

It is declared as the public policy of the City that it is necessary and appropriate to protect and safeguard the right and opportunity of all persons to be free from all forms of discrimination as that term is defined in this Chapter.
(Ord. 1578 § 1, 2000; Ord. 1920 § 2, 2017)
§ 2.45.010. Definitions.

For the purpose of this chapter:
"Commission" means the Palm Springs human rights commission. "Discrimination" means the treatment of or distinction against a person based on the group, class or category to which that person belongs rather than on individual merit and contrary to federal, state or local law. Discrimination can include discrimination because of race, religion, color, ancestry, national origin, age, gender, sexual orientation, disability, medical condition, marital status, parental status, source of income, HIV status, or any other arbitrary factor. "Domestic partnership" means two adults who have chosen to share one another's lives in an intimate and committed relationship of mutual caring and refers to those persons who have registered as domestic partners pursuant to a valid and current statement of domestic partnership on file with the city under this Chapter 2.45 and where all of the following requirements are met:
(a) The partnership is between no more than two persons, each of whom is eighteen years old or older;
(b) The persons are not related by blood in a way which would prevent them from being married to each other in the state of California;
(c) The persons are not married or a member of another domestic partnership; (d) The persons have agreed to be jointly responsible for their common care, welfare and basic living expenses, in that each partner has agreed to provide for the other partner's basic living expenses if the partner is unable to provide for herself or himself; (e) Each of the persons is competent to enter into a contract or consent to the domestic partnership;
(f) Both persons' domiciles are in the city and they share a common residence, but this does not require that the legal right to possess the residence be in both names; (g) Neither person has officially declared to the city that he or she has a different domestic partner nor has previously made and concurrently maintained such declaration to any other jurisdiction; provided, that any such prior declaration has been terminated; and further provided, that this shall not bar any such concurrent declaration filed with the Secretary of State of California if such declaration is for the same partner at the Palm Springs domicile;
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§ 2.45.005 § 2.45.160

(h) The persons have been cohabitating for a period of at least six months; and (i) The persons will complete, sign under penalty of perjury and personally submit to the city clerk a statement of domestic partnership in the form prescribed under this Chapter

2.45. "Domicile" shall mean the one location the respective person considers to be his or her most settled and permanent location, the place where he or she intends to remain and to which, whenever he or she is absent, to which he or she has he intention of returning. "National origin" shall mean place of origin, immigration status, cultural or linguistic characteristics, or ethnicity.
"Source of income" means any source of funds obtained through lawful means, including, but not limited to, any form of government financial aid, alimony payments, or child support payments.

The same financial requirements must be applied to everyone regardless of the legal source of income. If a person's income and credit history would be considered sufficient if it were received as a salary, it must be considered sufficient from other sources as well. Nothing in this chapter or the provisions thereof shall be construed as prohibiting the conduct of a credit history review and the denial of a benefit or a privilege based thereon, so long as the credit review is conducted in a fair and nondiscriminatory manner.
"Unlawful" means any policy or practice which constitutes illegal discrimination as defined in federal, state or local laws.
(Ord. 1426 § 2, 1992; Ord. 1578 §§ 2, 3, 2000; Ord. 1920 § 3, 2017) § 2.45.020. Scope.

This chapter applies to all discriminatory practices and resulting intergroup tensions specifically covered by the provisions of this chapter occurring within the territorial limits of the city or within any governmental agency or any other agency under the jurisdiction of the city. Nothing in this chapter, however, shall be interpreted or applied so as to create any power or duty in conflict with the preemptive effect of any federal or state law. Nor shall anything in this chapter be implemented in a way that overlaps already existing federal or state programs; rather, federal or state programs shall be utilized, or supplemented when necessary, appropriate, and feasible, to give effect to this chapter.
(Ord. 1426 § 2, 1992)
§ 2.45.030. Human rights commission created—Membership—Powers and duties. (a) Creation.

There is created within the city a human rights commission, consisting of nine members, appointed by the mayor with the approval of the city council, to serve at the pleasure of the city council. Subject to its unfettered legislative discretion, the council will attempt to ensure that sufficient funding and staff are provided to assist the commission in carrying out its duties and responsibilities, and to ensure that the commission reflects the social, ethnic and cultural diversity of the community.
(b) Term—Vacancies.
(1) Members of the commission shall be appointed or removed in accordance with and shall be subject to all of the provisions of Chapter 2.06 of the Palm Springs Municipal Code, Item 3C - Page 9
City of Palm Springs, CA
§ 2.45.005 § 2.45.160
as the chapter now reads, or as it may thereafter be amended from time to time. (c) Powers and Duties of the Commission. Within the limitations provided by law, the human rights commission shall:
(1) Conduct programs designed to bring groups together to close gaps resulting from past discriminatory practices and to address proactively current or ongoing intergroup tensions;
(2) In addition to the other powers and duties set forth in this chapter, the commission shall have the power and duty to:
(A) Prepare and disseminate educational and informational material relating to prejudice and discrimination and recommended ways and means of eliminating such prejudice and discrimination,
(B) Furnish cooperation, information, guidance and technical assistance to other public agencies and private persons, organizations and institutions engaged in activities and programs intended to eliminate prejudice and discrimination, (C) Consult and maintain contact with human relations agencies, other public agencies, and local non- profit organizations , professional associations, national origin groups, community organizations concerned with interracial, interreligious and intercultural understanding, social welfare organizations, and such other private organizations and institutions as the commission shall deem advisable, to further the objectives of this chapter,
(D) Advise and make written recommendations to the mayor, city council and city manager concerning the development and implementation of programs and practices for the purpose of furthering the objectives of this chapter. Make recommendations to the City Council on priorities for development in the city’s efforts in human rights including social programs and issues facing older adult s and other at-risk populations. If necessary, the commission and an agency, board or officer which the commission is assisting shall submit timely reports of progress in establishing and implementing such programs and practices as are from time to time requested by the mayor or council. The commission shall not have jurisdiction over matters within the authority of other city boards and commissions, except under specific direction from the city council, (E) Prepare, encourage and coordinate programs based on established laws, regulations, policies or goals to eliminate or reduce existing inequalities and disadvantages in the community resulting from past discriminatory practices, (F) Request through the city manager information, services, facilities or any other assistance for the purpose of furthering the objectives of this chapter, (G) Appoint subcommittees of members of the commission as may be required to address specific human relations problems, and/or advisory committees of members drawn from various segments of the Palm Springs population, (H) Support and participate in activities which bring together various factions and viewpoints on emerging issues in a way that will help the community to resolve the issues which arise with change,
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City of Palm Springs, CA
§ 2.45.005 § 2.45.160
(I) Support vulnerable community members through recommended programs, policies and coordinated strategies, and
(J) Promote citizen participation through an atmosphere that promotes amicable relations among all members of the community.
(Ord. 1426 § 2, 1992; Ord. 1428 § 1, 1992; Res. 20441 § 1, 2002) § 2.45.060. Meetings.
(a) The commission shall be deemed an advisory body to the legislative body and thus be governed by all procedures of the Ralph M. Brown Act.
(b) The commission shall adopt appropriate meeting procedures so that meetings will be conducted in accordance with the Brown Act as frequently as necessary to carry out the purposes of this chapter, but no less than once a month. (c) If a member absents himself or herself without advance permission of the commission or the city council from three consecutive meetings or twenty- five percent of the duly scheduled meetings within any fiscal year, the chair shall file a certification with the city clerk that such absences have occurred, and his or her office shall thereupon automatically become vacant and shall be filled as any other vacancy.
(d) Five members shall constitute a quorum of the commission, and any ruling, decision or other action of the commission may taken by a majority of those members present and voting, provided a quorum is present.
(Ord. 1426 § 2, 1992)
§ 2.45.070. Statement of domestic partnership.
(a) Domestic partners, who meet the qualifications of a domestic partnership under this chapter may make an official record of their domestic partnership by completing, signing and submitting in person to the city clerk, on the form prescribed by the city clerk, a "statement of domestic partnership" stating that they meet the requirements of this chapter. (b) The statement shall establish the location of domicile and be signed by both partners under penalty of perjury, with both signatures being notarized. (c) Each domestic partner who submits a statement of domestic partnership with the city clerk agrees to notify the city of any change in the status of their domestic partnership. (d) A statement of domestic partnership may be amended to reflect changes, such as a change in address of the partners, by filing in person a new statement of domestic partnership. (e) No person who has a statement of domestic partnership on file with the city clerk may file another statement of domestic partnership until a statement of termination of domestic partnership is filed with the city clerk in accordance with this chapter. (f) No statement of domestic partnership shall be deemed effective unless submitted to the city clerk in accordance with the provisions of this chapter. (Ord. 1578 § 4, 2000)
§ 2.45.080. Termination of domestic partnership.
(a) A domestic partnership is terminated when one of the following occurs: (1) one partner dies Item 3C - Page 11
City of Palm Springs, CA
§ 2.45.005 § 2.45.160

or is married, (2) the partners no longer have a common residence, or (3) one partner gives the other written notice by certified mail of termination. Upon the occurrence of such event, at least one former partner shall file with the city a statement of termination of domestic partnership.
(b) Any member of a domestic partnership may terminate the domestic partnership by jointly or unilaterally completing, signing under penalty of perjury and submitting in person to the city clerk a statement of termination of domestic partnership in the form prescribed by the city clerk.
(c) A domestic partnership shall be deemed terminated thirty days after the filing of the statement of termination of domestic partnership and, if applicable, proof that the statement of termination was either mailed to, served on or personally delivered to the former partner, when such former partner did not appear personally in the city to file the statement of termination of domestic partnership.
(d) No termination of domestic partnership shall be deemed effective unless submitted to the city clerk in accordance with the provisions of this chapter. (Ord. 1578 § 4, 2000)
§ 2.45.090. Fees.
(a) No statement of domestic partnership or statement of termination of domestic partnership shall be accepted by the city clerk unless accompanied by payment of the filing fee in an amount which may be established from time to time by resolution of the city council. (b) Payment of filing fees shall entitle the person filing the subject statement to have two copies of said statement certified by the city clerk.
(c) The cost of certification of additional copies of a statement shall be an amount per copy as established by resolution of the city council.
(Ord. 1578 § 4, 2000)
§ 2.45.100. Maintenance of records—Notary.

The city clerk shall maintain adequate records of all statements of domestic partnership and all statements of termination of domestic partnership along with a register of domestic partnerships.

No statement of domestic partnership or termination shall be valid and binding without the signature and seal of acknowledgement by a notary public. (Ord. 1578 § 4, 2000)
§ 2.45.110. Legal effect.
(a) Registration as a domestic partner under this chapter shall not be evidence of, or establish, any rights existing under law other than those expressly provided hereunder. (b) The filing of a statement of domestic partnership hereunder shall not change the character of property, real or personal, or interest in real or personal property owned by either domestic partner or both of them, and the formation of a domestic partnership shall not, in and of itself, create any interest in or rights to, any property, real or personal, owned by the partner in the other partner, including but not limited to, any rights similar to community property rights or "palimony" rights under common law.

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City of Palm Springs, CA
§ 2.45.005 § 2.45.160

(c) The formation of a domestic partnership hereunder shall not change the individual income or estate tax liability of each partner prior to and during the partnership, unless otherwise provided under another state or federal law or regulation. (d) This chapter is not intended to make the California Uniform Partnership Act (California Corporations Code Section 15001, et seq.) applicable to domestic partnerships. (e) At the election of the partners, they may enter into a durable power of attorney for any authorized purposes, including but not limited to, health care or the disposition of personal effects at the time of death; provided, that the statement complies with the requirements of the Uniform Durable Power of Attorney Act (Article 3, commencing with Section 2475, of Division 3, Part 4, Title 9 of the California Civil Code). (Ord. 1578 § 4, 2000)
§ 2.45.120. Health care facility visitations.

All health care and psychiatric care facilities located in the city, including but not limited to hospitals, convalescent facilities or other long- term care facilities, shall allow a domestic partner of a patient to visit the patient unless the applicable rules of the facility prohibit all visitors. (Ord. 1578 § 4, 2000)
§ 2.45.130. Jail visitation rights.

A domestic partner of an inmate in the city jail shall be allowed to visit the inmate unless: (1) the applicable rules prohibit all visitors, or (2) the police department decides that a particular visitor is a threat to the security of the jail.
(Ord. 1578 § 4, 2000)
§ 2.45.140. City applications, licenses and permits.

Persons registered with the city as domestic partners are entitled to file, on behalf of their domestic partner, any applications, approvals, licenses or permits that the city allows to be filed for any person by that person's spouse. This includes, but is not limited to, all business applications, licenses and permits; all planning, building and land use applications, licenses and permits; all health, safety and regulatory applications, licenses and permits; and all other municipal applications, licenses, and permits, whatsoever.
(Ord. 1578 § 4, 2000)
§ 2.45.150. Civil actions.

Any person or entity defrauded by a false representation in a statement of domestic partnership, an amendment to such statement or a statement of termination of domestic partnership may bring a civil action against either or both partners pursuant to the laws of the state of California to recover his, her or its actual losses, damages or injuries.
(Ord. 1578 § 4, 2000)
§ 2.45.160. Reciprocity.

The provisions of and the rights and benefits accorded by this Chapter 2.45 shall be applicable to persons registered as domestic partners in any other jurisdiction with a comparable domestic partnership enactment.

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§ 2.45.005 § 2.45.160

(Ord. 1578 § 4, 2000)
Item 3C - Page 14

CITY COUNCIL STAFF REPORT

DATE: February 27, 2025 Business & Legislative

SUBJECT: ACCEPTANCE OF RESIGNATION FROM THE PUBLIC ARTS

COMMISSION AND APPOINTMENT TO VARIOUS BOARDS AND

COMMISSIONS

FROM: Scott C. Stiles, City Manager

BY: Brenda Pree, City Clerk

RECOMMENDATION:

1. Accept the resignation of Christopher Ramirez from the Public Arts Commission.

2. Appoint Michelle Loya to the Public Arts Commission effective immediately for the remainder of the term expiring June 30, 2026.

3. Appoint Bond Shands to the Parks and Recreation Commission effective immediately for the remainder of the term expiring June 30, 2027.

4. Direct staff on the terms for the appointments to the Human Rights Commission of the three current vacancies for the terms ending June 30, 2025, June 30, 2026, and June 30, 2027.

BACKGROUND:

The City Council appointed Mayor deHarte and Mayor Pro Tem Soto to an Ad Hoc Subcommittee to review applications and conduct interviews to fill vacancies on various Boards and Commissions. The Ad Hoc Subcommitee have selected potential nominees to fill three remaining vacancies on the Human Rights Commission including Scott Nevins, Donald Soja, and Donna Myrow. Staff will need direction from the City Council to allocate the applicants to the unexpired terms ending on June 30 of 2025, June 30, 2026, and June 30, 2027.

With this action, there is one (1) vacancy within the Administrative Appeals Board (of which is an alternate position); one (1) vacancy on the Library Board; and one (1) vacancy on the Sustainability Commission.

Government Code Section 54974 (a) states, "whenever an unscheduled vacancy occurs in any board, commission, or committee for which the legislative body has the appointing power, whether due to resignation, death, termination, or other causes, a special vacancy Item 3D - Page 1
notice shall be posted in the office of the clerk of the local agency, on either the local agency’s Internet web site or at the library designated pursuant to Section 54973.”

FISCAL IMPACT:

None.

REVIEWED BY:

Department Director: Brenda Pree
City Manager: Teresa Gallavan for Scott C. Stiles

ATTACHMENTS:

A. Resignation from Christopher Ramirez (Email Correspondence)

Item 3D - Page 2

ATTACHMENT A

Item 3D - Page 3

Item 3D - Page 4
Dear Chair Gary Annstrong, Vice Chair Tom Bun1s, Direc tor Jay Virata, I am writing to fonnally resign from my role on the Pallin Springs Public Arts Commission, effective inunediate. Since moving to Palm Springs in 2019, I have been honored to serve my city tlu·m1gh va1ious conunission and conununity roles. However, at this time, I am devoting my full attention to expanding my producing projects and business at SUPERBLOOM .

Given my increasing comm itments, I feel I can no longer responsibly dedicat e the time and presence required to serve the conuni ssion effectively, and I want to ensure that space is availabl e for someone who can fully engage in the role, as the conununity and the board deserves . That said, if the city ever needs consulting support in digital strategy, social media, inten1al website and business development, or other behind-the-scenes efforts, I would be happy to collaborate as a contracto r in the future .

I deeply appreciate the oppornmi ty to have contributed to the arts and culttu·e of Palm Springs, and I look forward to seeing the conunission continu e its important work .

Best regards,
Cluis Ramirez