Palmdale City Council
May 4, 2022

STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.

B. Manage resources, costs, and liabilities to ensure the City’s long-term fiscal health.

C. Involve and expand engagement to enhance public oversight and transparency.

Prepared by: Janelle Samson, Director of Finance
Certified as to availability of Funds: Janelle Samson, Director of Finance Approved by: Ronda Perez, Interim City Manager
Approved as to form: Christopher Beck, City Attorney

ATTACHMENTS

1. Resolution No. CC 2022-049

CITY COUNCIL

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2022-049

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE

DESIGNATING BY TITLE AND NAME THOSE OFFICIALS WHO ARE

AUTHORIZED TO SIGN CHECKS AND WARRANTS, AND REPEAL
RESOLUTION NO. CC 2021-089.

WHEREAS, the City has engaged various financial institutions as depositories of City moneys: and
WHEREAS, the City Council has, by ordinance, heretofore designated by title certain officials who are authorized to sign checks, drafts, warrants or other orders for the payment of money drawn in the name of the City.

NOW THEREFORE, BE IT RESOLVED, THE CITY COUNCIL OF THE CITY OF

PALMDALE DOES HEREBY FIND, DETERMINE, RESOLVE AND ORDER AS FOLLOWS:

SECTION 1. For purposes of implementing Section 4 of Ordinance No. U-1146, the following persons are designated by name and are expressly authorized to sign checks, drafts, warrants or other orders for the payment of money drawn in the name of the City:

Mayor - STEVEN D. HOFBAUER
or
Mayor Pro Tem - RICHARD LOA
or
Interim City Manager - RONDA PEREZ
or
Assistant City Manager - TBD
or
Director of Finance - JANELLE SAMSON
or
City Treasurer - JANELLE SAMSON
or
Finance Manager - TBD
or
Deputy City Treasurer - TBD
Resolution No. CC 2022-049

SECTION 2. Resolution No. CC 2022-049 is repealed in its entirety.

SECTION 3. The City Clerk shall certify to the adoption of this resolution.

PASSED, APPROVED and ADOPTED this 4th day of May, 2022. _________________________________
Approved as to form: Steven D. Hofbauer, Mayor
ATTEST:
___________________________ _________________________________ Christopher L. Beck Shanae S. Smith, City Clerk
City Attorney
I, Shanae S. Smith, City Clerk of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 4 th day of May, 2022 by the following roll call vote:

AYES:

NOES:___________________________________________________________ ABSTAIN:______________________ABSENT:___________________________ Date:

Shanae S. Smith, City Clerk
City Council Staff Report
DATE: MAY 4, 2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER’S OFFICE

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: RECEIVE AND FILE THE ANNUAL COMPREHENSIVE FINANCIAL REPORTS FOR THE YEAR ENDED JUNE 30, 202 1 FOR THE CITY
OF PALMDALE.

ISSUE
Receive and file the Annual Comprehensive Financial Report for the Year Ended June 30, 2021 for the City of Palmdale, the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation.

RECOMMENDATION
Staff recommends that the City Council receive and file the independent auditor’s unmodified (clean) report for the City’s Annual Comprehensive Financial Report for the Year Ended June 30, 2021 for the City of Palmdale, the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, the Palmdale Financ ing Authority, and the Palmdale Community Foundation.

BACKGROUND
The Annual Comprehensive Financial Report (ACFR) communicates the City’s financial condition and activity for the Year Ended June 30, 202 1. Overall, the City’s operations show signs of sta bility, a result of the prudent and sound management practices and efforts of the City of Palmdale. The most important fact to note is that management will remain diligent and continue to recommend caution during this time of uncertainty. The following is an explanation of some key indicators shown in the ACFR.

The City contracted with Eide Bailly, LLP to perform the annual audit of the City’s financial transactions for the Year Ending June 30, 202 1. The independent auditors’ unmodified (clean) report provides the assurance that the ACFR and audited information within, present fairly the City’s financial position for the Year Ended June 30, 2021.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Report for Year Ended June 30, 2021 May 4, 2022

The ACFR is used to communicate the City’s financial condition and activity in a transparent and organized manner. The report presents historical and comparative information that can be useful to City staff, elected officials, and external users, such as debt rating agencies, businesses, other public agencies and the City’s residents. The most recent ACFR and several prior year reports are available at the City library and on the City’s website at: https://cityofpalmdale.org/293/Financial-Reports.

The quality of the City’s work and the ACFR is measured in two ways: (1) a clean audit report by the independent auditors; and (2) the Certificate of Achievement for Excellence in Financial Reporting, awarded by the Government Finance Officers’ Association of the United States and Canada (GFOA). The attainment of the latter is the highest form of recognition in governmental accounting and financial reporting. A clean audit report is defined as one without audit-related findings. The City of Palmdale has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers’ Association of the United States and Canada for thirty-one consecutive years.

The format and content of the ACFR document is largely prescribed in order to meet governmental accounting standards. In an effort to make this complicated and large document more user-friendly, staff has provided a more in-depth explanation of the ACFR in the staff report.

DISCUSSION
The City’s ACFR includes the following major sections and information:

Introductory Section
 Letter of Transmittal (Pages i-vi) – prepared by management and used to communicate information on areas that may have an impact on the City’s finances now and in the future. This includes economic factors as well as budget and management factors.

Financial Section (the main body of the ACFR for current year information)  Independent Auditor’s Report (pages 1-3) – The City’s report card on the content of the ACFR.
 Management’s Discussion and Analysis (MD&A) (pages 4-14) – provides an analytical overview of the City’s financial status.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Report for Year Ended June 30, 2021 May 4, 2022

 Basic Financial Statements – show finances at a point in time (assets – liabilities) and throughout the year (revenues – expenses, and budget to actual revenues and expenditures).
o City-Wide Statements (pages 15-16) – overview of financial information. o Fund Financial Statements (pages 17-21) – a detailed look at funds, showing Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance.
o Budget to Actual Comparisons (pages 22-24) – for the General Fund and other select major funds.
o Proprietary Fund Financial Statement (pages 25-27) – show finances for Internal Service Funds.
o Fiduciary Fund Financial Statement (pages 28-30) – show finances for Custodial Funds, Retiree Health Premium Trust Funds and Private- purpose Trust Funds.
o Notes to the Financial Statements (pages 31-88) – (Notes) a narrative explanation that accompanies the Basic Financial Statements.

Required Supplementary Information Sections
 Pension Information (pages 89-90) – information on changes in Net Pension Liability and related ratios and schedule of contributions.  Other Post Employment Defined Benefit information (OPEB) (pages 91-92) – information on changes in Net OPEB Liability and related ratios and schedule of investment returns.
 Combining Financial Statements (pages 96-109) - A detail schedule of the non- major individual funds for funds that were presented in a cumulative manner in the Financial Section.
 Budget to Actual Comparisons (pages 110-147) – for the non-major funds cumulated in the Financial Section.
 Combining Financial Statements (pages 148-150) – for internal service funds presented in a cumulative manner in the Financial Section.  Combining Financial Statements (pages 151-157) – for fiduciary funds presented in a cumulative manner in the Financial Section.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Report for Year Ended June 30, 2021 May 4, 2022

Statistical Section (current and historical information starting at page 158 – up to 10 years)
 Financial Trends
 Revenue Capacity Information
 Debt Capacity Information
 Demographic and Economic Information
 Operating Information
Overview of the Citywide Net position
The Statement of Net position, similar to a balance sheet, shows total assets and liabilities of the City as of June 30, 2021. The total net position (assets less liabilities) was $881.0 million. Net position is broken out into three categories: capital, restricted and unrestricted.
 Net Investment in Capital Assets ($635.7 million)
Capital is the largest of the three categories and is net of depreciation and debt.

Capital assets include land, buildings, improvements, infrastructure and utility systems and construction in progress.
 Restricted Net Position ($206.1 million)
These assets are subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. Approximately 28.6 percent of this amount is restricted for affordable housing, and 66.0 percent is restricted for committed projects such as streets, sewer and drainage public service projects.

The remaining amount is committed to debt obligations and community projects.  Unrestricted Net Position ($39.2 million)
These assets may be used to meet government’s ongoing obligations to citizens and creditors. These assets are made up of positive unrestricted balances of $31,731,246 in the General Fund; offset overall by negative unrestricted balances reported in Housing Authority Mobile Home Parks, Federal Funds, State Grant Funds, Miscellaneous/Developer Contribution Funds, and SAVES Grant Funds. The negative balances are expected to be resolved in the future years.
 Liabilities and Deferred Inflows of Resources ($172.7 million) Report to Mayor and City Council
Re: Annual Comprehensive Financial Report for Year Ended June 30, 2021 May 4, 2022

o The short-term liabilities totaling $22.3 million are considered current and payable within a year and consist of unpaid expenditures, accrued salaries, and principal and interest to be paid on long-term debt owed at the financial date and within the year. The long-term liabilities totaling $71.6 million are due after a year and are the largest component of the City’s liabilities.
o The long-term liabilities consist of $52.6 million balances owed on bonds issued to fund redevelopment projects, and various city, building, and park improvement. The remainder of the long-term liabilities was comprised of Notes Payable for Streetlight Acquisition totaling $9.3 million, Capital Leases Payable for Equipment Leases, Section 108 HUD Loan, HOME Loan, On Bill Financing with Southern California Edison, and $4.0 million on unpaid liability claims and compensated balances. More information on the debt can be found in the Notes to the Financial Statements (Notes) section starting at page 54. The second largest component of long-term liabilities consists of the Net Pension Liabilities totaling $51.5 million for future unpaid retirement benefits due employees. A detailed explanation of the net pension liability is included in the Notes section. (Note 15, pages 69 through 72).
o Schedules of Changes in Net pension Liability and Related Ratios and Schedule of Contributions can be found at pages 89 and 90 of the Required Supplementary Information Section. Schedules of Changes in the City’s Net Other Postemployment Benefits (OPEB) Liability and Related Ratios can be found at pages 91 and 92 of the Required Supplementary Information Section. The remaining amount consists of refundable deposits, unearned revenue and deferred inflows of resources in amount of $23.0 million. The deferred inflows of resources related to pensions and other postemployment benefits in the amount of $188 thousand consist of changes in assumptions, and differences between expected and actual experiences. This amount is recognized as a reduction of pension expense over a five-year period.
 Cash and Investments
The ACFR also includes detailed information on the City’s cash and investments.

As of June 30, 2021, the City had $281.6 million in total cash and investments.

More information on cash and investments can be found in the Notes Section starting at page 40.
 General Fund Balance
The General Fund balance is a good measure of the City’s financial health. As presented in the Basic Financial Statements, the City’s General Fund (page 18) Report to Mayor and City Council
Re: Annual Comprehensive Financial Report for Year Ended June 30, 2021 May 4, 2022

had a balance of $58.5 million as of June 30, 2021. The balance consists of several categories, as follows:
o $2.4 million nonspendable, resources not in a spendable form such as permit held for development, prepaids, and long-term receivables.

o $2.9 million restricted resources subject to externally enforceable legal restrictions such as donations and grants.
o $21.5 million assigned resources that are constrained by the City’s intent to be used for a specific purpose such as covering the City’s self-insured liability claims and healthcare claims liabilities, and unpaid accrued employee compensated absence balances.
o $31.7 million in unassigned resources that can be used for ongoing obligations of the City.

The City’s 2021-22 budget projects continuing operating revenues aligning with the continuing operating expenditures while the unassigned fund balance resources are used to maintain an operating reserve and also setting aside reserves for purposes considered to be most volatile and hard to forecast. It is the City’s policy to maintain a minimum General Fund reserve of 20 percent of operating expenditures. The operating reserve is projected to be 20 percent at June 30, 2023, while reserves are also being set aside for future contingent liability requirements, capital replacement requirements, information technology replacements, infrastructure improvement requirements.

Once approved, the Annual Comprehensive Financial Report will be mailed to all of the trustees for bond issues, Moody’s, Standard and Poor’s, State of California, County of Los Angeles, and any other agencies requesting the information.

FISCAL IMPACT
There is no fiscal impact associated with this action.

STRATEGIC PLAN
Goal II: Ensure long-term fiscal health of the City and maintain funding for services.

B. Manage resources, costs and liabilities to ensure the City’s long-term fiscal health.

C. Involve and expand engagement to enhance public oversight and transparency.

Prepared by: Willy Galindo, Sr. Financial Analyst
Certified as to availability of Funds: Janelle Samson, Director of Finance Report to Mayor and City Council
Re: Annual Comprehensive Financial Report for Year Ended June 30, 2021 May 4, 2022

Approved by: Ronda Perez, Interim City Manager
Approved as to form: Christopher Beck, City Attorney

ATTACHMENTS

1. City of Palmdale Annual Comprehensive Financial Report for the Year Ended June 30, 2021.

2. Auditor’s Letter to City Council

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City of Palmdale
Table of Contents
For the Year Ended June 30, 2021

INTRODUCTORY SECTION
Letter of Transmittal................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................i GFOA Certificate of Achievement for Excellence in Financial Reporting................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................vi Organizational Chart - City of Palmdale................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................vii Elected and Administrative Officers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................viii Location Map................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ix

FINANCIAL SECTION
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1 Management's Discussion and Analysis................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................4 Basic Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................15 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................16 Governmental Fund Financial Statements
Balance Sheet - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................18 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 Budgetary Comparison Statements - General and Major Special Revenue Funds Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 Budget and Actual - HA - Housing Asset Fund Special Revenue Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................23 Budget and Actual - HA - Housing Authority Facilities Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 Proprietary Fund Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 Statement of Revenues, Expenses and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26 Statement of Cash Flows - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................27 Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position - Fiduciary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 Statement of Changes in Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios-Public Employees Retirement System- Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................89 Schedule of Contributions-Public Employees Retirement System-Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................90 Schedule of Changes in Net OPEB Liability and Related Ratios................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................91 Schedule of Investment Returns for OPEB................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................92 City of Palmdale
Table of Contents
For the Year Ended June 30, 2021
Supplementary Information
Combining Balance Sheet - Nonmajor Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................96 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 97 Combining Balance Sheet - Nonmajor Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................98 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds 104
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Air Quality Improvement Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................110 Community Development Block Grant - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................111 Drainage - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................112 Drainage Benefit Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................113 Federal Funds - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................114 Federal Home Program - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................115 Federal Jobs Programs - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................116 Fire Facilities Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................117 Gas Tax - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................118 Housing Authority - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................119 Landscape Maintenance - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................120 Local Transport Article 3 - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................121 Local Transport Article 8 - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................122 Measure R - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................123 Measure M - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................124 Miscellaneous Grants/Developer Contributions - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................125 Park Assessments - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................126 Park Development - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................127 Proposition A - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................128 Proposition C - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................129 Public Facilities Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................130 Public Safety - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................131 Road Maintenance & Rehabilitation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................132 South Antelope Valley Emergency Services (SAVES) - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................133 Sewer Maintenance Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................134 Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................135 State Grants Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................136 Street Lighting Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................137 Traffic Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................138 Communications PEG - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................139 Solid Waste - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................140 Palmdale Community Foundation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................141 Water Park - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................142 Measure AV - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................143 Public Art - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................144 City of Palmdale
Table of Contents
For the Year Ended June 30, 2021
Palmdale Financing Authority - Debt Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................146 CFD/Assessment Districts - Capital Projects Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................147 Statement of Internal Service Fund Net Position
Combining Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................148 Combining Statement of Revenues, Expenses and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................149 Combining Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................150 Statement of Fiduciary Net Position and Assets and Liabilities Statement of Fiduciary Net Position and Assets and Liabilities Assessment and Community Facilities District Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................152 Statement of Fiduciary Net Position Retiree Health Premium Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................154 Statement of Changes in Net Position and Assets and Liabilities Combining Statement of Fiduciary Net Position Assessment and Community Facilities District Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................155 Combining Statement of Changes in Fiduciary Net Position Retiree Health Premium Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................157

STATISTICAL SECTION
Statistical Section................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................158 Net Position by Component................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................159 Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................160 Fund Balances - Governmental Funds, (continued)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................162 Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................164 General Governmental Tax Revenue by Source................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................166 Assessed Value and Estimated Actual Value of Taxable Property................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................167 Direct and Overlapping Property Tax Rates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................168 Principle Property Tax Payers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................169 City Property Taxes Levies and Collections Last Ten Fiscal................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................170 Ratios of Outstanding Debt by Type................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................171 Ratios of General Bonded Debt Outstanding................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................172 Direct and Overlapping Governmental Activities Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................173 Legal Debt Margin Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................175 Former Community Redevelopment Agency - Project Area 1 & 1 A Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................176 Former Community Redevelopment Agency - Project Area 2A Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................177 Former Community Redevelopment Agency - Project Area 2A (20 Percent Set Aside) Pledged-Revenue Coverage ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................178 Demographic and Economic Statistics................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................179 Principle Employers - Antelope Valley................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................180 Full-time-Equivalent City Government Employees by Function:Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................181 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................182 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................183 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................184 Capital Asset Statistics by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................185 Back page................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

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Palmdale, California
Year Ended June 30, 202
Introductory Section
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i
ii
iii
iv
v
G!vernment Finance Officers Ass!ciati!n
Certificate !f
Achievement
f!r Excellence
in Financial
Rep!rting
Presented t!
C!ty of Palmdale
Cal!forn!a
F!r its Annual C!mprehensive
Financial Rep!rt
F!r the Fiscal Year Ended
June 30, 2020
Executive Direct!r/CEO
vi
Public Safety
Community
Compliance
Affordable
Housing
Administration
Engineering
Maintenance
Environmental
Capital Improvement
Program
Parks and Facilities
Events and Culture
Recreation Services
Library
Public Works
Administration
Planning
Building and Safety
Economic
Development
Economic &
Community
Development
Assistant City
Manager
City Attorney
Risk Management
City Attorney
Citizens of Palmdale
City Council
Neighborhood
Services
Parks &
Recreation
City Manager
Human Resources
Information
Technology
Finance
City Clerk
Communications
CCA
City Manager
City Manager
Legislative Affairs
Community
Programs
SAVES
Deputy
City Manager
vii
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ix
Palmdale, California
Year Ended June 30, 202
Financial Section
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/ŶĚĞƉĞŶĚĞŶƚƵĚŝƚŽƌ͛ƐZĞƉŽƌƚ

To the Honorable City Council of
the City of Palmdale
City of Palmdale, California

Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the City of Palmdale, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise thĞŝƚLJ͛ƐďĂƐŝĐĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐĂƐůŝƐƚĞĚŝŶƚŚĞƚĂďůĞŽĨĐŽŶƚĞŶƚƐ͘

DĂŶĂŐĞŵĞŶƚ͛ƐZĞƐƉŽŶƐŝďŝůŝƚLJĨŽƌƚŚĞ&ŝŶĂŶĐŝĂů^ƚĂƚĞŵĞŶƚƐ Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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.

ƵĚŝƚŽƌ͛ƐZĞƐƉŽŶƐŝďŝůŝƚLJ
Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in ƚŚĞĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘dŚĞƉƌŽĐĞĚƵƌĞƐƐĞůĞĐƚĞĚĚĞƉĞŶĚŽŶƚŚĞĂƵĚŝƚŽƌ͛ƐũƵĚŐŵĞŶƚ͕ŝŶcluding the assessment of the risks of material misstatement of the financial statements, whether due to fraud or ĞƌƌŽƌ͘/ŶŵĂŬŝŶŐƚŚŽƐĞƌŝƐŬĂƐƐĞƐƐŵĞŶƚƐ͕ƚŚĞĂƵĚŝƚŽƌĐŽŶƐŝĚĞƌƐŝŶƚĞƌŶĂůĐŽŶƚƌŽůƌĞůĞǀĂŶƚƚŽƚŚĞĞŶƚŝƚLJ͛Ɛ preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the ĞĨĨĞĐƚŝǀĞŶĞƐƐŽĨƚŚĞĞŶƚŝƚLJ͛ƐŝŶƚĞƌŶĂůĐŽŶƚƌŽů͘ĐĐŽƌĚŝŶŐůLJ͕ǁĞĞdžƉƌĞƐƐŶŽƐƵĐŚŽƉŝŶŝŽŶ͘ŶĂƵĚŝt also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

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In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2021, and the respective changes in financial position, and the respective budgetary comparison for the General Fund and each of the major special revenue funds for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As discussed in Note 1 and Note 21 to the financial statements, the City has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 84, Fiduciary Activities, which has resulted in restatements of the net position and fund balance as of July 1, 2020. In addition, as further described in Note 21, the City converted certain governmental fund balances to Internal Service Funds as of July 1, 2020. Our opinions are not modified with respect to these matters.

Other Matters

Required Supplementary Information
ĐĐŽƵŶƚŝŶŐƉƌŝŶĐŝƉůĞƐŐĞŶĞƌĂůůLJĂĐĐĞƉƚĞĚŝŶƚŚĞhŶŝƚĞĚ^ƚĂƚĞƐŽĨŵĞƌŝĐĂƌĞƋƵŝƌĞƚŚĂƚƚŚĞŵĂŶĂŐĞŵĞŶƚ͛Ɛ discussion and analysis, schedules of chĂŶŐĞƐŝŶƚŚĞŝƚLJ͛ƐŶĞƚƉĞŶƐŝŽŶůŝĂďŝůŝƚLJĂŶĚƌĞůĂƚĞĚƌĂƚŝŽƐ͕ schedule of contributions, schedules of changes in net OPEB liability and related ratios, and schedule of investment returns as listed in the table of contents be presented to supplement the basic financial statements. Such 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 financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and ĐŽŵƉĂƌŝŶŐƚŚĞŝŶĨŽƌŵĂƚŝŽŶĨŽƌĐŽŶƐŝƐƚĞŶĐLJǁŝƚŚŵĂŶĂŐĞŵĞŶƚ͛ƐƌĞƐƉŽŶƐĞƐƚŽŽƵƌŝŶƋƵŝƌŝĞƐ͕ƚŚĞďĂƐŝĐ financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that ĐŽůůĞĐƚŝǀĞůLJĐŽŵƉƌŝƐĞƚŚĞŝƚLJ͛ƐďĂƐŝĐĨŝŶĂŶĐŝĂůƐƚĂƚĞŵĞŶƚƐ͘dŚĞŝŶƚƌŽĚƵĐƚŽƌLJƐĞĐƚŝŽŶ͕ĐŽŵďŝŶŝŶŐĂŶĚ individual nonmajor fund financial statements and schedules, statistical section and other information are presented for purposes of additional analysis and are not a required part of the financial statements.

The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such 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 auditing standards generally accepted in the United 2 States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

The introductory, statistical section, and other information have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 13, ϮϬϮϮ͕ŽŶŽƵƌĐŽŶƐŝĚĞƌĂƚŝŽŶŽĨƚŚĞŝƚLJ͛ƐŝŶƚĞƌŶĂůĐŽntrol 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 ĞĨĨĞĐƚŝǀĞŶĞƐƐŽĨƚŚĞŝƚLJ͛ƐŝŶƚĞƌŶĂůĐŽŶƚƌŽůŽǀĞƌĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŝŶŐŽƌŽŶĐŽŵƉůŝĂŶĐĞ͘dŚĂƚƌĞƉŽƌƚŝƐĂŶ integral part of an audit performed in accordance with Government Auditing Standards in considering ƚŚĞŝƚLJ͛ƐŝŶƚĞƌŶĂůĐŽŶƚƌŽůŽǀĞƌĨŝŶĂŶĐŝĂůƌĞƉŽƌƚŝŶŐĂŶĚĐŽŵƉůŝĂŶĐĞ͘

Rancho Cucamonga, California
April 13, 2022
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City of Palmdale
Management's Discussion and Analysis
As management of the City of Palmdale, we offer readers of the City of Palmdale's financial statements this narrative overview and analysis of the financial activities of the City of Palmdale for the Fiscal Year Ended June 30, 2021. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i through xii of this report.

Financial Highlights
 The Assets and Deferred Outflows of Resources of the City of Palmdale exceeded its Liabilities and Deferred Inflow s of Resources at the close of Fiscal Year Ending June 30, 2021, resulting in a Total Net Position of Governmental Activities of $881,020,099. The City’s Change in Net Position of Government Activities increased in Fiscal Year 2021-20 by $14,323,192 or 1.7 percent. Further details on reported Fiscal Year Net Position are discussed on page 7.  Included in the Statement of Net Position, the Total Net Position amount was a result of Total Assets increased to $1,045,290,138; Deferred Outflows of Resources reported a balance of $8,418,280 or an increase of 20.5 percent to $1,431,666; Total Liabilities increased by 9.1 percent to $172,500,224; and Deferred Inflows of Resources decreased by 80.1 percent to $188,095.
 Within Total Net Position, the Net Investment in Capital Assets was reported as $635,725,018, Restricted Net Position was reported as $206,139,337, and Unrestricted Net Position reported as $39,155,744. Unrestricted Net Position decreased b y 12.1 p ercent and may be used to meet the government's ongoing obligations to citizens and creditors.
 As of the close of Fiscal Year 2020-21, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $268,337,436, an increase of $18,262,462 in comparison with the Prior Year. Of the Total Ending Fund Balance of $268,479,336, the General Fund Balance was $58,501,266 o r a decrease o f $7,909,288 from the prior fiscal year. Of the $58,501,266 General Fund Balance, Nonspendable Fund Balance was $2,390,368, Restricted Fund Balance was $2,923,365, Assigned Fund Balance was $21,456,286 and Unassigned Fund Balance was $31,731,246.

Details are discussed on page 18.
 The City of Palmdale's Total Long-Term Liabilities decreased by $4,597,874 or 5.4 percent, during the Fiscal Year Ended June 30, 2021. The decrease is due to regular debt service pay ments that have reduced outstanding obligations and small obligations added during the Fiscal Year. During Fiscal Year 2020-21, Additions and Retirements offsetting the decrease in liabilities included:
 Compensated Absences Additions of $1,955,130 and Retirements of $1,510,161;  Self-Insurance Liability Claims Additions of $3,430,798 and Retirements of $2,929,609;  Lease Payable Additions of $518,936 and Retirements of $167,852;  Bonds Payable Additions of $13,584,908 and Retirements of $18,531,754; and  Note Payable Additions of $116,203 and Retirements of $1,064,372 4 City of Palmdale
Management's Discussion and Analysis
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Palmdale's basic financial statements. The City of Palmdale's basic financial statements are comprised of three components:
(1) Government-Wide Financial Statements,
(2) Fund Financial Statements, and
(3) Notes to the Financial Statements.

Government-Wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the City of Palmdale's finances, in a manner similar to a private-sector business. General Fund and Special Revenue Funds are the two types of governmental funds that will present financial statements in this grouping. General Fund is primarily an operating fund that is classified as a Major Fund. Special Revenue Funds are used to account for specific revenues that are restricted or committed to a specific program.

The Statement of Net Position presents information on all of the City of Palmdale's Assets, Deferred Outflows of Resources, Liabilities and Deferred Inflows of Resources, with the difference reported as Net Position. Over time, increases or decreases in Net Position may serve as a useful indicator of whether the financial position of the City of Palmdale is improving or deteriorating.

The Statement of Activities presents information showing how the government's Net Position changed during the most recent fiscal year. All changes in Net Position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Therefore, Revenues and Expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).

Both of the Government-Wide Financial Statements distinguish functions of the City of Palmdale that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Palmdale include General Government, Public Safety, Public Services, Community Development, Cultural and Recreational, Health and Welfare, and Interest on Debt. During the Fiscal Year, the City did not operate any business-type activities.

The Government-Wide Financial Statements include not only the City of Palmdale as the primary government, but also a legally separate Palmdale Civic Authority, Palmdale Financing Authority, Housing Authority of the City of Palmdale, Palmdale Community Foundation, and Industrial Development Authority of the City of Palmdale. Financial information for these component units is reported on a blended basis. The governm ent-wide financial statements can be found on pages 15-16 of this report.

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

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

Because the focus of Governmental Funds is narrower than that of the Government-Wide Financial Statements, it is useful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the Government-Wide Financial Statements. By d oing so, the readers may better understand the long-term impact of the government's near-term financing decisions. The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances, provide a reconciliation to facilitate this comparison between Governmental Funds and Governmental Activities. The Governmental Fund Statements can be found on pages 18 - 20. 5 City of Palmdale
Management's Discussion and Analysis
The City of Palmdale maintains 39 individual Governmental Funds. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund, the Housing Authority-Housing Asset Fund Special Revenue Fund, the Housing Authority- Facilities Fund Special Revenue Fund, and the American Rescue Plan Act Fund (ARPA), all of which are considered to be major funds. Data from the remaining 35 governmental funds are combined into a single, aggregated presentation. Individual fund data for these non-major governmental funds is provided in the form of combining statements on pages 96 - 146.

The City of Palmdale adopts an annual appropriated budget for its General Fund, its Housing Authority - Housing Asset Fund - Special Revenue Fund, and its Housing Authority Facilities Fund – Special Revenue Fund. A budgetary comparison statement has been provided for each of these funds to demonstrate compliance with their respective budgets. The ARPA fund has no budget this year as there were no expenditures. The budgetary comparison statements can be found on pages 22 - 23.

Proprietary Funds. Proprietary funds are used to account for activities that receive significant support from fees and charges.

The resources of those funds are solely to support the City of Palmdale's own programs. The basic Proprietary Fund Financial Statement can be found on pages 25 - 26.

Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside the government.

Fiduciary funds are not reflected in the Government-Wide financial statements because the resources of those funds are not available to support the City of Palmdale's own programs. The basic Fiduciary Fund Financial Statement can be found on pages 29 of this report.

Notes to the Financial Statements. The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Fund Financial Statements. The Notes Section provides greater detail on Significant Accounting Policies, Cash and Investments, capitalization consistency, fiscal activities and debt service. Generally accepted accounting principles are used to create the City’s financial statements and the Notes Section helps the reader to understand the objective of the financial reporting. The Notes can be found on pages 31 - 88 of this report.

Government-Wide Financial Analysis
As noted earlier, Net Position may serve over time as a useful indicator of a government's financial position. In the case of the City of Palmdale, Assets and Deferred Outflows of Resources exceeded Liabilities and Deferred Inflows of Resources by $881,020,099 as of June 30, 2021.

The City of Palmdale’s Net Investment in Capital Assets reflects a balance of $635,725,018. Investment in capital assets is defined as land, buildings, machinery and equipment, infrastructure, and construction in progress, net of Accumulated Depreciation, and less any related debt or deferred outflows of resources used to acquire these assets that is still outstanding.

The City of Palmdale capital assets are used to provide services to citizens; consequently, these assets are not available for future spending. And, although the City of Palmdale's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources and the capital assets themselves cannot be used to liquidate these liabilities.

In addition, the City has reported the City’s Net Pension Liability and related Deferred Inflows and Outflows in the City’s Financial Statements. Additional detailed information can be found in Note (15) of the Notes to the Financial Statements.

Separate sections are included and report:
 Total Assets totaling $1,045,290,138 as a sum of Current and Other Assets of $335,823,171 and Capital Assets of $709,466,967.
 Deferred Outflows of Resources totaling $8,418,280 as a sum of Pension Related Amounts for a future period totaling $7,833,049 a nd Other Postemployment Benefits Related Amounts totaling $585,231. This section represents a consumption of net position that applies to a future period.  Total Liabilities totaling $172,500,224 a s a sum of Long-Term Liabilities Outstanding of $79,874,282 a nd Other Liabilities of $92,625,942.
 Total Deferred Inflows of Resources totaling $188,095 a s Other Postemployment Benefit Related Amounts of $188,095. The Deferred Inflows Related to Pension Liability is the result of GASB 68 and will be recognized in the 6 City of Palmdale
Management's Discussion and Analysis
subsequent measurement period.
 Total Net Position reported totaling $881,020,099 r epresents a sum of the Net Investment in Capital Assets $635,725,018; Restricted Net Position of $206,139,337; and Unrestricted Net Position of $39,155,744.

Total Deferred Outflows of Resources related to pension amounts are not reported on the Governmental Funds Balance Sheet and are further explained in Note (15) of the Notes to the Financial Statements. The Deferred Outflows of Resources that represent a consumption of Net Position that applies to a future period in the amount of $7,833,049 is reported in accordance with GASB 68.

Total Deferred Inflows of Resources related to pension are not reported on the Governmental Funds Balance Sheet and are further explained in Note (Note 15.) of the Notes to the Financial Statements. This section is the result of GASB 68 and w ill be recognized in the subsequent measurement period in a separate section.

City of Palmdale's Net Position
Governmental
Activities
2021
Governmental
Activities
2020
Assets
Current and other assets $ 335,823,171 $ 293,986,765
Capital assets 709,466,967 724,855,267
Total assets 1,045,290,138 1,018,842,032
Pension related amounts 7,833,049 6,658,786
Other postemployment benefits related amounts 585,231 327,828 Total deferred outflows of resources 8,418,280 6,986,614 Long-term liabilities outstanding 79,874,282 84,472,156 Other liabilities 92,625,942 73,712,541
Total liabilities 172,500,224 158,184,697
Pension related amounts - 911,343
Other postemployment benefits related amounts 188,095 35,699 Total deferred inflows of resources 188,095 947,042
Net position
Net investment in capital assets 635,725,018 649,681,476 Restricted 206,139,337 172,484,623
Unrestricted 39,155,744 44,530,808
Total net position $ 881,020,099 $ 866,696,907
The City of Palmdale's Restricted Net Position of $206,139,337 represents resources that are subject to external restrictions on how they may be used. The Unrestricted Net Position of $39,155,744 m ay be used to meet the government's ongoing obligations to citizens and creditors. The Net Investment in Capital Assets is $635,725,018 and is the amount of capital assets net depreciation. At the end of the Fiscal Year, the City of Palmdale is able to report positive balances in Restricted and Unrestricted categories of Net Position for its governmental activities. 7 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Changes in Net Position
Governmental
Activities
2021
Governmental
Activities
2020
Revenues:

Program Revenues:

Charges for services $ 50,315,044 $ 44,037,573
Operating grants and contributions 3,828,357 9,552,177
Capital grants and contributions 34,148,793 40,280,273
Total Program Revenues 88,292,194 93,870,023
General revenue:

Property taxes 25,981,042 24,442,179
Sales and use taxes 30,305,927 21,587,441
Other Taxes 13,342,001 10,464,058
Unrestricted investment earnings 401,094 1,504,089
Other 1,267,638 673,444
Total General Revenues 71,297,702 58,671,211
Total revenues 159,589,896 152,541,234
Expenses:

General government 23,661,402 19,602,733
Public safety 34,120,577 31,440,137
Public services 64,363,055 60,561,501
Community development 10,337,092 8,673,102
Cultural and recreational 8,681,441 12,643,328
Health and welfare 1,136,316 1,287,612
Interest on long-term debt 2,966,821 2,955,972
Total expenses 145,266,704 137,164,385
Change in Net Position 14,323,192 15,376,849
Net Position, Beginning of Year 866,696,907 851,320,058 Net Position, End of Year $ 881,020,099 $ 866,696,907
8 City of Palmdale
Management's Discussion and Analysis
Governmental Activities. G overnmental activities increased t he City of Palmdale’s net position by $14,323,192 o r 1.65 percent, during the Fiscal Year 2020-21. Key elements of the Governmental activities Net Position increase are as follows:
 Charges for Services increased by $6,277,471 or 14.3 percent primarily due to the Antelope Valley Transit Authority providing funding ($2,082,869) for public safety and Covid-19 preventative measures as Sheriff activity and expenditures increased while the assessment districts revenues increased .  Operating Grants and Contributions decreased by $5,723,820 or 59.9 percent and is primarily due to a reduction in Edison rebates and refunds of $1,952,159 and a decrease in interest earnings from lower valuation of investments as well as various other program reductions.
 Capital Grants and Contribution proceeds decreased by $6,131,480 or 15.2 percent primarily due to a reduction in state grant funds (i.e. Amargosa project completed in 2020 and $6 million received in funding).  The City reported increases in Property Taxes of $1,538,863 or 6.3 percent. The improvement can be attributed to an increase in property values within the City and continued restoration of prior Proposition 8 Property Tax reductions.  Sales Taxes increased b y $8,718,486 o r 40.4 p ercent over the prior year primarily due to introducing a voter- approved local transactions and use tax (Measure AV) that became effective on April 1, 2021 and produced $5,188,745 in additional sales tax for the City.
 Other Taxes increased b y $2,877,943 o r 27.5 p ercent as a result of increases in collections of Franchise Taxes, Transient Occupancy Taxes, Property Transfer Taxes and Business Licenses Fees, as a result of Post-Covid-19 pandemic.
 The City’s Unrestricted Investment Earnings decreased by $1,102,995 as the result of declining interest rates due to the economic downturn that continues Post-Covid-19 pandemic.  Other Revenue increased by $594,194 or 88.2 percent.
 General Government expenses increased by $4,058,669, or 20.7 percent primarily due to increases in asset write-offs, salary increases due to increase in City staff, as well as increases in health insurance claims paid during the Fiscal Year.
 Public Safety expenses increased $2,680,440 o r 8.5 p ercent. This is largely due to the budgeted increase in the County Sheriff’s contract for services.
 Public Service expenses increased $3,801,554 or 6.3 percent.  Community Development expenses increased $1,663,990 or 19.2 percent.  Cultural and Recreational expenses decreased $3,961,887 or 31.3 percent.  Health and Welfare expenses decreased $151,296.
 Interest on Long-Term Debt increased by $10,849 or 0.4 percent. 9 City of Palmdale
Management's Discussion and Analysis
Program Expenses and Program Revenues-Governmental Activities The Statement of Activities reflects total expenses of $145,266,704. Total Revenues in the Statement of Activities for the Year Ended June 30, 2021 were $159,589,896. Of this amount, $88,292,194 of the resources came from Program Revenues, and $71,297,702 came from General Revenues received by the government. The largest revenues are Charges for Services, followed by Capital Grants and Contributions, Sales Tax, Property Taxes, and Other Taxes. 10 City of Palmdale
Management's Discussion and Analysis
Revenues by Source-Governmental Activities
Financial Analysis of the Government's Funds
As noted earlier, the City of Palmdale uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Governmental Funds The focus of the City of Palmdale's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Palmdale's financing requirements. In particular, fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.

As of the end of the Fiscal Year 2020-21, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $268,479,336, an increase of $18,404,362 over the prior year. The General Fund is the chief operating fund of the City of Palmdale. At the end of Fiscal Year 2020-21, the Total Fund Balance of the General Fund was $58,501,266. Of the Total Fund Balance:
 Nonspendable Fund Balance totaled $2,390,368. “Nonspendable” because the resources are not in a spendable form (i.e., prepaids, long-term receivables, or non-financial assets held for resale).Nonspendable Fund Balance includes Advances totaling $577,136; Deposits and Prepaids totaling $570,903; and Notes and Liens totaling $1,242,143. 11 City of Palmdale
Management's Discussion and Analysis
 Restricted Fund Balance t otaling $2,923,365. “Restricted” due to the existence of externally enforceable legal restrictions that are related primarily to special revenue funding sources and debt service reserves. Restricted Fund Balance includes City Investments of 2,923,365.
 Assigned Fund Balance totaling $21,456,286. “Assigned” for specific purposes such as Continuing Appropriations, Encumbrances, Compensated Absences, Self-Insurance and Health Insurance Claims, and Capital Projects. Assigned Fund Balance includes Compensated Absences totaling $2,642,732; Self-Insurance Claims totaling $1,590,497; Health Insurance obligations totaling $6,223,057; and Assigned for Capital Projects $11,000,000.  Unassigned Fund Balance t otaling $31,731,246. “Unassigned” and represents residual resources that cannot be properly classified in one of the other fund balance categories.

As a measure of the General Fund's liquidity, it may be useful to compare both Unassigned and Total Fund Balance to Total Fund Expenditures. At the end of the Fiscal Year 2020-21 the Unassigned Fund Balance in the General Fund is

54.2 percent of Total Fund Balance for the General Fund and 44.1 percent of Total General Fund Expenditures.

The Housing Authority - Housing Asset Fund has a Fund Balance of $50,817,162 a nd is restricted for low a nd moderate- income housing purposes. This Fund is used to record the assets formally held by the Community Redevelopment Agency Low and Moderate Income Housing Fund. The assets that were approved by the State Department of Finance to be retained by the Low and Moderate Housing Fund were transferred to the Housing Authority-Housing Asset Fund as the City has control of those assets, which may be used in accordance affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code 34176.1. The housing asset fund balance decreased by $1,233,372 in the Fiscal Year 2020-21, primarily due to cost and expenditures exceeding program revenue.

The Housing Authority – Facilities Fund is used to account for revenues and expenditures related to the operation of three mobile home parks, four apartments, and two multi-residential properties who were separate funds and were consolidated into one fund in 2021. The total fund balance was at a deficit of $5,081,605. The deficit was reduced by $1,563,998 as the result of a decline in operating expenditures and capital outlay.

General Fund Budgetary Highlights
Differences between original budget and final amended budget resulted in a increase of appropriations by $- as a result of an adjustment in budget needs in operating expenses primarily in General Government. Differences between final amended budget and actual resulted in a $- decrease in appropriations and can be briefly summarized as follows:
 $4,104,764 decrease in General Governmental expenditures.  $887,826 decrease in Public Safety expenditures.
 $1,016,718 decrease in Public Services expenditures.
 $776,508 decrease in Community Development program expenditures.  $1,313,431 decrease in Cultural and Recreational program expenditures.  $8,766,123 decrease in capital outlay expenditures.
 $9,956 increase in Debt Service Principal and Interest These decreases are due to not only Expenditures coming in less than anticipated but also the result of activities that were budgeted but not completed during Fiscal Year 2020-21 ( many were carried forward as encumbrances and continuing appropriations) and reclassifying activities to Special Revenue Funds to comply with GASB 54. Overall, the reclassifying of Expenditures resulted in a reduction of transfers in and offsetting reduction to expenditures. See Note (1). 12 City of Palmdale
Management's Discussion and Analysis
Capital Assets and Debt Administration
Capital Assets. The City of Palmdale's investment in capital assets for Governmental Activities as of June 30, 2021, amounts to $709,466,967 ( Net of Accumulated Depreciation). This investment in capital assets includes land, buildings and structures, improvements, machinery and equipment, infrastructure and construction in progress. The Capital Assets decreased by $15,388,300 in Fiscal Year 2020-21 as compared to prior year.

City of Palmdale's Capital Assets (Net of Depreciation) Governmental
Activities 2021
Governmental
Activities 2020
Land and improvements $ 119,295,459 $ 118,620,564
Intangible Assets 494,874 153,090
Construction in progress 30,360,348 51,759,180
Buildings and structures 53,788,945 55,836,667
Improvements other than buildings 1,339,882 -
Infrastructure 499,855,398 494,899,377
Machinery and equipment 4,332,061 3,586,389
$ 709,466,967 $ 724,855,267
Major capital asset events during the current fiscal year included the following:
 Additions of Land and Improvements totaling $674,895.  Additions of Construction In Progress totaling $23,276,957.  Additions of Building and Structures totaling $1,096,281.  Additions of Machinery and Equipment totaling $1,580,153.  Additions of Infrastructure Improvement totaling $39,686,129.  Additions of Total Accumulated Depreciation totaling $37,440,871.  Deletions of Depreciated and Non-Depreciated Assets totaling $44,674,874.

Additional information on the City of Palmdale's capital assets can be found on page 52, Note (10).

Long-Term Debt. At the end of the current fiscal year, the City of Palmdale had total bonded debt outstanding of $56,284,908.

The Mortgage Revenue Bonds are secured by pledges of net revenue received from the operation of the Housing Facilities.

Certificates of Participation and Lease Revenue Bonds require the City to pay a semi-annual base rental to the Palmdale Civic Authority (PCA) and the Palmdale Financing Authority (PFA). The rentals will be used by the PCA and PFA to pay debt service as the Certificates of Participation and Lease Revenue Bonds come due.

City of Palmdale's Outstanding Debt
Revenue Bonds, Certificates of Participation, Loans, and Leases Governmental
Activities 2021
Governmental
Activities 2020
Revenue Bonds $ 18,800,000 $ 20,465,000
Mortgage Revenue Bonds 3,835,000 3,925,000
Certificates of Participation 33,649,908 36,655,000
Bond Premiums 478,047 664,801
Loans & direct borrowings 15,035,845 15,984,014
Leases 1,183,277 832,294
Total $ 72,982,077 $ 78,526,109
13 City of Palmdale
Management's Discussion and Analysis
The City of Palmdale’s Total Long-Term Liabilities total was $72,982,077 o f which $18,800,000 w as Revenue Bonds, Mortgage Revenue Bonds, Certificates of Participation and Bond Premiums as noted on the schedule above.

The remainder of the debt was comprised of Capital Leases Payable for Equipment Leases totaling $1,183,277; Notes Payable for Street Light Acquisition totaling $9,998,228; Section 108 HUD Loan totaling $1,861,000; HOME Loan totaling $2,850,000; SCE Parks LED Retrofit OBF A-5963 totaling $147,489; SCE LED Retrofit OBF A-5806 totaling $9,681; SCE LED Retrofit OBF A-5807 totaling $50,407; SCE LED Retrofit OBF A-5808 totaling $5,449; SCE LED Retrofit OBF A-5809 totaling $2,489, and SCE LED Retrofit OBF A-7251 totaling $111,102.

Additional information on the City of Palmdale's long-term debt can be found on page 54, Note (12).

Economic Factors and Next Year's Budget
The City took into consideration the following factors in preparing the budget for the 2021-22 fiscal year:
 Economic downturn as a result of Covid-19 Pandemic.
 Positive Property tax increases as property values increase.  Continued slow paced growth in housing development.
 Reductions in Sales Tax revenue and possibly Measure AV.  Conservative escalators and only add known future development.  Implementing Fee Structures that align revenues with cost-recovery objectives.  Using onetime revenues for onetime expenditures.
 Building reserves for future capital replacements and economic uncertainties.  Prefunding retiree pension cost.
 City funds impacted by State and Federal budget actions.

While Actual Fiscal Year 2020-21 revenue growth in tax collections were above estimates, staff continues to follow a moderate approach to protecting these revenues due to the unknown impact of the Covid-19 Pandemic. Staff will continue to monitor actual revenues versus projections and provide any needed mid-year adjustments.

The dissolution of redevelopment (legislation AB x 126 and AB-1484) has and w ill continue to impact the City for a number of years. As of July 1, 2018, Los Angeles County consolidated the oversight boards and committees of each agency that contains the Successor Agency to the former Redevelopment Agency to administer the obligations of the former Redevelopment Agency until they are fully satisfied. This board consists of five districts segregated out based on the area maps within Los Angeles County. The City of Palmdale falls under the Fifth District the City and Successor Agency have been responding to the reporting requirement with Los Angeles Consolidated Oversight Board. Additional information can be found in Note (18).

Requests for Information
This financial report is designed to provide a general overview of the City of Palmdale's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report, requests for any of the separately issued component unit financial statements or additional financial information should be addressed to the City of Palmdale, City Manager’s Office – Finance Division, 38300 Sierra Highway, Suite D, Palmdale, California, 93550. 14 This page intentionally left blank
City of Palmdale
Statement of Net Position
June 30, 2021
Governmental
Activities
Assets
Cash $ 3,129,757
Investments 242,822,140
Accounts Receivable 17,611,837
Interest receivable 11,696,546
Property tax receivable 544,151
Due from other governmental units 12,291,387
Notes and liens 35,025,089
Deposits and prepaids 581,687
Land held for development 2,070,652
Restricted assets:

Cash and Investments 10,049,925
Capital assets:

Not being depreciated:

Land and improvements 119,295,459
Water credit CFD 16-1 494,874
Construction in progress 30,360,348
Being depreciated, net of accumulated depreciation:

Buildings and structures 53,788,945
Machinery, equipment, and other improvements 4,332,061
Improvements other than buildings 1,339,882
Infrastructure 499,855,398
Total assets 1,045,290,138
Deferred outflows of resources
Pension related amounts 7,833,049
Other postemployment benefits related amounts 585,231
Total deferred outflows of resources 8,418,280
Liabilities
Accounts payable 10,826,459
Accrued salaries and employee benefits 1,517,332
Due to other governmental units 3,815
Deposits 5,257,252
Accrued interest payable 1,689,233
Unearned Revenue 21,714,735
Noncurrent liabilities:

Due within one year 8,261,628
Due In more than one year 71,612,653
Net pension liability 51,524,094
Net OPEB liability 93,023
Total liabilities 172,500,224
Deferred Inflows of Resources
Other postemployment benefits related amounts 188,095
Net Position
Net investment in capital assets 635,725,018
Restricted
Public safety 7,688,170
Public services 136,065,559
Community development 59,000,925
Debt service 1,080,872
Culture and recreation 2,303,811
Unrestricted 39,155,744
Total net position $ 881,020,099
See Notes to Financial Statements
15 City of Palmdale
Statement of Activities
For the Year Ended June 30, 2021
Program Revenues Net (Expenses)
Operating Capital Revenue and
Expenses
Charges for
Services
Grants and
Contributions
Grants and
Contributions
Change in
Net Position
Governmental activities:

General government $ 23,661,402 $ 8,697,930 $ 234,247 $ 1,935,252 $ (12,793,973) Public safety 34,120,577 3,352,082 1,801 - (30,766,694) Public services 64,363,055 23,981,954 346,224 32,111,564 (7,923,313) Community development 10,337,092 8,177,023 3,006,215 101,977 948,123 Cultural and recreational 8,681,441 5,885,950 99,195 - (2,696,296) Health and welfare 1,136,316 220,105 140,675 - (775,536) Interest on long-term debt 2,966,821 - - - (2,966,821)
Total governmental activities $ 145,266,704 $ 50,315,044 $ 3,828,357 $ 34,148,793 $ (56,974,510) General revenue:

Taxes:

Property taxes $ 25,981,042
Sales and use taxes 30,305,927
Unrestricted motor vehicle in lieu 114,956
Franchise taxes 7,441,119
Transient occupancy taxes 4,667,137
Property Transfer Taxes 650,123
Business license taxes 468,666
Unrestricted investment earnings 401,094
Other 1,267,638
Total general revenues 71,297,702
Change in Net Position 14,323,192
Net Position - Beginning of Year 866,696,907
Net Position - End of Year $ 881,020,099
See Notes to Financial Statements
16 City of Palmdale
Governmental Fund Financial Statements
For the Year Ended June 30, 2021
The General Fund – i s the City’s primary operating fund and has been classified as a major fund. It accounts for all financial resources of the general government that are not already required legally or by sound financial management to be accounted for in another fund.

Special Revenue Funds – a re used to account for specific revenues that are restricted or committed to expenditure for a specific purpose other than debt service or capital projects. The following funds have been classified as major funds:

Housing Authority (HA) Housing Asset Fund – U sed to account for the restricted housing assets of the former CRA Housing Development Fund, which were transferred to the Successor Agency Fund and then transferred to the Housing Authority – Housing Asset Fund upon acceptance of the Housing Successor role by the City. Revenues received from assets previously held by the former CRA Housing Development Fund are restricted to be used in accordance with affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code Section 34176.1.

Housing Authority (HA) Facilities Fund - This fund is used to account for revenues and expenditures restricted to the operations of three mobile home parks. four apartments and one apartment consisting of two buildings with 4 units each. This fund is a combination of the previous funds the accounted for the operations of the mobile home parks, apartments, and two building units in order to consolidate the Housing Authority-owned properties and its activities in 2021.

American Rescue Plan Act (ARPA) Fund - This fund is used to account for the revenues and expenditures in order to respond to the Coronavirus (Covid-19) post-pandemic effects on the City.

See Notes to Financial Statements
17 City of Palmdale
Balance Sheet - Governmental Funds
June 30, 2021
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Assets:

Cash and Cash Equivalents $ 377,961 $ - $ 2,505,509 $ - $ 253,909 $ 3,137,379 Investments 52,492,204 10,847,776 1,548,073 17,722,510 154,204,353 236,814,916 Receivables:

Accounts and interest receivable 7,221,927 4,456,061 129,822 - 17,496,268 29,304,078 Property tax receivable 491,668 - - - 52,483 544,151
Due from other funds 681,999 - - - 1,322,906 2,004,905
Due from agency funds 74,071 - - - - 74,071
Advances due from fiduciary funds 577,136 5,409,777 - - 583,859 6,570,772 Due from other governmental units 5,646,544 - - - - 5,646,544 Notes and Liens 1,242,329 23,793,653 - - 9,989,107 35,025,089 Interfund promissory note - 8,376,667 - - - 8,376,667
Advances due from other funds 5,000,000 1,186,001 - - 4,400,000 10,586,001 Deposits and prepaid 570,903 - 9,670 - 1,114 581,687
Restricted Assets:

Investments 2,923,365 3,018,542 - - 2,771,354 8,713,261 Cash and Cash Equivalents - - 1,352,704 - - 1,352,704
Land held for development - 2,070,652 - - - 2,070,652
Total assets $ 77,300,107 $ 59,159,129 $ 5,545,778 $ 17,722,510 $ 191,075,353 $ 350,802,877 Liabilities, Deferred Inflows of Resources and Fund
Balances
Liabilities:

Accounts payable 8,395,025 46,776 690,668 - 3,017,168 12,149,637 Due to fiduciary funds 2,250 - - - 1,565 3,815
Due to other funds - 14,771 - - 1,990,134 2,004,905
Self insurance liability 1,462,969 - - - - 1,462,969
Advances due to other funds - - 1,186,001 - 9,400,000 10,586,001 Interfund promissory note - - 8,376,667 - - 8,376,667
Deposits 3,104,125 - 374,047 - 1,779,080 5,257,252
Unearned revenue 60,225 3,932,000 - 17,722,510 - 21,714,735 Notes payable 258,591 - - - 68,026 326,617
Total liabilities 13,283,185 3,993,547 10,627,383 17,722,510 16,255,973 61,882,598 Deferred Inflows of Resources
Unavailable revenue 5,515,657 4,348,418 - - 10,718,768 20,582,843 Total deferred inflows of resources 5,515,657 4,348,418 - - 10,718,768 20,582,843 Fund Balances
Nonspendable 2,390,368 - - - - 2,390,368
Restricted 2,923,365 50,817,164 - - 164,867,889 218,608,418 Assigned 21,456,286 - - - - 21,456,286
Unassigned 31,731,246 - (5,081,605) - (767,277) 25,882,364 Total fund balances (deficits) 58,501,265 50,817,164 (5,081,605) - 164,100,612 268,337,436 Total liabilities, deferred inflows of resources and
fund balances $ 77,300,107 $ 59,159,129 $ 5,545,778 $ 17,722,510 $ 191,075,353 $ 350,802,877 See Notes to Financial Statements
18 City of Palmdale
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Year Ended June 30, 2021
Fund Balances - Total Governmental Funds $ 268,337,436
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not current financial resources and therefore are not reported in the Governmental Funds Balance Sheet.

Governmental capital assets 1,389,948,942
Less accumulated depreciation (684,049,120) 705,899,822 The Net OPEB Liabilities reported in governmental activities is not a current financial resource and therefore is not reported in the funds. (93,023) Accounts receivable not available to pay for current-period expenditures are unavailable in the funds. 20,582,843
Interest due on long-term debt do not require current financial resources and therefore are not reported as a liability in the Governmental Funds Balance Sheet.

Interest payable (1,689,233)
Deferred Outflows related to pensions and OPEB benefits are not reported in the Governmental Fund Balance Sheet.

Deferred outflows related to pensions 9,375,335
Deferred outflows related to OPEB benefits 585,231
Long-Term Liabilities are not due and payable in the current period and therefore are not reported as a liability in the Governmental Funds Balance Sheet.

Compensated absences (3,838,737)
Claims payable (1,590,497)
Net pension liability (51,524,094)
Capital leases payable (1,183,278)
Notes payable (14,709,228)
Bonds & certificates of participation payable (56,284,908) Plus issuance premiums (478,047) (129,608,789)
Deferred Inflows related to pensions and OPEB benefits are not reported in the Governmental Funds Balance Sheet.

Deferred inflows related to pensions (1,542,286)
Deferred inflows related to OPEB benefits (188,095)
Internal service fund net position 9,360,858
Net Position of Governmental Activities $ 881,020,099
See Notes to Financial Statements
19 City of Palmdale
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Year Ended June 30, 2021
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Revenues:

Property taxes $ 26,631,165 $ - $ - $ - $ - $ 26,631,165 Sales Taxes 25,117,182 - - - 5,188,745 30,305,927
Other Taxes 11,988,673 - - - 4,516,585 16,505,258
Subventions and grants - - - - 28,048,936 28,048,936
Park development fees - - - - 2,089,872 2,089,872
Licenses and Permits 3,277,537 - - - 107,606 3,385,143
Motor vehicle license fees 114,956 - - - - 114,956
Fines and forfeitures 490,283 - - - 243,159 733,442
Special Assessments - - - - 19,505,242 19,505,242
Use of property 706,422 - 7,496,262 - - 8,202,684
Charges for current services 6,970,821 296,969 - - 1,061,103 8,328,893 Drainage fees - - - - 2,194,296 2,194,296
Traffic impact fees - - - - 806,342 806,342
Facilities impact fees - - - - 1,380,206 1,380,206
Interfund interest - 403,797 - - 36,868 440,665
Interest 343,673 95,401 8,471 - 755,663 1,203,208
Net increase (decrease) in fair value of investments 66,088 (37,489) (5,738) - (505,918) (483,057) Developer contributions - - - - 18,950 18,950
State contributions 166,800 - - - 764,639 931,439
Other agency contributions - - - - 2,215,098 2,215,098
County contributions - - - - 340,695 340,695
Other 3,203,785 28,117 - - 496,340 3,728,242
Total revenues 79,077,385 786,795 7,498,995 - 69,264,427 156,627,602 Expenditures:

Current:

General Government 16,568,016 - - - 1,229,671 17,797,687 Public safety 33,176,694 - - - 438,595 33,615,289
Public services 10,241,582 - - - 18,213,857 28,455,439
Community development 1,631,892 1,924,663 4,979,122 - 852,406 9,388,083 Cultural and recreational 6,172,669 - - - 1,197,007 7,369,676 Health and welfare - - - - 1,088,504 1,088,504
Capital Outlay 1,687,577 5,321 331,081 - 22,555,572 24,579,551 Debt service:

Principal 1,467,948 - 90,000 - 3,207,006 4,764,954
Interest 806,708 - 185,658 - 2,060,081 3,052,447
Interfund interest 266,000 - 403,797 - 36,868 706,665
Cost of Issuance - - - - 141,893 141,893
Total expenditures 72,019,086 1,929,984 5,989,658 - 51,021,460 130,960,188 Excess (deficiency) of revenues over (under)
expenditures 7,058,299 (1,143,189) 1,509,337 - 18,242,967 25,667,414 Other Financing Sources (Uses)
Transfers In 4,295,669 5,339 60,000 - 38,046,568 42,407,576 Transfers Out (19,782,094) (95,520) (5,339) - (29,089,720) (48,972,673) Issuance of Long-Term Debt 518,836 - - - 13,584,908 14,103,744 Payment to Refunding Bond Escrow Agent - - - - (14,943,599) (14,943,599) Total other financing sources (uses) (14,967,589) (90,181) 54,661 - 7,598,157 (7,404,952) Net Change in Fund Balances (7,909,290) (1,233,370) 1,563,998 - 25,841,124 18,262,462 Fund Balances (Deficit) - Beginning of Year 66,410,555 52,050,534 (6,645,603) - 138,259,488 250,074,974 Fund Balances (Deficit) - End of Year $ 58,501,265 $ 50,817,164 $ (5,081,605) $ - $ 164,100,612 $ 268,337,436 See Notes to Financial Statements
20 City of Palmdale
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2021
Net Change in Fund Balances - Total Governmental Funds $ 18,262,462 Amounts reported for governmental activities in the statement of activities are different because:

Governmental Funds report capital outlays as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets is allocated over their estimated useful lives and recorded as depreciation expense. This is the amount by which capital outlays exceeded depreciation in the current period.

Capital Asset additions and other adjustments - Current year 20,902,868 Less depreciation expense (36,721,488) (15,818,620)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.

Grant revenues earned, but not received within the 60-day accrual period 3,614,350 Long-term debt issuance provide current financial resources to Governmental Funds, but issuing debt increases long-term liabilities in the Government-Wide Statement of Net Position. Principal repayments of long-term debt and escrow agent payments are expenditures/uses in the Governmental Funds, but they reduce long-term liabilities in the Government-Wide Statement of Net Position. Also premiums are recognized in the current period in the Governmental Funds, whereas these amounts are amortized in the Government-Wide Statement of Activities. This is the amount by which repayments exceeded proceeds.

Debt Issuance
Bond Proceeds (13,584,908)
Capital Lease Proceeds (518,836)
Principal Repayments:

Capital leases 167,948
Notes payable 1,017,004
Bonds & Certificates of Participation payable 3,580,000 4,764,952 Internal service fund change in net position 5,934,667
Some expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the Governmental Funds.

Compensated absences (444,968)
Self insurance liability claims payable (490,100)
Pension expense (2,474,720)
OPEB expense (155,955)
Accrued interest on debt 97,217
Amortization of bond premiums 194,052
Payment to Refunding Escrow Agent 14,943,599 11,669,125 Change in Net Position of Governmental Activities $ 14,323,192 See Notes to Financial Statements
21 This page intentionally left blank
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Property taxes $ 23,611,500 $ 24,929,700 $ 26,631,165 $ 1,701,465 Sales Taxes 18,524,680 21,979,100 25,117,182 3,138,082
Other Taxes 11,482,700 10,951,900 11,988,673 1,036,773
Subventions and grants 1,000 - - -
Licenses and Permits 1,958,500 2,442,300 3,277,537 835,237 Motor vehicle license fees - - 114,956 114,956
Fines and forfeitures 416,350 539,500 490,283 (49,217)
Use of property 1,085,320 676,700 706,422 29,722
Charges for current services 8,872,880 6,634,700 6,970,821 336,121 Interest 926,200 1,000,200 343,673 (656,527)
Net increase (decrease) in fair value of investments - - 66,088 66,088 State contributions - - 166,800 166,800
Other Revenue 2,901,660 3,286,700 3,203,785 (82,915)
Total revenues 69,780,790 72,440,800 79,077,385 6,636,585 Expenditures:

Current:

General Government 14,202,770 20,672,780 16,568,016 4,104,764 Public safety 34,560,720 34,064,520 33,176,694 887,826
Public services 10,488,470 11,258,300 10,241,582 1,016,718 Community development 1,485,320 2,408,400 1,631,892 776,508 Cultural and recreational 7,672,980 7,486,100 6,172,669 1,313,431 Capital Outlay 164,000 10,453,700 1,687,577 8,766,123
Debt service:

Principal 1,407,630 1,457,900 1,467,948 (10,048)
Interest 799,220 806,800 806,708 92
Interfund interest (81,700) (81,700) 266,000 (347,700)
Total expenditures 70,699,410 88,526,800 72,019,086 16,507,714 Excess (deficiency) of revenues over (under) expenditures (918,620) (16,086,000) 7,058,299 23,144,299 Other Financing Sources (Uses):

Transfers In 4,586,040 21,718,700 4,295,669 (17,423,031) Transfers Out (8,153,990) (40,306,900) (19,782,094) 20,524,806 Issuance of Long-Term Debt - - 518,836 518,836
Capital Contributions (1,000,000) (3,000,000) - 3,000,000 Total other financing sources (uses) (4,567,950) (21,588,200) (14,967,589) 6,620,611 Net Change in Fund Balance (5,486,570) (37,674,200) (7,909,290) 29,764,910 Fund Balance - Beginning of Year 66,410,555 66,410,555 66,410,555 - Fund Balance (Deficit) - End of Year $ 60,923,985 $ 28,736,355 $ 58,501,265 $ 29,764,910 See Notes to Financial Statements
22 City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual HA Housing Asset Fund - Housing Asset Fund Special Revenue Fund Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 167,430 $ 225,600 $ 296,969 $ 71,369 Interfund interest 406,960 407,100 403,797 (3,303)
Interest 750,210 750,300 95,401 (654,899)
Net increase (decrease) in fair value of investments - - (37,489) (37,489) Other Revenue 250,000 2,501,100 28,117 (2,472,983)
Total revenues 1,574,600 3,884,100 786,795 (3,097,305)
Expenditures:

Current:

Community development 2,036,020 6,327,130 1,924,663 4,402,467 Capital Outlay 1,000 6,700 5,321 1,379
Total expenditures 2,037,020 6,333,830 1,929,984 4,403,846 Excess (deficiency) of revenues over (under) expenditures (462,420) (2,449,730) (1,143,189) 1,306,541 Other Financing Sources (Uses):

Transfers In 957,170 957,200 5,339 (951,861)
Transfers Out (55,370) (55,400) (95,520) (40,120)
Total other financing sources (uses) 901,800 901,800 (90,181) (991,981) Net Change in Fund Balance 439,380 (1,547,930) (1,233,370) 314,560 Fund Balance (Deficit) - Beginning of Year 52,050,534 52,050,534 52,050,534 - Fund Balance (Deficit) - End of Year $ 52,489,914 $ 50,502,604 $ 50,817,164 $ 314,560 See Notes to Financial Statements
23 City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Authority Facilities Fund
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Use of property $ 7,311,280 $ 7,522,800 $ 7,496,262 $ (26,538) Interest 4,060 4,000 8,471 4,471
Net increase (decrease) in fair value of investments - - (5,738) (5,738) Total revenues 7,315,340 7,526,800 7,498,995 (27,805)
Expenditures:

Current:

Community development 5,133,220 5,576,900 4,979,122 597,778 Capital Outlay 428,000 322,000 331,081 (9,081)
Debt service:

Principal 90,000 90,100 90,000 100
Interest 185,650 185,700 185,658 42
Interfund interest 406,970 407,100 403,797 3,303
Total expenditures 6,243,840 6,581,800 5,989,658 592,142 Excess (deficiency) of revenues over (under) expenditures 1,071,500 945,000 1,509,337 564,337 Other Financing Sources (Uses):

Transfers In - - 60,000 60,000
Transfers Out (957,170) (957,200) (5,339) 951,861
Total other financing sources (uses) (957,170) (957,200) 54,661 1,011,861 Net Change in Fund Balance 114,330 (12,200) 1,563,998 1,576,198 Fund Balance (Deficit) - Beginning of Year (6,645,603) (6,645,603) (6,645,603) - Fund Balance (Deficit) - End of Year $ (6,531,273) $ (6,657,803) $ (5,081,605) $ 1,576,198 See Notes to Financial Statements
24 This page intentionally left blank
City of Palmdale
Statement of Net Position
Proprietary Funds
June 30, 2021
Internal Service
Funds
Assets
Current Assets
Investments $ 5,983,562
Receivables 16,955
Total current assets 6,000,517
Capital Assets:

Depreciable capital assets:

Vehicles 8,267,919
Equipment 5,509,107
Less accumulated depreciation (10,209,881)
Capital assets, net 3,567,145
Total assets $ 9,567,662
Liabilities
Accounts payable $ 206,804
Total liabilities 206,804
Net Position
Investment in capital assets 3,567,145
Unrestricted 5,793,713
Total net position 9,360,858
Total net position and liabilities $ 9,567,662
See Notes to Financial Statements
25 City of Palmdale
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
Year Ended June 30, 2021
Internal Service
Funds
Operating Revenues:

Charges for current services $ 2,937,340
Other Revenue 46,405
Total operating revenues 2,983,745
Operating Expenses:

Salaries, Wages and Benefits 1,267,436
Material and Supplies 526,682
Utilities 9,730
Administrative 118,450
Depreciation and amortization 719,384
Repairs and Maintenance 967,719
Other Expenditures 2,100
Total operating expenses 3,611,501
Operating income (loss) (627,756)
Nonoperating Revenues (Expenses)
Interest income 7,695
Net realized and unrealized gains (losses) (10,369)
Total nonoperating revenues (expenses) (2,674)
Transfers In 6,565,097
Change in Net Position 5,934,667
Net Position - Beginning of Year -
Prior period adjustment 3,426,191
Net Position - Beginning of Year, Restated 3,426,191
Net Position - End of Year $ 9,360,858
See Notes to Financial Statements
26 City of Palmdale
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2021
Internal Service
Funds
Cash from Operating Activities:

Cash received from interfund services provided $ 2,920,385 Cash paid to employees for services (1,267,437)
Cash paid to suppliers for goods and services (1,417,875) Cash (paid)/received for other services 46,405
Net cash provided (used) by operating activities 281,478 Cash from Non Capital Financing Activities:

Transfers from other funds 6,565,097
Net cash provided (used) by noncapital financing activities 6,565,097 Cash from Capital and Related Financing Activities:

Acquisition and construction of capital assets (860,339) Net cash provided (used) by capital and related financing activities (860,339) Cash from Investing Activities:

Gain/(Loss) on investments (10,369)
Interest income 7,695
Purchase of investments (5,983,562)
Net cash provided (used) by investing activities (5,986,236) Total Cash Flow increase/(decrease) -
Beginning Cash and Cash Equivalents -
Ending Cash and Cash Equivalents -
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income/loss from operating activities (627,757) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation expense 719,384
Changes in assets and liabilities:

Change in accounts receivable (16,955)
Change in accounts payable 206,806
Net cash provided (used) by operating activities: $ 281,478 See Notes to Financial Statements
27 City of Palmdale
Fiduciary Fund Financial Statements
For the Year Ended June 30, 2021
The City’s Fiduciary Funds are Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds. Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds are used to account for assets held by the City in a fiduciary capacity for other governmental units, private organizations, individuals and/or other funds.

Assessment and Community Facilities Districts Fund – T his fund is used to account for receipts and disbursements associated with 1915 Act Assessment Bonds and Special Tax Bonds, which are administered by, but are not the liability of, the City.

Retiree Health Premium Trust Funds – T his fund is used to account for the receipt of City funds held in trust to provide Eligible Retirees with a supplement to reduce their premiums for participating in the City’s Health Plan.

Successor Agency Private-purpose Trust Funds – T his fund is used to account for the assets, liabilities and activities of the former Community Redevelopment Agency of the City of Palmdale in a trustee capacity to pay enforceable obligations of the former Community Redevelopment Agency. As more fully explained at Note 18, on February 1, 2012 in accordance with Assembly Bill (AB X1 26 and 1484) all redevelopment agencies in the State of California were dissolved. Assets and liabilities were transferred to the Successor Agency Private Purpose Trust Fund that is used to account for assets held by the City of Palmdale’s former Redevelopment Agency. The City has agreed to serve as the successor agency to hold the assets until all enforceable obligations of the prior redevelopment agency have been paid in full and they are distributed to other units of state and local government.

See Notes to Financial Statements
28 City of Palmdale
Statement of Fiduciary Net Position - Fiduciary Funds
June 30, 2021
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Assets:

Cash $ - $ 12,080,454 $ 2,000
Cash - OPEB trust money market funds 1,962,022 - -
Mutual funds 3,669,122 - -
Receivables
Property tax receivable - 105 52,085
Interest receivable - 3,530 -
Due from other governmental units - 4,000 1,565
Land held for development - 5,209,768 -
Restricted assets
Cash and investments - 726,105 7,175,428
Interest receivable - - 3,505
Capital assets:

Not being depreciated:

Land - 3,477,722 -
Being depreciated, net of accumulated depreciation:

Buildings and structures - 193,487 -
Total assets $ 5,631,144 $ 21,695,171 $ 7,234,583
Deferred outflows of resources
Deferred loss on refunding - 1,914,378 -
Liabilities:

Accounts payable $ 433,684 $ 28,886 $ 472,581
Advances due to general fund - 577,135 74,071
Due to fiduciary funds - - 1,750
Advances due to City of Palmdale - 5,409,777 583,859
Deposits - - 84,707
Interest payable - 1,210,993 -
Long-term liabilities:

Due within one year - 7,893,681 -
Due in more than one year - 78,191,290 -
Total liabilities 433,684 93,311,762 1,216,968
Net Position
Restricted:

OPEB benefits 5,197,460 - -
Redevelopment dissolution - (69,702,213) -
Held on behalf of others - - 6,017,615
Total net position (deficit) $ 5,197,460 $ (69,702,213) $ 6,017,615 See Notes to Financial Statements
29 City of Palmdale
Statement of Changes in Fiduciary Net Position
Year Ended June 30, 2021
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Additions:

Employer contributions to retiree medical trust $ 128,500 $ - $ - Property taxes - 66,630,451 3,733,052
Investment and interest income 110,297 9,177 21,583
Gain on sale of land - 626,612 -
Net realized and unrealized gains (losses) 548,810 - (14,596) Total additions 787,607 67,266,240 3,740,039
Deductions:

Benefits paid to participants and expenses 623,627 - -
Administrative expense - - 949,160
Community development - 3,929,924 -
Intergovernmental - tax sharing - 52,867,377 -
Depreciation and amortization - 8,763 -
Interest expense - 2,849,752 2,525,449
Payment to refunding bond escrow agent - - 266,024
Total deductions 623,627 59,655,816 3,740,633
Changes in Net Position 163,980 7,610,424 (594)
Net Position (Deficit) at Beginning of Year 5,033,480 (77,312,637) - Prior period adjustment - - 6,018,209
Net Position (Deficit) at Beginning of Year as Restated 5,033,480 (77,312,637) 6,018,209 Net Position (Deficit) at End of Year $ 5,197,460 $ (69,702,213) $ 6,017,615 See Notes to Financial Statements
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Palmdale, California
Year Ended June 30, 202
Notes to the Financial Statements
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City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
1 - Summary of Significant Accounting Policies
A. Description of the Reporting Entity
The City of Palmdale (the City) was incorporated on August 24, 1962, under the general laws of the State of California and became a Charter City in 2009. The City operates under a Council-Manager form of government and provides the following services: library, recreational and culture, public improvements, planning and zoning, building and safety, street maintenance, and general administrative services. The City contracts with the County of Los Angeles to provide law enforcement, animal control, limited street maintenance for snow and hazardous materials removal, and emergency services. Fire service is provided by a separate County Fire Protection District and is not under the City’s jurisdiction.

As required by Generally Accepted Accounting Principles (GAAP), the accompanying Annual Comprehensive Financial Report includes the financial activities of the City of Palmdale, the primary government, and its component units, legal separate entities for which the City is considered to be financially accountable. The decision to include a potential component unit in the reporting entity is made by applying the criteria set forth by accounting principles generally accepted in the United States of America. The City is considered to be financially accountable for an organization if the City’s governing body is substantially the same as the component unit’s governing body, and there is a financial benefit or burden relationship between the City and component unit, or the City has operational responsibility for a component unit. Additionally, blending would be appropriate if the component unit provides services entirely, or almost entirely, to the City or for the benefit of the City. Lastly, if the component units’ total debt outstanding is expected to be repaid with City resources, blending is also appropriate for the component unit. All of the City’s component units are considered to be blended component units because in all cases the City Council serves as the governing board for each component unit and the City benefits from the use of certain property and improvements as well as a burden in administering the debt service repayment. Blended component units, although legally separate entities, are, in substance, part of the City’s operations, therefore data from these units are reported with the interfund data of the primary government. Management of the City has operational responsibility for each component unit, as it manages the activities of each component unit in a similar manner in which it manages other of its own programs and activities.

Additionally, the City is responsible for repayment of debt within the component units using resources of the primary government.

The component units included within the financial reporting entity of the City of Palmdale are the Palmdale Civic Authority (Authority), the Palmdale Financing Authority (PFA), the Industrial Development Authority (IDA), the Housing Authority of the City of Palmdale (Housing Authority), and the Palmdale Community Foundation (Foundation). The component units above are included because they meet the definition provided in the previous paragraph and of the significance of their operational or financial relationships with the City. As such, these entities are presented on a blended basis.

Separate component unit financial statements are issued for the Palmdale Civic Authority, Palmdale Financing Authority, the Housing Authority, and the Palmdale Community Foundation may be obtained from the City’s website or from the City’s Finance Department, 38300 Sierra Highway, Suite D, Palmdale, California 93550.

The Palmdale Civic Authority is a joint powers authority organized under Section 6500 et seq. of the California Government Code on May 1, 1976, between the City and the former Community Redevelopment Agency (Agency) for the purpose of acting as a vehicle for financing various projects of the City and the Agency.

The Authority is a distinct legal entity separate and apart from the City and the former Community Redevelopment Agency. The City Council acts as the governing body of the Authority by serving as its board members. The activity of the Authority is reported in the Palmdale Civic Authority Debt Service and Capital Projects Funds.

The Palmdale Financing Authority i s a joint powers authority organized under Section 6500 et seq. of the California Government Code on September 26, 2012, between the City and the Housing Authority for the purpose of acting as a vehicle for financing various projects of the City and Housing Authority.

The Palmdale Financing Authority is a distinct legal entity separate and apart from the City and the Housing Authority, and its debts and obligations are not debts or obligations of the City or the Housing Authority. The City Council acts as the governing body of the Palmdale Financing Authority by serving as its board members. The activity of the Palmdale Financing Authority is reported in the Palmdale Financing Authority Debt Service Fund.

The Industrial Development Authority was organized under Section 91500 et seq. of the California Government Code on 31 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
February 8, 1995, for the purpose of financing industrial development in the City. The IDA works with manufacturers and industrial companies to develop new industrial sites in Palmdale. The IDA is a distinct legal entity separate and apart from the City and the Agency, and its debts and obligations are not debts or obligations of the City or the Agency. The City Council acts as the governing body of the IDA by serving as its board members. There has been no activity in the Industrial Development Authority Fund during the fiscal year.

The Housing Authority of the City of Palmdale was established on April 9, 1997, pursuant to the State of California Health and Safety Code, Section 34200, entitled “Housing Authorities Law.” The Housing Authority was formed for the purpose of working with mobile home parks located in the City. Upon dissolution of the former Redevelopment Agency of the City of Palmdale, the Housing Authority assumed the authority to perform housing functions previously performed by the dissolved Community Redevelopment Agency and all rights, powers, duties, obligations, and housing assets, were transferred to the Housing Authority during FY2011-12. The Housing Authority is a distinct legal entity separate and apart from the City and the Agency, and its debts and obligations are not debts or obligations of the City or the Agency. The City Council acts as the governing body of the Housing Authority by serving as its board members, along with two public members. The activity of the Housing Authority is reported in the Housing Asset, Mobile Home Parks, Housing Facilities, and Housing Authority Special Revenue Funds.

Palmdale Community Foundation was established on January 1998, and is a non-profit organization, is organized under the California Nonprofit Public Benefit Corporation Law for public purposes. The specific purpose of the Foundation is to receive contributions and donations from the public and to use such contributions and donations to support charitable, literary, and educational activities authorized under Section 501(c)(3) of the Internal Revenue Code, including the support of programs, projects, and activities sponsored by the City of Palmdale. City staff acts as the governing body of the Palmdale Community Foundation by serving as its board members. The Palmdale Community Foundation exists solely for the enhancement of the City of Palmdale programs, the business activities are reported as a Special Revenue Fund and the financial reporting must follow GASB reporting rules. The City of Palmdale is the sole corporate member of the Foundation.

The financial statements of the City of Palmdale have been prepared in conformity with Generally Accepted Accounting Principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for governmental accounting and financial reporting principles. The more significant of the City’s accounting policies are described below.

B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus The accounts of the City are organized on the basis of separate funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund balance, revenues, and expenditures/expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are to be controlled.

Government-Wide Financial Statements
The Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements report information on all of the non-fiduciary activities of the primary government and its component units.

Governmental activities are reported separately from business-type activities and, likewise, the primary government is reported separately from discretely presented component units. The City of Palmdale has no business-type activities or discretely presented component units. Interfund activity, including payables and receivables has been eliminated in the Statement of Activities and the Statement of Net Position.

Interfund services provided are treated as revenues and expenditures/expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental funds are netted as part of the reconciliation to the Government-Wide presentation. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges for services to customers who purchase, use or directly benefit from goods, services, or privileges provided by a given function, 2) grants and contributions that are restricted to meeting the operational requirements of a particular function and 3) grants and contributions that are restricted to meeting the capital requirements of a particular function. Taxes and other items 32 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
not properly included among program revenues are reported instead as general revenues. The Government-Wide Financial Statements are presented using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources (including capital assets, infrastructure assets, and long-term liabilities) are reported 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 as soon as they are earned and expenses are recognized as soon as a liability is incurred, regardless of the timing of related cash flows.

Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balances for all major funds individually and non-major funds in the aggregate. An accompanying schedule is presented to reconcile and explain the difference in fund balance or equity as presented in these statements to the net position presented in the Government-Wide Financial Statements.

Governmental Fund Financial Statements are presented using the current financial resources measurements focus and the modified accrual basis of accounting. Accordingly, only current assets, current liabilities and deferred inflows of resources are included on the Balance Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances present 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 considered to be available when they are collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are recorded in the accounting period in which the related fund liability is incurred. However, debt service expenditures are recorded only when payment is due.

Those revenues susceptible to accrual are property taxes, franchise taxes, special assessments, licenses, interest, and charges for services. Sales taxes collected and held by the state at year-end on behalf of the government are also recognized as revenue. All other revenue items are recorded when received in cash.

The City has presented all major funds that qualified as major funds, which included the General Fund, the Housing Authority Housing Asset Special Revenue Fund and the Housing Authority Facilities Fund. Not all of the component unit funds are reflected as major funds. Specific fund descriptions and purpose of each fund can be found on page 21 for all major funds.

Summarization of all non-major governmental funds is presented under the Other Governmental Funds column. The individual fund statements and descriptions and purpose of the non-major funds can be found on pages 94 - 95.

Proprietary Fund Financial Statements
Internal service f unds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Internal service funds are presented as proprietary funds because both enterprise and internal service funds follow the accrual basis of accounting. The City maintains internal service funds to account for Information Technology and the City’s fleet of vehicles.

Fiduciary Fund Financial Statements
Fiduciary funds are used to account for assets held in a trustee or fiduciary capacity and cannot be used to support the City’s own programs. Trust funds and Custodial Funds are accounted for using the accrual basis of accounting.

The Custodial Fund is used to account for receipts and disbursements associated with 1915 Act Assessment Bonds and Special Tax Bonds which are administered by, but are not the liability of, the City. 33 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
The OPEB Trust Funds are used to account for the City’s Other Post-Employment Benefits Plans. Employer contributions are recognized when due. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan.

The Successor Agency Private Purpose Trust Fund is used to account for the assets, deferred outflows of resources, liabilities, and activities of the dissolved Community Redevelopment Agency in a trustee capacity to pay obligations of the former Community Redevelopment Agency. Revenues are recognized when allocated in the amount that is necessary to pay the enforceable obligations and obligations are recognized when due and payable and approved by the oversight board.

C. Budgets and Budgetary Accounting
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital project funds, which adopt project-length budgets, and American Rescue Plan Act Fund that had no budget in 2021 as the only activity was unearned revenue of $17,722,510.

The budget process begins in January when budget request forms are distributed to each department. These requests are assembled by the Finance Department and are presented to the City Manager in March. Budget meetings are then held with each department. The proposed budget is presented to the City Council on or before May 31 of each year. The Council holds a public hearing in June and must adopt a final budget by July 1 of each fiscal year. If Council continues the public hearing and/or adoption of the budget beyond June 30, the Finance Department is required to obtain written authorization for the continuation of spending for the new fiscal year at a public meeting of the Council prior to July 1.

The legal level of budgetary control (i.e., the level at w hich expenditures may not legally exceed appropriations) is the category level. The category level includes personnel, training and meetings, operating expenditures, contingency, debt service, and capital outlay. Supplemental appropriations during the year must be approved by the City Council if they are over $100,000 or between funds, except for shifts in appropriations relating to personnel changes that may be done administratively by the City Manager. The City Manager can approve budget transfers up to $100,000 within a fund. Supplemental appropriations were made during the year and are reflected in the budgeted numbers contained in the accompanying financial statements.

Encumbrances and Continuing Appropriations may be added to the subsequent year’s adopted budget by the Finance Manager with the approval of the City Manager per Council Resolution 2020-070, Section 8.

A budgetary report-comparing budget to actual at the category level has been issued for the General Fund, Special Revenue Funds, and Debt Service Funds. General Fund and major special revenue funds are audited. Budgetary reports are not prepared for the Capital Projects Funds. This budgetary report is available from the City’s Finance Department, 38300 Sierra Highway, Suite D, Palmdale, California 93550.

Encumbrance accounting is employed in governmental funds. Encumbrances (i.e., purchase orders, contracts, and other commitments) outstanding at year-end are reported as assigned fund balance in the General Fund since they do not constitute expenditures or liabilities and are added to the subsequent year’s adopted appropriations.

D. Cash and Investments
Cash includes amounts in demand deposits and petty cash on hand. Investments include amounts in Federal Agency Securities, Certificates of Deposit, the Local Agency Investment Fund, money market funds, and investment agreements. The U.S.

Treasury and Agency Securities were adjusted to fair value based on market prices on June 30, 2021. The Local Agency Investment Fund is reported at the carrying value because the fair value was not materially different. Amounts invested in money market funds and investment agreements are reported at fair value or guaranteed amounts per investment agreement, which is equal to cost as of June 30, 2021.

The City categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

E. Short-Term Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” or “due to other funds” in the balance sheet. 34 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
F. Advances Between Funds
Non-current portions of interfund loans receivable, reported as advances from other funds, are offset by a restricted fund balance account to indicate that they are not available for appropriation and are not expendable available financial resources.

G. Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

H. Land Held for Development
Land held for development is recorded at the lower of cost or market in the governmental and fiduciary funds.

I. Restricted Assets
Restricted assets represent unexpended proceeds, interest thereon, and bond reserve amounts related to bond anticipation notes, revenue bonds, tax allocation bonds and certificates of participation. The bond resolutions and indentures require that the bond reserves be maintained in amounts equal to the maximum amount of principal and interest to be paid in any single future fiscal year for each issue.

The debt service funds report restricted assets for resources set aside for current and future principal and interest payments on the bonds. The capital projects funds report restricted assets for proceeds of bond issuances, and interest thereon, which are restricted for use in construction. In cases where capital construction is being financed partially by restricted bond proceeds and partially from the City’s own resources, the City typically uses restricted assets first as appropriate opportunities arise, but reserves the right to selectively defer the use of bond proceeds to future projects.

J. Capital Assets
Capital assets, which include property, plant, equipment, and public domain infrastructure assets (e.g., roads, bridges, curbs, and gutters, streets, and sidewalks, drainage systems, and lighting systems), are reported in the applicable governmental columns in the Government-Wide Financial Statements. Capital assets and intangible assets are defined by the government as assets with an initial, individual cost of more than $5,000 and $125,000 respectively and an estimated useful life in excess of two years. Such assets are recorded at cost where historical costs are available and at an estimated original cost where not historical records exist. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized.

Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the Government-Wide Financial Statements. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the Statement of Net Position. For depreciation purposes, the range of useful life used for each capital asset class are as follows:

Asset Years
Buildings and structures 50 years
Improvements Other than Buildings 5 - 10 years
Machinery and Equipment 5 - 15 years
Infrastructure 20 - 50 years
K. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position and the Statement of Fiduciary Net Position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, Deferred Outflows of Resources, represents a consumption of net position that applies to a future period and so will not be recognized as an outflow of resources (expense/expenditure) until then.

The City has three items that qualify for reporting in this category. 1) The deferred charge on refunding bonds, 2) The deferred outflows related to pension liability, and 3) the deferred outflows related to the total OPEB liability. A deferred charge on 35 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
refunding bonds results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt.

In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items, one which arises only under a modified accrual basis of accounting that qualifies for reporting in this category.

Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: State Mandated Cost Reimbursements and Grant Reimbursements. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The government-wide Statement of Net Position reports deferred inflows resulting from differences between expected and actual experiences in pension and OPEB related amounts.

L. Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and administrative leave, and compensatory and floating holiday time. There is no liability for unpaid accumulated sick leave since the City does not have a policy to pay any amounts when employees separate from service with the City. All vacation and administrative leave, compensatory and floating holiday time, and associated employer-related salary costs are accrued when incurred in the Government-Wide Financial Statements. A liability for these amounts is reported in Governmental Funds when they have matured, for example, as a result of employee resignations and retirements. Compensated absences are generally liquidated by the General Fund and Special Revenue Funds.

M. Pension Plan
For purposes of measuring Net Pension Liability and Deferred Outflows/Inflows of Resources related to pensions, and pension expense, information about the Fiduciary Net Position of the City of Palmdale’s California Public Employees Retirement System (CalPERS) Plan and additions to/deductions from the Plan’s Fiduciary Net Position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.

Gains and losses related to changes in Total Pension Liability and Fiduciary Net Position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs.

The remaining amounts are categorized as Deferred Outflows and Deferred Inflows of Resources related to pensions and are recognized in future pension expense. The amortization period differs depending on the source of gain or loss. The difference between projected and actual earnings is amortized straight-line over five years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period. The General Fund is used to liquidate the governmental fund net pension liability.

N. Other Postemployment Benefits (OPEB)
For purposes of measuring the net OPEB Liability or Asset, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City of Palmdale Retiree Benefits Plan (“OPEB Plan”) and additions to/deductions from OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the OPEB Plan recognizes benefits w hen due and payable in accordance with the benefit terms. Investments are reported at fair value, except for m oney market investments, which are reported at amortized cost.

Gains and losses related to changes in total OPEB asset and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are recognized in future OPEB expense. The amortization period differs depending on the source of gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period. The General Fund is used to liquidate the governmental fund OPEB liability. 36 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
O. Long-Term Obligations
In the Government-Wide Financial Statements long-term debt and other long-term obligations are reported as liabilities. Bond premiums/discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as charges in the period the cost is incurred.

In the Fund Financial Statements, governmental fund types recognize bond premiums and discounts during the current period.

The face amount of debt issued is reported as other financing sources. Premiums received on debt issuance are reported as other financing sources, while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as expenditures in the period the cost is incurred.

P. Fund Balance
In the Fund Financial Statements, governmental funds report fund balance into five components whereby each component identifies the extent to which the City is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The five components of the fund balance are as follows:

Nonspendable: Resources that are 1) not in spendable form, such as inventories, prepaids, long-term receivables, or non- financial assets held for resale, or 2) required to be maintained intact such as an endowment.

Restricted: Resources that are subject to externally enforceable legal restrictions; these restrictions w ould be either 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or law s or regulations of other governments or 2) imposed by law through constitutional provisions or enabling legislation.

Committed: Resources that have been constrained to a specific purpose by formal action of the City Council, such as an ordinance, which constitutes a binding constraint on that portion of Fund Balance. The constraint remains binding unless removed in the same formal manner by the City Council. Council action to commit fund balances must occur within the fiscal reporting period while the amount committed may be determined subsequently.

Assigned: Resources that are constrained by the City’s intent to be used for specific purposes, but that are neither restricted nor committed or the residual balance of all other governmental funds except the General Fund. This policy delegates to the Finance Manager the authority to assign fund balances where the City’s intent is for the amounts to be used for specific purposes. This delegation of authority is for the sole purpose of reporting these amounts in the annual financial statements.

Unassigned: Within the General Fund, the residual resources, either positive or negative, in excess of what can be properly classified in one of the other four fund balance categories. Within all other governmental funds, the negative residual resources in excess of what can be properly classified as nonspendable, restricted, or committed.

When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to first apply restricted fund balance. When expenditures are incurred for purposes for which committed, assigned, or unassigned fund balances are available, the City’s policy is to first apply committed fund balance, then assigned fund balances, and finally unassigned fund balance. 37 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Q. Deficit Fund Equity
The following funds had a deficit fund balance at June 30, 2021 in the amount indicated:

Major Special Revenue Funds:

Housing Authority Facilities Fund $ (5,081,605)
Non-Major Special Revenue Funds:

Federal Funds $ (1,461,937)
Federal Jobs Program (16,287)
SAVES Fund (115,211)
State Grants Fund $ (139,588)
Management anticipates that these deficits will be resolved in future years as outstanding reimbursable grants are received and as additional operating revenues become available. It is anticipated occupancy levels at the Mobile Home Parks and Apartments will continue to remain high and consistent and continue to reduce the deficit in the Housing Authority Facilities Fund.

R. Expenditures Exceeding Appropriations
The legal level of budgetary control is at the category level: personnel, training and meetings, operating, capital and debt expenditure level. In the adopted budget, certain appropriations are reported as being paid out of General Fund and funded through transfers in from special revenue funds. In the fund financial statements, these transfers are reclassified to the expenditure function level to comply with GASB 54 requirements. The following funds reported expenditures exceeding appropriations as a result of these reclassifications: Gas Tax Fund, Public Safety Fund, Prop A Fund, Prop C Fund, Article 3 Fund, Article 8 Fund, Miscellaneous Grants Fund, Park Development Fund, Fire Facilities Impact Fund, State Grants Funds, Measure R Fund, and Sewer Upgrade Fund.

The following is a summary of the Excess of Expenditures Over Appropriations:

Total
General
Government
Public
Safety
Public
Services
Governmental Funds:

CDBG Fund $ 7,353 $ - $ - $ 7,353
Proposition C Fund 46,653 - - 46,653
Article 3 Fund 36,424 - - 36,424
Park Development Fund 103,910 - - 103,910
Road Maintenance and Rehab Fund 946 - - 946
Fire Facilities Impact Fund 9,098 9,098 - -
Drainage Fund 31,919 - - 31,919
State Grants Fund 63,813 - - 63,813
Measure M Fund 5,290 - - 5,290
Measure R Fund 253,081 - - 253,081
Sewer Upgrade Fund 20,758 - - 20,758
Sewer Maintenance Fund 1,970 1,970 - -
Solid Waste Fund 6,613 - - 6,613
CFD/AD Capital Projects Fund 2 2 - -
Total excess of expenditures over appropriations $ 587,830 $ 11,070 $ - $ 576,760 S. Property Taxes
With the passage of Assembly Bill No. 1197, the City of Palmdale, previously a “no property tax” city began to receive property taxes in fiscal year 1989-90. In addition, the former Community Redevelopment Agency (CRA) received incremental 38 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
property taxes on property within its project areas over a base-assessed valuation on the date the project area was established.

After dissolution of the former CRA, incremental property tax is received by the Private Purpose Trust. The Los Angeles County Assessor and Tax Collector perform the duties of assessing and collecting property taxes, respectively. Tax levies cover the period from July 1 to June 30 of each year. All tax liens attach annually on January 1 preceding the fiscal year for w hich the taxes are levied. Taxes are levied on both real and personal property, as it exists on that date. Secured property taxes are levied against real property and are due and payable in two equal installments. The first installment is due on November 1 and becomes delinquent if not paid by December 10. The second installment is due on February 1 and becomes delinquent if not paid by April 10. Unsecured personal property taxes are due on July 1 each year. These taxes become delinquent if not paid by August 31st.

T. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

U. Implemented Accounting Pronouncements
GASB Statement No. 84, Fiduciary Activities. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported.

GASB Statement No. 90, Majority Equity Interests – (an amendment of GASB Statements No. 14 and No. 61). The primary objective of this Statement is to improve consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. It defines a majority equity interest and specifies that a majority equity interest in a legally separate organization should be reported as an investment if a government’s holding of the equity interest meets the definition of an investment. For all other holdings of a majority equity interest in a legally separate organization, a government should report the legally separate organization as a component unit, and the government or fund that holds the equity interest should report an asset related to the majority equity interest using the equity method.
39 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
2 -Cash and Investments
Cash and investments as of June 30, 2021 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash $ 3,129,757
Investments 242,822,140
Restricted cash and investments 10,049,925
Total 256,001,822
Statement of Fiduciary Net Position:

Cash 12,082,454
Cash - OPEB Trust Money Market Funds 1,962,022
Investments - OPEB Trust Mutual Funds 3,669,122
Restricted cash and investments 7,901,533
Total 25,615,131
Total cash and investments $ 281,616,953
Cash and investments as of June 30, 2021 consist of the following:

Cash on hand $ 18,051
Deposits with financial institutions 13,243,095
Investments:

Pooled $ 243,228,656
Held by trustees 16,572,642
Held by trustees - PARS section 115
Money Market Funds 1,998,705
Mutual Funds 924,660
Held by OPEB Trust Money Market Fund 1,962,022
Held by OPEB Trust Mutual Fund 3,669,122
Total 268,355,807
Total cash and investments $ 281,616,953
40 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
A. Investments Authorized by the California Government Code and the City of Palmdale’s Investment Policy The table below identifies the investment types that are authorized for the City of Palmdale, for the OPEB Trust Fund, and the Pension Stabilization Trust Fund by the California Government Code (or the City of Palmdale’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City of Palmdale’s investment policy, where more restrictive) that addresses interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements w ith the City of Palmdale or cash deposits held in restricted accounts, rather than the general provisions of the California Government Code or the City of Palmdale’s investment policy.

Authorized
Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio*
Maximum
Investment
in One Issuer**
U.S. Treasury Obligation 5 years None None
U.S. Federal Agency Securities 5 Years None None
Banker's Acceptance 180 days 40% 2%
Municipal Obligations 5 years 10% 15%
Medium Term Corporate Notes 5 years 15% None
Negotiable Certificates of Deposit 5 years 30% 15%
Overnight Bank Investment Pool N/A 10% None
Local Agency Investment Fund (LAIF) N/A None $65,000,000 California Asset Management Program (CAMP) N/A None $65,000,000 *Excluding amounts held by bond trustees that are not subject to California Code Restrictions **Per account
The City of Palmdale’s and OPEB Trust Fund investment policy also authorizes Demand Deposits of up to $2,000,000 (and $2,500,000 in the aggregate) with Bank of America or Wells Fargo Bank. As of June 30, 2021, a demand deposit of $6,892,777 is expected to be expended in a short period of time and is held on behalf of the Successor Agency Private Purpose Trust Fund as cash on hand.

B. Investments Authorized by Debt Agreements
Investment of debt proceeds held by bond trustees are governed by provisions of the trust agreements, created in connection with the issuance of debt (see Note 12) rather than the general provisions of the California Government Code. Certificates of Participation and Revenue Bond indentures specify the types of securities in which proceeds may be invested as well as any related insurance, collateral, or minimum credit rating requirements. Although requirements may vary between debt issues, money market funds, are all required to be investment grade. Guaranteed investment contracts are required to be acceptable to the municipal bond insurer. The fair value of investments is based on the valuation provided by trustee banks.

C. Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Investment Policy of the City of Palmdale, Section 4.1 and 4.2, provide guidelines for managing risk. One of the ways that the City of Palmdale 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.

Information about the sensitivity of the fair values of the City of Palmdale’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City of Palmdale’s Investments by Maturity.
41 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Remaining Maturity in Months
Total
12 Months or
Less 13-24 Months 25-60 Months
Investment Type:

Treasury Notes $ 25,133,216 $ - $ 2,950,036 $ 22,183,180 Federal Agency Securities 35,364,055 - 5,178,913 30,185,142 Negotiable Certificates of Deposit 2,286,530 1,252,895 1,033,635 - Local Agency Investment Fund 143,968,276 143,968,276 - - CAMP Investment Fund 248,672 248,672 - -
Corporate Notes 16,076,988 1,021,372 11,862,172 3,193,444 UBS Investment Fund 20,150,919 20,150,919 - -
Held by Trustees
Money Market Mutual Funds 11,384,965 11,384,965 - -
PARS Section 115
Money Market Funds 1,998,705 1,998,705 - -
Mutual Funds 924,660 924,660 - -
OPEB Trust Money Market Funds 1,962,022 1,962,022 - -
OPEB Trust Mutual Funds 3,669,122 3,669,122 - -
Local Agency Investment Fund 5,187,677 5,187,677 - -
Total investments by maturity $ 268,355,807 $ 191,769,285 $ 21,024,756 $ 55,561,766 D. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below i s the minimum rating required by (where applicable) the California Government Code, the City of Palmdale’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type:

Total
Minimum
Legal Rating
Not Required
To Be Rated AA- to Aa1* AAA to Aaa*
Investment Type:

Treasury Notes $ 25,133,216 N/A $ - $ 25,133,216 $ -
Federal Agency Securities 35,364,055 N/A - 35,364,055 - Certificates of Deposit 2,286,530 N/A 2,286,530 - -
Local Agency Investment Pool 143,968,276 N/A 143,968,276 - - CAMP Investment Fund 248,672 N/A 248,672 - -
Corporate Notes 16,076,988 A - 16,076,988 -
UBS Investment Fund 20,150,919 N/A 20,150,919 - -
Held by Trustees:

Money Market Funds 11,384,965 A - - 11,384,965
PARS Section 115
Money Market Funds 1,998,705 N/A 1,998,705 - -
Mutual Funds 924,660 N/A 924,660 - -
OPEB Trust Money Market Funds 1,962,022 N/A 1,962,022 - - OPEB Trust Mutual Funds 3,669,122 N/A 3,669,122 - -
Local Agency Investment Fund 5,187,677 N/A 5,187,677 - - $ 268,355,807 $ 180,396,583 $ 76,574,259 $ 11,384,965
42 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
E. Concentration of Credit Risk
The investment policy of the City of Palmdale contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Reportable investments in any one issuer that represent five percent or more of the total City of Palmdale’s investments are as follows:

Issuer Investment Type Reported Amount
Federal Farm Credit Bank Federal Agency Securities 20,450,425 F. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or w ill not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City of Palmdale’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits.

As of June 30, 2021, a total of $12,563,832 of City of Palmdale’s deposits with financial institutions in excess of federal depository insurance limits was held in collateralized accounts, but not in the name of the City. In addition, as of June 30, 2021, City of Palmdale investments in the following investment types were held by the safekeeping department of the broker-dealer (counterparty) used by the City of Palmdale to buy the securities:

Investment Type Reported Amount
Certificates of Deposit $ 2,286,530
Treasury Notes 25,133,216
Federal Agency Securities 35,364,055
Corporate Notes $ 16,076,988
G. Investment in State Investment Pool
The City of Palmdale is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City of Palmdale’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City of Palmdale’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on the amortized cost basis. LAIF is not rated and not registered with the Securities and Exchange Commission (SEC).

H. Investment in California Asset Management Program
The City of Palmdale is a voluntary participant in the California Asset Management Program (CAMP) that is regulated by the California Government Code Section 53601 (p) and managed by a Board of Trustees comprised of finance directors and treasurers of California public agencies that are members of the Joint Pow ers Authority. The value of pool shares in CAMP that may be withdrawn is determined on an amortized cost basis, which is the same as the fair value of the City’s portion in the pool. 43 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
I. Disclosures Relating to Fair Value of Investments
The City categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

When quoted prices in active markets are available, investments are classified within Level 1. For investments classified within Level 2, the City’s custodians generally use asset market prices derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, broker-dealer quotes and matrix pricing. The City does not have any investments classified with Level 3. Deposits and withdrawals in governmental investment pools, such as LAIF are made on the basis of $1 and not fair value. Accordingly, the fair value measurement of these types of investments is based on an uncategorized input not defined as a Level 1, Level 2, or Level 3 input.

As of June 30, 2021, the City has the following recurring fair value measurements:

Fair Value Measurements on A Recurring Basis Using
Balance
June 30, 2021
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Investments by fair value level:

Treasury Notes $ 25,133,216 $ - $ 25,133,216 $ -
Federal Agency Securities 35,364,055 - 35,364,055 -
Certificates of Deposit 2,286,530 - 2,286,530 -
Corporate Notes 16,076,988 - 16,076,988 -
PARS Section 115 - Mutual Funds 924,660 924,660 - -
OPEB Trust Mutual Funds 3,669,122 3,669,122 - -
Total investments by fair value level 83,454,571 $ 4,593,782 $ 78,860,789 $ - Investments Measured Using Uncategorized Inputs:

Local Agency Investment Fund 149,155,953
CAMP Investment Fund 248,672
UBS Investment Fund 20,150,919
Money Market Mutual Funds 11,384,965
PARS Section 115 - Money Market Funds 1,998,705
OPEB Trust - Money Market Mutual Funds 1,962,022
Total investments - uncategorized inputs 184,901,236
Total investments $ 268,355,807
J. PARS Section 115 - Pension Stabilization Trust
In April 2018, the City approved and adopted the Public Agencies Post-Retirement Pension Plan Document and Trust Agreement. The asset is classified and reported as a restricted asset in the General Fund. The Pension Stabilization Trust is a tax-qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to pre-fund pension obligations as described in GASB Statement No. 75.

The Plan Discretionary Trustee is U.S. Bank (U.S. Bank has delegated investment management responsibilities to High Mark Capital Management, Inc.), and Public Agencies Retirement Services (PARS) is the Trust Administrator. The City elected 'Moderately Conservative HighMark PLUS' investment approach with a blended investment objective strategy. The primary objective is to provide current income with capital appreciation as a secondary objective. 44 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
The Plan’s targeted Rate of Return is 3.2 percent. The asset allocation ranges for this objective are zero percent to 20 percent cash source, 50 percent to 80 percent fixed income mutual funds, and 20 percent to 40 percent equity mutual funds. The City funded the trust account and earned interest totaling $2,045,049 in Fiscal Year 2018-19 and 2,580,329 in Fiscal Year 2019-20, which invested in accordance with a blended investment objective strategy. With the net investment earnings of $343,036, the ending balance as of June 30, 2021 is $2,923,365.
3 -Interfund Transfers
Interfund transfers for the year ended June 30, 2021 were as follows:

Transfer To Transfer From Amount
General Fund Non-Major Governmental Funds $ 4,260,149 $ Housing Asset Fund 35,520 4,295,669
Non-Major Governmental Funds General Fund 13,916,000
Non-Major Governmental Funds 24,130,568 38,046,568
Housing Authority Fund Housing Asset Fund 5,339
Housing Asset Fund Housing Authority Fund 60,000
Internal Service Funds General Fund 6,565,097
Total interfund transfers $ 48,972,673
Transfers resulted from the following transactions:

1. Transferring revenues from the fund that statute or budget requires collecting them to the fund that statute or budget requires expending them.

2. Transferring receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments come due.

3. Using unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.
4 -Interfund Assets/Liabilities
A. Due From/To Other Funds as of June 30, 2021 were as follows:

The amounts payable to the General Fund and Non-Major Governmental Funds relate to temporary cash flow loans made to several non-major funds that all are scheduled to be collected in the subsequent year.

Payable To Payable From Amount
General Fund Non-Major Governmental Funds $ 666,712 $
Housing Asset Fund 15,287 681,999
Non-Major Governmental Funds Non-Major Governmental Funds 1,322,906 Total due to/due from other funds $ 2,004,905
B. Advances Due From/To Fiduciary Funds as of June 30, 2021 The amounts payable to the General Fund and due from Fiduciary Funds relate to administrative fees that are scheduled to be collected in the subsequent year and total $74,071.
45 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
C. Advances Due From/To Drainage Funds as of June 30, 2021 Beginning in fiscal year ending June 30, 1993, advances were made from the Amargosa, Portal Ridge, and Pearland Drainage funds to cover shortfalls in funding in the Anaverde Drainage Funds. Government Code Section 66006 stipulates that developer impact fees shall be kept in a separate fund and earn interest until expended for the purpose for which the fee was originally collected. In accordance with this Government Code Section, interest has been accrued on a monthly basis with a rate equal to the monthly LAIF rate since the inception of the advances.

The Drainage Funds financial statements are presented as one combined statement within this report. Due to this presentation, the advances have been eliminated.

Receivable Payable
Anaverde Drainage $ - $ 2,136,221
Pearland Drainage 2,136,221 -
Total $ 2,136,221 $ 2,136,221
The repayment of the remaining Pearland loan will be funded from future assessments received by the Anaverde Drainage Fund.

The Total Fund Equity of the individual funds is as follows:

Fund Name Fund Equity
Amargosa Drainage $ 379,034
Anaverde Drainage (3,785,906)
Big Rock Drainage 61,373
Portal Ridge Drainage (9,238)
Pearland Drainage 10,289,512
Littlerock Drainage 18,263
$ 6,953,038
D. Advances Due From Fiduciary Funds as of June 30, 2021 The amounts due from the Private Purpose Trust Funds are advances due to the General Fund, Housing Asset Fund that are approved enforceable obligations of the Successor Agency Trust of the Former Redevelopment Agency of the City of Palmdale and will be paid from future property tax. The amount due from the Custodial Funds includes advances to Assessment Districts that are scheduled to be collected in the subsequent year.

Advances Due From Fiduciary Funds
Payable To Payable From Amount
Major Fund
General Fund Private Purpose Trust Funds $ 577,136
Housing Asset Fund Private Purpose Trust Funds 5,409,777 Total Major Funds 5,986,913
Non-Major Governmental Funds Custodial Funds 583,859
$ 6,570,772
E. Interfund Promissory Note Receivable and Payable as of June 30, 2021 46 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
The Housing Authority Facilities - Fund issued a Promissory Note to the former Redevelopment Low and Moderate Income Housing Fund to generate proceeds to fund additional housing programs. The Promissory Note is to be repaid from the Mobile Home Parks operating revenue when net income is sufficient under the operating agreement. As the result of the dissolution of the Community Redevelopment Agency, the Promissory Note asset was transferred to the Housing Authority Housing Asset Fund. All proceeds from repayment of the Promissory Note must be used in accordance with applicable housing related provisions of Community Redevelopment Law. During fiscal year 2020-2021, the Housing Authority Facilities fund paid $911,667 principal and $406,972 interest for a total of $1,318,639 to the Housing Authority Housing Asset Fund. The balance of the Promissory Note as of June 30, 2021 is $8,376,667.

F. Advances Due to/Due From Other Funds as of June 30, 2020 Receivable Payable
Major Funds
General Fund $ 5,000,000 $ -
Housing Auth - Housing Asset Fund 1,186,001 -
Housing Auth Facilities Fund - 1,186,001
Non-Major Governmental Funds
Park Development Fund - 5,000,000
Pearland Drain Fund 4,400,000 -
Sewer Maintenance Assmnt District Fund - 4,400,000
Total $ 10,586,001 $ 10,586,001
The Park Development Fund has advances due to the General of $5,000,000 r esulting from a loan to provide funding to accelerate the planning, public outreach, design and construction of prioritized Park Development Fund projects, including community engagement, and establish a budget for construction based on completed design parameters. These advances shall be repaid in over a period of 27 years. Payments will be interest only for the first seven years, beginning on July 1, 2020, and both principal and interest payment for twenty years, beginning on July 1, 2027. The last payment shall be in June 30, 2047.

The Housing Authority Facilities Fund has advances due to the Housing Authority-Housing Asset Fund of $1,186,001 resulting from the acquisition and operation of three mobile home parks purchased during fiscal year 2002-2003. Upon acquisition, the Housing Authority assumed the Mobile Home Park's prior owner’s liabilities which were payable to the former CRA Low and Moderate Income Housing fund and City under the terms of an operating agreement. The operating agreement establishes priorities for the use of revenues from operation of the parks and provides for repayment of the advances from net income once expenses, debt service, operating, and capital reserve requirements are met. In the interim, additional liabilities and program/project management fees will continue to accrue to the long-term advances due the Housing Authority - Housing Asset Fund if there are shortfalls in expected payment. These advances will be repaid when net income is sufficient under the operating agreement.
5 -Notes Receivable and Liens
The City has the following Note Receivables outstanding at the end of June 30, 2021:
47 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
June 30,2021
Major Funds
General Fund:

Graffiti Reimbursement Charges $ 42,329
Related Party Loan 1,200,000
Total General Fund 1,242,329
Housing Authority Fund:

Housing Programs 23,793,653
Non-Major Governmental Funds
Federal Home Program 7,650,408
CDBG/NSP Program 2,338,699
Total Non-Major Governmental Funds 9,989,107
Total $ 35,025,089
A. City Loans
The City made loans for Graffiti reimbursement charges. The loan balance is $42,329 for the Graffiti loans as of June 30, 2021.

Refer to Note 20 - Related Party Loan for more information.

B. Federal Home Program Loans
The City provides loans to developers for development and rehabilitation of affordable housing. All loan payments w ill be used to pay for future program expenditures. The balances of the loans were $7,650,408 as of June 30, 2021.

C. CDBG/NSP Program Loans
Through the Community Development Block Grant and the Neighborhood Stabilization Program, the City provides subsidies to families for purchase of single family affordable housing. Each year a portion of the loan is forgiven if the participant is compliant or repayment of the loan would be received if the home is sold during the compliance period. The balances of the loans were $2,338,699 as of June 30, 2021.

D. Housing Program
The Housing Program Grants loans for mortgage assistance, mobile home rehabilitation and development of affordable homes.

All loan payments will be used to pay for future program expenditures. The balances of the loans were $23,793,653 as of June 30, 2021.
48 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
6 -Fund Balance Classification
The Fund Balances at June 30, 2021 were classified as follows:

Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund
Other
Governmental
Funds
Total
Governmental
Funds
Nonspendable:

Advances $ 577,136 $ - $ - $ - $ - $ 577,136
Note and liens 1,242,329 - - - - 1,242,329
Deposits and prepaids 570,903 - - - - 570,903
Total nonspendable 2,390,368 - - - - 2,390,368
Restricted:

Pension stabilization program 2,923,365 - - - - 2,923,365 Debt service - - - - 1,080,872 1,080,872
Public safety programs - - - - 7,770,664 7,770,664
Public services programs - - - - 133,544,321 133,544,321 Low and moderate income housing - 50,817,164 - - 10,215,497 61,032,661 Recreation and culture programs - - - - 12,008,810 12,008,810 Health and welfare programs - - - - 247,725 247,725
Total restricted 2,923,365 50,817,164 - - 164,867,889 218,608,418 Assigned:

Compensated absences 2,642,732 - - - - 2,642,732
Self insurance claims 1,590,497 - - - - 1,590,497
Health insurance 6,223,057 - - - - 6,223,057
Capital Projects 11,000,000 - - - - 11,000,000
Total assigned 21,456,286 - - - - 21,456,286
Unassigned Fund Balance 31,731,246 - (5,081,605) - (767,277) 25,882,364 Total fund balance (deficit) $ 58,501,265 $ 50,817,164 $ (5,081,605) $ - $ 164,100,612 $ 268,337,436 7 -Joint Ventures
A. Antelope Valley Transit Authority
The City of Palmdale is a member of the Antelope Valley Transit Authority (Authority), a joint powers authority of the County of Los Angeles and the cities of Palmdale and Lancaster. The Authority was formed to provide public transit service to Palmdale and Lancaster. The governing board consists of one person from each member agency. Each member has one vote.

The Authority entered into a “Reimbursement Agreement” with the County of Los Angeles to repay the obligation incurred by the County on their behalf. The Authority is funded in part by revenues allocated to the City and redirected to the Authority and in part by a shared formula based on the level of service provided to the jurisdiction.

Separate financial statements of the Authority are available from the Authority office located at 1031 W. Avenue L-12, Lancaster, California, 93534.

B. Palmdale Recycled Water Authority
As of September 26, 2012, the City of Palmdale became a member of the Palmdale Recycled Water Authority (Authority), a joint exercise of powers agreement between the City of Palmdale and Palmdale Water District. The Authority was formed to jointly study, promote, develop, distribute, construct, install, finance, use, and manage recycled water resources created by the Los Angeles County Sanitation District Nos. 14 and 20 for any and all reasonable and beneficial uses, including irrigation and recharge, and to finance the acquisition and construction or installation of recycled water facilities, recharge facilities, and irrigation systems. The governing board consists of five Directors. The governing body of each Member shall appoint and designate two Directors who shall be authorized to act for and on behalf of the Member on matters within the powers of the Authority. The fifth Director shall be appointed jointly by both Members. The Authority is funded by Member contributions.

Separate financial statements of the Authority are available from the City of Palmdale Finance Department at 38300 Sierra Highway, Suite D, Palmdale, California 93550.
49 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
8 -Risk Management
The City is self-insured and exposed to various risk of loss related to general liability and health, dental, and vision needs of employees. Under the City’s risk management program, the City retains the risk for general liability claims for the first $500,000 per occurrence and carries excess general liability and automobile insurance with total policy limits of $35,000,000.

There have been no settlements related to these programs that exceeded insurance coverage in the last three years. The City transitioned to a self-insurance health plan in January 2009 and purchases stop loss coverage for the health benefits program for health claims in excess of $125,000 per covered person. The first claims that exceed the $125,000 specific deductible, whether from a single member or several, are paid by the group’s $60,000 aggregating specific deductible. The City retains the risk for dental and vision claims. The health, dental, and vision claims are administered by Benefit and Risk Management Services, Inc., a third-party claims administrator.

The City records estimated liabilities for claims filed or expected to be filed up to the amounts for w hich it retains risk. Charges to the General Fund and other funds are determined from an analysis of claims costs, and are recorded as expenditures in the various funds.

During fiscal year 2020-2021, $740,411 was retired in general liability claims and $875,511 was paid in liability administrative costs. On June 30, 2021, $1,948,497 was accrued for general liability claims in the Government-Wide Financial Statements.

The portion estimated to be due w ithin one year is $358,000 and is calculated based on a three-year average of settlements paid during the fiscal year. These accruals, based on the results of an actuarial study, represent estimates of amounts to be paid for reported claims and incurred but unreported claims.

During fiscal year 2020-2021, $1,441,097 was paid in health claims and $492,897 was paid in health administrative costs. On June 30, 2021, $1,006,315 was accrued for health liability claims in the Government-Wide Financial Statements. The accruals, based on the results of an actuarial study, represent estimates of amounts to be paid for reported claims and incurred but unreported claims. All administrative costs were paid during the fiscal year and no unpaid amounts are due and payable as of June 30, 2021.

During fiscal year 2020-2021, $242,360 w as paid in dental and vision claims and $12,844 w as paid in dental and vision administrative costs. On June 30, 2021, $98,654 was accrued for dental and vision claims in the Government-Wide Financial Statements. The accruals, based on the results of an actuarial study, represent estimates of amounts to be paid for reported claims and incurred but unreported claims.

The total liability is calculated considering the effects of inflation, recent favorable claim settlement trends, including frequency and amount of payouts, anticipated future investment earnings on funds held to pay losses, and other economic and social factors.

It is the City’s practice to obtain a full actuarial study annually to perform an analysis of the City’s potential liability for the City’s retained risk portions of the various self-insurance programs. The amounts recorded as liabilities represent estimates of amounts to be paid for reported claims, as well as incurred but not reported claims based upon past experience, modified for current trends, and information. While the ultimate amounts of losses incurred through June 30, 2021, are dependent on future developments, the City’s management believes that the aggregate accrual is adequate to cover such losses. The liabilities for general liability claims are reported using a discount rate of 3.0% while a 25.0% margin was added to the estimated health, dental, and vision claims for potential adverse deviation. The estimates do not include any additional provision for administrative expenses associated with the adjudicating or processing the unpaid claims.

Changes in the balances of the City’s claims liabilities for the current and prior fiscal year are as follows:
50 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
General
Liability
Health
Claims
Dental and
Vision
Claims Total
Balance of June 30, 2019 $ 1,812,751 $ 558,408 $ 117,986 $ 2,489,145 Claims incurred 84,133 1,523,164 195,653 1,802,950
Claims paid (83,487) (1,427,832) (228,499) (1,739,818)
Balance of June 30, 2020 1,813,397 653,740 85,140 2,552,277 Claims incurred 875,511 2,286,569 268,718 3,430,798
Claims paid (740,411) (1,933,994) (255,204) (2,929,609) Balance as of June 30, 2021 $ 1,948,497 $ 1,006,315 $ 98,654 $ 3,053,466 9 -Unearned Revenue and Unavailable Revenue
Unearned Revenue - G overnmental Funds and governmental activities report unearned revenues on the balance sheet in connection with resources that have been received, but not yet earned. Accordingly, this type of unearned revenue is also reported on the Statement of Net Position. At the end of the current fiscal year, the components of unearned revenue were as follows:

General Fund
Fees received for Recreational Program Not Yet Held $ 54,514 Fees received for Business Licenses Paid in Advance 2,930 Fees received for Magazine Ads Paid in Advance 2,781
Total general fund unearned revenue 60,225
American Rescue Plan Act Fund
U.S. Treasury Funds received for Coronavirus Aid 17,722,510 Housing Asset Fund:

Lease revenues received in Advance 3,932,000
Total unearned revenues for governmental funds $ 21,714,735 Unavailable Revenue - Governmental funds also report deferred inflows of resources on the balance sheet in connection with resources that have been earned, but are not yet available to finance expenditures of the current fiscal period. This type of Unavailable Revenue is unique to governmental funds and is tied to the modified accrual basis of accounting. Accordingly, these Unavailable Revenues are not reported on the Statement of Net Position. At the end of Fiscal Year 2020-21, the components of Unavailable Revenue resulting from grant revenue not received with 60-day accrual period were detailed as follows:
51 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Major Funds
General Fund $ 5,515,657
HA Housing Asset Fund 4,348,418
Non-Major Special Revenue Funds
Community Development Block Grant 19,940
Federal Funds 287,699
Federal Home Program 2,393,025
Measure R 1,379,843
Misc. Grants/ Developer Contributions 4,100,043
Proposition C 945,301
States Grants Fund 1,592,917
Total unavailable revenue for governmental funds $ 20,582,843 10 - Capital Assets
Capital Assets of the City for year ended June 30, 2021, consisted of the following:

Beginning
Balance Additions Deletions
Ending
Balance
Capital Assets, Not being Depreciated:

Land and Improvements $ 118,620,564 $ 674,895 $ - $ 119,295,459 CFD 16-1 Water Credits 153,090 341,784 - 494,874
Construction in Progress 51,759,180 23,276,957 (44,675,789) 30,360,348 Total Capital Assets, Not being Depreciated 170,532,834 24,293,636 (44,675,789) 150,150,681 Capital Assets, Being Depreciated:

Buildings and Structures 79,035,828 1,096,281 - 80,132,109 Improvements Other than Buildings 2,483,428 71,246 - 2,554,674 Machinery and Equipment 16,369,703 1,580,153 (729,117) 17,220,739 Infrastructure 1,113,983,034 39,686,129 (1,398) 1,153,667,765 Total Capital Assets, Being Depreciated 1,211,871,993 42,433,809 (730,515) 1,253,575,287 Less: Accumulated Depreciation for:

Buildings and Structures 24,708,995 1,636,482 (2,313) 26,343,164 Improvements Other than Buildings 973,594 241,198 - 1,214,792 Machinery and Equipment 12,783,314 834,481 (729,117) 12,888,678 Infrastructure 619,083,657 34,728,710 - 653,812,367
Total Accumulated Depreciation 657,549,560 37,440,871 (731,430) 694,259,001 Total Capital Assets, Being Depreciated, Net 554,322,433 4,992,938 915 559,316,286 Total Capital Assets, Net $ 724,855,267 $ 29,286,574 $ (44,674,874) $ 709,466,967 52 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
For the year ended June 30, 2021, depreciation expense on capital assets was charged to the governmental functions as follows:

Governmental Function
Depreciation
Expense
General Government $ 584,785
Cultural and Recreational 852,965
Community Development 800,132
Public Services 34,483,605
Internal Service Funds 719,384
Total Depreciation Expense $ 37,440,871
11 - Capital Leases
Canon Copier Lease – On December 23, 2015, the City entered into a five-year lease-purchase agreement with Canon Financial Services, Inc. to finance the acquisition of copier machines throughout the City. Interest on the lease is payable monthly at 4.11 percent per annum.

In July 2017, the City entered into an additional lease agreement with Canon Financial Services, Inc. to finance the acquisition of a copier machine placed at Legacy Common facility. Interest on the lease is payable monthly at 4.11 percent per annum for forty-two months.

In May 2018, the City entered into a third lease agreement with Canon Financial Services, Inc. to finance the acquisition of a color copier machine to replace a black and white copier machine that was part of the first five- year lease-purchase agreement for general use by multiple departments. Interest on the lease is payable monthly at 4.11 percent per annum for thirty-two months.

In October 2020, the City entered into a new agreement with Canon Financial Services, Inc. to finance the acquisition of new copier machines throughout the City and thus terminated its existing three agreements that were scheduled to expire in December 2020. The terms of the agreement are for seven years with an interest rate of 2.26 percent per annum.

Lease payments for the year ended June 30, 2021, amounted to $60,826 under the new lease and $29,400 under the extinguished agreements (November and December payments were written off totaling $9,900) and are sourced by the General Fund. At the end of the lease, there is a one dollar buy-out cost. In the event of default, Canon Financial Services may repossess the equipment but may not accelerate the entire balance outstanding due and payable.

For Year Ended June 30, Amount
2022 $ 92,610
2023 92,610
2024 92,610
2025 92,610
2026 92,610
2027 23,153
Total minimum lease payments 486,203
Less: amount representing interest (28,192)
Present value of minimum lease payments $ 458,011
53 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Energy Efficient Equipment Lease - On June 29, 2016, the City entered into a thirteen- year lease purchase agreement with Capital One Public Funding, LLC to finance the acquisition of energy efficient equipment. Interest on the lease is payable semi- annually at 3.44 percent per annum. Lease payments for the year ended June 30, 2021, amounted to $105,246 and are sourced by the General Fund. In the Event of Default, Capital One Public Funding may repossess the equipment but may not accelerate the entire balance outstanding due and payable.

For Year Ended June 30, Amount
2022 $ 105,245
2023 105,246
2024 105,246
2025 105,245
2026 105,245
2027-2030 315,737
Total minimum lease payments 841,964
Less: amount representing interest (116,696)
Present value of minimum lease payments $ 725,268
12 - Long-Term Debt
A. Notes Payable
Section 108 HUD Note Payable – On January 11, 2006, the City issued a Variable Rate Note by entering into the Department of Housing and Urban Development contract for Loan Guarantee Assistance under Section 108 of the Housing and Urban Development Act of 1974. The City received advanced proceeds of $5,000,000 and used the proceeds for property acquisition, relocation, and demolition costs associated with the development of the proposed Senior Center. Interest on the note is equal to

0.2 percent above the applicable London Interbank Offered (LIBOR) and is payable semi-annually on February 1st, and August 1st, beginning February 1, 2006. Principal installments are payable August 1st of each year from 2006 through 2025. The payment schedule detailed below uses a blended interest rate ranging from 4.63 percent to 5.3 percent due to the note payable’s variable interest rate.

On March 20, 2019, the U.S. Department of Housing and Urban Development refinanced $327,338,000 of its debt for Section 108 Participating Certificates, new Series HUD 2019-A, in which the City participated by refinancing $2,056,000 of its $2,464,000 outstanding principal balance and thus generating new blended rates ranging from 2.54 percent to 3.365 percent where the remaining $408,000 and original terms and schedule of payments remaining the same. Debt payments are to be paid from Community Development Block Grant funds and there are no remedies for Event of Default explicitly stated. The principal balance outstanding as of June 30, 2021, is $1,861,000.

Year Ending Principal Interest Total
2022 $ 325,000 $ 89,733 $ 414,733
2023 342,000 72,475 414,475
2024 360,000 54,078 414,078
2025 398,000 34,001 432,001
2026 436,000 11,704 447,704
Totals $ 1,861,000 $ 261,991 $ 2,122,991
HOME Loan Note Payable – In December of 2005, the City entered into an agreement with the Department of Housing and Community Development for the State of California HOME Investment Partnerships Program (HOME) to help approve the construction loan closing for the Courson Connection Project. The City has received advanced proceeds of $2,850,000 from HOME and has passed through those funds to the developer, Courson Senior Partners LP, for the construction of the 75 units of 54 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Senior Housing in the Courson Connection Project. The repayment of the loan will be over a 55-year term through residual receipts from the Project. As of June 30, 2021, no residual receipts from the project have been received from developer. Interest on the note is equal to 3 percent.

If any installment under the Promissory Note is not paid when due or any default occurs in the agreements contained in the Note or the Loan Documents, the entire principal amount outstanding and any accrued interest thereon shall become due and payable immediately. The outstanding balance as of June 30, 2021, is $2,850,000 with $1,252,438 of unpaid accrued interest. 2017 Installment Payable of Street light Acquisition ($11,397,102) – During the Fiscal Year 2016-17, the City of Palmdale submitted a request to acquire street lights from Southern California Edison. In preparation for the acquisition of street lights, the City created a comprehensive inventory of light poles and their locations. Additionally, the City retained Utility Cost Management (UCM) to perform an analysis of the financial feasibility to acquire and maintain the City street lights. One of the key advantages of the street lights ownership is savings in energy cost by retrofitting existing street lights into Light Emitting Diode (LED) lighting. Retrofitting also provides the City with a greater ability to control future updates as technology develops.

The City has five (5) Streetlight Maintenance Assessment Districts. District No. 1 consists of residential and non-residential developments located throughout the City. It has 144 individual Annexations encompassing approximately 6,441 parcels.

District No. 2 includes the Anaverde Master Planned Community, with 1,457 parcels. District No. 3 includes the Ritter Ranch Master Planned Community and has approximately 48 parcels. There are no street lights in District No. 3. District No. 4, similar to District No. 1, consists of residential and nonresidential developments located throughout the City.

A new engineering firm took over the annexations in 2010 and started using the term “SLMD 4” to annex in any new projects after that date just to keep track, but legally they are all part of SLMD 1. Both Districts are referred to as SLMD 1/4. District No. 4 has 19 individual Annexations encompassing approximately 54 parcels. District No. 5 includes the approximately 32,790 parcels that were previously covered under the Los Angeles County Lighting Maintenance District No. 1616, and that have been administered by the City since fiscal year 2014/2015.

On August 1, 2017, the City Council approved the Purchase and Sale Agreement between the City of Palmdale and Southern California Edison for the ownership of approximately 17,352 street lights within the five (5) Streetlight Maintenance Assessment Districts limits. In order to finance the acquisition of street lights, the Palmdale Financing Authority and the City of Palmdale entered into an Installment Sale Agreement for $11,397,102 on September 1, 2017. Simultaneously, Opus Bank, a California commercial bank entered into an Assignment Agreement with the Palmdale Financing Authority. As such, the loan is now the City’s loan to OPUS, and no longer a Palmdale Financing Authority loan and receivable.

Opus Bank agreed to purchase the City’s obligations under the Installment Sale Agreement at a purchase price of $11,397,102 at the interest rate of 2.4 percent per annum. The purchase price paid by Opus Bank is to be used by the City to finance the acquisition of approximately 17,352 street lights from Southern California Edison and to pay the costs related to the preparation, execution and delivery of the Installment Sale Agreement and the Assignment Agreement.

On September 7, 2017, Opus Bank disbursed $157,850 constituting the first advance under the Installment Sale Agreement for payment of costs of the financing transactions, resulting in the available proceeds in the amount of $11,239,252 for the City to acquire the street lights from Southern California Edison. At closing of the Installment Sale Agreement and the Assignment Agreement, dated as of September 7, 2017, the City did not draw any funds from the available proceeds of $11,239,252.

Installment payments are computed based on the amount drawn upon during each six month period and represent the maximum payment assuming all project funds are drawn on the closing date. The 2017 Installment Sale Agreement is payable semi- annually on February 1st and August 1st at the rate of 2.48 percent per annum. Principal installments are payable August 1st of each year to 2032 commencing August 1, 2019. Up to 10 percent of outstanding principal can be prepaid every year without prepayment penalty or limitation, as long as such payment is not through refinancing. Such prepayments will be applied against the back end of the amortization schedule. On January 31, 2018, the City made the first interest payment of $1,565.87 on the $157,850 draw related to the cost of financing.
55 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
On January 25, 2018, the City drew upon $6,869,454 for the acquisition of approximately 10,538 street lights from Southern California Edison. On March 23, 2018, the remaining balance of available proceeds was drawn upon in the amount of $4,369,798, which was used to acquire additional 7,234 street lights from Southern California Edison. As a result of these two advances, all project funds are drawn to its maximum amount of $11,239,252. In accepting the inventory listing provided by Southern California Edison, the City acquired 17,772 street lights in total, which are 420 more street lights than the initial estimate of 17,352.

Pursuant to the Installment Sale Agreement, the City will pledge as collateral the assessments in the City’s Street Light Maintenance Districts 1, 4 and 5 and use such assessments with the first priority for repayment of advances. In the Event of Default, Pacific Premier Bank (acquired Opus Bank) may repossess the street light poles but may not accelerate the payments outstanding and due.

Year Ending Principal Interest Total
2022 $ 725,563 $ 238,959 $ 964,522
2023 743,556 220,742 964,298
2024 761,997 202,073 964,070
2025 780,894 182,941 963,835
2026 800,260 163,335 963,595
2027-2031 4,309,028 505,133 4,814,161
2032-2034 1,876,930 46,833 1,923,763
Totals $ 9,998,228 $ 1,560,016 $ 11,558,244
2017 On Bill Financing (OBF) – T he City of Palmdale and Southern California Edison (“SCE”) entered into the Energy Management Solution Incentive Application (“EMS Agreement”) with the California Public Utilities Commission (“CPUC”) in May 2014. After submission of the application, the City has completed installation of energy efficient equipment (“Equipment”) at the sites as set forth in the EMS Agreement. In Decision 12-11-015, the CPUC authorized SCE to provide zero-percent financing for the installation of Equipment, which is to be repaid over a specified period through the City’s electric utility bill through a process called On-Bill Financing (“OBF”).

Amounts due under this OBF Agreement will be amounts deemed due under each SCE utility bill to the Customer Service Account(s), and a default under this OBF Agreement will be treated as a default under the Customer Service Account(s).

Customer’s Loan Obligation is subject to the discontinuance provisions of SCE’s Rule 11, Discontinuance and Restoration of Service, Section B, Nonpayment of Bills or Summary Bills which is incorporated herein by reference. Following a breach as set forth in this section, SCE shall have the right to declare the entire unpaid balance of the Loan Obligation immediately due and payable.

A. In August 2017, the City entered into an OBF Agreement OBF A-5962 with SCE for the replacement of Courson Park lights with the Equipment. The Park’s address is 38226 10th Street East, Palmdale, CA 93550. The amount financed is $229,909, and the repayment will be over one hundred twenty (120) months in the amount of $1,916 per month starting in December 2017.

The outstanding balance as of June 30, 2021 is $147,489.

B. In October 2020, The City entered into another OBF Agreement with SCE. The City has completed installation of eligible energy efficient equipment at the Marie Kerr Park Site set forth in the EMS Agreement and has accepted the equipment as being operational and in good working order. The amount financed is $116,202.56, and the repayment will be sixty-nine (69) months in the amount of $1,700 per month. The outstanding balance as of June 30, 2021 is $111,102. 56 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Year Ending Principal A Interest Total Year Ending Principal B Interest Total 2022 $ 23,016 $ - $ 23,016 2022 $ 20,404 $ - $ 20,404
2023 23,016 - 23,016 2023 20,404 - 20,404
2024 23,016 - 23,016 2024 20,404 - 20,404
2025 23,016 - 23,016 2025 20,404 - 20,404
2026 23,016 - 23,016 2026 20,404 - 20,404
2027-2028 32,409 - 32,409 2027-2028 9,082 - 9,082
Total $ 147,489 $ - $ 147,489 Total 111,102 - $ 111,102 Street Lights Retrofitting – In March 2017, the City entered into four (4) OBF Agreements with SCE for installation of the safety street lights at Sites 1-25, 26-50, 51-75 and Sites 76-105 in accordance with Energy Management Solution Incentive Application (EMS) Agreement. The safety street lights are components of the traffic signal infrastructure, and Sites 1-105 consist of the various street lights located throughout the City. The repayment of all four (4) Agreements will be over 120 months. The first payments were made in January 2018.

Amounts due under this On-Bill Financing (OBF) Agreement will be amounts deemed due under each Southern California Edison (SCE) utility bill to the Customer’s Service Account(s). Customer’s Loan Obligation is subject to the discontinuance provisions of SCE’s Rule 11, Discontinuance and Restoration of Service, Section B, Nonpayment of Bills or Summary Bills which is incorporated herein by reference. Following a breach as set forth in this Section, SCE shall have the right to declare the entire unpaid balance of the loan obligation immediately due and payable.

The amounts financed and outstanding balances as of June 30, 2021 are as follows:

A. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5806 for $20,258 with an outstanding balance of $9,681 as of June 30, 2021.

Year Ending Principal Interest Total
2022 $ 3,340 $ - $ 3,340
2023 3,340 - 3,340
2024 3,001 - 3,001
Totals $ 9,681 $ - $ 9,681
B. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5807 for $100,761 with an outstanding balance of $50,407 as of June 30, 2021
Year Ending Principal Interest Total
2022 $ 15,455 $ - $ 15,455
2023 15,455 - 15,455
2024 15,455 - 15,455
2025 4,042 - 4,042
Totals $ 50,407 $ - $ 50,407
57 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
C. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5808 for $13,684 with an outstanding balance of $5,449 as of June 30, 2021.

Year Ending Principal Interest Total
2022 $ 2,220 $ - $ 2,220
2023 2,220 - 2,220
2024 1,009 - 1,009
Totals $ 5,449 $ - $ 5,449
D. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5809 for $15,588 with an outstanding balance of $2,489 as of June 30, 2021.

Year Ending Principal Interest Total
2022 $ 2,489 $ - $ 2,489
B. Revenue Bonds
2012 Lease Revenue Bonds Payable ($8,695,000) – On December 19, 2012, Palmdale Financing Authority issued $8,695,000 of Lease Refunding Revenue Bonds (2012 Bonds). Interest on the 2012 Bonds is payable semi-annually on March 1 and September 1 at rates ranging from 2 percent to 4 percent per annum. Principal installments are payable September 1 of each year from 2015 to 2029.

The 2012 Bonds maturing on or after September 1, 2015, are subject to extraordinary mandatory redemption from net proceeds of an insurance, title insurance, condemnation or eminent domain award on any interest payment date, in the amount of principal and accrued interest, to the extent that the City credits these proceeds towards the prepayment of lease payments. The 2012 Bonds maturing on or after September 1, 2023, may be redeemed on or after September 1, 2022, from proceeds of optional lease prepayments made by the City, without premium.

The proceeds of the 2012 Bonds were used to refinance an existing lease and refund the related Certificates of Participation, to satisfy the reserve requirement of the bonds, and pay the costs incurred in connection with the issuance of the bonds.

The 2012 Bonds represent direct, undivided fractional interests in a lease of the City’s Development Services Building and South Valley WorkSource Center. The City has the right, subject to certain conditions, to substitute alternate property for the above properties, as property subject to the lease.
58 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
The lease agreement requires the City to pay a semi-annual base rental on August 15 and February 15 to the Authority for the use of the facilities through September 2029. The rentals will be used by the Authority to pay principal and interest with respect to the 2012 Bonds as they become due. Title to the land and facilities covered by the lease and the 2012 Bonds is vested in the Authority, for the benefit of the 2012 Bond holders, during the lease term.

Upon completion of the term of the lease and payment in full to the 2012 Bond holders, title to the property shall vest in the City. The City may, on any date, deposit sufficient funds into an irrevocable trust to pay all remaining lease payments, at which time the lease agreement shall cease and terminate and title to the property shall vest in the City.

If City defaults in performance of its obligations under the lease agreement, the City has consented to the Authority’s repossession of the Property. Notwithstanding any re-entry by the Authority, the City shall continue to remain liable for the payment of the lease payments and the performance of all conditions contained in the lease agreement. The City shall remain liable for the payment of all lease payments and shall reimburse the Authority for any deficiency arising out of the re-leasing of the property, or, in the event the Authority is unable to re-lease the property, then for the full amount of all lease payments to the end of the term of the lease agreement, but said lease payments and/or deficiency shall be payable only at the same time and in the same manner as provided for the payment of lease payments, notwithstanding such entry or re-entry by the Authority of any suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the property or the exercise of any other remedy by the Authority.

Year Ending Principal Interest Total
2022 $ 575,000 $ 162,548 $ 737,548
2023 590,000 147,248 737,248
2024 610,000 129,985 739,985
2025 625,000 111,460 736,460
2026 645,000 92,007 737,007
2027-2031 2,500,000 159,581 2,659,581
Totals $ 5,545,000 $ 802,829 $ 6,347,829
2015 Multifamily Housing Revenue Bonds Payable ($4,235,000) – On September 3, 2015, the Housing Authority of the City of Palmdale issued $4,235,000 of Multifamily Housing Revenue Bonds (2015 Bonds). Interest on the 2015 Bonds is payable semi-annually on December 1st and June 1st at rates ranging from 2.62 percent to 5.25 percent per annum. Principal installments are payable June 1st of each year from 2017 to 2045.

The 2015 Bonds maturing on or after June 1, 2026, may be redeemed on or after June 1, 2025, from moneys deposited in the Redemption Fund from any source of available funds, at a redemption price equal to the principal amount of Bonds called for redemption, together with accrued interest to the date fixed for redemption, without premium.

The 2015 Bonds maturing on or after June 1, 2025, are subject to extraordinary mandatory redemption from proceeds derived from sale or part of any of the Housing Facilities not elected by the Authority to be deposited in the Repair & Replacement Fund and used for acquisition and/or construction of improvements and extensions to the Housing Facilities, but instead transferred to the Redemption Fund, at a redemption price equal to bond principal amount called for redemption, together with accrued interest to the date fixed for redemption, without premium, on any date.

The 2015 Bonds maturing on any date, are subject to extraordinary mandatory redemption from insurance proceeds or condemnation proceeds not used for the purpose of repairing or replacing the property damaged, destroyed or taken, and transferred to the Redemption Fund pursuant to the Indenture or from proceeds of any foreclosure action under any of the Deeds of Trust transferred to the Redemption Fund, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium. 59 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
The proceeds of the 2015 Bonds were used to finance the acquisition of the Impressions, La Quinta, Park Vista, and Summerwood Apartments (collectively, the “Housing Facilities”) all located within the City of Palmdale, to finance the costs to renovate portions of the Housing Facilities, pay costs related to the issuance of the bonds, and make a deposit to a Bond Reserve Account for the Bonds.

The 2015 Bonds are limited obligations of the Housing Authority of the City of Palmdale and are secured by a first pledge of all of the Net Revenues of the Housing Facilities and by the Trustee’s interest in a Deed of Trust for each of the Housing Facilities.

Net Revenues are derived primarily from rents received by the Authority from the operation of the Housing Facilities, less the costs of the operation and maintenance of the Housing Facilities. The 2015 Bonds are payable solely from the Net Revenues and other assets pledged under the Indenture. The 2015 Bonds do not constitute a debt or liability of the City, the State or any political subdivision thereof. The liability is included in these Notes because the Housing Authority is reported as a component unit of the City’s financial statements.

Failure by the Authority to pay debt service on the bonds constitutes an event of default under the indenture and the Trustee is permitted to pursue remedies at law or in equity to enforce the Authority’s obligation to make such payments. The Trustee has no right to accelerate the total unpaid principal amount of the debt service on the bonds by reason of the occurrence of an event of default und the indenture. If there is a default under the indenture, the primary remedy of the Trustee is to foreclose on the real and personal property security granted pursuant to the Deeds of Trust and related documents.

Year Ending Principal Interest Total
2022 $ 95,000 $ 182,395 $ 277,395
2023 100,000 178,951 278,951
2024 100,000 175,326 275,326
2025 105,000 171,701 276,701
2026 110,000 167,895 277,895
2027-2032 615,000 766,815 1,381,815
2033-2037 765,000 621,195 1,386,195
2038-2042 965,000 414,225 1,379,225
2043-2046 980,000 132,038 1,112,038
Totals $ 3,835,000 $ 2,810,541 $ 6,645,541
2017 Lease Revenue Bonds Payable ($17,475,000) – On April 5, 2017, the Palmdale Financing Authority issued $17,475,000 of Lease Revenue Refunding Bonds, Series 2017. Interest on the 2017 Series Bonds is payable semi-annually on November 1 and May 1 at rates ranging from 2.00 percent to 3.50 percent per annum. Principal installments are payable November 1 of each year to 2032.

The 2017 Series Bonds maturing on or after November 1, 2028, may be redeemed on or after November 1, 2027, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

The 2017 Series Bonds are subject to special mandatory redemption as a whole, or in part on any date, from hazard insurance proceeds or condemnation proceeds not used to repair or replace any portion of the Property damaged or destroyed and elected by the Authority, at the discretion of the City, to be used for such purpose, at a redemption price equal to 100 percent of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium.

The 2017 Bonds represent direct, undivided fractional interests in a lease of the Palmdale City Hall, Palmdale Main Library, Larry Chimbole Cultural Center, Domenic Massari Park, and Desert Sands Park. The City has the right, subject to certain conditions, to substitute alternate property for the above properties, as the property subject to the lease.

The lease agreement requires the City to pay a semi-annual base rental to the Authority on October 25 and April 25 for the use of the facilities through November 2032. The rentals will be used by the Authority to pay principal and interest with respect to the 2017 Bonds as they become due. Title to the land and facilities covered by the lease and the 2017 Bonds is vested in the Authority, for the benefit of the 2017 Bond holders, during the lease term.

Upon completion of the term of the lease and payment in full to the 2017 Bond holders, title to the property shall vest in the 60 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
City. The City may, on any date, deposit sufficient funds into an irrevocable trust to pay all remaining lease payments, at which time the lease agreement shall cease and terminate and title to the property shall vest in the City.

Should the City default under the lease agreement, the Trustee, as assigned by the Authority, may terminate the lease agreement and re-lease the property or may retain the lease agreement and hold the City liable for all lease payments thereunder on an annual basis. Under no circumstances will the Trustee have the right to accelerate lease payments.

Year Ending Principal Interest Total
2022 $ 1,200,000 $ 547,288 $ 1,747,288
2023 1,330,000 484,038 1,814,038
2024 1,465,000 414,163 1,879,163
2025 705,000 359,913 1,064,913
2026 750,000 323,538 1,073,538
2027-2031 3,790,000 872,915 4,662,915
2032-2034 4,015,000 215,516 4,230,516
Totals $ 13,255,000 $ 3,217,371 $ 16,472,371
C. Certificates of Participation
2007 Certificates of Participation Payable ($19,960,000) – O n April 12, 2007, the Palmdale Civic Authority issued $19,960,000 of Certificates of Participation (2007 Certificates). Interest on the 2007 Certificates is payable semi-annually on April 1 and October 1 at rates ranging from 5.705 percent to 6.311 percent per annum . Principal installments are payable April 1 of each year to 2037. The 2007 Certificates maturing on April 1, 2017 and April 1, 2037, are subject to mandatory sinking fund redemption beginning on April 1 in each year in the amount of the principal component of scheduled lease payments required to be made by the City together with interest accrued thereon, without premium. The 2007 Certificates maturing on or after April 1, 2008, are subject to mandatory redemption from the net proceeds of an insurance, title insurance, condemnation or eminent domain award on any date, in the amount of principal and accrued interest, to the extent that the City credits these proceeds towards the redemption of lease payments. The 2007 Certificates maturing on or after April 1, 2018, may be redeemed on or after April 1, 2017, from proceeds of optional lease prepayments made by the City, without premium.

The 2007 Certificates are subject to extraordinary redemption, in w hole, on any date upon the election of the City to do so prior to (a) the commencement of construction of a power generating plant on the property, or (b) the closing of a construction loan to finance a power generating plant on the property, in the amount of principal and accrued interest, to the extent that the City credits these proceeds towards the prepayment of lease payments, without premium. The 2007 Certificates are subject to extraordinary redemption, in whole or in part, on any date on or after April 1, 2010, from the proceeds derived by the City of the sale of all or a portion of the property to the extent that the City credits these proceeds towards the prepayment of lease payments, without premium.

The proceeds of the 2007 Certificates were used to finance the acquisition of certain real property for future development and for other City uses. The 2007 Certificates represent direct, undivided fractional interests in a lease of the certain property to be the location of a power generating plant as discussed above.

The lease agreement requires the City to pay a semi-annual base rental on September 15th and March 15th to the Authority for the use and occupancy of the property through April 2037. The rentals will be used by the Authority to pay principal and interest with respect to the 2007 Certificates as they become due. Title to the property covered by the lease and the 2007 Certificates is vested in the Authority, for the benefit of the 2007 Certificate holders, during the lease term.

Upon completion of the term of the lease and payment in full to the 2007 Certificate holders, title to the property shall vest in the City. The City may, on any date, deposit sufficient funds into an irrevocable trust to pay all remaining lease payments, at which time the lease agreement shall cease and terminate and title to the property shall vest in the City. The certificates were defeased and paid in full as the debt was refunded.
61 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
2021 Certificates of Participation Payable ($13,584,908) - O n May 27, 2021, the City issued the Refunding of the 2007 Certificates with a private placement loan with Western Alliance Bank, in the amount of $13,584,908 with annual interest rate of 3.93 percent. The Refunding loan and other available funds in the trust accounts were used to refund the outstanding principal of the 2007 Certificates. As a result of the refunding, the City entered into a new Site Lease Agreement with Palmdale Financing Authority and terminated its existing lease agreement with Palmdale Civic Authority. As of June 30, 2021, a total of $13,584,908 was outstanding. The lease agreement requires the City to pay a semi-annual base rental on August 15 and February 15 to the Authority for the use of the facilities through September 2029. The rentals will be used by the Authority to pay principal and interest with respect to the 2021 Bonds as they become due. Title to the land and facilities covered by the lease and the 2021 Bonds is vested in the Authority, for the benefit of the 2021 Bond holders, during the lease term.

A refinancing at this rate produces a present value savings to the City of approximately 15% of the outstanding balance of the 2007 COPs and a total estimated $4,247,425 reduction in debt service payments over 15 years, or approximately $267,000 per year, and an estimated economic gain of $2,474,462
Upon completion of the term of the lease and payment in full to the lender, Western Alliance Bank, title to the property shall vest in the City. The City may, on any date, deposit sufficient funds into an irrevocable trust to pay all remaining lease payments on or after April 1, 2023 (option 1) or on or after April 1, 2029 (option 2), at which time the lease agreement shall cease and terminate and title to the property shall vest in the City.

In event of default under the lease, there is no available remedy of acceleration of the total lease payments due under the terms of the lease agreement. The City will only be liable for lease payments on an annual basis as they come due, and the Trustee would be required to seek separate judgments for the annual lease payments that may include foreclosure of the property.

Year Ending Principal Interest Total
2022 $ 757,457 $ 450,838 $ 1,208,295
2023 703,899 504,119 1,208,018
2024 733,546 476,456 1,210,002
2025 762,314 447,627 1,209,941
2026 790,168 417,668 1,207,836
2027-2031 4,444,385 1,597,126 6,041,511
2032-2036 5,393,139 651,964 6,045,103
Totals $ 13,584,908 $ 4,545,798 $ 18,130,706
2014 Lease Payable ($25,920,000) – O n October 16, 2014, the Palmdale Financing Authority assigned the future lease revenues from the Lease Agreement dated as of October 1, 2014, by and between the City of Palmdale and the Authority, to TPB Investments, Inc., a wholly owned subsidiary of Western Alliance Bank, an Arizona corporation, in exchange for $25,920,000 as a private placement loan. These funds were used to redeem $25,445,000 of outstanding 2002 Palmdale Civic Authority Certificates of Participation, pay $262,893 of interest on the outstanding 2002 Palmdale Civic Authority Certificates of Participation, and pay financing costs of $212,107.

All future lease payments will be paid to TPB Investments, Inc. by the City of Palmdale in semiannual installments beginning March 1, 2015 through September 1, 2032. The payments will be paid by the City of Palmdale from a first lien on the Park Assessment Fund fees.

Interest on the 2014 Certificates of Participation is payable semi-annually on March 1st and September 1st at 3.72 percent per annum. Principal installments are payable September 1st of each year through 2032. Certificates of Participation maturing on or after September 1, 2024 are subject to optional redemption at a price of 100 percent of the principal amount redeemed plus accrued interest.

Whenever any event of default shall have happened and be continuing, the Authority shall have the right, at its option and without any further demand or notice, to:
a. Declare all principal components of the unpaid lease payment, together with accrued interest from the immediately preceding lease payment date on which payment was made, to be immediately due and payable, whereupon the same 62 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
shall become due and payable; and
b. Take whatever action at law or in equity may appear necessary or desirable to collect the lease payments then due or thereafter to become due during the term of the lease agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this lease agreement.

All net proceeds received from subsequent lease or other disposition of the property, and all other amounts derived by the Authority as a result of an event of default hereunder and shall be applied to the lease payment in order of payment date. The City shall not have the right to terminate this lease agreement as a remedy for a default by the Authority in the performance of its obligation hereunder.

Year Ending Principal Interest Total
2022 $ 1,350,000 $ 721,308 $ 2,071,308
2023 1,400,000 670,158 2,070,158
2024 1,455,000 617,055 2,072,055
2025 1,510,000 561,906 2,071,906
2026 1,570,000 504,618 2,074,618
2027-2031 6,895,000 1,400,487 8,295,487
2032-2034 5,885,000 333,777 6,218,777
Totals $ 20,065,000 $ 4,809,309 $ 24,874,309
63 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
D. Change in Long-Term Liabilities
Activity for the year ended June 30, 2021 were as follows:

June 30,2020 Additions Retirements June 30,2021
Due Within
One Year
Compensated Absences Payable:

Compensated Absences Payable: $ 3,393,768 $ 1,955,130 $ 1,510,161 $ 3,838,737 $ 1,386,102 Total compensated absences payable 3,393,768 1,955,130 1,510,161 3,838,737 1,386,102 Liability Claims (General Fund)
Health, Dental and Vision Claims 738,880 2,555,287 2,189,198 1,104,969 1,104,969 Liability Claims 1,813,397 875,511 740,411 1,948,497 358,000 Total liability claims 2,552,277 3,430,798 2,929,609 3,053,466 1,462,969 Bonds payable:
2012 Lease Revenue Bond 6,115,000 - 570,000 5,545,000 575,000 2015 Mortgage Revenue Bonds 3,925,000 - 90,000 3,835,000 95,000 2017 Lease Revenue Bonds 14,350,000 - 1,095,000 13,255,000 1,200,000 2007 Certificates of Participation 15,290,000 - 15,290,000 - - 2014 Certificates of Participation 21,365,000 - 1,300,000 20,065,000 1,350,000 2021 Certificates of Participation - 13,584,908 - 13,584,908 757,457 Plus: Deferred Issuance Premiums $17.4 Million 664,801 - 186,754 478,047 154,243 Total bonds payable 61,709,801 13,584,908 18,531,754 56,762,955 4,131,700 Direct Borrowings and Direct Placements:

Notes Payable:

Section 108 HUD Loan 2,170,000 - 309,000 1,861,000 325,000 Home Loan 2,850,000 - - 2,850,000 -
Street Light Purchase Loan 10,706,232 - 708,004 9,998,228 725,563 SCE Parks LED Retrofit OBF A-5962 170,480 - 22,991 147,489 22,991 SCE LED Retrofit OBF A-5806 12,186 - 2,505 9,681 3,340
SCE LED Retrofit OBF A-5807 63,400 - 12,993 50,407 15,455 SCE LED Retrofit OBF A-5808 7,114 - 1,665 5,449 2,220
SCE LED Retrofit OBF A-5809 4,602 - 2,113 2,489 2,488
SCE LED Retro OBF A-7251 - 116,203 5,101 111,102 20,404 Total notes payable 15,984,014 116,203 1,064,372 15,035,845 1,117,461 Lease Payable:

Copier Lease 29,400 - 29,400 - -
New Copier Lease - 518,835 60,826 458,009 83,099
Energy Efficient Lease 802,894 - 77,626 725,268 80,297
Total lease payable 832,294 518,835 167,852 1,183,277 163,396 Total $ 84,472,154 $ 19,605,874 $ 24,203,748 $ 79,874,280 $ 8,261,628 The City is subject to a legal debt limit statutorily computed at 3.75 percent of assessed valuation. As of June 30, 2021, the City’s total debt limit was $512,549,479, and the total outstanding debt applicable to the limit w as $98,452,808, which is 19.21 percent of the total debt limit. The aggregate principal amount of the City's general obligation debt for public improvements is statutorily limited to 15.0 percent of the City's total reported assessed valuation. The City has no general obligation debt outstanding as of June 30, 2021.
64 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
13 - Special Assessment District and Community Facilities District Bonds None of the Bonds described below constitute indebtedness of the City, and the City is in no way obligated for their repayment except to the extent of any assessments, or special taxes collected and pledged for their repayment. The City is only acting on behalf of the Bondholders in collecting the assessments and special taxes levied to repay the Bonds, forwarding the collections to the Bondholders and initiating foreclosure proceedings, if necessary. Accordingly, these special assessment and special tax Bonds payable are not recorded as a liability in the accompanying financial statements. The amounts collected and held by the City pending disbursement to the Bondholders are accounted for in a custodial fund.

A. Bonds Outstanding
Community Facilities District No. 91-1 (Sierra Gateway) Special Tax Bonds – I n December 1991, the City issued $7,970,000 of special tax Bonds. Proceeds were used for the development of public improvements for the Sierra Gateway Center, a master-planned, mixed-use business park, which is proposed to ultimately include 2.5 million square feet of industrial, office, and retail buildings. The Bond issue provided for the acquisition of land, acquisition and construction of storm drainage retention facilities, landscaping, and street, water, and utility improvements. As of June 30, 2021, a total of $7,425,000 in Bonds was outstanding. No principal and interest payments are due on the Bonds after the maturity in December 2016. No additional special taxes will be levied on the property in the Sierra Gateway Community Facilities District No. 91-1.

In the Event of Default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.

Community Facilities District No. 93-1 (Ritter Ranch) Special Tax Bonds – In April 1995, the City issued $50,000,000 of special tax Bonds for the design, acquisition and construction of public improvements for a master-planned community known as Ritter Ranch consisting of facility, recreational, school, and commercial uses. As of June 30, 2021, a total of $22,665,000 in Bonds was outstanding for Ritter Ranch Community Facilities District No. 93-1. The principal and interest on the Bonds are to be paid from the collection of special taxes levied on the property in the Ritter Ranch Community Facilities District No. 93-1.

In the event of default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.

Community Facilities District No. 2003-1 (Anaverde Improvement Area A) Special Tax Bonds – On July 17, 2019 on behalf of the Improvement Area A of the City of Palmdale Community Facilities District No. 2003-1 (Anaverde Public Improvements), the City issued the Special Tax Refunding Bonds, Series 2019 in the amount of $15,565,000 with annual interest rate of 5 percent and $3,500,000 of issuance premium. The Special Tax Refunding Bond, Series 2019, issuance premium, and other available funds of the District were used to refund the outstanding principal of the Special Tax Bonds, Series 2005-A and Special Tax Bonds, Subordinate Series 2005-B. The Series 2005-A and Series 2005- B bonds were issued for the acquisition and construction of certain public capital improvements necessary for the development of a 5,200-unit master-planned community known as Anaverde. As of June 30, 2021, a total of $14,960,000 in Series 2019 Bonds was outstanding. The principal and interest on the Bonds are to be paid from the collection of special taxes on the property in the Anaverde Community Facilities District No. 2003-1.

In the event of default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.
65 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Community Facilities District No. 05-1 (Trade & Commerce Center) Special Tax Bonds – On August 2, 2005, the City of Palmdale issued $5,765,000 of Series A and $1,460,000 of Subordinate Series B Community Facilities District No. 05-1 (Trade and Commerce Center Area) 2005 Special Tax Refunding Bonds to refund a portion of the City’s outstanding 10th Street West Assessment District No. 88-1 Series 1989-A Limited Obligation Improvement Bonds and refund certain outstanding CFD 99-1 (Trade and Commerce Center) special tax bonds. The Subordinate Series B Bonds w ere converted to Series A Bonds during the 2011-12 Fiscal Year. The principal and interest on the bonds are to be paid from the collection of special taxes on the property in the Trade & Commerce Center Community Facilities District No. 05-1. On September 1, 2021, the bonds were fully redeemed by the refunding that took place on June 17, 2021 and under GASB 62 the City recorded the redemption in full as of June 30, 2021.

In the event of default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.

Community Facilities District No. 05-1 (Trade & Commerce Center Area) 2007 Special Tax Refunding Bonds, Series A – On August 23, 2007, the City of Palmdale issued $6,460,000 of Series A Community Facilities District No. 05-1 (Trade and Commerce Center Area) 2007 Special Tax Refunding Bonds to refund a portion of the City’s outstanding 7th Street West Assessment District No. 90-2 Series 1990-A Limited Obligation Improvement Bonds. The principal and interest on the Bonds are to be paid from the collection of special taxes on the property in the Trade & Commerce Center Community Facilities District No. 05-1. On September 1, 2021, the bonds were fully redeemed by the refunding that took place on June 17, 2021 and under GASB 62 the City recorded the redemption in full as of June 30, 2021.

In the event of default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.

Community Facilities District No. 05-1 (Trade & Commerce Center Area) 2021 Special Tax Refunding Bonds, - On June 17, 2021, the City issued the Refunding of the 2005 Series A and B and 2007 refunding bonds with a private placement loan with Western Alliance Bank, in the amount of $10,442,992, with annual interest rate of 3.39 percent. The Refunding loan and other available funds in the trust accounts were used to refund the outstanding principal of the 2005 and 2007 bonds. As a result of the refunding, the City entered into a new Fiscal Agreement with US Bank as Trustee. As of June 30, 2021, a total of $10,442,992 was outstanding. The Fiscal agreement requires the Community Facilities District to pay a semi-annual base rental on September 1 and March 1 to the trustee in order to pay Western Alliance Bank through September 2037.

The Refunding at an interest rate of 3.39% produces a total estimated $2.9 million reduction in debt service payments over 16 years, or approximately $188,000 per year.

In the event of default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.
66 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Assessment District No. 2006-1 (Godde Hills Estates Sewer Im provements) Limited Obligation Improvement Bonds – In November 2006, the City issued $2,220,000 of Special Assessment Bonds for the construction of sewer improvements in the community known as Godde Hills Estates. As of June 30, 2021, a total of $1,130,000 in Bonds was outstanding. The principal and interest on the Bonds are to be paid from the collection of special assessments on the Property in the Godde Hills Estates Sewer Improvements Assessment District No. 2006-1.

In the event of default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.

Community Facilities District No. 2016-1 (Joshua Ranch Water Supply and Maintenance Services) – O n February 3, 2016, the City established the City of Palmdale Community Facilities District 16-1 (Joshua Ranch Water Supply and Maintenance Services) to provide funds to pay the costs of certain water rights and related costs, and costs of certain maintenance services. In connection with the formation of District, the City entered into a Joint Community Facilities Agreement (“JCFA”), dated as of June 1, 2016, with the Antelope Valley-East Kern Water Agency (“AVEK”), CV Communities, LLC, Joshua Ranch 2 Inv, LLC (“JR2”), and Joshua Ranch 3 Inv, LLC (“JR3”). In November 2015, CV Communities secured entitlements to improve and develop the Property with a residential development to include up to 528 single family dwelling units. On December 23, 2015, ownership of the Property was transferred to JR2 and JR3. Under the JCFA as of June 1, 2016, CV Communities assigned to AVEK its rights to 567 acre-feet per year of water, including without limitation the right to all groundwater return flow resulting therefrom.

The special taxes are authorized to be levied on the Property for the purpose of (i) paying the annual purchase price of the Assigned Water Rights and other related and allocable charges to be paid by AVEK, (ii) paying the expenses of the City in administrating the CFD, (iii) paying the expenses of AVEK relative to its obligations under this agreement and otherwise with respect to the Assigned Water Rights, including but not limited to wheeling costs, and any costs associated with water banking by AVEK, (iv) paying an energy charge to AVEK based on California Department of Water Resources charges to transport water from the Tupman Turnout to AVEK’s water treatment plant, (v) paying energy charges incurred by the City related to banked water, and (vi) establishing and replenishing a reserve fund to be maintained by the City and to be drawn upon if the special taxes revenues collected by the City for the CFD in any fiscal year are not sufficient to pay the Annual Water Rights Charges, the AVEK Administrative Expenses and the AVEK Energy Charges due and payable in any fiscal year.

Under the Assignment Agreement between AVEK and CV Communities, AVEK will timely perform all the AVEK Obligations (as defined in the Assignment Agreement) on and after January 1, 2017 as they apply to the Assigned Water Rights and the City Water Allocation. CV Communities is obligated to pay the Annual Water Rights charges, and AVEK Administrative Expenses and any AVEK Energy Charges payable in calendar year 2017 (collectively, the “2017 Expenses”). In order to assure the City that the foregoing payments will be made, CV Communities provided the City with a Letter of Credit issued by Wells Fargo Bank on June 10, 2016. The City is entitled to draw on the amount available under the Letter of Credit in the event that CV Communities does not timely pay expenses. The current Letter of Credit was renewed in June 2021 and is effective through July 12, 2022. As of June 30, 2021, a total of $379,491 in Letter of Credit w as outstanding.

B. Default in Payment of Debt Service on Bonds Outstanding Community Facilities District No. 91-1 (Sierra Gateway) Special Tax Bonds – O n December 1, 1997, there were insufficient funds on hand to make the full payment of the scheduled principal and interest on the Community Facilities District No. 91-1 Bonds due to delinquencies within the District. In accordance with procedures for Community Facilities Districts (which are different from those for Assessment Districts), payments of interest only were made proportionally to the Bondholders as listed in the table below. During fiscal year 2015-16, foreclosure proceedings were initiated against the owner of Defaulted Properties. During the fiscal year 2016-17, the City, on behalf of CFD 91-1, obtained judgments against the property owner of the Defaulted Properties (“Property”). The Property went to a foreclosure sale on September 28, 2016, but no bids were received. The County of Los Angeles’ Treasurer and Tax Collector office (“TTC”) also conducted ad valorem foreclosure sale with respect to the Defaulted Properties. This foreclosure sale also failed. 67 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
During the Fiscal Year 2017-18, the owner of non-defaulted properties within the District has permanently satisfied the District special taxes attributable to such parcels. Accordingly, the City took the necessary actions to release the special tax lien imposed for the District on three non-defaulted parcels in June 2018.

As part of ongoing efforts to resolve the delinquency, the City met with Los Angeles County TTC officials at the City facility on August 29, 2018. There was an agreement in principal that Los Angeles County TTC office will seek Board of Supervisors’ approval of (i) cancellation of delinquent Ad Valorem Taxes levied against Property pursuant to Cal. Rev. and Tax Code section 4986.3 in connection with a deed in lieu of Property to the City, and (ii) County CFD’s pro rata distribution of proceeds from sale of Property via bankruptcy proceeding (net of costs) on aggregate debt outstanding in complete satisfaction of County judgment and delinquent special taxes.

The Los Angeles County TTC officials were interested in a proposed timeline and the City’s plan for the Property. The Plan is to market and sell the property and distribute proceeds to bondholders in complete satisfaction of amount owed under the Bonds, have the Property developed and paying taxes again. They also went out and visited the Property after the meeting. As of the date of the financial statements, the bonds and delinquent Ad Valorem Taxes levied against the Property remain outstanding.

Year Ending Interest Paid Fiscal Year Interest Paid
1997-1998 $ 241,881 2008-2009 $ 141,179
1998-1999 148,474 2009-2010 147,131
1999-2000 148,283 2010-2011 149,729
2000-2001 123,693 2011-2012 154,943
2001-2002 141,376 2012-2013 158,128
2002-2003 130,703 2013-2014 160,207
2003-2004 129,454 2014-2015 161,823
2004-2005 126,712 2015-2016 164,925
2005-2006 140,404 2016-2017 137,100
2006-2007 144,418 2017-2018 128,454
2007-2008 142,787 2018-2019 -
2019-2020 -
2020-2021 -
$ 3,121,804
14 - Residential Mortgage Revenue Bond Programs
The Multifamily Mortgage Program is designed to provide funds for the construction and permanent financing of apartment complexes. Bonds are paid from monthly rental payments generated by the development and from remaining bond proceeds held by Wells Fargo against loan number ending in 0039. The loan is administered by California Community Reinvestment Corp. (CCRC) and the loan is under the name Courson Senior Partners LP. As of June 30, 2021, there was $865,842 of Multifamily Mortgage Revenue Bonds outstanding.

On February 2, 2021, the City approved the issuance of tax-exempt revenue bonds by the California Public Finance Authority (CalPFA) to finance or refinance the acquisition and construction of a 118-unit multi family rental housing project located on 65th Street East and East Avenue S. The property is to be owned by Maison's Palmdale LP (the "Borrower") or a partnership with Ravello Holdings, Inc. (the "Developer"). As of June 30, 2021, there was $24,119,000 of Multifamily Mortage Revenue Bonds outstanding.

The bonds described above do not constitute indebtedness of the Housing Authority or the City, and there exists no legal or moral obligation on the part of the Housing Authority or the City to make payments on such bonds from any source other than the revenue and assets pledged thereto. The program is completely administered by the trustees. Accordingly, these programs and the mortgage revenue bonds issued there under have been excluded from the accompanying financial statements. 68 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
15 - Public Employees’ Retirement System (PERS) Pension Plan A. General Information about the Pension Plan
Plan Description - All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, an agent multiple employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers.

Benefit provisions under the Plan is established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided - CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Unused sick leave accumulated at the time of retirement will be converted to credited service at a rate of 0.004 years of service for each day of sick leave. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is the Basic Death benefit and the 1959 Survivor Benefit. The cost of living adjustments is 2 percent and applied as specified by the Public Employees’ Retirement Law.

The Plan’s provisions and benefits in effect at June 30, 2021, are summarized as follows:

On or Prior to
April 10, 2011

2.7 Percent @ Age 55
Between April 11, 2011
December 31, 2012

2.0 Percent @ Age 60
On or After
January 1, 2013

2.0 Percent @ Age 62
Benefit Vesting Schedule 5 year of Service 5 year of Service 5 year of Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age Age 50 to 55 Age 50 to 63 Age 50 to 67
Monthly Benefits, as a Percent of Annual Salary 2.0 to 2.7 percent 1.092 th 2.418 percent 1.0 to 2.5 percent Retired Employee Contribution Rates 8.0 percent 7.0 percent 6.75 percent Required Employer Contribution Rates 11.816 percent 11.816 percent 11.816 percent Employees Covered
At June 30, 2021, the following employees were covered by the benefit terms for each Plan:

On or Prior to
April 10, 2011

2.7 Percent @ Age 55
Between April 11, 2011
December 31, 2012

2.0 Percent @ Age 60
On or After
January 1, 2013

2.0 Percent @ Age 62
Inactive Employees or Beneficiaries Currently
Receiving Benefits 279 - -
Inactive Employees to But Not Yet Receiving
Benefits 241 - -
Active Employees 117 14 127
637 14 127
69 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Contributions
Section 20814(c) of the California Public Employees’ Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. The employer contributions during the year ended June 30, 2021 were $5,284,299.

B. Net Pension Liability
The City’s net pension liability for the Plan was measured as of June 30, 2020, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019, rolled forward to June 30, 2020.

Actuarial Assumptions
The total pension liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions.

Valuation Date June 30, 2019
Measurement Date June 30, 2020
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15 percent
Inflation Rate 2.50 percent
Projected Salary Increase Rate (1) 3.2 to 12.2 percent
Investment Rate of Return 7.50 percent
Mortality (2)
Notes:
(1) Depending on Age, Service and Type of Employment
(2) The Mortality Table used was developed based on CalPERS specific data The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For details on this table, please refer to the 2017 experience study report.

Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the City’s contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 70 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
In determining the long-term expected 7.15 percent rate of return on pension plan investments, CalPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the pension funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to the account for assumed administrative expenses.

The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

Asset Class
Target
Allocations
Real Return
Years 1 Thru 10*
Real Return
Years 11 and
Thereafter**
Global Equity %50.00 %4.80 %5.98
Fixed Income %28.00 %1.00 %2.62
Real Assets %13.00 %3.75 %4.93
Private Equity %8.00 %6.30 %8.23
Inflation Assets %- %0.77 %1.81
Liquidity %1.00 %- %(0.92)
Total %100.00
* An Expected Inflation Rate of 2.00% was used for this period. ** An Expected Inflation Rate of 2.92% was used for this period.

Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Plan for the measurement date June 30, 2021, are as follows:

Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balances as of June 30, 2020 $ 180,642,998 $ 133,679,230 $ 46,963,768 Changes in the Year:

Service Cost 2,918,406 - 2,918,406
Interest on the Total Pension Liability 12,822,978 - 12,822,978 Changes in Assumptions - - -
Differences between Expected and Actual Experience 1,368,882 - 1,368,882 Net Plan to Plan Resource Movement - - -
Contribution - Employer - 4,771,554 (4,771,554)
Contribution - Employee - 1,335,708 (1,335,708)
Net Investment Income - 9,450,968 (9,450,968)
Benefit Payments, including Refunds of Employee Contributions - (2,819,835) 2,819,835 Administrative Expenses (8,257,460) (8,257,460) -
Other Miscellaneous Income/(Expense) - (188,455) 188,455 Net changes 8,852,806 4,292,480 4,560,326
Balance at June 30, 2021 $ 189,495,804 $ 137,971,710 $ 51,524,094 71 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan, as of the measurement date, calculated using the discount rate of

7.15 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage- point lower (6.15 percent) or 1 percentage-point higher (8.15 percent) than the current rate.

Discount Rate
Less One Percent

6.15 Percent
Current
Discount Rate

7.15 Percent
Discount Rate
Plus One Percent

8.15 Percent
Plan's Net Pension Liability $ 76,112,758 $ 51,524,094 $ 31,094,292 Pension plan fiduciary net position:

Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial report which can be obtained from the CalPERS website.

C. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2021, the City recognized pension expense of $7,763,030. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Contributions made Subsequent to the Measurement Date $ 5,287,313 $ - Difference between Expected and Actual Experience 1,413,170 - Net Difference between Projected and Actual Earnings on Plan Investments 1,132,566 - Total $ 7,833,049 $ -
The amount of $5,287,313 r eported as deferred outflows of resources related to contributions made subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2022.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended June 30,
2022 $ 513,645
2023 764,497
2024 703,627
2025 563,967
Total pension expense $ 2,545,736
72 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
16 - Public Agency Retirement Systems
For all of its part-time employees not covered by PERS, a defined contribution pension plan is made available through the Public Agency Retirement System (PARS) pursuant to the requirements of 3121(B)(7)(F) of the Internal Revenue Code. This was created in accordance with Internal Revenue Code Sections 401(a) and 501 and adm inistered by Phase II Systems. Benefit terms, including contribution requirements for PARS are established by Internal Revenue Code 3121(b)(7)(F). Employees are required to contribute 7.5 percent of their salary to the pension plan, up to applicable Internal Revenue Code limits. The City does not contribute to Employees PARS account. Employees are immediately vested in their contributions and earnings on those contributions. For the year ended June 30, 2021, employee contributions amount were $223,394.

The City is required to contribute 3.75 percent of the elected Council Members annual salary to the individual account. The individuals are immediately vested in their own and the City’s contributions and earnings on those contributions. For the year ended June 30, 2021, employee and employer contributions amount were $3,188. 17 - Post-Employment Benefits Other Than Pensions
A. General Information about the Other Than Pensions-Plan (OPEB) Plan Description:

The City of Palmdale Retiree Health Program (Plan) is a single-employer plan that consists of a defined benefit healthcare plan and a defined contribution plan that is used to provide postemployment healthcare benefits other than pensions (OPEB) to eligible retirees. Management of the plan is vested with the Finance Manager, Human Resources Manager and Director of Administrative Services. The City is the trustee over the plan with fiduciary oversight and authority over the operations and management of the Trust.

On January 1, 2009, the City of Palmdale adopted a single employer defined benefit, as well as a single employer defined contribution Other Post Employment Benefit (OPEB) healthcare plan. The plans are administered by Benefit and Risk Management Services, Inc. of Folsom, California. To receive a post-employment health care benefit, an eligible or vested employee must retire from the City on or after attaining age 50 with at least five years of service and elect retiree health benefits within 120 days of separation. Retirees who opt out of the health plan may re-enroll under eligible qualifying events.

Beginning January 1, 2009, the City through local resolution amended the post-employment health care benefits and offered two benefit options to current retirees and to full-time employees employed at December 31, 2008. The options included a defined contribution option and defined benefit option. All full-time employees hired after December 31, 2008 are not eligible for any post-employment benefits. The City of Palmdale retains the authority and may elect at any time to amend post- employment health care benefits through local ordinance or resolution. Contributions are not currently required to be made by employees for either of the plans. The Plan does not issue a publicly available report.

B. Defined Benefit Plan
Funding Policies:

Plan membership - At June 30, 2021, the Defined Benefit Plan membership consisted of the following:

Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 25 Inactive Plan Members Entitled to But Not Yet Receiving Benefit Payments 3 Active Plan Members 60
88 73
City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Benefits provided
The Plan provides medical insurance benefits to eligible retirees. Current retirees receive a maximum of $250 deposited into the Plan per month beginning January 1, 2009. Employees age 45 and greater on December 31, 2008 that choose a defined benefit plan deposit of $250 per month at retirement, will receive either a maximum contribution of $250 per month or a pro-rated contribution for less than 10 years of service.

Contributions
The contribution requirements of the plan members and the City are established as described above under each plan and may be amended by the City Council. The Council establishes rates based on an actuarially determined rate. For the year ended June 30, 2021, the City contributed $0 to the Defined Benefit Plan.

Investment Policy
The Defined Benefit Plan’s policy in regard to the allocation of invested assets is established and may be amended by the City Council. It is the policy of the City Council to pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The investment policy applies to the investment of all cash and various funds of the City as identified in the adopted budget document for the purpose of funding the City OPEB liability
Concentrations
The Plan adheres to the investment policy for concentrations and types of investments.

Rate of Return
For the year ended June 30, 2021, the annual money-weighted rate of return on investments, net of investment expense was 5.73 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Net OPEB Liability (Asset)
The City’s net OPEB liability (Asset) was measured as of June 30, 2021, and the total OPEB liability (Asset) used to calculate the net OPEB liability (Asset) was determined by an actuarial valuation as of June 30, 2021.

Mortality rates were based on assumptions for Public agency miscellaneous members used in the December 2017 CalPERS actuarial valuation.

The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best–estimates of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These asset class estimates are combined to produce the portfolio long-term expected rate of return by weighting the expected future real rates of return by the current asset allocation percentage (or target allocation, if available) and by adding an expected inflation rate of 2.25 percent. All results are then rounded to the nearest quarter percentage point.

The best-estimates of expected future asset class returns were published in the 2016 Survey of Capital Market Assumptions produced by Horizon Actuarial Services. These expected returns, along with expected asset class standard deviations and correlation coefficients, are based on Horizon’s annual survey of investment advisory firms. The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data.

Best-estimates of geometric real and nominal rates of return for each major asset class included in the OPEB plan’s asset allocation as of the measurement date are summarized in the following table:
74 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Asset Class
Estimated
Long-Term
Allocations
Long-Term
Expected
Real Rate of Return
Domestic equity 45.00% 4.42%
International equity 10.00% 4.91%
Fixed Income 40.00% 1.00%
Real Estate and Alternatives 0.00% 3.98%
Cash and Cash Equivalents 5.00% (3.30)%
Total 100.00%
Discount Rate
The discount rate used to measure the total OPEB liability w as 2,67 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to m ake all projected future benefit payments of current plan members through 2036 and the long-term expected rate of return on OPEB plan investments was applied to those periods. A projected “crossover” date occurs in 2037 and unfunded benefit payments for the years thereafter were discounted using the expected 2.45% municipal bond index rate. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of June 30, 2021, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2021
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 2.67 percent
Investment Rate of Return 5.25 percent (1)
General Inflation Rate 2.25 percent
Healthcare Cost Trend Rate 6.30 percent for FY2022, gradually decreasing over several decades to an ultimate rate of 3.8 percent in
FY2076 and later years.
(1) Net of OPEB Plan Investment, including inflation
75 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Changes in the Net OPEB Liability (Asset):

OPEB Plan Increase (Decrease)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability (Asset)
Balances as of June 30,2020 $ 871,796 $ 1,039,735 $ (167,939) Changes in the Year:

Service Cost 26,370 - 26,370
Interest 31,829 - 31,829
Differences between Expected and Actual Experience 439,617 - 439,617 Changes in Assumptions (7,331) - (7,331)
Net Investment Income - 263,944 (263,944)
Benefit Payments, including Refunds of Employee Contributions (346,268) (346,268) - Administrative Expenses - (34,421) 34,421
Net changes 144,217 (116,745) 260,962
Balance at June 30, 2021 $ 1,016,013 $ 922,990 $ 93,023 Administrative Expenses for Fiscal Year Ended 2021, include $20,725 in payables for which the Trust is expected to reimburse the City after Fiscal Year End 2021, plus $13,696 in estimated costs paid directly from the Trust during Fiscal Year 2021.

Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate The following presents the net OPEB liability (asset) of the City, as well as what the City’s OPEB liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (1.67% percent) or one percentage point higher ( 3.67% percent) than the current discount rate:

Decrease 1%
Discount Rate of

1.67%
Current
Discount Rate of

2.67%
Increase 1%
Discount Rate of

3.67%
Net OPEB Liability (Asset) $ 165,888 $ 93,023 $ 28,451
Sensitivity of the Net OPEB liability (Asset) to Changes in the Healthcare Cost Trend Rates The following presents the Net OPEB Liability (Asset) of the City, as well as what the City’s Net OPEB Liability (Asset) would be if it were calculated using healthcare cost trend rates that are one percentage point lower (5.3 percent decreasing to 2.8 percent) or one percentage point higher (7.3 percent decreasing to 4.8 percent) than the current healthcare cost rates:

Healthcare
Cost Rates

5.3 percent
decreasing to 2.8
percent
Current
Healthcare
Cost Rates

6.3% Decreasing
to 3.8%
Healthcare
Cost Rates

7.3 percent
decreasing to 4.8
percent
Net OPEB Liability (Asset) $ 63,275 $ 93,023 $ 126,058
76 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
OPEB Expense and Deferred Outflows/Inflows of Resources related to OPEB:

For the Year ended June 30, 2021, the City recognized OPEB expense of $155,955. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Difference between Expected and Actual Experience $ 518,865 $ - Change of assumptions 66,366 26,776
Net Difference between Projected and Actual Investments Earnings - 161,319 Total $ 585,231 $ 188,095
Other amounts reported as deferred outflows of resources r elated to OPEB will be recognized as future OPEB expense as follows:

Measurement Period
Year Ended June 30,
2022 $ 126,692
2023 135,738
2024 115,444
2025 19,262
Total $ 397,136
C. Defined Contribution OPEB Plan
Plan membership
At June 30, 2021, the Defined Contribution OPEB Plan membership consisted of the following:

Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 14 Inactive Plan Members Entitled to But Not Yet Receiving Benefit Payments 0 Active Plan Members 89
Total defined contribution benefit plan membership $ 103 Benefits provided
Full time employees under age 45 on December 31, 2008 and employees aged 45 and greater who choose a defined contribution option will receive a defined contribution account. Annual allocations begin at $100 and increase with age up to a maximum $2,000 annual allocation. Individual balances grow w ith investment earnings and annual City contributions.

Beginning account balances were determined based on years of service, annual benefit times the life annuity factory at expected retirement age. Annual contributions for the beginning account balances and the annual contribution is made when the employee is fully vested as described above.
77 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Contributions
The contribution requirements of the plan members and the City are established as described above under the defined contribution plan and may be amended by the City Council. Currently, plan members and beneficiaries are not required to contribute to the plan. For the year ended June 30, 2021, the City contributed $128,500 to the Defined Contribution Plan.

Condensed Financial Statements:

Separate GAAP-basis reports are not currently available for the defined benefit and contribution plans. In lieu of separate issued financial statements for the City administered post-employment health care benefit trust funds, condensed financial statements are presented below for the year ended June 30, 2021:

OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution Plan Total
Assets:

Cash and cash equivalents $ 14,829 $ 1,947,193 $ 1,962,022 Investments:

Mutual Funds 1,359,123 2,309,999 3,669,122
Interfund Receivable - 17,278 -
Total assets 1,373,952 4,274,470 5,631,144
Liabilities:

Accounts Payable 433,684 - 433,684
Interfund Payable 17,278 - -
Total liabilities 450,962 - 433,684
Total net position restricted
for OPEB benefits $ 922,990 $ 4,274,470 $ 5,197,460
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution Plan Total
Additions:

Employer Contributions to Retiree Medical Trust $ - $ 128,500 $ 128,500 Investment and Interest Income 39,224 71,073 110,297
Net Realized and Unrealized Gains (Losses) 241,998 306,812 548,810 Total additions (deletions) 281,222 506,385 787,607
Deductions:

Benefits Paid to Participants and expenses 397,967 225,658 623,625 Total deductions 397,967 225,658 623,625
Change in Net Position (116,745) 280,727 163,982
Net Position as of July 1, 2020 1,039,735 3,993,743 5,033,478 Net Position as of June 30, 2021 $ 922,990 $ 4,274,470 $ 5,197,460 78 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
18 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency A. General Discussion
On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (“the Bill”) that provides for the dissolution of all Redevelopment Agencies in the State of California. This action impacted the reporting entity of the City of Palmdale that previously had reported a Redevelopment Agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a Redevelopment Agency, either the City or another unit of local government will agree to serve as the “Successor Agency” to hold the assets until they are distributed to other units of state and local government. On January 4, 2012, the City Council elected to become the Successor Agency for the former Redevelopment Agency in accordance with the Bill as part of City Resolution Number CC 2012-002.

After enactment of the law, which occurred on June 28, 2011, Redevelopment Agencies in the State of California cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

Successor Agencies are only allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former Redevelopment Agency until all enforceable obligations of the prior Redevelopment Agency have been paid in full and all assets have been liquidated.

B. Land Held for Development
Land held for development is recorded at the lower of acquisition cost or estimated fair market value. During fiscal year 2010- 2011, properties were conveyed to the City pursuant to Section 33220(g) of the Health and Safety Code to provide redevelopment and retain local control. As a result of AB1484, the same properties were reconvened back to the Successor Agency Trust Fund through a quitclaim process on November 9, 2012. The reconveyance was legally deemed to be reported as of June 30, 2015. Land Held for Development was transferred at a carrying value of $11,673,527. After the sale of land in accordance with the Successor Agency’s Long Range Property Management Plan, the carrying value of remaining land held is $5,209,768 as of June 30, 2021, and is reported on the Successor Agency Private Purpose Trust Fund financial statements.

C. Capital Assets
Capital Assets of the Successor Agency Trust Fund as of June 30, 2021 consisted of the following:

Beginning
Balance Additions Deletions
Ending
Balance
Capital assets not being depreciated:

Land and improvements $ 3,477,722 $ - $ - $ 3,477,722
Construction in progress 1,987,118 - (1,987,118) -
Total capital assets not being depreciated 5,464,840 - (1,987,118) 3,477,722 Capital assets being depreciated:

Buildings and structures 438,152 - - 438,152
Total capital assets being depreciated 438,152 - - 438,152 Less: accumulated depreciation for:

Buildings and structures 235,903 8,762 - 244,665
Total accumulated depreciation 235,903 8,762 - 244,665
Total capital assets, being depreciated, net 202,249 (8,762) - 193,487 Total capital assets, net $ 5,667,089 $ (8,762) $ (1,987,118) $ 3,671,209 79 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
For the Year Ended June 30, 2021, Depreciation Expense on capital assets was charged to the private purpose trust fund in the amount of $8,765.

D. Advances Due to Housing Authority-Housing Asset Fund Major Governmental Funds Receivables Payable
Housing Authority - Special Revenue Funds:

Housing Authority - Housing Asset Fund $ 5,409,777 $ -
Successor Agency Trust Fund:

Dissolved - CAR Project Area No. 1 and No. 2A - 5,409,777 Total $ 5,409,777 $ 5,409,777
In fiscal years 2004-2005 and 2005-2006, the State required the former Community Redevelopment Agency (CRA) to shift tax increment of $1,862,827 to the Education Revenue Augmentation Fund (ERAF). To assist in funding this shift, the former CRA Housing Development fund advanced $355,538 and $1,507,289 (50% of the total requirement) to the former CRA Project Area No. 1 and 2A Debt Service Funds, respectively. The 2004-2005 advance of $939,215 and the 2005-2006 advance of $923,612 will be repaid by the Successor Agency from available future property tax revenues with no interest charged.

In fiscal year 2009-2010, the State required the former Community Redevelopment Agency to shift tax increment of $11,605,102 to the Supplemental Education Revenue Augmentation Fund (SERAF). To assist in funding this shift, the former CRA Housing Development Fund advanced $2,533,394 and $9,091,708 (100% of the total requirement) to the former CRA Project Area No. 1 and 2A Debt Service Funds, respectively. The 2009-2010 advance of $11,605,102 will be repaid by the Successor Agency from available future property tax revenues with no interest charged.

In fiscal year 2010-11, the State required the former Community Redevelopment Agency to shift tax increment of $2,389,286 to the Supplemental Education Revenue Augmentation Fund. To assist in funding this shift, the former CRA Housing Development Fund advanced $521,581 and $1,867,705 (100% of the total requirement) to the former CRA Project Area No. 1 and 2A Debt Service Funds, respectively. The 2010-2011 advance of $2,389,286 will be repaid by the Successor Agency from available property tax revenues with no interest charged.

The advances due to Housing Authority described above are approved enforceable obligations in existence at the date of dissolution and will be repaid by the Successor Agency from future property tax. The repayment amount cannot exceed one-half of the increase between the amount distributed to the taxing entities and the 2012-13 base year (or residuals).

During Fiscal Year 2020-21, the Housing Authority received $2,750,000 from the Successor Agency during the Recognized Obligation Payment Schedule (ROPS) Period of July-June 2021 or ROPS 20-21A and B. The next payment is expected to be received during the ROPS Period of July-December 2021 or ROPS 21-22A and is estimated to be approximately $250,000.

E. Due to Other Governmental Units
The Successor Agency has advances due to the City as of June 30, 2021 of $577,135 for approved obligations paid by the City on behalf of the Agency.

F. Successor Agency Long-Term Debt

1. Notes Payable
2010 Series A and Series B Refunding Notes – The former Community Redevelopment Agency (CRA) issued a promissory Note for the purchase of 120 acres of industrial property known as the Fairway Business Park. On May 16, 2007, the former Community Redevelopment Agency approved a Settlement Agreement and Mutual General Release, which provided for the former Community Redevelopment Agency to pay a settlement amount of $23,043,000 for the property and $4,975,309 for accrued, unpaid interest. On September 1, 2010, the former Community Redevelopment Agency of the City of Palmdale issued $11,001,339 of 2010 Series A Tax Allocation Refunding Revenue Notes (2010 Series A Notes) and $16,504,000 of 2010 Series B Tax Allocation Refunding Revenue Notes (2010 Series B Notes). The net proceeds of the 2010 Series A & B Tax Allocation Refunding Revenue Notes were used to refinance the former Community Redevelopment Agency’s outstanding 80 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Fairway Business Park note payable.

The principal and interest on the Notes were payable from pledged property tax from the former Redevelopment Project Area No. 1. Interest on notes is payable semi-annually on March 1st and September 1st, beginning March 1, 2011. Principal installments are payable September 1st and March 1st of each year through 2026. The 2010 Series A Notes bear a fixed interest rate of 5.97 percent per annum and 2010 Series B Notes bear a fixed interest rate of 6.2 percent per annum.

Upon dissolution of the former Community Redevelopment Agency, the Note Payable was an approved enforceable obligation by the State Department of Finance, therefore beginning February 1, 2012, the pledge and payments will be made from future property tax revenues received by the Private Purpose Trust. The current year payments of principal and interest were $1,937,100. The outstanding balance of the notes as of June 30, 2021 is $12,010,262.

In event of default, the developer may exercise remedial action for delinquent payment under the Third Implementation Agreement, including declaring outstanding amounts to become immediately due if outstanding amounts continue after 30 days of event of default notice is sent. There is no clause for acceleration of payments.

Year Ending Principal Interest Total
2022 $ 2,058,542 $ 692,118 $ 2,750,660
2023 2,187,598 563,063 2,750,661
2024 2,321,278 429,382 2,750,660
2025 2,461,926 288,734 2,750,660
2026 2,980,918 139,563 3,120,481
Totals $ 12,010,262 $ 2,112,860 $ 14,123,122
Dillard's Infrastructure Note Payable
Dillard’s Infrastructure Note Payable – The former Community Redevelopment Agency entered into a Third Implementation Agreement to a Disposition and Development Agreement to reimburse the developer for improvements relating to the construction of a Dillard’s department store. The agreement provides for a maximum reimbursement of $1,851,038 to Dillard’s for costs of the public Infrastructure improvements necessary for the site. The former Community Redevelopment Agency has pledged a one percent of sales tax revenues generated from Dillard’s department store to repay the Note. The amount to be reimbursed quarterly is based upon 50 percent of the sales tax revenue actually received by the former Community Redevelopment Agency, generated by the sales occurring at the Dillard’s department store as reported by the latest quarterly report. Reimbursement payments are due 30 days after the Agency receives notice stating the amount of sales tax revenue generated by sales occurring during such calendar quarter.

Upon dissolution of the former Community Redevelopment Agency the Note Payable was an approved enforceable obligation by the State Department of Finance, therefore beginning February 1, 2012, the pledge and payments will be made from future property tax revenues received by the Private Purpose Trust. The reimbursement payment made from the current year was $51,425, and the balance remaining to be paid from pledged future revenues total $0 as of June 30, 2021. 81 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021

2. Tax Allocation Bonds
2002 Tax Allocation Bonds Payable ($5,329,758) – O n August 20, 2002, the former Community Redevelopment Agency issued $5,329,758 of 2002 Subordinate Lien Tax Allocation Bonds (2002 Bonds). The 2002 Bonds constitute capital appreciation bonds that are not subject to redemption prior to their respective stated maturities. Interest on the 2002 Bonds compound at rates ranging from 4.88% to 5.68% per annum on June 1 and December 1, and will be payable solely at maturity or upon earlier redemption of the respective Bonds. The Bonds w ill mature and be payable December 1 of each year from 2016 through 2032.

The former Community Redevelopment Agency has reported the debt in the Private Purpose Trust Fund and is an approved enforceable obligation by the State Department of Finance and will be repaid from future property tax revenues allocated to the Private Purpose Trust Fund.

The proceeds of the 2002 Bonds were used to finance redevelopment activities in or of benefit to Project Area No. 2A. The former Community Redevelopment Agency has pledged incremental property tax generated in Project Area No. 2A to pay principal and interest with respect to the 2002 Bonds as they become due. The current year payment of principal w as $970,000.

No interest was paid for the current year. Property taxes received after negotiated, statutory, and residual distributions totaled $12,415,000 for the year. At year-end, pledged future revenues totaled $12,415,000 of w hich $8,971,567 was the amount of the remaining principal and $3,443,433 interest on the Bonds.

In event of default, outstanding amounts become immediately due to the Trustee who act on behalf of the bond owners. An acceleration clause exists that allows the owners of the bonds to accelerate payment of the entire principal amount outstanding in the event of default. If acceleration occurs, then all pledged tax revenues and all sums of funds are to be held by Trustee under the indenture and will be applied by the Trustee.

Year Ending Principal Interest Total
2022 $ 943,904 $ 21,096 $ 965,000
2023 898,762 71,238 970,000
2024 854,894 120,106 975,000
2025 804,708 165,292 970,000
2026 765,179 209,821 975,000
2027-2031 3,371,646 1,733,354 5,105,000
2032-2033 1,332,473 1,122,527 2,455,000
Totals $ 8,971,566 $ 3,443,434 $ 12,415,000
2016 Tax Allocation Bonds Payable ($31,490,000) – On April 26, 2016, the Successor Agency issued $31,490,000 of 2016 Series A Tax Allocation Refunding Bonds (2016 Series A Bonds). Interest on the 2016 Series A Bonds is payable semi- annually on March 1 and September 1 at rates ranging from 2.00% to 5.00% per annum. Principal installments are payable September 1 of each year to 2034.

The 2016 Series A Bonds maturing on or after September 1, 2027, may be redeemed on or after September 1, 2026, at par together with accrued interest, without premium.

The Successor Agency has reported the debt in the Private Purpose Trust Fund and is an approved enforceable obligation by the State Department of Finance and will be repaid from future property tax revenues allocated to the Private Purpose Trust Fund.

The Successor Agency has pledged incremental property tax generated in the Successor Agency’s project areas to pay principal and interest on the 2016 Series A Bonds. The current year payments of principal and interest were $2,961,250. Property taxes received after negotiated, statutory, and residual distributions totaled $36,152,870 for the year. At year-end, pledged future revenues totaled $31,485,500 of which $23,760,000 was the amount of the remaining principal and $7,725,500 interest on the Bonds.
82 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
In Event of Default, outstanding amounts become immediately due to the Trustee who act on behalf of the bond owners. An acceleration clause exists that allows the owners of the bonds to accelerate payment of the entire principal amount outstanding in the Event of Default. If acceleration occurs, then all pledged tax revenues and all sums of funds are to be held by Trustee under the indenture and will be applied by the Trustee.

Year Ending Principal Interest Total
2022 $ 1,810,000 $ 1,142,750 $ 2,952,750
2023 1,910,000 1,049,750 2,959,750
2024 1,990,000 952,250 2,942,250
2025 2,095,000 850,125 2,945,125
2026 2,200,000 742,750 2,942,750
2027-2031 7,860,000 2,380,500 10,240,500
2032-2035 5,895,000 607,375 6,502,375
Totals $ 23,760,000 $ 7,725,500 $ 31,485,500
2016 Tax Allocation Bonds Payable ($41,645,000) – On June 23, 2016, the Successor Agency issued $41,645,000 of 2016 Series B Tax Allocation Refunding Bonds (2016 Series B Bonds). Interest on the 2016 Series B Bonds is payable semi- annually on March 1st and September 1st at rates ranging from 3.00 percent to 5.00 percent per annum. Principal installments are payable September 1st of each year to 2034. The 2016 Series B Bonds maturing on or after September 1, 2027, may be redeemed on or after September 1, 2026, at par together with accrued interest, without premium.

The Successor Agency has reported the debt in the Private Purpose Trust Fund and is an approved enforceable obligation by the State Department of Finance and will be repaid from future property tax revenues allocated to the Private Purpose Trust Fund.

The Successor Agency has pledged incremental property tax generated in the Successor Agency’s project areas to pay principal and interest on the 2016 Series B Bonds. The current year payments of principal and interest were $3,539,900. Property taxes received after negotiated, statutory, and residual distributions totaled $36,152,870 for the year. At year-end, pledged future revenues totaled $46,893,125 of which $34,855,000 was the amount of the remaining principal and $12,038,125 interest on the Bonds.

In Event of Default, outstanding amounts become immediately due to the Trustee who act on behalf of the bond owners. An acceleration clause exists that allows the owners of the bonds to accelerate payment of the entire principal amount outstanding in the Event of Default. If acceleration occurs, then all pledged tax revenues and all sums of funds are to be held by Trustee under the indenture and will be applied by the Trustee.

Year Ending Principal Interest Total
2022 $ 1,915,000 $ 1,636,775 $ 3,551,775
2023 2,005,000 1,538,775 3,543,775
2024 2,095,000 1,436,275 3,531,275
2025 2,205,000 1,328,775 3,533,775
2026 2,310,000 1,215,900 3,525,900
2027-2031 13,725,000 3,978,875 17,703,875
2032-2035 10,600,000 902,750 11,502,750
Totals $ 34,855,000 $ 12,038,125 $ 46,893,125
83 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021

3. Change in Long Term Liabilities
The following debt activity for the year ended June 30, 2021 are not debts or obligations of the City. They were transferred to the Successor Agency of the former Community Redevelopment Agency which are now accounted for in the Private Purpose Trust Fund:

Balances at July
01, 2020 Additions Retirements
Balance at June
30, 2021
Due Within One
Year
Bonds Payable:
2002 Tax Allocation Bonds $ 9,441,387 $ 500,181 $ 970,000 $ 8,971,568 $ 943,904 2016 Tax Allocation Bonds Series A 25,490,000 - 1,730,000 23,760,000 1,810,000 2016 Tax Allocation Bonds Series B 36,665,000 - 1,810,000 34,855,000 1,915,000 Plus: Deferred Issuance Premiums 7,786,393 - 1,298,252 6,488,141 1,166,235 Total bonds payable 79,382,780 500,181 5,808,252 74,074,709 5,835,139 Notes from Direct Borrowing and
Direct Placements:

Fairway Business Park 13,947,362 - 1,937,100 12,010,262 2,058,542 Dillard's Infrastructure 51,424 - 51,424 - -
Total notes payable - direct borrowing and direct
placements 13,998,786 - 1,988,524 12,010,262 2,058,542
$ 93,381,566 $ 500,181 $ 7,796,776 $ 86,084,971 $ 7,893,681 19 - Commitments and Contingencies
A. Contracts and Purchase Orders
The City has contracted with the County of Los Angeles for various services, principally law enforcement until June 30, 2024.

The agreement is maintained under “Contract City Law Enforcement Service Level Authorization” through which the County charges the set amount of service fees based on the number of deputies, support personnel, and their projected hours of services. The service rates are established by the County Auditor-Controller and adjusted annually effective July 1st of each year. To date, the annual increase in cost for the services provided has been approximately 6 percent. Accordingly, the projected commitments are constructed with such average increase. Additionally, the City is required to pay for the City’s portion of liability cost to ensure that funds are available in the event of litigations. The liability cost is currently 11 percent of the service units purchased and is expected to increase in future years. These contracts are cancelable at any time, with or without cause, upon 180-days written notice by the City or as of the first day of July of any year upon notice in writing not less than 60-days prior.

The following was the contract cost for the fiscal year ending June 30, 2021:

Fiscal Year 2020-21 $ 27,492,570
Total Cost $ 27,492,570
The City also has other various outstanding contracts and purchase orders for services, supplies, materials, and capital projects that have not been completed at year-end. These commitments total approximately $28,693,201 a t June 30, 2021, with the following breakdown between major funds and non-major funds. 84 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Major Funds:

General Fund $ 2,256,730
Housing Asset Fund 3,224,940
Total Major Funds 5,481,670
Internal Service Funds
Information Technology 2,000,000
Fleet Maintenance 235,670
Total Internal Service Funds 2,235,670
Non-Major Special Revenue Funds 20,975,861
Total Contract and Purchase Orders
Outstanding for Governmental Funds $ 28,693,201
B. Grants
The City has received State and Federal funds for specific purposes that are subject to review by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grant, it is believed that any disallowed amounts will not be material.

C. Claims and Judgments
There are certain legal actions pending against the City that have arisen in the normal course of operations and are covered under the risk management liability. These actions include filed lawsuits and asserted claims for personal injury, property damage, and wrongful death – auto accident. In the opinion of management, after consultation with counsel, claims against the City not covered by insurance resulting from such litigation would not materially affect the financial position of the City.

D. Obligations of the Successor Agency Private Purpose Trust Fund As more fully described at Note 18, the former Community Redevelopment Agency of the City of Palmdale was dissolved on January 31, 2012. Obligations to be paid out to the Successor Agency Private Purpose Trust Fund are included in the Required Obligation Payment Schedules (ROPS) which are subject to approval by the State Department of Finance. All obligations of the Successor Agency have been approved by the State Department of Finance, however, are still subject to audit by the County Auditor-Controller and the State Controller. Additionally, obligations on a future ROPS may be denied even if it was not questioned from a preceding ROPS. The City is not legally obligated for any of the Successor Agency Private Purpose Trust Fund debt.
20 - Related Party Loan
On June 30, 2021, the City authorized a home loan for the City Manager totaling $1,200,000 with a 30-year term and bearing a fixed interest rate of 1.04 percent. The loan is secured by the residence and has a provision that any outstanding balance is due within 12 months of termination of employment. Please see Note 23 - Subsequent Event for more detail. 21 - Prior Period Adjustment
As of July 1, 2020, the City of Palmdale adopted GASB Statement No. 84, Fiduciary Activities (GASB 84). As a result, the City restated its fiduciary net position as of June 30, 2020 to properly reflect the beginning equity and the change in accounting related to this implementation. The restatement is summarized as follows:
85 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
Fund
Financial
Statements
Fiduciary
Fund
Custodial
Funds
Net position at July 1, 2020, as previously stated $ -
Prior period adjustment:

Recognize Custodial Funds Net Position-6/30/20 6,018,209 Net Position at July 1, 2020, as restated $ 6,018,209
In addition to GASB 84 implementation, on July 1, 2020 the City of Palmdale converted its Information Technology and Fleet Vehicle assets to Proprietary Funds as Internal Service Funds. As a result, the City restated its Proprietary Funds net position as of June 30, 2020 to properly reflect the beginning equity. The restatement is summarized as follows:

Fund Financial Statements
Proprietary
Fund
Proprietary
Fund
Proprietary
Fund
IT Internal
Service Fund
Fleet Internal
Service Fund
Total Internal
Service Fund
Net position at July 1, 2020, as previously stated $ - $ - $ - Prior period adjustment:

Reclassification of capital assets balances from governmental fund to internal service fund 6/30/2020 293,962 3,132,229 3,426,191 Net Position at July 1, 2020, as restated $ 293,962 $ 3,132,229 $ 3,426,191 22 - New Accounting Pronouncements
The following pronouncements were issued prior to June 30, 2021 and have effective dates that may impact future financial statement presentation. The effects of the statements are currently under review.

Governmental Accounting Standard No. 87
GASB Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. The requirements of this Statement are effective for periods ending June 30, 2022 and subsequent.

Governmental Accounting Standard No. 89
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. The objective of this Statement is to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and to simplify accounting for interest cost incurred before the end of a construction period. The requirements of this Statement are effective for periods beginning after December 15, 2020.

Governmental Accounting Standard No. 91
GASB Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this Statement are effective for reporting periods beginning after December 15, 2021.

Governmental Accounting Standard No. 92
86 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
GASB Statement No. 92, Omnibus 2020. The primary objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. This Statement is effective for periods ending June 30, 2022 and subsequent.

Governmental Accounting Standard No. 93
GASB Statement No. 93, Replacement of Interbank Offered Rates (IBOR). The primary objectives of this Statement are to address the accounting and financial reporting implications that result from the replacement of an IBOR. This Statement is effective for periods ending June 30, 2022 and subsequent.

Governmental Accounting Standard No. 94
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objectives of this Statement are to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). This Statement is effective for periods beginning after June 15, 2022.

Governmental Accounting Standard No. 96
GASB Statement No. 96, Subscription-based Information Technology Arrangements. The primary objectives of this Statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). The Statement is effective for reporting periods beginning after June 15, 2022.

Governmental Accounting Standard No. 97
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting For Internal Revenue Code Section 457 Deferred Compensation Plans – An Amendment of GASB Statement No.14 and No.84 and A Supersession of GASB Statement No.32. The primary objectives of this Statement are to (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other em ployee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The Statement is effective for reporting periods beginning after June 15, 2021 for requirements that are related to the accounting and financial reporting for Section 457 plans.
87 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2021
23 - Subsequent Event
On Feb 16th, 2022, the City Council voted to dismiss the City Manager, to whom this loan was provided. Section 4 of the the home loan agreement provides that the outstanding balance of the loan must be paid in full within 12 calendar months after the conclusion, for any reason, of the City Manager's employment. As of March 31, 2022, the outstanding balance on the loan is $1,174,335.
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Palmdale, California
Year Ended June 30, 202
Required Supplementary Information
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City of Palmdale
Schedule of Changes in Net Pension Liability and Related Ratios-Public Employees Retirement System - Miscellaneous Plan Year Ended June 30, 2021
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021
Total pension liability
Service costs $ 2,590,160 $ 2,387,436 $ 2,233,050 $ 2,601,354 $ 2,649,090 $ 2,767,665 $ 2,918,406 Interest on the total pension liability 10,116,430 10,398,124 10,825,834 11,018,183 11,570,800 12,220,037 12,822,978 Differences between expected and actual experience - (2,606,465) - 9,269,931 (1,358,574) - 1,368,882 Changes in assumptions - (3,032,525) (948,090) (3,510,853) 2,354,023 2,310,424 - Benefit payments, including refunds of member contributions (5,808,324) (6,049,238) (6,289,370) (6,542,229) (7,277,711) (7,740,973) (8,257,460) Net change in total pension liability 6,898,266 1,097,332 5,821,424 12,836,386 7,937,628 9,557,153 8,852,806 Total pension liability - beginning 136,494,809 143,393,075 144,490,407 150,311,831 163,148,217 171,085,845 180,642,998 Total pension liability - ending (a) $ 143,393,075 $ 144,490,407 $ 150,311,831 $ 163,148,217 $ 171,085,845 $ 180,642,998 $ 189,495,804 Plan fiduciary net position
Net plan to plan resource movement $ - $ - $ - $ - $ (297) $ - $ - Contributions - employer 3,673,903 3,871,255 4,262,274 5,157,320 3,514,327 4,117,304 4,771,554 Contributions - member 1,106,027 1,030,304 1,016,500 1,165,598 1,138,029 1,195,002 1,335,708 Net investment income 16,152,589 2,406,554 545,870 12,177,480 10,157,757 8,331,569 9,450,968 Benefit payments, including refunds of member contributions (5,808,324) (6,049,238) (6,289,370) (6,542,229) (7,277,711) (7,740,973) (2,819,835) Administrative expense - (127,281) (66,805) (161,055) (188,366) (91,249) (8,257,460) Other - - - - (357,711) 297 (188,455)
Net change in plan fiduciary net position 15,124,195 1,131,594 (531,531) 11,797,114 6,986,028 5,811,950 4,292,480 Plan fiduciary net position - beginning 93,359,880 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 Plan fiduciary net position - ending (b) 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 137,971,710 Net pension liability - ending (a) - (b) $ 34,909,000 $ 34,874,738 $ 41,227,693 $ 42,266,965 $ 43,218,565 $ 46,963,768 $ 51,524,094 Plan fiduciary net position as a percentage of the total net pension liability %75.66 %75.86 %72.57 %74.09 %74.74 %74.00 %72.81 Covered payroll $ 13,588,668 $ 13,287,152 $ 12,550,868 $ 13,529,154 $ 14,797,277 $ 15,030,592 $ 16,449,558 Net pension liability as a percentage of covered payroll %256.90 %262.47 %328.48 %312.41 %292.07 %312.45 %313.22 Measurement date June 30 , 2014 June 30 , 2015 June 30 , 2016 June 30 , 2017 June 30 , 2018 June 30 , 2019 June 30 , 2020 *Fiscal year 2015 is the first year of implementation.
89 City of Palmdale
Schedule of Contributions - Public Employees Retirement System - Miscellaneous Plan Year Ended June 30, 2021
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021
Actuarially determined contribution $ 3,871,255 $ 4,262,274 $ 5,157,320 $ 3,509,493 $ 4,112,469 $ 4,766,182 $ 5,287,313 Contributions in relation to the actuarially determined contribution 3,871,255 4,262,274 5,157,320 3,509,493 4,112,469 4,766,182 5,287,313 Contribution deficiency $ - $ - $ - $ - $ - $ - $ -
Covered payroll 13,287,152 12,550,868 13,529,154 14,797,277 15,030,592 16,449,558 17,567,263 Contributions as a percentage of covered payroll %29.14 %33.96 %38.12 %23.72 %27.36 %28.97 %30.10 Valuation date: 2012 2013 2014 2015 2016 2017 2018
Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age Entry age Entry age Entry age Entry age Entry age Entry age Amortization method
Level percentage of
payroll, closed
Level percentage of
payroll, closed
Level percentage of
payroll, closed
Level percentage of
payroll, closed
Level percentage of
payroll, closed
Level percentage of
payroll, closed
Level percentage of
payroll, closed
Remaining amortization period 15 years 20 years 25 years 30 years 30 years 30 years 30 years Asset valuation method
5-year smoothed
market
15-year smoothed
market 5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed Inflation %2.75 %2.75 %2.75 %2.75 %2.75 %2.50 %2.75
Salary increase

4.5% average,
including inflation
of 3%

3.30% to 14.20%,
including inflation
of 3%
Varies on entry
age, and service,
including
varies on entry age,
and service,
including
varies on entry age,
and service,
including
varies on entry age,
and service,
including
varies on entry age,
and service,
including
Investment rate of return 7.5% net of
pension plan
investment
expense, including
inflation

7.5% net of
pension plan
investment
expense, including
inflation

7.5% net of
pension plan
investment
expense, including
inflation

7.5% net of
pension plan
investment
expense, including
inflation

7.5% net of
pension plan
investment
expense, including
inflation

7.5% net of
pension plan
investment
expense, including
inflation

7.375 net of
pension plan
investment
expense, including
inflation
Retirement age:

The probabilities of retirement and mortality are based on the CalPERS Experience Study for the period from 1997 to 2015.

Mortality:

The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 20 years of projected mortality improvements using Scale BB published by the Society of Actuaries. *Fiscal year 2015 was the first year of implementation. 90 City of Palmdale
Schedule of Changes in Net OPEB Liability and Related Ratios Other Postemployment Benefits (OPEB)
Year Ended June 30, 2021
Last Ten Years*
2017 2018 2019 2020 2021
Total OPEB liability
Service costs $ 9,380 $ 9,801 $ 10,241 $ 19,286 $ 26,370 Interest 42,190 41,817 41,771 49,286 31,829
Differences between expected and actual
experience 162,410 117,475 272,638 - 439,617
Changes in assumptions - - (45,786) 103,650 (7,331)
Benefit payments, including refunds of
member contributions (244,316) (195,980) (144,496) (139,429) (346,268) Net change in total OPEB liability (30,336) (26,887) 134,368 32,793 144,217 Total OPEB liability - beginning 761,858 731,522 704,635 839,003 871,796 Total OPEB liability - ending (a) $ 731,522 $ 704,635 $ 839,003 $ 871,796 $ 1,016,013 Plan fiduciary net position
Contributions - employer $ - $ - $ - $ - $ -
Contributions - member - - - - -
Net investment income 165,897 122,424 68,284 64,325 263,944 Differences between projected and actual
earnings on plan investments - - - - -
Administrative expense (45,852) (42,234) (51,637) (34,922) (34,421) Benefit payments, including refunds of
employee contributions (244,316) (195,980) (144,496) (139,429) (346,268) Net change in plan fiduciary net position $ (124,271) $ (115,790) $ (127,849) $ (110,026) $ (116,745) Plan fiduciary net position - beginning 1,517,671 1,393,400 1,277,610 1,149,761 1,039,735 Plan fiduciary net position - ending $ 1,393,400 $ 1,277,610 $ 1,149,761 $ 1,039,735 $ 922,990 Net OPEB liability ending $ (661,878) $ (572,975) $ (310,758) $ (167,939) $ 93,023 Plan fiduciary net position as a percentage of
the total net pension liability %190.48 %181.32 %137.04 %119.26 %90.84 Covered-employee payroll1 840,010 874,002 914,074 941,496 897,776 City's net OPEB asset as a percentage of
covered-employee payroll %(78.79) %(65.56) %(34.00) %(17.84) %10.36 Measurement date June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 Notes to Schedule
* Fiscal year 2017 was the first year of implementation. 1 Contributions to the OPEB plan are not based on measure of pay, as such, covered employee payroll is used as the measure of payroll 91 City of Palmdale
Schedule of Investment Returns for OPEB
Other Postemployment Benefits (OPEB)
Year Ended June 30, 2021
Last Ten Years*
2017 2018 2019 2020 2021
Annual money-weighted rate of return -
net of investment expense %11.23 %10.31 %5.50 %5.73 %26.04 Notes to Schedule
* Fiscal year 2017 was the first year of implementation. 92 Supplementary Information
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City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2021
Special Revenue Funds – Are used to account for specific revenues that are legally restricted to expenditures for a particular purpose. The following special revenue funds have been classified as non-major funds:

Air Quality Improvement Fund – This fund accounts for revenue and related expenditures for the City’s equipment and capital projects which improve air quality.

Community Development Block Grant (CDBG) Fund – This fund accounts for Federal entitlements under the Housing and Community Development Act of 1974, as amended.

Communications PEG Fund - This fund accounts for The Public, Education and Government Fund (PEG) that was established to account for costs related to local public education and government access stations.

Drainage Funds – T his fund accounts for revenues collected under the City’s Drainage Fee, which are used for the development of drainage improvements.

Drainage Benefit Assessment District – This fund accounts for revenues collected under the City’s Drainage fee, which are used for the development of drainage improvements.

Federal Funds – This fund accounts for revenues and expenditures received from Federal sources.

Federal Home Program – This fund accounts for all federal funds received under the Home Investment Partnership Act.

Federal Jobs Program Fund – This fund accounts for revenues and expenditures associated with the Job Training Partnership Act and Welfare to Work Programs.

Fire Facilities Impact Fund – This fund accounts for revenues collected under the City’s Fire Facilities Impact Fee, which are used for constructing and outfitting facilities needed to serve future development.

Gas Tax Fund – This fund accounts for state gasoline allocations provided to the City for street-related purposes.

Housing Authority Fund – T his fund accounts for compliance monitoring expenditures and Bond Issuer’s Fees collected for Housing Authority.

Landscape Maintenance Fund – This fund is used to account for revenues and expenditures attributable to Landscape Maintenance District 97-1.

Local Transportation Article 3 Fund – This fund is used to account for State funds provided to the City for construction of local bikeways and bikeway related projects.

Local Transportation Article 8 Fund – This fund accounts for State funds provided to the City for street-related purposes only.

Measure AV Fund - This fund accounts for the revenues received as a result of the ¾ cent sales tax increase that was passed in November 2020 and took effect April 1, 2021. Funds must be spent on operating and capital expenditures that are in alignment with the ballot measure.

Measure R Fund – This fund accounts for State Funds provided to the City for street-related purposes only.

Measure M Fund – This fund accounts for State Funds provided to the City for transportation related purposes only.

Miscellaneous Grants/Developer Contributions – This fund accounts for revenues and expenditures received from Developers and Local Agencies for improvements.

Parks Assessments Fund – This fund accounts for revenues collected under the City-wide Park Assessment District, which are used for the acquisition, improvement, expansion and maintenance of public parks.

Park Development Fund – This fund accounts for revenues collected under the City’s Unit Dwelling Fee, which are used for the acquisition, improvement and expansion of public parks, playgrounds & recreational facilities.

Proposition A Fund – This fund accounts for special sales tax revenues, which are used for local transit.

Proposition C Fund – T his fund accounts for special sales tax revenues and expenditures related to street and road 94 City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2021
improvements and transit.

Public Art Fund - This fund accounts for the revenues and expenditures generated under the Public Art policy, derived from gifts or donations for public art. Private and municipal development projects are required to contribute to the fund per PMC Section 15.01.020.

Public Facilities Fund – This fund is used to account for revenues received from developer fees. These funds can only be used to assist with the development and rehabilitation of City buildings.

Public Safety Fund – This fund is used to account for the revenues received as a result of vehicle code violations and drug forfeiture operations. These funds can only be used for law enforcement expenditures.

Road Maintenance & Rehabilitation – This fund is used to account for state funds provided to the City to repair roads, improve traffic safety, and expand public transit systems across the state.

S.A.V.E.S. Fund (South Antelope Valley Emergency Services) – T his fund is used to account for revenues and expenditures related to providing food and shelter for qualified recipients.

Sewer Maintenance Assessment District – This fund is used to account for revenues and expenditures associated with the City sewer assessment district service the City and its sewer system.

Sewer Upgrade Fund – T his fund accounts for revenues collected under the City’s Sewer Upgrade Fee, which are used for sewer improvements.

Solid Waste Fund - T his fund was established to account for costs related to programs initiating recycling and waste management efforts throughout the City.

State Grants Fund – This fund accounts for revenues and expenditures received from State resources.

Street Lighting Assessment District Fund - This fund is used to account for revenues and expenditures restricted to residential street lighting services.

Traffic Impact Fund – This fund accounts for revenues collected under the City’s Traffic Impact Fee, which are used for traffic related projects, such as traffic signals and street improvements.

Housing Facilities Fund – This fund accounts for the revenues and expenditures restricted to the operations of four (4) City owned apartment buildings, three (3) City owned mobile home parks, and two (2) properties with eight (8) apartment units acquired from New Beginnings Outreach.

Palmdale Community Foundation – T his fund accounts for the 501 (C) (3) non-profit public benefit corporation activities related to City programs.

Water Park – This fund accounts for the operation of the City owned Dry Town Water Park.

Debt Service Funds – a re used to account for the accumulation of resources for and the payment made for principal and interest on bonded debt and other long-term obligations. The following fund has been classified as a non-major fund:

Palmdale Civic Authority Fund – This fund is used to account for construction projects funded through issuance of Certificates of Participation. Current projects include new park facilities and street improvements.

Palmdale Financing Authority Fund – T his fund accounts for resources accumulated and payments made for principal and interest on Lease Revenue Bonds secured by lease payments by the City of Palmdale as rental for certain property pursuant to a lease agreement.

Capital Projects Funds – are used to account for financial resources used for the acquisition and construction of major capital facilities. The following capital projects funds have been classified as non-major funds:

Community Facilities District (CFD) – This fund accounts for the revenues and expenditures of community facilities districts and assessment districts, which are funded entirely from district bond proceeds. 95 City of Palmdale
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2021
Debt Service Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale Civic
Authority
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Assets:

Cash $ 253,909 $ - $ - $ - $ 253,909
Investments 153,124,520 1,079,833 - - 154,204,353
Receivables:

Accounts Receivable 17,495,217 1,039 - 12 17,496,268
Property tax receivable 52,483 - - - 52,483
Due from other funds 1,322,906 - - - 1,322,906
Notes and Liens 9,989,107 - - - 9,989,107
Advances due from fiduciary funds - - - 583,859 583,859 Advances due from other funds 4,400,000 - - - 4,400,000 Prepaid Items and Other Assets 1,114 - - - 1,114
Restricted Assets
Investments - - - 2,771,354 2,771,354
Total assets $ 186,639,256 $ 1,080,872 $ - $ 3,355,225 $ 191,075,353 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable $ 3,017,168 $ - $ - $ - $ 3,017,168
Due to fiduciary funds - - - 1,565 1,565
Due to other funds 1,954,365 - - 35,769 1,990,134
Advances due to other funds 9,400,000 - - - 9,400,000
Notes payable 68,026 - - - 68,026
Deposits 1,779,080 - - - 1,779,080
Total liabilities 16,218,639 - - 37,334 16,255,973
Deferred Inflows of Resources:

Unavailable revenue 10,718,768 - - - 10,718,768
Fund Balances:

Restricted 160,469,126 1,080,872 - 3,317,891 164,867,889 Unassigned (767,277) - - - (767,277)
Total fund balances 159,701,849 1,080,872 - 3,317,891 164,100,612 Total liabilities, deferred inflows of resources and
fund balances $ 186,639,256 $ 1,080,872 $ - $ 3,355,225 $ 191,075,353 96 City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Year Ended June 30, 2021
Debt Service Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale Civic
Authority
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Revenues:

Sales Taxes $ 5,188,745 $ - $ - $ - $ 5,188,745
Other Taxes 4,516,585 - - - 4,516,585
Subventions and grants 28,048,936 - - - 28,048,936
Park development fees 2,089,872 - - - 2,089,872
Licenses and Permits 107,606 - - - 107,606
Fines and forfeitures 243,159 - - - 243,159
Special Assessments 19,505,242 - - - 19,505,242
Charges for current services 1,061,103 - - - 1,061,103
Drainage fees 2,194,296 - - - 2,194,296
Traffic impact fees 806,342 - - - 806,342
Facilities impact fees 1,380,206 - - - 1,380,206
Interfund interest 36,868 - - - 36,868
Interest 738,334 16,941 5 383 755,663
Net increase (decrease) in fair value of investments (501,856) (4,002) - (60) (505,918) Developer contributions 18,950 - - - 18,950
State contributions 764,639 - - - 764,639
Other agency contributions 2,215,098 - - - 2,215,098
County contributions 340,695 - - - 340,695
Other Revenue 496,340 - - - 496,340
Total revenues 69,251,160 12,939 5 323 69,264,427
Expenditures:

Current:

General Government 1,229,670 (1) - 2 1,229,671
Public safety 438,595 - - - 438,595
Public services 18,213,857 - - - 18,213,857
Community development 852,406 - - - 852,406
Cultural and recreational 1,197,007 - - - 1,197,007
Health and welfare 1,088,504 - - - 1,088,504
Capital Outlay 22,521,528 - - 34,044 22,555,572
Debt service:

Principal 1,017,004 525,002 1,665,000 - 3,207,006
Interest 319,782 964,963 775,336 - 2,060,081
Interfund interest 36,868 - - - 36,868
Cost of Issuance - - 141,893 - 141,893
Total expenditures 46,915,221 1,489,964 2,582,229 34,046 51,021,460 Excess (deficiency) of revenues over expenditures 22,335,939 (1,477,025) (2,582,224) (33,723) 18,242,967 Other Financing Sources (Uses):

Issuance of Long-Term Debt - - 13,584,908 - 13,584,908
Transfers In 17,703,278 16,402,414 3,940,876 - 38,046,568 Transfers Out (12,645,537) (1,500,584) (14,943,599) - (29,089,720) Payment to Refunding Bond Escrow Agent - (14,943,599) - - (14,943,599) Total other financing sources (uses) 5,057,741 (41,769) 2,582,185 - 7,598,157 Net Change in Fund Balances 27,393,680 (1,518,794) (39) (33,723) 25,841,124 Fund Balances (Deficit) - Beginning of Year 132,308,169 2,599,666 39 3,351,614 138,259,488 Fund Balances (Deficit) - End of Year $ 159,701,849 $ 1,080,872 $ - $ 3,317,891 $ 164,100,612 97 City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2021
Air Quality
Improvement
Fund
Community
Development
Block Grant Drainage Funds
Drainage Benefit
Assmnt Dist Federal Funds
Assets:

Cash $ - $ - $ - $ - $ -
Investments 43,218 1,331,337 2,559,822 1,192,337 69,124 Receivables:

Accounts Receivable - 485,708 2,454 1,147 286,501
Property tax receivable - - - 811 -
Due from other funds - 62 - - -
Notes and Liens - 2,338,699 - - -
Advances due from other funds - - 4,400,000 - -
Prepaid Items and Other Assets - 1,114 - - -
Total assets $ 43,218 $ 4,156,920 $ 6,962,276 $ 1,194,295 $ 355,625 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts payable $ - $ 47,871 $ - $ 2,520 $ 1,495
Due to other funds - - 9,238 - 426,548
Advances due to other funds - - - - -
Notes payable - - - - -
Deposits - 1,755,523 - - -
Total liabilities - 1,803,394 9,238 2,520 428,043
Deferred Inflows of Resources:

Unavailable revenue - 19,940 - - 287,699
Total deferred inflows of resources - 19,940 - - 287,699 Fund Balances:

Restricted - 2,333,586 6,953,038 1,191,775 -
Unassigned 43,218 - - - (360,117)
Total fund balances 43,218 2,333,586 6,953,038 1,191,775 (360,117) Total liabilities, deferred inflows of
resources and fund balances $ 43,218 $ 4,156,920 $ 6,962,276 $ 1,194,295 $ 355,625 98 City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2021
Federal Home
Program
Federal Jobs
Programs
Fire Facilities
Impact Gas Tax
Housing
Authority
Landscape
Maintenance
Local
Transportation
Article 3
$ - $ - $ - $ - $ - $ - $ -
- - 7,492,929 10,845,311 207,158 13,543,084 -
2,581,891 16,677 7,207 16,319 10,190 13,025 493,440
- - - - - 87,079 -
- - - 1,322,844 - - -
7,650,408 - - - - - -
- - - - - - -
- - - - - - -
$ 10,232,299 $ 16,677 $ 7,500,136 $ 12,184,474 $ 217,348 $ 13,643,188 $ 493,440 $ 50,980 $ 5,727 $ - $ 338,139 $ - $ 570,828 $ -
122,731 48,100 - - - - 435,917
- - - - - - -
- - - - - - -
- - - - 1,000 - -
173,711 53,827 - 338,139 1,000 570,828 435,917
2,393,025 - - - - - -
2,393,025 - - - - - -
7,665,563 - 7,500,136 11,846,335 216,348 13,072,360 57,523 - (37,150) - - - - -
7,665,563 (37,150) 7,500,136 11,846,335 216,348 13,072,360 57,523 $ 10,232,299 $ 16,677 $ 7,500,136 $ 12,184,474 $ 217,348 $ 13,643,188 $ 493,440 99 City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2021
Local
Transportation
Article 8 Measure R Measure M
Misc Grants/
Developer
Contributions
Park
Assessments
Assets:

Cash $ - $ 2,481 $ - $ 1 $ -
Investments 1,004,225 5,481,241 5,559,542 3,033,175 3,232,337 Receivables:

Accounts Receivable 437,002 2,159,719 9,445 4,100,113 3,108 Property tax receivable - - - - 59,522
Due from other funds - - - - -
Notes and Liens - - - - -
Advances due from other funds - - - - -
Prepaid Items and Other Assets - - - - -
Total assets $ 1,441,227 $ 7,643,441 $ 5,568,987 $ 7,133,289 $ 3,294,967 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts payable $ 331,108 $ 147,202 $ 4,228 $ 25,691 $ 2,613 Due to other funds - - - - -
Advances due to other funds - - - - -
Notes payable - 68,026 - - -
Deposits - - - - -
Total liabilities 331,108 215,228 4,228 25,691 2,613
Deferred Inflows of Resources:

Unavailable revenue - 1,379,843 - 4,100,043 -
Total deferred inflows of resources - 1,379,843 - 4,100,043 - Fund Balances:

Restricted 1,110,119 6,048,370 5,564,759 3,007,555 3,292,354 Unassigned - - - - -
Total fund balances 1,110,119 6,048,370 5,564,759 3,007,555 3,292,354 Total liabilities, deferred inflows of
resources and fund balances $ 1,441,227 $ 7,643,441 $ 5,568,987 $ 7,133,289 $ 3,294,967 100
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2021
Park
Development Proposition A Proposition C
Public Facilities
Fund Public Safety
Road
Maintenance and
Rehab SAVES
$ - $ - $ - $ - $ - $ - $ -
13,388,707 8,268,666 13,882,155 979,626 545,860 2,579,251 - 12,875 7,952 1,082,573 942 27,831 - -
- - - - (303,163) - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
$ 13,401,582 $ 8,276,618 $ 14,964,728 $ 980,568 $ 270,528 $ 2,579,251 $ - $ 562,752 $ 31,832 $ 278,435 $ - $ - $ 21,779 $ 20,840
- - - - - - 12,333
5,000,000 - - - - - -
- - - - - - -
- - - - - - -
5,562,752 31,832 278,435 - - 21,779 33,173
- - 945,301 - - - -
- - 945,301 - - - -
7,838,830 8,244,786 13,740,992 980,568 270,528 2,557,472 - - - - - - - (33,173)
7,838,830 8,244,786 13,740,992 980,568 270,528 2,557,472 (33,173) $ 13,401,582 $ 8,276,618 $ 14,964,728 $ 980,568 $ 270,528 $ 2,579,251 $ - 101
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2021
Sewer
Maintenance
Assmnt Dist Sewer Upgrade
States Grants
Fund
Street
Lighting
Assmnt Dist
Traffic
Impact
Assets:

Cash $ 500 $ - $ - $ - $ -
Investments 29,784,886 521,613 737,872 18,135,515 2,792,042 Receivables:

Accounts Receivable 98,249 501 1,593,230 17,441 2,686
Property tax receivable 101,246 - - 106,988 -
Due from other funds - - - - -
Notes and Liens - - - - -
Advances due from other funds - - - - -
Prepaid Items and Other Assets - - - - -
Total assets $ 29,984,881 $ 522,114 $ 2,331,102 $18,259,944 $ 2,794,728 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable $ 47,692 $ - $ 221,289 $ 246,194 $ -
Due to other funds - - 896,296 - -
Advances due to other funds 4,400,000 - - - -
Notes payable - - - - -
Deposits 21,900 - 657 - -
Total liabilities 4,469,592 - 1,118,242 246,194 -
Deferred Inflows of Resources:

Unavailable revenue - - 1,592,917 - -
Total deferred inflows of resources - - 1,592,917 - -
Fund Balances:

Restricted 25,515,289 522,114 (2) 18,013,750 2,794,728
Unassigned - - (380,055) - -
Total fund balances 25,515,289 522,114 (380,057) 18,013,750 2,794,728 Total liabilities, deferred inflows of resources and
fund balances $ 29,984,881 $ 522,114 $ 2,331,102 $18,259,944 $ 2,794,728 102
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2021
Communications
PEG Solid Waste
Palmdale
Community
Foundation Water Park Public Art Measure AV
Total Special
Revenue Funds
$ - $ - $ 250,927 $ - $ - $ - $ 253,909
472,080 154,215 - 3,222,391 1,000,000 1,064,801 153,124,520 53,796 - - 1,695 - 3,971,500 17,495,217
- - - - - - 52,483
- - - - - - 1,322,906
- - - - - - 9,989,107
- - - - - - 4,400,000
- - - - - - 1,114
$ 525,876 $ 154,215 $ 250,927 $ 3,224,086 $ 1,000,000 $ 5,036,301 $ 186,639,256 $ - $ 3,847 $ - $ 54,106 $ - $ - $ 3,017,168
- - 3,202 - - - 1,954,365
- - - - - - 9,400,000
- - - - - - 68,026
- - - - - - 1,779,080
- 3,847 3,202 54,106 - - 16,218,639
- - - - - - 10,718,768
- - - - - - 10,718,768
525,876 150,368 247,725 3,169,980 1,000,000 5,036,301 160,469,126 - - - - - - (767,277)
525,876 150,368 247,725 3,169,980 1,000,000 5,036,301 159,701,849 $ 525,876 $ 154,215 $ 250,927 $ 3,224,086 $ 1,000,000 $ 5,036,301 $ 186,639,256 103
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2021
Air Quality
Improvement
Fund
Community
Development
Block Grant Drainage Funds
Drainage Benefit
Assmnt Dist Federal Funds
Revenues:

Sales Taxes $ - $ - $ - $ - $ -
Other Taxes - - - - -
Subventions and grants 6,000 1,908,201 - - 2,006,783
Park development fees - - - - -
Licenses and Permits - - - - -
Fines and forfeitures - - - - -
Special Assessments - - - 205,267 -
Charges for current services - - - - -
Drainage fees - - 1,347,273 - -
Traffic impact fees - - - - -
Facilities impact fees - - - - -
Interfund interest - - 36,868 - -
Interest - 6,705 10,553 5,824 -
Net increase (decrease) in fair value of
investments - (4,921) (8,260) (4,220) -
Developer contributions - - - - -
State contributions - - - - -
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue - - - - -
Total revenues 6,000 1,909,985 1,386,434 206,871 2,006,783 Expenditures:

Current:

General Government - - - - 716,363
Public safety - - - - -
Public services - 7,353 31,914 29,043 -
Community development - 317,447 - - -
Cultural and recreational - - - - -
Health and welfare - 926,201 - - -
Capital Outlay - 111,334 54,306 - 188,600
Debt service:

Principal - 309,000 - - -
Interest - 63,047 - - -
Interfund interest - - 30,360 - -
Total expenditures - 1,734,382 116,580 29,043 904,963
Excess (deficiency) of revenues over expenditures 6,000 175,603 1,269,854 177,828 1,101,820 Other Financing Sources (Uses):

Transfers In - - 4,500,000 - -
Transfers Out - - (75,956) - -
Total other financing sources (uses) - - 4,424,044 - -
Net Change in Fund Balances 6,000 175,603 5,693,898 177,828 1,101,820 Fund Balances (Deficit) - Beginning of Year 37,218 2,157,983 1,259,140 1,013,947 (1,461,937) Fund Balances (Deficit) - End of Year $ 43,218 $ 2,333,586 $ 6,953,038 $ 1,191,775 $ (360,117) 104
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2021
Federal Home
Program
Federal Jobs
Programs
Fire Facilities
Impact Gas Tax
Housing
Authority
Landscape
Maintenance
Local
Transportation
Article 3
$ - $ - $ - $ - $ - $ - $ -
- - - 3,387,184 - - -
553,041 - - - - - 493,440
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - 6,187,184 -
- - - - 93,552 - -
- - - - - - -
- - - - - - -
- - 892,001 - - - -
- - - - - - -
36,160 - 39,871 65,088 1,129 68,845 30
- - (27,481) (42,013) (761) (49,928) (23)
- - - - - - -
- - - - - - -
- - - - - - -
- - - 187,002 - - -
- 26,629 - - - 3,251 -
589,201 26,629 904,391 3,597,261 93,920 6,209,352 493,447 - - 44,598 - - - -
- - - - - - -
- 47,492 - 4,913,879 - 5,468,885 36,424
500,688 - - - 34,271 - -
- - - - - - -
- - - - - - -
- - - 3,676,980 - 151,106 457,405
- - - - - - -
- - - - - - -
- - - - - - -
500,688 47,492 44,598 8,590,859 34,271 5,619,991 493,829 88,513 (20,863) 859,793 (4,993,598) 59,649 589,361 (382) - - - 3,203,278 - - -
- - - (764,131) - (33,295) -
- - - 2,439,147 - (33,295) -
88,513 (20,863) 859,793 (2,554,451) 59,649 556,066 (382) 7,577,050 (16,287) 6,640,343 14,400,786 156,699 12,516,294 57,905 $ 7,665,563 $ (37,150) $ 7,500,136 $ 11,846,335 $ 216,348 $ 13,072,360 $ 57,523 105
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2021
Local
Transportation
Article 8 Measure R Measure M
Misc Grants/
Developer
Contributions
Park
Assessments
Revenues:

Sales Taxes $ - $ - $ - $ - $ -
Other Taxes - - - - -
Subventions and grants 5,195,685 4,747,805 2,677,594 - - Park development fees - - - - -
Licenses and Permits - - - - -
Fines and forfeitures - - - - -
Special Assessments - - - - 2,799,429
Charges for current services - - - - -
Drainage fees - - - - -
Traffic impact fees - - - - -
Facilities impact fees - - - - -
Interfund interest - - - - -
Interest 7,930 29,696 26,091 1,161 10,616
Net increase (decrease) in fair value of
investments (1,278) (20,581) (19,836) (793) (10,472)
Developer contributions - - - - -
State contributions - - - - -
Other agency contributions - - - 2,215,098 -
County contributions - - - 153,693 -
Other Revenue - - - 33,500 -
Total revenues 5,202,337 4,756,920 2,683,849 2,402,659 2,799,573 Expenditures:

Current:

General Government 206,838 - - - 48,714
Public safety - - - 26,834 -
Public services 1,359,699 253,081 5,290 10,863 -
Community development - - - - -
Cultural and recreational - - - 35,005 -
Health and welfare - - - - -
Capital Outlay 1,366,131 5,679,521 1,601,659 1,541,397 - Debt service:

Principal - - - - -
Interest - - - - -
Interfund interest - - - - -
Total expenditures 2,932,668 5,932,602 1,606,949 1,614,099 48,714 Excess (deficiency) of revenues over expenditures 2,269,669 (1,175,682) 1,076,900 788,560 2,750,859 Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out (3,212,533) - - (1,892) (2,409,690)
Total other financing sources (uses) (3,212,533) - - (1,892) (2,409,690) Net Change in Fund Balances (942,864) (1,175,682) 1,076,900 786,668 341,169 Fund Balances (Deficit) - Beginning of Year 2,052,983 7,224,052 4,487,859 2,220,887 2,951,185 Fund Balances (Deficit) - End of Year $ 1,110,119 $ 6,048,370 $ 5,564,759 $ 3,007,555 $ 3,292,354 106
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2021
Park
Development Proposition A Proposition C
Public Facilities
Fund Public Safety
Road
Maintenance and
Rehab SAVES
$ - $ - $ - $ - $ - $ - $ -
- - - - - - -
- 3,002,383 4,639,878 - - 2,793,676 24,450
2,089,872 - - - - - -
- - - - - - -
- - - - 229,511 - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - 488,205 - - -
- - - - - - -
47,627 42,647 72,570 4,990 - - -
(40,925) (29,899) (50,296) (3,518) - - -
- - - - - - -
- - - - - - 116,225
- - - - - - -
- - - - - - -
- - - - - - -
2,096,574 3,015,131 4,662,152 489,677 229,511 2,793,676 140,675 - - - - - - -
- 283,116 - - - - -
103,910 1,096,111 46,653 - - 946 -
- - - - - - -
- - - - - - -
- - - - - - 58,638
1,754,388 607,072 2,966,307 103,850 - 582,603 -
- - - - - - -
- - - - - - -
- - - - - - -
1,858,298 1,986,299 3,012,960 103,850 - 583,549 58,638
238,276 1,028,832 1,649,192 385,827 229,511 2,210,127 82,037 5,000,000 - - - - - -
- - (586,948) - (147,017) - -
5,000,000 - (586,948) - (147,017) - -
5,238,276 1,028,832 1,062,244 385,827 82,494 2,210,127 82,037 2,600,554 7,215,954 12,678,748 594,742 188,034 347,345 (115,211) $ 7,838,830 $ 8,244,786 $ 13,740,992 $ 980,569 $ 270,528 $ 2,557,472 $ (33,174) 107
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2021
Sewer
Maintenance
Assmnt Dist Sewer Upgrade
States Grants
Fund
Street
Lighting
Assmnt Dist
Traffic
Impact
Revenues:

Sales Taxes $ - $ - $ - $ - $ -
Other Taxes - - - 541,152 -
Subventions and grants - - - - -
Park development fees - - - - -
Licenses and Permits 107,606 - - - -
Fines and forfeitures - - - 13,648 -
Special Assessments 5,562,114 - - 4,751,248 -
Charges for current services - - - - -
Drainage fees 847,023 - - - -
Traffic impact fees - - - - 806,342
Facilities impact fees - - - - -
Interfund interest - - - - -
Interest 153,472 3,157 1,690 88,556 13,926
Net increase (decrease) in fair value of investments (108,481) (2,059) (1,211) (64,525) (10,375) Developer contributions - - - 18,950 -
State contributions - - 592,560 - -
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue - - - 300,000 -
Total revenues 6,561,734 1,098 593,039 5,649,029 809,893 Expenditures:

Current:

General Government 1,970 - - - -
Public safety - - 128,645 - -
Public services 2,396,446 20,758 63,813 2,076,984 -
Community development - - - - -
Cultural and recreational - - - - -
Health and welfare - - - - -
Capital Outlay 768,853 226,304 641,049 1,125 18,452
Debt service:

Principal - - - 708,004 -
Interest - - - 256,735 -
Interfund interest 6,508 - - - -
Total expenditures 3,173,777 247,062 833,507 3,042,848 18,452 Excess (deficiency) of revenues over expenditures 3,387,957 (245,964) (240,468) 2,606,181 791,441 Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out (4,549,227) - - - (864,848)
Total other financing sources (uses) (4,549,227) - - - (864,848) Net Change in Fund Balances (1,161,270) (245,964) (240,468) 2,606,181 (73,407) Fund Balances (Deficit) - Beginning of Year 26,676,559 768,078 (139,588) 15,407,570 2,868,140 Fund Balances (Deficit) - End of Year $ 25,515,289 $ 522,114 $ (380,056) $18,013,751 $ 2,794,733 108
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2021
Communications
PEG Solid Waste
Palmdale
Community
Foundation Water Park Public Art Measure AV
Total Special
Revenue Funds
$ - $ - $ - $ - $ - $ 5,188,745 $ 5,188,745
588,249 - - - - - 4,516,585
- - - - - - 28,048,936
- - - - - - 2,089,872
- - - - - - 107,606
- - - - - - 243,159
- - - - - - 19,505,242
- 338,827 - 628,724 - - 1,061,103
- - - - - - 2,194,296
- - - - - - 806,342
- - - - - - 1,380,206
- - - - - - 36,868
- - - - - - 738,334
- - - - - - (501,856)
- - - - - - 18,950
- 55,854 - - - - 764,639
- - - - - - 2,215,098
- - - - - - 340,695
- - 132,960 - - - 496,340
588,249 394,681 132,960 628,724 - 5,188,745 69,251,160
62,373 - - - - 148,808 1,229,664
- - - - - - 438,595
- 244,313 - - - - 18,213,857
- - - - - - 852,406
- - - 1,162,002 - - 1,197,007
- - 103,665 - - - 1,088,504
- - 19,450 - - 3,636 22,521,528
- - - - - - 1,017,004
- - - - - - 319,782
- - - - - - 36,868
62,373 244,313 123,115 1,162,002 - 152,444 46,915,215
525,876 150,368 9,845 (533,278) - 5,036,301 22,335,945
- - - 4,000,000 1,000,000 - 17,703,278
- - - - - - (12,645,537)
- - - 4,000,000 1,000,000 - 5,057,741
525,876 150,368 9,845 3,466,722 1,000,000 5,036,301 27,393,686 - - 237,880 (296,743) - - 132,308,169
$ 525,876 $ 150,368 $ 247,725 $ 3,169,979 $ 1,000,000 $ 5,036,301 $ 159,701,855 109
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Air Quality Improvement Fund - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ - $ 46,000 $ 6,000 $ (40,000)
Total revenues - 46,000 6,000 (40,000)
Expenditures:

Excess (deficiency) of revenues over (under)
expenditures - 46,000 6,000 (40,000)
Net Change in Fund Balance - 46,000 6,000 (40,000)
Fund Balance (Deficit) - Beginning of Year 37,218 37,218 37,218 - Fund Balance (Deficit) - End of Year $ 37,218 $ 83,218 $ 43,218 $ (40,000) 110
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Development Block Grant - Special Revenue Funds Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,443,680 $ 4,958,000 $ 1,908,201 $ (3,049,799) Interest - - 6,705 6,705
Net increase (decrease) in fair value of investments - - (4,921) (4,921) Total revenues 3,443,680 4,958,000 1,909,985 (3,048,015) Expenditures:

Current:

Public services - - 7,353 (7,353)
Community development 1,019,960 1,634,100 317,447 1,316,653 Health and welfare 209,120 1,500,700 926,201 574,499
Capital Outlay 821,900 1,626,400 111,334 1,515,066
Debt service:

Principal 309,000 309,000 309,000 -
Interest 54,350 63,100 63,047 53
Total expenditures 2,414,330 5,133,300 1,734,382 3,398,918 Excess (deficiency) of revenues over (under)
expenditures 1,029,350 (175,300) 175,603 350,903
Net Change in Fund Balance 1,029,350 (175,300) 175,603 350,903 Fund Balance (Deficit) - Beginning of Year 2,157,983 2,157,983 2,157,983 - Fund Balance (Deficit) - End of Year $ 3,187,333 $ 1,982,683 $ 2,333,586 $ 350,903 111
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Drainage Funds - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Drainage fees $ 140,000 $ 563,500 $ 1,347,273 $ 783,773 Interfund interest 150,000 150,000 36,868 (113,132)
Interest 23,000 23,000 10,553 (12,447)
Net increase (decrease) in fair value of investments - - (8,260) (8,260) Total revenues 313,000 736,500 1,386,434 649,934
Expenditures:

Current:

Public services - - 31,914 (31,914)
Capital Outlay 1,094,620 1,766,700 54,306 1,712,394
Debt service:

Interfund interest - 150,000 30,360 119,640
Total expenditures 1,094,620 1,916,700 116,580 1,800,120 Excess (deficiency) of revenues over (under)
expenditures (781,620) (1,180,200) 1,269,854 2,450,054
Other Financing Sources (Uses):

Transfers In 150,000 256,500 4,500,000 4,243,500
Transfers Out (87,900) (87,900) (75,956) 11,944
Total other financing sources (uses) 62,100 168,600 4,424,044 4,255,444 Net Change in Fund Balance (719,520) (1,011,600) 5,693,898 6,705,498 Fund Balance (Deficit) - Beginning of Year 1,259,140 1,259,140 1,259,140 - Fund Balance (Deficit) - End of Year $ 539,620 $ 247,540 $ 6,953,038 $ 6,705,498 112
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Drainage Benefit Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Special Assessments $ 127,060 $ 127,200 $ 205,267 $ 78,067 Interest 2,040 2,000 5,824 3,824
Net increase (decrease) in fair value of investments - - (4,220) (4,220) Total revenues 129,100 129,200 206,871 77,671
Expenditures:

Current:

Public services 51,490 38,400 29,043 9,357
Total expenditures 51,490 38,400 29,043 9,357
Excess (deficiency) of revenues over (under)
expenditures 77,610 90,800 177,828 87,028
Net Change in Fund Balance 77,610 90,800 177,828 87,028 Fund Balance (Deficit) - Beginning of Year 1,013,947 1,013,947 1,013,947 - Fund Balance (Deficit) - End of Year $ 1,091,557 $ 1,104,747 $ 1,191,775 $ 87,028 113
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Funds - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ - $ 8,380,700 $ 2,006,783 $ (6,373,917) Total revenues - 8,380,700 2,006,783 (6,373,917)
Expenditures:

Current:

General Government - 843,700 716,362 127,338
Capital Outlay - 6,301,700 188,600 6,113,100
Total expenditures - 7,145,400 904,962 6,240,438
Excess (deficiency) of revenues over (under)
expenditures - 1,235,300 1,101,821 (133,479)
Other Financing Sources (Uses):

Transfers In - 1,461,900 - (1,461,900)
Total other financing sources (uses) - 1,461,900 - (1,461,900) Net Change in Fund Balance - 2,697,200 1,101,821 (1,595,379) Fund Balance (Deficit) - Beginning of Year (1,461,938) (1,461,938) (1,461,938) - Fund Balance (Deficit) - End of Year $ (1,461,938) $ 1,235,262 $ (360,117) $ (1,595,379) 114
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Home Program - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 400,000 $ 824,700 $ 553,041 $ (271,659) Interest 219,670 219,700 36,160 (183,540)
Total revenues 619,670 1,044,400 589,201 (455,199)
Expenditures:

Current:

Community development 412,470 1,721,200 500,688 1,220,512 Total expenditures 412,470 1,721,200 500,688 1,220,512
Excess (deficiency) of revenues over (under)
expenditures 207,200 (676,800) 88,513 765,313
Net Change in Fund Balance 207,200 (676,800) 88,513 765,313 Fund Balance (Deficit) - Beginning of Year 7,577,050 7,577,050 7,577,050 - Fund Balance (Deficit) - End of Year $ 7,784,250 $ 6,900,250 $ 7,665,563 $ 765,313 115
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Jobs Programs - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Revenue $ 47,500 $ 40,000 $ 26,629 $ (13,371)
Total revenues 47,500 40,000 26,629 (13,371)
Expenditures:

Current:

Public services 48,400 54,400 47,492 6,908
Total expenditures 48,400 54,400 47,492 6,908
Excess (deficiency) of revenues over (under)
expenditures (900) (14,400) (20,863) (6,463)
Other Financing Sources (Uses):

Transfers In - 30,700 - (30,700)
Total other financing sources (uses) - 30,700 - (30,700) Net Change in Fund Balance (900) 16,300 (20,863) (37,163) Fund Balance (Deficit) - Beginning of Year (16,287) (16,287) (16,287) - Fund Balance (Deficit) - End of Year $ (17,187) $ 13 $ (37,150) $ (37,163) 116
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Fire Facilities Impact - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Facilities impact fees $ 200,000 $ 710,000 $ 892,001 $ 182,001 Interest 10,000 10,000 39,871 29,871
Net increase (decrease) in fair value of investments - - (27,481) (27,481) Total revenues 210,000 720,000 904,391 184,391
Expenditures:

Current:

General Government 10,000 35,500 44,598 (9,098)
Total expenditures 10,000 35,500 44,598 (9,098)
Excess (deficiency) of revenues over (under)
expenditures 200,000 684,500 859,793 175,293
Net Change in Fund Balance 200,000 684,500 859,793 175,293 Fund Balance (Deficit) - Beginning of Year 6,640,343 6,640,343 6,640,343 - Fund Balance (Deficit) - End of Year $ 6,840,343 $ 7,324,843 $ 7,500,136 $ 175,293 117
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Gas Tax - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Taxes $ 3,913,870 $ 3,614,400 $ 3,387,184 $ (227,216) Interest 100,000 100,000 65,088 (34,912)
Net increase (decrease) in fair value of investments - - (42,013) (42,013) State contributions 2,000 2,000 - (2,000)
County contributions 125,000 140,000 187,002 47,002
Total revenues 4,140,870 3,856,400 3,597,261 (259,139)
Expenditures:

Current:

Public services 4,857,180 6,408,000 4,913,879 1,494,121 Capital Outlay 262,000 8,899,700 3,676,980 5,222,720
Total expenditures 5,119,180 15,307,700 8,590,859 6,716,841 Excess (deficiency) of revenues over (under)
expenditures (978,310) (11,451,300) (4,993,598) 6,457,702 Other Financing Sources (Uses):

Transfers In - 748,000 3,203,278 2,455,278
Transfers Out (438,660) (438,700) (764,131) (325,431)
Total other financing sources (uses) (438,660) 309,300 2,439,147 2,129,847 Net Change in Fund Balance (1,416,970) (11,142,000) (2,554,451) 8,587,549 Fund Balance (Deficit) - Beginning of Year 14,400,786 14,400,786 14,400,786 - Fund Balance (Deficit) - End of Year $ 12,983,816 $ 3,258,786 $ 11,846,335 $ 8,587,549 118
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Authority - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 89,820 $ 89,800 $ 93,552 $ 3,752 Interest 500 500 1,129 629
Net increase (decrease) in fair value of investments - - (761) (761) Total revenues 90,320 90,300 93,920 3,620
Expenditures:

Current:

Community development 67,660 84,500 34,271 50,229
Total expenditures 67,660 84,500 34,271 50,229
Excess (deficiency) of revenues over (under)
expenditures 22,660 5,800 59,649 53,849
Net Change in Fund Balance 22,660 5,800 59,649 53,849
Fund Balance (Deficit) - Beginning of Year 156,699 156,699 156,699 - Fund Balance (Deficit) - End of Year $ 179,359 $ 162,499 $ 216,348 $ 53,849 119
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Landscape Maintenance - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Fines and forfeitures $ 6,000 $ 7,500 $ - $ (7,500)
Special Assessments 6,056,190 6,056,200 6,187,184 130,984 Interest 86,700 86,700 68,845 (17,855)
Net increase (decrease) in fair value of investments - - (49,928) (49,928) Developer contributions 5,100 5,100 - (5,100)
Other Revenue - 2,900 3,251 351
Total revenues 6,153,990 6,158,400 6,209,352 50,952
Expenditures:

Current:

Public services 6,306,680 6,072,400 5,468,885 603,515
Capital Outlay 250,000 1,380,200 151,106 1,229,094
Total expenditures 6,556,680 7,452,600 5,619,991 1,832,609 Excess (deficiency) of revenues over (under)
expenditures (402,690) (1,294,200) 589,361 1,883,561
Other Financing Sources (Uses):

Transfers Out (30,000) (30,000) (33,295) (3,295)
Total other financing sources (uses) (30,000) (30,000) (33,295) (3,295) Net Change in Fund Balance (432,690) (1,324,200) 556,066 1,880,266 Fund Balance (Deficit) - Beginning of Year 12,516,294 12,516,294 12,516,294 - Fund Balance (Deficit) - End of Year $ 12,083,604 $ 11,192,094 $ 13,072,360 $ 1,880,266 120
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Local Transportation Article 3 - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 119,730 $ 568,000 $ 493,440 $ (74,560) Interest - - 30 30
Net increase (decrease) in fair value of investments - - (23) (23) Total revenues 119,730 568,000 493,447 (74,553)
Expenditures:

Current:

Public services - - 36,424 (36,424)
Capital Outlay - 615,800 457,405 158,395
Total expenditures - 615,800 493,829 121,971
Excess (deficiency) of revenues over (under)
expenditures 119,730 (47,800) (382) 47,418
Net Change in Fund Balance 119,730 (47,800) (382) 47,418 Fund Balance (Deficit) - Beginning of Year 57,905 57,905 57,905 - Fund Balance (Deficit) - End of Year $ 177,635 $ 10,105 $ 57,523 $ 47,418 121
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Local Transportation Article 8 - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 7,060,380 $ 5,195,700 $ 5,195,685 $ (15) Interest 10,000 10,000 7,930 (2,070)
Net increase (decrease) in fair value of investments - - (1,278) (1,278) Total revenues 7,070,380 5,205,700 5,202,337 (3,363)
Expenditures:

Current:

General Government - 271,900 206,838 65,062
Public services 2,054,270 1,586,400 1,359,699 226,701
Capital Outlay - 4,327,200 1,366,131 2,961,069
Total expenditures 2,054,270 6,185,500 2,932,668 3,252,832 Excess (deficiency) of revenues over (under)
expenditures 5,016,110 (979,800) 2,269,669 3,249,469
Other Financing Sources (Uses):

Transfers Out (116,150) (864,200) (3,212,533) (2,348,333) Total other financing sources (uses) (116,150) (864,200) (3,212,533) (2,348,333) Net Change in Fund Balance 4,899,960 (1,844,000) (942,864) 901,136 Fund Balance (Deficit) - Beginning of Year 2,052,983 2,052,983 2,052,983 - Fund Balance (Deficit) - End of Year $ 6,952,943 $ 208,983 $ 1,110,119 $ 901,136 122
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure R - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,070,090 $ 55,066,500 $ 4,747,805 $ (50,318,695) Interest 25,000 25,000 29,696 4,696
Net increase (decrease) in fair value of investments - - (20,581) (20,581) Total revenues 2,095,090 55,091,500 4,756,920 (50,334,580) Expenditures:

Current:

Public services - - 253,081 (253,081)
Capital Outlay 517,000 55,325,700 5,679,521 49,646,179
Total expenditures 517,000 55,325,700 5,932,602 49,393,098 Excess (deficiency) of revenues over (under)
expenditures 1,578,090 (234,200) (1,175,682) (941,482)
Net Change in Fund Balance 1,578,090 (234,200) (1,175,682) (941,482) Fund Balance (Deficit) - Beginning of Year 7,224,052 7,224,052 7,224,052 - Fund Balance (Deficit) - End of Year $ 8,802,142 $ 6,989,852 $ 6,048,370 $ (941,482) 123
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure M - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,345,860 $ 10,738,300 $ 2,677,594 $ (8,060,706) Interest 10,000 10,000 26,091 16,091
Net increase (decrease) in fair value of investments - - (19,836) (19,836) Total revenues 2,355,860 10,748,300 2,683,849 (8,064,451) Expenditures:

Current:

Public services - - 5,290 (5,290)
Capital Outlay 387,000 10,722,300 1,601,659 9,120,641
Total expenditures 387,000 10,722,300 1,606,949 9,115,351 Excess (deficiency) of revenues over (under)
expenditures 1,968,860 26,000 1,076,900 1,050,900
Net Change in Fund Balance 1,968,860 26,000 1,076,900 1,050,900 Fund Balance (Deficit) - Beginning of Year 4,487,859 4,487,859 4,487,859 - Fund Balance (Deficit) - End of Year $ 6,456,719 $ 4,513,859 $ 5,564,759 $ 1,050,900 124
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Misc Grants/ Developer Contributions - Special Revenue Funds Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 3,000 $ 3,000 $ 1,161 $ (1,839)
Net increase (decrease) in fair value of investments - - (793) (793) Other agency contributions - 3,580,000 2,215,098 (1,364,902) County contributions - 30,000 153,693 123,693
Other Revenue - 36,000 33,500 (2,500)
Total revenues 3,000 3,649,000 2,402,659 (1,246,341)
Expenditures:

Current:

Public safety - 30,000 26,834 3,166
Public services - 33,500 10,863 22,637
Cultural and recreational - 36,000 35,005 995
Capital Outlay 40,000 3,224,200 1,541,397 1,682,803
Total expenditures 40,000 3,323,700 1,614,099 1,709,601 Excess (deficiency) of revenues over (under)
expenditures (37,000) 325,300 788,560 463,260
Other Financing Sources (Uses):

Transfers Out - - (1,892) (1,892)
Total other financing sources (uses) - - (1,892) (1,892) Net Change in Fund Balance (37,000) 325,300 786,668 461,368 Fund Balance (Deficit) - Beginning of Year 2,220,887 2,220,887 2,220,887 - Fund Balance (Deficit) - End of Year $ 2,183,887 $ 2,546,187 $ 3,007,555 $ 461,368 125
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Park Assessments - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Special Assessments $ 2,776,000 $ 2,692,500 $ 2,799,429 $ 106,929 Interest 25,500 25,500 10,616 (14,884)
Net increase (decrease) in fair value of investments - - (10,472) (10,472) Total revenues 2,801,500 2,718,000 2,799,573 81,573
Expenditures:

Current:

General Government 111,300 61,600 48,714 12,886
Total expenditures 111,300 61,600 48,714 12,886
Excess (deficiency) of revenues over (under)
expenditures 2,690,200 2,656,400 2,750,859 94,459
Other Financing Sources (Uses):

Transfers Out (2,150,200) (2,150,200) (2,409,690) (259,490) Total other financing sources (uses) (2,150,200) (2,150,200) (2,409,690) (259,490) Net Change in Fund Balance 540,000 506,200 341,169 (165,031) Fund Balance (Deficit) - Beginning of Year 2,951,185 2,951,185 2,951,185 - Fund Balance (Deficit) - End of Year $ 3,491,185 $ 3,457,385 $ 3,292,354 $ (165,031) 126
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Park Development - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Park development fees $ 150,000 $ 1,320,000 $ 2,089,872 $ 769,872 Interest 10,000 10,000 47,627 37,627
Net increase (decrease) in fair value of investments - - (40,925) (40,925) Total revenues 160,000 1,330,000 2,096,574 766,574
Expenditures:

Current:

Public services - - 103,910 (103,910)
Capital Outlay 520,000 10,120,000 1,754,388 8,365,612
Debt service:

Interfund interest 81,700 81,700 - 81,700
Total expenditures 601,700 10,201,700 1,858,298 8,343,402 Excess (deficiency) of revenues over (under)
expenditures (441,700) (8,871,700) 238,276 9,109,976
Other Financing Sources (Uses):

Transfers In - 5,000,000 5,000,000 -
Transfers Out (150,000) (150,000) - 150,000
Total other financing sources (uses) (150,000) 4,850,000 5,000,000 150,000 Net Change in Fund Balance (591,700) (4,021,700) 5,238,276 9,259,976 Fund Balance (Deficit) - Beginning of Year 2,600,554 2,600,554 2,600,554 - Fund Balance (Deficit) - End of Year $ 2,008,854 $ (1,421,146) $ 7,838,830 $ 9,259,976 127
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Proposition A - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,327,200 $ 2,844,900 $ 3,002,383 $ 157,483 Interest 30,000 30,000 42,647 12,647
Net increase (decrease) in fair value of investments - - (29,899) (29,899) Total revenues 3,357,200 2,874,900 3,015,131 140,231
Expenditures:

Current:

Public safety 386,500 370,500 283,116 87,384
Public services 885,260 1,200,300 1,096,111 104,189
Capital Outlay 400,000 2,219,500 607,072 1,612,428
Total expenditures 1,671,760 3,790,300 1,986,299 1,804,001 Excess (deficiency) of revenues over (under)
expenditures 1,685,440 (915,400) 1,028,832 1,944,232
Other Financing Sources (Uses):

Transfers Out (15,000) (15,000) - 15,000
Total other financing sources (uses) (15,000) (15,000) - 15,000 Net Change in Fund Balance 1,670,440 (930,400) 1,028,832 1,959,232 Fund Balance (Deficit) - Beginning of Year 7,215,954 7,215,954 7,215,954 - Fund Balance (Deficit) - End of Year $ 8,886,394 $ 6,285,554 $ 8,244,786 $ 1,959,232 128
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Proposition C - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,759,830 $ 13,624,800 $ 4,639,878 $ (8,984,922) Interest 25,000 25,000 72,570 47,570
Net increase (decrease) in fair value of investments - - (50,296) (50,296) Total revenues 2,784,830 13,649,800 4,662,152 (8,987,648) Expenditures:

Current:

Public services - - 46,653 (46,653)
Capital Outlay 3,800,000 15,746,300 2,966,307 12,779,993 Total expenditures 3,800,000 15,746,300 3,012,960 12,733,340 Excess (deficiency) of revenues over (under)
expenditures (1,015,170) (2,096,500) 1,649,192 3,745,692 Other Financing Sources (Uses):

Transfers Out (586,950) (587,000) (586,948) 52
Total other financing sources (uses) (586,950) (587,000) (586,948) 52 Net Change in Fund Balance (1,602,120) (2,683,500) 1,062,244 3,745,744 Fund Balance (Deficit) - Beginning of Year 12,678,748 12,678,748 12,678,748 - Fund Balance (Deficit) - End of Year $ 11,076,628 $ 9,995,248 $ 13,740,992 $ 3,745,744 129
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Facilities Fund - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Facilities impact fees $ 100,000 $ 360,000 $ 488,205 $ 128,205 Interest 500 500 4,990 4,490
Net increase (decrease) in fair value of investments - - (3,518) (3,518) Total revenues 100,500 360,500 489,677 129,177
Expenditures:

Capital Outlay - 568,300 103,850 464,450
Total expenditures - 568,300 103,850 464,450
Excess (deficiency) of revenues over (under)
expenditures 100,500 (207,800) 385,827 593,627
Net Change in Fund Balance 100,500 (207,800) 385,827 593,627 Fund Balance (Deficit) - Beginning of Year 594,742 594,742 594,742 - Fund Balance (Deficit) - End of Year $ 695,242 $ 386,942 $ 980,569 $ 593,627 130
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Safety - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Fines and forfeitures $ 280,000 $ 150,000 $ 229,511 $ 79,511 Interest 500 500 - (500)
Total revenues 280,500 150,500 229,511 79,011
Excess (deficiency) of revenues over (under)
expenditures 280,500 150,500 229,511 79,011
Other Financing Sources (Uses):

Transfers Out (280,000) (150,000) (147,017) 2,983
Total other financing sources (uses) (280,000) (150,000) (147,017) 2,983 Net Change in Fund Balance 500 500 82,494 81,994
Fund Balance (Deficit) - Beginning of Year 188,034 188,034 188,034 - Fund Balance (Deficit) - End of Year $ 188,534 $ 188,534 $ 270,528 $ 81,994 131
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Road Maintenance and Rehab - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,981,370 $ 2,817,100 $ 2,793,676 $ (23,424) Interest 4,000 4,000 - (4,000)
Total revenues 2,985,370 2,821,100 2,793,676 (27,424)
Expenditures:

Current:

Public services - - 946 (946)
Capital Outlay 2,908,160 2,908,200 582,603 2,325,597
Total expenditures 2,908,160 2,908,200 583,549 2,324,651 Excess (deficiency) of revenues over (under)
expenditures 77,210 (87,100) 2,210,127 2,297,227
Net Change in Fund Balance 77,210 (87,100) 2,210,127 2,297,227 Fund Balance (Deficit) - Beginning of Year 347,345 347,345 347,345 - Fund Balance (Deficit) - End of Year $ 424,555 $ 260,245 $ 2,557,472 $ 2,297,227 132
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual SAVES - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 25,000 $ 20,300 $ 24,450 $ 4,150 State contributions - 174,000 116,225 (57,775)
Total revenues 25,000 194,300 140,675 (53,625)
Expenditures:

Current:

Health and welfare - 73,000 58,638 14,362
Capital Outlay - 6,000 - 6,000
Total expenditures - 79,000 58,638 20,362
Excess (deficiency) of revenues over (under)
expenditures 25,000 115,300 82,037 (33,263)
Net Change in Fund Balance 25,000 115,300 82,037 (33,263) Fund Balance (Deficit) - Beginning of Year (115,211) (115,211) (115,211) - Fund Balance (Deficit) - End of Year $ (90,211) $ 89 $ (33,174) $ (33,263) 133
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Sewer Maintenance Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Licenses and Permits $ 95,370 $ 95,400 $ 107,606 $ 12,206 Special Assessments 5,495,400 5,495,400 5,562,114 66,714 Drainage fees 333,540 652,100 847,023 194,923
Interest 86,700 86,700 153,472 66,772
Net increase (decrease) in fair value of investments - - (108,481) (108,481) Total revenues 6,011,010 6,329,600 6,561,734 232,134
Expenditures:

Current:

General Government - - 1,970 (1,970)
Public services 3,468,810 3,171,200 2,396,446 774,754
Capital Outlay 3,365,000 6,980,700 768,853 6,211,847
Debt service:

Interfund interest - - 6,508 (6,508)
Total expenditures 6,833,810 10,151,900 3,173,777 6,978,123 Excess (deficiency) of revenues over (under)
expenditures (822,800) (3,822,300) 3,387,957 7,210,257
Other Financing Sources (Uses):

Transfers Out (30,000) (136,500) (4,549,227) (4,412,727) Total other financing sources (uses) (30,000) (136,500) (4,549,227) (4,412,727) Net Change in Fund Balance (852,800) (3,958,800) (1,161,270) 2,797,530 Fund Balance (Deficit) - Beginning of Year 26,676,559 26,676,559 26,676,559 - Fund Balance (Deficit) - End of Year $ 25,823,759 $ 22,717,759 $ 25,515,289 $ 2,797,530 134
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Sewer Upgrade - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final Actual Variance
Revenues
Interest $ - $ - $ 3,157 $ 3,157
Net increase (decrease) in fair value of investments - - (2,059) (2,059) Total revenues - - 1,098 1,098
Expenditures
Current:

Public services - - 20,758 (20,758)
Capital Outlay - 704,500 226,304 478,196
Debt service:

Total expenditures - 704,500 247,062 457,438
Excess (deficiency) of revenues over expenditures - (704,500) (245,964) 437,778 Net Change in Fund Balance - (704,500) (245,964) 437,778 Fund Balance (Deficit) - Beginning of Year 768,078 768,078 768,078 - Fund Balance (Deficit) - End of Year $ 768,078 $ 63,578 $ 522,114 $ 437,778 135
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual States Grants Fund - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ - $ 779,100 $ - $ (779,100)
Interest 5,000 5,000 1,690 (3,310)
Net increase (decrease) in fair value of investments - - (1,211) (1,211) State contributions - 9,478,800 592,560 (8,886,240)
Total revenues 5,000 10,262,900 593,039 (9,669,861)
Expenditures:

Current:

Public safety 136,310 176,700 128,645 48,055
Public services - - 63,813 (63,813)
Community development - 779,100 - 779,100
Capital Outlay 500,000 8,652,100 641,049 8,011,051
Total expenditures 636,310 9,607,900 833,507 8,774,393
Excess (deficiency) of revenues over (under)
expenditures (631,310) 655,000 (240,468) (895,468)
Other Financing Sources (Uses):

Transfers In - 139,600 - (139,600)
Total other financing sources (uses) - 139,600 - (139,600) Net Change in Fund Balance (631,310) 794,600 (240,468) (1,035,068) Fund Balance (Deficit) - Beginning of Year (139,588) (139,588) (139,588) - Fund Balance (Deficit) - End of Year $ (770,898) $ 655,012 $ (380,056) $ (1,035,068) 136
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Street Lighting Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Taxes $ 250,000 $ 250,000 $ 541,152 $ 291,152
Fines and forfeitures 20,200 20,200 13,648 (6,552)
Special Assessments 4,065,010 4,065,140 4,751,248 686,108 Interest 98,940 98,900 88,556 (10,344)
Net increase (decrease) in fair value of investments - - (64,525) (64,525) Developer contributions 20,400 20,400 18,950 (1,450)
Other Revenue - - 300,000 300,000
Total revenues 4,454,550 4,454,640 5,649,029 1,194,389
Expenditures:

Current:

Public services 4,650,050 2,599,400 2,076,984 522,416
Capital Outlay - 3,658,900 1,125 3,657,775
Debt service:

Principal 708,020 708,000 708,004 (4)
Interest 256,740 256,700 256,735 (35)
Total expenditures 5,614,810 7,223,000 3,042,848 4,180,152 Excess (deficiency) of revenues over (under)
expenditures (1,160,260) (2,768,360) 2,606,181 5,374,541 Other Financing Sources (Uses):

Transfers Out (15,000) (40,000) - 40,000
Total other financing sources (uses) (15,000) (40,000) - 40,000 Net Change in Fund Balance (1,175,260) (2,808,360) 2,606,181 5,414,541 Fund Balance (Deficit) - Beginning of Year 15,407,570 15,407,570 15,407,570 - Fund Balance (Deficit) - End of Year $ 14,232,310 $ 12,599,210 $ 18,013,751 $ 5,414,541 137
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Traffic Impact - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Traffic impact fees $ 500,000 $ 700,000 $ 806,342 $ 106,342 Interest 5,000 5,000 13,926 8,926
Net increase (decrease) in fair value of investments - - (10,375) (10,375) Total revenues 505,000 705,000 809,893 104,893
Expenditures:

Capital Outlay - 906,300 18,452 887,848
Total expenditures - 906,300 18,452 887,848
Excess (deficiency) of revenues over (under)
expenditures 505,000 (201,300) 791,441 992,741
Other Financing Sources (Uses):

Transfers Out (648,640) (648,600) (864,848) (216,248)
Total other financing sources (uses) (648,640) (648,600) (864,848) (216,248) Net Change in Fund Balance (143,640) (849,900) (73,407) 776,493 Fund Balance (Deficit) - Beginning of Year 2,868,140 2,868,140 2,868,140 - Fund Balance (Deficit) - End of Year $ 2,724,500 $ 2,018,240 $ 2,794,733 $ 776,493 138
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Communications PEG - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Other Taxes $ 358,100 $ 358,100 $ 588,249 $ 230,149
Total revenues 358,100 358,100 588,249 230,149
Expenditures
Current:

General Government 84,800 172,100 62,373 109,727
Total expenditures 84,800 172,100 62,373 109,727
Excess (deficiency) of revenues over expenditures 273,300 186,000 525,876 449,603 Net Change in Fund Balance 273,300 186,000 525,876 449,603 Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ 273,300 $ 186,000 $ 525,876 $ 449,603 139
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Solid Waste - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Charges for current services $ 338,840 $ 338,900 $ 338,827 $ (73) State contributions 38,810 38,800 55,854 17,054
Total revenues 377,650 377,700 394,681 16,981
Expenditures
Current:

Public services 239,430 237,700 244,313 (6,613)
Total expenditures 239,430 237,700 244,313 (6,613)
Excess (deficiency) of revenues over expenditures 138,220 140,000 150,368 3,755 Net Change in Fund Balance 138,220 140,000 150,368 3,755 Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ 138,220 $ 140,000 $ 150,368 $ 3,755 140
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Community Foundation - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Revenue $ 132,970 $ 132,970 $ 132,960 $ (10)
Total revenues 132,970 132,970 132,960 (10)
Expenditures:

Current:

Health and welfare 103,670 103,670 103,665 5
Capital Outlay 19,450 19,450 19,450 -
Total expenditures 123,120 123,120 123,115 5
Excess (deficiency) of revenues over (under)
expenditures 9,850 9,850 9,845 (5)
Net Change in Fund Balance 9,850 9,850 9,845 (5)
Fund Balance (Deficit) - Beginning of Year 237,880 237,880 237,880 - Fund Balance (Deficit) - End of Year $ 247,730 $ 247,730 $ 247,725 $ (5) 141
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Water Park - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 1,440,000 $ 137,000 $ 628,724 $ 491,724 Total revenues 1,440,000 137,000 628,724 491,724
Expenditures:

Current:

Cultural and recreational 1,432,030 1,333,600 1,162,002 171,598 Capital Outlay - 626,000 - 626,000
Total expenditures 1,432,030 1,959,600 1,162,002 797,598 Excess (deficiency) of revenues over (under)
expenditures 7,970 (1,822,600) (533,278) 1,289,322
Other Financing Sources (Uses):

Transfers In 1,000,000 4,000,000 4,000,000 -
Total other financing sources (uses) 1,000,000 4,000,000 4,000,000 - Net Change in Fund Balance 1,007,970 2,177,400 3,466,722 1,289,322 Fund Balance (Deficit) - Beginning of Year (296,743) (296,743) (296,743) - Fund Balance (Deficit) - End of Year $ 711,227 $ 1,880,657 $ 3,169,979 $ 1,289,322 142
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Measure AV - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Sales Taxes $ - $ 3,000,000 $ 5,188,745 $ 2,188,745
Total revenues - 3,000,000 5,188,745 2,188,745
Expenditures
Current:

General Government - 300,000 148,808 151,192
Capital Outlay - 2,615,000 3,636 2,611,364
Total expenditures - 2,915,000 152,444 2,762,556
Excess (deficiency) of revenues over expenditures - 85,000 5,036,301 5,102,493 Net Change in Fund Balance - 85,000 5,036,301 5,102,493 Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ - $ 85,000 $ 5,036,301 $ 5,102,493 143
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Art - Special Revenue Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Expenditures:

Current:

Cultural and recreational $ - $ 5,000 $ - $ 5,000
Capital Outlay - 30,000 - 30,000
Total expenditures - 35,000 - 35,000
Excess (deficiency) of revenues over (under)
expenditures - (35,000) - 35,000
Other Financing Sources (Uses)
Transfers In - 1,000,000 1,000,000 -
Transfers Out - (25,500) - 25,500
Total other financing sources (uses) - 974,500 1,000,000 25,500 Net Change in Fund Balance - 939,500 1,000,000 60,500
Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ - $ 939,500 $ 1,000,000 $ 60,500 144
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Civic Authority - Debt Service Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 19,330 $ 19,400 $ 16,941 $ (2,459)
Net increase (decrease) in fair value of investments - - (4,002) (4,002) Total revenues 19,330 19,400 12,939 (6,461)
Expenditures:

General Government - - (1) 1
Debt service:

Principal 525,000 525,000 525,000 -
Interest 964,950 965,000 964,965 35
Total expenditures 1,489,950 1,490,000 1,489,964 36
Excess (deficiency) of revenues over (under)
expenditures (1,470,620) (1,470,600) (1,477,025) (6,425) Other Financing Sources (Uses):

Transfers In 1,489,950 1,490,000 16,402,414 14,912,414
Transfers Out - - (1,500,584) (1,500,584)
Payment to Refunding Bond Escrow Agent - - (14,943,599) (14,943,599) Total other financing sources (uses) 1,489,950 1,490,000 (41,769) (1,531,769) Net Change in Fund Balance 19,330 19,400 (1,518,794) (1,538,194) Fund Balance (Deficit) - Beginning of Year 2,599,666 2,599,666 2,599,666 - Fund Balance (Deficit) - End of Year $ 2,618,996 $ 2,619,066 $ 1,080,872 $ (1,538,194) 145
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Financing Authority - Debt Service Funds
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 150 $ 200 $ 5 $ (195)
Total revenues 150 200 5 (195)
Expenditures:

Debt service:

Principal 1,665,000 1,665,000 1,665,000 -
Interest 775,340 775,400 775,336 64
Cost of Issuance - - 141,893 (141,893)
Total expenditures 2,440,340 2,440,400 2,582,229 (141,829) Excess (deficiency) of revenues over (under)
expenditures (2,440,190) (2,440,200) (2,582,224) (142,024) Other Financing Sources (Uses):

Issuance of Long-Term Debt - - 13,584,908 13,584,908
Transfers In 2,440,340 2,492,700 3,940,876 1,448,176
Transfers Out - - (14,943,599) (14,943,599)
Total other financing sources (uses) 2,440,340 2,492,700 2,582,185 89,485 Net Change in Fund Balance 150 52,500 (39) (52,539)
Fund Balance (Deficit) - Beginning of Year 39 39 39 -
Fund Balance (Deficit) - End of Year $ 189 $ 52,539 $ - $ (52,539) 146
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual CFD/Assessment Districts - Capital Projects Fund
Year Ended June 30, 2021
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 781,760 $ 781,800 $ 383 $ (781,417)
Net increase (decrease) in fair value of investments - - (60) (60) Total revenues 781,760 781,800 323 (781,477)
Expenditures:

General Government - - 2 (2)
Capital Outlay 536,000 536,000 34,044 501,956
Total expenditures 536,000 536,000 34,046 501,954
Excess (deficiency) of revenues over (under)
expenditures 245,760 245,800 (33,723) (279,523)
Net Change in Fund Balance 245,760 245,800 (33,723) (279,523) Fund Balance (Deficit) - Beginning of Year 3,351,614 3,351,614 3,351,614 - Fund Balance (Deficit) - End of Year $ 3,597,374 $ 3,597,414 $ 3,317,891 $ (279,523) 147
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City of Palmdale
Combining Statement of Net Position
Internal Service Funds
June 30, 2021
Information
Technology Fleet Maintenance
Total Internal
Service Funds
Assets
Current Assets
Investments $ 3,638,315 $ 2,345,247 $ 5,983,562
Receivables - 16,955 16,955
Total current assets 3,638,315 2,362,202 6,000,517
Capital Assets
Depreciable capital assets
Vehicles - 8,267,919 8,267,919
Equipment 5,509,107 - 5,509,107
Less accumulated depreciation (5,237,060) (4,972,821) (10,209,881) Capital assets, net 272,047 3,295,098 3,567,145
Total assets $ 3,910,362 $ 5,657,300 $ 9,567,662
Liabilities
Accounts payable $ 141,005 $ 65,799 $ 206,804
Total liabilities 141,005 65,799 206,804
Net Position
Net Investment in capital assets 272,047 3,295,098 3,567,145 Unrestricted (Deficit) 3,497,310 2,296,403 5,793,713
Total net position 3,769,357 5,591,501 9,360,858
Total net position and liabilities $ 3,910,362 $ 5,657,300 $ 9,567,662 148
City of Palmdale
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
Year Ended June 30, 2021
Information
Technology Fleet Maintenance
Total Internal
Service Funds
Operating Revenues:

Charges for current services $ 1,971,900 $ 965,440 $ 2,937,340 Other Revenue - 46,405 46,405
Total operating revenues 1,971,900 1,011,845 2,983,745
Operating Expenses:

Salaries, Wages and Benefits 875,956 391,480 1,267,436
Material and Supplies 134,132 392,550 526,682
Utilities 9,490 240 9,730
Administrative - 118,450 118,450
Depreciation and amortization 181,476 537,908 719,384
Repairs and Maintenance 792,777 174,942 967,719
Other Expenditures - 2,100 2,100
Total operating expenses 1,993,831 1,617,670 3,611,501
Operating income (loss) (21,931) (605,825) (627,756)
Nonoperating Revenues (Expenses)
Investment and interest income 7,695 - 7,695
Net realized and unrealized gains (losses) (10,369) - (10,369) Prior period adjustment (2,674) - (2,674)
Income (loss) before operating transfers (24,605) (605,825) (630,430) Transfers In 3,500,000 3,065,097 6,565,097
Change in Net Position 3,475,395 2,459,272 5,934,667
Net Position (Deficit) - Beginning of Year - - -
Prior period adjustment 293,962 3,132,229 3,426,191
Net Position (Deficit) - Beginning of Year, Restated 293,962 3,132,229 3,426,191 Net Position (Deficit) - End of Year $ 3,769,357 $ 5,591,501 $ 9,360,858 149
City of Palmdale
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2021
Information
Technology
Fleet
Maintenance
Total Internal
Service Funds
Cash from Operating Activities:

Cash received from interfund services provided $ 1,971,900 $ 948,485 $ 2,920,385 Cash paid to employees for services (875,955) (391,482) (1,267,437) Cash paid to suppliers for goods and services (795,395) (622,480) (1,417,875) Cash (paid)/received for other services - 46,405 46,405 Net cash provided (used) by operating activities 300,550 (19,072) 281,478 Cash from Noncapital Financing Activities:

Transfers from other funds 3,500,000 3,065,097 6,565,097 Net cash provided (used) by noncapital financing activities 3,500,000 3,065,097 6,565,097 Cash from Capital and Related Financing Activities:

Acquisition and construction of capital assets (159,561) (700,778) (860,339) Net cash provided (used) by capital and related financing activities (159,561) (700,778) (860,339) Cash from Investing Activities:

Gain/(Loss) on investments (10,369) - (10,369)
Investment income 7,695 - 7,695
Purchase of investments (3,638,315) (2,345,247) (5,983,562) Net cash provided (used) by investing activities (3,640,989) (2,345,247) (5,986,236) Total Cash Flow increase/(decrease) - - -
Beginning Cash and Cash Equivalents - - -
Ending Cash and Cash Equivalents - - -
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities
Net income/loss from operating activities (21,931) (605,826) (627,757) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation exp 181,476 537,908 719,384
Changes in assets and liabilities:

Change in accounts receivable - (16,955) (16,955)
Change in accounts payable 141,006 65,800 206,806
Net cash provided (used) by operating activities: $ 300,551 $ (19,073) $ 281,478 150
City of Palmdale
Statement of Fiduciary Net Position
For the Year Ended June 30, 2021
Assessment and Community Facilities District Fund - This fund is used to account for receipts and disbursements associated with 1915 Act Assessment Bonds and Special Tax Bonds which are administered by, but are not the liability of, the City.

Retiree Health Premium Trust Funds - These funds are used to account for the receipt of City funds held in trust to provide Eligible Retirees with a supplement to reduce their premiums for participating in the City’s Health Plan. 151
City of Palmdale
Statement of Net Position Assets and Liabilities
Assessment and Community Facilities District Custodial Funds June 30, 2021
AD 88-1
Redevelopment
CFD 99-1
Redevelopment
AD 90-2
Redevelopment
AD 87-1
Redevelopment Anaverde
Trade and
Commerce
Assets:

Cash and Cash Equivalents $ 2,000 $ - $ - $ - $ - $ -
Receivables
Property tax receivable - - - - 20,741 1,076
Due from other governmental units - - - - - -
Restricted assets:

Cash and investments 401,950 3 200,870 151,764 1,896,945 1,606,310 Interest receivable 389 - 192 146 2 263
Total assets $ 404,339 $ 3 $ 201,062 $ 151,910 $ 1,917,688 $ 1,607,649 Liabilities:

Accounts payable $ - $ - $ - $ - $ 6,825 $ -
Advances due to general fund - - - - - -
Advances due to City of Palmdale 269,908 - 313,951 - - - Due to fiduciary funds - - - - - 1,750
Deposits 57,580 - 7,210 19,917 - -
Total liabilities 327,488 - 321,161 19,917 6,825 1,750
Net Position
Restricted
Held on behalf of others 76,851 3 (120,099) 131,993 1,910,863 1,605,899 Total net position $ 76,851 $ 3 $ (120,099) $ 131,993 $ 1,910,863 $ 1,605,899 152
City of Palmdale
Statement of Net Position Assets and Liabilities
Assessment and Community Facilities District Custodial Funds June 30, 2021
Sierra
Gateway
AD 91-2
Redevelopment Ritter Ranch Godde Hills
Joshua
Ranch Total
$ - $ - $ - $ - $ - $ 2,000
- - - 2,377 27,891 52,085
1,565 - - - - 1,565
34,085 23,564 276,484 304,771 2,278,682 7,175,428
33 22 266 - 2,192 3,505
$ 35,683 $ 23,586 $ 276,750 $ 307,148 $ 2,308,765 $ 7,234,583 $ - $ - $ - $ - $ 465,756 $ 472,581
74,071 - - - - 74,071
- - - - - 583,859
- - - - - 1,750
- - - - - 84,707
74,071 - - - 465,756 1,216,968
(38,388) 23,586 276,750 307,148 1,843,009 6,017,615
$ (38,388) $ 23,586 $ 276,750 $ 307,148 $ 1,843,009 $ 6,017,615 153
City of Palmdale
Statement of Fiduciary Net Position
June 30, 2021
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution
Plan Total
Assets :

Cash and Cash Equivalents $ 14,829 $ 1,947,193 $ 1,962,022 Investments:

Mutual funds 1,359,123 2,309,999 3,669,122
Noncurrent Assets
Intergovernmental Receivable - 17,278 17,278
Total noncurrent assets - 17,278 17,278
Total assets $ 1,373,952 $ 4,274,470 $ 5,648,422
Liabilities:

Accounts payable $ 433,684 $ - $ 433,684
Due in more than one year
Interfund promissory note 17,278 - 17,278
Total due in more than one year 17,278 - 17,278
Total liabilities 450,962 - 450,962
Net Position:

Other Postemployment Benefits 922,990 4,274,470 5,197,460 Total net position $ 922,990 $ 4,274,470 $ 5,197,460
154
City of Palmdale
Statement of Fiduciary Change in Net Position
Assessment and Community Facilities District Custodial Funds Year Ended June 30, 2021
AD 88-1
Redevelopment
CFD 99-1
Redevelopment
AD 90-2
Redevelopment
AD 87-1
Redevelopment Anaverde
Trade and
Commerce
Additions
Property taxes $ - $ - $ - $ - $ 1,547,999 $ 1,198,159
Investment and interest income 2,192 - 1,089 833 2,227 2,370 Net realized and unrealized gains (losses) (1,497) - (745) (563) (984) (1,438) Total additions 695 - 344 270 1,549,242 1,199,091
Deductions:

Administrative expense - - - - 95,565 262,431
Interest expense - - - - 1,368,125 1,034,744
Payments to refunding bond escrow agent - - - - - 266,024 Total deductions - - - - 1,463,690 1,563,199
Change in Net Position - - - - (1,463,690) (2,762,290)
Net Position (Deficit) at Beginning of Year - - - - - - Prior period adjustment 76,156 3 (120,443) 131,723 1,825,311 1,970,007 Net Position (Deficit) at Beginning of Year
as Restated 76,156 3 (120,443) 131,723 1,825,311 1,970,007 Net Position (Deficit) at End of Year $ 76,851 $ 3 $ (120,099) $ 131,993 $ 1,910,863 $ 1,605,899 155
City of Palmdale
Statement of Fiduciary Change in Net Position
Assessment and Community Facilities District Custodial Funds Year Ended June 30, 2021
Sierra
Gateway
AD 91-2
Redevelopment Ritter Ranch Godde Hills
Joshua
Ranch Total
$ - $ - $ - $ 197,953 $ 788,941 $ 3,733,052
215 128 1,524 370 10,635 21,583
(137) (87) (1,035) (189) (7,921) (14,596)
78 41 489 198,134 791,655 3,740,039
14,933 1 26,526 29,720 519,984 949,160
- - - 122,580 - 2,525,449
- - - - - 266,024
14,933 1 26,526 152,300 519,984 3,740,633
(15,011) (42) (27,015) (350,434) (1,311,639) (5,930,121) - - - - - -
(23,533) 23,546 302,787 261,314 1,571,338 6,018,209
(23,533) 23,546 302,787 261,314 1,571,338 6,018,209
$ (38,388) $ 23,586 $ 276,750 $ 307,148 $ 1,843,009 $ 6,017,615 156
City of Palmdale
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds
Year Ended June 30, 2021
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution
Plan Total
Additions:

Employer contributions to retiree medical trust $ - $ 128,500 $ 128,500 Investment and interest income 39,224 71,073 110,297
Net realized and unrealized gains (losses) 241,998 306,812 548,810 Total additions 281,222 506,385 787,607
Deductions:

Benefits paid to participants and expenses 397,967 225,658 623,625 Total deductions 397,967 225,658 623,625
Change in net position (116,745) 280,727 163,982
Net Position Held in Trust at Beginning of Year 1,039,735 3,993,743 5,033,478 Net Position Held in Trust at End of Year $ 922,990 $ 4,274,470 $ 5,197,460 157
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Palmdale, California
Year Ended June 30, 202
Statistical Section
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City of Palmdale
Statistical Section
June 30, 2021
This part of the City's comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health.

Contents Page
Financial Trends 159
These schedules contain information to help the reader understand how the City's financial performance and well-being have changed over time.

Revenue Capacity 166
These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.

Debt Capacity 171
These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information 179
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.

Operating Information 182
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.

Source: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 158
City of Palmdale
Net Position by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
Governmental Activities Total Governmental
Net Investments
in
Capital Assets Restricted Unrestricted
Activities
Net
Position
2012 $ 687,877,989 $ 138,272,965 $ 25,291,390 $ 851,442,344 2013 648,717,242 171,783,181 17,175,066 837,675,489
2014 655,895,266 179,662,667 20,804,395 856,362,328
2015 651,915,581 160,152,582 20,470,245 832,538,408
2016 662,351,171 144,651,291 30,980,820 837,983,282
2017 659,365,081 149,318,498 36,278,228 844,961,807
2018 643,077,802 158,892,011 43,372,746 845,342,559
2019 644,332,182 168,327,294 38,660,581 851,320,057
2020 649,681,476 172,484,623 44,530,808 866,696,907
2021 635,725,018 206,139,337 39,155,744 881,020,099
Source: The information is derived from the Comprehensive Annual Financial Reports for the relevant year.

The City Palmdale implemented GASB 63 for the fiscal year ended June 30, 2013. Net Investment in Capital Assets was reported as Invested in Capital Assets, Net of Related Debt and Net Position was reported as Net Assets prior to that.

Note 1: The City of Palmdale does not have any business-type activities to report 159
City of Palmdale
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2012 2013 2014 2015
Expenses
Governmental Activities:

General government $ 16,855,129 $ 17,227,290 $ 24,150,674 $ 17,167,502 Public safety 21,761,897 22,873,718 22,973,910 23,763,312 Public services 48,181,827 49,082,866 47,723,268 51,743,421 Community development 22,039,137 6,480,832 5,418,368 5,852,056 Cultural and recreational 10,809,922 9,732,400 10,863,071 9,878,585 Health and welfare - 1,402,424 - -
Interest on long-term debt 9,253,632 5,624,571 5,152,837 4,953,848 Total governmental activities expenses $ 128,901,544 $ 112,424,101 $ 116,282,128 $ 113,358,724 Program Revenues
Governmental Activities
Charges for services:

General Government 5,665,531 8,912,099 8,451,711 5,272,710 Public safety 2,286,012 2,394,095 2,462,495 2,411,614
Public services 13,835,689 13,044,551 13,521,227 16,223,970 Community development 4,535,231 5,227,628 5,173,147 4,798,108 Cultural and recreational 4,581,581 4,628,582 4,820,809 5,157,093 Health and welfare 274,643 245,701 275,289 198,531
Operating Grants and Contributions 8,932,066 9,142,066 12,637,721 14,681,296 Capital Grants and Contributions 23,057,899 19,661,447 35,822,039 38,039,564 Total primary governmental activities program revenues 63,168,652 63,256,169 83,164,438 86,782,886 Net Revenues (Expenses) (65,732,892) (49,167,932) (33,117,690) (26,575,838) Governmental Revenues and other Changes in Net Position Governmental activities:

Taxes:

Tax increment (note 1) 16,474,950 - - -
Property taxes 4,553,208 4,831,816 5,269,406 6,098,318
Sales and use taxes 15,177,845 15,649,190 16,396,713 17,084,411 Motor vehicle in lieu 10,391,440 10,400,447 10,651,753 11,484,571 Franchise taxes 4,445,066 4,556,419 5,847,596 5,526,119 Transient occupancy taxes 2,788,736 2,907,995 2,824,182 3,089,802 Business license taxes 480,470 468,830 515,815 551,202
Land sale proceeds - - - -
Unrestricted investment earnings 280,195 (136,096) 391,725 260,322 Other 233,760 270,275 274,312 288,740
Extraordinary item-dissolution of RDA (note 1) 125,544,368 (3,547,799) 10,346,241 - Total governmental activities 180,370,038 35,401,077 52,517,743 44,383,485 Special Item - Write off of Permit Held for Sale - - - - Change in Net Position $ 114,637,146 $ (13,766,855) $ 19,400,053 $ 17,807,647 Note 1: Effective February 1, 2012, all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity. All assets and liabilities of the former Redevelopment Agency of the City of Palmdale was transferred to a Private Purpose Trust Fund to be held until they are distributed to other units of the state and local government. All Tax Increment is reported under a fiduciary Fund statements (Private Purpose Trust Fund). The FY2011-12 extraordinary gain recognized on the Government Wide statements is the net assets and liabilities transferred to the Fiduciary Fund at February 1, 2012. For FY2012-13, the extraordinary loss recognized are assets returned to the Private Purpose Trust Fund as the result of California's Department of Finance review and determination of transfers made prior to the dissolution of the former RDA.

Note 2: The Motor Vehicle in Lieu Taxes include property tax in lieu of VLF revenues Source: The information is derived from the Comprehensive Annual Financial Reports for the relevant year. 160
City of Palmdale
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2016 2017 2018 2019 2020 2021
$ 14,771,775 $ 15,162,734 $ 16,416,215 $ 18,136,297 $ 19,602,733 $ 23,661,402 24,453,097 26,436,495 28,284,134 29,586,144 31,440,137 34,120,577 53,165,326 51,989,170 55,006,590 59,682,264 60,561,501 64,363,055 7,900,847 8,715,698 7,584,015 8,645,117 8,673,102 10,337,092 9,704,499 10,405,253 11,463,299 12,060,182 12,643,328 8,681,441 - - - - 1,287,612 1,136,316
6,116,645 3,948,940 3,327,586 3,237,967 2,955,972 2,966,821 $ 116,112,189 $ 116,658,290 $ 122,081,839 $ 131,347,971 $ 137,164,385 $ 145,266,704 5,967,654 6,095,516 6,716,003 6,933,948 10,430,987 8,697,930 3,478,453 3,188,196 2,687,364 2,667,432 3,658,425 3,352,082 16,469,772 16,853,232 17,545,979 17,712,240 18,427,062 23,981,954 6,541,258 6,674,317 6,775,750 7,486,493 7,588,544 8,177,023 5,226,101 5,320,091 5,255,553 5,262,707 3,643,056 5,885,950 344,932 354,054 311,587 322,559 289,499 220,105
9,206,823 9,058,728 8,540,307 13,858,198 9,552,177 3,828,357 29,098,236 30,874,206 23,778,358 38,211,672 40,280,273 34,148,793 76,333,229 78,418,340 71,610,901 92,455,249 93,870,023 88,292,194 (39,778,960) (38,239,950) (50,470,938) (38,892,722) (43,294,362) (56,974,510) - - - - - -
6,154,152 7,026,181 7,689,753 9,298,991 10,058,703 9,962,884 19,186,043 18,577,244 19,267,083 21,798,640 21,587,441 30,305,927 12,523,079 13,062,518 13,925,859 14,171,324 15,024,455 16,133,114 5,562,090 5,352,221 5,463,623 6,225,233 5,458,426 7,441,119 3,278,724 3,716,154 4,028,350 4,653,290 3,697,656 4,667,137 569,381 589,805 628,303 628,479 666,997 468,666
- - 133,981 - - -
537,396 (71,826) 519,275 2,365,811 1,504,089 401,101
412,936 592,876 594,975 569,791 673,444 1,267,638
- - - - - -
48,223,801 48,845,173 52,251,202 59,711,559 58,671,211 70,647,586 - - - (10,158,182) - -
$ 8,444,841 $ 10,605,223 $ 1,780,264 $ 10,660,655 $ 15,376,849 $ 13,673,076 161
City of Palmdale
Fund Balance, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2012 2013 2014 2015
General Fund
Nonspendable $ 4,685,548 $ 10,574,731 $ 10,491,577 $ 10,884,095 Restricted 2,917,536 4,135,688 3,053,154 3,004,896
Assigned 5,639,221 5,432,558 5,717,857 11,946,745
Unassigned 16,415,346 18,391,993 21,637,632 17,200,108
Total general fund $ 29,657,651 $ 38,534,970 $ 40,900,220 $ 43,035,844 All Other Governmental Funds
Restricted 142,828,907 147,398,476 163,742,301 169,737,885 Assigned 13,643,822 - - -
Unassigned (17,187,366) (16,444,270) (15,388,578) (14,667,579) Total all other governmental funds 139,285,363 130,954,206 148,353,723 155,070,306 Total governmental funds $ 168,943,014 $ 169,489,176 $ 189,253,943 $ 198,106,150 The information is derived from the Comprehensive Annual Financial Reports for the relevant year.

FY2011 is the first year that the City implemented GASB issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. The City chose not to restate the prior year information. 162
City of Palmdale
Fund Balance, Governmental Funds (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
2016 2017 2018 2019 2020 2021
$ 11,433,344 $ 10,889,726 $ 11,072,269 $ 876,958 $ 470,243 $ 2,390,368 3,363,298 3,433,942 3,507,069 4,414,580 2,580,329 2,923,365 7,816,109 10,808,898 11,838,025 14,021,843 15,564,685 21,456,286 29,139,751 31,648,004 35,914,833 43,846,622 47,795,298 31,731,246 $ 51,752,502 $ 56,780,570 $ 62,332,196 $ 63,160,003 $ 66,410,555 $ 58,501,265 165,219,475 164,464,462 179,943,144 184,867,493 194,970,111 215,685,053 - - - - - -
(13,624,754) (15,208,273) (13,373,212) (16,523,119) (11,305,691) (5,848,882) 151,594,721 149,256,189 166,569,932 168,344,374 183,664,420 209,836,171 $ 203,347,223 $ 206,036,759 $ 228,902,128 $ 231,504,377 $ 250,074,975 $ 268,337,436 163
City of Palmdale
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
Modified Accrual Basis of Accounting
2012 2013 2014 2015
Revenues:

Taxes (see page 188) $ 58,488,094 $ 42,329,440 $ 46,089,020 $ 48,122,305 Subventions and grants 18,185,576 15,156,355 18,645,952 21,563,749 Fees and charges 13,776,125 17,248,834 22,906,797 14,528,075 Licenses and Permits 1,574,855 1,513,526 1,652,670 1,802,758 Special Assessments 13,998,835 14,179,059 14,402,577 17,269,746 Interfund interest 570,935 661,662 636,401 606,114
Interest 750,011 601,227 683,854 830,588
Successor agency contributions - 3,553,656 3,389,127 5,758,733 Capital contributions 328,515 443,774 315,299 11,358,487 69,767 (736,165) 480,776 21,262
Other 3,825,141 3,556,653 4,227,192 3,939,117
Total revenues 111,567,854 98,508,021 113,429,665 125,800,934 Expenditures:

Current:

General Government 16,049,708 16,049,207 19,285,105 19,755,437 Public safety 21,638,652 22,692,501 22,926,361 23,904,831 Public services 17,241,488 16,929,292 17,238,982 21,215,460 Community development 13,705,233 5,962,701 4,874,350 5,119,951 Cultural and recreational 9,484,918 8,899,259 9,963,444 9,121,236 Health and welfare 1,853,032 1,388,304 2,824,602 2,178,496 Intergovernmental - tax sharing 8,289,166 - - -
Capital Outlay 13,489,752 12,456,560 10,777,668 25,664,366 Debt service:

Principal 7,080,489 13,623,679 4,453,442 30,144,672
Interfund interest 570,935 661,662 636,401 606,114
Interest 8,431,895 5,506,918 5,139,543 4,950,664
Cost of issuance - 320,404 - 207,500
Total expenditures 117,835,268 104,490,487 98,119,898 142,868,727 Excess (deficiency) of revenue over (under) expenditures (6,267,414) (5,982,466) 15,309,767 (17,067,793) Other Financing Sources (Uses):

Capital lease proceeds - 1,345,884 - -
Gain (loss) on resale land - - - -
Issuance of notes - - - -
Issuance of bonds - 8,695,000 - 25,920,000
Payments to refunded bond escrow - - - -
Debt issuance premiums (discounts) - 35,543 - -
Transfers in 16,092,930 25,593,919 11,001,936 34,083,575 Transfers out (16,092,930) (25,593,919) (11,001,936) (34,083,575) Total other financing sources (uses) - 10,076,427 - 25,920,000 Special Item:

Write-off of permit held for sale - - - -
Extraordinary Items:

Extraordinary gain (loss) upon dissolution of the redevelopment agency 4,278,664.00 (3,547,799.00) - -
Net Change in Fund Balances $ (1,988,750) $ 546,162 $ 15,309,767 $ 8,852,207 Debt services as a percentage of non-capital expenditures %15.56 %21.65 %15.07 %31.17 Source: City of Palmdale, Finance Department and Audited Annual Financial Reports

1. Transfers In excludes $6,565,097 of Interservice Funds Capital Assets that were transferred in 2021 (Proprietary Funds) and are not Governmental funds. 164
City of Palmdale
Changes in Fund Balances, Governmental Funds (Continued) Last Ten Fiscal Years
Modified Accrual Basis of Accounting
2016 2017 2018 2019 2020 20211
$ 50,600,450 $ 51,283,788 $ 54,229,982 $ 59,912,769 $ 59,928,123 $ 73,442,350 25,690,529 26,057,852 28,470,216 31,759,025 41,727,112 28,048,936 18,823,349 18,711,910 18,692,915 14,995,901 22,247,921 23,850,691 2,539,507 2,667,827 2,180,693 1,998,982 3,528,336 3,385,142 17,227,611 17,579,851 18,204,324 18,569,358 18,397,067 13,943,128 577,052 543,708 516,103 481,194 882,858 440,665
1,342,135 1,695,340 2,260,381 3,487,106 3,528,323 1,203,208 17,265,417 41,258 35,953 35,925 - -
463,304 153,796 126,153 161,608 5,898,413 3,506,182
320,522 (1,648,795) (941,708) 2,401,196 1,317,573 (483,057) 4,218,962 4,483,380 3,925,523 9,361,216 3,657,594 3,728,242 139,068,838 121,569,915 127,700,535 143,164,280 161,113,320 151,065,487 14,681,150 15,276,501 15,629,948 16,266,972 20,039,498 17,797,687 24,785,404 26,793,853 28,107,228 29,083,581 30,684,148 33,615,289 22,095,709 20,952,691 20,980,917 22,432,301 23,487,783 28,455,439 7,242,971 7,229,495 6,566,458 7,324,760 7,192,095 9,388,083 9,206,904 9,736,509 10,086,436 10,783,255 11,246,819 7,369,676 3,031,167 3,650,042 1,872,018 1,774,890 1,209,687 1,088,504 - - - - - -
28,470,675 26,733,173 25,935,646 37,329,350 38,890,472 24,579,551 5,433,042 3,391,747 3,425,667 3,587,279 5,744,341 4,764,954 577,052 543,708 516,103 481,194 882,858 3,052,447
4,627,754 3,663,254 3,348,492 3,416,038 3,245,817 706,665 361,287 383,662 157,280 - - -
120,513,115 118,354,635 116,626,193 132,479,620 142,623,518 130,818,295 18,555,723 3,215,280 11,074,342 10,684,660 18,489,802 20,247,192 1,234,862 - 14,161 - - -
- - 377,481 91,753 80,796 -
- - - 1,252,500 - -
4,235,000 17,475,000 11,397,102 - - -
(18,784,512) (19,420,000) - - - -
- 1,419,256 - - - -
8,824,216 29,471,537 8,153,168 9,104,075 7,644,581 -
(8,824,216) (29,471,537) (8,153,168) (9,104,075) (7,644,581) 42,407,576 (13,314,650) (525,744) 11,788,744 1,344,253 80,796 42,407,576 - - - (10,158,182.00) - -
- - - - - -
$ 5,241,073 $ 2,689,536 $ 22,863,086 $ 1,870,731 $ 18,570,598 $ 62,654,768 %12.75 %9.36 %12.07 %7.60 %8.52 %-
165
City of Palmdale
General Governmental Tax Revenue by Source
Last Ten Fiscal Years
Fiscal
Year
Property and
Tax Increment
Revenuea
Sales and
Use Taxes
Business
License
Tax
Franchise
Tax
Gasoline
Tax
Transient
Occupancy
Taxb
Real Property
Transfer
Tax Total
2011-12 $ 31,041,261 $ 15,177,845 $ 480,470 $ 4,445,066 $ 4,252,237 $ 2,788,736 $ 302,479 $ 58,488,094 2012-13 14,791,598 15,649,190 468,830 4,556,419 3,593,343 2,907,995 362,065 42,329,440 2013-14 15,478,125 16,396,713 515,815 5,847,596 4,649,226 2,824,182 377,364 46,089,021 2014-15 17,152,560 17,084,411 551,202 5,526,119 4,351,675 3,089,802 366,535 48,122,304 2015-16 18,118,214 19,186,043 569,381 5,562,090 3,392,713 3,278,724 493,284 50,600,449 2016-17 19,514,208 18,577,244 589,805 5,352,221 3,031,375 3,716,154 502,781 51,283,788 2017-18 20,983,338 19,267,083 628,303 5,463,623 3,310,498 4,028,350 548,787 54,229,982 2018-19 22,953,195 21,798,640 628,479 6,225,233 3,213,087 4,653,290 440,845 59,912,769 2019-20 24,442,179 21,587,441 666,997 5,458,426 3,559,379 3,697,656 516,045 59,928,123 2020-21 25,981,042 30,305,927 468,666 7,441,119 3,566,382 4,667,137 650,123 73,080,396 a The City's property and tax increment revenue has increased over the last ten years due to the increases in the City's population and housing boom However, the City has a significant decrease in 2012-13 as the result of the dissolution of all California Redevelopment Agencies during 2011-12. The Tax Increment previously reported under the City of Palmdale's Redevelopment Agency, a component unit of the City of Palmdale, is now reported under a Private Purpose Trust Fund effective February 1, 2012.

Source: City of Palmdale, Finance Department
166
City of Palmdale
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Secured Property
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Dry Farm
Property
Governmental
Property
Institutional
Property
Irrigated
Property
Miscellaneous
Property
2011-12 $ 6,253,123,516 $ 1,247,918,809 $ 499,582,507 $ 2,953 $ 127,500 $ 141,963,630 $ 2,062,267 $ 956,897 2012-13 6,090,761,455 1,272,332,319 503,277,273 3,011 127,500 143,862,691 2,102,483 2,844,875 2013-14 6,272,332,777 1,297,491,324 470,738,935 3,070 273,000 218,014,208 2,143,503 3,254,005 2014-15 7,077,476,628 1,327,043,593 371,182,157 3,083 292,000 222,889,982 2,152,995 5,245,552 2015-16 7,635,291,990 1,365,232,525 511,346,775 3,144 452,000 225,436,801 2,386,169 3,365,234 2016-17 8,037,144,588 1,420,981,536 538,952,556 3,191 - 243,902,415 2,422,533 5,191,041 2017-18 8,533,219,339 1,469,739,955 591,126,895 3,254 - 255,229,741 2,470,953 5,416,084 2018-19 9,092,073,933 1,539,003,968 637,402,588 1,311,427 - 264,757,053 2,520,345 6,346,928 2019-20 9,604,501,555 1,615,682,922 461,649,492 1,337,654 - 280,936,547 2,973,968 9,002,895 2020-21 10,110,405,114 1,748,162,062 467,272,879 1,364,404 - 332,597,730 3,033,418 9,255,140 Secured Property
Fiscal
Year
Recreational
Property
Vacant Land
Property
Cross Reference
Property
Exempt
Property
Unknown
Property
Total
Secured
SBE Nonunitary
Property
Unsecured
Property
Total Taxable
Assessed Value
Total Direct
Tax
Rate
2011-12 $ 29,731,246 $ 584,249,065 $ 148,423,521 $ (83,267,879) 6,000 $ 8,824,880,032 $ 963,200 $ 273,267,652 $ 9,099,110,884 %0.46508 2012-13 30,041,270 548,640,377 160,682,096 (79,247,893) 6,000 8,675,433,457 963,200 373,414,517 9,049,811,174 %0.46508 2013-14 30,562,607 549,530,339 157,243,314 (78,516,112) 6,000 8,923,076,970 963,200 354,680,993 9,278,721,163 %0.07637 2014-15 30,665,697 558,074,395 174,080,817 (78,416,749) 6,000 9,690,696,150 963,200 362,362,996 10,054,022,346 %0.07933 2015-16 31,833,238 577,190,707 200,289,742 (75,198,398) 6,000 10,477,635,927 963,200 415,364,218 10,893,963,345 %0.07867 2016-17 32,269,300 605,292,964 176,381,014 (75,989,372) 6,000 10,986,557,766 963,200 392,307,216 11,379,828,182 %0.07878 2017-18 35,235,135 652,028,634 201,337,611 (68,143,060) 6,000 11,677,670,541 836,266 448,141,048 12,126,647,855 %0.07858 2018-19 40,385,529 649,821,664 196,505,558 (67,773,322) 6,000 12,362,361,671 836,266 499,037,306 12,862,235,243 %0.07875 2019-20 40,807,956 646,784,750 261,764,983 (76,302,878) 6,000 12,849,145,844 836,266 741,701,115 13,591,683,225 %0.07893 2020-21 53,368,986 690,821,809 262,686,124 (75,151,870) - $ 13,603,815,796 836,266 1,014,356,469 $14,619,008,531 %0.07824 Note 1: Exempt values are not included in total taxable assessed value Note 2: In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner.

At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Data Source: L.A County Assessor 2010/11 - 2019/20 Combined Tax Rolls 167
City of Palmdale
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of Taxable Value)
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 Basic Levy1 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 Acton-Agua Dulce USD DS 2008 Series A %0.03523 %0.03390 %0.03271 %0.03386 %0.03538 %0.03886 %0.03652 %0.03875 %0.04022 %0.03906 Antelope Valley Community College %0.02599 %0.02949 %0.02740 %0.02480 %0.02556 %0.02560 %0.04869 %0.04847 %0.04722 %0.04247 Antelope Valley Union High %0.02913 %0.03075 %0.02602 %0.02585 %0.02428 %0.02474 %0.02357 %0.02317 %0.02187 %0.02163 Antelope Valley East Kern Water Agency %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 Eastside Union School District %0.08149 %0.08302 %0.08677 %0.08893 %0.08176 %0.08449 %0.08029 %0.07257 %0.07363 %0.06430 Lancaster School District %0.03074 %0.03380 %0.05503 %0.04837 %0.05449 %0.05511 %0.06398 %0.05620 %0.05864 %0.06540 Palmdale School District %0.02323 %0.02527 %0.04839 %0.04591 %0.04973 %0.03819 %0.07534 %0.07211 %0.07059 %0.07264 Palmdale Water District %0.29166 %0.33361 %0.32898 %0.34586 %0.29922 %0.27726 %0.26591 %0.22356 %0.21817 %0.19676 Westside Union School District %0.05062 %0.05526 %0.05615 %0.08166 %0.08107 %0.07929 %0.07904 %0.07895 %0.07507 %0.07656 Total Direct & Overlapping2Tax Rates %1.63858 %1.69559 %1.73194 %1.76573 %1.72198 %1.69403 %1.74383 %1.68427 %1.67590 %1.64931 City Share of 1% Levy per Prop 133 %0.06629 %0.06629 %0.06629 %0.10374 %0.10374 %0.10374 %0.10374 %0.10367 %0.10367 %0.10367 Redevelopment Rate4 %1.07049 %- %- %- %- %- %- %- %- %- Total Direct Rate5 %0.46508 %0.43604 %0.07637 %0.07933 %0.07867 %0.07878 %0.07858 %0.07875 %0.07893 %0.07824 Notes:
1In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the

1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values of the payment of any approved bonds. 2Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners. 3City's share of 1% levy is based on the City's share of the general fund tax rate area with the largest net taxable value with the City. ERAF general fund tax shifts may not be included in tax ratio figures 4RDA rate is based on the largest RDA tax rate area (TRA) and includes only rate(s) from indebtedness adopted prior to 1989 per California State statue. RDA direct and overlapping rates are applied only to the incremental property values. Effective February 1, 2012, all California Redevelopment Agencies were dissolved. 5Total direct rate is the weighted average of all individual direct rates and applied by the City of Palmdale.

Data Source: L.A. County Assessor 2012/11 - 2021/20 Tax Rate Table 168
City of Palmdale
Principle Property Tax Payers
Current Year and Nine Years Ago
2020-21 2011-12
Tax Payer
Taxable
Assessed
Value
Percentage
of Total City
Taxable
Assessed
Valuation
Taxable
Assessed
Value
Percentage
of Total City
Taxable
Assessed
Valuation
Lockheed Corporation $ 554,653,719 %3.77 $ 354,006,864 %3.86 Northrop Grumman Systems Corporation 447,043,067 %3.04 32,564,864 %0.35 Lancaster Hospital Corporation 254,988,358 %1.74 - %0.00 Antelope Valley Mall LLC 206,330,473 %1.40 115,563,572 %1.26 MGP X Properties LLC 105,378,632 %0.72 67,497,382 %0.74 Walmart/Sam's Club 81,972,126 %0.56 73,974,866 %0.81
Time Warner Cable 63,485,662 %0.43 57,225,454 %0.62
Forest City Harris AVM LLC 50,948,388 0.35 - 0.00
Design Create Explore LLC 50,247,121 0.34 - 0.00
Golden Spectrum Property LLC 46,203,301 %0.31 - %0.00
Bascom Fountains LLC - %0.00 29,865,035 %0.33
Universal Health Services of Palmdale - %0.00 134,379,497 %1.46 Amargosa Palmdale Investments LLC - %0.00 33,809,072 %0.37 Target Corporation - %0.00 37,852,506 %0.41
Top Ten Total 1,861,250,847 %12.67 936,739,112 %10.20
Total City Taxable Assessed Value $ 14,694,160,401 %100.00 $ 9,182,378,763 %100.00 Source: HdL Coren & Cone, Los Angeles County Assessor 2020/21 and 2011/12 Combined Tax Roll 169
City of Palmdale
City Property Taxes Levies and Collections Last Ten Fiscal Last Ten Fiscal Years
Fiscal
Year City Property Tax Subsequent Collections
Total
Collections
Levy (1)
Collections
(2)
Percentage
of Levy
Supplemental
(3)
Redemption(
(4)
Refunds
Adjustments
(5)
Percentage
of Levy
2011-12 4,569,196 4,045,607 88.54% 153,788 114,549 101,781 4,415,725 96.64% 2012-13 4,702,797 4,168,372 88.64% 198,103 102,478 119,284 4,588,237 97.56% 2013-14 4,866,006 4,295,755 88.28% 323,668 79,763 118,794 4,817,980 99.01% 2014-15 5,181,707 4,561,031 88.02% 159,671 54,300 338,739 5,113,741 98.69% 2015-16 5,564,458 4,851,602 87.19% 186,674 60,744 362,953 5,461,973 98.16% 2016-17 5,402,998 4,987,980 92.32% 140,425 61,470 155,603 5,345,478 98.94% 2017-18 5,828,578 5,228,633 89.71% 147,686 55,389 324,312 5,756,020 98.76% 2018-19 6,806,674 5,583,646 82.03% 181,836 55,887 912,182 6,733,551 98.93% 2019-20 7,618,313 5,801,915 76.16% 175,030 66,903 1,338,234 7,382,082 96.90% 2020-21 7,448,412 6,270,301 84.18% 122,110 112,061 879,714 7,384,186 99.14% (1) Billings represents the Secured, Unsecured, and Homeowners Property Tax billed amounts for each fiscal year (2) Collections represents the Secured, Unsecured, and Homeowners Property Tax collected amounts for each fiscal year (3) SB813 requires than a supplemental assessment be enrolled for the amount of the difference in value between regular assessment roll and the new fair market value after a change of ownership. The Supplemental figures were taken from LA County remittances and may include supplemental amounts from prior fiscal years. (4) Redemption collections represent tax-defaulted secured property taxes that were unpaid at the end of a fiscal year. The Redemption figures were taken from LA County remittances and may include redemption amounts from prior fiscal years. (5) Refunds represent overpayments of taxes due because of a decrease in value; whereas adjustments represent changes to the (6) tax roll. The Refund and Adjustment figures were taken from LA County remittances and may include refunds and/or (7) adjustments from prior fiscal years.
170
City of Palmdale
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal
Year
Certificates
of
Participation
Tax
Allocation
Bondsa
Revenue
Bonds
Capital
Leases
Other
Notes
Payable
Total
Governmental
Activities
Percentage
of Personal
Income (1)
Per
Capita (1)
2012 $ 78,663,861 $ - $ 25,203,459 $ 149,214 $ 8,233,768 $ 112,250,302 %3.93 726 2013 67,773,873 - 32,356,201 1,219,846 7,665,342 109,015,262 %3.77 705 2014 66,537,300 - 30,392,752 962,260 7,084,485 104,976,797 %3.63 674 2015 65,097,544 - 28,337,814 697,150 6,474,923 100,607,431 %3.32 629 2016 62,879,049 - 12,440,000 1,636,893 6,117,000 83,072,942 %2.76 524 2017 41,160,000 - 30,736,782 1,310,146 5,862,000 79,068,928 %2.53 498 2018 39,815,000 - 28,901,224 1,091,639 17,614,522 87,422,385 %2.80 550 2019 38,315,000 - 26,982,753 964,360 18,271,625 84,533,738 %2.54 536 2020 36,655,000 - 25,054,801 832,294 15,984,014 78,526,109 %2.25 501 2021 33,649,908 - 22,635,000 1,183,278 15,035,845 72,504,031 %2.04 465 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. a A decrease in Tax Allocation Bonds reported is the direct result of the dissolution of all California Redevelopment Agencies during 2011-12. The Debt previously reported under the City of Palmdale's Redevelopment Agency, a component unit of the City of Palmdale, is now being reported under a Private Purpose Trust Fund effective February 1, 2012. (1) These ratios are calculated using per capita personal income and population for the prior calendar year provided by HdL, Coren & Cone Source: City of Palmdale, Finance Department
171
City of Palmdale
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Year
Tax Allocation
Bondsa
Revenue*
Bonds Total
Percent of
Assessed
Value (1)
Per
Capita
2012 $ - $ 25,203,459 $ 25,203,459 %0.28 163
2013 - 32,356,202 32,356,202 %0.36 209
2014 - 30,392,752 30,392,752 %0.33 195
2015 - 28,337,814 28,337,814 %0.28 177
2016 - 8,205,000 8,205,000 %0.08 52
2017 - 25,180,000 b 25,180,000 %0.22 158
2018 - 23,685,000 23,685,000 %0.19 149
2019 - 22,090,000 22,090,000 %0.17 140
2020 - 20,465,000 20,465,000 %0.15 131
2021 - 18,800,000 18,800,000 %0.15 120
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

General bonded debt is debt payable with governmental fund resources recorded in Palmdale Financing Authority (of which the City has none).
(1) Assessed value has been used because the actual value of taxable property is not readily available in the State of California. a A decrease in Tax Allocation Bonds reported is the direct result of the dissolution of all California Redevelopment Agencies during 2011-12. The Debt previously reported under the City of Palmdale's Redevelopment Agency, a component unit of the City of Palmdale, is now being reported under a Private Purpose Trust Fund effective February 1, 2012. b A increase in total Revenue Bonds reported in 2017 as compared to 2016 is the result of refunding revenue bonds issued to pay off certificates of participation during 2016-17.
*During FY2012-13, $8,695,000 Lease Revenue Bonds were issued. 172
City of Palmdale
Direct and Overlapping Governmental Activities Debt
June 30, 2021
City Assessed Valuation $ 8,545,515,270
Redevelopment Agency Incremental Valuation 6,148,645,131 Total Assessed Valuation $ 14,694,160,401
OVERLAPPING DEBT:

Gross Bonded
Debt Balance
Percentage
Applicable
Estimated Share
of Overlapping
Debt
308.60-Palmdale Water District $ 119,049,460 %91.599 $ 109,048,115 464.50-Eastside Union Elem School District 1998 Series A Debt Service 645,985 %21.735 140,405 464.54-Eastside Union School District Debt Service 2016 REF 3,490,000 %21.735 758,552 529.50-Lancaster School District Debt Service 1999 Series A 1,646,521 %0.548 9,023 529.51-Lancaster School District Debt Service 1999 Series 2001 6,096,066 %0.548 33,406 529.53-Lancaster School District Debt Service 2012 Series 2013A Bond 17,205,000 %0.548 94,283 529.54-Lancaster School District Debt Service 2012 Series 2013B Bond 10,370,000 %0.548 56,828 529.55-Lancaster School District Debt Service 2012 Series 2018C 11,000,000 %0.548 60,280 529.56-Lancaster School District Debt Service 2012 Series 2020D 15,184,908 %0.548 83,213 593.53-Palmdale School District Debt Service 2010 Ref Bonds 1,259,827 %94.835 1,194,757 593.54-Palmdale School District Debt Service 2012 Series 2013A Bonds 4,845,000 %94.835 4,594,756 593.55-Palmdale School District Debt Service Ref Series 2013B Bonds 40,835,000 %94.835 38,725,872 593.56-Palmdale School District Debt Service Ref Series 2015B 1,765,000 %94.835 1,673,838 593.57-Palmdale School District Debt Service Ref Series 2017A 23,665,000 %94.835 22,442,703 593.58-Palmdale School District Debt Service Ref Series B 24,420,000 %94.835 23,158,707 593.59-Palmdale School District Debt Service 2012 SER C 29,155,000 %94.835 27,649,144 593.60-Palmdale School District Debt Service 2016 SER C 17,205,000 %94.835 16,316,362 689.54-Westside Union School District 1998 Series A Debt Service 1,294,174 %40.108 519,067 689.55-Westside Union School District 1998 Series S-2001 A Debt Service 2,391,216 %40.108 959,069 689.56-Westside Union School District 1998 Series S-2002 A Debt Service 1,720,228 %40.108 689,949 689.61-Westside Union School District 2008 Series A Debt Service 20,048,029 %40.108 8,040,863 689.62-Westside Union School District Debt Service 2008 Series B 9,000,000 %40.108 3,609,720 689.63-Westside Union School District Debt Service 2012 Series A 13,410,000 %40.108 5,378,483 689.65-Westside Union School District Debt Service 2020 3,806,694 %42.058 1,601,019 717.51-Antelope Valley Unified High School District DS 2002 SER A 698,179 %42.058 293,640 717.52-Antelope Valley Unified High School District DS 02 SER B 5,605,000 %42.058 2,357,351 717.54-Antelope Valley Unified High School District Refund SR 2012 17,370,000 %42.058 7,305,475 717.55 Antelope Valley Union High School District Refund 2015 17,815,000 %42.058 7,492,633 717.56 Antelope Valley Union High School District DS 19 RF BD 15,700,000 %39.537 6,207,309 792.55-Antelope Valley CCD Debt Service 2014 Ref Series A 6,060,000 %39.537 2,395,942 792.56-Antelope Valley CCD Debt Service 2014 Ref Series B 116,385,000 %39.537 46,015,137 792.58-Antelope Valley CCD Debt Service 2016 Series A 20,395,000 %39.537 8,063,571 792.59-Antelope Valley CCD Debt Service 2016 Series A 95,000,000 %39.537 37,560,150 792.60-Antelope Valley CCD Debt Service 2016 Series B 125,295,000 %39.537 49,537,884 792.61-Antelope Valley CCD Debt Service 2020 REF BDS 10,200,664 %0.006 612 Total overlapping debt $ 434,068,118
City of Palmdale's Direct Debt $ 72,982,079
Total Direct and Overlapping Debt $ 507,050,197
Notes:

This report reflects debt which is being repaid through voter-approved property tax indebtedness. It excludes mortgage revenue, tax allocation bonds, interim financing obligations, non-bonded capital lease obligations, and certificates of participation.

Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City of Palmdale. The percentage of overlapping debt applicable is estimated by using taxable assessed values. Applicable percentages were estimated by determining the portion 173
City of Palmdale
Direct and Overlapping Governmental Activities Debt
June 30, 2021
of another governmental unit's taxable assessed value that is within the City's boundaries and dividing it by each unit's total taxable assessed value.

Data Source HDL Coren & Cone, L. A. County Assessor and Auditor Combined 2018/19 Lien Date Tax Rolls. 174
City of Palmdale
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year
Assessed
Evaluation
Debt Limit
(1)
Total Net Debt
Applicable to the
Limit (2)
Total Debt
Applicable to the
Limit as a Percentage
of Debt Limit
2011-12 $ 9,182,378,763 $ 344,339,204 $ 111,397,152 %32.35 2012-13 9,129,059,067 342,339,715 116,925,374 %34.15
2013-14 9,357,237,275 350,896,398 115,840,632 %33.01
2014-15 10,380,860,342 389,282,263 112,074,317 %28.79
2015-16 10,969,161,743 441,343,565 121,994,744 %27.64
2016-17 11,455,817,554 429,593,158 121,593,787 %28.30
2017-18 12,194,790,915 457,304,659 114,426,984 %25.02
2018-19 12,930,008,625 484,875,323 105,383,212 %21.73
2019-20 13,667,986,103 512,549,479 98,452,808 %19.21
2020-21 14,694,160,401 551,031,015 91,438,375 %16.59
Source: Los Angeles County
Note (1): The legal debt limit is statutorily computed at 3.75% of assessed valuation. Amounts applicable to the former Community Redevelopment Agency of the City of Palmdale are included in years 2002-03 through 2010-11.

Note (2): Total net debt applicable to the limit includes Tax Allocation Bonds and Revenue Bonds.

Note (3): The aggregate principal amount of the City's general obligation debt for public improvements is statutorily limited to 15.0 percent of the City's total reported assessed valuation. The City has no general obligation debt outstanding as of June 30, 2020.
175
City of Palmdale
Former Community Redevelopment Agency - Project Area 1 & 1 A Pledged-Revenue Coverage Last Ten Fiscal Years
1993 Revenue Bonds
Debt Service (1)
2003 Revenue Bonds 19.2
Debt Service (3)
2009 Note Payable 6.0
Debt Service (4)
2011 Tax Allocation Note

27.5 Debt Service (5)
Fiscal
Year Principle Interest Principle Interest Principle Interest Principle Interest 2012 $ - $ - $ 780,000 $ 737,638 $ 95,000 $ 386,843 $ 1,120,714 $ 1,629,947 2013 - - 810,000 705,837 100,000 380,442 1,190,968 1,559,692 2014 - - 845,000 672,737 105,000 373,713 1,265,627 1,485,033 2015 - - 875,000 638,338 115,000 366,491 1,344,967 1,405,693 2016 - - 910,000 602,638 125,000 358,613 1,429,282 1,321,378 2017 - - - - - - 1,518,883 1,231,777
2018 - - - - - - 1,614,102 1,136,558
2019 - - - - - - 1,715,292 1,035,369
2020 - - - - - - 1,822,825 927,835
2021 - - - - - - 1,937,100 813,560
Debt Summary Pledge Revenue
Fiscal
Year Total Principle Total Interest
Total Debt
Service
Gross Tax
Increment (6)
Less: Operating
Expenses (7) Net Available Coverage
2012 $ 1,995,714 $ 2,754,428 $ 4,750,142 $ 8,217,166 $ 274,933 $ 7,942,233 1.67 2013 2,100,968 2,645,971 4,746,939 9,961,671 356,493 9,605,178 2.02 2014 2,215,627 2,531,483 4,747,110 9,696,225 341,547 9,354,678 1.76 2015 2,334,967 2,410,522 4,745,489 8,956,435 327,804 8,628,631 1.82 2016 2,464,282 2,282,629 4,746,911 9,245,959 352,357 8,893,602 1.87 2017 1,518,883 1,231,777 2,750,660 9,666,704 393,523 9,273,181 3.37 2018 1,614,102 1,136,558 2,750,660 10,236,117 402,461 9,833,656 3.58 2019 1,715,292 1,035,369 2,750,661 10,529,801 429,833 10,099,968 3.67 2020 1,822,825 927,835 2,750,660 11,393,921 452,757 10,941,164 3.98 2021 1,937,100 813,560 2,750,660 11,560,764 477,635 11,083,129 4.03 Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes
Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18) Source: City of Palmdale, Finance Department
(1) Revenue Bonds were fully matured and paid off in FY 2011. (2) 2003 Bond Anticipation Note was fully defeased in June 2009 by the CRA Loan associated with the 2009 Revenue Bonds. (3) 2003 Revenue Bonds were fully defeased in April 2016 by the Successor Agency 2016 Series A Tax Allocation Refunding Bonds. (4) 2009 Revenue Bonds were fully defeased in June 2016 by the Successor Agency 2016 Series B Tax Allocation Refunding Bonds. (5) Sole source of payment on 2011 Tax Allocation Notes is Available Tax Increment, but is subordinate to any existing or future indebtedness.
(6) Gross Tax Increment consist of property taxes generated from Project Area No. 1&1A (7) Operating Expenses consist of the 20% set-aside property taxes generated from Project Area No. 1&1A up until 2011, pass through payments pursuant to agreements to allocate tax increment funds to various Local Agencies, and other charges related to administering Area 1&1A debt.
176
City of Palmdale
Former Community Redevelopment Agency - Project Area 2A Pledged-Revenue Coverage Last Ten Fiscal Years
1999 Sublien TAB 2.7
Debt Service (2)
2002 TAB 5.3
Debt Service
2004 TAB 6.09
Debt Service (3)
2004 TAB 18.5
Debt Service (3)
1998 TAB 30.6
Debt Services (2)
1994 Revenue Bonds Debt
Service (1)
1997 Revenue Bonds
Debt Service (1)
Fiscal Year Principle Interest Principle Interest Principle Interest Principle Interest Principle Interest Principle Interest Principle Interest 2012 $ 95,000 $ 161,838 $ - $ - $ 145,000 $ 272,930 $ 280,000 $ 902,750 $ 615,000 $ 1,346,625 $ 190,000 $ - $ 730,000 $ 204,098 2013 100,000 156,475 - - 145,000 268,508 290,000 888,500 640,000 1,315,250 195,000 - 765,000 163,919 2014 105,000 150,837 - - 155,000 263,780 300,000 873,750 675,000 1,282,375 205,000 - 805,000 120,820 2015 110,000 144,925 - - 160,000 258,580 310,000 858,500 710,000 1,247,750 205,000 - 850,000 74,480 2016 115,000 70,950 - - 165,000 252,890 320,000 842,750 740,000 1,211,500 215,000 - 905,000 25,340 2017 - - 970,000 - - - - - - - - - - -
2018 - - - - - - - - - - - - - -
2019 - - - - - - - - - - - - - -
2020 - - - - - - - - - - - - - -
2021 - - - - - - - - - - - - - -
2016 TAB A&B 73.1
Debt Service Debt Summary Pledge Revenue
Fiscal Year Total Principal Total Interest Total Principle Total Interest Total Debt Service Sales Tax (4) Gross Tax
Increment (6)
Less: Operating
Expenses (7) Net Available Coverage
2012 $ - $ - $ 2,055,000 $ 2,888,241 $ 4,943,241 Note (6) $ 27,126,295 $ 16,712,555 Note (6) - 2013 - - 2,135,000 2,792,652 4,927,652 Note (6) 29,606,177 21,450,574 Note (6) - 2014 - - 2,245,000 2,691,562 4,936,562 Note (6) 29,406,998 17,777,381 Note (6) - 2015 - - 2,345,000 2,584,235 4,929,235 Note (6) 32,813,662 19,508,055 Note (6) - 2016 - - 2,460,000 2,403,430 4,863,430 Note (6) 34,915,819 20,449,662 Note (6) - 2017 1,235,000 2,611,743 2,205,000 2,611,743 4,816,743 Note (7) 40,469,941 22,224,293 18,245,648 3.79 2018 3,130,000 3,394,850 3,130,000 3,394,850 6,524,850 Note (7) 40,400,227 22,619,322 17,780,905 2.73 2019 3,250,000 3,282 3,250,000 3,282 3,253,282 Note (7) 44,929,524 24,908,918 20,020,606 3.06 2020 3,365,000 3,133,775 3,365,000 3,133,775 6,498,775 Note (7) 45,399,840 27,528,918 17,870,922 2.75 2021 3,540,000 2,961,150 3,540,000 2,961,150 6,501,150 Note (7) 55,069,687 29,999,947 25,069,740 3.86 Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes to the financial statements.

Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18) Source: City of Palmdale, Finance Department
(1) The 1994 and 1997 Revenue Bonds were fully matured and paid off in FY 2016. (2) The 1998 and 1999 Tax Allocation Bonds were fully defeased in April 2016 by the Successor Agency 2016 Series A Tax Allocation Refunding Bonds. (3) The 2004 $18.5M and 2004 $6.1 Tax Allocation Bonds were fully defeased in June 2016 by the Successor Agency 2016 Series B Tax Allocation Refunding Bonds. (4) (Gross sales tax and tax increment consist of property taxes and sales tax generated from Project Area No. 2A. (5) Operating Expenses consist of the 20% set-aside property taxes generated from Project Area No. 2A up until 2011, pass through payments pursuant to agreements to allocate tax increment funds to various Local Agencies, and other charges related to administering Area 2A debt. (6) Due to the dissolution of the Community Redevelopment Agency in 2012, the Sales Tax generated by Project Area was not available therefore the "Net Available" and "Coverage" percent is not available. (7) Due to the FY 2016 refunding of bond issues with a sales tax pledge, there is no longer any pledge of sales tax towards any Successor Agency debt. 177
City of Palmdale
Former Community Redevelopment Agency - Project Area 2A (20 Percent Set Aside) Pledged-Revenue Coverage Last Ten Fiscal Years
2003 TAB 5.9
Debt Service (1)
2003 TAB 7.2
Debt Service (1)
2005 TAB 14.115
Debt Service (1)
2005 TAB 2.8
Debt Service (1)
Fiscal Year Principle Interest Principle Interest Principle Interest Principle Interest 2012 $ 175,000 $ 203,985 $ 30,000 $ 343,545 $ 475,000 $ 494,479 $ 35,000 $ 115,961 2013 175,000 198,516 30,000 342,428 500,000 472,541 35,000 114,802 2014 180,000 192,523 30,000 341,168 525,000 452,104 35,000 113,599 2015 180,000 186,043 35,000 339,803 550,000 430,541 35,000 112,356 2016 190,000 179,103 35,000 338,333 570,000 407,479 40,000 110,976 2017 - - - - - - - -
2018 - - - - - - - -
2019 - - - - - - - -
2020 - - - - - - - -
2021 - - - - - - - -
Debt Summary Pledge Revenue
Fiscal Year Total Principle Total Interest
Total Debt
Service
20 Percent Set
Aside Tax
Increment (2) Net Available Coverage
2012 $ 715,000 $ 1,157,970 $ 1,872,970 $ 6,339,147 $ 6,339,147 3.39 2013 740,000 1,128,287 1,868,287 5,425,259 5,425,259 2.90 2014 770,000 1,099,394 1,869,394 5,921,235 5,921,235 3.17 2015 800,000 1,068,743 1,868,743 5,881,400 5,881,400 3.15 2016 835,000 1,035,891 1,870,891 6,562,732 6,562,732 3.51 2017 - - - 6,983,164 6,983,164 3.73
2018 - - - - - -
2019 - - - - - -
2020 - - - - - -
2021 - - - - - -
Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes to the financial statements
Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18) Source: City of Palmdale, Finance Department
(1) The 2003 Series C & D TAB's and the 2005 Series E & F TAB's were fully defeased in April 2016 by the Successor Agency 2016 Series B TAB's. (2) The pledged revenues represent 20% property tax increments generated from Project Area 2A and set aside as required by State law for low and moderate income housing.
(3) Due to the dissolution of the Community Redevelopment Agency during 2012, the 20% set aside is no longer required. The 20% set aside calculated is based on what it should have been if legally required.
178
City of Palmdale
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal
Year
(1)
Population
(2)
Personal
Income
(thousands
of dollars)
(2)
Per
Capita
Personal
Income
(2)
Median
Age
(3)
School
Enrollment
(4)
Unemployment
Rate
(5)
Percent of Pop
25+
with HS
Degree
(5)
Percent of Pop
25+
with Bachelor's
Degree
2011 153,708 $ 2,837,296 $ 18,459 29.00 31,915 %15.2 %73.4 %15.2 2012 154,535 2,859,670 18,505 28.90 31,372 %11.6 %74.1 %15.4 2013 154,629 2,890,789 18,695 28.70 31,226 %10.8 %73.0 %14.7 2014 155,734 2,892,448 18,573 29.10 35,356 %11.0 %74.2 %15.3 2015 160,072 3,028,678 18,920 29.30 34,932 %9.0 %73.6 %15.5 2016 158,605 3,010,803 18,983 30.10 33,874 %7.1 %74.2 %14.8 2017 158,905 3,121,978 19,646 30.40 36,785 %6.2 %74.0 %15.0 2018 157,854 3,327,236 21,077 31.30 35,799 %6.4 %74.4 %14.7 2019 156,737 3,598,995 22,962 31.90 22,166 %14.9 %75.8 %16.5 2020 156,074 3,545,820 22,718 32.00 4,946 %15.3 %74.6 %15.5 Source:
(1) California State Department of Finance, Demographic Research Unit E-1: City/County Population Estimates (2) 2010-2013 Income, Age, and Education Data: ESRA - Demographic Estimates are based on the last available Census.

Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's Boundaries. U.S. Census Bureau, most recent American Community Survey. 2010, and later - Income, Age and Education Data - US Census Bureau, most recent American Community Survey. (3) Palmdale School District, California Department of Education - SARC Not Available for Palmdale School District and AVUHSD. Only Westside School District is available
(4) California Employment Development Department.
(5) U.S. Census Bureau
179
City of Palmdale
Principle Employers - Antelope Valley
Calendar Year 2020 and Calendar Year 2011
2020 2011
Employer
Number of
Employees
Percentage of
Total Valley
Employment Employer
Number of
Employees
Percentage of
Total Valley
Employment
Northrop Grumman 28,000 27.67% Edwards Air Force Base 10,610 7.76% Walmart (5) stores 19,900 19.66% China Lake NWC 6,734 4.93% Edwards Air Force base 8,929 8.82% County of Los Angeles 3,953 2.89% China Lake NWC 7,995 7.90% Lockheed Martin 3,100 2.27%
County of Los Angeles 3,933 3.89% Palmdale School District 2,739 2.00% Lockheed Martin 3,700 3.66% Antelope Valley Hospital Medical Center 2,722 1.99% Lancaster School District 2,600 2.57% Northrop-Grumman 2,611 1.91% Antelope Valley Hospital Medical
Center 2,425 2.40% A.V. High School District 2,054 1.50% Antelope Valley Union Highschool
District 2,300 2.27% Tehachapi State Prison 1,911 1.40% Antelope Valley Mall (All Stores) 1,800 1.78% Bank of America 1,846 1.35% Source: City of Palmdale Economic Development Department 2020 GAVEA Report Note 1: FY2020 represents employment reported for calendar year 2019 and the most recent year available. Calendar year 2020 will not be available until January 2021.

Note 2: "Total Employment" as used above represents the total employment located within the Greater Antelope Valley region. The Antelope Valley region is considered to be the City's economic region and covers 3,514.2 square miles of area and includes the City of Palmdale, Lancaster, Tehachapi and Ridgecrest. The principal employers represent all employers within the greater Antelope Valley region.

Note 3: 2010 total employment used to calculate the percentage of principal employers is an estimate. The estimate is based on the ratio of the 2010 employment to total population and then applied to total population reported for the calendar year 2010. 180
City of Palmdale
Full-time-Equivalent City Government Employees by Function:Program Last Ten Fiscal Years
Function 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 City council - - - - - - - - - 0.50
City manager 5.00 5.00 7.00 5.00 6.00 8.00 8.00 12.00 25.00 46.50 City attorney 4.00 4.00 4.00 4.00 4.00 4.00 4.00 6.00 6.00 8.00 Administrative services 18.00 18.00 17.00 20.00 20.00 21.00 21.00 21.00 13.00 - Economic & community development* 38.00 35.00 33.00 39.00 25.00 27.00 29.00 29.00 30.00 31.00 Neighborhood services 21.00 19.00 24.00 21.00 20.00 21.00 24.00 23.00 23.00 24.00 Public works* 87.00 89.00 83.00 81.00 97.00 103.00 110.00 112.00 114.00 116.00 Recreation & culture 20.00 14.00 13.00 14.00 14.00 14.00 16.00 16.00 17.00 19.00 Total 193.00 184.00 181.00 184.00 186.00 198.00 212.00 219.00 228.00 245.00 *2016 Fluctuation in full time employees was caused by a reorganization.

Source: City of Palmdale, Finance Department
181
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Communications:

Television programs produced 25 18 7 10 16 12 21 94 127 113 Commercials produced 4 2 4 5 7 8 7 5 8 8
Still Photo Shoots - - 2 24 39 33 39 65 68 72
Newsletters published - hard
copies 3 3 3 3 3 3 3 15 15 15
Newsletters published - external
e-newsletters - - 51 80 91 91 140 166 265 309
Newsletters published - internal
e-newsletters - - - 22 57 18 48 58 - -
Economic and Community
Development:

Film permits issued 21 22 15 19 36 35 29 30 19 28
Businesses licensed 6,290 4,973 6,240 8,873 9,585 10,099 9,929 9,456 9,372 6,560 Building permits issued 851 862 1,168 1,517 1,814 1,742 1,566 1,674 1,935 1,951 Engineer grading permits issued 14 9 23 17 22 26 18 16 41 27 Engineer Geotechnical review 10 16 18 10 20 12 12 17 20 16 Engineer Improvement plans 91 74 80 70 139 - - - - -
Engineer Inspections 2,667 1,921 2,189 3,200 2,219 965 1,101 1,543 1,311 1,009 Financial assistance to
businesses - - - - - - - - - 70
SBDC business counseling
hours 278 275 275 275 206 374 286 351 249 358
Business retention site visits 35 32 32 35 34 36 35 25 8 290 General Government:

Buildings maintained 40 40 48 57 64 65 57 60 60 60
Square footage of facilities 387,300 387,300 312,600 415,830 424,488 418,000 418,000 423,000 432,000 432,000 Neighborhood Services
Neighborhood watch
presentations 93 172 115 118 66 86 88 32 14 16
Business watch presentations 12 56 36 11 52 57 63 11 3 2 PAC presentations 18 23 62 11 25 8 11 8 4 5
Administration Citations
Processed 535 768 641 741 361 818 630 559 1,242 968
Parking Enforcement:

Vehicle Impounds 292 410 330 205 500 483 462 396 405 351 Citations Issued 7,416 8,648 5,585 5,195 3,560 5,430 7,233 6,014 6,633 3,065 Calls for Service 696 719 757 1,086 2,837 9,346 2,007 2,626 2,485 3,445 Number of law violations::

Part 1 crimes 4,087 4,305 4,093 4,750 4,200 5,946 4,082 3,757 2,895 3,232 Part 2 crimes 6,589 5,787 7,775 6,614 4,835 10,743 7,876 7,985 5,387 6,985 Crime reports taken 16,605 - 20,612 19,254 15,630 16,689 11,958 11,742 8,268 12,232 Arrests 9,901 7,435 5,267 6,206 5,976 9,061 6,583 6,652 6,554 5,355 Accident reports taken 1,385 1,278 1,572 1,967 2,081 2,226 1,435 1,850 1,720 2,320 Animal licenses issued 9,375 8,504 8,314 8,318 9,643 11,416 11,616 11,747 10,656 8,111 Code Enforcement cases closed 4,016 3,254 3,421 3,835 4,190 4,607 4,390 3,045 3,572 2,271 Mobile Home Parks paid
occupied spaces 787 787 787 787 787 787 787 787 787 791 Affordable Housing - Apartment
Units4 - - - - 291 291 291 291 299 299
182
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Health and Welfare:

Family members assisted with
food and/or shelter 3,370 5,561 10,281 7,184 7,516 6,573 9,143 3,080 5,563 4,346 SAVES meals provided 87,507 86,037 575,085 361,956 94,170 94,595 118,321 209,100 347,511 387,610 SAVES motel vouchers
provided (night) 188 19 25 29 59 160 101 61 42 298
Public Services:

Number of landscape districts
maintained 245 245 245 248 230 230 230 233 233 248
Landscaped area (acres)
maintained 253 253 253 253 376 377 377 377 377 381
Irrigation controllers maintained 542 542 542 542 532 413 413 534 534 534 Landscape median area
maintained (sq. ft.) 2,500,344 2,500,344 2,500,344 2,500,344 2,500,344 2,553,144 2,553,144 2,553,144 2,553,114 2,553,144 SR 14 Interchange area
maintained (sq. ft.) 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 Park-n-ride spaces maintained 2,009 2,009 2,009 2,009 2,009 2,009 2,009 2,006 2,006 2,006 Park-n-ride Acres maintained 22 22 22 22 22 22 22 22 22 22 Park-n-ride security hours
provided 15,240 - - - - - - - - -
Detention basins maintained 226 226 226 226 267 267 267 267 267 267 Detention basins (acres)
maintained 94 94 94 94 110 110 110 110 110 110
Service requests - landscape
maint. 252 215 365 1,109 1,236 1,016 1,016 1,297 1,297 1,310 Vandalism repair hours 126 200 20 20 23 13 13 42 42 42
Graffiti abatement hours 5,150 4,775 3,246 1,211 4,720 1,204 1,210 1,573 1,573 1,781 Lighting districts 149 171 150 164 164 164 164 170 170 170 Number of street lights in
districts 4,100 18,692 18,437 18,513 18,515 18,515 18,515 18,523 18,523 18,523 Commercial acreage in street
lighting districts 600 625 625 2,090 2,111 2,111 2,111 2,115 2,115 2,115 Commercial acreage in street
lighting districts 8,000 37,038 40,730 40,770 40,785 40,785 40,792 40,790 40,790 40,790 Striping and marking sq. ft. 1,900,000 1,068,911 2,500,000 2,500,000 2,500,000 1,713,453 2,500,000 2,500,000 2,500,000 2,500,000 Trees planted 263 500 130 320 45 100 75 141 141 142
Street trees pruned 1,200 980 947 410 455 455 1,678 959 959 755 Street signs maintained 8,650 8,650 9,100 9,100 9,150 14,500 14,500 14,500 14,500 14,560 Street centerline miles 518 518 504 504 504 508 508 508 508 508 Street curb miles swept 26,400 26,400 - - - - - - - -
Street pavement area (acres) 2,109 2,109 2,109 2,109 2,109 2,172 2,172 2,172 2,172 2,172 Bridges maintained 9 9 9 9 9 9 9 9 9 9
Box culverts maintained 6 6 7 7 7 7 7 7 7 7
Number of passengers served3 3,283,438 3,493,239 3,641,482 3,500,593 3,462,497 2,534,682 2,442,282 2,301,868 - N/A Number of commuter and fixed
routes3 18 18 18 18 18 18 19 21 22 22
Cultural and Recreational:

Library circulation* 329,002 332,010 318,006 284,027 263,750 315,639 198,361 179,521 179,521 60,700 Library volumes owned* 69,805 89,210 - N/A 73,045 73,612 78,073 88,214 88,214 33,100 Library programs* 79 139 233 190 271 339 428 528 528 180 Playhouse general attendance1 6,642 8,735 - N/A N/A 8,900 10,800 16,200 8,000 - Larry Chimbole Center
attendance 61,099 57,850 - 75,000 80,000 80,000 80,120 80,500 40,000 9,200 Legacy Commons Attendance 36,000 36,000 36,000 37,000 40,000 55,875 55,900 59,556 49,825 5,000 183
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 Oasis Park Recreation Center
attendance1 9,013 11,000 - N/A N/A 47,000 47,000 47,200 15,000 1,500 Amphitheater attendance1 33,150 25,800 - N/A N/A 47,500 50,800 48,600 10,000 7,500 Day Camp participants 920 920 - N/A N/A N/A N/A N/A N/A N/A After school participants1 11,175 11,000 - N/A N/A N/A N/A N/A N/A N/A Tiny Tot Participants1 1,633 1,630 - N/A N/A N/A N/A N/A N/A N/A Recreational swimming
attendance1 9,165 3,330 - N/A N/A 2,450 2,500 2,400 3,081 2,218 Lesson swimming attendance1 15,883 16,802 - N/A N/A 2,680 2,587 2,450 1,665 1,415 Youth sports participants 167,527 16,000 1,700 1,661 1,784 1,664 1,586 1,718 1,169 818 Adult sports participants 125,525 119,136 2,500 2,446 2,530 2,574 2,560 1,712 1,192 60 General Program Registrants2 - - 7,193 13,701 11,328 11,510 11,264 12,000 9,000 7,600 Aquatic Program Registrants2 - - 8,934 8,378 2,833 2,910 2,999 2,800 3,200 2,300 Facility Rental Bookings2 - - 2,259 4,819 2,600 4,452 925 698 400 90 Airpark Attendance2 - - 11,874 16,918 17,100 16,336 17,000 20,210 3,000 600 Airpark Guided Tours2 - - 258 51 60 22 30 34 10 2
Community Event Attendance2 - - 64,750 43,000 44,000 44,000 44,000 50,600 10,000 200 Playhouse Performance
Attendance2 - - 5,155 10,125 9,416 13,345 15,230 16,200 5,000 - DryTown Admissions2 - - 81,000 85,000 91,400 92,000 92,000 77,137 34,443 10,000 Tournament Attendance2 - - 50,000 46,500 47,320 58,032 65,000 85,000 65,000 4,500 *Source: City of Palmdale, various City departments
Note
(1) Reported under new function/program for FY 2013-14
(2) Began reporting in FY 2013-14
(3) Figures provided by Antelope Valley Transit Authority (4) Four multifamily apartment buildings purchased in September 2015 184
City of Palmdale
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Function/Program 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 General Government:

Number of City owned building facilities 47 47 47 47 55 55 55 55 55 55 City Vehicles 4 4 4 4 4 4 4 4 4 4
Public Safety Vehicles 8 8 8 8 12 12 16 26 31 33
Public Services:

Streets and Bikeways (miles) 580 580 580 580 580 580 580 580 580 580 Landscaped area (acres) 260 260 260 260 260 260 260 260 260 260 Park-n-ride 22 22 22 22 22 22 22 22 22 22
Storm drainage systems (feet) 95,000 95,000 95,000 95,000 95,000 95,000 95,000 95,000 100,000 100,000 Retention and detention basins 11 11 11 11 11 11 11 11 11 11 Storm drainage pump stations 3 3 3 3 3 3 3 19 19 19
Detention basins (acres) 207 207 207 207 207 207 207 207 207 207 Traffic signals 166 168 168 168 184 188 195 195 199 200 Traffic signs 8,700 8,700 8,700 8,700 8,700 8,750 8,750 8,750 8,750 8,750 Transportation Center 1 1 1 1 1 1 1 1 1 1
Bridges 9 9 9 9 9 9 9 9 9 9
Street Lights1 4,100 4,150 4,150 4,200 4,200 4,200 18,523 18,523 18,523 18,523 Vehicles 75 75 75 75 91 91 104 102 101 101
Community Development:

Mobile Home Parks 3 3 3 3 3 3 3 3 3 3
Cultural and Recreational:

Number of Parks 21 21 21 21 21 22 22 22 22 22
Developed park acreage 576 576 576 576 576 576 588 588 588 588 Number of swimming pools 4 4 3 3 3 3 3 4 4 4
Number of tennis courts 9 9 9 9 10 10 10 10 10 10
Number of Libraries 1 1 1 1 1 1 1 1 1 1
Number of Community Centers 4 3 3 3 3 3 3 3 3 3
Skate Parks 2 2 2 2 2 2 2 2 2 2
Soccer Fields 27 27 27 27 29 30 30 30 30 30
Basketball courts 8 8 8 8 9 9 9 9 9 9
Softball diamonds 20 20 20 20 13 13 13 15 15 15
Volleyball courts 6 6 6 6 7 7 7 7 7 7
Little league fields 11 11 11 11 11 11 11 11 11 11
Roller Hockey rinks 2 2 2 2 2 2 2 2 2 2
Aquatics Facility - Water Park 1 1 1 1 1 1 1 1 1 1
Community Theatre 1 1 1 1 1 1 1 1 1 1
Amphitheater 1 1 1 1 1 1 1 1 1 1
Vehicles 7 3 4 4 6 6 5 6 6 6
Health and Welfare:

Vehicles 2 2 2 2 2 2 2 2 3 3
Source: City of Palmdale, various City departments
(1) The City of Palmdale obtained jurisdiction of 14,315 Los Angeles County street lights in 2013; currently in the process of acquisition of street lights. 185

What inspires you, inspires us. | eidebailly.com
10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE 1 April 13, 2022
To the Honorable Mayor and City Council and Audit Committee City of Palmdale, California
We have audited the financial statements of the City of Palmdale, California (City) as of and for the y
ear ended June 30, 2021, and have issued our report thereon dated April 13, 2022. We are currently performing the compliance audit of the City’s federal award programs (single audit). Professional standards require that we advise you of the following matters relating to our audit.

Our Responsibility in Relation to the Financial Statement Audit under Generally Accepted Auditing Standards and Government Auditing Standards and our Compliance Audit under the Uniform Guidance
As communicated in our letter dated August 2, 2021, our responsibility, as described by professional standards, is to form and express an opinion about whether the financial statements that have been prepared by management with your oversight are presented fairly, in all material respects, in accordance with accounting principles generally accepted in the United States of America and to express an opinion on whether the City complied with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of the City major federal programs. Our audit of the financial statements and major program compliance does not relieve you or management of its respective responsibilities.

Our responsibility, as prescribed by professional standards, is to plan and perform our audit to obtain reasonable, rather than absolute, assurance about whether the financial statements are free of material misstatement. An audit of financial statements includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, as part of our audit, we considered the internal control of the City solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control.

Our responsibility, as prescribed by professional standards as it relates to the audit of the City’s major federal program compliance, is to express an opinion on the compliance for each of the City’s major federal programs based on our audit of the types of compliance requirements referred to above. An audit of major program compliance includes consideration of internal control over compliance with the types of compliance requirements referred to above as a basis for designing 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 internal control over compliance. Accordingly, as a part of our major program compliance audit, we considered internal control over compliance for these purposes and not to provide any assurance on the effectiveness of the City’s internal control over compliance. 2 We are also responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing the financial reporting process.

However, we are not required to design procedures for the purpose of identifying other matters to communicate to you.

We have provided our comments regarding internal controls during our audit in our Independent Auditor’s 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 dated April 13, 2022.

Planned Scope and Timing of the Audit
The timing of the audit was modified to provide for the City’s completion of the year-end closing and preparation of the financial statements.

Compliance with All Ethics Requirements Regarding Independence The engagement team, others in our firm, as appropriate, our firm, and other firms utilized in the engagement, if applicable, have complied with all relevant ethical requirements regarding independence.

Qualitative Aspects of the Entity’s Significant Accounting Practices Significant Accounting Policies
Management has the responsibility to select and use appropriate accounting policies. A summary of the significant accounting policies adopted by the City is included in Note 1 to the financial statements. The City adopted GASB Statement No. 84, Fiduciary Activities, as of July 1, 2020. No matters have come to our attention that would require us, under professional standards, to inform you about (1) the methods used to account for significant unusual transactions and (2) the effect of significant accounting policies in controversial or emerging areas for which there is a lack of authoritative guidance or consensus.

Significant Accounting Estimates
Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s current judgments. Those judgments are normally based on knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ markedly from management’s current judgments.

The most sensitive accounting estimates affecting the financial statements were:
• Estimates for the total OPEB liability and net pension liability, related deferred inflows of resources and deferred outflows of resources, which are based on third party actuarial valuations.

We evaluated the key factors and assumptions used to develop these estimates and determined that they were reasonable in relation to the basic financial statements taken as a whole.

Financial Statement Disclosures

3 Certain financial statement disclosures involve significant judgment and are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the City’s financial statements relate to:

Note 15 to the City’s financial statements describe the net pension liability, pension expense, and deferred inflows and outflows of resources associated with the City’s pension plan administered by the California Public Employee’s Retirement System (CalPERS).

Note 17 to the City’s financial statements describe the City’s net OPEB asset, OPEB expense, and deferred inflows and outflows of resources associated with the City’s OPEB Plan.

Notes 5, 20 and 23 describe the terms of a related party loan and subsequent event.

Significant Difficulties Encountered during the Audit

We encountered no significant difficulties in dealing with management relating to the performance of the audit.

Uncorrected and Corrected Misstatements

For purposes of this communication, professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that we believe are trivial, and communicate them to the appropriate level of management. Further, professional standards require us to also communicate the effect of uncorrected misstatements related to prior periods on the relevant classes of transactions, account balances or disclosures, and the financial statements as a whole.

The following summarizes uncorrected financial statement misstatements whose effects in the current and prior periods, as determined by management, are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.

Opinion Unit – Entity Wide Governmental Activities:

Understatement of self-insurance liabilities $1 ,100,000 Understatement of general government expenses 1,100,000

The effect of these uncorrected misstatements is an overstatement of the change in net position of $1,100,000, and overstatement of net position at the end of the year of $1,100,000.

Disagreements with Management

For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter, which could be significant to the City’s financial statements or the auditor’s report.

No such disagreements arose during the course of the audit.

4 Representations Requested from Management
We have requested certain written representations from management which are included in the management representation letter dated April 13, 2022.

Management’s Consultations with Other Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting matters. Management informed us that, and to our knowledge, there were no consultations with other accountants regarding auditing and accounting matters.

Other Significant Matters, Findings, or Issues
In the normal course of our professional association with the City, we generally discuss a variety of matters, including the application of accounting principles and auditing standards, operating conditions affecting the entity, and operating plans and strategies that may affect the risks of material misstatement. None of the matters discussed resulted in a condition to our retention as the City’s auditors.

Other Information in Documents Containing Audited Financial Statements Pursuant to professional standards, our responsibility as auditors for other information in documents containing the City’s audited financial statements does not extend beyond the financial information identified in the audit report, and we are not required to perform any procedures to corroborate such other information.

Modification of the Auditor’s Report
We made the following modification to our auditor’s report: Addition of an emphasis of matter paragraph for the City’s implementation of GASB Statement No. 84, Fiduciary Activities, the City’s conversion of certain governmental fund balances to Internal Service Funds as of July 1, 2020.

Group Audits
The financial statements include the financial statements of the Palmdale Housing Authority, the Palmdale Financing Authority, the Palmdale Civic Authority, and the Palmdale Community Foundation, which are blended component units of the City, which for the purposes of our audit we consider to be significant components within the financial statements. Consistent with the audit of the financial statements as a whole, our audit included obtaining an understanding of the component units and their environment, including internal control, sufficient to assess the risks of material misstatement of the financial statements and completion of further audit procedures.

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

Rancho, Cucamonga, California
City Council Staff Report
DATE: MAY 4, 2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER’S OFFICE – FINANCE DIVISION
DISTRICT: ALL
SUBJECT: APPROVE AGREEMENT WITH NBS GOVERNMENT FINANCE

GROUP TO PROVIDE BONDED COMMUNITY FACILITY DISTRICT

FORMATION SERVICES WITH LANDOWNER VOTE, IN AN
AMOUNT NOT TO EXCEED $91,000 FOR A TWO-YEAR TERM
ISSUE
Approve Agreement with NBS Government Finance Group to provide bonded Community Facilities District formation services with landowner vote, in an amount not to exceed $91,000 for a two-year term.

RECOMMENDATION
Staff recommends that the City Council:

1. Approve Agreement with NBS Government Finance Group: 1) Agreement No. A- 7921 to provide bonded Community Facilities District formation services with landowner vote, in an amount not to exceed $91,000 for a 2-year term.

2. Authorize the Interim City Manager or her designee to execute Agreement No. A - 7921, with NBS Government Finance Group, LLC, including minimal and/or non- substantive changes.

BACKGROUND
In 1994, the City Council formed the City of Palmdale Community Facilities District No. 93-1 (Ritter Ranch), and in 1995 the City issued special tax bonds for the Community Facilities District to finance various public infrastructure improvements within an d in the vicinity of the proposed Ritter Ranch development. The prior owner of the Ritter Ranch property, Ritter Holdings LLC, failed to make required special tax payments due in February of 2020, and its lender, Preston Hollow Capital, LLC (Preston Hollo w), which also is the owner of the special tax bonds, foreclosed on the Ritter Ranch property and became the owner of the Ritter Ranch property and all of the rights and interests of Ritter Holdings, LLC under agreements with the City and others related toRitter Ranch. Preston Hollow subsequently transferred the Ritter Ranch property to RdR Development Holdings, LLC, a Delaware limited liability company (“RdR”), of which Preston Hollow is the sole member.

Report to Mayor and City Council
Re: Approve Agreement A-7921 NBS Government Finance Group May 4, 2022