Palmdale City Council
June 1, 2022

The Council Chamber is open for in-person public comment and seating.

How to observe the meeting virtually:

1. Spectrum local access Channel 27

2. Online live webcast at www.cityofpalmdale.org.

How to Submit Public Comments:

VERBAL PUBLIC COMMENT DURING THE MEETING – ZOOM Number: US: +1 253 215 8782 Webinar ID: 822 4378 3983 Passcode: 866014
Webinar attendee link
https://us06web.zoom.us/j/82243783983?
pwd=Z1JqVXlEdlcvaUNhc1FYMThrMXJiQT09
.

Verbal comments must be limited to three (3) minutes. Public comments submitted will become part of the official meeting record.

The safety and well-being of employees and the public remains the City's top priority. The City of Palmdale appreciates your patience and understanding during these challenging times.

CITY COUNCIL MEETING

SUCCESSOR AGENCY/HOUSING AUTHORITY

PALMDALE CIVIC AUTHORITY/

PALMDALE FINANCING AUTHORITY

CITY COUNCIL CHAMBERS
38300 SIERRA HIGHWAY, SUITE B
PALMDALE, CA 93550

WEDNESDAY, JUNE
1, 2022
5:00 PM
7:00 PM
www.cityofpalmdale.org

WELCOME
City Council
Wednesday, June
1, 2022
The City Council is making every effort to follow the spirit and intent of the Brown Act and other applicable laws regulating the conduct of public meetings in order to maximize transparency and public access.

In accordance with the Americans with Disabilities Act of 1990, if you require a disability- related modification or accommodation to participate in this meeting, please contact the City Clerk’s Office at (661) 267-5151 at least 72 hours prior to the meeting.

If you require oral Spanish translation, please contact the City Clerk’s Office at (661) 267- 5151 at least 72 hours prior to the meeting.

Your courtesy is requested to help our meetings run smoothly. If you’ll be kind enough to follow these simple rules, we can make the best possible use of your time and ours:

Please refrain from public displays or outbursts, such as unsolicited applause, comments, cheering, foul language or obscenities.

Any disruptive activities that substantially interfere with the ability of the City Council to carry out its meeting will not be permitted and offenders will be asked to leave the meeting.

Please turn off/mute your cell phones and mobile devices.

5:00 P.M.

1. MAYOR TO CALL MEETINGS TO ORDER

2. ROLL CALL

MAYOR HOFBAUER, MAYOR PRO TEM LOA,

COUNCILMEMBERS CARRILLO, BISHOP, BETTENCOURT

3. PUBLIC COMMENTS
Pursuant to Government Code section 54954.3, members of the public are provided the opportunities to address the City Council. You may address the Council once per meeting during Public Comments on any matter within the Council's jurisdiction that is not listed on the agenda. Please submit a Speaker's Form card to the City Clerk BEFORE
this
portion of the meeting begins. To address the Council regarding an item on the agenda, please fill out a Speaker's Form card and submit it to the City Clerk BEFORE
the Mayor
announces the item. Each person addressing the Council is given up to three minutes to speak (with double the time allotted to non-English speakers using a translator). If you wish to provide information to the Council, please present the City Clerk with 7 copies.

Otherwise, your materials will simply be added to the administrative record. If you are attending the meeting by phone, please press *9 to "raise your hand." If attending by personal computer, please click the "raise your hand" button. Press *6 to un-mute City Council
Wednesday, June
1, 2022
yourself, state your name and begin speaking.

4. PRESENTATION BY CITY ATTORNEY

4.1 CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Ricci v. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 22STCV01269
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.2 CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
CV Communities v. AVEK, et al.

Los Angeles County Superior Court
Case No. 20STCV10953
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.3 CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Shanae Smith
City Claim No.: 2022-005
Date Filed: 1/10/22
Date of Loss: Various

4.4 CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Patricia Nevarez
City Claim No.: 2022-005
Date Filed: 1/27/22
Date of Loss: Various

4.5 CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

City Council
Wednesday, June
1, 2022
Claimant: Michael Behen
City Claim No.: 2022-008
Date Filed: 02/09/22
Date of Loss: Various

4.6 CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Community Development Associates et al. v. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 18STCV06968
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

4.7 CONFERENCE WITH REAL PROPERTY NEGOTIATORS
The reason for holding a closed session is for the purpose of obtaining authorization and direction from the City Council regarding the possible acquisition of property interests in the following property, generally located near Avenue M and 10th Street West:

Property Owner: Successor Agency to the Community Redevelopment Agency of the City of Palmdale
Property: APN 3128-015-900 & 902
City Negotiator: Luis Garibay

This closed session is being held pursuant to the authority of California Government Code Section 54956.8. Closed session is recommended because the City Council will be instructing the negotiator regarding terms and conditions, including price, for the possible purchase of the real property identified above.

5. ANNOUNCEMENT BY CITY ATTORNEY

6. ADJOURN CLOSED SESSION MEETING

7:00 P.M.

7. PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE IN HONOR OF OUR TROOPS

8. ROLL CALL

MAYOR/CHAIR HOFBAUER, MAYOR PRO TEM/VICE CHAIR LOA,

COUNCILMEMBERS/DIRECTORS/COMMISSIONERS CARRILLO, BISHOP,

BETTENCOURT, FRAGA-SAENZ, DENNY
City Council
Wednesday, June
1, 2022

9. PRESENTATIONS

9.1 Presentation of a cute critter available for adoption at the Palmdale Animal Care Center.

9.2 Presentation of Certificates of Recognition by Mayor and Council to the 2022 Rancho Vista Queens.

Miss Rancho Vista 2022 Lyn ‘ Aya Gipson
Teen Miss Rancho Vista 2022 Kaylee Crumlish
Jr Miss Rancho Vista 2022 Nichole Wilson
Young Miss Rancho vista 2022 Elexia Jimenez
Little Miss Rancho Vista 2022 Aurora Aguilar
Tiny Miss Rancho Vista 2022 Penelope Avila

9.3 Presentation of a Proclamation by Mayor and Council declaring June as LGBTQ Pride Month in the City of Palmdale.

9.4 Presentation of a Proclamation by Mayor and Council declaring June 14th as Flag Day in the City of Palmdale.

9.5 Presentation of a Proclamation by Mayor and Council declaring June 13th – 19th International Men’s Health Week in the City of Palmdale.

9.6 Presentation of a Proclamation by Mayor and Council declaring June19th as Juneteenth in the City of Palmdale.

10. WAIVER OF FULL READING OF RESOLUTION(S) and ORDINANCE(S) Staff Recommendation: Move to waive full reading of the Resolution (s) and/or Ordinance(s) to be considered and voted on at this meeting. (Voice Vote - Requires a majority to waive.)

11. PUBLIC COMMENTS
Pursuant to Government Code section 54954.3, members of the public are provided the opportunities to address the City Council/Housing Authority. You may address the Council/Authority once per meeting during Public Comments on any matter within the Council's/Authority's jurisdiction that is not listed on the agenda. Please submit a Speaker's Form card to the City Clerk
BEFORE
this portion of the meeting begins. To
address the Council/Authority regarding an item on the agenda, please fill out a Speaker's Form card and submit it to the City Clerk
BEFORE
the Mayor/Chair announces the item.

Each person addressing the Council/Authority is given up to three minutes to speak (with City Council
Wednesday, June
1, 2022
double the time allotted to non-English speakers using a translator). If you wish to provide information to the Council/Authority, please present the City Clerk with 7 copies.

Otherwise, your materials will simply be added to the administrative record. If you are attending the meeting by phone, please press *9 to "raise your hand." If attending by personal computer, please click the "raise your hand" button. Press *6 to un-mute yourself, state your name and begin speaking.

12. HOUSING AUTHORITY CONSENT CALENDAR
All matters listed under the Housing Authority Consent Calendar will be enacted by one motion unless an item(s) is pulled by the Authority, in which case the item(s) will be removed from the Calendar and will be considered separately following this portion of the Agenda.

12.1 Adopt Resolution No. HA 2022-003, a resolution of the Housing Authority of the City of Palmdale, approving the amendment of agreement 07-IIG-4212 with the State of California Department of Housing and Community Development for the Proposition 1-C Infill Infrastructure Grant Program. (Staff Reference: Director Neighborhood Services Miller - Presented by Housing Manager Reyes)

1a_SR_HA_RESO_HA_2022-003.docx

1b Reso HA 2022-003.docx

12.2 Receive and File the Annual Financial Report for the year ended June 30th, 2021 for The Housing Authority of the City of Palmdale. (Staff Reference: Director of Finance Samson)

Staff_Report_ACFR_06.30.21_-_Housing_Authority.docx

TC-City of Palmdale FY21 - Housing Authority.pdf

12.3 Approve the minutes from previous meetings. (Staff Reference: Authority Secretary Smith)

HA - March 16, 2022
HA - April 6, 2022

HA 03 16 2022.pdf

HA 04 06 2022.pdf

13. CONSENT CALENDAR
All matters listed under the Consent Calendar will be enacted by one motion unless an item(s) is pulled by Council, in which case the item(s) will be removed from the Calendar and will be considered separately following this portion of the Agenda.

13.1 Receive and File the Monthly Investment activity reports for April 2022. (Staff Reference: Director of Finance Samson)

Staff_Report_-_Investment_Report_April_2022.docx
City Council
Wednesday, June
1, 2022

10 April 2022 Investment Rpt City & Successor Agency.pdf

13.2 Approve agreement with Turner Consulting and Actuarial, LLC., to provide actuarial services in an amount not to exceed $ 111,000.00 for a three (3) year term with the option to extend for two (2) additional years. (Staff Reference:

Director of Finance Samson)

Turner_Consulting_Staff_Report.docx

2022.04.28 Palmdale Agreement Signed_000173.pdf

13.3 Receive and File the Annual Financial Reports for the year ended June 30th, 2021 for the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation. (Staff Reference: Director of Finance Samson)

Staff_Report_ACFR_06.30.21_-_City_Council.docx

PCA Annual Financial Statement_Final 6.30.21pdf.pdf

PFA Financial Statement_Final_6.30.21.pdf

Palmdale Community Foundation Financials_Final.pdf

13.4 Approve the City of Palmdale's 2022 Five-Year Capital Improvement Plan. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

5 year CIP staff report.docx

2022 Condensed Project List.pdf

CIP Plan 2022 revised 5.25.22.pdf

13.5 Adopt Resolution No. CC 2022-039, a Resolution of the City Council of the City of Palmdale of intention to continue assessments for Fiscal Year 2022/2023, preliminarily approving the annual Engineer's Report and providing for Notice of Hearing for the City of Palmdale Drainage Benefit Assessment Districts No. 1 and No. 2006-02. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Palmdale_DBAD_-_Staff_Report_6-1-22_v2.docx

Palmdale DBAD - Res 2 #CC 2022-039 for 6-1-22.doc

Drainage Engineers Report FY 2022-23.pdf

13.6 Adopt Resolution No. CC 2022-040, a Resolution of the City Council of the City of Palmdale of intention to continue assessments for Fiscal Year 2022/2023, preliminarily approving the annual Engineer's Reports and providing for Notice of Hearing for the City of Palmdale Landscape Maintenance Assessment Districts and Annexations, Park Maintenance and Recreation Improvement District, and Streetlight Maintenance Assessment Districts and Annexations. (Staff Reference:

Director of Public Works Heffernan)

Palmdale_L_Ls_-_Staff_Report_6-1-22_v2.docx

Palmdale L&Ls - Res 2 #CC 2022-040 for 6-1-22.doc

LMD Engineers Report FY 2022-23.pdf

Park Engineers Report FY 2022-23.pdf
City Council
Wednesday, June
1, 2022

Streetlight Engineers Report FY 2022-23.pdf

13.7 Adopt Resolution No. CC 2022-060, a Resolution of the City Council of the City of Palmdale declaring it's intention to establish a community facilities district and to authorize the levy of special tax therein for citywide maintenance and services. (Staff Reference: Director of Public Works Heffernan)

Palmdale CFD 2022-1 Intent Meeting Staff Report_Final.doc

Reso CC 2022-060 Intent to Establish.docx

Palmdale CFD 2022-1 Boundary Map_FINAL_Rev.pdf

13.8 Notice of Completion - Accept Public Improvements for Palmdale Senior Living located at West Rancho Vista Boulevard & Town Center Drive. (Staff Reference:

Director of Public Works Heffernan)

SR-06012022 19-44.docx

EXHIBIT A 19-44.docx

EXHIBIT B.docx

Signed NOC.pdf

13.9 Authorize Purchase Order No. 20220479 with Generac Power Systems, Inc. for PN 804, Emergency Generator, in the amount of $109,904. (Staff Reference:

Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Staff Report PN 804 - SAVES Emergency Generator.docx

13.10 Approve Amendment No. 2 for PN 826, the Palmdale Regional Recreation Complex, with Barker Rinker Seacat Architecture in the amount of $20,280. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Staff Report - Approval BRS Amendment #1 (A-7541).docx

Supplemental Agreement 2.pdf

13.11 Award construction agreement with Manhole Adjusting Inc. for PN 847, 2022 Local Street & Minor Arterial Resurfacing Project, in the amount of $6,937,785.50 for a term of 60 working days from the date of the Notice to Proceed. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Staff_Report_PN_847_-_2022_Street_Resurf_-_v2.docx

PN 847 map for award SR for A-7894 ATTACHMENT 01 Citywide Project Map.pdf

13.12 Adopt Resolution No. CC 2022-054, a Resolution of the City Council of the City of Palmdale to adopt a list of projects for Fiscal Year 2022-2023 to be funded by SB 1: The Road Repair and Accountability Act of 2017. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

Resolution_2022-054_staff_report.docx
City Council
Wednesday, June
1, 2022

Resolution 2022-054.doc

13.13 Adopt Resolution No. CC 2022-068, a Resolution of the City Council of the City of Palmdale declaring its intention to conduct a public hearing to consider the vacation of a segment of 6th Street East (100 Feet South of Sierra Highway to 220 Feet North of Avenue P-14) and the reservation of the utility easements therein. (Staff Reference: Director of Public Works Heffernan)

SR_Resolution_CC_2022-068.doc

Resolution CC 2022-068 Intention to Vacate.doc

Exhibit A (-912, -913).pdf

Exhibit B (-904).pdf

Exhibit C (-905).pdf

Exhibit D (-908).pdf

13.14 Approve 32 fireworks booth permits for non-profit organizations. (Staff Reference:

Director of Economic and Community Development Garibay)

Staff Report Fireworks 2022.docx

05-09-2022_GIS_00124-08_Fireworks_Map_2022_Citywide.pdf

13.15 Approve Cost-Sharing Agreement between the City of Palmdale and the Antelope Valley Mall, LLC/CBRE and Harris AVM, LLC for a reimbursement amount of $120,000 for the three (3) year term of the agreement. (Staff Reference: Director of Neighborhood Services Miller - Presented by Neighborhood Services Specialist Nichols)

Staff_Report_AV_Mall (2).docx

A-7941 AV Mall Agreement 3 yr.pdf

13.16 Approve the minutes from the previous meetings. (Staff Reference: City Clerk/Agency Secretary Smith)

CC - April 20, 2022
CC/SA - May 4, 2022

04 20 2022 Minutes CC.pdf

05 04 2022 Minutes CC-SA.pdf

14. PUBLIC HEARING

14.1 Public Hearing to hear public comments and review proposal to amend the 2019- 2020 Action Plan to reprogram Community Development Block Grant COVID (CDBG-CV) funds in the amount of $207,510 from the Economic Opportunity Program CV and $23,990 from the Mortgage Assistance CDBG CV to SAVES CV in the amount of $231,500. (Staff Reference: Director of Neighborhood Services Miller - Presented by Housing Manager Reyes)
City Council
Wednesday, June
1, 2022

SR-_CC_CDBG_CV_Reprogram_5.11.22.docx

15. APPOINTMENTS

15.1 Approve Reappointment to the Board of Library Trustees. (Staff Reference: City Clerk Smith)

6_1_2022_Approve_Nomination__Reappointment_Library.docx

Ordinance No. 1561.pdf

15.2 Approve Reappointments of Planning Commissioners to the Planning Commission. (Staff Reference: City Clerk Smith)

6_1_2022_Planning_Commission_reappointments.docx

15.3 Approve Reappointments to the Mobile Home Park Rental Review Board. (Staff Reference: City Clerk Smith)

6_1_2022_Reappointment__Mobile_Home_Board (4).docx

Ordinance No. 1561.pdf

16. NEW BUSINESS

16.1 Award Measure AV Grant Program Funding, totaling $1,306,810, to grantees in Exhibit A and authorize Interim City Manager to enter into agreements ranging from $2,000 to $250,000. (Staff Reference: Interim City Manager Perez, Deputy Director of Parks and Recreation Dombrowski and Management Analyst Kelley)

Staff_Report-Award_Measure_AV_Grant_Funding_06012022_FINAL.docx

EXHIBIT A-Awardee List

Measure AV Final Report PPT 06012022.pptx

16.2 Discuss potential amendment to Palmdale Municipal Code Section 2.08.040 regarding regular meetings, including meeting times, public comment periods, and meeting organization.

16.3 Adopt Resolution Nos. CC 2022-056, CC 2022-057, and CC 2022-058 Initiating the Tuesday, November 8, 2022 City of Palmdale City Council General Municipal Election. (Staff Reference: City Clerk Smith)

6_1_2022_Resolutions_Initiating_Nov_8_2022_Election.docx

Reso CC 20222-056 Calling for Holding Election.doc

Reso CC 2022-057 Candidate Statements.doc

Reso. CC 2022-058 Consolidate Election.doc

City Council
Wednesday, June
1, 2022

17. INFORMATIONAL REPORT FROM MAYOR AND / OR COUNCILMEMBERS ON

THEIR VARIOUS COMMITTEE MEMBERSHIPS AND MEETINGS ATTENDED AT

PUBLIC EXPENSE

17.1 COMMITTEE MEMBERSHIPS.

• ANTELOPE VALLEY AIR QUALITY MANAGEMENT DISTRICT
• ANTELOPE VALLEY TRANSIT AUTHORITY
• CALIFORNIA CONTRACT CITIES ASSOCIATION
• CITY OF PALMDALE AUDIT COMMITTEE
• CITY OF PALMDALE INVESTMENT OVERSIGHT COMMITTEE
• HIGH DESERT CORRIDOR JOINT POWERS AUTHORITY
• LEAGUE OF CALIFORNIA CITIES
• LOS ANGELES COUNTY SANITATION DISTRICT
• NORTH LOS ANGELES COUNTY TRANSPORTATION COALITION
• PALMDALE RECYCLED WATER AUTHORITY
• SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS REGIONAL

COUNCIL
• UNITED STATES/MEXICO SISTER CITIES ASSOCIATION
• CALIFORNIA STATE PRISON – LOS ANGELES COUNTY, CITIZENS

ADVISORY COMMITTEE

17.2 MEETINGS ATTENDED AT PUBLIC EXPENSE

Bettencourt Informational Report 060122.docx

18. CITY MANAGER’S REPORT

19. CITY COUNCIL REQUESTS FOR NEW AGENDA ITEMS

20. Adjourn meeting to June 15, 2022 at 7:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

City Council
Wednesday, June
1, 2022
Housing Authority
Staff Report
DATE: JUNE 1, 2022
TO: HONORABLE CHAIR AND COMMISSIONERS
FROM: NEIGHBORHOOD SERVICES DEPARTMENT

HOUSING DIVISION
DISTRICT: 2
SUBJECT: ADOPT RESOLUTION NO. HA 2022-003, A RESOLUTION OF THE

HOUSING AUTHORITY OF THE CITY OF PALMDALE,
APPROVINGTHE AMENDMENT OF AGREEMENT 07-IIG-4212 WITH

THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND
COMMUNITY DEVELOPMENT FOR THE PROPOSITION 1-C INFILL

INFRASTRUCTURE GRANT PROGRAM
ISSUE
Adopt Resolution HA 2022 -003, a resolution of the Housing Authority of the City of Palmdale, approving the amendment of agreement 07 -IIG-4212 with the State of California Department of Housing and Community Development for the Proposition 1-C Infill Infrastructure Grant Program.

RECOMMENDATION
Staff recommends that the City Council:

1. Adopt Resolution HA 2022-003, a resolution of the Housing Authority of the City of Palmdale, approving the amendment of agreement 07 -IIG-4212 with the State of California Department of Housing and Community Development for the Proposition 1-C Infill Infrastructure Grant Program; and

2. Authorize the Executive Director or their designee to execute amendments and documents related to the Proposition 1 -C Infill Infrastructure Gr ant Program Agreement with the State of California Department of Housing and Community Development.

BACKGROUND
The Community Redevelopment Agency of the City of Palmdale and Community Development Associates, Inc. entered into Agreement 07 -IIG-4212 with th e State of California Department of Housing and Community Development (HCD) on October 24, 2011, for the Proposition 1 -C Infill Infrastructure Grant (IIG) Program . The funding Report to Chair and Commissioners of the Housing Authority Re: Adopt Resolution HA 2022-003
June 1, 2022

received for the Proposition 1-C Infill and Infrastructure Grant Program was used for development of the infrastructure necessary for construction of the Townhome Project and the Wright Brothers Court Apartment Project, located at 4 th Street East and East Avenue Q.

DISCUSSION
The Housing Authority of the City of Palmdale, as Successor Housing Agency, (Housing Authority) is requesting an amendment of the IIG Agreement removing Community Development Associates, Inc. from the IIG Agreement and to amend the IIG Agreement Exhibit A Performance Milestones Housing to extend the timeline for completion of Phase 2 of the agreement. In addition, the Housing Authority is requesting to further amend the IIG Agreement to add the Developer selected through a Request for Proposal process subject to approval by HCD. The agreement’s current milestone requirement is for construction of the Townhomes to be completed and occupied by June 30, 2024. Staff has proposed to HCD to amend the milestone requirement to July 2026.

FISCAL IMPACT
IIG Program grant funds were expended on the infrastructure for the development of the infrastructure necessary for construction of the Townhome Project and the Wright Brothers Court Apartments. Funds are available for pre-development costs of the Townhome development in account 29364011-782921 of $1,000,000.

STRATEGIC PLAN
Goal III: Invest in infrastructure to improve community livability.

C. Transform housing inventory to meet the changing lifestyle and market demands
Prepared by: Sophia Reyes, Housing Manager
Certified as to availability of Funds: Janelle Samson, Director of Finance Approved by: Ronda Perez, Interim Executive Director
Approved as to form: Christopher Beck, Authority Attorney

ATTACHMENTS

1. Resolution HA 2022-003

HOUSING AUTHORITY

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. HA 2022-003

A RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF
PALMDALE APPROVING THE AMENDMENT OF AGREEMENT 07-IIG-
4212) WITH THE STATE OF CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR THE PROPOSITION 1-C

INFILL INFRASTRUCTURE GRANT PROGRAM
WHEREAS, the City Council of the City of Palmdale (“City Council”) adopted the Redevelopment Plans for the Merged Redevelopment Projects (“Project Area”) on March 24, 1994, by Ordinance Nos. 1042, 1043, and 1044, which resulted in the allocation of property taxes from the Project Area to the former Community Redevelopment Agency of the City of Palmdale (“Redevelopment Agency”) for purposes of redevelopment. On May 4, 2011 the City Council adopted the Expansion Area Amendment by Ordinance No. 1418 adding additional territory to the Merged Project Area, and amending and restating the Redevelopment Plans into a single Amended and Restated Redevelopment Plan for the Merged Project Area (“Redevelopment Plan”). Project Area No. 2, Project Area No. 3, Project Area No. 4, and the Expansion Area collectively are referred to as the “Merged Project Area”; and WHEREAS, the Housing Authority of the City of Palmdale (“Authority”) is implementing certain proposed uses in the Merged Project Area including low-income housing, which will aid in carrying out the Redevelopment Plan, pursuant to its obligations under Assembly Bill No. 26 (2011-2012 1 st Ex. Sess.), as amended by Assembly Bill No. 1484 (2011-2012 Regular Session) and as further amended from time to time (collectively, the “Dissolution Bills”) wherein the Authority, as the designated entity, will perform the housing functions previously performed by the former Redevelopment Agency to carry out the purposes of the Redevelopment Plan and the Dissolution Bills.

NOW THEREFORE, BE IT RESOLVED, THE HOUSING AUTHORITY OF THE CITY

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

SECTION 1. The Community Redevelopment Agency of the City of Palmdale and Community Development Associates, Inc. entered into Agreement 07-IIG-4212 with the State of California Department of Housing and Community Development (HCD) on October 24, 2011, for the Proposition 1-C Infill Infrastructure Grant (IIG) Program.

SECTION 2 . The funding received for the Proposition 1-C Infill and Infrastructure Grant Program was used for development of the infrastructure Resolution No. HA 2022-003

necessary for construction of the Townhome Project and the Wright Brothers Court Apartment Project, located at 4th Street East and East Avenue Q.

SECTION 3 . The Housing Authority of the City of Palmdale, as Successor Hosing Agency, (Housing Authority) is requesting an amendment of the IIG Agreement removing Community Development Associates, Inc. from the IIG Agreement and to amend the IIG Agreement Exhibit A Performance Milestones Housing to extend the timeline for completion of Phase 2 of the agreement. In addition, the Housing Authority is requesting to further amend the IIG Agreement to add the Developer selected through a Request for Proposal process subject to approval by HCD.

SECTION 4. The Housing Authority authorizes the Executive Director or their designee to execute any and all instruments required by HCD or otherwise convenient and necessary to the City’s joint participation with Developers in the IIG Program, including but not limited to the Standard Agreement and any amendments thereto with the State of California Department of Housing and Community Development.

SECTION 5. The Authority Secretary shall certify to the adoption of this resolution.

PASSED, APPROVED and ADOPTED this ______ day of ____________, ________. _________________________________
Approved as to form: Steven D. Hofbauer, Chair
ATTEST:
___________________________ _________________________________ Christopher L. Beck Shanae S. Smith,
Authority Attorney Authority Secretary
Resolution No. HA 2022-003

I, Shanae S. Smith, Authority Secretary of the Housing Authority of the City of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the Housing Authority of the City of Palmdale at a special meeting of said Authority held on the ______ day of _____________, 20___ by the following roll call vote:

AYES:

NOES:___________________________________________________________ ABSTAIN:______________________ABSENT:___________________________ Date:

Shanae S. Smith, Authority Secretary
Housing Authority
Staff Report
DATE: JUNE 1, 2022
TO: HONORABLE CHAIR AND COMMISSIONERS
FROM: CITY MANAGER DEPARTMENT

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: RECEIVE AND FILE THE ANNUAL FINANCIAL REPORTS FOR THE YEAR ENDED JUNE 30, 202 1 FOR THE HOUSING AUTHORITY OF

THE CITY OF PALMDALE
ISSUE
Receive and file the Annual Financial Reports for the Year Ended June 30, 2021 for the Housing Authority of the City of Palmdale.

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

BACKGROUND
The Annual Financial Reports communicate the financial condition and activity for the Year Ended June 30, 2021, for the Housing Authority of the City of Palmdale, a component unit of the City of Palmdale.Component units are defined as legally separate organizations for which the primary government in financially accountable or which the nature and significance of the relationship with the primary government are such that exclusion would cause the reporti ng entity’s financial statements to be misleading or incomplete. Independent audits are performed for each of the City’s component units, which includes the Housing Authority of the City of Palmdale . The City’s Annual Comprehensive Financial Report was bro ught before the City Council at the May 4, 2022, meeting and is inclusive of the component unit financial information. The component unit information is then reported and audited separately in the form of individual Annual Financial Reports as required by the Governmental Accounting Standards Board.

Report to Mayor and City Council
Re: Housing Authority Financial Reports for Year Ended June 30, 2021 June 1, 2022

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

The Housing Authority of the City of Palmdale’s financial statements are prepared in accordance with Generally Accepted Accounting Principles. The Housing Authority of the City of Palmdale has received an unmodified (clean) audit opinion for the year ended June 30, 2021. Attached are the financial statements, inclusive of the Auditor Opinions for review.

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

ANNUAL FINANCIAL REPORT

CITY OF PALMDALE, CALIFORNIA

HOUSING AUTHORITY
(A Component Unit of the City of Palmdale)
For the Fiscal Year Ended
June 30, 2021

This page intentionally left blank
City of Palmdale Housing Authority
June 30, 2021

TABLE OF CONTENTS
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1 MANAGEMENT DISCUSSION AND ANALYSIS................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8 Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................9 Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Fund Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Budgetary Comparison Statements Section Page................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

Statement of Revenue, Expenditures and Changes in Fund Balances – Budget and Actual General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................14 Special Revenue Fund-Housing Asset Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................15 Special Revenue Fund-Mobile Home Parks................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................16 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................18 REQUIRED SUPPLEMENTARY INFORMATION................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 Schedule of the Authority's Proportionate Share of the City's Net Pension Liability................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 Schedules of Contributions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 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................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................37 This page intentionally left blank

2 Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the Authority, as of June 30, 2021, and the respective changes in financial position, and where applicable, the respective budgetary comparison statements 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.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the managements discussion and analysis, schedules of changes in the Authoritys proportionate share of the Citys net pension liability and the schedule of contributions 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 comparing the information for consistency with managements responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 24, 2022, on our consideration of the Citys internal control over financial reporting as it relates to the Authority and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authoritys internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Citys internal control over financial reporting and compliance as it relates to the Authority.

Rancho Cucamonga, California
May 24, 2022
City of Palmdale Housing Authority
Management Discussion and Analysis
As management of the City of Palmdale Housing Authority (Authority), a component unit of the City of Palmdale, we offer readers of the Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30, 2021.

Financial Highlights
 The assets and deferred outflows of resources of the Authority exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $72,549,320.
 The Authority’s total net position increased in the current year by $668,887. Details of the increased can be found on page 10.  As of the close of the current fiscal year, the Authority's governmental funds reported combined ending fund balances of $45,951,907, an increase of $390,278 in comparison with the prior year.

Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Authority’s basic financial statements. The Authority’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 Authority’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the Authority’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the differences 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 Authority is improving or deteriorating.

The statement of activities presents information showing how the Authority’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.

Both of the government-wide financial statements distinguish functions of the Authority that are principally supported by 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 Authority has no business-type activities. The governmental activities of the Authority include community development and interest on long-term debt.

The government-wide financial statements can be found on pages 8 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 Authority, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All five of the funds of the Authority are governmental funds.

Government 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. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances, provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The governmental fund financial statements can be found on pages 10 - 12. Budget and actual statements can be found on pages 14 - 16.

The Authority maintains three 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 Facilities Fund Special Revenue Fund and the Housing Facilities Fund Special Revenue Fund, all of which are considered to be major funds. The Authority does not have any non-major governmental funds.

The Housing Facilities Special Revenue Fund is used to account for revenues and expenditures related to the operation of three mobile home parks, four Multifamily apartments; Impressions, La Quinta, Park Vista and Summerwood, and one apartment building located at See Notes to Financial Statements
3 City of Palmdale Housing Authority
Management Discussion and Analysis
507 and 513 East Avenue Q4. The funds are distributed under the terms of various agreements. The Housing Facilities Special Revenue Fund has a deficit fund balance of $(5,081,605).

Revenues received by the Authority in its capacity as the owner of the mobile home parks are restricted to be used in accordance with California’s Housing Authorities Law. Revenues received by the Authority in its capacity as housing successor to the former Community Redevelopment Agency are restricted to be used in accordance with the affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code section 34176.1.

Impressions, La Quinta, Park Vista and Summerwood Multifamily Apartments acquired by the Authority during fiscal year 2015-16.

Net revenues derived from the operations of the Housing Facilities Fund will be reserved for repair and replacements, payment of debt service, bond reserve amounts, and operating reserves. Any revenues net of the operations and reserves may be used for any lawful purpose of the Authority. Housing Revenue Bonds were issued on September 3, 2015 to finance the acquisition of the four apartment facilities.

The apartment building located at 507 and 513 East Avenue Q4, was acquired by the Authority during fiscal year 2018-19. Net revenues derived from the operations of the Housing Facilities Ave Q4 Fund will be reserved for repair and replacements. Any revenues net of the operations and reserves may be used for any lawful purpose of the Authority.

The Housing Asset Fund is used to account for the restricted housing assets of the former Community Redevelopment Agency Housing Development Fund. Revenues received from assets previously held by the former CRA Housing Development Fund are restricted to be used in accordance with the affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code section 34176.1, added by Senate Bill 341 (2013-2014 Regular Session). The Housing Asset Fund has a fund balance of $50,817,164.

The Authority adopts an annual appropriated budget for its Major Fund, Mobile Home Parks Fund, Housing Asset Fund, Housing Facilities Fund, and Housing Facilities Ave Q4 Fund. A budgetary comparison statement has been provided for General Fund and each of the Special Revenue funds to demonstrate compliance with budget.

Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 18 - 33 of this report.

See Notes to Financial Statements
4 City of Palmdale Housing Authority
Management Discussion and Analysis
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 Authority, assets exceeded liabilities by $72,549,320 as of June 30, 2021.

Housing Authority Net Position
Governmental
Activites
Governmental
Activites
2021 2020
Current and Other Assets $ 55,359,587 $ 53,994,461
Capital Assets 27,066,936 27,500,821
Total Assets 82,426,523 81,495,282
Deferred Outflows of Resources 156,738 133,272
Other Liabilities 5,074,462 4,776,594
Long-Term Liabilities Outstanding 3,928,889 4,014,128
Net Pension Liabilities 1,030,590 939,373
Total Liabilities 10,033,941 9,730,095
Deferred Inflows of Resources - 18,226
Net position
Net Investment in Capital Assets 23,581,702 23,575,821
Restricted
Community development 48,845,159 48,237,042
Unrestricted 122,459 67,570
Total net position $ 72,549,320 $ 71,880,433
The Authority’s net investment restricted in capital assets reflects a balance of $23,581,702. Net investment in capital assets is defined as land, buildings, machinery and equipment, infrastructure, and construction in progress, net of depreciation and less any related debt used to acquire these assets that is still outstanding.

The Authority’s restricted net position of $48,845,159 r epresent resources that are subject to the affordable housing provisions of California Redevelopment Law, by contract or grant agreement, health and safety code and debt service.

The Authority’s Long-term Liabilities reflect a balance of $3,928,889, consisting of $3,835,000 o f Multifamily Housing Revenue Bonds (2015 Bonds) used to finance the acquisition of the Housing Facility Apartments on September 3, 2015. The remaining balance consists of unpaid compensated absences of $93,889.

The Authority’s Other Liabilities reflect a balance of $5,074,462. Other Liabilities consists of long-term liabilities totaling $898,627 that are considered payable within a year and consist of accounts payable, accrued interest and accrued salaries. The remaining balance consists of $14,771 due to other funds and $4,307,047 of refundable deposits and unearned revenue.

See Notes to Financial Statements
5 City of Palmdale Housing Authority
Management Discussion and Analysis
Housing Authority's Changes in Net Position
Governmental
Activities
Governmental
Activities
2021 2020
Revenues:

Program Revenue:

Charges for Services $ 7,886,631 $ 7,459,191
Operating Grants and Contributions 720,584 591,729
General Revenue:

Unrestricted investment earnings 17,089 303,282
Other 28,120 -
Gain from sale of land - 80,795
Total Revenues 8,652,424 8,434,997
Expenses
Community development 7,798,151 7,167,416
Interest on long-term debt 185,386 187,823
Total Expenses 7,983,537 7,355,239
Change in Net Position 668,887 1,107,980
Net Position - Beginning of Year 71,880,433 70,800,675
Net Position - End of Year $ 72,549,320 $ 71,880,433
Governmental Activities. Governmental activities increased the Authority’s net position by $668,887. The increase is primarily the result of increased Community Development program activities during the year.  Charges for services increased b y $427,440, or 5.73 p ercent primarily due to asset, program and project management fees collected during the year, as well as an increase in rents collected as higher occupancy levels were achieved at the four Multifamily Housing Facility Apartments.
 Operating Grants and contributions increased by $128,855, or 21.78 percent.  Community Development expenses increased by $630,735 or 8.80 due to increases in bad debt expense as a result of compliance monitoring for Mobile Homes, and operating costs at the four Multifamily Housing Facility Apartments.

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

Governmental Funds. The focus of the Authority's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the Authority'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 current fiscal year, the Authority’s governmental funds reported combined ending fund balances of $45,951,907, an increase of $390,278 in comparison with the prior year. The fund balances were classified as follows:
 $50,817,164 i s “Restricted” due to the existence of externally enforceable legal restrictions that are related primarily to special revenue funding sources.
 $(4,865,257) is “Unassigned” and represents negative residual resources.

The General Fund has a fund balance of $216,348, which was an increase o f $59,649 f rom the prior fiscal year. The increase is primarily due to a decline in operating expenditures.

The Housing Asset Fund has a fund balance of $50,817,164 which was a decrease o f $1,233,369 f rom the prior fiscal year. The decrease is attributable to an increase in operating expenditures The Housing Facilities Fund has a fund balance of $(5,081,605), which was an increase of $1,563,998 from the prior fiscal year. The increase is primarily due to consolidation of Mobile Home Parks Fund, Housing Facilities Ave Q4 Fund into this fund.

See Notes to Financial Statements
6 City of Palmdale Housing Authority
Management Discussion and Analysis
General Fund Budgetary Highlights
Differences between the original budget and the final amended budget resulted in an increase of appropriations by $16,840 as the result of anticipated decreased in expenditures for contract and professional services throughout the budget. Differences between the final amended budget and actual resulted in a $50,230 decrease in appropriations due to expenditures for salaries and benefits coming in less than anticipated. Differences between the final amended budget and actual revenues received resulted in a $3,620 increase i n appropriations due to the Asset Management Fees coming in higher than anticipated.

Capital Asset and Debt Administration
Capital Assets. The Authority’s investment in capital assets for its governmental activities as of June 30, 2021, amounts to $27,066,936 ( net of accumulated depreciation). This investment in capital assets includes land, buildings and structures, and infrastructure. A $433,886 decrease in the Authority’s investment in capital assets as compared to prior year is primarily the result of current year depreciation. There were additions of $366,246 and no disposals in the current year.

Housing Authority's Capital Assets
(Net of Depreciation)
Governmental
Activities
Governmental
Activities
2021 2020
Land $ 11,962,311 $ 11,758,761
Buildings & Structures 7,268,447 7,348,120
Improvements Other than Buildings 565,694 581,251
Infrastructure 7,270,484 7,812,690
Total $ 27,066,936 $ 27,500,822
Additional information on the Authority’s capital assets can be found on page 25, Note 7.

Long-Term Debt. At the end of the current fiscal year, the Authority had total bonded debt outstanding of $3,835,000. The 2015 Bonds are secured by pledges of the net revenue received from the operations of the Housing Facilities.

Housing Authority's Outstanding Debt
Revenue Bonds
Governmental
Activities
Governmental
Activities
2021 2020
2015 Multifamily Housing Revenue bonds $ 3,835,000 $ 3,925,000 The Authority’s total long-term liability was $3,835,000, which is the amount of Revenue Bonds. The total debt decreased primarily as the result regularly scheduled debt service payments on the Multi-Family Housing Bond. The Authority did not apply for a rating on the bonds. No such rating should be assumed based upon any other Authority or City rating that may be obtained. See Note 13.

Request for Information
This financial report is designed to provide a general overview of the Authority's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Palmdale Housing Authority, Office of the Finance Manager, 38300 Sierra Highway, Suite D, Palmdale, California, 93550.

See Notes to Financial Statements
7 This page intentionally left blank
Government-Wide Financial Statements
City of Palmdale Housing Authority

STATEMENT OF NET POSITION
JUNE 30, 2021
Governmental
Activities
Assets
Cash $ 2,505,509
Investments 12,603,007
Accounts Receivable 251,545
Interest receivable 4,344,528
Due from other governmental units 5,409,777
Notes and liens 23,793,653
Deposits and prepaids 9,670
Land held for development 2,070,652
Restricted assets:

Cash and Investments 4,371,246
Capital assets:

Not being depreciated:

Land and improvements 11,962,311
Being depreciated, net of accumulated depreciation:

Buildings and structures 7,268,447
Improvements other than buildings 565,694
Infrastructure 7,270,484
Total assets 82,426,523
Deferred outflows of resources
Pension related amounts 156,738
Liabilities
Accounts payable 737,444
Accrued interest payable 15,200
Due to City 14,771
Deposits 375,047
Unearned Revenue 3,932,000
5,074,462
Noncurrent liabilities:

Due within one year 145,983
Due In more than one year 3,782,906
Net pension liability 1,030,590
Total liabilities 10,033,941
Net Position
Net investment in capital assets 23,581,702
Restricted
Community development 48,845,159
Unrestricted 122,459
Total net position $ 72,549,320
See Notes to Financial Statements
8 City of Palmdale Housing Authority

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2021
Program Revenues Total
Expenses
Charges for
Services
Operating Grants
and
Contributions
Net (Expense)
Revenues and
Changes in Net
Position
Governmental activities:

Community development $ 7,798,151 $ 7,886,631 $ 720,584 $ 809,064 Interest on long-term debt 185,386 - - (185,386)
Total governmental activities $ 7,983,537 $ 7,886,631 $ 720,584 $ 623,678 General Revenue:

Unrestricted investment earnings $ 17,092
Other 28,117
Total general revenues 45,209
Change in Net Position 668,887
Net Position - Beginning of Year 71,880,433
Net Position - End of Year $ 72,549,320
See Notes to Financial Statements
9 This page intentionally left blank
Governmental Fund Financial Statements
The General Fund LVWKH+RXVLQJ$XWKRULW\¶VSULPDU\RSHUDWLQJIXQGDQGKDVEHHQFODVVLILHGDV a major fund. It accounts for compliance, administrative, and monitoring expenditures collected for the Housing Authority.

Special Revenue Funds are used to account for specific revenues that are restricted to expenditure for a particular purpose. The following funds have been classified as major funds:

Housing Facilities Fund ± Used to account for the revenues and expenditures related to the operations of four apartment buildings, mobile home parks and two apartment buildings, consisting of eight units.

The Housing Authority of the City of Palmdale owns and operates the Impressions, La Quinta, Park Vista, and Summerwood Multifamily Apartments. Net revenues derived from the operations of the Housing Facilities Fund will be restricted for repair and replacements, payment of debt service, bond reserve amounts, and operating reserves. Any revenues net of the operations and reserves may be used for any lawful purpose (i.e., assigned) of the Housing Authority.

The mobile home Parks funds are distributed under the terms of various agreements. Revenues received by the Housing Authority in its capacity as the owner of the mobile home parks are UHVWULFWHG WR EH XVHG LQ DFFRUGDQFH ZLWK &DOLIRUQLD¶V +RXVLQJ $XWKRULWLHV /DZ 5HYHQXHV received by the Housing Authority in its capacity as housing successor to the former Community Redevelopment Agency are restricted to be used in accordance with the affordable housing SURYLVLRQV RI &DOLIRUQLD¶V&RPPXQLW\5HGHYHORSPHQW /DZ DV DPHQGHGE\ +HDOWK DQG 6DIHW\ Code section 34176.1, added by Senate Bill 341 (2013-2014 Regular Session).

The Housing Authority of the City of Palmdale acquired two apartment buildings with eight units from new Beginnings Outreach in 2018. The Housing Authority of the City of Palmdale owns and operates the apartments located at 507 and 513 East Avenue Q4. Net revenues derived from the operations of the Housing Facilities Ave. Q4 Fund will be restricted for repair and replacements. Any revenues net of the operations and reserves may be used for any lawful purpose (i.e. assigned) of the Housing Authority.

Housing Asset Fund ± Used to account for the restricted housing assets of the former Community Redevelopment Agency Housing Development Fund, which were transferred to the Successor Agency Fund and then transferred to the Housing Asset Fund upon acceptance of the Housing Successor role by the Housing Authority. Revenues received from assets previously held by the former CRA Housing Development Fund are restricted to be used in DFFRUGDQFH ZLWK WKH DIIRUGDEOH KRXVLQJ SURYLVLRQV RI &DOLIRUQLD¶V &RPPXQLW\ 5HGHYHORSPHQW Law, as amended by Health and Safety Code section 34176.1, added by Senate Bill 341.

City of Palmdale Housing Authority
Balance Sheet
Governmental Funds
June 30, 2021
Special Revenue Funds
General Fund
Housing
Authority
Facilities Fund
HA Housing
Asset Fund
Total
Governmental
Funds
Assets:

Cash $ - $ 2,505,509 $ - $ 2,505,509
Investments 207,158 1,548,073 10,847,776 12,603,007
Receivables:

Accounts and interest receivable 10,190 129,822 4,456,061 4,596,073 Advances due from other funds - - 1,186,001 1,186,001
Deposits and prepaid - 9,670 - 9,670
Interfund promissory note - - 8,376,667 8,376,667
Notes and Liens - - 23,793,653 23,793,653
Advances due from fiduciary funds - - 5,409,777 5,409,777 Restricted Assets:

Investments - - 3,018,542 3,018,542
Cash and Cash Equivalents - 1,352,704 - 1,352,704
Land held for development - - 2,070,652 2,070,652
Total assets $ 217,348 $ 5,545,778 $ 59,159,129 $ 64,922,255 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable - 690,668 46,776 737,444
Deposits 1,000 374,047 - 375,047
Unearned revenue - - 3,932,000 3,932,000
Advances due to other funds - 1,186,001 - 1,186,001
Due to City - - 14,771 14,771
Interfund promissory note - 8,376,667 - 8,376,667
Total liabilities 1,000 10,627,383 3,993,547 14,621,930 Deferred Inflows of Resources
Unavailable revenue - - 4,348,418 4,348,418
Fund Balances
Restricted - - 50,817,164 50,817,164
Unassigned 216,348 (5,081,605) - (4,865,257)
Total fund balances (Deficit) 216,348 (5,081,605) 50,817,164 45,951,907 Total liabilities, deferred inflows of resources and fund balances $ 217,348 $ 5,545,778 $ 59,159,129 $ 64,922,255 See Notes to Financial Statements
10 City of Palmdale Housing Authority
Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Position
June 30, 2021
Total Fund Balances - Total Governmental Funds (page 10) $ 45,951,907 Amounts reported for governmental activities in the Statement of Net Position (page 8) 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 37,799,785
Less accumulated depreciation (10,732,849) 27,066,936
Accounts receivable not available to pay for current-period expenditures are reported as deferred inflows of resources in the funds. 4,348,418
Deferred outflows related to pensions are not reported in the Governmental Fund Balance Sheet.

Deferred outflows related to pensions 156,738
Interest due on long-term debt does not require current financial resources and therefore is not reported as a liability on the Governmental Funds Balance Sheet.

Interest payable (15,200)
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 (93,889)
Net pension liability (1,030,590)
Bonds Payable (3,835,000) (4,959,479)
Net Position of Governmental Activities (page 8) $ 72,549,320 See Notes to Financial Statements
11 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2021
Special Revenue Funds
General Fund
Housing
Authority
Facilities Fund
HA Housing
Asset Fund
Total
Governmental
Funds
Revenues:

Charges for current services $ 93,552 $ - $ 296,969 $ 390,521 Use of property - 7,496,262 - 7,496,262
Interest 1,129 8,471 95,401 105,001
Interfund interest - - 403,797 403,797
Net increase (decrease) in fair value of investments (761) (5,738) (37,489) (43,988) Other - - 28,117 28,117
Total revenues 93,920 7,498,995 786,795 8,379,710
Expenditures:

Current:

Community development 34,270 4,979,122 1,924,663 6,938,055 Capital Outlay - 331,081 5,321 336,402
Debt service:

Principal - 90,000 - 90,000
Interest - 185,658 - 185,658
Interfund interest - 403,797 - 403,797
Total expenditures 34,270 5,989,658 1,929,984 7,953,912 Excess (deficiency) of revenues over (under)
expenditures 59,650 1,509,337 (1,143,189) 425,798
Other Financing Sources (Uses)
Transfers In - 60,000 5,339 65,339
Transfers Out - (5,339) (60,000) (65,339)
Transfers to City's General Fund - - (35,520) (35,520)
Total other financing sources (uses) - 54,661 (90,181) (35,520) Net Change in Fund Balances 59,650 1,563,998 (1,233,370) 390,278 Fund Balances (Deficit) - Beginning of Year 156,698 (6,645,603) 52,050,534 45,561,629 Fund Balances (Deficit) - End of Year $ 216,348 $ (5,081,605) $ 50,817,164 $ 45,951,907 See Notes to Financial Statements
12 City of Palmdale Housing Authority
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities and Changes in Net Position Year Ended June 30, 2021
Net Change in Fund Balances - Total Governmental Funds (page 12) $ 390,278 Amounts reported for governmental activities in the Statement of Activities and Changes in Net Position (page 9) 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.

Capital Asset Additions - Current Year 366,246
Less Depreciation Expense (800,132) (433,886)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 676,508
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.

Bonds & Certificates of Participation payable 90,000
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 (4,760)
Accrued interest on debt 272
Pension expense (49,525) (54,013)
Net change in net position - governmental activities (page 9) $ 668,887 See Notes to Financial Statements
13 This page intentionally left blank
Budgetary Comparison Statements
City of Palmdale Housing Authority
Statement 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:

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 34,270 50,230
Total expenditures 67,660 84,500 34,270 50,230
Excess (deficiency) of revenues over (under) expenditures 22,660 5,800 59,650 53,850 Net Changes in Fund Balance 22,660 5,800 59,650 53,850
Fund Balance (Deficit) - Beginning of Year 156,698 156,698 156,698 - Fund Balance (Deficit) - End of Year $ 179,358 $ 162,498 $ 216,348 $ 53,850 See Notes to Financial Statements
14 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual 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 Interest 750,210 750,300 95,401 (654,899)
Interfund interest 406,960 407,100 403,797 (3,303)
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
Debt service:

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) (60,000) (4,600)
Transfers to City's General Fund (35,370) (35,400) (35,520) (120) Total other financing sources (uses) 866,430 866,400 (90,181) (956,581) Net Changes in Fund Balance 404,010 (1,583,330) (1,233,370) 349,960 Fund Balance (Deficit) - Beginning of Year 52,050,534 52,050,534 52,050,534 - Fund Balance (Deficit) - End of Year $ 52,454,544 $ 50,467,204 $ 50,817,164 $ 349,960 See Notes to Financial Statements
15 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Facilities - Special Revenue 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:

Interfund interest 406,970 407,100 403,797 3,303
Principal 90,000 90,100 90,000 100
Interest 185,650 185,700 185,658 42
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 Changes 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
16 CITY OF PALMDALE HOUSING AUTHORITY
Notes to the Financial Statements
For the Fiscal Year Ended
June 30, 2021

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City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
(1) Summary of Significant Accounting Policies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19 A. Description of the Reporting Entity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19 B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19 C. Budgets and Budgetary Accounting................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 D. Cash and Investments ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 E. Land Held for Resale................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 F. Capital Assets................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 G. Deferred Outflows/Inflows of Resources................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 H. Compensated Absences................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 I. Pensions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 J. Fund Equity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 K. Deficit Fund Equity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 L. Use of Estimates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 M. Implemented Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 (2) Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 A. Investments Authorized by the California Government Code and the Authority's Investment Policy................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................23 B. Disclosures Relating to Interest Rate Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................23 C. Disclosures Relating to Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 D. Custodial Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 E. Disclosures relating to Fair Value of Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 (3) Notes Receivable................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 (4) Fund Balance Classification................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 (5) Interfund Transfers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 (6) Interfund Due To/From and Advances Due To/From................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 A. Advances and Due To/From Other Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 B. Interfund Promissory Note Between the Housing Facilities Fund and the Housing Asset Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 C. Advances Due from Successor Agency at June 30, ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26 (7) Capital Assets................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................27 (8) Deposits and Prepaids................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................27 (9) Due to City................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................27 (10) Risk Management................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 (11) Unearned Revenue/Unavailable Revenues................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 (12) Public Employee's Retirement System (PERS) Pension Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 A. General Information about the Pension Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 (13) Long-Term Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 A. Revenue Bonds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 B. Changes in Long-Term Liabilities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 (14) Contingencies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 (15) New Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 18 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
(1) Summary of Significant Accounting Policies
A. Description of the Reporting Entity
The Housing Authority of the City of Palmdale, California (Authority) was established on April 9, 1997, pursuant to provisions of the State of California Housing Authorities Law. The Authority is subject to the financial accountability of the City Council of the City of Palmdale, California (City) and, accordingly, is a blended component unit of the City although it is a separate legal entity. The Authority’s primary purpose is to address the shortage of multi- family housing in the City of Palmdale with respect to which long-term affordability for low-income persons is ensured as the result of recorded agreements or covenants.

As the result of the dissolution of the former Community Redevelopment Agency, and under the provision of AB 1484, the City can elect to become the Housing Successor and retain the housing assets. The City elected to become the Housing Successor and on February 1, 2012, certain housing assets were transferred to the City’s Successor Agency Housing Asset Fund and later transferred to the Authority. The 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 Authority during fiscal year 2011-12.

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

B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus The accounts of the Authority are organized on the basis of separate funds, each of which is considered to be a separate accounting equity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures/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 activities of the Authority. Interfund activity, including payables and receivables, have been eliminated in the Statement of Activities and the Statement of Net Position.

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. Unrestricted investment earnings are reported 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 Authority’s assets, deferred outflows of resources, liabilities (including long-term liabilities), and deferred inflows of resources 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. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in the Statements of Net Position presented in the Government-Wide Financial Statements.

Governmental Fund Financial Statements are presented using the current financial resources measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, current liabilities, and deferred inflows of resources are included on the Balance Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balances 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 period or soon enough 19 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
thereafter to be used to pay liabilities of the current period. For this purpose, the Authority considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Charges for current services and interest revenue are considered susceptible to accrual. Expenditures are recorded in the accounting period in w hich the related fund liability is incurred. However, debt service expenditures are recorded only when payment is due.

The Authority has presented all funds as major funds because the Authority believes the financial position and activities of these funds are significant to the Authority as a whole. Specific fund descriptions can be found on page 10.

C. Budgets and Budgetary Accounting
An annual budget is adopted on a basis consistent with generally accepted accounting principles. 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 since they do not constitute expenditures or liabilities and are added to the subsequent year’s adopted appropriations.

The legal level of budgetary control (i.e., the level at which 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 betw een 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. Unexpended appropriations at year-end may be added to the subsequent year’s adopted budget by the Finance Manager with the approval of the City Manager per Council Resolution 2021- 058, Section 8.

D. Cash and Investments
Cash includes amounts in demand deposits and petty cash on hand. Investments include amounts invested in the City of Palmdale Investment Pool and Investments held by trustees. See Note 2 for additional detail.

E. Land Held for Resale
Abandoned and Foreclosed Mobile Home Rehabilitation
Abandoned and Foreclosed Mobile Homes for resale are capitalized in the special revenue funds at the lower of cost or market. To preserve the occupancy, maximize the monthly space rent revenues and minimize vacant lot potential at the mobile home parks, the Authority will purchase and rehabilitate mobile homes for resale to a qualified applicant in need of an affordable home. Fund balances are classified as restricted. At the end of the current fiscal year, the Authority did not hold any abandoned and foreclosed mobile homes for resale.

Low and Moderate Affordable Housing-Land Held for Resale Land Held for resale is capitalized in the special revenue funds at the lower of cost or market. The land held by the Authority was purchased with either low m oderate housing funds or housing asset funds and is being held for resale or development in order to benefit qualified or eligible households with affordable housing. At the end of the current fiscal year, the Authority reported $2,070,652 in land held for resale.

F. Capital Assets
Capital assets are defined by the government as assets with an initial, individual cost of more than $5,000 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 no 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 balance sheet. The range of lives used for depreciation purposes for each capital asset class is as follows:

Asset Years
Buildings and structures 50
Infrastructure 5-10
20 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
G. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of 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 Authority has two items that qualify for reporting in this category. 1) Changes of assumptions, and 4) the difference between actual earnings and the projected earnings on the pension fiduciary net position.

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 Authority has one type of item which arises only under a modified accrual basis of accounting that qualifies for reporting in this category. The government-wide Statement of Net Position reports deferred inflows resulting from changes of assumptions and net difference between actual earnings and projected earnings on the pension fiduciary net position. These amounts are deferred and recognized over a defined amortization period of five years.

H. Compensated Absences
It is the Authority’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 only if they have matured, for example, as a result of employee resignations and retirements. Compensated absences are generally liquidated by the various special revenue funds.

I. Pensions
For purposes of measuring the 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 Housing Authority’s proportionate share of the City of Palmdale Pension’s Plan, which is administered by the California Public Employees Retirement System (CalPERS) and additions to/deductions from the Plan’s fiduciary net position have been determined as an allocation of the City of Palmdale’s net pension liability, pension expense, and deferred inflows and outflows based on contributions paid by Authority employees. 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 to be 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 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.

J. Fund Equity
In the Fund Financial Statements, governmental funds may classify fund balances into five components whereby each component identifies the extent to which the Authority 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 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 would be either 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or 2) imposed by law through constitutional provisions or enabling legislation.

Committed: Revenues that are constrained to specific purposes by a formal action of the Authority’s Board, which constitutes the most binding constraint such as an ordinance. The constraint remains binding unless removed in the same formal manner by the Authority’s Board. The Authority’s Board action to commit fund balance must occur within the fiscal reporting period while the amount committed may be determined subsequently.
21 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
Assigned: Resources that are constrained by the Authority’s intent to be used for specific purposes, but that neither restricted nor committed. This policy delegates to the Finance Manager the authority to assign unrestricted fund balance amounts where the Authority’s intent is for those 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 Authority’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 Authority’s policy is to first apply committed fund balance, then assigned fund balances, and finally unassigned fund balance.

K. Deficit Fund Equity
The following funds had a deficit fund balance at June 30, 2021 in the amount indicated:

Major Special Revenue Funds:

Housing Facilities Fund $ (5,081,605)
Management anticipates that these deficits will be resolved in future years as additional operating revenues become available. It is anticipated occupancy levels at the Mobile Home Parks will continue to remain high and consistent and continue to reduce the deficit in the Housing Authority Mobile Home Park Fund to positive levels once the Mobile Home Park loan is paid off.

L. 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.

M. 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. The implementation had no material impact.

GASB Statement No. 90, Majority Equity Interests – (an amendment of GASB Statements No. 14 and No. 61). The prim ary 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. The implementation had no material impact.
(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 $ 2,505,509
Investments 12,603,007
Restricted cash and investments 4,371,246
Total cash and investments $ 19,479,762
22 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
Cash and investments as of June 30, 2021 consist of the following:

Cash held by third party $ 2,505,509
Cash and investments with City of Palmdale investment pool 12,603,007 Cash and Investments held by Trustee 4,371,246
Total cash and investments $ 19,479,762
Cash and investments of the Authority are pooled with funds of the City for deposit and investment purposes, except for funds required to be held by third parties for the operations of the mobile home parks and apartment facilities or to be held by outside fiscal agents.

Interest earned on pooled cash and investments is credited to the funds based on each respective fund’s month-end cash balance.

Detailed information concerning the City’s pooled cash and investments can be found in the City’s Annual Comprehensive Financial Report for the year ended June 30, 2021.

A. Investments Authorized by the California Government Code and the Authority's Investment Policy Investments of the Authority are pooled with funds of the City and therefore adhere to the City’s Investment Policy. The following table identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements with the Authority, rather than the general provisions of the California Government Code or the City’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 3 years 10% None
Negotiable Certificates of Deposit 5 years 30% 15%
Overnight Bank Investment Pool N/A 10% None
Mutual Funds N/A 15% 10%
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 Government Code Restrictions **Per account
The City’s 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.

B. Disclosures Relating to Interest Rate Risk
Interest rate risk in 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, Sections 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. 23 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
C. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations 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 the Authority’s debt agreements, and the actual rating as of year-end for each investment type.

Investment Type: Total
Minimum
Legal
Rating
Not Required
To
Be Rated AAA/Aaa*
Cash and Investments with City of
Palmdale Investment Pool $ 12,603,007 N/A $ 12,603,007 $ - Held by bond trustees:

Money market funds 4,371,246 A - 4,371,246
Total $ 16,974,253 $ 12,603,007 $ 4,371,246
D. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.

The California Government Code and the City’s Investment Policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies.

California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

City deposits with financial institutions in excess of federal depository insurance limits of $250,000 were held in collateralized accounts held with the City of Palmdale. As of June 30, 2021, City investments were held by the safekeeping department of the broker- dealer (counterparty) used by the City of Palmdale to buy the securities.

E. Disclosures relating to Fair Value of Investments
The Authority 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.

Deposits and withdrawals in governmental investment pools, such as the City’s Investment Pool are made on the basis of $1 and not fair value. Accordingly, the measurement of fair value of these types of investments is based on an uncategorized input not defined as a Level 1, Level 2, or Level 3 input. Money market investments are carried at amortized cost. (3) Notes Receivable
Notes Receivable in the amount of $23,793,653, are reported on the governmental fund financial statements and the government-wide financial statements. The balances consist of Affordable Housing Project loans made through various grants for low t o moderate- income homeowners seeking to improve their homes. As the Notes are repaid, proceeds are used to continue the Affordable Housing Programs.
(4) Fund Balance Classification
The Governmental Fund Balances at June 30, 2021 were classified as follows:
24 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
HA
General
Fund
Special
Revenue Fund
HA Facilities
Fund
Special
Revenue Fund
Housing
Asset Fund
Total
Governmental
Funds
Restricted:

Low and moderate income housing $ - $ - $ 50,817,164 $ 50,817,164 Unassigned Fund Balance 216,348 (5,081,605) - (4,865,257) Total fund balance (deficit) $ 216,348 $ (5,081,605) $ 50,817,164 $ 45,951,907 (5) Interfund Transfers
Transfers between funds for the year ended June 30, 2021, consisted of the following:

Transfer to: Transfer From: Amount
Housing Asset Fund Housing Facilities Fund $ 5,339
Housing Facilities Fund Housing Asset Fund 60,000
Total Interfund Transfers $ 65,339
City of Palmdale Housing Asset Fund $ 35,520
Total Transfers to City's General Fund $ 35,520
The transfers resulted from changes in security deposits held by the Housing Facilities that were reimbursed by the Housing Asset Fund. Transfers to the Housing Facilities in the amount of $60,000 were a result of consolidating of funds this fiscal year. (6) Interfund Due To/From and Advances Due To/From
A. Advances and Due To/From Other Funds
The advances due to/from are reported on the Governmental Fund Balance Sheet of the Housing Asset Fund and Housing Facilities Fund as a result of the dissolution of the former Community Redevelopment Agency of the City of Palmdale resulting from the acquisition of three mobile home parks purchased during fiscal year 2002-2003. Upon acquisition, the Authority assumed the prior park 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 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. As of June 30, 2021, the balance of these liabilities was $1,186,001.

Advances Due To/From Other Funds for the year ended June 30, 2021 were as follows:

Payable To: Payable From: Amount
Housing Asset Fund Housing Facilities Fund $ 1,186,001
Advances Total Due From/To Other Funds $ 1,186,001
B. Interfund Promissory Note Between the Housing Facilities Fund and the Housing Asset Fund The Authority and the City of Palmdale former Community Redevelopment Agency (Agency) previously entered into loan and repayment agreements whereby the Agency loaned the proceeds of a 1997 Series A (refunded by 2005 Series E) and Series B 25 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
(refunded by 2003 Series C) Tax Allocation Bond debt issuances to the Authority.

The proceeds of the Bonds were used to finance the acquisition, sale, and improvement of three mobile home parks (“Parks”) in the City. Immediately upon acquiring the Parks, the Agency sold them pursuant to an Affordable Housing Agreement, which reserved an option for the Agency to later designate another entity to take title of the Parks. On March 26, 2003, the Agency exercised this option by entering into a Cooperation Agreement with the Housing Authority of the City of Palmdale. Title to the property transferred from the prior owner of the Parks to the Housing Authority on April 4, 2003.

The liability for the 1997 Series B Bonds was fully defeased in December 2003 in the amount of $5,090,000 by the Agency’s 2003 Tax Allocation Series C Bonds. The Agency advance refunded the 1997 Series B Bonds to take advantage of the current market and realize economic savings. The liability for the 1997 Series A Bonds was fully defeased in August 2005 in the amount of $13,170,000 by the Agency’s 2005 Tax Allocation Series E Bonds. The Agency advance refunded the 1997 Series A Bonds to take advantage of the current market and realize economic savings.

Repayment agreements between the former Community Redevelopment Agency and the Authority require the Authority to pay the former Community Redevelopment Agency under the same terms as the Bonds were issued. The 2003 Series C Bonds and 2005 Series E Bonds were secured by Project Area No. 2A’s Housing Set-Aside revenue and certain related reimbursements provided for in the Affordable Housing Agreement. The Housing Authority was to use operating income from the Parks to repay the former Agency, which was supposed to in turn, pay principal and interest with respect to the 2003 Series C Bonds and 2005 Series E Bonds as they become due. Under the 2003 amended Indenture, the Bonds were to be paid and secured by the tax increment of the former Community Redevelopment Agency and principal and interest was no longer required to be paid from the Authority.

As the result of the dissolution of the former Community Redevelopment Agency and the Authority assuming the duties of the former Community Redevelopment Housing Development Fund, the agreement will be maintained by the Housing Asset Fund which is now classified as an Interfund Promissory Note effective February 1, 2012. All proceeds from repayment of the note must be used in accordance with applicable housing related provisions of Community Redevelopment Law. During FY 2020-21, the Boulder Mobile Home parks paid $951,666 of principal and $406,972 interest for a total $1,358,638 to the Housing Asset Fund. The balance of the Note as of June 30, 2021 is $8.376,667. The remaining debt service schedule below uses a blended interest rate ranging from 3.7% to

4.75% due to the note’s variable interest rate.

Year Ending Principal Interest Total
2022 $ 991,667 $ 366,173 $ 1,357,840
2023 1,031,667 323,471 1,355,138
2024 1,075,000 277,989 1,352,989
2025 1,123,333 230,356 1,353,689
2026 1,170,000 180,331 1,350,331
2027-2030 2,985,000 212,017 3,197,017
Total $ 8,376,667 $ 1,590,337 $ 9,967,004
C. Advances Due from Successor Agency at June 30, 2021
Payable To: Payable From: Amount
Housing Asset Fund City of Palmdale - Successor Agency $ 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 requirements) to the former CRA Project Area No. 1 and 2A Debt Service funds, respectively.

In 2009-2010, the State required the former Community Redevelopment Agency (CRA) 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 $9,071,708 (100% of the total requirement) to the former CRA Project Area No. 1 and 2A Debt Service Fund, respectively.

In fiscal year 2010-11, the State required the former Community Redevelopment Agency (CRA) to shift tax increment of $2,389,286 26 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
to the Supplemental Education Revenue Augmentation Fund (SERAF). 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 2ADebt Service funds, respectively.

The Successor Agency Private Trust Fund was formed for the purpose of holding the assets and liabilities of the former Community Redevelopment Agency. All assets and liabilities were transferred to the Successor Agency Private Purpose Trust Fund which is used to account for assets and liabilities held by the City for the former Community Redevelopment Agency. The Advances Due to the 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 revenues. 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 FY 2020-21, the Authority received $250,000 from the Successor Agency during the Recognized Obligations Payment Schedule (ROPS) period of July-December 2021 or ROPS 20-21A. The Authority received $2,500,000 the ROPS period of January-June 2021 or ROPS 20-21B. (7) Capital Assets
Capital Assets of the Housing Authority for the year ended June 30, 2021 consisted of the following:

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

Land and improvements $ 11,758,761 $ 203,550 $ - $ 11,962,311 Total capital assets not being depreciated 11,758,761 203,550 - 11,962,311 Capital assets being depreciated:

Buildings and structures 8,510,457 91,450 - 8,601,907
Improvements other than buildings 832,409 71,246 - 903,655 Infrastructure 16,331,912 - - 16,331,912
Total capital assets being depreciated 25,674,778 162,696 - 25,837,474 Less: accumulated depreciation for:

Buildings and Improvements 1,162,336 171,124 - 1,333,460 Improvements other than buildings 251,158 86,803 - 337,961 Infrastructure 8,519,223 542,205 - 9,061,428
Total accumulated depreciation 9,932,717 800,132 - 10,732,849 Total capital assets being depreciated, net 15,742,061 (637,436) - 15,104,625 Governmental activities capital assets, net $ 27,500,822 $ (433,886) $ - $ 27,066,936 For the year ended June 30, 2021, depreciation expense on capital assets was charged to the Community Development function in the amount of $800,132.
(8) Deposits and Prepaids
For the year ended June 30, 2021, deposits in the amount of $9,670 are reported on the governmental fund statements and government- wide statements and consist of $9,670 from security deposits held for the mobile home renters. (9) Due to City
2018 Habitat for Heroes Development Loan
A Cooperative Agreement, dated as of September 3, 2014, was entered into by and between the City of Palmdale and the Housing Authority of the City of Palmdale. The City of Palmdale is the owner of certain real property located at the northeast corner of Division Street and Avenue R (“Property”). Habitat for Humanity of San Fernando/Santa Clarita, Inc., a California nonprofit public benefit corporation (the “Developer”) proposes to develop on the Property 50 units of single-family housing to be sold at affordable cost to income qualified military veterans (“Project”) with financial assistance from the Authority.

The Authority, the City, and Developer concurrently entered into a Memorandum of Understanding by which the Authority and 27 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
Developer will negotiate an Affordable Housing Agreement, setting forth the terms and conditions by which the Authority will sell the Property to the Developer and carry back the purchase price. The Authority will take a promissory note from Developer for repayment to the Authority of the Project Fees. The City agrees to defer its collection of the Project Fees charged by the City in relation to the Project. The Project Fees include but not lim ited to park development fees, traffic impact fees, drainage fees, building permit fees, and engineering fees. The total amount of the Project Fees to be paid by the Authority will be determined by the City in accordance with the City’s adopted fee schedules and customary processes.

To implement the Affordable Housing Agreement and facilitate the Project, the Authority agrees to pay the City the fair market value of the Property at $25,000 per acre (“Purchase Price”). The Authority agrees to pay the Purchase Price and the Project Fees to the City in ten equal installments at zero interest, commencing on a date that is one year after the closing of the Authority’s sale of the Property to Developer. As a condition of the City’s sale of Property to the Authority, the Authority executed a promissory note the City, in a form approved by the City, setting forth the payment terms in this Agreement. The amount due will be in an original principal amount equal to the Purchase Price of the Property plus the final amount of the Project Fees determined by the City. During the Fiscal Year 2020-21, the City incurred costs in the amount of $14,771. (10) Risk Management
The Authority is covered under the City of Palmdale’s risk management program for general liability claims, automobile insurance and health plan.
(11) Unearned Revenue/Unavailable Revenues
Unearned Revenue - Governmental funds report unearned revenue 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:

Housing Asset Fund: Lease Revenues Received in Advance $ 3,932,000 Total Housing Authority Unearned Revenue $ 3,932,000
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 deferred revenue is unique to governmental funds since it 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 the current fiscal year, the components of unavailable revenues result from accrued interest revenue not received with the 60-day period were as follows:

Housing Asset Fund $ 4,348,418
(12) Public Employee's Retirement System (PERS) Pension Plan A. General Information about the Pension Plan
The Authority participates in the City of Palmdale’s Miscellaneous pension plan by sharing the costs related to pensions with the City for eligible employees. All plan information described below pertains to the overall plan for the City.

Plan Description -All qualified permanent probationary employees are eligible to participate in the City of Palmdale’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 Plans are 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 at: http://www.calpers.ca.gov/index.jap?bc=/about/forms-pubs/calpers-reports/actuarial- reports/home.xml Benefits Provided - CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan 28 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
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 of0.004 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 Plans’ provisions and benefits in effect at June 30, 2021, are summarized as follows:

Miscellaneous Plan
Hire Date
On or Prior to
April 10, 2011

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

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

2.0 Percent @ Age 62
Benefit vesting schedule 5 years of service 5 years of service 5 years 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 % of annual salary 2.0 to 2.7 percent 1.092 to 2.418 percent 1.0 to 2.5 percent Required 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 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. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. 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.

For the year ended June 30, 2021, the Authority’s proportionate share of the City’s contribution to the Plan was $105,686.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2021, the Authority reported a liability of $1,030,590 for its proportionate share of the City’s net pension liability.

The net pension liability of the Plan was measured as of June 30, 2020 and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020. The Authority’s proportion of the City’s net pension liability was based on the Authority’s Fiscal Year 2020 actual contributions to the City’s pension plan relative to the total contribution of the City as a whole.

At June 30, 2020, the Authority’s proportion was 2.00% which is flat to its proportion measured as of June 30, 2019.

For the year ended June 30, 2021, the Authority’s recognized pension expense was $155,318. At June 30, 2021, the Authority 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 $ 105,686 $ - Difference between expected and actual experience 28,263 - Net difference between projected and actual earnings on plan investments 22,789 - Total $ 156,738 $ -
The amount of $105,686 reported as deferred outflows of resources related to pensions resulting from the Authority’s contributions to the City’s plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be 29 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
recognized as pension expense as follows:

Year Ended June 30,
2022 $ 10,273
2023 15,290
2024 14,073
2025 11,279
$ 50,915
Actuarial Assumptions - The Authority’s proportion of the City’s total pension liability was derived from the June 30, 2019 valuation being rolled forward to determine the June 30, 2020 total pension liability, based on the following actuarial methods and assumptions:

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

Discount Rate 7.15%
Inflation Rate 2.50%
Investment Rate of Return 7.50%
Projected Salary Increase Rate 3.2% - 12.2% (1)
Mortality Society of Actuaries Scale BB (2)
(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 more details on this table, please refer to the 2017 experience study report.

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 contributions w ill 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 m ake 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.

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
The table below reflects long-term expected real rate of return by asset class. The rate of return w as 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 101
Real Return
Years 11 and
Thereafter+2
Global Equity 50.00% 4.80% 5.98%
30 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
Asset Class
Target
Allocations
Real Return
Years 1 Thru 101
Real Return
Years 11 and
Thereafter+2
Fixed Income 28.00% 1.00% 2.62%
Real Assets 13.00% 3.75% 4.93%
Private Equity 8.00% 6.30% 7.23%
Inflation Assets 0.00% 0.77% 1.81%
Liquidity 1.00% 0.00% (0.92)%
Total 100%
Discount Rate - The discount rate used to measure the total pension liability was 7.15 percent. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. The tests revealed the assets would not run out.

Therefore, the current 7.15 p ercent discount rate is appropriate, and the use of the municipal bond rate calculation is not deemed necessary. The long-term expected discount rate of 7.15 percent is applied to all plans in the Public Employees Retirement Fund. The cash flows used in the testing were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB 68 section.

Sensitivity of the Authority’s proportionate share of the City’s Net Pension Liability to Changes in the Discount Rate - The following table presents the Authority’s proportionate share of the City of Palmdale’s Miscellaneous Plan net pension liability as of the measurement date, calculated using the discount rate of 7.15 percent, as well as what the Authority’s proportionate share of the City’s 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
-1% 6.15
Current
Discount Rate

7.15 Discount Rate
+1% 8.15
Authority's proportionate share
of the City's Net Pension Liability $ 1,522,255 $ 1,030,590 $ 621,886 Pension Plan Fiduciary Net Position - Detailed information about the City’s collective net pension liability is available in the City separate issued Annual Comprehensive Financial Report (ACFR) or in the separately issued CalPERS financial report which can be obtained from the CalPERS website. The City’s ACFR may be obtained by contacting the City of Palmdale, Office of the Finance Manager, 38300 Sierra Highway, Suite D, Palmdale, California, 93550. 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. (13) Long-Term Debt
A. Revenue Bonds
2015 Multifamily Housing Revenue Bonds Payable ($4,235,000) - O n September 3, 2015, the Housing Authority of the City of Palmdale issued $4,235,000 of Multifamily Housing Revenue Bonds (2015 Bonds). The Authority did not apply for a rating on the bonds, and no such rating should be assumed based upon any other Authority or City rating that may be obtained. Interest on the 2015 Bonds is payable semi-annually on December 1 and June 1 at rates ranging from 2.625 percent to 5.25 percent per annum. Principal installments are payable June 1 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 the acquisition and/or construction of improvements and extensions to the Housing Facilities, but instead transferred to the 31 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
Redemption Fund, 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, 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 w ith accrued interest to the date fixed for redemption, without premium.

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 lim ited 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, other than the Authority to the limited extent of the pledge.

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 under 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. All amounts collected upon foreclosure of the Housing Facilities pursuant to the Deeds of Trust, after payment of costs of foreclosure, will first be used to pay amounts owing under the Indenture, including the payment of the Bonds.

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
2027-2031 615,000 766,815 1,381,815
2032-2036 765,000 621,195 1,386,195
2037-2041 965,000 414,225 1,379,225
2042-2046 980,000 132,038 1,112,038
Totals $ 3,835,000 $ 2,810,541 $ 6,645,541
B. Changes in Long-Term Liabilities
Activity for the year ended June 30, 2021 were as follows:

Balance at
June 30,2020 Additions Retirements
Balance at
June 30,2021
Due Within
One Year
Compensated Absences Payable $ 89,129 $ 4,760 $ - $ 93,889 $ 50,983 2015 Multifamily Housing Revenue Bonds 3,925,000 - 90,000 3,835,000 95,000 Total Long Term Liabilities $ 4,014,129 $ 4,760 $ 90,000 $ 3,928,889 $ 145,983 (14) Contingencies
Obligations of the Successor Agency Private Purpose Trust Fund The former Community Redevelopment Agency of the City of Palmdale was dissolved on January 31, 2012. Obligations to be paid out 32 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
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. (15) New Accounting Pronouncements
The GASB has issued the following pronouncements that have effective dates which may impact future financial statement presentation. The Authority has not determined the effect of the following Statements:

GASB Statement No. 87 - Leases.

GASB Statement No. 89 - Accounting for Interest Cost Incurred Before the End of a Construction Period .

GASB Statement No. 91 - Conduit Debt Obligations.

GASB Statement No. 92 - Omnibus 2020.

GASB Statement No. 93 - Replacement of Interbank Offered Rates.

GASB Statement No. 94 - Public-Private and Public-Public Partnerships and Availability Payment Arrangements .

GASB Statement No. 96 - Subscription-Based Information Technology Arrangements .

GASB Statement No. 97 - Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans.
33 Required Supplementary Information
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Schedules of Required Supplementary Information
Schedule of the Authority's Proportionate Share of the City's Net Pension Liability Last Ten Years*
2015 2016 2017 2018 2019 2020 2021
Authority's proportion of the net pension liability %2.10 %1.96 %2.00 %2.00 %2.00 %2.00 %2.00 Authority's proportionate share of the net pension liability $ 728,131 $ 727,471 $ 824,554 $ 845,339 $ 864,469 $ 939,373 $ 1,030,590 Authority's covered payroll $ 262,490 $ 260,428 $ 251,017 $ 264,742 $ 295,946 $ 300,612 $ 328,991 Authority's proportionate share of the net pension liability as apercentage of its covered payroll 277.39% 279.34% 328.48% 319.31% 292.10% 312.49% 313.26% Plan fiduciary net postion as a percentage of the total pension liability 75.66% 75.86% 72.57% 74.09% 74.74% 75.66% 75.86% 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 was the first year of implementation, thus only six years are presented. 35 Schedules of Required Supplementary Information
Last Ten Years*
Contribution Years 2015 2016 2017 2018 2019 2020 2021
Contribution $ 81,237 $ 83,721 $ 103,146 $ 70,190 $ 82,346 $ 95,420 $ 105,686 Contributions in relation to the contractually required contribution (81,237) (83,721) (103,146) (70,190) (82,346) (95,420) (105,686) Contribution deficiency - - - - - - -
Covered payroll $ 260,428 $ 251,017 $ 264,742 $ 295,946 $ 300,612 $ 328,991 $ 351,345 Contributions as a percentage of covered payroll %31.19 %33.35 %38.96 %23.72 %27.39 %29.00 %30.08 * - Fiscal year 2015 was the first year of implementation, thus only six years are presented. 36 37

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

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

Rancho Cucamonga, California
May 24, 2022
38 CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 1

MINUTES

CITY COUNCIL/SA/HA/IDA/PAA/PCA/PFA

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
MARCH 16, 2022

www.cityofpalmdale.org

7:00 P.M.
1) MAYOR TO CALL THE MEETING TO ORDER
Mayor Pro Tem Loa called the meeting to order at 7:08 p.m.

2) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE IN HONOR OF OUR TROOPS
Marcos Alvarez led the pledge of allegiance.

3) ROLL CALL MAYOR / CHAIR HOFBAUER, MAYOR PRO TEM / VICE CHAIR /

CHAIR PRO TEM LOA, COUNCILMEMBERS / DIRECTORS / MEMBERS /

COMMISSIONERS CARRILLO, BISHOP, BETTENCOURT COMMISSIONERS

FRAGA-SAENZ, DENNY
PRESENT: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

ABSENT: None.

Motion: Excuse the absence of Mayor Hofbauer.

Moved by Juan Carrillo, seconded by Richard J. Loa.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

4) WAIVER OF FULL READING OF RESOLUTION(S) and ORDINANCE(S) Motion: Move to waive full reading of the Resolution (s) and/or Ordinance(s) to be considered and voted on at this meeting.

Moved by Juan Carrillo, seconded by Austin Bishop.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 2
5) PUBLIC COMMENTS
The following individuals provided public comments:

Eugene Hernandez encouraged City Council to write a letter to Governor Newsom and State Senators regarding ending the gas tax.

Michelle Valmer, Vladimir Gomez, Christina Hayden, Nicole Teaque, Ruth Sanchez,Samantha Barbic, Ismael Galvanall shared views regarding the lack of support for the Walking With a Purpose event.

Xavier Flores encouraged Council support of a research project at R. Rex Parris High School.

Lancaster resident Dave Bowman commented regarding bettering the community.

Kevin Shenkman made comments regarding the sequencing of the Elections.

Maria Mainella requested a proclamati on declaring April as “Child Abuse Awareness and Prevention Month”, and thanked Councilmember Bettencourt for participating in the project "You Matter." Ms. Mainella also inquired if Council would assist with stricter rules and laws related to Cannabis.

Marcos Alvarez expressed concerns regarding the lack of women's shelters in the City of Palmdale.

Jason Zink commented on homelessness, gas tax, and other miscellaneous items.

Eugene Hernandez encouraged the Council to review rent control in the City of Palmdale.

Motion: Close Public Comments.

Moved by Juan Carrillo, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

6) WORKSHOP PRESENTATION(S)

6.1) Illegal Dumping Action Plan Updates. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden) Deputy Director of Public Works Glidden provided an overview of the staff report.

Management Analyst Mejia explained the PowerPoint presentation. Discussion ensued regarding illegal dumping, dump hours, and public outreach.

Motion: Move to open the Public Comments.

Moved by Juan Carrillo, seconded by Richard J. Loa.

CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 3

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

Jason Zink commented on the dump hours and suggested a Public Works yard on the eastside.

A motion was made and carried unanimously to close the Public Comments.

7) CONSENT CALENDAR

7.1) Receive the Summary of the Annual Housing Element Progress Report. (Staff Reference: Director of Economic and Community Development Garibay)

7.2) Approve Agreement with Kimley -Horn and Associates, Inc for professional services on PN 835, Palmdale Sustainable Transportation Plan, in the amount of $597,339. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

7.3) Adopt Resolution No. CC 2022-020, a Resolution of the City Council of the City of Palmdale authorizing the application for grant funds from the Recreational Trails Program for the Barrel Springs Trail Improvement Project. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)
Councilmember Bettencourt pulled this item for discussion and suggested applying for grants funds that will benefit the eastside in the future.

Councilmember Carrillo requested that staff identify City owned property on the eastside to see what qualifies for grant funding.

Motion: Adopt Resolution No. CC 2022-020.

Moved by Austin Bishop, seconded by Laura Bettencourt.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

7.4) Adopt Resolution No. CC 2022-025, a Resolution of the City Council of the City of Palmdale authorizing California Choice Energy Authority (CalChoice) to enter into a long -term renewable energy agreement with Powerex Corporation on behalf of Energy for Palmdale’s Independent Choice (EPIC). (Staff Reference:

Finance Manager: Kang, Presented by: Energy Resource Manager Salt) Councilmember Bettencourt pulled this item for discussion.

Motion: Adopt Resolution No. CC 2022-025.

Moved by Juan Carrillo, seconded by Richard J. Loa.

Vote: Motion carried (3-1)

CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 4
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop.

No: Laura Bettencourt.

Absent: Steven Hofbauer.

7.5) Adopt Resolution No. CC 2022-030, a Resolution of the City Council of the City of Palmdale Authoriz ing Remote Teleconference Meeting of the City Council and All City Subordinate Bodies for the Period of March 24, 2022 - April 23, 2022. (Staff Reference: City Attorney Beck)

Motion: Approve items listed on the Consent Calendar except for

7.3 and 7.4.

Moved by Juan Carrillo, seconded by Austin Bishop.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

8) APPOINTMENTS

8.1) Approve District 4 Alternate Member nomination for appointment to the Measure AV Oversight Committee. (Staff Reference: City Clerk Smith) Motion: Appoint Glenn Flood.

Moved by Juan Carrillo, seconded by Laura Bettencourt.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

8.2) Approve nominations for appointment of three Committee Members and one Alternate Committee Member to the Human Rights Advisory Committee. (Staff Reference: City Clerk Smith)
Motion: Appoint Darby Edwards for District 2.

Moved by Richard J. Loa, seconded by Laura Bettencourt.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

Motion: Appoint Rudolpho Perez for District 4.

Moved by Austin Bishop, seconded by Juan
Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 5
Motion: Appoint Shushank Pretrosyan District 3.

Moved by Laura Bettencourt, seconded by Juan Carrillo.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

A motion was made by Councilmember Carrillo to appoint Glenn Abram, the motion died for lack of a second.

Motion: Appoint Stephanie Rodgers as an alternate.

Moved by Richard J. Loa, seconded by Laura
Bettencourt.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

Absent: Steven Hofbauer.

9) JOINT NEW BUSINESS CC/SA/HA/IDA/PAA/PCA/PFA

9.1) Review and approve the FY 2022 mid -year budget adjustment, and adopt Resolution No. CC 2022 -032, A Resolution of the City Council of the City of Palmdale amending the City’s Classification and Pay Plan for Parks and Recreation Unbenefited Positions. (Staff Reference: Finance Manager Kang)

Assistant Finance Manager Samson provided a detailed overview of the FY 2022 mid-year budget adjustments. Councilmember Bettencourt inquired regarding the increase in funds for Parks and Recreation part time positions, and Director of Parks and Recreation Smith stated the pay scale was adjusted to align with similar paying positions. Councilmember Carrillo inquired about the graffiti truck and whether it would require an operator/employee. Interim City Manager Perez confirmed that an operator/employee would not be required. Discussion ensued.

Councilmember Bettencourt directed staff to provide an online report indicating all expenditures associated with the Measure AV funds.

The following individuals provided public comment:

Jason Zink commented regarding a homeless shelter in the City of Palmdale, Measure AV funds, waiving lifeguard lesson fees, and senior citizen subsidies.

Eugene Hernandez inquired regarding the mission statement of the Human Rights Advisory Committee.

Motion: Adopt Resolution No. CC 2022-032.

Moved by Austin Bishop, seconded by Christina Fraga-Saenz.

Vote: Motion carried (6-0)

CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 6
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt, Christina Fraga-Saenz, Phil Denny.

Absent: Steven Hofbauer.

10) PUBLIC HEARING

10.1) Public Hearing and Review of Proposed Ordinance No. 1579 for adoption. (Staff Reference: City Manager - City Clerk Division)

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALMDALE

ADOPTING A MAP DESCRIBING VOTING DISTRICT BOUNDARIES AND AMENDING CHAPTER 4.10 OF TITLE 4 OF THE PALMDALE MUNICIPAL CODE

Staff Recommendation: Adopt Ordinance No. 1579
Motion: Move to remove Item 10.1 from the agenda.

Moved by Juan Carrillo, seconded by Laura
Bettencourt.

Vote: Motion carried (4-1)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

No: Steven Hofbauer.

10.2) Public hearing to review and consider several proposed five (5) district draft maps provided by Compass D emographics, Inc. and discuss the potential move to five (5) council districts and rotating mayor.

Interim City Manager Perez provided a detailed overview of the staff report.

Mayor Pro Tem Loa opened the Public Hearing.

The following individuals provided public input:

Dave Bowman expressed his opinion of the fifth district and the process related to rotating the Mayor.

Kevin Shenkman commented in support of the five-districts map and confirmed the timeline for the adoption of the ordinance.

Vladimir Gomez spoke in favor of having five districts and equal representation.

V. Jesse Smith encouraged Council to approve and support the five-district map, which would support diversity in the community.

Jason Zink commented on the politics in the Antelope Valley and in opposition to the rotating mayor Item No. 10.2.

Ruth Sanchez voiced concerns regarding Latino representation.

CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 7

Nicole Teaque spoke regarding equality.

Maria Mainella commented regarding equity.

Marcos Alvarez commented on representation and inclusivity and encouraged Council to adopt five districts.

Xavier Flores encouraged Council to move forward with the adoption of a five- district map.

Patricia Salazar provided comments in support of adopting five Council districts.

Carmen Molina commented regarding equality.

Nancy, Dayanna Noguera, Felix Menendez spoke regarding change and representation of Latinos.

Oscar commented in support of the five-districts maps.

A motion was made and carried unanimously to close the Public Hearing.

Dave Ely, Compass Demographics, provided a brief summary of the five - districts maps that were drawn. Councilmember Carrillo asked which of the five options presented was the closest to the ten percent deviation. Mr. Ely stated that all the maps provided are approximately four (4) percent deviation.

Discussion ensued.

Mayor Hofbauer made a motion to prepare a ballot measure as a Council i initiative, to be placed on the ballot of the next General Election for the Cit y of Palmdale The motion failed due to the lack of a second.

Motion: Move forward with map #2 with a rotational mayor at the will of the Council on a one-year basis.

Moved by Juan Carrillo, seconded by Laura Bettencourt.

Vote: Motion carried (4-1)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

No: Steven Hofbauer.

CC/SA/HA/IDA/PAA/PCA/PFA Minutes 03/16/2022 8
11) ADJOURN
Mayor Pro Tem Loa adjourned the meeting at 10:35 p.m. in honor of Mr. Avrum Harris.

PASSED, APPROVED, and ADOPTED this 4th day of May 2022.

Steven D. Hofbauer, Mayor

ATTEST:

Shanae S. Smith, City Clerk

CC/SA/HA Minutes 04/06/2022 1

MINUTES

CITY COUNCIL/SUCCESSOR AGENCY/HOUSING AUTHORITY

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
APRIL 6, 2022

www.cityofpalmdale.org

5:00 P.M.
1) MAYOR TO CALL MEETINGS TO ORDER
Mayor Hofbauer called the meeting to order at 5:00 p.m.

2) ROLL CALL MAYOR HOFBAUER, MAYOR PRO TEM LOA, COUNCILMEMBERS

CARRILLO, BISHOP, BETTENCOURT
PRESENT: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

ABSENT: None.
3) PUBLIC COMMENTS
Dave Bowman commented regarding the SALVA event and a public records request.

Xavier Flores commented on the SALVA event and the performance evaluation of City Attorney Beck.

Lisa Craft spoke in opposition to the Ritter Ranch project.

Marcos Alvarez announced a vote of no confidence for City Attorney Beck.

Rosie Mainella announced that a 5K run was scheduled for domestic violence.

Vladimir Gomez provided Council with clarification on the SALVA event.

4) PRESENTATION BY CITY ATTORNEY
City Attorney Beck confirmed that the items would be heard as listed.

4.1) CONFERENCE WITH LABOR NEGOTIATORS
City representatives: Steve Hofbauer, Mayor
Unrepresented employee: Ronda Perez, Interim City Manager

This Closed Session is being held pursuant to the authority of California Government Code Section 54957.6.

4.2) CONFERENCE WITH LABOR NEGOTIATORS
City representatives: Steve Hofbauer, Mayor
Unrepresented employee: Christopher Beck, City Attorney

CC/SA/HA Minutes 04/06/2022 2
This Closed Session is being held pursuant to the authority of California Government Code Section 54957.6.

4.3) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure tolitigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Patricia Nevarez
City Claim No.: 2022-005
Date Filed: 1/27/22
Date of Loss: Various

4.4) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Shanae Smith
City Claim No.: 2022-005
Date Filed: 1/10/22
Date of Loss: Various

4.5) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Maithi Ricci
City Claim No.: 2021-047
Date Filed: 09/27/21
Date of Loss: 09/22/21

4.6) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION The existing facts and circumstances that constitute a significant exposure to litigation are detailed in the following claim received by the City, which is available for public inspection pursuant to Government Code Section 54957.5:

Claimant: Michael Behen
City Claim No.: 2022-008
Date Filed: 02/09/22
Date of Loss: Various

4.7) CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED
LITIGATION Initiation of litigation pursuant to paragraph (4) of subdivision (d) of Section 54956.9 of the California Government Code. Number of Cases: One.

4.8) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED
LITIGATION Significant exposure to litigation pursuant to paragraph (2) of subdivision (d) of Section 54956.9: One case.

A point has been reached where, in the opinion of the City on the advice of the City Attorney, based on existing facts and circumstances, there is a significant exposure to litigation against the City. The City believes that the facts and circumstances that might result i n litigation against the City are not yet known to a potential plaintiff or plaintiffs.

CC/SA/HA Minutes 04/06/2022 3
5) ANNOUNCEMENT BY CITY ATTORNEY
All Councilmembers were present and able to participate in all items.

Item 4.1 Conference with Labor Negotiators – Council conducted labor negotiations and provided unanimous direction to staff, up to and including the items in open session this evening. There was no further reportable action.

Item 4.2 Conference with Labor Negotiators – Council conducted labor negotiations and directed this item back at the May meeting. There was no further reportable action.

Item 4.3 Conference with Legal Counsel – Anticipated Litigation: Council was provided an update on this matter and provided unanimous direction to staff. There was no further reportable action.

Item 4.4 Conference with Legal Counsel – Anticipated Litigation: Council was provided an update on this matter and provided unanimous direction to staff. There was no further reportable action.

Item 4.5 Conference with Legal Counsel – Existing Litigation: Ricci v. City of Palmdale – Council was provided an update o n this matter. There was no further reportable action.

Item 4.6 Conference with Legal Counsel – Anticipated Litigation: Council was provided an update on this matter and provided unanimous direction to staff. There was no further reportable action.

Item 4.7 Conference with Legal Counsel – Anticipated Litigation/Initiation: Council was provided an update on this matter and provided direction to staff. There was no further reportable action.

Item 4.8 Conference with Legal Counsel – Anticipated Litigation/E xposure: Council was provided an update on this matter. There was no further reportable action.

6) ADJOURN CLOSED SESSION MEETING
Mayor Hofbauer called the meeting to order at 7:08 p.m.

Motion: Move to continue Ritter Ranch Item 15.1 and 15.2 to April 20, 2022 meeting.

Moved by Juan Carrillo, seconded by Steven Hofbauer.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

7) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE IN HONOR OF OUR TROOPS
8) ROLL CALL MAYOR/CHAIR HOFBAUER, MAYOR PRO TEM/CHAIR/VICE CHAIR

LOA, COUNCILMEMBERS/DIRECTORS/COMMISSIONERS CARRILLO,

BISHOP, BETTENCOURT COMMISSIONERS FRAGA-SAENZ, DENNY
PRESENT: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt, Christina Fraga-Saenz, and Phil Denny.

ABSENT: None.

CC/SA/HA Minutes 04/06/2022 4
9) PRESENTATIONS

9.1) Mayor Hofbauer presented a cute critter available for adoption at the Palmdale Animal Care Center.

9.2) Mayor Hofbauer presented a Proclamation to Rosie Mainella declaring April as Child Abuse Awareness and Prevention Month in the City of Palmdale.

9.3) Mayor Hofbauer presented Certificates of Recognition to the Antelope Valley Futbol Club (AVFC) for winning the 2022 Cal South State Cup.

9.4) Mayor Hofbauer presented a Proclamation to Chancela Al-Mansour, Housing Rights Center declaring April 2022 as Fair Housing Month in the City of Palmdale.

9.5) Mayor Hofbauer presented William Warford with a Commendation and Plaque for 38 years of service to the Antelope Valley Press.
10) WAIVER OF FULL READING OF RESOLUTION(S) and ORDINANCE(S) Motion: Move to waive full reading of the Resolution (s) and/or Ordinance(s) to be considered and voted on at this meeting.

Moved by Richard J. Loa, seconded by Juan Carrillo.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

11) PUBLIC COMMENTS
The following individuals provided public comments:

Marcos Alvarez expressed concerns regarding Homeland Security showing up at a SALVA event.

Dave Bowman commented on the authority of the Mayor's office, five districts, and public funding of elections.

Yvette Mullen requested that her application receive equal opportunity to host an event at the Palmdale Amphitheater.

Eugene Hernandez suggested a prime desert woodland area in the City of Palmdale.

Kendra Kuhnhofer spoke in opposition to a signal on Avenue N. and 60th Street West.

Nicole McMillan representing the AV Wellbeing Coalition reported on a business incubator space.

Ruth Sanchez reported that her food ban k provided meals for one hundred twenty - nine families. Ms. Sanchez also requested assistance to provide housing to homeless women.

Both Rosie Mainella and Pueblo Y Salud commented on the language for the smoking ban was not captured appropriately and requested the Ordinance be updated to reflect what was intended.

CC/SA/HA Minutes 04/06/2022 5
Magdy and Christine Hanna announced the opening of the Regency Palm Senior Living facility on Orchard View Place and Avenue Q. and invited Council to do a private walk through. The also requested help regarding a storm drain.

Angela Smith, Executive Director for the Regency Palm Senior Living facility introduced herself and thanked the City Council, Code Enforcement and Maintenance departments for cleaning the streets.

Steve Hill expressed concerns regarding a situation he experienced with the Los Angeles County Sheriff's Department and requested assistance from City officials.

12) HOUSING AUTHORITY CONSENT CALENDAR

12.1) Approve the License Agreement between Music and Kids and Housing Authority of the City of Palmdale for the Management of the Gabriel’s House Program. (Staff Reference: Director of Neighborhood Services Miller - Presented by Housing Manager Reyes)

12.2) Approve the minutes from previous meetings. (Staff Reference: Authority Secretary Smith)
Motion: Loa/Fraga-Saenz
Approve all items listed on the Housing Authority Consent Calendar.

Moved by Richard J. Loa, seconded by Christina Fraga Saenz.

Vote: Motion carried (7-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt, Christina Fraga-Saenz, Phil Denny.

Eugene Hernandez expressed concerns regarding potential evictions, and requested rent control in the City of Palmdale.

Commissioner Fraga-Saenz announced the following:

Seasons of Service will be held on April 30, 2022 meeting up at 70th Street and Avenue S from 8:00am - 11:00am
SAVES Stamp Out Hunger will be held on May 12, 2022 from 11:00 am - 3:00 pm
Seasons of Service will be held on May 28, 2022 meeting up at 70th Street and Avenue R from 8:00am - 11:00am

13) ADJOURN HOUSING AUTHORITY
Mayor Hofbauer adjourned the Housing Authority meeting at 7:50 p.m.

14) CONSENT CALENDAR

14.1) Receive and file the monthly investment activity reports for February 2022. (Staff Reference: Finance Manager Kang)

14.2) Approve Second Amendment to professional services Agreement with Robert Half International, Inc. for an additional amount of $75,000 not to exceed amount of $125,000 for the term through June 30,2023 and approve the additional budget appropriation for $75,000 in the General Fund. (Staff Reference: Finance Manager Kang)

CC/SA/HA Minutes 04/06/2022 6

14.3) Approve the Measure AV Reserve Policy. (Staff Reference: Finance Manager Kang)

14.4) Adopt Resolution No. CC 2022 -044, A Resolution of the City Council of the City of Palmdale Requesting a New Full -Time Position and Amending the City’s Classification and Pay Plan for General Positions. (Staff Reference:

Human Resources Manager Nevarez)

14.5) Approve Agreement No. A -7865 with Innovative Concert Lighting, Inc. to provide lighting production and equipment services for the Palmdale Amphitheater, in an amount not to exceed $117,000 for a three year term with two one -year options. (Staff Reference: Director of Parks and Recreation Smith)

14.6) Approve Agreement No. A -7866 with Pacific West Sound, Inc. to provide sound production and event equipment services for the Palmdale Amphitheater, in an amount not to exceed $242,000 for a three year term with two one -year options. (Staff Reference: Direct or of Parks and Recreation Smith).

14.7) Approve Third Amendment to the Agreement with Interwest Consulting Group for an amount, not to exceed $100,000. (Staff Reference: Director of Economic and Community Development Garibay)
Economic and Community Development - Building and Safety Division

14.8) Approve 4th Amendment to the Agreement with Bureau Veritas North America for an additional amount not to exceed amount of $120,000. (Staff Reference: Director of Economic and Community Development Garibay)

14.9) Approve the agreement with Karma Rescue, Inc. to administer a low or no cost spay and neuter program for Palmdale residents. (Staff Reference: Director of Neighborhood Services Miller - Presented by Public Safety Supervisor German)
Councilmember Bishop pulled this item for discussion. Council thanked staff for staying consistent and accomplishing this goal. Interim City Manager Perez stated this was accomplished by Measure AV funds.

Motion: Approve the agreement with Karma Rescue, Inc. to administer a low or no cost spay and neuter program for Palmdale residents.

Moved by Austin Bishop, seconded by Richard J. Loa.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

14.10) Notice of Completion - Accept Public Improvements for Carmax located at northeast corner of 5th Street West and Technology Drive. (Staff Reference:

Director of Public Works Heffernan)
Councilmember Bishop pulled this item for discussion and recused himself.

Motion: Accept Public Improvements for Carmax located at northeast corner of 5th Street West and Technology Drive.

Moved by Richard J. Loa, seconded by Juan Carrillo.

CC/SA/HA Minutes 04/06/2022 7

Vote: Motion carried (4-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Laura Bettencourt.

14.11) Award Construction Contract with Alfaro Communications Construction, Inc. for PN 670, Palmdale Blvd. and 15th St. East Intersection Improvement Project, in the amount of $648,250.60, for a term of 100 calendar days. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director Works Glidden)

14.12) Notice of Completion - Accept Completed Project with America Landscape Inc. for PN 758, Avenue S LMD Landscape Enhancement. (Staff Reference:

Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

14.13) Award Construction Agreement with ACCO Engineered Systems for PN 759, Palmdale Playhouse HVAC Replacement Phase 2, in the amount of $369,007.49, for a term of 7 months from the date of notice to proceed. (Staff Reference: Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

14.14) Approve Amendment No. 3 for PN 795, Sam Yellen Park, Phase II, with KTUA in the amount of $182,665. (Staff Reference: Dire ctor of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden) Councilmember Carrillo pulled this item for discussion. Deputy Director of Public Works Glidden provided a brief overview of the staff report and recommended that the amendment be approved with Public Works being able to revisit and bring back to Council again.

Motion: Approve Amendment No. 3 for PN 795, Sam Yellen Park, Phase II, with KTUA in the amount of $182,665 with the provision that further discussion and explo ration occur with Councilmember Carrillo, staff, and interested parties. Moved by Steven Hofbauer, seconded by Juan Carrillo.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

14.15) Award Construction Agreement with New Art Construction, Inc., for PN 837, IT Server Room Uninterruptable Power Supply, located at 38300 Sierra Highway, in the amount of $208,000 for a term of 18 weeks. (Staff Reference:

Director of Public Works Heffernan - Presented by Deputy Director of Public Works Glidden)

14.16) Adopt Resolution No. CC 2022 -028, a Resolution of the City Council of the City of Palmdale, approving Joint Resolution of the Board of Supervisors of the County of Los Angeles, the Board of Directors of the Antelope Valley Cemetery District, the Board of Trustees of the Antelope Valley Mosquito and Vector Control District, the Board of Directors of County Sanitation District No. 14 of Los Angeles County, the Board of Directors of Antelope Valley Resource Conservation District, the City Council of the City of Palmdale, and the Board of Directors of the Antelope Valley -East Kern Water Agency approving and accepting the negotiated exchange of property tax revenues CC/SA/HA Minutes 04/06/2022 8
resulting from annexation of property designated as Annexation 40-153 (34- 44), local agency Formation Commission Designation 2021 -02, to the Los Angeles County Waterworks District No. 40, Antelope Valley. (Staff Reference: Director of Public Works Heffernan)

14.17) Adopt Resolution No. CC 2022 -023, a Resolution of the City Council of the City of Palmdale approving the application for Local Streets and Roads Funds authorized under Article 8 of the Transportation Development Act. (Staff Reference: Director of Public Wo rks Heffernan - Presented by Deputy Director of Public Works Glidden)

14.18) Approve Final Tract Map No. 60431 -01 (located at the southwest corner of Avenue M -8 and 70th Street West). (Staff Reference: Director of Public Works Heffernan)

14.19) Approve the minutes from the previous meetings. (Staff Reference: City Clerk/Agency Secretary Smith)

CC - February 16, 2022
CC/SA - March 2, 2022
CC - March 7, 2022

Motion: Approve all items on the Consent Calendar with the exception of 14.9,

14.10, and 14.14.

Moved by Richard J. Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

15) PUBLIC HEARING

15.1) Public Hearing and review of proposed Resolution No. CC 2022 -031 for adoption. (Staff Reference: Director of Economic and Community Development Luis Garibay - Presented by Eric Norris)

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE DENYING APPEAL 22 -001 AND UPHOLDING THE PLANNING
COMMISSION'S APPROVAL OF CONDITIONAL USE PERMIT 22 -001 FOR THE IMPLEMENTATION OF PLANNED DEVELOPMENT DOCUMENT 21-
001 AND VESTING TENTATIVE TRACT MAPS 51604, 51605, 51606, 51607, 52093, and 52116

15.2) Adopt Resolution No. CC 2022-029, a Resolution of the City Council of the City of Palmdale approving Interim Agreement associated with Ritter Ranch Master Planned Community and Community Facilities District No. 93-1 (Ritter Ranch) and actions referenced to therein. (Staff Reference: Director of Public Works Heffernan)

15.3) Public Hearing and Review of Proposed Ordinance No. 1579 for adoption. (Staff Reference: Interim City Manager Perez) ORDINANCE NO. 1579, AN

ORDINANCE OF THE CITY COUNCIL OF THE CITY OF PALMDALE , CALIFORNIA, TO ENSURE PALMDALE’S ELECTIONS COMPLY WITH THE CALIFORNIA VOTING RIGHTS ACT; AMENDING SECTIONS 2.080.10,

2.08.020, 2.08.030, 2.08.060, 4.10.010, 4.10.020, 4.11.010 and CC/SA/HA Minutes 04/06/2022 9

4.11.020 OF THE PALMDALE MUNICIPAL CODE, ADDING SECTION

4.10.030 TO THE PALMDALE MUNICIPAL CODE, REPEALING
SUBDIVISIONS (B) AND (C)(2) OF SECTION 2.08.025 OF THE PALMDALE

MUNICIPAL CODE, ESTABLISHING DISTRICT -BASED ELECTIONS,

DEFINING DISTRICT BOUNDARIES, AND SCHEDULING DISTRICT

ELECTIONS
Interim City Manager Perez provided a brief overview of the staff report.

Mayor Hofbauer opened the Public Hearing.

The following individuals provided public comments.

Kevin Shenkman applauded the City Council and City Manager for expeditiously accomplishing an excellent district map and moving the City of Palmdale forward.

David Bowman expressed his views on the adoption of the maps and rotating mayor.

Michael Rives encouraged Council to submit the matter of the fifth district and a rotating mayor to the voters.

Debbie Kosel and Amanda Palmer commented in favor of the constituents having the right to vote for a mayor.

Xavier Flores, ALVA, shared his views on the redistricting process.

Ruth Sanchez commented regarding fair representation of all Palmdale citizens.

A motion was made and carried unanimously to close the Public Hearing.

A motion was made and carried unanimously to introduce Ordinance No. 1579. Motion: Adopt Ordinance No. 1579.

Moved by Juan Carrillo, seconded by Laura Bettencourt.

Vote: Motion carried (4-1)
Yes: Richard J. Loa, Juan Carrillo, Austin Bishop, Laura Bettencourt.

No: Steven Hofbauer.

16) NEW BUSINESS

16.1) Approve the First Amendment to Employment Agreement Between the City of Palmdale and Interim City Manager, Ronda Perez. (Staff Reference: Human Resources Manager Nevarez)
Motion: Approve the First Amendment to Employment Agreement with Interim City Manager Perez with proposed additional language to paragraph 1.

Moved by Richard J. Loa, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Steven Hofbauer, Richard J. Loa, Juan Carrillo, Austin Bishop, Laura CC/SA/HA Minutes 04/06/2022 10
Bettencourt.

16.2) Approve the first amendment to employment agreement No. A-7065 between the City of Palmdale and Christopher Beck, City Attorney (Staff Reference:

Human Resources Manager Nevarez)
Item 16.2 was tabled by Council.

17) INFORMATIONAL REPORT FROM MAYOR AND / OR COUNCILMEMBERS ON

THEIR VARIOUS COMMITTEE MEMBERSHIPS AND MEETINGS ATTENDED AT

PUBLIC EXPENSE

17.1) COMMITTEE MEMBERSHIPS.
• ANTELOPE VALLEY AIR QUALITY MANAGEMENT DISTRICT -
Councilmember Bishop reported the AVAQMD is making some changes to the alternative fuel program.
• ANTELOPE VALLEY TRANSIT AUTHORITY - Mayor Pro Tem Loa attended a celebration on March 16, 2022 recognizing AVTA for being the first all electric zero emissions transit agency in North America. • LOS ANGELES COUNTY SANITATION DISTRICT - Mayor Hofbauer attended the Sanitation District meeting.
• SOUTHERN CALIFORNIA ASSOCIATION OF GOVERNMENTS
REGIONAL COUNCIL - Mayor Pro Tem Loa attended the SCAG meeting on April 7th and reported on the 2023 Active Transportation Program Guidelines and call for projects. Mike Behen reported on the $650M grant program and stated applications are due by June 15, 2023.

Mayor Pro Tem Loa announced he attended the Antelope Valley Hispanic Chamber 25th Anniversary Gala on March 4th, 2022.

Councilmember Carrillo reported attending the grand opening for Dutch Bros coffee shop.

Councilmember Bishop reported meeting with the Anaverde community regarding illegal dumping and semi-truck parking.

Councilmember Bettencourt announced she attended the Vet 4 Veterans, Homes 4 Families Builder's Ball, Welcome Home Vets for Veterans, and the You Matter event.

Mayor Hofbauer attended the National Defense Cities meeting.

17.2) MEETINGS ATTENDED AT PUBLIC EXPENSE
18) CITY MANAGER’S REPORT
Interim City Manager Perez stated City staff is working very hard to deliver p rojects.

She also announced the Children's Spring Fest and Egg Hunt that will take place at Marie Kerr Park on April 13th.

19) CITY COUNCIL REQUESTS FOR NEW AGENDA ITEMS

CC/SA/HA Minutes 04/06/2022 11
20) Adjournment
Mayor Hofbauer adjourned the meeting at 10:02 p.m., in honor of his mother, Marilyn Hofbauer, to April 20, 2022, at 7:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

PASSED, APPROVED, and ADOPTED this 1st day of June 2022.

Steven D. Hofbauer, Mayor

ATTEST;

Shanae S. Smith, City Clerk
City Council Staff Report
DATE: JUNE 1, 2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER’S OFFICE – FINANCE DIVISION
DISTRICT: ALL
SUBJECT: RECEIVE AND FILE THE MONTHLY INVESTMENT ACTIVITY REPORT S FOR APRIL 2022.

ISSUE
Receive and file the monthly investment activity reports for April 2022.

RECOMMENDATION
Staff recommends that the City Council accept the monthly investment activity report for City of Palmdale and Successor Agency for April 2022.

BACKGROUND
Pursuant to Section 16 of the City of Palmdale and Successor Agency Investment Policy, the City Treasurer shall prepare and present monthly and quarterly reports on investments to the City Manager/Executive Director and the City Council/Direc tors.

The reports shall detail the type of investment, name of the issuer, purchase date, date of maturity, amount of deposit, and rate of interest. This information shall be provided for all City and Successor Agency pooled investments, as well as for Cer tificates of Participation, Revenue Bonds, Tax Allocation Bonds, Assessment Districts and Community Facilities District accounts which are managed by outside Fiscal Agents.

The monthly and quarterly reports provide a synopsis of the investment activity for the City of Palmdale and Successor Agency. The report s provide information on assets, allocations, average maturities, yields, and book valuations.

The interest rates presented are the most current rates available as of the date of this report.

The market values presented for pooled City and Successor Agency investments are based on closing prices for the related investment as of the date of this report. This information was obtained from the Wall Street Journal, Bloomberg Financial Markets, Capital Market Finances, or other reliable source of market prices.

Report to Mayor and City Council
Re: Monthly Report on Investments
June 1, 2022

DISCUSSION
Compliance with Investment Policy
For April, the invested portfolio amount for the City of Palmdale totaled $259,126,975, an increase of $20,072,341 from the previous month, and an increase of $75,056,444 in comparison to last year. The increase in overall portfolio balance from the previous month is a result of earned interest, and a $20,000,000 deposit made to one of the LAIF accounts from the General Fund to increase our investment portfolio.

The par value of Successor Agency’s portfolio as of April was $11,846,392. The balance decreased by $14,668 from the last month due to operating expenditures paid out during the month.

All investments meet criteria appropriate to Section 8 of the Investment Policy. The portfolios are based on a combination of various investments, including CDs, Corporate Notes, U.S. Treasury Securities and Government Agency Paper, each adhering to portfolio percentage limitations.

The Finance Division is the custodian for the City and Successor Agency’s investment portfolio and follows the three main principles of both entity’s investment policy to 1) Investment in financial instruments that mitigate the risk of monetary losses stemming from market fluctuations; 2) Establish and maintain a portfolio that has sufficient liquidity to allow the City and Successor Agency to meet all anticipated cash requirements; and 3) Seek out investment instruments that provide a competitive market rate of return.

Liquidity
One core approach the Finance Division focuses on, is providing liquidity to measure up to the City and Successor Agency’s operational requirements. Thus, the Finance Department is currently investing in two pooled funds, LAIF and CAMP. These are intended for the daily operational activities, used for economic uncertainties and maintenance needs. The pooled funds provide a higher liquidity ratio to ensure the City and Successor Agency meet cash flow requirements.

Total LAIF balance for the City of Palmdale at the end of April is $85,077,206, an increase of $20,051,238, compared to the prior month. The increase in balance is due to interest received during the month, in addition to a $20,000,000 transfer into LAIF from the General Fund during the current month.

Successor Agency LAIF balance at the end of April was $3,700,688, a slight change from the prior month due to interest earned.

Report to Mayor and City Council
Re: Monthly Report on Investments
June 1, 2022

CAMP’s balance for City of Palmdale is $248,914 compared to March’s balance of $248,812. The slight increase is due to interest received during the month.

The interest rates presented are the most current rates available as of the date of this report. As of April 30, 2022, the interest rates for LAIF and CAMP investments were at .523 percent and .50 percent, respectively. By comparison, the LAIF and CAMP interest rates at the end of February were at .365 percent and .25 percent. Both rates have slightly increased within this month. This time last year, LAIF and CAMP rates were at 0.339 percent and 0.06, respectively.

The chart above shows both the Local Agency Investment Fund and California Asset Management Program’s average monthly yields beginning July 2021 through April 2022, the graph depicts the decline last year and slow incline during the current year.

We anticipate the rates to increase in the upcoming months, considering the current state of the economy. Overall, LAIF shows better performance than CAMP in interest rates. The difference between the performance of the two funds is partly due to the varying pool characteristics. CAMP’s portfolio composition is much more subject to market volatility, resulting in performance variation.

Diversity
The Finance Division aims to diversify the investment portfolios to avoid incurring unreasonable and avoidable risks regarding specific security types or individual financial institutions.

City of Palmdale and Successor Agency’s investment portfolios remain strongly diversified. The monthly and quarterly reports include all investments held by both entities and current book values as of April 30, 2022.

0.22% 0.22% 0.21% 0.20% 0.20% 0.21% 0.23%

0.28%

0.37%

0.52%

0.05% 0.05% 0.05% 0.05% 0.05% 0.05% 0.05% 0.06%

0.25%

0.50%

0.00%

0.10%

0.20%

0.30%

0.40%

0.50%

0.60%
Jul Aug Q1 Sep Oct Nov Q2 Dec Jan Feb Q3 Mar
Pooled Investments Monthly Yields

LAIF CAMP
Report to Mayor and City Council
Re: Monthly Report on Investments
June 1, 2022

It is anticipated that both the City of Palmdale and Successor Agency will have sufficient moneys to meet its expenditure requirements for the next 6 months as we continue to monitor any financial impact due to the Coronavirus pandemic.

Attached are summaries of the investments on the City of Palmdale and Successor Agency’s books as of April 30, 2022.

FISCAL IMPACT
There is no fiscal impact associated with the recommended actions for this report.

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: Gohar Avetisyan, Financial Analyst
Certified as to availability of Funds: Janelle Samson, Director of Finance Approved by: Ronda Perez, Acting City Manager
Approved as to form: Christopher Beck, City Attorney

ATTACHMENTS

1. Monthly Report on City of Palmdale Investments

2. Monthly Report on Successor Agency Investments

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022

PURCHASE MATURITY ACCOUNT/ FDIC INTEREST PAR PURCHASE INVESTED DATE DATE FUND INSTITUTION Number RATE AMOUNT AMOUNT AMOUNT U.S. TREASURY SECURITIES Yield
05-31-19 04-30-24 CITY 9128286R6 U.S. Treasury Note 2.03 5,000,000.00 5,051,650.00 5,256,640.00 01-19-21 05-31-23 CITY 9128284S6 U.S. Treasury Note 2.75 2,815,000.00 2,985,994.41 2,950,035.55 03-19-21 12-31-25 CITY 9128285T3 U.S. Treasury Note 2.63 3,000,000.00 3,260,634.36 3,244,110.00 05-11-21 02-28-26 CITY 9128286F2 U.S. Treasury Note 0.66 3,000,000.00 3,261,331.50 3,231,330.00 05-11-21 12-31-24 CITY 9128283P3 U.S. Treasury Note 0.40 3,000,000.00 3,200,040.56 3,175,080.00 06-04-21 12-31-22 CITY 912828N30 U.S. Treasury Note 0.05 3,000,000.00 3,097,665.56 3,087,420.00 06-04-21 12-31-23 CITY 912828V23 U.S. Treasury Note 0.20 4,000,000.00 4,210,026.50 4,188,600.00 07-12-21 12-31-23 CITY 9128285U0 U.S. Treasury Note 2.63 5,000,000.00 5,294,239.83 5,294,239.83 07-12-21 12-31-25 CITY 9128285T3 U.S. Treasury Note 2.63 5,000,000.00 5,456,238.24 5,456,238.24 07-12-21 12-31-23 CITY 912828V23 U.S. Treasury Note 2.25 5,000,000.00 5,247,829.98 5,247,829.98 12-17-21 12-15-23 CITY 91282CBA8 U.S. Treasury Note 0.56 10,000,000.00 9,913,130.25 9,913,198.93 12-17-21 12-15-24 CITY 91282CDN8 U.S. Treasury Note (UBS) 0.85 10,000,000.00 10,045,505.25 10,046,054.70 12-22-21 12-15-23 CITY 91282CBA8 U.S. Treasury Note 0.56 5,000,000.00 4,957,270.88 4,957,391.07 12-22-21 12-15-24 CITY 91282CDN8 U.S. Treasury Note 0.88 5,000,000.00 5,018,208.38 5,019,169.92 12-20-21 12-15-24 CITY 91282CDN8 U.S. Treasury Note (Stifel) 1.00 5,000,000.00 5,017,187.50 5,018,011.68 TOTAL U.S. TREASURY SECURITIES 73,815,000.00$ 76,016,953.20$ 76,085,349.90$

GOVERNMENT AGENCY PAPER
06-05-19 06-05-23 CITY 3133EKPT7 Fed Farm Credit Bk 2.13 5,000,000.00 5,008,600.00 5,178,913.05 06-10-20 06-16-25 CITY 3133ELK37 Federal Farm Credit 0.78 5,000,000.00 5,000,000.00 5,000,332.40 08-07-20 05-06-24 CITY 3133EL2X1 Federal Farm Credit 0.42 2,000,000.00 2,000,000.00 1,985,613.10 08-27-20 11-27-24 CITY 3134GWNG7 Freddie Mac Domestic 0.50 2,000,000.00 2,000,000.00 1,998,606.02 04-01-21 04-01-25 CITY 3133EMUP5 Fed Farm Credit 0.71 5,000,000.00 5,000,000.00 5,001,585.95 05-11-21 09-04-25 CITY 3133EJYM5 FFCB Bond 0.59 1,000,000.00 1,103,275.25 1,094,660.00 05-11-21 09-04-25 CITY 3133EJYM5 FFCB Bond 0.57 0.57 2,000,000.00 2,208,460.00 2,189,320.00 06-04-21 11-07-25 CITY 3135G06G3 Fannie Mae 0.55 3,000,000.00 2,993,675.25 2,967,390.00 06-04-21 08-01-24 CITY 3130AMHH8 FHLB NOTE 0.41 4,000,000.00 4,000,000.00 3,979,555.16 06-07-21 06-07-24 CITY 3130AMQR6 FHLB NOTE 0.35 3,000,000.00 3,000,000.00 2,986,755.36 06-30-21 12-30-25 CITY 3130AMRQ7 FHLB NOTE 0.88 3,000,000.00 3,000,000.00 2,981,324.28 07-29-21 04-29-26 CITY 3130AN5C0 FHLB NOTE 1.05 4,000,000.00 4,010,455.13 4,010,455.13 12-17-21 11-12-25 CITY 3134GXBM5 FHLMC Note 1.15 1,150,000.00 1,125,785.50 1,126,456.33 12-17-21 12-30-24 CITY 3130AQDY6 FHLB 1.00 6,750,000.00 6,750,000.00 6,750,000.00 12-17-21 06-23-25 CITY 3133ENHW3 FFCB 1.17 10,000,000.00 10,000,000.00 10,000,000.00 12-20-21 07-30-25 CITY 3136G4ZP1 FANNIE MAE 0.65 3,500,000.00 3,444,175.00 3,453,085.42 12-20-21 09-24-25 CITY 3134GWUG9 FREDDIE MAC 0.57 10,000,000.00 9,806,600.00 9,820,375.00 12-21-21 12-22-26 CITY 3133ENJC5 FFCB 1.29 5,000,000.00 5,000,000.00 5,000,000.00 01-14-22 01-14-25 CITY 3130AQEA7 FHLB 1.05 7,000,000.00 7,000,000.00 7,000,000.00 c = callable
TOTAL GOVERNMENT AGENCY PAPER 82,400,000.00$ 82,451,026.13$ 82,524,427.20$

CERTIFICATES OF DEPOSIT
05-11-18 05-11-22 CITY 05580AMR2 Bmw Bank North America 35141 2.95 245,000.00 245,000.00 251,143.62 05-15-18 05-16-22 CITY 86063QAN5 Stifel Bank & Trust 57311 2.85 245,000.00 245,000.00 250,964.53 05-18-18 05-18-22 CITY 29278TBF6 Enerbank Usa 57293 2.95 245,000.00 245,000.00 251,216.88 05-31-17 05-31-22 CITY 02587CFM7 American Express Bk 35328 2.40 245,000.00 245,000.00 250,250.84 06-01-17 05-31-22 CITY 51210SMT1 Lakeside Bank 19573 2.00 245,000.00 245,026.85 249,319.60 05-10-18 05-10-23 CITY 61747MX30 Morgan Stanley Bank Na 32992 3.15 245,000.00 245,000.00 258,447.32 05-11-18 05-11-23 CITY 87164WWF1 Synchrony Bank 27314 3.15 245,000.00 245,000.00 258,465.69 05-11-18 05-11-23 CITY 17312QL23 Citibank Na 7213 3.15 245,000.00 245,000.00 258,465.69 05-15-18 05-15-23 CITY 20033AYE0 Comenity Capital Bank 57570 3.10 245,000.00 245,000.00 258,255.73 TOTAL CERTIFICATES OF DEPOSIT 2,205,000.00$ 2,205,026.85$ 2,286,529.90$

CITY OF PALMDALE INVESTMENTS

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022

CORPORATE NOTES
03-10-20 03-01-23 CITY 30231GAR3 Exxon Mobil 2.73 1,000,000.00 1,045,330.00 1,035,276.25 03-10-20 05-13-22 CITY 037833BF6 Apple Inc 2.70 1,000,000.00 1,039,820.00 1,021,372.65 03-10-20 11-03-22 CITY 594918BH6 Microsoft Corp 2.65 1,000,000.00 1,047,870.00 1,028,648.84 03-10-20 01-13-23 CITY 037833DE7 Apple Inc 2.40 1,000,000.00 1,041,800.00 1,032,294.50 03-10-20 12-14-22 CITY 92826CAC6 VISA Inc 2.80 1,500,000.00 1,572,135.00 1,549,706.22 06-10-20 04-15-23 CITY 30231GBL5 Exxon Mobil Corp 1.75 5,000,000.00 5,000,000.00 5,110,650.00 06-10-20 05-11-23 CITY 166764BV1 Chevron Corp 1.14 2,075,000.00 2,075,000.00 2,105,595.85 TOTAL CORPORATE BONDS 12,575,000.00$ 12,821,955.00$ 12,883,544.31$

STATE OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND
09-01-84 n/a CITY ACCOUNT 98-19-620 0.78 30,118,304.25 30,118,304.25 30,118,304.25 06/23/08 n/a PCA ACCOUNT 40-19-060 0.78 37,234,403.09 37,234,403.09 37,234,403.09 n/a ARPA ACCOUNT 19-19-004 0.78 17,724,498.78 17,724,498.78 17,724,498.78 TOTAL LAIF ACCOUNTS 85,077,206.12$ 85,077,206.12$ 85,077,206.12$

CAMP- CALIFORNIA ASSET MANAGEMENT PROGRAM
6080-01 n/a CITY ACCOUNT 6080-01 0.30 248,914.15 248,914.15 248,914.15 TOTAL CAMP ACCOUNTS 248,914.15$ 248,914.15$ 248,914.15$

UBS FINANCIAL SERVICES
n/a n/a CITY ACCOUNT 0.00 21,003.33 21,003.33 21,003.33 TOTAL UBS FINANCIAL SERVICES ACCOUNTS 21,003.33$ 21,003.33$ 21,003.33$ TOTAL CITY INVESTMENTS 256,342,123.60$ 258,842,084.78$ 259,126,974.91$

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022

PURCHASE MATURITY ACCOUNT INTEREST INVESTED

DATE DATE FUND NUMBER RATE AMOUNT

STATE OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND
11-20-84 n/a LIBRARY 16-19-012 0.78 12,463.81
TOTAL LIBRARY INVESTMENTS 12,463.81$

PURCHASE MATURITY ACCOUNT INTEREST INVESTED

DATE DATE FUND NUMBER RATE AMOUNT

BOND PROCEEDS
SIERRA GATEWAY COMMUNITY FACILITIES DISTRICT 91-1
Fiscal Agent: U.S. Bank National Association (fka First Trust) 05-10-95 n/a BOND 95421220 0.01 106.62
05-10-95 n/a IMPROVEMENT 95421222 0.01 154,943.59
City Held Cash(Fund 736-114000) ($255,912.67)
TOTAL SIERRA GATEWAY COMMUNITY FACILITIES DISTRICT 91-1 155,050.21$

BOND PROCEEDS
RITTER RANCH COMMUNITY FACILITIES DISTRICT 93-1
Fiscal Agent: U.S. Bank National Association (fka First Trust) 04-06-95 n/a RESERVE-SEN 95420880 n/a 0.00
04-06-95 n/a IMPV-ACQUI 95420884 0.01 2,585,454.57
04-06-95 n/a BOND 95420887 0.00 0.15
City Held Cash(Fund 738-114000) ($1,000,675.82)
TOTAL RITTER RANCH COMMUNITY FACILITIES DISTRICT 93-1 2,585,454.72$

BOND PROCEEDS
ANAVERDE COMMUNITY FACILITIES DISTRICT 2003-1
Fiscal Agent: U.S. Bank National Association (fka First Trust) 08-01-19 n/a SP TAX - B BOND 242969000 0.00 19.33
08-01-19 n/a RESERVE 242969003 0.00 722,953.75
08-01-19 n/a SP TAX - REFUNDING BOND 242969004 0.01 15,149.33 08-01-19 n/a SP TAX - REFUNDING BOND COI242969005 0.01 300.42 City Held Cash(Fund 734-114000) $900,917.97
TOTAL ANAVERDE COMMUNITY FACILITIES DISTRICT 2003-1 738,422.83$

LIBRARY INVESTMENTS

FISCAL AGENT CASH

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022

BOND PROCEEDS
2005 $7.2M COMMUNITY FACILITIES DISTRICT 05-1 (TRADE AND COMMERCE CENTER) Fiscal Agent: U.S. Bank National Association (fka First Trust) 08-02-05 n/a SPEC TRB SER A/B 790330000 0.01 0.00
08-02-05 n/a RESERVE FUND 790330002 0.01 0.00
City Held Cash(Fund 735-114000) $744,688.56
TOTAL 2005 $7.2M COMMUNITY FACILITIES DISTRICT 05-1 (TRADE AND COMMERCE CENTER) -$

BOND PROCEEDS
2005 $7.2M COMMUNITY FACILITIES DISTRICT 05-1 (TRADE AND COMMERCE CENTER) REFUNDED 2021 Fiscal Agent: U.S. Bank National Association (fka First Trust) n/a SPEC TRB SER A/B 251009000 0.01 19.38
n/a RESERVE FUND 251009001 0.01 639,063.36
City Held Cash
TOTAL 2005 $7.2M COMMUNITY FACILITIES DISTRICT 05-1 (TRADE AND COMMERCE CENTER) REFUNDED 2021639,082.74$

BOND PROCEEDS
2006-1 Godde Hill Estate Sewer Improvements LOIB
Fiscal Agent: U.S. Bank National Association (fka First Trust) 11-08-06 n/a REDEMPTION FUND 106844000 0.01 45,336.10
11-08-06 n/a ADM EXP 106844002 0.01 1,594.41
11-08-06 n/a RESERVE FUND 106844003 0.01 99,751.70
City Held Cash(Fund 739-114000) $127,799.09
TOTAL 2006-1 Godde Hill Estate Sewer Improvements LOIB 146,682.21$

BOND PROCEEDS
2007 $19.9M COP Power Plant Land Acquisition
Fiscal Agent: U.S. Bank National Association (fka First Trust) 04-12-07 n/a LEASE PAYMENT 112055000 0.01 0.00
04-12-07 n/a RESERVE FUND 112055001 0.00 0.00
TOTAL 2007 $19.9M COP Power Plant Land Acquisition -$

BOND PROCEEDS
2007 $6.5M COMMUNITY FACILITIES DISTRICT 05-1 (TRADE AND COMMERCE CENTER) Fiscal Agent: U.S. Bank National Association (fka First Trust) 08-23-07 n/a BOND FUND 117856000 0.01 0.00
08-23-07 n/a RESERVE FUND 117856002 0.01 0.00
TOTAL 2007 $6.5M COMMUNITY FACILITIES DISTRICT 05-1 (TRADE AND COMMERCE CENTER) -$

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022

PURCHASE MATURITY ACCOUNT INTEREST INVESTED

DATE DATE FUND NUMBER RATE AMOUNT

BOND PROCEEDS
2012 PFA $8.7M LEASE REVENUE BONDS
Fiscal Agent: U.S. Bank National Association (fka First Trust) 12-19-12 n/a REVENUE FD 201546000 0.00 0.33
12-19-12 n/a INTEREST ACCOUNT 201546001 n/a 0.00
12-19-12 n/a PRINCIPAL ACCOUNT 201546002 n/a 0.00
TOTAL 2012 PFA $8.7M LEASE REVENUE BONDS 0.33$
2013 HA PALMDALE TRANSIT VILLAGE HOMES LLC ESCROW
Fiscal Agent: U.S. Bank National Association (fka First Trust) 10-11-13 n/a ESCROW FUND 206455000 0.00 2,979,500.00
TOTAL 2013 HA TRANSIT VILLAGE HOMES ESCROW 2,979,500.00$ 2015 HA DEBT SERVICE RESERVE
Fiscal Agent: Bank of America
11-19-15 n/a DEBT SVC RESERVE 1257964992 0.08 39,140.93 TOTAL 2015 HA DEBT SERVICE RESERVE 39,140.93$

PARS RESTRICTED CASH FOR PENSION STABILIZATION TRUST FUND 05-23-18 n/a CITY 104790895775 Public Agency Retirement Services2.60 6,854,560.88 TOTAL PARS PENSION TRUST FUND 6,854,560.88$

BOND PROCEEDS
2015 HA $4.3M MULTIFAMILY HOUSING REVENUE BONDS
Fiscal Agent: U.S. Bank National Association (fka First Trust) 09-03-15 n/a BOND FUND 277067000 0.00 168,695.09
09-03-15 n/a INTEREST ACCT 277067001 0.01 7.06
09-03-15 n/a BOND RESERVE 277067003 0.00 281,020.80
09-03-15 n/a REPAIR & REPLACE FUND 277067004 0.00 1,114,742.57 TOTAL 2015 HA $4.3M MULTIFAMILY HOUSING REVENUE BONDS 1,564,465.52$

FISCAL AGENT CASH

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022

BOND PROCEEDS
2017 PFA $17.4M LEASE REVENUE BONDS
Fiscal Agent: U.S. Bank National Association (fka First Trust) 04-05-17 n/a REVENUE FUND 271128000 0.00 0.00
04-05-17 n/a PRINCIPAL ACCT 271128002 n/a 0.00
TOTAL 2017 PFA $17.4M LEASE REVENUE BONDS -$
Total City Held Cash (XXX-114000) $516,817.13
GRAND TOTAL - FISCAL AGENT CASH 15,063,277.63$

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022
Cash on Hand 14,295,289$
Pooled Cash Investments

City: 249,379,529$
Insur Fund: $9,747,446 259,126,975$
Library Investments $12,464

Subtotal 273,434,728$

City/AD/CFD/PCA/PFA/HA
Fiscal Agent Cash 15,063,278$ *

Grand total 288,498,006$

The interest rate quoted on LAIF, AIM, and Fiscal Agent/Trustee accounts is the most current rate available.

LAIF & AIM interest rates are as of April 30, 2022.

S:\Cash and Investment\Investment\Investment Reports\21-22\10 April 2022\[10 April 2022 Investment Report City.xls] Apr Monthly

SUMMARY OF CASH AND INVESTMENTS

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
March 31, 2022

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS

POOLED CASH - LOCAL AGENCY INVESTMENT FUND (LAIF), CALIFORNIA ASSET MANAGEMENT PROGRAM (CAMP), & UBS FINANCIAL SERVICES April 30, 2022

TRANSACTION INTEREST

DATE DEPOSIT WITHDRAWAL RECEIVED BALANCE
CITY ACCOUNT 98-19-620
Beginning Balance 30,094,590.89$
04/15/22 -$ 23,713.36$

Subtotal -$ -$ 23,713.36$ 30,118,304.25$ PCA ACCOUNT 40-19-060
Beginning Balance 17,220,834.52$
04/14/22 20,000,000.00$ -$ 13,568.57$ 04/15/22
Subtotal 20,000,000.00$ -$ 13,568.57$ 37,234,403.09$ LIBRARY ACCOUNT 16-19-012
Beginning Balance 12,454.00$
04/15/22 -$ 9.81$
Subtotal -$ -$ 9.81$ 12,463.81$ ARPA ACCOUNT 19-19-004
Beginning Balance 17,710,542.41$
04/15/22 -$ 13,956.37$ Subtotal -$ -$ 13,956.37$ 17,724,498.78$

CAMP - CALIFORNIA ASSET MANAGEMENT PROGRAM
Beginning Balance 248,812.09$
04/29/22 - $ 102.06$ Subtotal -$ -$ 102.06$ 248,914.15$ UBS Financial Services
Beginning Balance 2.85$
04/30/22 -$ 21,000.48$ Subtotal -$ -$ 21,000.48$ 21,003.33$ Total 20,000,000.00$ -$ 72,350.65$ 85,359,587.41$ 85,110,673.26$

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
March 31, 2022
TN= US Treasury C= Call
FP= Federal Paper M= Maturity
CD= Certificate of Deposit CB= Corporate Bond
FACE

PURCHASEMATURITY REDEMPTION VALUE INTEREST NET INVESTED GAIN/

ISSUER DATE DATE DATE REDEEMED RECEIVED FUNDS AMOUNT (LOSS) -$ $0.00
-$ $0.00
-$ -$ -$ -$ -$ Total Number of Transactions: 0

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS

POOLED CASH - INVESTMENTS MATURED OR CALLED
April 30, 2022

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
March 31, 2022
TN = US Treasury
FP = Federal Paper
CD = Certificate of Deposit
CN = Corporate Notes ACCRUED
PURCHASE MATURITY FACE PREMIUM / PURCHASE INTEREST NET Yield

ISSUER DATE DATE VALUE (DISCOUNT) PRICE PURCHASED PURCHASE -$ -$
-$ -$ -$ -$ -$ Total Number of Transactions: 0

CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS

POOLED CASH - INVESTMENTS PURCHASED
April 30, 2022

SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS
April 30, 2022
4/30/2022

PURCHASE MATURITY ACCOUNT/ INTEREST INVESTED

DATE DATE FUND INSTITUTION RATE AMOUNT TOTAL

STATE OF CALIFORNIA LOCAL AGENCY INVESTMENT FUND
09-01-84 n/a SA ACCOUNT 65-19-035 0.78 3,700,687.94
TOTAL LAIF ACCOUNTS 3,700,687.94$

FISCAL AGENT CASH

BOND PROCEEDS
CRA - 2002 Sub Lien Tax Allocation Bonds $5.3M ($5,329,748.25) Fiscal Agent: U.S. Bank National Association
08-20-02 n/a RESERVE FUND 94460700 0.01 527,748.76
08-20-02 n/a INTEREST ACCT 94460701 0.01 28.91
08-20-02 n/a PRINCIPAL ACCT 94460702 0.01 0.15

TOTAL CRA - 2002 Sub Lien Tax Allocation Bonds $5.3M ($5,329,748.25) 527,777.82$

BOND PROCEEDS
2016 SA $31.5M Tax Allocation Refunding Bonds Series A
Fiscal Agent: U.S. Bank National Association (fka First Trust) 04-26-16 n/a DEBT SERVICE 245113000 0.00 1.29
04-26-16 n/a INTEREST ACCT 245113001 N/A 0.00
TOTAL 2016 SA $31.5M Tax Allocation Refunding Bonds Series A 1.29$ GRAND TOTAL - FISCAL AGENT CASH $527,779

SUMMARY OF CASH AND INVESTMENTS
Cash on Hand 7,617,925$ $7,611,787
($17,586)
Pooled Cash Investments 3,700,688$ $23,724
$7,617,925
Successor Agency Fiscal Agent Cash 527,779$ *

Grand total 11,846,392$

* The interest rate quoted on LAIF and Fiscal Agent/Trustee accounts is the most current rate available.

LAIF interest rates are as of April 30, 2022.

S:\Cash and Investment\Investment\Investment Reports\21-22\10 April 2022\[10 April 2022 Investment Report Successor Agency.xls]GL Balances

SUCCESSOR AGENCY TO THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALMDALE

TREASURER'S REPORT OF INVESTMENTS

POOLED CASH - LOCAL AGENCY INVESTMENT FUND (LAIF)
April 30, 2022

TRANSACTION INTEREST

DATE DEPOSIT WITHDRAWAL RECEIVED BALANCE
SA ACCOUNT 65-19-035
Beginning Balance 3,697,774.06$
04/14/22 2,913.88$
Subtotal -$ -$ 2,913.88$ 3,700,687.94$ City Council Staff Report
DATE: JUNE 1, 2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: APPROVE AGREEMENT WITH TURNER CONSULTING AND

ACTUARIAL, LLC TO PROVIDE ACTUARIAL SERVICES IN AN
AMOUNT NOT TO EXCEED $ 111,000.00 FOR A THREE (3) YEAR
TERM WITH THE OPTION TO EXTEND FOR TWO (2) ADDITIONAL
YEARS.

ISSUE
Approve agreement with Turner Consulting and Actuarial, LLC. To provide actuarial services in an amount not to exceed $ 111,000.00 for a three (3) year term with the option to extend for two (2) additional years.

RECOMMENDATION
Staff recommends that the City Council:

1. Approve Agreement A-7938 for actuarial services between the City of Palmdale and Turner Consulting and Actuarial, LLC. Not to exceed $ 111,000.00 for a term of three (3) years, with the option to extend for two (2) additional years, commencing on July 1st, 2022, and to

2. Direct the City Attorney to finalize the Agreement and authorize the Interim City Manager or her designee to execute the agreement, including making minor and non-substantive changes.

BACKGROUND
The City of Palmdale has contracted with Turner Consulting and Actuarial, LLC since 2012 to provide actuarial service that estimates the Incurred But Not Reported (IBNR) claim liability reserves for the City’s medical plan , and assists the City with setting renewal rates for the self-funded medical plan. The Consultant performs analyses of claims from the City’s third-party administrator, Benefit and Risk Management Services (BRMS) and reviews claim and enrollment history as a part of this process. Assumptions relating to the City’s self-funded administration fees, reinsurance (stop -loss) fees are Report to Mayor and City Council
Approve agreement with Turner Consulting & Actuarial, LLC June 01, 2021

provided to the City in the form of a complete report detailing all results, from which the City may rely on for financial reporting and budgeting purposes.

DISCUSSION
The City wishes to engage in a professional service agreement with Turner Consulting and Actuarial, LLC to continue providing actuarial services relating to the City’s medical plan for a term of three years with the option to extend two years. The firm specializes in actuarial and benefit consulting and has a proven track-record of positive financial results. The City is fully funded for claims, expenses, and IBNR reserves as a result of the strategic and customized advice that Turner Consulting and Actuarial, LLC has provided.

FISCAL IMPACT
$111,000; the fiscal impact will be $111,000 over a three (3) year term commencing on July 1, 2022. Funds are proposed in the Fiscal Year 2022-23 budget in account 15113001-721414. Below is the breakdown of the cost per year, over the three (3) year term.

Fiscal Year Amount
FY 2022-23 $18,000
FY 2023-24 $21,000
FY 2024-25 $24,000
Total Contract Amount $111,000

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

A. 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. Attachment ‘A’ – Agreement A-7938

City Council Staff Report
DATE: MAY 4, 2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: CITY MANAGER DEPARTMENT

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

AUTHORITY, THE PALMDALE FINANCING AUTHORITY, AND THE

PALMDALE COMMUNITY FOUNDATION
ISSUE
Receive and file the Annual Financial Reports for the Year Ended June 30, 2021 for 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 Financial Reports for the Year Ended June 30, 2021, for the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation.

BACKGROUND
The Annual Financial Report s communicate the financial condition and activity for the Year Ended June 30, 2021, for each of the City’s component units: the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, The Palmdale Financing Authority and the Palmdale Community Foundation. Component units are defined as legally separate organizations for which the primary government in financially accountable or which the nature and significance of the relationship with the primary government are such that exclusion would cause the reporting entity’s financial statements to be misleading or incomplete. Independent audits are performed for each of the four component units. The City’s Annual Comprehensive Financial Report was brought before the City Council at the May 4, 2022, meeting, and is inclusive of the component unit financial information. The component unit information is then reported and audited separately in the form of individual Annual Financial Reports as required by the Governmental Accounting Standards Board.

Report to Mayor and City Council
Re: Component Unit Annual Financial Reports for Year Ended June 30, 2021 June 1, 2022

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

Component unit statements are prepared in accordance with Generally Accepted Accounting Principles. The three (3) component unit statements, the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation, have received unmodified (clean) audit opinions for the year ended June 30, 2021.

Attached are the financial statements, inclusive of the Auditor Opinions for review.

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: 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. Palmdale Civic Authority Annual Comprehensive Financial Report for the Year Ended June 30, 2021.

2. Palmdale Financing Authority Annual Comprehensive Financial Report for the Year Ended June 30, 2021.

3. Palmdale Community Foundation Financial Statements for the Year Ended June 30, 2021.

ANNUAL FINANCIAL REPORT

CITY OF PALMDALE, CALIFORNIA

PALMDALE CIVIC AUTHORITY

(A Component Unit of the City of Palmdale)

For the Fiscal Year Ended

June 30, 2021

THIS PAGE INTENTIONALLY LEFT BLANK

PALMDALE CIVIC AUTHORITY

ANNUAL FINANCIAL REPORT
JUNE 30, 2021

TABLE OF CONTENTS

PAGE

INDEPENDENT AUDITOR’S REPORT 1

BASIC FINANCIAL STATEMENTS

Statement of Net Position 3

Statement of Revenues, Expenses and Changes in Fund Net Position 4

Statement of Cash Flows 5

NOTES TO THE BASIC FINANCIAL STATEMENTS 7

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
19 THIS PAGE LEFT BLANK INTENTIONALLY
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 Independent Auditor’s Report
To the Honorable Members of the Board of Directors
of the Palmdale Civic Authority
City of Palmdale, California
Report on the Financial Statements
We have audited the accompanying financial statements of the Palmdale Civic Authority (Authority), a component unit of the City of Palmdale, California (City), as of and for the year e nded June 30, 2021, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these fi nancial  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.

Auditor’s Responsibility
Our responsi
bility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United St ates. 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 the financial statements. The procedures selected depend on the auditor’s judg ment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropria
te in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit 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 fi
nancial statements.

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

2 Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Authority, as of June 30, 2021, and the changes in its financial position, and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters

Required Supplementary Information
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is
required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 24, 2022, on our consideration of the City’s internal control over financial reporting as it relates to the Authority and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance as it relates to the Authority.

Rancho Cucamonga, California
May 24, 2022

Assets:

Cash and Investments 1,079,833$
Interest Receivable 1,039
Total Assets 1,080,872
Liabilities:

Total Liabilities -
Net Position:

Unrestricted 1,080,872
Total Net Position 1,080,872$

CITY OF PALMDALE CIVIC AUTHORITY

STATEMENT OF NET POSITION
JUNE 30, 2021
See Accompanying Notes to the Financial Statements
Non-Operating Revenues:

Interest Income from Leases Receivable 933,815
Interest Income 16,941
Net Decrease Fair Value of Investments (4,002)
Total Non-Operating Revenues 946,754
Non-Operating Expenses:

Lease Abatement Loss 1,321,985
Interest Expense 1,143,563
Total Non-Operating Expenses 2,465,548
(1,518,794)
Net Position, Beginning of Year 2,599,666
Net Position, End of Year 1,080,872$
Change in Net Position

CITY OF PALMDALE CIVIC AUTHORITY

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND NET POSITION
FOR THE YEAR ENDING JUNE 30, 2021
See Accompanying Notes to the Financial Statements
4 Cash flows from non-capital financing activities:

Payment from Palmdale Financing Authority 13,443,015$
Principal received from Leases Receivable 525,000
Interest income from Leases Receivable 933,816
Reversal of payments to the City (5,103)
Net cash provided by non-capital financing activities 14,896,728 Cash flows from capital and related financing activities:

Principal paid on Long-term Debt (525,000)
Principal paid to Bond Escrow Agent (14,765,000)
Interest on Debt (964,964)
Interest Payment to Escrow Agent (178,599)
Net cash used for capital and related financing activities (16,433,563) Cash flows from investing activities:

Interest on Investments 16,827
Net cash used for investing activities 16,827
Net decrease in cash and cash equivalents (1,520,008)
Cash and cash equivalents - Beginning of Year 2,599,841 Cash and cash equivalents - End of Year 1,079,833$

CITY OF PALMDALE CIVIC AUTHORITY

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDING JUNE 30, 2021
See Accompanying Notes to the Financial Statements
5 See Accompanying Notes to the Financial Statements
6 PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
For the Fiscal Year Ended
Jun
e 30, 2021
7 CITY OF PALMDALE CIVIC AUTHORITY

TABLE OF CONTENTS TO THE

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021

Note No. Page No.

1. Summary of Significant Accounting Policies ......................................................... 9 A. Description of the Reporting Entity .......................................................................... 9 B. Financial Statements Presentation, Basis of Accounting and Measurement Focus ............................................................................................................................... 9 C. Cash and Investments .......................................................................................... 10 D. Long-Term Obligations ......................................................................................... 10 E. Net Position .......................................................................................................... 10 F. Use of Estimates ................................................................................................... 10 G. Implemented Accounting Pronouncements .......................................................... 10

2. Cash and Investments ............................................................................................ 11 A. Investments Authorized by the California Government Code and the Authority's Investment Policy .................................................................................................. 11 B. Interest Rate Risk ................................................................................................. 12 C. Credit Risk ............................................................................................................ 13 D. Concentration of Credit Risk ................................................................................. 13 E. Custodial Credit Risk ............................................................................................ 14 F. Disclosures Relating to Fair Value of Investments ................................................ 14

3. Long-Term Receivables ......................................................................................... 15

4. Long-Term Debt ...................................................................................................... 15 A. Certificates of Participation ................................................................................... 15 B. Changes in Long-Term Liabilities .......................................................................... 16

5. New Accounting Pronouncements ........................................................................ 17

CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
1) Summary of Significant Accounting Policies
A. Description of the Reporting Entity
The Palmdale Civic Authority of the City of Palmdale, California (Authority) was originally created under a joint powers agreement between the City of Palmdale (City) and the former Community Redevelopment Agency of the City of Palmdale (Agency) on May 1, 1976 for the purpose of financing public improvements in the City. The Authority is financially accountable to the City and, accordingly, is a component unit of the City although it is a separate legal entity. Assets of the Authority, after providing for all debts and obligations, are to be transferred to the City upon final payment of the loans.

The Authority is a component unit of the City of Palmdale, California (as defined by the Governmental Accounting Standards Board) and, as such, is included in the Comprehensive Annual Financial Report of the City. Component units are legally separate organizations for which the elected officials of the primar y government are financially accountable. Although a legally separate entity, it is reported on a blended basis as part of the primary government (the City) because a voting majority of the Authority’s governing board is appointed by the City Council and they are, in substance part of the City’s operations.

The following is a summary of the significant accounting policies of the Authority.

B. Financial Statement Presentation, Basis of Accounting and Measurement Focus The Authority’s basic financial statements are 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 Authority reports its activities as an enterprise fund. The Authority’s financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recognized in the period incurred regardless of the timing of related cash flows.

Proprietary funds distinguish operating revenues and expenses from those revenues and expenses that are non -operating. Operating revenues are those revenues that ar e generated by leasing activities while operating expenses pertain directly to the furnishing of those services. Non- operating revenues and expenses are those revenue and expenses generated that are not directly associated with the normal business of debt activities.

When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as they are needed.

The Annual Financial Statements are intended to reflect the financial position, results of operation and net position of the City of Palmdale Civic Authority. They do not present fairly the financial position and results of operations of the City of Palmdale, California, in conformity with accounting principles generally accepted in the United States of America. 9 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
C. Cash and Investments
Cash includes amounts in demand deposits and petty cash on hand. Investments include amounts in the Local Agency Investment Fund. The Local Agency Investment Fund is reported at the carrying value because the fair value was not materially different The Authority 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 s ignificant unobservable inputs.

D. Long-Term Obligations
In the statement of net position, long-term debt and other long- term obligations are reported as liabilities. Bond premium/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 in the period the cost was incurred.

E. Net Position
Net position is classified in the following category:

Unrestricted – This component of net position consists of resources that are not restricted for use by the Authority.

F. 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.

G. 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. The City has determined that this statement does not apply to Palmdale Civic Authority.

GA
SB 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 10 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
interest using the equity method. The City has determined that this statement does not apply to Palmdale Civic Authority.
2) Cash and Investments
Cash and investments of the Authority are pooled with funds of the City for deposit and investment purposes, except for funds required to be held by outside fiscal agents.

Interest earned on pooled cash and investments is credited to the Authority based on the Authority’s month-end cash balance.

Statement of Net Position
Cash and Investments with the City of Palmdale 1,079,833$ Total Cash and Investments 1,079,833$
Cash and investments as of June 30, 2021 consist of the following:

Investments:

Cash and Investments with the City of Palmdale Investment Pool 1,079,833$ Total Cash and Investments 1,079,833$
Detailed information concerning the City's pooled cash and investments can be found in the City's Annual Comprehensive Financial Report for the year ended June 30, 2021.

A. Investments Authorized by the California Government Code and the Authority’s Investment Policy
Investments of the Authority are pooled with funds of the City and therefore adhere to the City’s Investment Policy. The table following identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements with the Authority, rather than the general provisions of the California Government Code or the City’s investment policy.
11 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
Authorized
Investment Type
Maximum
Maturity
Maximum
Percentage
of P
ortfolio*
Maximum
Investment
in O
ne Issuer**
U.S. Treasury Obligations 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 3 years 10% None
Negotiable Certificates of Deposit 5 years 30% 15%
Overnight Bank Investment Pool N/A 10% None
Mutual Funds N/A 15% 10%
Local Agency Investment Fund (LAIF) N/A None $65,000,000 California Asset Management Program (CAMP N/A None $65,000, 000 **Per Account
*Excluding amounts held by bond trustees that are not subject to California Government Code restrictions
The Ci
ty’s 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.

B. 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 rat es. The Investment Policy of the City, Sections 4.1 and 4.2, provide guidelines for managing risk. One of the ways that the City 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 Authority’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Authority’s investments by maturity:
12 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
Remaining Maturity
(in Months)
Investment Type Total
12 Months
or Less
1,079,833$ 1,079,833$
Total 1,079,833$ 1,079,833$
Cash and Investments with City of Palmdale Investment
Pool
C. Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the Authority’s investment policy, or debt agreements, and the actual rating as of year -end for each investment type:

D. Concent
ration of Credit Risk
The investment policy of the Authority contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code.

There are no Investments in any one issuer that represent 5% or more of total Authority’s investments.

Total
Minimum
Legal Rating
Not
Rated AAA/Aaa
1,079,833$ N/A 1,079,833$ -$
Total 1,079,833$ 1,079,833$ -$
Investment Type
Cash and Investments with City of
Palmdale Investment Pool
13 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
E. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the Authority’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure Authority deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

Cash in City of Palmdale Investment Pool included City deposits with financial institutions in excess of federal depository insurance limits held in collateralized accounts, but not in the name of the City or the Authority. Detailed information concerning the City’s pooled cash and investments can be found in the City’s Annual Comprehensive Financial Report for the year ended June 30, 2020. The report can be obtained from the City's website at www.cityofpalmdale.org.

F. Disclosures Relating to Fair Value of Investments
The Authority 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 Authority’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 Authority does not have any investments classified with Level 3. Deposits and withdrawals in the City pool and LAIF are made on the basis of $1 and not fair value. Accordingly, the fair value measurements of these types of investments are based on an uncategorized input not defined as a Level 1, Level 2, or Level 3 input. 14 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
3) Long- Term Receivables
Leases Receivable
The Authority and the City of Palmdale have entered into lease agreements that obligate the City to pay lease payments to the Authority in consideration of the City’s use and enjoyment of certain property and improvements. The lease payment schedules, as well as the facilities subject to the leases, are more fully described below in Note 4 A - Certificates of Participation. On May 27, 2021, the City issued the Refunding of the 2007 Certificates of Participation and thus also extinguished its agreement and its lease receivable with PCA. Lease receivable activity for the year ended June 30, 2021, was as follows:

Balance at
June 30, 2020 Additions Deletions
Balance at
June 30, 2021
Amount Due
Within One Year
Lease Receivable Related to:
2007 Certificate of Participation 15,290,000$ - 15,290,000$ -$ -$ 15,290,000$ -$ 15,290,000$ -$ -$
As of June 30, 2021, there are no future lease payments. 4) Long- Term Debt
A. Certificates of Participation
2007 Certificates of Participation Payable ($19,960,000) - On April 12, 2007, the 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% to 6.311% per annum. Principal installments are payable April 1 of each year from 2008 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 after April 1, 2018, 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, 2015, 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 whole, 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. 15 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
The proceeds of the 2007 Certificates were used to finance the acquisition of certain real property for future use as the site of a power generating plant 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 15 and March 15 to t he 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.

On M
ay 27, 2021, the Palmdale Financing Authority 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 totaling $1,500,584 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. In addition, the refunding resulted in a lease abatement loss of $1,321,985.

B. Changes in Long-Term Liabilities
Long-term liability activity for the year ended June 30, 2021, was as follows:

Balance at
June 30, 2020 Additions Retirements
Balance at
June 30, 2021
Amount Due
Within One Year
Lease Receivable Related to:
2007 Certificate of Participation 15,290,000$ - 15,290,000$ -$ -$ 15,290,000$ -$ 15,290,000$ -$ -$
16 CITY OF PALMDALE CIVIC AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021
5) New Accounting Pronouncements
The GASB has issued the following pronouncements that have effective dates which may impact future financial statement presentation. The Authority has not determined the effect of the following Statements:

GA
SB Statement No. 87 – Leases.

GA
SB Statement No. 89 - Accounting for Interest Cost Incurred Before the End of a Construction Period.

GA
SB Statement No. 91 - Conduit Debt Obligations.

GA
SB Statement No. 92 - Omnibus 2020.

GA
SB Statement No. 93 - Replacement of Interbank Offered Rates.

GA
SB Statement No. 94 - Public-Private and Public -Public Partnerships and Availability Payment Arrangements.

GA
SB Statement No. 96 - Subscription-Based Information Technology Arrangements.

GA
SB Statement No. 97 - Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans. 17 THIS PAGE LEFT BLANK INTENTIONALLY
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endent 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
To the Honorable Members of the Board of Directors
of the Palmdale Civic Authority
City of Palmdale, California
We have audited, in accordance with th
e 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, the financial statements of the Palmdale Civic Authority (Authority), a component unit 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 the Authority’s basic financial statements, and have issued our report thereon dated May 24, 2022.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements,  we considered the City’s internal control over financial reporting (internal control) as it relates to the Authority as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness  of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control as it relates to the Authority.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees,
in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be preve nted, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of intern al control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However,  material weaknesses may exist that have not been identified.
20 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing  an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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

Rancho Cucamonga, California
May 24, 2022

ANNUAL FINANCIAL REPORT

CITY OF PALMDALE, CALIFORNIA

PALMDALE FINANCING AUTHORITY

(A Component Unit of the City of Palmdale)

For the Fiscal Year Ended

June 30, 2021

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CI

TY OF PALMDALE FINANCING AUTHORITY

ANNUAL FINANCIAL REPORT
JUNE 30, 2021

TABLE OF CONTENTS

INDEPENDENT AUDITOR'S REPORT .......................................................................1

BASIC FINANCIAL STATEMENTS

Statement of Net Position .............................................................................................3

Statement of Revenues, Expenses, and Changes in Fund Net Position .......................4

Statement of Cash Flows ..............................................................................................5

Notes to the Financial Statements ................................................................................7

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 ............................................................................................................20

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1 Independent Auditor’s Report

To the Honorable Members of the Board of Directors
of the Palmdale Financing Authority
City of Palmdale, California

Report on the Financial Statements
We have audited the accompanying financial statements of the Palmdale Financing Authority (Authority), a component unit of the City of Palmdale, California (City), as of and for the year ended June 30, 2021, and the relate
d notes to the financial statements, which comprise the Authority’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of th ese  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.

Auditor’s Responsibility
Our responsi
bility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of th e  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 the financial statements. The procedures selected depend on the auditor’s ju dgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropria
te in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit 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 pr esentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
2 Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Authority, as of June 30, 2021, and the changes in its financial position and its cash flows for the year then ended in accordance with accounting principles generally accepted in the Unit
ed States of America.

Other Matters
Required Supplementary Information
Management as omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by th
e 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. Our opinion on the basic financial statements is not affected by this missing information.

Other Reporting Re quired  by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 24, 2022, on our consideration of the City’s internal control over financial reporting as it relates to the Authority and on our tests of its compliance with certain provisions of laws, regulations, contrac ts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control over financial r eporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance as it relates to the Authority.

Rancho Cucamonga, California
May 24, 2022
Assets:

Interest Receivable 214,091$
Leases Receivable - City of Palmdale:

Current 2,686,700
Non-Current 30,176,255
Restricted Assets:

Cash and Investments 1
Total Assets 33,077,047
Liabilities:

Accrued Interest Payable 214,091
Non-current Liabilities:

Due Within One Year 2,686,700
Due in More than One Year 30,176,255
Total Liabilities 33,077,046
Net Position:

Unrestricted 1
Total Net Position 1$

CITY OF PALMDALE FINANCING AUTHORITY

STATEMENT OF NET POSITION
JUNE 30, 2021
See Accompanying Notes to the Financial Statements
3 Non-Operating Revenues:

Interest Income from Leases Receivable 1,023,342
Interest Income 5
Payment Received from Palmdale Civic Authority 141,893
Total Non-Operating Revenues 1,165,240
Non-Operating Expenses:

Cost of Issuance 141,893
Interest Expense 1,023,385
Total Non-Operating Expenses 1,165,278
(38)
Net Position, Beginning of Year 39
Net Position, End of Year 1$
Change in Net Position

CITY OF PALMDALE FINANCING AUTHORITY

STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN FUND NET POSITION
FOR THE YEAR ENDING JUNE 30, 2021
See Accompanying Notes to the Financial Statements
4 Cash flows from non-capital financing activities:

Principal received from Leases Receivable 1,665,000$
Interest income from Leases Receivable 775,292
Net cash provided by non-capital financing activities 2,440,292 Cash flows from capital and related financing activities:

Principal paid on Long-term Debt (1,665,000)
Interest on Debt (775,335)
Cost of Issuance (141,893)
Proceeds from Bond Issuance 13,584,908
Payment to Palmdale Civic Authority (13,443,015)
Net cash used for capital and related financing activities (2,440,335) Cash flows from investing activities:

Interest on Investments 5
Net cash used for investing activities 5
Net decrease in cash and cash equivalents (38)
Cash and cash equivalents - Beginning of Year 39$
Cash and cash equivalents - End of Year 1$
FOR THE YEAR ENDING JUNE 30, 2021

CITY OF PALMDALE FINANCING AUTHORITY

STATEMENT OF CASH FLOWS
See Accompanying Notes to the Financial Statements
5 THIS PAGE LEFT BLANK INTENTIONALLY
6 PALMDALE FINANCING AUTHORITY

NOTES TO THE FINANCIAL STATEMENTS

For the Fiscal Year Ended

June 30, 2021

7 CITY OF P

ALMDALE FINANCING AUTHORITY

TABLE OF CONTENTS TO THE

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021

Note No. Page No.

1. Summary of Significant Accounting Policies .......................................................................... 9 A. Description of the Reporting Entity .................................................................................... 9 B. Financial Statements Presentation, Basis of Accounting amd Measurement Focus ........... 9 C. Cash and Cash Equivalents ................................................................................................. 9 D. Long-Term Obligations .................................................................................................... 10 E. Net Position....................................................................................................................... 10 F. Use of Estimates ............................................................................................................... 10 G. Implemented Accounting Pronouncements ...................................................................... 10

2. Cash and Investments .............................................................................................................. 10 A. Investments Authorized by Debt Agreements .................................................................. 11 B. Interest Rate Risk .............................................................................................................. 11 C. Credit Risk ........................................................................................................................ 11 D. Custodial Credit Risk ........................................................................................................ 12 E. Disclosures Relating to Fair Value of Investments ........................................................... 12

3. Long-Term Receivables ........................................................................................................... 12 A. Leases Receivable ............................................................................................................. 12

4. Long-Term Debt...................................................................................................................... 14 A. Lease Revenue Bonds ....................................................................................................... 14 B. Changes in Long-Term Liabilities .................................................................................... 18

5. New Accounting Pronouncements ......................................................................................... 18

8 CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

(1) Summary of Significant Accounting Policies

A. Description of the Reporting Entity

The Palmdale Financing Authority of the City of Palmdale, California (Authority) was originally created under a joint powers agreement between the City of Palmdale (City) and the Housing Authority of the City of Palmdale (Agency) on September 26, 2012 for the purpose of financing public improvements in the City. The Authority is financially accountable to the City and, accordingly, is a component unit of the City although it is a separate legal entity. Assets of the Authority, after providing for all debts and obligations, are to be transferred to the Cit y upon final payment of the leases.

The Authority is a component unit of the City of Palmdale, California (as defined by the Governmental Accounting Standards Board) and, as such, is included in the Comprehensive Annual Financial Report of the City. Component units are legally separate organizations for which the elected officials of the primary government are financially accountable. Although a legally separate entity, it is reported on a blended basis as part of the primary government (the City) because a voting majority of the Authority’s governing board is appointed by the City Council and they are, in substance part of the City’s operations.

B. Financial Statement Presentation, Basis of Accounting and Measurement Focus

The Authority’s basic financial statements are 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 Authority reports its activities as an enterprise fund. The Authority’s financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues and expenses are recognized in the period incurred regardless of the timing of related cash flows.

Proprietary funds distinguish operating revenues and expenses f rom those revenues and expenses that are non-operating. Operating revenues are those revenues that are generated by leasing activities while operating expenses pertain directly to the furnishing of those services. Non-operating revenues and expenses are those revenue and expenses generated that are not directly associated with the normal business of debt activities.

When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first, then unrestricted resources as they are needed.

The Annual Financial Statements are intended to reflect the financial position, results of operation and net position of the City of Palmdale Financing Authority. They do not present fairly the financial positi on and results of operations of the City of Palmdale, California, in conformity with accounting principles generally accepted in the United States of America.

C. Cash and Cash Equivalents

Cash includes amounts in demand deposits and petty cash on hand. Investments include amounts in money market funds.

The Authority 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:

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

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.

D. Long-Term Obligations

In the Statement of Net Position, long-term debt is a liability . Bond premium/discounts are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount.

E. Net Position

Net position is classified in the following categories:

Unrestricted – This component of net position consists of resources that are available to the Authority.

F. 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.

G. 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. The City has determined that this statement does not apply to Palmdale Financing Authority.

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. The City has determined that this statement does not apply to Palmdale Financing Authority.

(2) Cash and Investments

Cash and investments of the Authority are pooled with funds of the City for deposit and investment purposes, except for funds required to be held by outside fiscal agents. Interest earned on pooled cash and investments is credited to the Authority based on the Authority’s month-end cash balance. In addition, restricted cash and investments were held by fiscal agents in accordance with bond indenture agreements.

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

Statement of Net Position
Restricted Cash and Investments $ 1
Total Cash and Investments $ 1

Cash and investments as of June 30, 2021 consist of the following:

Investments:

Held by Bond Trustees $ 1
Total Cash and Investments $ 1

Restricted cash and investments were held by a fiscal agent in accordance with the bond indenture agreement.

A. 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 rather than the general provisions of the California Government Code. 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 accep table to the municipal bond insurer. The fair value of investments is based on the valuation provided by trustee banks.

B. 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, more sensitive it is to changes in market interest rates. Information about the sensitivity of the fair values of the Authority’s investments held by bond trustees to market interest rate fluc tuations is provided by the following table that shows the distribution of the Authority’s investments by maturity:

Remaining Maturity (in months) Total 12 Months or Less
Investment Type
Held by bond trustees:

Money market funds 1$ 1$
Total 1$ 1$

C. Credit Risk

Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the debt agreement, and the actual rating as of year- end for each investment type:

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

Total Minimum Legal Rating AAA/Aaa
Held by bond trustee:

Money market funds 1$ A 1$
Total 1$ 1$
Investment Type

D. Custodial Credit Risk

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 does not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments.

E. Disclosures Relating to Fair Value of Investments

The Authority 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 Authority’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. Money market investments are carried at amortized cost. The Authority does not have any investments classified with Level 1, 2 or 3.

Detailed information concerning the fair value measurement of the Authority’s pooled cash and investments can be found in the City’s Annual Comprehensive Financial Report for the year ended June 30, 202 1. The report can be obtained from the City's website at www.cityofpalmdale.org.

(3) Long-Term Receivables

A. Leases Receivable

The Authority and the City of Palmdale have entered into lease agreements that obligate the City to pay lease payments to the Authority in consideration of the City’s use and enjoyment of certain property and improvements. The lease payment schedules, as well as the facilities subject to the leases, are more fully described in Note 4 A – Lease Revenue Bonds. Lease receivable activity for the year ended June 30, 2021, was as follows:

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

Balance at
July 1, 2020 Additions Payments
Balance at
June 30, 2021
Amount Due
Within One Year
Lease Receivable Related to:
2012 Lease Revenue Bonds 6,115,000$ -$ 570,000$ 5,545,000$ 575,000$ 2017 Lease Revenue Bonds 14,350,000 - 1,095,000 13,255,000 1,200,000 Plus: Deferred Issuance Premium $17.4M 664,801 - 186,754 478,047 154,243 2021 Lease Revenue Bonds (private placement) - 13,584,908 - 13,584,908 757,457 Total Lease Receivables 21,129,801$ 13,584,908$ 1,851,754$ 32,862,955$ 2,686,700$

As of June 30, 2021, future lease payments for 2012 Lease Revenue Bonds are as follows:

Fiscal
Year
Ended Principal Interest
2022 575,000 162,548
2023 590,000 147,248
2024 610,000 129,985
2025 625,000 111,460
2026 645,000 92,007
2027-2031 2,500,000 159,581
5,545,000$ 802,829$
2012 Lease Receivable

As of June 30, 2021, future lease payments for 2017 Lease Revenue Bonds are as follows:

Fiscal
Year
Ended Principal Interest
2022 1,200,000 547,288
2023 1,330,000 484,038
2024 1,465,000 414,163
2025 705,000 359,913
2026 750,000 323,538
2027-2031 3,790,000 872,915
2032-2034 4,015,000 215,516
13,255,000$ 3,217,371$
2017 Lease Receivable

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

As of June 30, 2021, future lease payments for 2021 Certificates of Participation are as follows:

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 1,597,125 6,041,510
2032-2036 5,393,139 651,965 6,045,104
Totals 13,584,908$ 4,545,798$ 18,130,706$

(4) Long-Term Debt

A. Lease Revenue Bonds

2012 Lease Revenue Bond Payable ($8,695,000) - On December 19, 2012, the 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 2.00% to

4.00% 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 extr aordinary 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 towar ds 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 the South Valley Work Source Center. 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 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.

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

If the City defaults in performance of its obligations under the Lease Agreement it shall be lawful for the Trustee, as assignee of the Authority, to exercise any and all remedies available pursuant to law or granted pursuant to the Lease Agreement; provided, however, that notwithstanding anything to the contrary in the Lease Agreement or in the Indenture, there shall be no right under any circumstances to acceler ate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable or to terminate the Lease Agreement or to cause the fee interest or the leasehold interest of the City in the Property to be sold, assigned or otherwise alienated. The City has consented to the Authority's repossession of the Property if an Event of Default shall occur and consented to the Authority's re-letting of the Property for the account of the City. Notwithstanding any re- entry by the Authority, the City shall continue to remain liable for the payment of the Lease Payments and /or damages for breach of the Lease Agreement 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 or 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$

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% to 3.50% 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 f or 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 pr ice equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium.

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

The proceeds of the 2017 Series Bonds were $18,894,256 ($17,475,000 principal and $1,419,256 premium), of which $18,505,222 (after a payment of $383,662 cost of issuance and debt service funds of $5,372) were contributed to Palmdale Civic Authority to advance refund all ($12,825,000) of the outstanding 2002 Certificates and all ($6,595,000) of the outstanding 2004 Certificates. Concurrently, the proceeds of the 2017 Bonds were used by the City to fully pay the outstanding lease receivable for the Palmdale Civic Authority ’s 2002 Certificate of Participation and 2004 Certificate of Participation.

The Bonds are payable from the revenues pledged under the Indenture, consisting primarily of lease payments to be made by the City of Palmdale to the Palmdale Financing Authority as rental for certain properties pursuant to a Lease Agreement. 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 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 assignee of 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$

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

2021 Certificates of Participation Payable ($13,584,908) - On 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 carried on Palmdale Civic Authority’s books.

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 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.

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 judgements 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 1,597,125 6,041,510
2032-2036 5,393,139 651,965 6,045,104
Totals 13,584,908$ 4,545,798$ 18,130,706$

CITY OF PALMDALE FINANCING AUTHORITY

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2021

B. Changes in Long-Term Liabilities

Long-term liability activity for the year ended June 30, 2021, was as follows:

Balance at
July 1, 2020 Additions Payments
Balance at
June 30, 2021
Amounts Due
Within One
Year
2012 Lease Revenue Bonds 6,115,000$ -$ 570,000$ 5,545,000$ 575,000$ 2017 Lease Revenue Bonds 14,350,000 - 1,095,000 13,255,000 1,200,000 2021 Lease Revenue Bonds (private placement) - 13,584,908 - 13,584,908 757,457 Plus: Deferred Issuance Premium 664,801 - 186,754 478,047 154,243 Total 21,129,801$ 13,584,908$ 1,851,754$ 32,862,955$ 2,686,700$

(5) New Accounting Pronouncements

The GASB has issued the following pronouncements that have effective dates which may impact future financial statement presentation. The Authority has not determined the effect of the following Statements:

GASB Statement No. 87 - Leases.

GASB Statement No. 89 - Accounting for Interest Cost Incurred Before the End of a Construction Period.

GASB Statement No. 91 - Conduit Debt Obligations.

GASB Statement No. 92 - Omnibus 2020.

GASB Statement No. 93 - Replacement of Interbank Offered Rates.

GASB Statement No. 94 - Public-Private and Public-Public Partnerships and Availability Payment Arrangements.

GASB Statement No. 96 - Subscription-Based Information Technology Arrangements.

GASB Statement No. 97 - Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans.

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19 20
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10681 Foothill Blvd., Ste. 300 | Rancho Cucamonga, CA 91730-3831 | T 909.466.4410 | F 909.466.4431 | EOE I
ndependent 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
To the Honorable Members of the Board of Directors
of the Palmdale Financing Authority
City of Palmdale, California
We have audited, in accordance with the 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, the financial statements of the Palmdale Financing Authority (Authority), a component unit 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 comprise the Authority’s basic financial statements, and have issued our report thereon dated May 24, 2022.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as it relates to the Authority as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control as it relates to the Authority.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
21 Compliance and Other Matters
A
s part of obtaining reasonable assurance about whether the Authority’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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

Rancho Cucamonga, California
May 24, 2022

PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

FINANCIAL STATEMENTS
With
INDEPENDENT AUDITOR’S REPORT THEREON

FOR THE YEAR ENDED
JUNE 30, 2021

PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

FOR THE YEAR ENDED JUNE 30, 2021

CONTENTS

PAGE

INDEPENDENT AUDITOR’S REPORT 1

FINANCIAL STATEMENTS

Statement of Net Position and General Fund Balance Sheet 3

Statement of Activities and General Fund Revenues, Expenditures and Change in Fund Balance 4

Notes to Financial Statements 5

REQUIRED SUPPLEMENTARY INFORMATION

Schedule of Revenues, Expenditures and Changes in Fund Balance – General Fund – Budget and Actual 10

Note to the Required Supplementary Information 11

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ndependent Auditor’s Report
To the Board of Directors
Palmdale Community Foundation
City of Palmdale, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and general fund of the Palmdale Community Foundation (a California nonprofit organization), a component unit 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 comprise the Foundation’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements 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.

Auditor’s Responsibility
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 the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s 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 effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit 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.
2 Opinions
I
n our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and general fund of the Palmdale Community Foundation, as of June 30, 2021, and the respective changes in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison information 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 comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Such missing information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of the financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 5, 2022, on our consideration of the City’s internal control over financial reporting as it relates to the Foundation and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Foundation’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance as it relates to the Foundation.

Rancho Cucamonga, California
May 5, 2022

PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

STATEMENT OF NET POSITION

AND GENERAL FUND BALANCE SHEET
JUNE 30, 2021

General Statement of
Fund Net Position
Assets
Cash $ 250,927 $ 250,927
Total Assets 250,927 250,927

Liabilities
Due to City 3,202 3,202
Total Liabilities 3,202 3,202

Fund Balance
Restricted 247,725 247,725
Total Fund Balance 247,725 247,725 Total Liabilities and Fund Balance $ 250,927

Net Position:

Restricted 247,725
Total Net Position $ 247,725

The accompanying notes are an integral part of these financial statements. 3 PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

STATEMENT OF ACTIVITIES AND GENERAL FUND

REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
FOR THE YEAR ENDED JUNE 30, 2021

General Statement of
Fund Activities
Revenues:

Total Revenues $ 132,960 $ 132,960

Expenditures/Expenses:

Current:

Health and Welfare 103,665 103,665 Capital Outlay 19,450 19,450

Total Expenditures/Expenses 123,115 123,115

Change in Fund Balance/Net Position 9,845 9,845 Fund Balance/Net Position, Beginning of Year 237,880 237,880

Fund Balance/Net Position, End of Year $ 247,725 $ 247,725

The accompanying notes are an integral part of these financial statements. 4 PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021

NOTE 1 – ORGANIZATION

The Palmdale Community Foundation (the “Foundation”), 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 by Section 501 (c) (3) of the Internal Revenue Code, including the support of programs, projects, and activities sponsored by the City of Palmdale.

Persons appointed to the Foundation’s Board of Directors must include the City Attorney of the City of Palmdale, the Finance Director of the City of Palmdale, and the Assistant to the City Manager of the City of Palmdale. If the number of authorized directors exceeds three (3), the additional Directors must be persons who are affiliated with public or private agencies that provide services to the public in the City of Palmdale.

The accounting policies of the Foundation conform to accounting principles generally accepted in the United States of America as they are applicable to governmental units. Since the Foundation was established by the City of Palmdale, to support or carry out public services, the Foundation, as a public corporation, is considered a governmental entity for financial statement reporting purposes. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The Foundation is a component unit of the City of Palmdale, California (as defined by the Governmental Accounting Standards Board) and, as such, is included in the Comprehensive Annual Financial Report of the City.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

Measurement Focus, Basis of Accounting and Financial Statement Presentation

The statement of net position and the statement of activities include all of the financial activities of the Foundation. All of the Foundation’s activities are considered governmental in nature; therefore, the Foundation does not report any business -type activities. Governmental activities are typically supported by intergovernmental revenues and other nonexchange transactions.

The statement of activities demonstrates the degree to which the direct expenses of the Foundation are offset by general revenues.

The accounting used for the Foundation is the full accrual accounting method at the entity-wide level on the statements. This method of accounting is similar to private sector companies in that all the current year’s revenues and expenses are taken into account regardless of when the cash is received or paid.

5 PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available if they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Foundation considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. The Foundation accounts for all of its operating activities in its General Fund.

When both restricted and unrestricted net position is available, unrestricted resources are used only after restricted resources have been depleted.

Cash and Cash Equivalents

Cash and cash equivalents are stated at cost and consist of unrestricted demand deposits as of June 30, 2021.

Fund Balance

In the Fund Financial Statements, governmental funds may classify fund balances into five components whereby each component identifies the extent to which the Foundation 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 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 would be either 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or 2) imposed by law through constitutional provisions or enabling legislation. Amounts received by the Foundation are donor restricted if they are received with donor stipulations that limit the use of the donated asset.

Committed: Re venues that are constrained to specific purposes by a formal action of the Foundation’s Board, which constitutes the most binding constraint such as an ordinance. The constraint remains binding unless removed in the same formal manner by the Foundation’s Board.

The Foundation’s Board action to commit fund balance must occur within the fiscal reporting period while the amount committed may be determined subsequently.

Assigned: Resources that are constrained by the Foundation’s intent to be used for specifi c purposes, but that neither restricted nor committed. This policy delegates to the Finance Manager the authority to assign unrestricted fund balance amounts where the Foundation’s intent is for those 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. 6 PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2021

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.

Net Position

Net position is classified in the following categories:

Restricted: This component of net position consists of resources (net assets) that are not available to the Foundation and are subject to externally enforceable legal restrictions (imposed by laws, regulations or external creditors and/or donors).

Net assets consist of amounts received by the
Foundation and are donor restricted if they are received with donor stipulations that limit the use of the donated asset.

When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the Foundation’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 Foundation’s policy is to first apply committed fund balance, then assigned fund balances, and finally unassigned fund balance.

Income Taxes

The Foundation is a non-profit public benefit corporation that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Service as other than a private foundation and qualifies for deductible contributions as provided in Section 170(b) (A) (vi). It is also exempt from State Franchise and income taxes under Section 23701(d) of the California Revenue and Taxation Code. Accordingly, no provision for income taxes has been reflected in these financial statements . Income tax returns for 2015 and forward may be audited by regulatory agencies; however, the Foundation is not aware of any such actions at this time. The Foundation annually files forms 990, 199 and RRF-1 with the appropriate agencies.

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.

NOTE 3 – CASH AND CASH EQUIVALENTS

Custodial credit risk is the risk that in the event of a bank failure, the Foundation’s deposits may not be returned. The Foundation's cash balance of $250,927 as of June 30, 2021 represents amounts held with third-party depository financial institutions and cash on hand. As of June 30, 2021, the bank balance was $251,457 , insured by the Federal Deposit Insurance Corporation (FDIC), up to $250,000.

7 NOTE 4 – RELATED PARTY TRANSACTIONS

The Foundation reimburses the City of Palmdale for the cost of providing the Foundation with various services, including accounting, administration, insurance and other services.

Additionally, the Foundation provides various services to the community on behalf of the City of Palmdale. Amounts due to the City of Palmdale as of June 30, 2021 $3,202.

NOTE 5 – RESTRICTED FUND BALANCE

Amounts received by the Foundation are donor restricted if they are received with donor stipulations that limit the use of the donated asset. At June 30, 2021 , the Foundation had fund balance with donor restrictions in the amount of $24 8,814 and held for the following programs and purposes:

Community Supported Programs
Total Restricted
Fund Balance
Arts & Cultural Programs $ 565
Best of the West Snack Bar 100
Community Gardens 836
Community Outreach 755
Community Programs 9,249
Emancipated Youth Program 13,386
Gabriel's House 458
Legacy Senior Center Programs 89
Library 682
Neighborhood Service Programs 16,275
Other 250
Parks & Recreation 10,362
Pelona Vista Fitness Court 566
Playhouse 4,551
R. Lee Ermey Memorial Avenue 277
SAVES Programs 92,448
Vietnam Memorial Wall 4,629
Warnack Foundation Programs 93,336
Undesignated (1,089)
Total Restricted Fund Balance by Program $ 247,725

NOTE 6 – RISK MANAGEMENT

The Foundation is exposed to various risks of loss related to torts, theft of assets, errors and omissions, and natural disasters. The Foundation participates in the City of Palmdale’s commercial insurance programs, who obtains the appropriate insurance coverage needed by the Foundation from insurance companies. In the past three years, there have not been any settled claims which have exceeded insurance coverage.

8 REQUIRED SUPPLEMENTARY INFORMATION

9 PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – GENERAL FUND – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021

Variance
with
Budgeted Amounts

Final
Budget -
Positive
Original

Final
Actual
Amounts

(Negative)
Revenues:

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

9,880

9,880

9,845

(35)

Fund Balance - Beginning of Year

237,880

237,880

237,880

-

Fund Balance - End of Year $ 247,760 $ 247,760 $ 247,725 $ (5)

10 PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDED JUNE 30, 2021

Budgetary Information

The Foundation's budget is prepared and adopted on a modified accrual basis, where all expenditures are accounted for when liabilities are incurred. The budgetary level of control is at the fund level.
11 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 2
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
To the Board of Directors
of the Palmdale Community Foundation
City of Palmdale, California
We have audited, in accordance with the 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, the financial statements of the governmental activities and general fund of the Palmdale Community Foundation (a California nonprofit organization), a component unit of the City of Palmdale, California (City), as of and for the year ended June 30, 2020, and the related notes to the financial statements, which collectively comprise the Foundation’s basic financial statements, and have issued our report thereon dated May 5, 2022.

Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as it relates to the Foundation as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control as it relates to the Foundation.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
1 3
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Foundation’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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

Rancho Cucamonga, California
May 5, 2022
City Council Staff Report
DATE: JUNE 1, 2022
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS

CAPITAL IMPROVEMENT PROGRAM DIVISION
DISTRICT: ALL
SUBJECT: APPROVE THE CITY OF PALMDALE’S 202 2 FIVE-YEAR CAPITAL

IMPROVEMENT PLAN
ISSUE
Approve the City of Palmdale’s 2022 Five-Year Capital Improvement Plan.

RECOMMENDATION
Staff recommends that the City Council approve the 202 2 Five-Year Capital Improvement Plan.

BACKGROUND
Each year the Public Works Department updates the City’s Five-Year Capital Improvement Plan (CIP) to provide a basis for planning and budgeting significant capital projects. This process involves the review of the current Five-Year plan by all City departments. All suggestions for new projects are carefully considered for inclusion in the Five-Year CIP update. As new information becomes available to the city, current projects are sometimes revised or eliminated, and new projects are added.

The Five-Year CIP is simply a planning document and is divided into several categories including General City projects, Parks, Recreation and Culture projects, Street Improvement projects, Traffic/Transportation projects and Water Resource projects. Its purpose is to identify capital projects that are worthy of consideration to be undertaken within the next five years. From this list of projects identified in the CIP, selection is made of those projects that can realistically be funded in the upcoming fiscal year.

Approval of the annual City CIP budget by the City Council is the final determination of spending priorities for City capital projects for the budget year.

DISCUSSION
The 2022 Five-Year CIP is comprised of 111 proposed projects with an estimated value of $978,112,000. A copy of the condensed CIP project list is attached to this report for quick reference. A full copy of the 20 22 Five-Year CIP has also been distributed for reference.

Report to Mayor and City Council
Re: Approval of Five-Year CIP
June 1, 2022