Palmdale City Council
April 5, 2023

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 Address the City Council
Any person who would like to address the Council regarding an item on the agenda, please fill out a Speaker's Form and submit it to the City Clerk prior
to the agenda item
you would like to discuss. You may address the Council once per meeting, per public comment section of the agenda on only those matters within the Council's jurisdiction.

Please note that you are not required to complete this form or state your name and residence in order to speak. 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). The amount of time authorized may be adjusted by the chair. 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. Please note use of City Council Chamber technology equipment to present electronic material during meetings is

CITY COUNCIL MEETING

SUCCESSOR AGENCY

HOUSING AUTHORITY

INDUSTRIAL DEVELOPMENT AUTHORITY

PALMDALE AIRPORT AUTHORITY

PALMDALE CIVIC AUTHORITY

PALMDALE FINANCING AUTHORITY

CITY COUNCIL CHAMBERS
38300 SIERRA HIGHWAY

SUITE B
PALMDALE, CA 93550

WEDNESDAY, APRIL
5, 2023
5:00 PM
www.cityofpalmdale.org

WELCOME
City Council
Wednesday, April
5, 2023
not allowed.

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. Please follow these simple rules so 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. CALL MEETING TO ORDER

2. PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

*Note: All City Council memberships are reflected in their City Council titles.

3. ROLL CALL

MAYOR BETTENCOURT, MAYOR PRO TEM ALARC
Ó

N, COUNCILMEMBERS

BISHOP, LOA, OHLSEN

COMMISSIONERS FRAGA-SAENZ, DENNY

4. PRESENTATIONS

4.1 Presentation by Mayor and Council of a Proclamation declaring April 2023 as Child Abuse Awareness Month in the City of Palmdale.

4.2 Presentation by Mayor and Council of a Proclamation declaring April 2023 as Fair Housing Month in the City of Palmdale.

4.3 Presentation by Mayor and Council of a Proclamation declaring April 2023 as Prevention of Cruelty to Animals Month in the City of Palmdale.

City Council
Wednesday, April
5, 2023

4.4 Presentation by Mayor and Council of a Commendation to outgoing Planning Commissioners Marcos Alvarez and Christina Fraga-Saenz.

5. 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.)

6. PUBLIC COMMENTS ON CONSENT CALENDAR ITEMS ONLY
This portion of the Agenda allows an individual the opportunity to address the Council on Consent Calendar items ONLY. If you wish to comment on any item(s) listed on the Consent Calendar, please come forward to the podium when called or acknowledged by the Chair and state the item number(s) and your comments.

PLEASE NOTE: A three-
minute time limit
will be imposed on each speaker.

7. JOINT CONSENT CALENDAR CC/SA/HA/IDA/PAA/PCA/PFA

7.1 Receive and file the Annual Comprehensive Financial Reports for the Year Ended June 30, 2022, for the City of Palmdale, the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation. (Staff reference: Director of Finance Samson)

Staff Report ACFR 06.30.22 - Joint Item.docx

1. City of Palmdale June 30 2022 ACFR.pdf

2. Housing Authority June 30 2022.pdf

3. Civic Authority June 30 2022.pdf

4. Finance Authority June 30 2022.pdf

5. Palmdale Community Foundation June 30 2022.pdf

7.2 Approve the minutes from the previous meetings.

HA - February 1, 2023
HA - February 15, 2023
CC/SA/HA/IDA/PAA/PCA/PFA - March 1, 2023

Minutes HA 02_01_2023.pdf

Minutes HA 02_15_2023 .pdf

City Council_SA_HA_IDA_PAA_PCA_PFA Minutes 03 01 2023 5pm & 7pm.pdf

8. 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.

8.1 Receive and file the Monthly Investment Reports for February 2023.

City Council
Wednesday, April
5, 2023

1. Staff_Report_-_Investment_Report_Feb_2023.docx

Feb 2023 City & SA Investment Report.pdf

8.2 Ratify the approval of the Memorandum of Understanding between the City of Palmdale and the Antelope Valley Fair Authority defining the City's benefits resulting from the City's financial contribution to the Multi-Agency Regional Resiliency Center (MARRC).

Staff Report_Approve MOU with AV Fair_MARRC.docx

A-8296 AV Fair Authority.pdf

8.3 Summary of Annual Housing Element Progress Report.

Staff_Report_-_Annual_Housing_Element_Report_4-5-2023 v1.docx

Attachment 1 - Table A.pdf

Attachment 2 - Table A2.pdf

Attachment 3 - Table B.pdf

Attachment 4 - Table C.pdf

Attachment 5 - Table D.pdf

Attachment 6 - Table E.pdf

Attachment 7- Table F.pdf

Attachment 8 - Table F2.pdf

Attachment 9 - Table G.pdf

Attachment 10 - Table H.pdf

Attachment 11 - Table I.pdf

Attachment 12 - Table J.pdf

Attachment 13 -
Summary.pdf

8.4 Award Agreement with Tangram Interiors in the amount, not to exceed $325,000, for purchase and installation of furniture associated with the Code Enforcement and Public Safety relocation to the Aero Institute Building.

Code Enforcement and PS furniture.docx

8.5 Approve additional funds of $84,323.37 for Purchase Order No. 20230423, with Servpro of Palmdale North, dba P&C Restoration Cleaning Corp. for emergency clean up services for the Chimbole Cultural Center in the amount not to exceed $304,324.

Chimbole Staff report.docx

Purchase Order 20230423.pdf

8.6 Approve proposal to amend the 2019-2020 Action Plan to reprogram Community Development Block Grant COVID (CDBG-CV) funds, review and approve budget adjustments to SAVES CDBG and SAVES CDBG-CV budgets, and decrease SAVES CDBG budget.

CDBG CV Reprogram 4.5.23 SAVES.docx

8.7 Award construction agreement with SOV Security, for PN 872, Citywide Security City Council
Wednesday, April
5, 2023
Infrastructure Project, at the City facilities, including City Hall, Palmdale Transportation Center, Palmdale Playhouse, and the Maintenance Yard, in the amount not to exceed $973,833 and determine this project is to be exempt from CEQA.

Staff Report - Award Construction PN 872.docx

8.8 Adopt Resolution No. CC 2023-023, a Resolution of the City Council of the City of Palmdale authorizing the execution of a Surety Bond to meet the financial security requirement for energy for Palmdale's Independent Choice.

20230405_Palmdale Staff Report Final_EPIC Financial Security Requirement Bond.docx

1. 20230405_Palmdale Resolution 2023-023 Final_FSR Surety Bond.doc

2. Form of Surety Bond.docx

3. Form of Commercial GAI.pdf

9. APPOINTMENTS

9.1 City Council Nomination and Appointment of seven (7) Members and one (1) Alternate to the Human Rights Advisory Committee.

StaffReport_HRAC_Appointments (1).docx

HRAC apps.pdf

Ordinance No. 1550.pdf

10. NEW BUSINESS

10.1 Discussion and possible action regarding Animal Care and Control Operations.

11. PUBLIC COMMENTS ON NON-AGENDA ITEMS
This portion of the Agenda allows an individual the opportunity to address the Council on any subject regarding City business not on the Agenda. Under state legislation, no action can be taken on items not specifically referenced on the Agenda and the Chair may refer you to the City Manager or staff to address your request.

PLEASE NOTE: A three-
minute time limit
will be imposed on each speaker and your topic must remain relevant to items within the City's authority or purview.

12. INFORMATIONAL REPORT FROM MAYOR AND / OR COUNCILMEMBERS ON

THEIR VARIOUS COMMITTEE MEMBERSHIPS AND MEETINGS ATTENDED AT

PUBLIC EXPENSE

12.1 COMMITTEE MEMBERSHIPS.

• ANTELOPE VALLEY AIR QUALITY MANAGEMENT DISTRICT
• ANTELOPE VALLEY TRANSIT AUTHORITY
• CALIFORNIA CONTRACT CITIES ASSOCIATION
City Council
Wednesday, April
5, 2023
• 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
• UNITED STATES/MEXICO SISTER CITIES ASSOCIATION
• CALIFORNIA STATE PRISON – LOS ANGELES COUNTY, CITIZENS

ADVISORY COMMITTEE

12.2 MEETINGS ATTENDED AT PUBLIC EXPENSE

Alarcon Informational Report 040523 FINAL.docx

Bettencourt Informational Report 040523.docx

Bishop Informational Report 040523.docx

Ohlsen_Informational_Report_040523.docx

13. CITY COUNCIL ANNOUNCEMENTS AND REQUESTS FOR NEW AGENDA ITEMS

14. CITY MANAGER’S REPORT

15. PUBLIC COMMENTS ON CLOSED SESSION ITEMS
This portion of the Agenda allows an individual the opportunity to address the Council on Closed Session items ONLY.

PLEASE NOTE: A three-minute time limit
will be
imposed on each speaker.

16. PRESENTATION BY CITY ATTORNEY

16.1 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Shanae Smith, Patricia Nevarez and Michael "Mike" Behen vs. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 22STCV18219
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

16.2 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).

City Council
Wednesday, April
5, 2023

16.3 CONFERENCE WITH LEGAL COUNSEL—EXISTING LITIGATION
Ricky Thorstensen v. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 22STCV29463
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

16.4 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Kenya Torres vs. City of Palmdale, et al.

Los Angeles County Superior Court
Case No. 22STCV37041
This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

16.5 PUBLIC EMPLOYMENT
Title: City Attorney

16.6 CONFERENCE WITH REAL PROPERTY NEGOTIATORS
Property: 828 E. Palmdale Blvd. (APN: 3009-015-001)
Agency Negotiator for the City: Ronda Perez, City Manager and Mike Miller, Assistant City Manager
Negotiating parties: Pat Hunt
Under negotiations is both price and terms

17. ANNOUNCEMENT BY CITY ATTORNEY

18. ADJOURN
meeting to April 19, 2023 at 5:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

City Council
Wednesday, April
5, 2023
Joint Staff Report
DATE: APRIL 05, 2023
TO: HONORABLE MAYOR AND CITY COUNCIL

HONORABLE CHAIR AND COMMISSIONERS

HONORABLE CHAIR AND MEMBERS

HONORABLE CHAIR AND DIRECTORS
FROM: CITY MANAGER’S OFFICE

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: RECEIVE AND FILE THE ANNUAL COMPREHENSIVE FINANCIAL REPORTS FOR THE YEAR ENDED JUNE 30, 2022, FOR THE CITY

OF PALMDALE, THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE, THE PALMDALE CIVIC AUTHORITY, THE PALMDALE

FINANCING AUTHORITY, AND THE PALMDALE COMMUNITY
FOUNDATION.

ISSUE
Receive and file the Annual Comprehensive Financial Report for the Year Ended June 30, 2022, for the City of Palmdale, the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation.

RECOMMENDATION
Staff recomm ends that the City Council receive and file the independent auditor’s unmodified (clean) report for the City’s Annual Comprehensive Financial Report for the Year Ended June 30, 2022, for the City of Palmdale, the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation.

BACKGROUND
The Annual Comprehensive Financial Report (ACFR) communicates the City’s financial condition and activity for the Year Ended June 30, 202 2. Overall, the City’s operations show signs of stability, a result of the prudent and sound management practices and efforts of the City of Palmdale. The most important fact to note is that management will remain diligent and continue to recommend caution during this time of uncertainty. The following is an explanation of some key indicators shown in the ACFR.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2022 April 05, 2023

The City contracted with Eide Bailly, LLP to perform the annual audit of the City’s financial transactions for the Year Ending June 30, 2022. The independent auditors’ unmodified (clean) report provides the assurance that the ACFR and audited information within, present fairly the City’s financial position for the Year Ended June 30, 2022.

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

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

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

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

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

Financial Section (the main body of the ACFR for current year information) Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2022 April 05, 2023

 Independent Auditor’s Report (pages 1-4) – The City’s report card on the content of the ACFR.
 Management’s Discussion and Analysis (MD&A) (pages 5-24) – provides an analytical overview of the City’s financial status.
 Basic Financial Statements – show finances at a point in time (assets – liabilities) and throughout the year (revenues – expenses, and budget to actual revenues and expenditures).
o City-Wide Statements (pages 24-26) – overview of financial information. o Fund Financial Statements (pages 21-24) – a detailed look at funds, showing Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance.
o Budget to Actual Comparisons (pages 25-29) – for the General Fund and other select major funds.
o Proprietary Fund Financial Statement (pages 30-32) – show finances for Internal Service Funds.
o Fiduciary Fund Financial Statement (pages 34-35) – show finances for Custodial Funds, Retiree Health Premium Trust Funds and Private- purpose Trust Funds.
o Notes to the Financial Statements (pages 36-90) – (Notes) a narrative explanation that accompanies the Basic Financial Statements.

Required Supplementary Information Sections
 Pension Information (pages 92-93) – information on changes in Net Pension Liability and related ratios and schedule of contributions.  Other Post Employment Defined Benefit information (OPEB) (pages 94-95) – information on changes in Net OPEB Liability and related ratios and schedule of investment returns.
 Combining Financial Statements (pages 99-107) - A detailed schedule of the non- major individual funds for funds that were presented in a cumulative manner in the Financial Section.
 Budget to Actual Comparisons (pages 113-151) – for the non-major funds cumulated in the Financial Section.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2022 April 05, 2023

 Combining Financial Statements (pages 152-154) – for internal service funds presented in a cumulative manner in the Financial Section.  Combining Financial Statements (pages 156-157) – for fiduciary funds presented in a cumulative manner in the Financial Section.

Statistical Section (current and historical information starting at page 162 – up to 10 years)
 Financial Trends
 Revenue Capacity Information
 Debt Capacity Information
 Demographic and Economic Information
 Operating Information
Overview of the Citywide Net position
The Statement of Net position, similar to a balance sheet, shows total assets and liabilities of the City as of June 30, 2022. The total net position (assets less liabilities) was $897.1 million. Net position is broken out into three categories: capital, restricted and unrestricted.
 Net Investment in Capital Assets ($618.1 million)
Capital is the largest of the three categories and is net of depreciation and debt.

Capital assets include land, buildings, improvements, infrastructure and utility systems and construction in progress.
 Restricted Net Position ($233.5 million)
These assets are subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. Approximately 28.6 percent of this amount is restricted for affordable housing, and 66.0 percent is restricted for committed projects such as streets, sewer and drainage public service projects.

The remaining amount is committed to debt obligations and community projects.  Unrestricted Net Position ($45.4 million)
These assets may be used to meet government’s ongoing obligations to citizens and creditors. These assets are made up of positive unrestricted balances of $40,428,440 in the General Fund.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2022 April 05, 2023

 Liabilities and Deferred Inflows of Resources ($151.6 million) o The short-term liabilities totaling $19.5 million are considered current and payable within a year and consist of unpaid expenditures, accrued salaries, and principal and interest to be paid on long-term debt owed at the financial date and within the year. Non-current liabilities totaling $110.4 million are the largest component of the City’s liabilities. o The long-term liabilities consist of $52.6 million balances owed on bonds issued to fund redevelopment projects, and various city, building, and park improvement. The remainder of the long-term liabilities was comprised of Notes Payable for Streetlight Acquisition totaling $9.2 million, Capital Leases Payable for Equipment Leases, Section 108 HUD Loan, HOME Loan, On Bill Financing with Southern California Edison, and $11.8 million on unpaid liability claims and compensated balances. More information on the debt can be found in the Notes to the Financial Statements (Notes) section starting at page 36. The second largest component of long-term liabilities consists of the Net Pension Liabilities totaling $30.1 million for future unpaid retirement benefits due employees. A detailed explanation of the net pension liability is included in the Notes section. (Note 15, pages 74 through 77).
o Schedules of Changes in Net pension Liability and Related Ratios and Schedule of Contributions can be found on pages 92 and 93 of the Required Supplementary Information Section. Schedules of Changes in the City’s Net Other Postemployment Benefits (OPEB) Liability and Related Ratios can be found on pages 94 and 95 of the Required Supplementary Information Section. The remaining amount consists of refundable deposits, unearned revenue and deferred inflows of resources in the amount of $9.1 million. The deferred inflows of resources related to pensions and other postemployment benefits in the amount of $15.8 million and consist of changes in assumptions, and differences between expected and actual experiences. This amount is recognized as a reduction of pension expense over a five-year period.
 Cash and Investments
The ACFR also includes detailed information on the City’s cash and investments.

As of June 30, 2022, the City had $296.4 million in total cash and investments.

More information on cash and investments can be found in the Notes Section starting at page 46.
 General Fund Balance
The General Fund balance is a good measure of the City’s financial health. As presented in the Basic Financial Statements, the City’s General Fund (page 21) Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2022 April 05, 2023

had a balance of $73.3 million as of June 30, 2022. The balance consists of several categories, as follows:
o $2.6 million nonspendable, resources not in a spendable form such as permit held for development, prepaids, and long-term receivables.

o $6.2 million restricted resources subject to externally enforceable legal restrictions such as donations and grants.
o $23.9 million assigned resources that are constrained by the City’s intent to be used for a specific purpose such as covering the City’s self-insured liability claims and healthcare claims liabilities, and unpaid accrued employee compensated absence balances.
o $40.4 million in unassigned resources that can be used for ongoing obligations of the City.

The City’s 2022-23 budget projects continuing operating revenues aligning with the continuing operating expenditures while the unassigned fund balance resources are used to maintain an operating reserve and also setting aside reserves for purposes considered to be most volatile and hard to forecast. It is the City’s policy to maintain a minimum General Fund reserve of 20 percent of operating expenditures. The operating reserve is projected to be 20 percent at June 30, 2023, while reserves are also being set aside for future contingent liability requirements, capital replacement requirements, information technology replacements, infrastructure improvement requirements.

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

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

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

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

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

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2022 April 05, 2023

Prepared by: Janelle Samson, Director of Finance
Certified as to availability of Funds: Janelle Samson, Director of Finance Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, Special Counsel

ATTACHMENTS

1. City of Palmdale Annual Comprehensive Financial Report for the Year Ended June 30, 2022.

2. Housing Authority of the City of Palmdale Annual Comprehensive Financial Report for the Year Ended June 30, 2022.

3. Palmdale Civic Authority Annual Comprehensive Financial Report for the Year Ended June 30, 2022.

4. Palmdale Financing Authority Annual Comprehensive Financial Report for the Year Ended June 30, 2022.

5. Palmdale Community Foundation Financial Statements for the Year Ended June 30, 2022.

This page intentionally left blank
City of Palmdale
Table of Contents
For the Year Ended June 30, 2022

INTRODUCTORY SECTION
Letter of Transmittal................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................i Organizational Chart - City of Palmdale................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................viii Elected and Administrative Officers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ix Location Map................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................x

FINANCIAL SECTION
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1 Management's Discussion and Analysis................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5 Basic Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................17 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19 Governmental Fund Financial Statements
Balance Sheet - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................23 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 Budgetary Comparison Statements - General and Major Special Revenue Funds Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 Budget and Actual - HA - Housing Asset Fund Special Revenue Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26 Budget and Actual - HA - Housing Authority Facilities Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................27 Budget and Actual - ARPA Fund ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 Budget and Actual - Measure AV Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 Proprietary Fund Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 Statement of Revenues, Expenses and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 Statement of Cash Flows - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position - Fiduciary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 Statement of Changes in Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios-Public Employees Retirement System- Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................92 Schedule of Contributions-Public Employees Retirement System-Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................93 City of Palmdale
Table of Contents
For the Year Ended June 30, 2022
Schedule of Changes in Net OPEB Liability and Related Ratios................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................94 Schedule of Investment Returns for OPEB................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................95 Supplementary Information
Combining Balance Sheet - Nonmajor Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................99 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds 100
Combining Balance Sheet - Nonmajor Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................101 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................107 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Air Quality Improvement Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................113 Community Development Block Grant - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................114 Drainage - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................115 Drainage Benefit Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................116 Federal Funds - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................117 Federal Home Program - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................118 Federal Jobs Programs - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................119 Federal Home ARP Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................120 Fire Facilities Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................121 Gas Tax - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................122 Housing Authority - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................123 Landscape Maintenance - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................124 Local Transport Article 3 - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................125 Local Transport Article 8 - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................126 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................127 Measure R - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................128 Measure M - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................129 Miscellaneous Grants/Developer Contributions - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................130 Park Assessments - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................131 Park Development - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................132 Proposition A - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................133 Proposition C - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................134 Public Facilities Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................135 Public Safety - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................136 Road Maintenance & Rehabilitation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................137 South Antelope Valley Emergency Services (SAVES) - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................138 Sewer Maintenance Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................139 Measure A LA County Parks - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................140 State Grants Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................141 Street Lighting Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................142 Traffic Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................143 Communications PEG - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................144 Solid Waste - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................145 City of Palmdale
Table of Contents
For the Year Ended June 30, 2022
Palmdale Community Foundation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................146 Water Park - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................147 Public Art - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................148 Palmdale Civic Authority - Debt Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................149 Palmdale Financing Authority - Debt Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................150 CFD/Assessment Districts - Capital Projects Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................151 Statement of Internal Service Fund Net Position
Combining Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................152 Combining Statement of Revenues, Expenses and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................153 Combining Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................154 Statement of Fiduciary Net Position and Assets and Liabilities Statement of Fiduciary Net Position Retiree Health Premium Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................156 Statement of Fiduciary Net Position and Assets and Liabilities Assessment and Community Facilities District Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................157 Statement of Changes in Net Position and Assets and Liabilities Combining Statement of Changes in Fiduciary Net Position Retiree Health Premium Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................159 Combining Statement of Fiduciary Net Position Assessment and Community Facilities District Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................160

STATISTICAL SECTION
Statistical Section................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................162 Net Position by Component................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................163 Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................164 Fund Balances - Governmental Funds, (continued)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................166 Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................168 General Governmental Tax Revenue by Source................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................170 Assessed Value and Estimated Actual Value of Taxable Property................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................171 Direct and Overlapping Property Tax Rates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................172 Principal Property Tax Payers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................173 City Property Taxes Levies and Collections................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................174 Ratios of Outstanding Debt by Type................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................175 Ratios of General Bonded Debt Outstanding................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................176 Direct and Overlapping Governmental Activities Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................177 Legal Debt Margin Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................178 Former Community Redevelopment Agency - Project Area 1 & 1 A Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................179 Former Community Redevelopment Agency - Project Area 2A Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................180 Former Community Redevelopment Agency - Project Area 2A (20 Percent Set Aside) Pledged-Revenue Coverage ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................181 Demographic and Economic Statistics................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................182 Principal Employers - Antelope Valley................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................183 Full-time-Equivalent City Government Employees by Function:Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................184 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................185 City of Palmdale
Table of Contents
For the Year Ended June 30, 2022
Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................186 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................187 Capital Asset Statistics by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................188 This page intentionally left blank



This page intentionally left blank

March 30, 2023

Honorable Mayor, Members of the City Council,
and Citizens of the City of Palmdale:

We are pleased to submit the Annual Comprehensive Financial Report (ACFR) of the City of Palmdale for the fiscal year ended June 30, 2022. This report is published in accordance with local ordinance and the state law requirements that financials statements be presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by an independent public accounting firm of licensed certified public accountants.

This report consists of management's representations concerning the finances of the City of Palmdale. Consequently, management assumes full responsibility for the completeness and reliability of all of the information presented in this report. To provide a reasonable basis for making these representations, management of the City of Palmdale has established a comprehensive internal control framework that is designed to protect the government's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City of Palmdale's financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the City of Palmdale’s comprehensive framework of internal controls has been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.

The City of Palmdale's financial statements have been audited by Eide Bailly, LLP, a firm of licensed certified public accountants. The goal of the independent audit was to opine on whether the financial statements of the City of Palmdale for the fiscal year ended June 30, 2022, are free of material misstatement. The independent audit involved examination on a test basis, evidence supporting the amounts and disclosures in the financial statements; assessing the accounting principles used and significant estimates made by management; and evaluating the overall financial statement presentation.

Based upon the audit, the independent auditor concluded that there was a i

reasonable basis for rendering an unmodified opinion that the City of Palmdale's basic financial statements for the fiscal year ended June 30, 2022, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

The City of Palmdale’s Management’s Discussion and Analysis (MD&A) can be found immediately following the report of the independent auditors.

Palmdale Profile

The City of Palmdale was incorporated on August 24, 1962 and became a charter City in November 2009. The City is located 60 miles north of Los Angeles and is situated in the high desert at an elevation of 2,600 feet with an average mean temperature of 72 degrees Fahrenheit. Palmdale is an upper-middle class community, with a median household income of $70,858 in 2021, which is comparable to Los Angeles at $69,778. Palmdale residents enjoy a comfortable hometown feel with a strong family orientation, excellent education system and abundant opportunities in a safe environment.

There are eighty-eight cities in Los Angeles County with a total population of 10 million. Palmdale is the sixth largest and one of the fastest growing cities in the county. The City currently occupies a land area of 104 square miles and serves a population of 167,398. The City is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing council.

The City of Palmdale is a Charter City governed under the council/manager form of local government. The City is divided into five geographic areas, and voters in each district elect one council representative who also lives in that district. All Council seats serve four-year terms. The five-person Council designates one of its members to serve as the Mayor at the December meeting each year; the Mayor Pro-Tem is selected from among the councilmembers.

The City Manager serves at the pleasure of the City Council and administers the City's affairs and carries out policies established by the City Council. The City Council is responsible for passing ordinances, adopting the budget, appointing committees, and hiring both the City Manager and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the Council, overseeing the day-to-day operations of the government, and for appointing department heads.

ii

The City provides the following municipal services:

Building
Services
Parks,
Recreation,
and
Culture
Public Safety
Economic
Development
Human
Resources
Public Works
& Utilities
Engineering Planning &
Zoning
Environmental
Programs
Finance and
Information
Technology
Library Affordable
Housing

The annual budget serves as the foundation for the City of Palmdale's financial planning and control. All departments of the City of Palmdale are required to submit requests for appropriations to the City Manager on or before March 31 each year. The City Manager uses these requests as the starting point for developing a proposed budget. The City Manager then presents this proposed budget to the council for review prior to May 31. The council is required to hold public hearings on the proposed budget and to adopt a final budget by no later than June 30. The appropriated budget is by fund and department. Department heads may make transfers of appropriations within a department.

The accompanying Annual Comprehensive Financial Report includes the financial activities of the City of Palmdale, the primary government, and its component units, which are the Palmdale Civic Authority, the Palmdale Financing Authority, the Housing Authority of the City of Palmdale, the Palmdale Community Foundation and the Industrial Development Authority of the City of Palmdale. Financial information for the City and these component units is accounted for in the accompanying financial statements in accordance with principles defining the governmental reporting entity adopted by the Governmental Accounting Standards Board.

Factors Affecting Financial Condition

The information presented in the financial statements is best understood when it is considered from the broader perspective of the specific environment with which the City of Palmdale operates.

Local Economy

Recognized as the Most Business Friendly City in 2021, the City of Palmdale is guided by a community-minded, business-driven approach to iii

economic development. City officials pride themselves on the organization’s ability to balance the needs of local businesses with those of the community members, resulting in an unmatched quality of life.

In 2022, Palmdale added over 140 new businesses including Sprouts Farmers Market, Pier 88, Black Bear Diner, Pilot Flying J, Dutch Bros and many more. Palmdale is also home to the new B-21 Raider Stealth Bomber developed and manufactured by Palmdale’s Northrop Grumman. Northrop has steadily built up its workforce over the last few years and now employs approximately 7,000 and will be looking to add an additional 1,200 employees to support the B-21 program over the next decade. Palmdale is also working with national developers to entitle over 10 million SF of new industrial space. These buildings will help attract dozens of new businesses to Palmdale creating thousands of new jobs for the community.

The Palmdale Tourism Improvement District (PTID), continues to make progress in its second year, working to promote tourism in our area and increase hotel stays. The City is also aggressively working to further develop its reputation as a film-friendly city through the Film Palmdale program. A new 6,000 square foot Palmdale Film Stage is being constructed that will include a large Cyc Wall and green screen. The film stage will be available for rent to accommodate a variety of productions including music videos, film, television, photoshoots, and more.

The demand for quality housing in Palmdale continues. A broad range of housing choices from traditional single-family homes to market rate townhomes and apartments are all being developed in Palmdale. There are approximately 2,000 single family and over 600 apartment and townhomes in construction or starting construction this year.

The Palmdale EIFD, established in partnership with LA County at the end of 2021, created the largest EIFD in California, consisting of more than 23,000 acres. Through that partnership we have identified a first phase of projects to be funded and design work should start later this year. The Palmdale EIFD will help fund a variety of projects to help fulfill economic goals for the City, County, and State, as well as support needed infrastructure to help accelerate the production of quality jobs and housing in the Palmdale.

Long Term Financial Planning

As part of the City of Palmdale land use planning process, the City’s completed General Plan is at the top of the City’s land use regulation hierarchy. It is the foundation for most of the Council’s budgeting decisions in terms of capital facilities, staffing, programs, utility infrastructure, and levels of service; it establishes a land use pattern for lands beyond the City limit; it provides the vision and guidance for capital improvements and the iv

development of City infrastructure; and it is used to create development impact fees and provides the basis for environmental analysis of the growth of the City. The plan is intended to guide development for a period of ten years and will be the basis of the City’s annual 5 year operating and capital forecast.

To finance current growth, the City has in place a variety of user and developer fees to pay for streets, parks, and sewer lines. The City reviews these fees on an annual basis to assure that the fee structure is in line with the cost of construction. As growth in the City’s economically sensitive revenues remained on pace with a solid fiscal year 2021-22, the City’s focus is to maintain the long-term health of the organization in order to deliver needed services to our residents. We continue to preserve the City’s ability to respond to external financial challenges such as continued increases in our law enforcement contract, required pension contributions, and healthcare costs, as well as federal and state funding uncertainty.

The City provides necessary funding for essential services for City Council and community -identified priorities while taking necessary steps to ensure the City remains in good financial health. The City prepares extended forecasts for the General Fund twice a year to determine the future impact of current actions. These forecasts indicate that expenditures are growing at a pace greater than revenues. The General Fund is expected to remain stable over the next few years, primarily as a result of the passage of Measure AV sales tax as well an increase in Federal and State funding.

The City maintains a General Fund balance sufficient to provide for various, identified contingencies, as well as an established operating and capital reserve. In addition, the General Fund contributes annually to reserves set aside for future contingent liability requirements, capital replacement requirements, computer technology replacements, infrastructure improvement requirements, and an economic sustainability fund for future downturns in the economy. The City’s Capital Improvement Program is a component of the annual budget process that addresses the City’s short- term and long-term capital needs. Just as important, the CIP emphasizes a plan of action that effectively maintains the existing infrastructure to a sound physical standard as well as providing new facilities and infrastructure to support current growth and new development.

Strategic Plan

The City of Palmdale’s Strategic Plan establishes the foundation and framework for guiding policy and financial management decisions. This long-term perspective integrates strategic planning and budgeting to forecast and actively communicate challenges and opportunities before they arise.
v

The City Council goals are predicated on the understanding that investments of financial, physical and staff resources today ensure the community’s quality of life is preserved and enhanced in the future.

Preparing for an uncertain future requires consideration of a wide range of factors as well as direct and indirect influences on the City providing the community’s desired service level on a sustainable basis. Long term financial planning involves financial forecasting and strategizing how to meet both current and future needs of the community.

The Strategic Plan, in conjunction with the detailed Business Plans, will continue to serve as a roadmap for our organization and the framework for our important programming and budgetary decisions.

Processes involving strategic planning will allow the City the opportunity to not only reflect on five decades of growth and success, but also to revisit our focus for the future. Creating a successful future in Palmdale will depend on the continued implementation of the Strategic Plan, as well as making necessary adjustments that will sustain us in the years and decades ahead.

Award and Acknowledgements

The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Palmdale for its annual comprehensive financial report (ACFR) for the fiscal year ended June 30, 2021. This was the 31st consecutive year that the City has received this prestigious award. In order to be awarded a Certificate of Achievement, the government published an easily feadable and efficiently organized ACFR. This report satisfied both GAAP and applicable legal requirements.

A Certificate of Achievement is valid for a period of one year only. I believe that our current ACFR continues to meet the Certificate of Achievement program’s requirements and I am submitting it to the GFOA to determine its eligibility for another certificate.

The City also received the Excellence in Operational Budgeting Award from California Society of Municipal Finance Officers (CSMFO) and the Distinguished Budget Presentation Award from Government Finance Officers Association (GFOA) for the fiscal year 2021-2022 Budget.

The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the City Manager’s Office - Finance Division. I would like to express my appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor, City Council vi

members, and the City Manager for their support for maintaining the highest standards of professionalism in the management of the City of Palmdale’s finances.

Respectfully submitted,

Janelle Samson
Director of Finance/City Treasurer

vii





















































viii
City Officials

Year Ended June 30, 2022

City Council
Steven D. Hofbauer Mayor
Laura Bettencourt Mayor Pro Tem
Austin Bishop Councilmember
Richard J. Loa Councilmember
Juan Carrillo Councilmember

Administration and Department Heads

Interim City Manager Ronda Perez
Interim Assistant City Manager Michael Miller
Interim City Attorney Scott E. Porter
Deputy City Manager Mike Behen
Director of Economic & Community Development Luis Garibay Director of Finance Janelle Samson
Director of Parks & Recreation Keri Smith
Director of Neighborhood Services Michael Miller
Director of Public Works Chuck Heffernan
ix
/2&$7,210$3
7KHEHDXWLIXO$QWHORSH9DOOH\VLWXDWHGDWWKHQRUWKHUQWLSRI/RV$QJHOHV&RXQW\LVERXQGHGE\ WKH7HKDFKDSL0RXQWDLQVLQ.HUQ&RXQW\WRWKHQRUWKWKH$QJHOHV1DWLRQDO)RUHVWDQG6DQWD &ODULWD9DOOH\WRWKHZHVWWKH6DQ*DEULHO0RXQWDLQVWRWKHVRXWKDQGDORQJH[SDQVHRIKLJK GHVHUWVWUHWFKLQJDOOWKHZD\WR9LFWRUYLOOHLQ6DQ%HUQDUGLQR&RXQW\WRWKHHDVW7KH&LW\RI 3DOPGDOHHQFRPSDVVLQJVTXDUHPLOHVVLWVDWWKHVRXWKHUQHQGRIWKH$QWHORSH9DOOH\DW DQHOHYDWLRQRIIHHW
x



This page intentionally left blank
1 2
Responsibilities of Management for the Financial Statements

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

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

Auditor’s Responsibilities for the Audit of the Financial Statements

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

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

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

2 3
Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedules of changes in the City’s net pension liability and related ratios, schedule of contributions, schedules of changes in net OPEB liability and related ratios, and schedule of investment returns as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information

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

Other Information

Management is responsible for the other information included in the annual report. The other information comprises the introductory section and the statistical section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

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

3 4
Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2023, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Rancho Cucamonga, California
March 30, 2023
4 This page intentionally left blank
City of Palmdale
Management's Discussion and Analysis
As management of the City of Palmdale, we offer readers of the City of Palmdale's financial statements this narrative overview and analysis of the financial activities of the City of Palmdale for the Fiscal Year Ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i through xii of this report.

Financial Highlights
 The Assets and Deferred Outflows of Resources of the City of Palmdale exceeded its Liabilities and Deferred Inflow s of Resources at the close of Fiscal Year Ending June 30, 2022, resulting in a Total Net Position of Governmental Activities of $897,138,235. The City’s Change in Net Position of Government Activities increased in Fiscal Year 2022-21 by $16,118,136 or 1.8 percent. Further details on reported Fiscal Year Net Position are discussed on page 7.  Included in the Statement of Net Position, the Total Net Position amount was a result of Total Assets increased to $1,057,533,195; Deferred Outflows of Resources reported a balance of $6,796,915 or an decrease of 19.3 percent to $1,621,365; Total Liabilities increased b y 12.2 p ercent to $151,383,199; and Deferred Inflows of Resources decreased by 8,304.6 percent to $15,808,676.
 Within Total Net Position, the Net Investment in Capital Assets was reported as $618,136,264, Restricted Net Position was reported as $233,562,972, and Unrestricted Net Position reported as $45,438,999. Unrestricted Net Position increased b y 16.1 p ercent and may be used to meet the government's ongoing obligations to citizens and creditors.
 As of the close of Fiscal Year 2021-22, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $309,953,663, an increase of $41,616,227 in comparison with the Prior Year. Of the Total Ending Fund Balance of $309,953,663, the General Fund Balance was $73,269,501 or an increase of $14,768,235 from the prior fiscal year. Of the $73,269,501 General Fund Balance, Nonspendable Fund Balance was $2,554,221, Restricted Fund Balance was $6,297,363, Assigned Fund Balance was $23,989,477 and Unassigned Fund Balance was $40,428,440.

Details are discussed on page 21.
 The City of Palmdale's Total Long-Term Liabilities increased b y $289,812 o r 0.4 p ercent, during the Fiscal Year Ended June 30, 2022. The increase is due to the accrual of liability claims that are anticipated to be settled in the short term. During Fiscal Year 2021-22, Additions and Retirements offsetting the increase in liabilities included:
 Compensated Absences Additions of $1,278,280 and Retirements of $1,613,600;  Self-Insurance Liability Claims Additions of $7535,219 and Retirements of $1,583,920;  Lease Payable Additions of $60,974 and Retirements of $163,394;  Bonds Payable Additions of $0 and Retirements of $4,131,700; and  Note Payable Additions of $0 and Retirements of $1,120,716 5 City of Palmdale
Management's Discussion and Analysis
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Palmdale's basic financial statements. The City of Palmdale's basic financial statements are comprised of three components:
(1) Government-Wide Financial Statements,
(2) Fund Financial Statements, and
(3) Notes to the Financial Statements.

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

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

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

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

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

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

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

Because the focus of Governmental Funds is narrower than that of the Government-Wide Financial Statements, it is useful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the Government-Wide Financial Statements. By d oing so, the readers may better understand the long-term impact of the government's near-term financing decisions. The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances, provide a reconciliation to facilitate this comparison between Governmental Funds and Governmental Activities. The Governmental Fund Statements can be found on pages 21 - 23. 6 City of Palmdale
Management's Discussion and Analysis
The City of Palmdale maintains 39 individual Governmental Funds. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund, the Housing Authority-Housing Asset Fund Special Revenue Fund, the Housing Authority- Facilities Fund Special Revenue Fund, the American Rescue Plan Act Fund (ARPA), and Measure AV fund, all of which are considered to be major funds. Data from the remaining 35 governmental funds are combined into a single, aggregated presentation. Individual fund data for these non-major governmental funds is provided in the form of combining statements on pages 99 - 150.

The City of Palmdale adopts an annual appropriated budget for its General Fund, its Housing Authority - Housing Asset Fund - Special Revenue Fund, its Housing Authority Facilities Fund – Special Revenue Fund, its ARPA fund, and its Measure AV fund. A budgetary comparison statement has been provided for each of these funds to demonstrate compliance with their respective budgets. The budgetary comparison statements can be found on pages 25 - 26.

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

The resources of those funds are solely to support the City of Palmdale's own programs. The basic Proprietary Fund Financial Statement can be found on pages 30 - 31.

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

Fiduciary funds are not reflected in the Government-Wide financial statements because the resources of those funds are not available to support the City of Palmdale's own programs. The basic Fiduciary Fund Financial Statement can be found on pages 34 of this report.

Notes to the Financial Statements. The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Fund Financial Statements. The Notes Section provides greater detail on Significant Accounting Policies, Cash and Investments, capitalization consistency, fiscal activities and debt service. Generally accepted accounting principles are used to create the City’s financial statements and the Notes Section helps the reader to understand the objective of the financial reporting. The Notes can be found on pages 36 - 91 of this report.

Government-Wide Financial Analysis
As noted earlier, Net Position may serve over time as a useful indicator of a government's financial position. In the case of the City of Palmdale, Assets and Deferred Outflows of Resources exceeded Liabilities and Deferred Inflows of Resources by $897,138,235 as of June 30, 2022.

The City of Palmdale’s Net Investment in Capital Assets reflects a balance of $618,136,264. Investment in capital assets is
defined as land, buildings, machinery and equipment, infrastructure, and construction in progress, net of Accumulated Depreciation, and less any related debt or deferred outflows of resources used to acquire these assets that is still outstanding.

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

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

Separate sections are included and report:
 Total Assets totaling
$1,057,533,195 as a sum of Current and Other Assets of $375,224,928 and Capital Assets of $682,308,267.
 Deferred Outflows of Resources totaling $6,796,915 as a sum of Pension Related Amounts for a future period totaling $6,326,853 a nd Other Postemployment Benefits Related Amounts totaling $470,063. This section represents a consumption of net position that applies to a future period.  Total Liabilities totaling $151,383,199 a s a sum of Long-Term Liabilities Outstanding of $80,164,094 a nd Other Liabilities of $71,219,105.
 Total Deferred Inflows of Resources totaling $15,808,676 a s Other Postemployment Benefit Related Amounts of $199,797. The Deferred Inflows Related to Pension Liability is the result of GASB 68 and will be recognized in the 7 City of Palmdale
Management's Discussion and Analysis
subsequent measurement period.
 Total Net Position reported totaling $897,138,235 r epresents a sum of the Net Investment in Capital Assets $618,136,264; Restricted Net Position of $233,562,972; and Unrestricted Net Position of $45,438,999.

Total Deferred Outflows of Resources related to pension amounts are not reported on the Governmental Funds Balance Sheet and are further explained in Note (15) of the Notes to the Financial Statements. The Deferred Outflows of Resources that represent a consumption of Net Assets that applies to a future period in the amount of $6,326,852 is reported in accordance with GASB 68.

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

City of Palmdale's Net Position
Governmental
Activities
2022
Governmental
Activities
2021
Assets
Current and other assets $ 375,224,928 $ 335,823,171
Capital assets 682,308,267 709,466,967
Total assets 1,057,533,195 1,045,290,138
Pension related amounts 6,326,852 7,833,049
Other postemployment benefits related amounts 470,063 585,231 Total deferred outflows of resources 6,796,915 8,418,280 Long-term liabilities outstanding 80,164,094 79,874,282 Other liabilities 71,219,105 92,625,942
Total liabilities 151,383,199 172,500,224
Pension related amounts 15,517,784 -
Other postemployment benefits related amounts 199,797 188,095 Deferred inflows from Leases 91,095 -
Total deferred inflows of resources 15,808,676 188,095
Net position
Net investment in capital assets 618,136,264 635,725,018 Restricted 233,562,972 206,139,337
Unrestricted 45,438,999 39,155,744
Total net position $ 897,138,235 $ 881,020,099
The City of Palmdale's Restricted Net Position of $233,562,972 represents resources that are subject to external restrictions on how they may be used. The Unrestricted Net Position of $45,438,999 m ay be used to meet the government's ongoing obligations to citizens and creditors. The Net Investment in Capital Assets is $618,136,264 and is the amount of capital assets net depreciation. At the end of the Fiscal Year, the City of Palmdale is able to report positive balances in Restricted and Unrestricted categories of Net Position for its governmental activities. 8 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Changes in Net Position
Governmental
Activities
2022
Governmental
Activities
2021
Revenues:

Program Revenues:

Charges for services $ 54,542,664 $ 50,315,044
Operating grants and contributions 2,740,434 3,828,357
Capital grants and contributions 32,939,685 34,148,793
Total Program Revenues 90,222,783 88,292,194
General revenue:

Property taxes 26,366,000 25,981,042
Sales and use taxes 50,484,625 30,305,927
Other Taxes 14,847,593 13,342,001
Unrestricted investment earnings/(loss) (7,686,544) 401,094 Other 697,180 1,267,638
Total General Revenues 84,708,854 71,297,702
Total revenues 174,931,637 159,589,896
Expenses:

General government 26,570,018 23,661,402
Public safety 35,668,009 34,120,577
Public services 75,158,621 64,363,055
Community development 9,269,097 10,337,092
Cultural and recreational 9,648,980 8,681,441
Health and welfare 316,031 1,136,316
Interest on long-term debt 2,182,745 2,966,821
Total expenses 158,813,501 145,266,704
Change in Net Position 16,118,136 14,323,192
Net Position, Beginning of Year 881,020,099 866,696,907 Net Position, End of Year $ 897,138,235 $ 881,020,099
9 City of Palmdale
Management's Discussion and Analysis
Governmental Activities. G overnmental activities increased t he City of Palmdale’s net position by $16,118,136 o r 1.83 percent, during the Fiscal Year 2021-22. Key elements of the Governmental activities Net Position increase are as follows:
 Charges for Services increased by $4,227,620 or 8.4 percent primarily due to inflationary pressure .  Operating Grants and Contributions decreased by $1,087,923 or 28.4 percent from the prior fiscal year primarily due to a reduction in Covid mitigation and reimbursement grants.  Capital Grants and Contribution proceeds decreased by $1,209,108 or 3.5 percent primarily due to a reduction in state grant funds as a result of completed projects.
 The City reported increases in Property Taxes of $384,958 or 1.5 percent. The improvement can be attributed to an increase in property values within the City and continued restoration of prior Proposition 8 Property Tax reductions.  Sales Taxes increased b y $20,178,698 o r 66.6 p ercent over the prior year primarily due to introducing a voter- approved local transactions and use tax (Measure AV) that became effective on April 1, 2021 and produced $22,685,307 in additional sales tax for the City in the current fiscal year.  Other Taxes increased b y $1,505,592 o r 11.3 p ercent as a result of increases in collections of Franchise Taxes, Transient Occupancy Taxes, Property Transfer Taxes and Business Licenses Fees, as a result of Post-Covid-19 pandemic.
 The City’s Unrestricted Investment Earnings decreased by $8,087,638 as the result of declining interest rates due to the economic downturn that continues Post-Covid-19 pandemic.  Other Revenue decreased by $570,458 or 45.0 percent.
 General Government expenses increased by $2,908,616, or 12.3 percent primarily due to increases in asset write-offs, salary increases due to increase in City staff, as well as increases in health insurance claims paid during the Fiscal Year.
 Public Safety expenses increased $1,547,432 o r 4.5 p ercent. This is largely due to the budgeted increase in the County Sheriff’s contract for services.
 Public Service expenses increased $10,795,566 or 16.8 percent. This is primarily due to City services increasing back to pre-pandemic levels.
 Community Development expenses decreased $1,067,995 or 10.3 percent.  Cultural and Recreational expenses increased $967,539 or 11.1 percent.  Health and Welfare expenses decreased $820,285.
 Interest on Long-Term Debt decreased by $784,076 or 26.4 percent. 10 City of Palmdale
Management's Discussion and Analysis
Program Expenses and Program Revenues-Governmental Activities The Statement of Activities reflects total expenses of $158,813,501. Total Revenues in the Statement of Activities for the Year Ended June 30, 2022 were $174,931,637. Of this amount, $90,222,783 of the resources came from Program Revenues, and $84,708,854 came from General Revenues received by the government. The largest revenues are Charges for Services, followed by Capital Grants and Contributions, Sales Tax, Property Taxes, and Other Taxes. 11 City of Palmdale
Management's Discussion and Analysis
Revenues by Source-Governmental Activities
Financial Analysis of the Government's Funds
As noted earlier, the City of Palmdale uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

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

As of the end of the Fiscal Year
2021-22, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $309,953,663, an increase of $41,474,327 over the prior year. The General Fund is the chief operating fund of the City of Palmdale. At the end of Fiscal Year 2021-22, the Total Fund Balance of the General Fund was $73,269,501. Of the Total Fund Balance:
 Nonspendable Fund Balance totaled $2,554,221. “Nonspendable” because the resources are not in a spendable form (i.e., prepaids, long-term receivables, or non-financial assets held for resale). Nonspendable Fund Balance includes Advances totaling $577,136; Deposits and Prepaids totaling $570,903; and Notes and Liens totaling $1,242,143. 12 City of Palmdale
Management's Discussion and Analysis
 Restricted Fund Balance totaling $246,694,827. “Restricted” due to the existence of externally enforceable legal restrictions that are related primarily to special revenue funding sources and debt service reserves. Restricted Fund Balance includes City Investments of 6,297,363.
 Assigned Fund Balance totaling $23,989,477. “Assigned” for specific purposes such as Continuing Appropriations, Encumbrances, Compensated Absences, Self-Insurance and Health Insurance Claims, and Capital Projects. Assigned Fund Balance includes Compensated Absences totaling $2,221,782; Self-Insurance Claims totaling $4,028,030; Health Insurance obligations totaling $6,739,666; and Assigned for Capital Projects $11,000,000.  Unassigned Fund Balance t otaling $36,715,138. “Unassigned” and represents residual resources that cannot be properly classified in one of the other fund balance categories.

As a measure of the General Fund's liquidity, it may be useful to compare both Unassigned and Total Fund Balance to Total Fund Expenditures. At the end of the Fiscal Year 2021-22 the Unassigned Fund Balance in the General Fund is

55.2 percent of Total Fund Balance for the General Fund and 58.6 percent of Total General Fund Expenditures.

The Housing Authority - Housing Asset Fund has a Fund Balance of $50,558,486 a nd is restricted for low a nd moderate- income housing purposes. This Fund is used to record the assets formally held by the Community Redevelopment Agency Low and Moderate Income Housing Fund. The assets that were approved by the State Department of Finance to be retained by the Low and Moderate Housing Fund were transferred to the Housing Authority-Housing Asset Fund as the City has control of those assets, which may be used in accordance affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code 34176.1. The housing asset fund balance decreased by $258,678 in the Fiscal Year 2021-22, primarily due to cost and expenditures exceeding program revenue. Program revenues were $(43,245), primarily due to loss on investments, and expenditures were $215,433 in Fiscal Year 2021-22. Expenditures exceed program revenues in the Housing Asset Fund as the result of regular ongoing operations. Revenues into the fund consist primarily of debt service payments, while expenditures consist of payments for multi-year capital projects that are funded through available fund balance.

The Housing Authority – Facilities Fund is used to account for revenues and expenditures related to the operation of three mobile home parks, four apartments, and two multi-residential properties who were separate funds and were consolidated into one fund in 2021. The total fund balance in Fiscal Year 2021-22 was at a deficit of $3,585,195. The deficit was reduced by $1,496,410 as the result of a decline in operating expenditures and capital outlay. The excess is due to the Housing Asset Fund receives funding from debt service and fees of about $1.9M for HAF and $250,000 for 29364011 ERAF/SERAF (see chart below). C arryforward of prior year funds at July 1, 2022 was $6,195,520. The Housing Division has commitments for Affordable Housing Agreements that may take more than one year to complete and to receive the request for draws against approved loans.

General Fund Budgetary Highlights
Differences between original budget and final budget resulted in a increase of appropriations for General Fund expenditures of $4,783,790 a s a result of an adjustment in budget needs in operating expenses primarily in General Government, as well as carry forward of budgets for multi-year Capital Projects. Differences between final amended budget and actual resulted in a $14,851,809 decrease in appropriations and can be briefly summarized as follows:
 $5,412,933 decrease in General Governmental expenditures as a result of vacancies in various departments.  $2,778,882 decrease in Public Safety expenditures as a result of a multi-year I.T. project implementation.  $2,521,950 decrease in Public Services expenditures primarily due to supply shortages of fleet equipment.  $359,825 decrease in Community Development program expenditures.  $1,279,052 decrease in Parks and Recreation program expenditures (see paragraph below).  $2,234,241 decrease in capital outlay expenditures.
 $626 decrease in Debt Service Principal and Interest
13 City of Palmdale
Management's Discussion and Analysis
 $264,300 decrease in Interfund Interest
These decreases are due to not only Expenditures coming in less than anticipated but also the result of activities that were budgeted but not completed during Fiscal Year 2021-22 ( many were carried forward as encumbrances and continuing appropriations) and reclassifying activities to Special Revenue Funds to comply with GASB 54. Parks and Recreastion had a reduction in program expenditures as a result of a multi-year I.T. project implementation. Overall, the reclassifying of Expenditures resulted in a reduction of transfers in and offsetting reduction to expenditures. See Note (1).

Capital Assets and Debt Administration
Capital Assets. The City of Palmdale's investment in capital assets for Governmental Activities as of June 30, 2022, amounts to $682,249,445 ( Net of Accumulated Depreciation). This investment in capital assets includes land, buildings and structures, improvements, machinery and equipment, infrastructure and construction in progress. The Capital Assets decreased by $27,217,522 in Fiscal Year 2021-22 as compared to prior year.

City of Palmdale's Capital Assets (Net of Depreciation) Governmental
Activities 2022
Governmental
Activities 2021
Land and improvements $ 119,352,146 $ 119,295,459
Intangible Assets 153,090 494,874
Construction in progress 28,091,702 30,360,348
Buildings and structures 52,481,574 53,788,945
Improvements other than buildings 1,144,746 1,339,882
Infrastructure 475,932,110 499,855,398
Machinery and equipment 5,094,077 4,332,061
$ 682,249,445 $ 709,466,967
Major capital asset events during the current fiscal year included the following:
 Additions of Land and Improvements totaling $56,687.
 Additions of Construction In Progress totaling $19,969,647.  Additions of Building and Structures totaling $369,712.  Additions of Machinery and Equipment totaling $1,599,733.  Additions of Infrastructure Improvement totaling $11,498,577.  Additions of Total Accumulated Depreciation totaling $38,184,013.  Deletions of Depreciated and Non-Depreciated Assets totaling $22,580,102.

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

Long-Term Debt. At the end of the current fiscal year, the City of Palmdale had total bonded debt outstanding of $52,631,255.

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

Certificates of Participation and Lease Revenue Bonds require the City to pay a semi-annual base rental to the Palmdale Civic Authority (PCA) and the Palmdale Financing Authority (PFA). The rentals will be used by the PCA and PFA to pay debt service as the Certificates of Participation and Lease Revenue Bonds come due. 14 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Outstanding Debt
Revenue Bonds, Certificates of Participation, Loans, and Leases Governmental
Activities 2022
Governmental
Activities 2021
Revenue Bonds $ 17,025,000 $ 18,800,000
Mortgage Revenue Bonds 3,740,000 3,835,000
Certificates of Participation 31,542,451 33,649,908
Bond Premiums 323,804 478,047
Loans & direct borrowings 13,915,129 15,035,845
Leases 1,080,857 1,183,277
Total $ 67,627,241 $ 72,982,077
The City of Palmdale’s Total Long-Term Liabilities total was $67,627,241 o f which $17,025,000 w as Revenue Bonds, Mortgage Revenue Bonds, Certificates of Participation and Bond Premiums as noted on the schedule above.

The remainder of the debt was comprised of Capital Leases Payable for Equipment Leases totaling $1,080,857; Notes Payable for Street Light Acquisition totaling $9,272,665; Section 108 HUD Loan totaling $1,536,000; HOME Loan totaling $2,850,000; SCE Parks LED Retrofit OBF A-5963 totaling $124,473; SCE LED Retrofit OBF A-5806 totaling $6,341; SCE LED Retrofit OBF A-5807 totaling $34,952, and SCE LED Retrofit OBF A-7251 totaling $90,698.

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

Economic Factors and Next Year's Budget
The City took into consideration the following factors in preparing the budget for the 2022-23 fiscal year:
 Economic downturn as a result of Covid-19 Pandemic.
 Positive Property tax increases as property values increase.  Continued slow paced growth in housing development.
 Reductions in Sales Tax revenue and possibly Measure AV.  Conservative escalators and only add known future development.  Implementing Fee Structures that align revenues with cost-recovery objectives.  Using onetime revenues for onetime expenditures.
 Building reserves for future capital replacements and economic uncertainties.  Prefunding retiree pension cost.
 City funds impacted by State and Federal budget actions.

While Actual Fiscal Year 2021-22 revenue growth in tax collections were above estimates, staff continues to follow a moderate approach to protecting these revenues due to the unknown impact of the Covid-19 Pandemic. Staff will continue to monitor actual revenues versus projections and provide any needed mid-year adjustments. 15 City of Palmdale
Management's Discussion and Analysis
The dissolution of redevelopment (legislation AB x 126 and AB-1484) has and w ill continue to impact the City for a number of years. As of July 1, 2018, Los Angeles County consolidated the oversight boards and committees of each agency that contains the Successor Agency to the former Redevelopment Agency to administer the obligations of the former Redevelopment Agency until they are fully satisfied. This board consists of five districts segregated out based on the area maps within Los Angeles County. The City of Palmdale falls under the Fifth District the City and Successor Agency have been responding to the reporting requirement with Los Angeles Consolidated Oversight Board. Additional information can be found in Note (18).

Requests for Information
This financial report is designed to provide a general overview of the City of Palmdale's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report, requests for any of the separately issued component unit financial statements or additional financial information should be addressed to the City of Palmdale, City Manager’s Office – Finance Division, 38300 Sierra Highway, Suite D, Palmdale, California, 93550. 16 This page intentionally left blank
City of Palmdale
Statement of Net Position
June 30, 2022
Governmental
Activities
Assets
Cash $ 21,726,672
Investments 261,182,449
Accounts Receivable 15,081,815
Interest receivable 12,004,348
Property tax receivable 1,172,798
Due from other governmental units 11,936,240
Notes and liens 35,690,423
Deposits and prepaids 757,422
Land held for development 2,070,652
Short-term lease receivable 30,501
Restricted assets:

Cash and Investments 13,511,014
Long-term lease receivable 60,594
Capital assets and Right to use assets:

Not being depreciated:

Land and improvements 119,352,146
Water credit CFD 16-1 153,090
Construction in progress 28,091,702
Being depreciated/amortized, net of accumulated depreciation/amoritzation:

Buildings and structures 52,481,574
Machinery, equipment, and other improvements 5,094,077
Improvements other than buildings 1,144,746
Infrastructure 475,932,110
Machinery and Equipment - Right to Use 58,822
Total assets 1,057,533,195
Deferred outflows of resources
Pension related amounts 6,326,852
Other postemployment benefits related amounts 470,063
Total deferred outflows of resources 6,796,915
See Notes to Financial Statements
17 City of Palmdale
Statement of Net Position
June 30, 2022
Governmental
Activities
Liabilities
Accounts payable 9,676,522
Accrued salaries and employee benefits 2,512,383
Due to other governmental units 5,970
Deposits 5,653,979
Accrued interest payable 1,668,419
Unearned Revenue 21,460,798
Noncurrent liabilities:

Due within one year 12,031,219
Due in more than one year 68,104,205
Net pension liability 30,147,178
Net OPEB liability 122,526
Total liabilities 151,383,199
Deferred Inflows of Resources
Pension related amounts 15,517,784
Other postemployment benefits related amounts 199,797
Deferred inflows from Leases 91,095
Total deferred inflows of resources 15,808,676
Net Position
Net investment in capital assets 618,136,264
Restricted
Public safety 8,885,222
Public services 149,695,778
Community development 60,713,473
Debt service 2,259,687
Culture and recreation 12,008,812
Unrestricted 45,438,999
Total net position $ 897,138,235
See Notes to Financial Statements
18 City of Palmdale
Statement of Activities
For the Year Ended June 30, 2022
Program Revenues Net (Expenses)
Operating Capital Revenue and
Expenses
Charges for
Services
Grants and
Contributions
Grants and
Contributions
Change in
Net Position
Governmental activities:

General government $ 26,570,018 $ 7,060,041 $ 737,932 $ - $ (18,772,045) Public safety 35,668,009 5,889,031 792,116 - (28,986,862) Public services 75,158,621 25,124,723 422,899 32,939,685 (16,671,314) Community development 9,269,097 7,993,491 596,686 - (678,920) Cultural and recreational 9,648,980 8,258,640 186,746 - (1,203,594) Health and welfare 316,031 216,738 4,055 - (95,238)
Interest on long-term debt 2,182,745 - - - (2,182,745)
Total governmental activities $ 158,813,501 $ 54,542,664 $ 2,740,434 $ 32,939,685 $ (68,590,718) General revenue:

Taxes:

Property taxes $ 26,366,000
Sales and use taxes 50,484,625
Unrestricted motor vehicle in lieu 180,305
Franchise taxes 7,497,156
Transient occupancy taxes 5,540,832
Property Transfer Taxes 952,103
Business license taxes 677,197
Unrestricted investment earnings/(loss) (7,686,544)
Other 697,180
Total general revenues 84,708,854
Change in Net Position 16,118,136
Net Position - Beginning of Year 881,020,099
Net Position - End of Year $ 897,138,235
See Notes to Financial Statements
19 City of Palmdale
Governmental Fund Financial Statements
For the Year Ended June 30, 2022
The General Fund – is the City’s primary operating fund and has been classified as a major fund. It accounts for all financial resources of the general government that are not already required legally or by sound financial management to be accounted for in another fund.

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

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

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

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

Measure AV Fund - This fund is used to account for the revenues and expenditures incurred as a result of the 3/4 cent sales tax increase that was passed by voters in November 2020 and took effect April 1, 2021 See Notes to Financial Statements
20 City of Palmdale
Balance Sheet - Governmental Funds
June 30, 2022
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund Measure AV
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Assets:

Cash $ 14,420,390 $ - $ 2,887,076 $ - $ - $ 1,067 $ 17,308,533 Investments 50,705,407 10,872,022 1,410,407 17,417,337 15,493,009 165,284,267 261,182,449 Receivables:

Accounts and interest receivable 6,277,505 4,951,336 197,677 - 3,976,718 11,665,377 27,068,613 Property tax receivable 551,711 - - - - 621,087 1,172,798 Due from other funds 593,298 - - - - 62 593,360
Due from custodial funds 74,071 - - - - - 74,071
Advances due from fiduciary funds 599,148 5,159,777 - - - 583,859 6,342,784 Due from other governmental units 5,519,385 - - - - - 5,519,385 Notes and Liens 1,208,065 24,846,208 - - - 9,636,150 35,690,423 Interfund promissory note - 7,385,000 - - - - 7,385,000 Advances due from other funds 5,000,000 1,186,001 - - - 4,100,000 10,286,001 Deposits and prepaid 746,638 - 9,670 - - 1,114 757,422
Short-term lease receivable 30,501 - - - - - 30,501
Restricted Assets:

Investments 6,297,363 3,018,542 - - - 2,756,045 12,071,950 Cash - - 1,439,064 - - - 1,439,064
Land held for development - 2,070,652 - - - - 2,070,652 Long-term lease receivable 60,594 - - - - - 60,594
Total assets $ 92,084,076 $ 59,489,538 $ 5,943,894 $ 17,417,337 $ 19,469,727 $ 194,649,028 $ 389,053,600 Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable 7,596,734 102,028 779,310 13,137 1,446,883 2,123,566 12,061,658 Due to fiduciary funds 4,405 - - - - 1,565 5,970
Due to other funds - 12,509 - - - 580,851 593,360
Self insurance liability 1,653,114 - - - - - 1,653,114
Advances due to other funds - - 1,186,001 - - 9,100,000 10,286,001 Interfund promissory note - - 7,385,000 - - - 7,385,000 Deposits 3,691,077 - 178,778 - - 1,784,124 5,653,979
Unearned revenue 175,097 3,906,000 - 17,379,701 - - 21,460,798 Notes payable 201,263 - - - - 34,433 235,696
Total liabilities 13,321,690 4,020,537 9,529,089 17,392,838 1,446,883 13,624,539 59,335,576 Deferred Inflows of Resources
Unavailable revenue 5,401,790 4,910,515 - - - 9,360,961 19,673,266 Deferred Inflows Related to Lease
Receivables 91,095 - - - - - 91,095
Total deferred inflows of
resources 5,492,885 4,910,515 - - - 9,360,961 19,764,361 Fund Balances
Nonspendable 2,554,221 - - - - - 2,554,221
Restricted 6,297,363 50,558,486 - 24,499 18,022,844 171,791,635 246,694,827 Assigned 23,989,477 - - - - - 23,989,477
Unassigned 40,428,440 - (3,585,195) - - (128,107) 36,715,138 Total fund balances (deficits) 73,269,501 50,558,486 (3,585,195) 24,499 18,022,844 171,663,528 309,953,663 Total liabilities, deferred inflows
of resources and fund balances $ 92,084,076 $ 59,489,538 $ 5,943,894 $ 17,417,337 $ 19,469,727 $ 194,649,028 $ 389,053,600 See Notes to Financial Statements
21 City of Palmdale
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Year Ended June 30, 2022
Fund Balances - Total Governmental Funds $ 309,953,663
Amounts reported for governmental activities in the Statement of Net Position are different because:

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

Governmental capital assets 1,399,385,864
Less accumulated amortization and depreciation (721,271,452) 678,114,412 The Net OPEB Liabilities reported in governmental activities is not a current financial resource and therefore is not reported in the funds. (122,526) Accounts receivable not available to pay for current-period expenditures are unavailable in the funds. 19,673,267
Interest due on long-term debt do not require current financial resources and therefore are not reported as a liability in the Governmental Funds Balance Sheet.

Interest payable (1,668,419)
Deferred Outflows related to pensions and OPEB benefits are not reported in the Governmental Fund Balance Sheet.

Deferred outflows related to pensions 6,326,852
Deferred outflows related to OPEB benefits 470,063
Long-Term Liabilities are not due and payable in the current period and therefore are not reported as a liability in the Governmental Funds Balance Sheet.

Compensated absences (3,503,417)
Claims payable (7,351,651)
Lease liability (60,974)
Net pension liability (30,147,178)
Financing leases payable (1,019,884)
SCE LED Notes Payable (20,818)
Notes payable (13,658,615)
Bonds & certificates of participation payable (52,307,451) Plus issuance premiums (323,804) (108,393,792)
Deferred Inflows related to pensions and OPEB benefits are not reported in the Governmental Funds Balance Sheet.

Deferred inflows related to pensions (15,517,784)
Deferred inflows related to OPEB benefits (199,797)
Internal service fund net position 8,502,296
Net Position of Governmental Activities $ 897,138,235
See Notes to Financial Statements
22 City of Palmdale
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Year Ended June 30, 2022
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund Measure AV
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Revenues:

Property taxes $ 27,318,103 $ - $ - $ - $ - $ - $ 27,318,103 Sales taxes 27,799,318 - - - 22,685,307 - 50,484,625
Other taxes 13,451,681 - - - - 4,483,729 17,935,410
Subventions and grants - - - 342,809 - 29,612,814 29,955,623 Park development fees - - - - - 2,413,127 2,413,127
Licenses and Permits 5,680,413 - - - - 66,779 5,747,192 Motor vehicle license fees 180,305 - - - - - 180,305
Fines and forfeitures 668,204 - - - - 285,971 954,175
Special Assessments - - - - - 19,263,188 19,263,188
Use of property 986,788 - 7,625,664 - - - 8,612,452
Charges for current services 6,037,565 264,246 - - - 2,447,693 8,749,504 Drainage fees - - - - - 3,329,104 3,329,104
Traffic impact fees - - - - - 891,289 891,289
Facilities impact fees - - - - - 1,422,618 1,422,618
Interfund interest - - - - - 26,251 26,251
Interest 608,002 96,824 13,597 24,499 - 1,573,963 2,316,885 Net increase (decrease) in fair value of
investments (3,644,709) (405,852) (52,852) - - (6,075,762) (10,179,175) Developer contributions - - - - - 51,380 51,380
State contributions 18,753 - - - - 944,145 962,898
Other agency contributions - - - - - 722,844 722,844
County contributions - - - - - 681,443 681,443
Other revenue 3,340,576 1,537 - - - 486,007 3,828,120
Lease Interest Revenue 2,611 - - - - - 2,611
Total revenues 82,447,610 (43,245) 7,586,409 367,308 22,685,307 62,626,583 175,669,972 Expenditures:

Current:

General Government 19,390,597 - - 129,671 520,566 365,241 20,406,075 Public safety 27,047,778 - - - 8,174,362 532,600 35,754,740 Public services 11,078,060 - - 996 3,004 21,680,496 32,762,556 Community development 616,095 527,064 5,114,833 212,142 400,817 1,042,926 7,913,877 Cultural and recreational 7,684,818 - - - - 1,546,949 9,231,767 Health and welfare - - - - - 312,924 312,924
Capital Outlay 1,194,159 - 331,026 - 600,015 18,280,181 20,405,381 Debt service:

Principal 1,510,530 - 95,000 - - 3,583,020 5,188,550
Interest 758,044 - 182,395 - - 1,452,975 2,393,414
Interfund interest (239,200) - - - - 265,451 26,251
Total expenditures 69,040,881 527,064 5,723,254 342,809 9,698,764 49,062,763 134,395,535 Excess (deficiency) of revenues
over (under) expenditures 13,406,729 (570,309) 1,863,155 24,499 12,986,543 13,563,820 41,274,437 Other Financing Sources (Uses)
Transfers In 4,668,096 366,744 - - - 3,674,221 8,709,061 Transfers Out (3,648,373) (55,113) (366,745) - - (4,638,830) (8,709,061) Proceeds from Sale of Assets 341,784 - - - - - 341,784
Total other financing sources
(uses) 1,361,507 311,631 (366,745) - - (964,609) 341,784 Net Change in Fund Balances 14,768,236 (258,678) 1,496,410 24,499 12,986,543 12,599,211 41,616,221 Fund Balances (Deficit) - Beginning of
Year 58,501,265 50,817,164 (5,081,605) - 5,036,301 159,064,317 268,337,442 Fund Balances (Deficit) - End of Year $ 73,269,501 $ 50,558,486 $ (3,585,195) $ 24,499 $ 18,022,844 $ 171,663,528 $ 309,953,663 See Notes to Financial Statements
23 City of Palmdale
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2022
Net Change in Fund Balances - Total Governmental Funds $ 41,616,221 Amounts reported for governmental activities in the statement of activities are different because:

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

Capital Asset additions and other adjustments - Current year 9,896,543 Less depreciation expense (37,399,001)
Lease amortization expense (23,132)
Gain(loss) on sale of Capital assets (341,784) (27,867,374) Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.

Grant revenues earned, but not received within the 60-day accrual period offset by reversal of larger amount of prior period accruals due to write off of federal and state receivables (973,316) 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.

Principal Repayments:

Financing Arrangements 160,530
Lease payments 20,806
Notes payable 1,050,563
Bonds & Certificates of Participation payable 3,977,457 5,209,356 Internal service fund change in net position (858,562)
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 335,323
Self insurance liability claims payable (5,761,154)
Pension expense 4,352,938
OPEB expense (156,373)
Accrued interest on debt 56,834
Amortization of bond premiums 164,243 (1,008,189)
Change in Net Position of Governmental Activities $ 16,118,136 See Notes to Financial Statements
24 This page intentionally left blank
City of Palmdale
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Property taxes $ 25,425,800 $ 25,425,800 $ 27,318,103 $ 1,892,303 Sales taxes 23,049,000 27,578,280 27,799,318 221,038
Other taxes 11,789,200 12,346,700 13,451,681 1,104,981
Licenses and Permits 4,354,900 3,605,200 5,680,413 2,075,213 Motor vehicle license fees - 181,000 180,305 (695)
Fines and forfeitures 387,400 494,900 668,204 173,304
Use of property 696,500 714,790 986,788 271,998
Charges for current services 5,488,400 6,785,270 6,037,565 (747,705) Interest 1,015,200 1,024,470 608,002 (416,468)
Net increase (decrease) in fair value of investments - - (3,644,709) (3,644,709) State contributions - 16,000 18,753 2,753
Other Revenue 3,326,300 3,885,460 3,340,576 (544,884)
Interest Revenue - - 2,611 2,611
Total revenues 75,532,700 82,057,870 82,447,610 389,740 Expenditures:

Current:

General Government 17,574,200 24,803,530 19,390,597 5,412,933 Public safety 36,031,600 29,826,660 27,047,778 2,778,882 Public services 12,613,100 13,600,010 11,078,060 2,521,950 Transportation 42,800 - - -
Community development 1,079,900 975,920 616,095 359,825 Cultural and recreational 8,493,100 8,963,870 7,684,818 1,279,052 Capital Outlay 1,043,900 3,428,400 1,194,159 2,234,241
Debt service:

Principal 1,513,400 1,513,400 1,510,530 2,870
Interest 755,800 755,800 758,044 (2,244)
Interfund interest (81,700) 25,100 (239,200) 264,300
Total expenditures 79,066,100 83,892,690 69,040,881 14,851,809 Excess (deficiency) of revenues over (under) expenditures (3,533,400) (1,834,820) 13,406,729 15,241,549 Other Financing Sources (Uses):

Transfers In 15,384,000 6,433,640 4,668,096 (1,765,544) Transfers Out (9,036,100) (11,826,140) (3,648,373) 8,177,767 Proceeds from Sale of Assets - - 341,784 341,784
Total other financing sources (uses) 5,097,900 (6,642,500) 1,361,507 8,004,007 Net Change in Fund Balance 1,564,500 (8,477,320) 14,768,236 23,245,556 Fund Balance - Beginning of Year 58,501,265 58,501,265 58,501,265 - Fund Balance (Deficit) - End of Year $ 60,065,765 $ 50,023,945 $ 73,269,501 $ 23,245,556 See Notes to Financial Statements
25 City of Palmdale
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual HA Housing Asset Fund - Housing Asset Fund Special Revenue Fund Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 170,000 $ 286,440 $ 264,246 $ (22,194) Interest 750,300 750,300 96,824 (653,476)
Net increase (decrease) in fair value of investments - - (405,852) (405,852) Other Revenue 251,200 251,350 1,537 (249,813)
Total revenues 1,171,500 1,288,090 (43,245) (1,331,335) Expenditures:

Current:

Community development 4,594,600 9,323,570 527,064 8,796,506 Total expenditures 4,594,600 9,323,570 527,064 8,796,506 Excess (deficiency) of revenues over (under) expenditures (3,423,100) (8,035,480) (570,309) 7,465,171 Other Financing Sources (Uses):

Transfers In 632,200 631,200 366,744 (264,456)
Transfers Out (55,100) (55,100) (55,113) (13)
Total other financing sources (uses) 577,100 576,100 311,631 (264,469) Net Change in Fund Balance (2,846,000) (7,459,380) (258,678) 7,200,702 Fund Balance (Deficit) - Beginning of Year 50,817,164 50,817,164 50,817,164 - Fund Balance (Deficit) - End of Year $ 47,971,164 $ 43,357,784 $ 50,558,486 $ 7,200,702 See Notes to Financial Statements
26 City of Palmdale
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Authority Facilities Fund Special Revenue Fund
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Use of property $ 3,278,400 $ 3,618,240 $ 7,625,664 $ 4,007,424 Interest 4,000 4,000 13,597 9,597
Net increase (decrease) in fair value of investments - - (52,852) (52,852) Total revenues 3,282,400 3,622,240 7,586,409 3,964,169
Expenditures:

Current:

Community development 5,301,400 5,215,020 5,114,833 100,187 Capital Outlay 20,000 15,000 331,026 (316,026)
Debt service:

Principal 8,100 9,500 95,000 (85,500)
Interest 15,500 17,100 182,395 (165,295)
Total expenditures 5,345,000 5,256,620 5,723,254 (466,634) Excess (deficiency) of revenues over (under) expenditures (2,062,600) (1,634,380) 1,863,155 3,497,535 Other Financing Sources (Uses):

Transfers Out (271,700) (271,700) (366,745) (95,045)
Total other financing sources (uses) (271,700) (271,700) (366,745) (95,045) Net Change in Fund Balance (2,334,300) (1,906,080) 1,496,410 3,402,490 Fund Balance (Deficit) - Beginning of Year (5,081,605) (5,081,605) (5,081,605) - Fund Balance (Deficit) - End of Year $ (7,415,905) $ (6,987,685) $ (3,585,195) $ 3,402,490 See Notes to Financial Statements
27 City of Palmdale
Statement of Revenues and Expenditures and Changes In Fund Balance - Budget and Actual ARPA Fund Special Revenue Fund
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final Actual
Positive
(Negative)
Revenues
Subventions and grants $ 35,455,000 $ 35,455,000 $ 342,809 $ (35,112,191) Interest - 350 24,499 24,149
Total revenues 35,455,000 35,455,350 367,308 (35,088,042) Expenditures
Current
General Government 10,032,800 389,600 129,671 259,929
Public services 125,000 - 996 (996)
Community development 375,000 - 212,142 (212,142)
Cultural and recreational 49,300 - - -
Capital Outlay 1,015,000 2,250,400 - 2,250,400
Total expenditures 11,597,100 2,640,000 342,809 2,297,191 Excess (deficiency) of revenues over expenditures 23,857,900 32,815,350 24,499 (32,744,060) Transfers Out (4,264,200) - - -
Net Change in Fund Balance 19,593,700 32,815,350 24,499 (32,744,060) Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ 19,593,700 $ 32,815,350 $ 24,499 $ (32,744,060) See Notes to Financial Statements
28 City of Palmdale
Statement of Revenues and Expenditures and Changes In Fund Balance - Budget and Actual Measure AV
Year Ended June 30, 2022
Original Final Actual Variance
Revenues
Sales taxes $ 15,500,000 $ 21,945,000 $ 22,685,307 $ 740,307 Total revenues 15,500,000 21,945,000 22,685,307 740,307 Expenditures
Current
General Government 848,100 2,044,980 520,566 1,524,414
Public safety 8,689,700 1,208,620 8,174,362 (6,965,742) Public services 50,000 - 3,004 (3,004)
Community development 632,500 435,000 400,817 34,183
Capital Outlay 5,360,000 2,222,930 600,015 1,622,915
Total expenditures 15,580,300 5,911,530 9,698,764 (3,787,234) Excess (deficiency) of revenues over expenditures (80,300) 16,033,470 12,986,543 (8,457,076) Net Change in Fund Balance (80,300) 16,033,470 12,986,543 (8,457,076) Fund Balance (Deficit) - Beginning of Year 5,036,301 5,036,301 5,036,301 - Fund Balance (Deficit) - End of Year $ 4,956,001 $ 21,069,771 $ 18,022,844 $ (8,457,076) See Notes to Financial Statements
29 This page intentionally left blank
City of Palmdale
Statement of Net Position
Proprietary Funds
June 30, 2022
Internal Service
Funds
Assets
Current Assets
Cash $ 4,418,139
Receivables 17,550
Total current assets 4,435,689
Capital Assets and Leased Assets:

Depreciable capital assets:

Vehicles 9,287,697
Equipment 5,665,091
Less accumulated depreciation (10,758,933)
Capital assets and Leased Assets, net 4,193,855
Total assets $ 8,629,544
Liabilities
Accounts payable $ 127,248
Total liabilities 127,248
Net Position
Investment in capital assets 4,193,855
Unrestricted 4,308,441
Total net position $ 8,502,296
See Notes to Financial Statements
30 City of Palmdale
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
Year Ended June 30, 2022
Internal Service
Funds
Operating Revenues:

Charges for current services $ 3,816,980
Other Revenue 29,267
Total operating revenues 3,846,247
Operating Expenses:

Salaries, Wages and Benefits 1,379,760
Material and Supplies 624,468
Utilities 13,365
Administrative 4,817
Depreciation 785,014
Repairs and Maintenance 1,793,009
Other Expenditures 1,567
Total operating expenses 4,602,000
Operating income (loss) (755,753)
Nonoperating Revenues (Expenses)
Interest income 65,781
Net realized and unrealized gains (losses) (168,590)
Total nonoperating revenues (expenses) (102,809)
Change in Net Position (858,562)
Net Position - Beginning of Year 9,360,858
Net Position - End of Year $ 8,502,296
See Notes to Financial Statements
31 City of Palmdale
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2022
Internal Service
Funds
Cash from Operating Activities:

Cash received from interfund services provided $ 3,816,385 Cash paid to employees for services (1,379,761)
Cash paid to suppliers for goods and services (2,516,782) Cash (paid)/received for other services 29,267
Net cash provided (used) by operating activities (50,891) Cash from Capital and Related Financing Activities:

Acquisition and construction of capital assets (1,411,723) Net cash provided (used) by capital and related financing activities (1,411,723) Cash from Investing Activities:

Gain/(Loss) on investments (168,590)
Interest income 65,781
Change in investments 5,983,562
Net cash provided (used) by investing activities 5,880,753 Net increase/(decrease) in cash 4,418,139
Beginning Cash -
Ending Cash 4,418,139
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities Operating income/loss from operating activities (755,753) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation expense 785,014
Changes in assets and liabilities:

Change in accounts receivable (595)
Change in accounts payable (79,557)
Net cash provided (used) by operating activities: $ (50,891) See Notes to Financial Statements
32 City of Palmdale
Fiduciary Fund Financial Statements
For the Year Ended June 30, 2022
The City’s Fiduciary Funds are Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds. Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds are used to account for assets held by the City in a fiduciary capacity for other governmental units, private organizations, individuals and/or other funds.

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

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

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

See Notes to Financial Statements
33 City of Palmdale
Statement of Fiduciary Net Position - Fiduciary Funds
June 30, 2022
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Assets:

Cash $ - $ 6,012,000 $ 197,376
Cash - OPEB trust money market funds 1,720,568 - -
Investments - 8,700,688 -
Mutual funds 3,118,621 - -
Receivables
Property tax receivable - - 414,865
Interest receivable - 5,945 -
Due from other governmental units - - 1,565
Land held for development - 1,693,515 -
Restricted assets
Cash and investments - 527,876 6,237,677
Interest receivable - - 2,974
Capital assets:

Not being depreciated:

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

Buildings and structures - 184,724 -
Total assets $ 4,839,189 $ 20,602,470 $ 6,854,457
Deferred outflows of resources
Deferred loss on refunding - 1,768,982 -
Liabilities:

Accounts payable $ 425,793 $ 2,470,557 $ 14,892
Advances due to general fund - 599,147 74,071
Advances due to City of Palmdale - 5,159,777 583,859
Due to other governmental units - 4,294 -
Deposits - - 84,707
Interest payable - 1,077,583 -
Long-term liabilities:

Due within one year - 8,085,395 -
Due in more than one year - 70,561,019 -
Total liabilities 425,793 87,957,772 757,529
Net Position
Restricted:

OPEB benefits 4,413,396 - -
Redevelopment dissolution - (65,586,320) -
Held on behalf of others - - 6,096,928
Total net position (deficit) $ 4,413,396 $ (65,586,320) $ 6,096,928 See Notes to Financial Statements
34 City of Palmdale
Statement of Changes in Fiduciary Net Position
Year Ended June 30, 2022
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Additions:

Employer contributions to retiree medical trust $ 117,400 $ - $ - Property taxes - 62,476,280 -
Other taxes - - 3,424,165
Investment and interest income 164,421 15,834 33,600
Net realized and unrealized gains (losses) (615,450) - (103,223) Total additions (333,629) 62,492,114 3,354,542
Deductions:

Benefits paid to participants and expenses 450,435 - -
Administrative expense - - 817,684
Community development - 1,686,617 -
Intergovernmental - tax sharing - 52,971,698 -
Depreciation - 8,763 -
Interest expense - 2,648,219 1,022,545
Principal payments on long-term debt - - 1,435,000
Loss on sale of land - 1,060,924 -
Total deductions 450,435 58,376,221 3,275,229
Changes in Net Position (784,064) 4,115,893 79,313
Net Position (Deficit) at Beginning of Year 5,197,460 (69,702,213) 6,017,615 Net Position (Deficit) at End of Year $ 4,413,396 $ (65,586,320) $ 6,096,928 See Notes to Financial Statements
35 This page intentionally left blank



City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
1 - Summary of Significant Accounting Policies
A. Description of the Reporting Entity
The City of Palmdale (the City) was incorporated on August 24, 1962, under the general laws of the State of California and became a Charter City in 2009. The City operates under a Council-Manager form of government and provides the following services: library, recreational and culture, public improvements, planning and zoning, building and safety, street maintenance, and general administrative services. The City contracts with the County of Los Angeles to provide law enforcement, animal control, limited street maintenance for snow and hazardous materials removal, and emergency services. Fire service is provided by a separate County Fire Protection District and is not under the City’s jurisdiction.

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

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

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

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

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

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

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

The Palmdale Financing Authority is a distinct legal entity separate and apart from the City and the Housing Authority, and its debts and obligations are not debts or obligations of the City or the Housing Authority. The City Council acts as the governing body of the Palmdale Financing Authority by serving as its board members. The activity of the Palmdale Financing Authority is reported in the Palmdale Financing Authority Debt Service Fund. 36 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
The Industrial Development Authority was organized under Section 91500 et seq. of the California Government Code on February 8, 1995, for the purpose of financing industrial development in the City. The IDA works with manufacturers and industrial companies to develop new industrial sites in Palmdale. The IDA is a distinct legal entity separate and apart from the City and the Agency, and its debts and obligations are not debts or obligations of the City or the Agency. The City Council acts as the governing body of the IDA by serving as its board members. There has been no activity in the Industrial Development Authority Fund during the fiscal year.

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

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

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

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

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

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

Interfund services provided are treated as revenues and expenditures/expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental funds are netted as part of the reconciliation to the Government-Wide presentation. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges for services to customers who purchase, use or directly benefit from goods, services, or privileges provided by a given function, 2) grants and contributions that are restricted to meeting the operational requirements of a particular function and 3) 37 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
grants and contributions that are restricted to meeting the capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. The Government-Wide Financial Statements are presented using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources (including capital assets, infrastructure assets, and long-term liabilities) are reported in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized as soon as they are earned and expenses are recognized as soon as a liability is incurred, regardless of the timing of related cash flows.

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

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

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

The City has presented all major funds that qualified as major funds, which included the General Fund, the Housing Authority Housing Asset Special Revenue Fund, the Housing Authority Facilities Fund, Measure AV and the American Rescue Plan Act Fund. Specific fund descriptions and purpose of each fund can be found on page 21 for all major funds. Summarization of all non-major governmental funds is presented under the Other Governmental Funds column. The individual fund statements and descriptions and purpose of the non-major funds can be found on pages 97 - 98.

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

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

The Custodial Fund is used to account for receipts and disbursements associated with 1915 Act Assessment Bonds and Special Tax Bonds which are administered by, but are not the liability of, the City. 38 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
The OPEB Trust Funds are used to account for the City’s Other Post-Employment Benefits Plans. Employer contributions are recognized when due. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan.

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

C. Budgets and Budgetary Accounting
Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital project funds, which adopt project-length budgets.

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

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

Encumbrances and Continuing Appropriations may be added to the subsequent year’s adopted budget by the Finance Manager with the approval of the City Manager per Council Resolution 2021-058, Section 8.

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

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

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

Treasury and Agency Securities were adjusted to fair value based on market prices on June 30, 2022. The Local Agency
Investment Fund is reported at the carrying value because the fair value was not materially different. Amounts invested in money market funds and investment agreements are reported at fair value or guaranteed amounts per investment agreement, which is equal to cost as of June 30, 2022.

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

E. Short-Term Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” or “due to other funds” in the balance sheet. 39 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
F. Advances Between Funds
Non-current portions of interfund loans receivable, reported as advances from other funds, are offset by a restricted fund balance account to indicate that they are not available for appropriation and are not expendable available financial resources.

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

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

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

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

J. Capital Assets
Capital assets, which include property, plant, equipment, and public domain infrastructure assets (e.g., roads, bridges, curbs, and gutters, streets, and sidewalks, drainage systems, and lighting systems), are reported in the applicable governmental columns in the Government-Wide Financial Statements. Capital assets and intangible assets are defined by the government as assets with an initial, individual cost of more than $5,000 and $125,000 respectively and an estimated useful life in excess of two years. Such assets are recorded at cost where historical costs are available and at an estimated original cost where 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 Statement of Net Position. For depreciation purposes, the range of useful life used for each capital asset class are as follows:

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

The City has three items that qualify for reporting in this category. 1) The deferred outflows related to pension liability, 2) the deferred outflows related to the total OPEB liability, and 3) the deferred inflows related to leases. 40 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
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 assets that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items, one which arises only under a modified accrual basis of accounting that qualifies for reporting in this category.

Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from two sources: State Mandated Cost Reimbursements and Grant Reimbursements. At the government wide statements, these two items are eliminated and recognized as revenues since the "availability" of resource is not a criteria used in government wide statements. The government-wide Statement of Net Position reports deferred inflows resulting from differences between expected and actual experiences in pension and OPEB related amounts, and leases.

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

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

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

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

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

Gains and losses related to changes in total OPEB asset and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are recognized in future OPEB expense. The amortization period differs depending on the source of gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period. The General Fund is used to liquidate the governmental fund OPEB liability. 41 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
O. Long-Term Obligations
In the Government-Wide Financial Statements long-term debt and other long-term obligations are reported as liabilities. Bond premiums/discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as charges in the period the cost is incurred.

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

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

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

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

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

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

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

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

When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to first apply restricted fund balance. When expenditures are incurred for purposes for which committed, assigned, or unassigned fund balances are available, the City’s policy is to first apply committed fund balance, then assigned fund balances, and finally unassigned fund balance. 42 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Q. Deficit Fund Equity
The following funds had a deficit fund balance at June 30, 2022 in the amount indicated:

Major Special Revenue Funds:

Housing Authority Facilities Fund $ (3,585,195)
Non-Major Special Revenue Funds:

Federal Funds $ (119,121)
Federal Jobs Program $ (8,986)
Management anticipates that these deficits will be resolved in future years as outstanding reimbursable grants are received and as additional operating revenues become available. It is anticipated occupancy levels at the Mobile Home Parks and Apartments will continue to remain high and consistent and continue to reduce the deficit in the Housing Authority Facilities Fund.

R. Expenditures Exceeding Appropriations
The legal level of budgetary control is at the category level: personnel, training and meetings, operating, capital and debt expenditure level. In the adopted budget, certain appropriations are reported as being paid out of General Fund and funded through transfers in from special revenue funds. In the fund financial statements, these transfers are reclassified to the expenditure function level to comply with GASB 54 requirements. The following funds reported expenditures exceeding appropriations.

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

Total
General
Government
Public
Safety
Public
Services
Cultural and
Recreational
Governmental Funds:

Federal Funds $ 532 $ - $ - $ 532 $ -
CDBG Fund 40,459 14 - 40,445 -
Public Facilities Fund 3,612 - 3,612 - -
Proposition A Fund 72,078 - - 72,078 -
Proposition C Fund 66,789 - - 66,789 -
Miscellaneous Grant/Developer
Contributions 8,144 - - - 8,144
Park Development Fund 46,369 - - 38,164 8,205
Road Maintenance and Rehab Fund 14,107 - - 14,107 -
Fire Facilities Impact Fund 17,502 17,502 - - -
Drainage Fund 8,862 - - 8,862 -
State Grants Fund 31,145 - - 31,145 -
Measure M Fund 47,935 - - 47,935 -
Measure R Fund 129,486 - - 129,486 -
Sewer Upgrade Fund 1 - - 1 -
Sewer Maintenance Fund 2 2 - - -
Traffic Impact Fund 79 3 - 76 -
Total excess of expenditures over
appropriations $ 487,102 $ 17,521 $ 3,612 $ 449,620 $ 16,349 S. Property Taxes
With the passage of Assembly Bill No. 1197, the City of Palmdale, previously a “no property tax” city began to receive property taxes in fiscal year 1989-90. In addition, the former Community Redevelopment Agency (CRA) received incremental 43 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
property taxes on property within its project areas over a base-assessed valuation on the date the project area was established.

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

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

U. Implemented Accounting Pronouncements
The Governmental Accounting Standards Board (GASB) releases new accounting and financial reporting standards which may have a significant impact on the City’s financial reporting process. New standards applicable to the year ending June 30, 2022 are as follows:

GASB Statement No. 87 – Leases. The implementation of this standard establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The standard requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. The effect of the implementation of this standard on beginning net position is disclosed on the following page and the additional disclosures required by this standard are included in Note 12.

GASB Statement No. 89 – Accounting for Interest Cost Incurred before the End of a Construction Period. T his statement establishes accounting requirements for interest cost incurred before the end of a construction period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. The City has determined that there is no material impact on the financial statements.

GASB Statement No. 92 – Omnibus 2020
. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. The requirements of this Statement are effective for reporting periods beginning after June 15, 2021. The City has determined that there is no material impact on the financial statements.

GASB Statement No. 93 – Replacement of Interbank Offered Rates. The objective of this Statement is to address the accounting and financial reporting implications that result from the replacement of an IBOR. The City has determined that there is no material impact on the financial statements.

GASB Statement No. 97 – Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans – An Amendment of GASB Statement No.14 and No.84 and A Supersession of GASB Statement No.32. The objective of this Statement is (1) increase consistency and comparability related to the reporting of fiduciary component units in circumstances in which a potential component unit does not have a governing board and the primary government performs the duties that a governing board typically would perform; (2) mitigate costs associated with the reporting of certain defined contribution pension plans, defined contribution other postemployment benefit (OPEB) plans, and employee benefit plans other than pension plans or OPEB plans (other employee benefit plans) as fiduciary component units in fiduciary fund financial statements; and (3) enhance the relevance, consistency, and comparability of the accounting and financial reporting for Internal Revenue Code (IRC) Section 457 deferred compensation plans (Section 457 plans) that meet the definition of a pension plan and for benefits provided through those plans. The City has determined that there is no material impact on the financial statements. 44 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
GASB - Restatement
GASB Statement No. 87 – As of July 1, 2021, the City adopted GASB Statement No. 87, Leases. The implementation of this standard establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The standard requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. T he effect of the implementation of this standard on beginning net position is disclosed in Note below and the additional disclosures required by this standard are included in Note 12.

Governmental
Activities
Net Position at July 1, 2021, as previously reported $ 881,020,099 Recognition of General Fund receivables 153,674
Recognition of deferred inflows from General Fund (153,674) Net Position at July 1, 2021, as adjusted $ 881,020,099 As the assets are offset by an equal amount of deferred inflows, there was no impact on net position as of July 1, 2021. The same net impact was noted for the General Fund beginning balance.

V. Leases
The City determines if an arrangement is a lease at inception. Lease assets are included in capital assets and lease liabilities in the statements of net position.

Lease assets represent the City’s control of the right to use an underlying asset for the lease term, as specified in the contract, in an exchange or exchange-like transaction. Lease assets are recognized at the commencement date based on the initial measurement of the lease liability, plus any payments made to the lessor at or before the commencement of the lease term and certain direct costs. Lease receivables are amortized in a systematic and rational manner over the shorter of the lease term or the useful life of the underlying asset.

Lease liabilities represent the City’s obligation to make lease payments arising from the lease. Lease liabilities are recognized at the commencement date based on the present value of expected lease payments over the lease term, less any lease incentives.

Interest expense is recognized ratably over the contract term. The lease term may include options to extend or terminate the lease when it is reasonably certain that the City will exercise that option.

The City has elected to recognize payments for short-term leases with a lease term of 12 months or less as expenses as incurred, and these leases are not included as lease liabilities or right-to-use lease assets on the statements of net position. For individual contracts where information about the discount rate implicit in the lease are not included, the City has elected to use the incremental borrowing rate to calculate the present value of expected lease payments. 45 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
2 -Cash and Investments
Cash and investments as of June 30, 2022 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash $ 21,726,672
Investments 261,182,449
Restricted cash and investments 13,511,014
Total 296,420,135
Statement of Fiduciary Net Position:

Cash 6,209,376
Cash - OPEB Trust Money Market Funds 1,720,568
Investments 8,700,688
Investments - OPEB Trust Mutual Funds 3,118,621
Restricted cash and investments 6,765,553
Total 26,514,806
Total cash and investments $ 322,934,941
Cash and investments as of June 30, 2022 consist of the following:

Cash on hand $ 19,652
Deposits with financial institutions 20,723,169
Investments:

Pooled $ 270,915,118
Held by trustees 20,140,450
Held by trustees - PARS section 115
Money Market Funds 314,868
Mutual Funds 5,982,495
Held by OPEB Trust Money Market Fund 1,720,568
Held by OPEB Trust Mutual Fund 3,118,621
Total 302,192,120
Total cash and investments $ 322,934,941
46 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
A. Investments Authorized by the California Government Code and the City of Palmdale’s Investment Policy The table below identifies the investment types that are authorized for the City of Palmdale, for the OPEB Trust Fund, and the Pension Stabilization Trust Fund by the California Government Code (or the City of Palmdale’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City of Palmdale’s investment policy, where more restrictive) that addresses interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements w ith the City of Palmdale or cash deposits held in restricted accounts, rather than the general provisions of the California Government Code or the City of Palmdale’s investment policy.

Authorized
Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio*
Maximum
Investment
in One Issuer**
U.S. Treasury Obligation 5 years None None
U.S. Federal Agency Securities 5 Years None None
Banker's Acceptance 180 days 40% 2%
Municipal Obligations 5 years 10% 15%
Medium Term Corporate Notes 5 years 15% None
Negotiable Certificates of Deposit 5 years 30% 15%
Overnight Bank Investment Pool N/A 10% None
Local Agency Investment Fund (LAIF) N/A None $65,000,000 California Asset Management Program (CAMP) N/A None $65,000,000 *Excluding amounts held by bond trustees that are not subject to California Code Restrictions **Per account
The City of Palmdale’s and OPEB Trust Fund investment policy also authorizes Demand Deposits of up to $2,000,000 (and $2,500,000 in the aggregate) with Bank of America or Wells Fargo Bank. As of June 30, 2022, a demand deposit of $6,017,006 is expected to be expended in a short period of time and is held on behalf of the Successor Agency Private Purpose Trust Fund as cash on hand.

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

C.

Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The Investment Policy of the City of Palmdale, Section 4.1 and 4.2, provide guidelines for managing risk. One of the ways that the City of Palmdale manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City of Palmdale’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City of Palmdale’s Investments by Maturity.
47 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Remaining Maturity in Months
Total
12 Months or
Less 13-24 Months 25-60 Months
Investment Type:

Treasury Notes $ 71,885,721 $ 5,805,181 $ 33,228,180 $ 32,852,360 Federal Agency Securities 85,850,111 4,971,628 4,769,565 76,108,918 Negotiable Certificates of Deposit 984,243 984,243 - -
Local Agency Investment Fund 100,077,206 100,077,206 - - CAMP Investment Fund 249,321 249,321 - -
Corporate Notes 11,492,306 11,492,306 - -
UBS Money Market Funds 376,210 376,210 - -
Held by Trustees
Money Market Mutual Funds 11,439,762 11,439,762 - -
PARS Section 115
Money Market Funds 314,868 314,868 - -
Mutual Funds 5,982,495 5,982,495 - -
OPEB Trust Money Market Funds 1,720,568 1,720,568 - -
OPEB Trust Mutual Funds 3,118,621 3,118,621 - -
Local Agency Investment Fund 8,700,688 8,700,688 - -
Total investments by maturity $ 302,192,120 $ 155,233,097 $ 37,997,745 $ 108,961,278 D. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below i s the minimum rating required by (where applicable) the California Government Code, the City of Palmdale’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type:

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

Treasury Notes $ 71,885,721 N/A $ - $ 71,885,721 $ -
Federal Agency Securities 85,850,111 N/A - 85,850,111 - Certificates of Deposit 984,243 N/A 984,243 - -
Local Agency Investment Pool 100,077,206 N/A 100,077,206 - - CAMP Investment Fund 249,321 N/A 249,321 - -
Corporate Notes 11,492,306 A - 11,492,306 -
UBS Money Market Funds 376,210 N/A 376,210 - -
Held by Trustees:

Money Market Funds 11,439,762 A - - 11,439,762
PARS Section 115
Money Market Funds 314,868 N/A 314,868 - -
Mutual Funds 5,982,495 N/A 5,982,495 - -
OPEB Trust Money Market Funds 1,720,568 N/A 1,720,568 - - OPEB Trust Mutual Funds 3,118,621 N/A 3,118,621 - -
Local Agency Investment Fund 8,700,688 N/A 8,700,688 - - $ 302,192,120 $ 121,524,220 $ 169,228,138 $ 11,439,762
48 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
E. Concentration of Credit Risk
The investment policy of the City of Palmdale contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Reportable investments in any one issuer that represent five percent or more of the total City of Palmdale’s investments are as follows:

Issuer Investment Type Reported Amount
Federal Home Loan Bank Federal Agency Securities $ 32,746,634 Federal Farm Credit Bank Federal Agency Securities 34,940,185 F. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or w ill not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City of Palmdale’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits.

As of June 30,
2022, a total of $20,619,285 o f City of Palmdale’s deposits with financial institutions in excess of federal depository insurance limits was held in collateralized accounts, but not in the name of the City. In addition, as of June 30, 2022, City of Palmdale investments in the following investment types were held by the safekeeping department of the broker-dealer (counterparty) used by the City of Palmdale to buy the securities:

Investment Type Reported Amount
Certificates of Deposit $ 984,243
Treasury Notes 71,885,721
Federal Agency Securities 85,850,111
Corporate Notes 11,492,306
G. Investment in State Investment Pool
The City of Palmdale is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City of Palmdale’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City of Palmdale’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on the amortized cost basis. LAIF is not rated and not registered with the Securities and Exchange Commission (SEC).

H. Investment in California Asset Management Program
The City of Palmdale is a voluntary participant in the California Asset Management Program (CAMP) that is regulated by the California Government Code Section 53601 (p) and managed by a Board of Trustees comprised of finance directors and treasurers of California public agencies that are members of the Joint Pow ers Authority. The value of pool shares in CAMP that may be withdrawn is determined on an amortized cost basis, which is the same as the fair value of the City’s portion in the pool. 49 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
I. Disclosures Relating to Fair Value of Investments
The City categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

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

As of June 30, 2022, the City has the following recurring fair value measurements:

Fair Value Measurements on A Recurring Basis Using
Balance
June 30, 2022
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Investments by fair value level:

Treasury Notes $ 71,885,721 $ - $ 71,885,721 $ -
Federal Agency Securities 85,850,111 - 85,850,111 -
Certificates of Deposit 984,243 - 984,243 -
Corporate Notes 11,492,306 - 11,492,306 -
PARS Section 115 - Mutual Funds 5,982,495 5,982,495 - - OPEB Trust Mutual Funds 3,118,621 3,118,621 - -
Total investments by fair value level 179,313,497 $ 9,101,116 $ 170,212,381 $ - Investments Measured Using Uncategorized Inputs:

Local Agency Investment Fund 108,777,894
CAMP Investment Fund 249,321
UBS Money Market Funds 376,210
Money Market Mutual Funds 11,439,762
PARS Section 115 - Money Market Funds 314,868
OPEB Trust - Money Market Mutual Funds 1,720,568
Total investments - uncategorized inputs 122,878,623
Total investments $ 302,192,120
J. PARS Section 115 - Pension Stabilization Trust
In April 2018, the City approved and adopted the Public Agencies Post-Retirement Pension Plan Document and Trust Agreement. The asset is classified and reported as a restricted asset in the General Fund. The Pension Stabilization Trust is a tax-qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to pre-fund pension obligations as described in GASB Statement No. 75.

The Plan Discretionary Trustee is U.S. Bank (U.S. Bank has delegated investment management responsibilities to High Mark Capital Management, Inc.), and Public Agencies Retirement Services (PARS) is the Trust Administrator. The City elected 'Moderately Conservative HighMark PLUS' investment approach with a blended investment objective strategy. The primary objective is to provide current income with capital appreciation as a secondary objective. 50 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
The Plan’s targeted Rate of Return is 3.2 percent. The asset allocation ranges for this objective are zero percent to 20 percent cash source, 50 percent to 80 percent fixed income mutual funds, and 20 percent to 40 percent equity mutual funds. The City funded the trust account and earned interest totaling $2,045,049 in Fiscal Year 2018-19, $2,580,329 in Fiscal Year 2019-20, and $343,036 in Fiscal Year 2020-21, which invested in accordance with a blended investment objective strategy. With the net investment earnings of $802,981, the ending balance as of June 30, 2022 is $6,297,363. 3 -Interfund Transfers
Interfund transfers for the year ended June 30, 2022 were as follows:

Transfer To Transfer From Amount
General Fund Non-Major Governmental Funds $ 4,632,983
General Fund Housing Asset Fund 35,113
Non-Major Governmental Funds General Fund 3,674,221
Housing Asset Fund Housing Authority Fund 366,744
Total interfund transfers $ 8,709,061
Transfers resulted from the following transactions:

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

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

3. Using unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.
4 -Interfund Assets/Liabilities
A. Due From/To Other Funds as of June 30, 2022 were as follows:

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

Payable To Payable From Amount
General Fund Non-Major Governmental Funds $ 580,789 $
Housing Asset Fund 12,509 593,298
Non-Major Governmental Funds Non-Major Governmental Funds 62 Total due to/due from other funds $ 593,360
B. Advances Due From/To Fiduciary Funds as of June 30, 2022 The amounts payable to the General Fund and due from Fiduciary Funds relate to administrative fees that are scheduled to be collected in the subsequent year and total $74,071.

C. Advances Due From/To Drainage Funds as of June 30, 2022 Beginning in fiscal year ending June 30, 1993, advances were made from the Amargosa, Portal Ridge, and Pearland Drainage funds to cover shortfalls in funding in the Anaverde Drainage Funds. Government Code Section 66006 stipulates that developer impact fees shall be kept in a separate fund and earn interest until expended for the purpose for which the fee was originally collected. In accordance with this Government Code Section, interest has been accrued on a monthly basis with a rate equal to 51 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
the monthly LAIF rate since the inception of the advances.

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

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

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

Fund Name Fund Equity
Amargosa Drainage $ 709,902
Anaverde Drainage (3,297,215)
Big Rock Drainage 53,876
Portal Ridge Drainage 95,824
Pearland Drainage 11,363,316
Littlerock Drainage 10,480
$ 8,936,183
D. Advances Due From Fiduciary Funds as of June 30, 2022 The amounts due from the Private Purpose Trust Funds are advances due to the General Fund, Housing Asset Fund that are approved enforceable obligations of the Successor Agency Trust of the Former Redevelopment Agency of the City of Palmdale and will be paid from future property tax. The amount due from the Custodial Funds includes advances to Assessment Districts that are scheduled to be collected in the subsequent year.

Advances Due From Fiduciary Funds
Payable To Payable From Amount
Major Fund
General Fund Private Purpose Trust Funds $ 599,147
Housing Asset Fund Private Purpose Trust Funds 5,159,778 Total Major Funds 5,758,925
Non-Major Governmental Funds Custodial Funds 583,859
$ 6,342,784
52 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
E. Interfund Promissory Note Receivable and Payable as of June 30, 2022 The Housing Authority Facilities - Fund issued a Promissory Note to the former Redevelopment Low and Moderate Income Housing Fund to generate proceeds to fund additional housing programs. The Promissory Note is to be repaid from the Mobile Home Parks operating revenue when net income is sufficient under the operating agreement. As the result of the dissolution of the Community Redevelopment Agency, the Promissory Note asset was transferred to the Housing Authority Housing Asset Fund. All proceeds from repayment of the Promissory Note must be used in accordance with applicable housing related provisions of Community Redevelopment Law. During fiscal year 2021-2022, the Housing Authority Facilities fund paid $911,667 principal and $406,972 interest for a total of $1,318,639 to the Housing Authority Housing Asset Fund. The balance of the Promissory Note as of June 30, 2022 is $7,385,000.

F. Advances Due to/Due From Other Funds as of June 30, 2022 Receivable Payable
Major Funds
General Fund $ 5,000,000 $ -
Housing Auth - Housing Asset Fund 1,186,001 -
Housing Auth Facilities Fund - 1,186,001
Non-Major Governmental Funds
Park Development Fund - 5,000,000
Pearland Drain Fund 4,100,000 -
Sewer Maintenance Assmnt District Fund - 4,100,000
Total $ 10,286,001 $ 10,286,001
The Park Development Fund has advances due to the General of $5,000,000 r esulting from a loan to provide funding to accelerate the planning, public outreach, design and construction of prioritized Park Development Fund projects, including community engagement, and establish a budget for construction based on completed design parameters. These advances shall be repaid in over a period of 27 years. Payments will be interest only for the first seven years, beginning on July 1, 2020, and both principal and interest payment for twenty years, beginning on July 1, 2027. The last payment shall be in June 30, 2047.

The Housing Authority Facilities Fund has advances due to the Housing Authority-Housing Asset Fund of $1,186,001 resulting from the acquisition and operation of three mobile home parks purchased during fiscal year 2002-2003. Upon acquisition, the Housing Authority assumed the Mobile Home Park's prior owner’s liabilities which were payable to the former CRA Low and Moderate Income Housing fund and City under the terms of an operating agreement. The operating agreement establishes priorities for the use of revenues from operation of the parks and provides for repayment of the advances from net income once expenses, debt service, operating, and capital reserve requirements are met. In the interim, additional liabilities and program/project management fees will continue to accrue to the long-term advances due the Housing Authority - Housing Asset Fund if there are shortfalls in expected payment. These advances will be repaid when net income is sufficient under the operating agreement.
53 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
5 -Notes Receivable and Liens
The City has the following Note Receivables outstanding at the end of June 30, 2022:

June 30,2022
Major Funds
General Fund:

Graffiti Reimbursement Charges $ 42,329
Related Party Loan 1,165,736
Total General Fund 1,208,065
Housing Authority Fund:

Housing Programs 24,846,208
Non-Major Governmental Funds
Federal Home Program 7,452,537
CDBG/NSP Program 2,183,613
Total Non-Major Governmental Funds 9,636,150
Total $ 35,690,423
A. City Loans
The City made loans for Graffiti reimbursement charges. The loan balance is $42,329 for the Graffiti loans as of June 30, 2022.

The City authorized a home loan for the former City Manager totaling $1,200,000 with a 30-year term. The outstanding balance of the loan was $1,165,736 as of June 30, 2022. Refer to Note 20 - Related Party Loan for more information.

B. Federal Home Program Loans
The City provides loans to developers for development and rehabilitation of affordable housing. All loan payments w ill be used to pay for future program expenditures. The balances of the loans were $7,452,537 as of June 30, 2022.

C. CDBG/NSP Program Loans
Through the Community Development Block Grant and the Neighborhood Stabilization Program, the City provides subsidies to families for purchase of single family affordable housing. Each year a portion of the loan is forgiven if the participant is compliant or repayment of the loan would be received if the home is sold during the compliance period. The balances of the loans were $2,183,613 as of June 30, 2022.

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

All loan payments will be used to pay for future program expenditures. The balances of the loans were $24,846,208 as of June 30, 2022.
54 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
6 -Fund Balance Classification
The Fund Balances at June 30, 2022 were classified as follows:

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

Advances $ 599,147 $ - $ - $ - $ - $ - $ 599,147
Note and liens 1,208,437 - - - - - 1,208,437
Deposits and prepaids 746,637 - - - - - 746,637
Total nonspendable 2,554,221 - - - - - 2,554,221
Restricted:

General Government - - - - 18,022,844 - 18,022,844
Pension stabilization program 6,297,363 - - - - - 6,297,363 Debt service - - - - - 1,051,445 1,051,445
Public safety programs - - - - - 9,549,230 9,549,230
Public services programs - - - - - 137,996,352 137,996,352 Low and moderate income housing - 50,558,486 - - - 10,968,022 61,526,508 Recreation and culture programs - - - - - 11,928,409 11,928,409 Health and welfare programs - - - 24,499 - 298,177 322,676 Total restricted 6,297,363 50,558,486 - 24,499 18,022,844 171,791,635 246,694,827 Assigned:

Compensated absences 2,221,782 - - - - - 2,221,782
Self insurance claims 4,028,030 - - - - - 4,028,030
Health insurance 6,739,665 - - - - - 6,739,665
Capital Projects 11,000,000 - - - - - 11,000,000
Total assigned 23,989,477 - - - - - 23,989,477
Unassigned Fund Balance 40,428,440 - (3,585,195) - - (128,107) 36,715,138 Total fund balance (deficit) $ 73,269,501 $ 50,558,486 $ (3,585,195) $ 24,499 $ 18,022,844 $ 171,663,528 $ 309,953,663 7 -Joint Ventures
A. Antelope Valley Transit Authority
The City of Palmdale is a member of the Antelope Valley Transit Authority (Authority), a joint powers authority of the County of Los Angeles and the cities of Palmdale and Lancaster. The Authority was formed to provide public transit service to Palmdale and Lancaster. The governing board consists of one person from each member agency. Each member has one vote.

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

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

B. Palmdale Recycled Water Authority
As of September 26, 2012, the City of Palmdale became a member of the Palmdale Recycled Water Authority (Authority), a joint exercise of powers agreement between the City of Palmdale and Palmdale Water District. The Authority was formed to jointly study, promote, develop, distribute, construct, install, finance, use, and manage recycled water resources created by the Los Angeles County Sanitation District Nos. 14 and 20 for any and all reasonable and beneficial uses, including irrigation and recharge, and to finance the acquisition and construction or installation of recycled water facilities, recharge facilities, and irrigation systems. The governing board consists of five Directors. The governing body of each Member shall appoint and designate two Directors who shall be authorized to act for and on behalf of the Member on matters within the powers of the Authority. The fifth Director shall be appointed jointly by both Members. The Authority is funded by Member contributions. 55 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Separate financial statements of the Authority are available from the City of Palmdale Finance Department at 38300 Sierra Highway, Suite D, Palmdale, California 93550.
8 -Risk Management
The City is self-insured and exposed to various risk of loss related to general liability and health, dental, and vision needs of employees. Under the City’s risk management program, the City retains the risk for general liability claims for the first $500,000 per occurrence and carries excess general liability and automobile insurance with total policy limits of $35,000,000.

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

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

During fiscal year
2021-2022, $341,603 was paid in liability administrative costs. On June 30, 2022, general liability claims totaled $8,255,651. The portion estimated to be due within one year is $4,227,621 a nd is calculated based on a three-year average of settlements paid during the fiscal year. These accruals, based on the results of an actuarial study and the Risk Management department, represent estimates of amounts to be paid for reported claims and incurred but unreported claims.

During fiscal year
2021-2022, $773,040 was paid in health claims and $343,061 was paid in health administrative costs. On June 30, 2021, $669,117 was accrued for health liability claims in the Government-Wide Financial Statements. The accruals, based on the results of an actuarial study, represent estimates of amounts to be paid for reported claims and incurred but unreported claims. All administrative costs were paid during the fiscal year and no unpaid amounts are due and payable as of June 30, 2022.

During fiscal year 2021-2022, $810,880 w as paid in dental and vision claims and $19,653 w as paid in dental and vision administrative costs. On June 30, 2022, $79,997 was accrued for dental and vision claims in the Government-Wide Financial Statements. The accruals, based on the results of an actuarial study, represent estimates of amounts to be paid for reported claims and incurred but unreported claims.

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

It is the City’s practice to obtain a full actuarial study annually to perform an analysis of the City’s potential liability for the City’s retained risk portions of the various self-insurance programs. The amounts recorded as liabilities represent estimates of amounts to be paid for reported claims, as well as incurred but not reported claims based upon past experience, modified for current trends, and information. While the ultimate amounts of losses incurred through June 30, 2022, are dependent on future
developments, the City’s management believes that the aggregate accrual is adequate to cover such losses. The liabilities for general liability claims are reported using a discount rate of 3.0% while a 25.0% margin was added to the estimated health, dental, and vision claims for potential adverse deviation. The estimates do not include any additional provision for administrative expenses associated with the adjudicating or processing the unpaid claims. 56 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Changes in the balances of the City’s claims liabilities for the current and prior fiscal year are as follows:

General
Liability
Health
Claims
Dental and
Vision
Claims Total
Balance of June 30, 2020 $ 1,813,397 $ 653,740 $ 85,140 $ 2,552,277 Claims incurred 875,511 2,286,569 268,718 3,430,798
Claims paid (740,411) (1,933,994) (255,204) (2,929,609) Balance of June 30, 2021 1,948,497 1,006,315 98,654 3,053,466 Claims incurred 6,307,154 435,842 792,223 7,535,219
Claims paid - (773,040) (810,880) (1,583,920)
Balance as of June 30, 2022 $ 8,255,651 $ 669,117 $ 79,997 $ 9,004,765 9 -Unearned Revenue and Unavailable Revenue
Unearned Revenue - G overnmental Funds and governmental activities report unearned revenues on the balance sheet in connection with resources that have been received, but not yet earned. Accordingly, this type of unearned revenue is also reported on the Statement of Net Position. At the end of the current fiscal year, the components of unearned revenue were as follows:

General Fund
Fees received for Recreational Program Not Yet Held $ 175,097 Total general fund unearned revenue 175,097
American Rescue Plan Act Fund
U.S. Treasury Funds received for Coronavirus Aid 17,379,701 Housing Asset Fund:

Lease revenues received in Advance 3,906,000
Total unearned revenues for governmental funds $ 21,460,798 Unavailable Revenue - Governmental funds also report deferred inflows of resources on the balance sheet in connection with resources that have been earned, but are not yet available to finance expenditures of the current fiscal period. This type of Unavailable Revenue is unique to governmental funds and is tied to the modified accrual basis of accounting. Accordingly, these Unavailable Revenues are not reported on the Statement of Net Position. At the end of Fiscal Year 2021-22, the components of Unavailable Revenue resulting from grant revenue not received with 60-day accrual period were detailed as follows:
57 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Major Funds
General Fund $ 5,401,790
HA Housing Asset Fund 4,910,515
Non-Major Special Revenue Funds
Community Development Block Grant 33,344
Federal Home Program 2,494,553
Measure R 1,760,564
Misc. Grants/ Developer Contributions 4,100,043
Proposition C 951,949
Housing Authority 20,508
Total unavailable revenue for governmental funds $ 19,673,266 10 - Capital Assets and Right to Use Assets
Capital Assets of the City for year ended June 30, 2022, consisted of the following:

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

Land and Improvements $ 119,295,459 $ 56,687 $ - $ 119,352,146 CFD 16-1 Water Credits 494,874 - (341,784) 153,090
Construction in Progress 30,360,348 19,969,647 (22,238,293) 28,091,702 Total Capital Assets, Not being Depreciated 150,150,681 20,026,334 (22,580,077) 147,596,938 Capital Assets, Being Depreciated:

Buildings and Structures 80,132,109 369,712 - 80,501,821 Improvements Other than Buildings 2,554,674 52,237 - 2,606,911 Machinery and Equipment 17,220,739 1,599,733 (435,761) 18,384,711 Infrastructure 1,153,667,765 11,498,577 (25) 1,165,166,317 Total Capital Assets, Being Depreciated 1,253,575,287 13,520,259 (435,786) 1,266,659,760 Less: Accumulated Depreciation for:

Buildings and Structures 26,343,164 1,677,083 - 28,020,247 Improvements Other than Buildings 1,214,792 247,373 - 1,462,165 Machinery and Equipment 12,888,678 837,717 (435,761) 13,290,634 Infrastructure 653,812,367 35,421,840 - 689,234,207
Total Accumulated Depreciation 694,259,001 38,184,013 (435,761) 732,007,253 Total Capital Assets, Being Depreciated, Net 559,316,286 (24,663,754) (25) 534,652,507 Total Capital Assets, Net 709,466,967 (4,637,420) (22,580,102) 682,249,445 Right to Use Lease Assets:

Machinery and Equipment - Right to Use $ - $ 81,954 $ - $ 81,954 Accumulated Amortization
Machinery and Equipment $ - $ (23,132) $ - $ (23,132)
Total Right to Use Lease Assets, Net $ - $ 58,822 $ - $ 58,822 58 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
For the year ended June 30, 2022, depreciation expense on capital assets was charged to the governmental functions as follows:

Governmental Function
Depreciation
Expense
General Government $ 544,362
Cultural and Recreational 869,389
Community Development 807,220
Public Safety 1,291
Public Services 35,176,737
Internal Service Funds 785,014
Total Depreciation Expense $ 38,184,013
11 - Financed Purchases
Canon Copier – On December 23, 2015, the City entered into a five-year agreement with Canon Financial Services, Inc. to finance the acquisition of copier machines throughout the City. Interest on the contract is payable monthly at 4.11 percent per annum.

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

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

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

Payments for the year ended June 30,
2022, amounted to $83,098 under the agreement and are sourced by the General Fund. In the event of default, Canon Financial Services may repossess the equipment but may not accelerate the entire balance outstanding due and payable.

For Year Ending Principal Interest Total
2023 $ 85,000 $ 7,610 $ 92,610
2024 86,944 5,666 92,610
2025 88,934 3,676 92,610
2026 90,968 1,642 92,610
2027 23,065 87 23,152
Total value of minimum lease payments $ 374,911 $ 18,681 $ 393,592 59 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Energy Efficient Equipment - On June 29, 2016, the City entered into a thirteen- year agreement with Capital One Public Funding, LLC to finance the acquisition of energy efficient equipment. Interest on the contract is payable semi-annually at 3.44 percent per annum. Payments for the year ended June 30, 2022, amounted to $80,296 and are sourced by the General Fund. In the Event of Default, Capital One Public Funding may repossess the equipment but may not accelerate the entire balance outstanding due and payable.

For Year Ending Principal Interest Total
2023 $ 83,059 $ 22,187 $ 105,246
2024 85,916 19,330 105,246
2025 88,871 16,374 105,245
2026 91,928 13,317 105,245
2027 95,091 10,155 105,246
2028-2029 200,107 10,384 210,491
Total value of minimum lease payments $ 644,972 $ 91,747 $ 736,719 12 - Long-Term Debt
A. Notes Payable
Section 108 HUD Note Payable – On January 11, 2006, the City issued a Variable Rate Note by entering into the Department of Housing and Urban Development contract for Loan Guarantee Assistance under Section 108 of the Housing and Urban Development Act of 1974. The City received advanced proceeds of $5,000,000 and used the proceeds for property acquisition, relocation, and demolition costs associated with the development of the proposed Senior Center. Interest on the note is equal to

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

On March 20, 2019, the U.S. Department of Housing and Urban Development refinanced $327,338,000 of its debt for Section 108 Participating Certificates, new Series HUD 2019-A, in which the City participated by refinancing $2,056,000 of its $2,464,000 outstanding principal balance and thus generating new blended rates ranging from 2.54 percent to 3.365 percent where the remaining $408,000 and original terms and schedule of payments remaining the same. Debt payments are to be paid from Community Development Block Grant funds and there are no remedies for Event of Default explicitly stated. The principal balance outstanding as of June 30, 2022, is $1,536,000.

Year Ending Principal Interest Total
2023 $ 342,000 $ 43,091 $ 385,091
2024 360,000 32,207 392,207
2025 398,000 20,273 418,273
2026 436,000 6,990 442,990
Totals $ 1,536,000 $ 102,561 $ 1,638,561
HOME Loan Note Payable – I n December of 2005, the City entered into an agreement with the Department of Housing and Community Development for the State of California HOME Investment Partnerships Program (HOME) to help approve the construction loan closing for the Courson Connection Project. The City has received advanced proceeds of $2,850,000 from HOME and has passed through those funds to the developer, Courson Senior Partners LP, for the construction of the 75 units of Senior Housing in the Courson Connection Project. The repayment of the loan will be over a 55-year term through residual receipts from the Project. As of June 30, 2022, no residual receipts from the project have been received from developer. Interest 60 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
on the note is equal to 3 percent.

If any installment under the Promissory Note is not paid when due or any default occurs in the agreements contained in the Note or the Loan Documents, the entire principal amount outstanding and any accrued interest thereon shall become due and payable immediately. The outstanding balance as of June 30, 2022, is $2,850,000 with $1,337,938 of unpaid accrued interest. 2017 Installment Payable of Street light Acquisition ($11,397,102) – D uring the Fiscal Year 2016-17, the City of Palmdale submitted a request to acquire street lights from Southern California Edison. In preparation for the acquisition of street lights, the City created a comprehensive inventory of light poles and their locations. Additionally, the City retained Utility Cost Management (UCM) to perform an analysis of the financial feasibility to acquire and maintain the City street lights. One of the key advantages of the street lights ownership is savings in energy cost by retrofitting existing street lights into Light Emitting Diode (LED) lighting. Retrofitting also provides the City with a greater ability to control future updates as technology develops.

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

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

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

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

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

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

Installment payments are computed based on the amount drawn upon during each six month period and represent the maximum payment assuming all project funds are drawn on the closing date. The 2017 Installment Sale Agreement is payable semi- annually on February 1st and August 1st at the rate of 2.48 percent per annum. Principal installments are payable August 1st of each year to 2032 commencing August 1, 2019. Up to 10 percent of outstanding principal can be prepaid every year without prepayment penalty or limitation, as long as such payment is not through refinancing. Such prepayments will be applied against the back end of the amortization schedule. On January 31, 2018, the City made the first interest payment of $1,565.87 on the $157,850 draw related to the cost of financing.
61 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
On January 25, 2018, the City drew upon $6,869,454 for the acquisition of approximately 10,538 street lights from Southern California Edison. On March 23, 2018, the remaining balance of available proceeds was drawn upon in the amount of $4,369,798, which was used to acquire additional 7,234 street lights from Southern California Edison. As a result of these two advances, all project funds are drawn to its maximum amount of $11,239,252. In accepting the inventory listing provided by Southern California Edison, the City acquired 17,772 street lights in total, which are 420 more street lights than the initial estimate of 17,352.

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

Year Ending Principal Interest Total
2023 $ 743,556 $ 220,742 $ 964,298
2024 761,997 202,073 964,070
2025 780,894 182,941 963,835
2026 800,260 163,335 963,595
2027 820,107 143,242 963,349
2028-2032 4,415,891 396,944 4,812,835
2033 949,960 11,780 961,740
Totals $ 9,272,665 $ 1,321,057 $ 10,593,722
2017 On Bill Financing (OBF) – The City of Palmdale and Southern California Edison (“SCE”) entered into the Energy Management Solution Incentive Application (“EMS Agreement”) with the California Public Utilities Commission (“CPUC”) in May 2014. After submission of the application, the City has completed installation of energy efficient equipment (“Equipment”) at the sites as set forth in the EMS Agreement. In Decision 12-11-015, the CPUC authorized SCE to provide zero-percent financing for the installation of Equipment, which is to be repaid over a specified period through the City’s electric utility bill through a process called On-Bill Financing (“OBF”).

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

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

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

The outstanding balance as of June 30, 2022 is $124,473.

B. In October 2020, The City entered into another OBF Agreement with SCE. The City has completed installation of eligible energy efficient equipment at the Marie Kerr Park Site set forth in the EMS Agreement and has accepted the equipment as being operational and in good working order. The amount financed is $116,202.56, and the repayment will be sixty-nine (69) months in the amount of $1,700 per month. The outstanding balance as of June 30, 2022 is $90,698. 62 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Year Ending Principal A Interest Total Year Ending Principal B Interest Total 2023 $ 23,016 $ - $ 23,016 2023 $ 20,404 $ - $ 20,404
2024 23,016 - 23,016 2024 20,404 - 20,404
2025 23,016 - 23,016 2025 20,404 - 20,404
2026 23,016 - 23,016 2026 20,404 - 20,404
2027 23,016 - 23,016 2027 9,082 - 9,082
2028 9,393 - 9,393 2028 - - -
Total $ 124,473 $ - $ 124,473 Total 90,698 - $ 90,698
Street Lights Retrofitting – I n March 2017, the City entered into four (4) OBF Agreements with SCE for installation of the safety street lights at Sites 1-25, 26-50, 51-75 and Sites 76-105 in accordance with Energy Management Solution Incentive Application (EMS) Agreement. The safety street lights are components of the traffic signal infrastructure, and Sites 1-105 consist of the various street lights located throughout the City. The repayment of all four (4) Agreements will be over 120 months. The first payments were made in January 2018.

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

The amounts financed and outstanding balances as of June 30, 2022 are as follows:

A. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5806 for $20,258 with an outstanding balance of $6,341
as of June 30, 2022.

Year Ending Principal Interest Total
2023 $ 3,340 $ - $ 3,340
2024 3,001 - 3,001
Totals $ 6,341 $ - $ 6,341
B. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5807 for $100,761 with an outstanding balance of $34,952 as of June 30, 2022
Year Ending Principal Interest Total
2023 $ 15,455 $ - $ 15,455
2024 15,455 - 15,455
2025 4,042 - 4,042
Totals $ 34,952 $ - $ 34,952
63 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
C. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5808 was paid in full as of June 30, 2022.

D. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5809 was paid in full as of June 30, 2022.

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

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

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

The 2012 Bonds represent direct, undivided fractional interests in a lease of the City’s Development Services Building and South Valley WorkSource Center. The City has the right, subject to certain conditions, to substitute alternate property for the above properties, as property subject to the lease.

The lease agreement requires the City to pay a semi-annual base rental on August 15 and February 15 to the Authority for the use of the facilities through September 2029. The rentals will be used by the Authority to pay principal and interest with respect to the 2012 Bonds as they become due. Title to the land and facilities covered by the lease and the 2012 Bonds is vested in the Authority, for the benefit of the 2012 Bond holders, during the lease term.

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

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

Year Ending Principal Interest Total
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 665,000 71,289 736,289
2028-2030 1,835,000 88,292 1,923,292
Totals $ 4,970,000 $ 640,281 $ 5,610,281
64 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
2015 Multifamily Housing Revenue Bonds Payable ($4,235,000) – On September 3, 2015, the Housing Authority of the City of Palmdale issued $4,235,000 of Multifamily Housing Revenue Bonds (2015 Bonds). Interest on the 2015 Bonds is payable semi-annually on December 1st and June 1st at rates ranging from 2.62 percent to 5.25 percent per annum. Principal installments are payable June 1st of each year from 2017 to 2045.

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

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

The 2015 Bonds maturing on any date, are subject to extraordinary mandatory redemption from insurance proceeds or condemnation proceeds not used for the purpose of repairing or replacing the property damaged, destroyed or taken, and transferred to the Redemption Fund pursuant to the Indenture or from proceeds of any foreclosure action under any of the Deeds of Trust transferred to the Redemption Fund, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date fixed for redemption, without premium.

The proceeds of the 2015 Bonds were used to finance the acquisition of the Impressions, La Quinta, Park Vista, and Summerwood Apartments (collectively, the “Housing Facilities”) all located within the City of Palmdale, to finance the costs to renovate portions of the Housing Facilities, pay costs related to the issuance of the bonds, and make a deposit to a Bond Reserve Account for the Bonds.

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

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

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

Year Ending Principal Interest Total
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 115,000 163,275 278,275
2028-2032 640,000 740,715 1,380,715
2033-2037 800,000 586,133 1,386,133
2038-2042 1,015,000 363,563 1,378,563
2043-2045 755,000 80,587 835,587
Totals $ 3,740,000 $ 2,628,146 $ 6,368,146
65 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
2017 Lease Revenue Bonds Payable ($17,475,000) – On April 5, 2017, the Palmdale Financing Authority issued $17,475,000 of Lease Revenue Refunding Bonds, Series 2017. Interest on the 2017 Series Bonds is payable semi-annually on November 1 and May 1 at rates ranging from 2.00 percent to 3.50 percent per annum. Principal installments are payable November 1 of each year to 2032.

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

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

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

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

Upon completion of the term of the lease and payment in full to the 2017 Bond holders, title to the property shall vest in the City. The City may, on any date, deposit sufficient funds into an irrevocable trust to pay all remaining lease payments, at which time the lease agreement shall cease and terminate and title to the property shall vest in the City.

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

Year Ending Principal Interest Total
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 810,000 284,538 1,094,538
2028-2032 5,530,000 778,256 6,308,256
2033 1,465,000 25,638 1,490,638
Totals $ 12,055,000 $ 2,670,084 $ 14,725,084
66 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
C. Certificates of Participation
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. As a result of the refunding, the City entered into a new Site Lease Agreement with Palmdale Financing Authority and terminated its existing lease agreement with Palmdale Civic Authority. As of June 30, 2021, a total of $13,584,908 was outstanding. The lease agreement requires the City to pay a semi-annual base rental on August 15 and February 15 to the Authority for the use of the facilities through September 2029. The rentals will be used by the Authority to pay principal and interest with respect to the 2021 Bonds as they become due. Title to the land and facilities covered by the lease and the 2021 Bonds is vested in the Authority, for the benefit of the 2021 Bond holders, during the lease term.

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

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

Year Ending Principal Interest Total
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 821,121 386,615 1,207,736
2028-2032 4,621,221 1,422,461 6,043,682
2033-2036 4,395,182 440,015 4,835,197
Totals $ 12,827,451 $ 4,094,961 $ 16,922,412
67 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
2014 Lease Payable ($25,920,000) – O n October 16, 2014, the Palmdale Financing Authority assigned the future lease revenues from the Lease Agreement dated as of October 1, 2014, by and between the City of Palmdale and the Authority, to TPB Investments, Inc., a wholly owned subsidiary of Western Alliance Bank, an Arizona corporation, in exchange for $25,920,000 as a private placement loan. These funds were used to redeem $25,445,000 of outstanding 2002 Palmdale Civic Authority Certificates of Participation, pay $262,893 of interest on the outstanding 2002 Palmdale Civic Authority Certificates of Participation, and pay financing costs of $212,107.

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

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

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

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

Year Ending Principal Interest Total
2023 $ 1,400,000 $ 670,158 $ 2,070,158
2024 1,455,000 617,055 2,072,055
2025 1,510,000 561,906 2,071,906
2026 1,570,000 504,618 2,074,618
2027 1,630,000 445,098 2,075,098
2028-2032 9,115,000 1,251,315 10,366,315
2033 2,035,000 37,851 2,072,851
Totals $ 18,715,000 $ 4,088,001 $ 22,803,001
68 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
D. Change in Long-Term Liabilities
Activity for the year ended June 30, 2022 were as follows:

June 30,2021 Additions Retirements June 30,2022
Due Within
One Year
Compensated Absences Payable:

Compensated Absences Payable: $ 3,838,737 $ 1,278,280 $ 1,613,600 $ 3,503,417 $ 1,468,115 Total compensated absences payable 3,838,737 1,278,280 1,613,600 3,503,417 1,468,115 Liability Claims (General Fund)
Health, Dental and Vision Claims 1,104,969 1,228,065 1,583,920 749,114 749,114 Liability Claims 1,948,497 6,307,154 - 8,255,651 4,227,621 Total liability claims 3,053,466 7,535,219 1,583,920 9,004,765 4,976,735 Bonds payable:
2012 Lease Revenue Bond 5,545,000 - 575,000 4,970,000 590,000 2015 Mortgage Revenue Bonds 3,835,000 - 95,000 3,740,000 100,000 2017 Lease Revenue Bonds 13,255,000 - 1,200,000 12,055,000 1,330,000 2014 Certificates of Participation 20,065,000 - 1,350,000 18,715,000 1,400,000 2021 Certificates of Participation 13,584,908 - 757,457 12,827,451 703,899 Plus: Deferred Issuance Premiums $17.4 Million 478,047 - 154,243 323,804 117,970 Total bonds payable 56,762,955 - 4,131,700 52,631,255 4,241,869 Direct Borrowings and Direct Placements:

Notes Payable:

Section 108 HUD Loan 1,861,000 - 325,000 1,536,000 342,000 Home Loan 2,850,000 - - 2,850,000 -
Street Light Purchase Loan 9,998,228 - 725,563 9,272,665 743,556 SCE Parks LED Retrofit OBF A-5962 147,489 - 23,016 124,473 23,016 SCE LED Retrofit OBF A-5806 9,681 - 3,340 6,341 3,340
SCE LED Retrofit OBF A-5807 50,407 - 15,455 34,952 15,455 SCE LED Retrofit OBF A-5808 5,449 - 5,449 - -
SCE LED Retrofit OBF A-5809 2,489 - 2,489 - -
SCE LED Retro OBF A-7251 111,102 - 20,404 90,698 20,404 Total notes payable 15,035,845 - 1,120,716 13,915,129 1,147,771 Financial Arrangements:

Lease Liability - 81,780 20,806 60,974 28,671
Financed Purchase-Copier 458,009 - 83,098 374,911 84,999 Financed Purchase-Energy Efficient Equipment 725,268 - 80,296 644,972 83,059 Total payable 1,183,277 81,780 184,200 1,080,857 196,729 Total $ 79,874,280 $ 8,895,279 $ 8,634,136 $ 80,135,423 $ 12,031,219 The City is subject to a legal debt limit statutorily computed at 3.75 percent of assessed valuation. As of June 30, 2022, the City’s total debt limit was $561,530,620, and the total outstanding debt applicable to the limit w as $83,819,392, which is 14.93 percent of the total debt limit. The aggregate principal amount of the City's general obligation debt for public improvements is statutorily limited to 15.0 percent of the City's total reported assessed valuation.

E. Lease receivable
As of year-end June 30, 2022, the City had entered into two lease agreements as the lessor where it had leased its assets, ranging from ten to twenty-five years. As of June 30, 2022 the outstanding leases receivable total $91,095. These leases require the lessees to make periodic payments to the City, and range in interest rates from 1.46% to 2.46%. The offsetting entry to the leases receivable is a deferred inflow and the value of the deferred inflow at June 30, 2022 is $91,095. The City will be systematically recognizing revenue over the terms of the lease, and in the current fiscal year, the City recognized $62,580 in lease principal and $2,611 in interest.
69 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
F. Lease liability
During fiscal year 2022, the City has entered into one lease agreement as the lessee for the use of a leased assets, at a term of 2 years. The lease terminates on August 2024. Under the term of the lease, the City pays a base fee of $2,100 every four weeks increasing by 5% on the anniversary of the agreement. The City has the option to extend the term by 1 year, which the City believes it will exercise with reasonable certainty.

At June 30, 2022, the City recognized a right to use the leased asset of $58,822 and a lease liability of $60,974 related to this agreement. During the fiscal year, the City recorded $23,132 in am ortization expense and $175 of interest expense for the right to use leased asset. The City used a discount rate of 3.87% based on its estimated incremental borrowing rate.

The remaining obligations associated with the lease are as follows:

Year Ending Principal Interest Total
2023 $ 28,672 $ 724 $ 29,396
2024 27,912 270 28,182
2025 4,390 1 4,391
Totals $ 60,974 $ 995 $ 61,969
13 - Special Assessment District and Community Facilities District Bonds None of the Bonds described below constitute indebtedness of the City, and the City is in no way obligated for their repayment except to the extent of any assessments, or special taxes collected and pledged for their repayment. The City is only acting on behalf of the Bondholders in collecting the assessments and special taxes levied to repay the Bonds, forwarding the collections to the Bondholders and initiating foreclosure proceedings, if necessary. Accordingly, these special assessment and special tax Bonds payable are not recorded as a liability in the accompanying financial statements. The amounts collected and held by the City pending disbursement to the Bondholders are accounted for in a custodial fund.

A. Bonds Outstanding
Community Facilities District No. 91-1 (Sierra Gateway) Special Tax Bonds – I n December 1991, the City issued $7,970,000 of special tax Bonds. Proceeds were used for the development of public improvements for the Sierra Gateway Center, a master-planned, mixed-use business park, which is proposed to ultimately include 2.5 million square feet of industrial, office, and retail buildings. The Bond issue provided for the acquisition of land, acquisition and construction of storm drainage retention facilities, landscaping, and street, water, and utility improvements. As of June 30, 2022, a total of $7,425,000 in
Bonds was outstanding. No principal and interest payments are due on the Bonds after the maturity in December 2016. No additional special taxes will be levied on the property in the Sierra Gateway Community Facilities District No. 91-1.

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

Community Facilities District No. 93-1 (Ritter Ranch) Special Tax Bonds – In April 1995, the City issued $50,000,000 of special tax Bonds for the design, acquisition and construction of public improvements for a master-planned community known as Ritter Ranch consisting of facility, recreational, school, and commercial uses. As of June 30, 2022, a total of $22,665,000 in Bonds was outstanding for Ritter Ranch Community Facilities District No. 93-1. The principal and interest on the Bonds are to be paid from the collection of special taxes levied on the property in the Ritter Ranch Community Facilities District No. 93-1.

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

Community Facilities District No. 2003-1 (Anaverde Improvement Area A) Special Tax Bonds – O n July 17, 2019 on behalf of the Improvement Area A of the City of Palmdale Community Facilities District No. 2003-1 (Anaverde Public Improvements), the City issued the Special Tax Refunding Bonds, Series 2019 in the amount of $15,565,000 with annual 70 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
interest rate of 5 percent and $3,500,000 of issuance premium. The Special Tax Refunding Bond, Series 2019, issuance premium, and other available funds of the District were used to refund the outstanding principal of the Special Tax Bonds, Series 2005-A and Special Tax Bonds, Subordinate Series 2005-B. The Series 2005-A and Series 2005- B bonds were issued for the acquisition and construction of certain public capital improvements necessary for the development of a 5,200-unit master-planned community known as Anaverde. As of June 30, 2022, a total of $14,270,000 in Series 2019 Bonds was outstanding. The principal and interest on the Bonds are to be paid from the collection of special taxes on the property in the Anaverde Community Facilities District No. 2003-1.

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

Community Facilities District No. 05-1 (Trade & Commerce Center Area) 2021 Special Tax Refunding Bonds, - On June 17, 2021, the City issued the Refunding of the 2005 Series A and B and 2007 refunding bonds with a private placement loan with Western Alliance Bank, in the amount of $10,442,992, with annual interest rate of 3.39 percent. The Refunding loan and other available funds in the trust accounts were used to refund the outstanding principal of the 2005 and 2007 bonds. As a result of the refunding, the City entered into a new Fiscal Agreement with US Bank as Trustee. As of June 30, 2022, a total of
$9,802,992 was outstanding. The Fiscal agreement requires the Community Facilities District to pay a semi-annual base rental on September 1 and March 1 to the trustee in order to pay Western Alliance Bank through September 2037.

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

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

Assessment District No. 2006-1 (Godde Hills Estates Sewer Im provements) Limited Obligation Improvement Bonds – In November 2006, the City issued $2,220,000 of Special Assessment Bonds for the construction of sewer improvements in the community known as Godde Hills Estates. As of June 30,
2022, a total of $1,005,000 in Bonds was outstanding. The principal and interest on the Bonds are to be paid from the collection of special assessments on the Property in the Godde Hills Estates Sewer Improvements Assessment District No. 2006-1.

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

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

The special taxes are authorized to be levied on the Property for the purpose of (i) paying the annual purchase price of the Assigned Water Rights and other related and allocable charges to be paid by AVEK, (ii) paying the expenses of the City in administrating the CFD, (iii) paying the expenses of AVEK relative to its obligations under this agreement and otherwise with respect to the Assigned Water Rights, including but not limited to wheeling costs, and any costs associated with water banking by AVEK, (iv) paying an energy charge to AVEK based on California Department of Water Resources charges to transport water from the Tupman Turnout to AVEK’s water treatment plant, (v) paying energy charges incurred by the City related to banked water, and (vi) establishing and replenishing a reserve fund to be maintained by the City and to be drawn upon if the special taxes revenues collected by the City for the CFD in any fiscal year are not sufficient to pay the Annual Water Rights 71 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Charges, the AVEK Administrative Expenses and the AVEK Energy Charges due and payable in any fiscal year.

Under the Assignment Agreement between AVEK and CV Communities, AVEK will timely perform all the AVEK Obligations (as defined in the Assignment Agreement) on and after January 1, 2017 as they apply to the Assigned Water Rights and the City Water Allocation. CV Communities is obligated to pay the Annual Water Rights charges, and AVEK Administrative Expenses and any AVEK Energy Charges payable in calendar year 2017 (collectively, the “2017 Expenses”). In order to assure the City that the foregoing payments will be made, CV Communities provided the City with a Letter of Credit issued by Wells Fargo Bank on June 10, 2016. The City is entitled to draw on the amount available under the Letter of Credit in the event that CV Communities does not timely pay expenses. The current Letter of Credit was renewed in June 2022 and is effective through July 12, 2023. As of June 30, 2022, a total of $379,491 in Letter of Credit was outstanding.

B. Default in Payment of Debt Service on Bonds Outstanding Community Facilities District No. 91-1 (Sierra Gateway) Special Tax Bonds – O n December 1, 1997, there were insufficient funds on hand to make the full payment of the scheduled principal and interest on the Community Facilities District No. 91-1 Bonds due to delinquencies within the District. In accordance with procedures for Community Facilities Districts (which are different from those for Assessment Districts), payments of interest only were made proportionally to the Bondholders as listed in the table below. During fiscal year 2015-16, foreclosure proceedings were initiated against the owner of Defaulted Properties. During the fiscal year 2016-17, the City, on behalf of CFD 91-1, obtained judgments against the property owner of the Defaulted Properties (“Property”). The Property went to a foreclosure sale on September 28, 2016, but no bids were received. The County of Los Angeles’ Treasurer and Tax Collector office (“TTC”) also conducted ad valorem foreclosure sale with respect to the Defaulted Properties. This foreclosure sale also failed.

During the Fiscal Year 2017-18, the owner of non-defaulted properties within the District has permanently satisfied the District special taxes attributable to such parcels. Accordingly, the City took the necessary actions to release the special tax lien imposed for the District on three non-defaulted parcels in June 2018.

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

The Los Angeles County TTC officials were interested in a proposed timeline and the City’s plan for the Property. The Plan is to market and sell the property and distribute proceeds to bondholders in complete satisfaction of amount owed under the Bonds, have the Property developed and paying taxes again. They also went out and visited the Property after the meeting. As of the date of the financial statements, the bonds and delinquent Ad Valorem Taxes levied against the Property remain outstanding.
72 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Year Ending Interest Paid Year Ending Interest Paid
1997-1998 $ 241,881 2008-2009 $ 141,179
1998-1999 148,474 2009-2010 147,131
1999-2000 148,283 2010-2011 149,729
2000-2001 123,693 2011-2012 154,943
2001-2002 141,376 2012-2013 158,128
2002-2003 130,703 2013-2014 160,207
2003-2004 129,454 2014-2015 161,823
2004-2005 126,712 2015-2016 164,925
2005-2006 140,404 2016-2017 137,100
2006-2007 144,418 2017-2018 128,454
2007-2008 142,787 2018-2019 -
2019-2020 -
2020-2021 -
2021-2022 -
$ 3,121,804
14 - Residential Mortgage Revenue Bond Programs
The Multifamily Mortgage Program is designed to provide funds for the construction and permanent financing of apartment complexes. Bonds are paid from monthly rental payments generated by the development and from remaining bond proceeds held by Wells Fargo against loan number ending in 0039. The loan is administered by California Community Reinvestment Corp. (CCRC) and the loan is under the name Courson Senior Partners LP. As of June 30, 2022, there was $849,749 of Multifamily Mortgage Revenue Bonds outstanding.

On February 2, 2021, the City approved the issuance of tax-exempt revenue bonds by the California Public Finance Authority (CalPFA) to finance or refinance the acquisition and construction of a 118-unit multi family rental housing project located on 65th Street East and East Avenue S. The property is to be owned by Maison's Palmdale LP (the "Borrower") or a partnership with Ravello Holdings, Inc. (the "Developer"). As of June 30, 2022, there was $24,119,000 of Multifamily Mortage Revenue Bonds outstanding.

The bonds described above do not constitute indebtedness of the Housing Authority or the City, and there exists no legal or moral obligation on the part of the Housing Authority or the City to make payments on such bonds from any source other than the revenue and assets pledged thereto. The program is completely administered by the trustees. Accordingly, these programs and the mortgage revenue bonds issued there under have been excluded from the accompanying financial statements. 73 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
15 - Public Employees’ Retirement System (PERS) Pension Plan A. General Information about the Pension Plan
Plan Description - All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, an agent multiple employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers.

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

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

The Plan’s provisions and benefits in effect at June 30, 2022, are summarized as follows:

On or Prior to
April 10, 2011

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

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

2.0 Percent @ Age 62
Benefit Vesting Schedule 5 year of Service 5 year of Service 5 year of Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age Age 50 to 55 Age 50 to 63 Age 50 to 67
Monthly Benefits, as a Percent of Annual Salary 2.0 to 2.7 percent 1.092 th 2.418 percent 1.0 to 2.5 percent Retired Employee Contribution Rates 8.0 percent 7.0 percent 7.75 percent Required Employer Contribution Rates 11.06 percent 11.06 percent 11.06 percent Employees Covered
At June 30, 2022, the following employees were covered by the benefit terms for each Plan:

On or Prior to
April 10, 2011

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

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

2.0 Percent @ Age 62
Inactive Employees or Beneficiaries Currently
Receiving Benefits 299 - -
Inactive Employees to But Not Yet Receiving
Benefits 246 4 -
Active Employees 95 4 145
640 8 145
74 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Contributions
Section 20814(c) of the California Public Employees’ Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. The employer contributions during the year ended June 30, 2022 were $5,935,743.

B. Net Pension Liability
The City’s net pension liability for the Plan was measured as of June 30, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020, rolled forward to June 30, 2021.

Actuarial Assumptions
The total pension liability in the June 30, 2020 actuarial valuation was determined using the following actuarial assumptions.

Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15 percent
Inflation Rate 2.50 percent
Projected Salary Increase Rate (1) 3.2 to 12.2 percent
Investment Rate of Return 7.00 percent
Mortality (2)
Notes:
(1) Depending on Age, Service and Type of Employment
(2) The Mortality Table used was developed based on CalPERS specific data The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For details on this table, please refer to the 2017 experience study report.

Discount Rate
The discount rate used to measure the total pension liability was 7.15 percent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the City’s contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability. 75 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
In determining the long-term expected 7.15 percent rate of return on pension plan investments, CalPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the pension funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to the account for assumed administrative expenses.

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

Asset Class
Target
Allocations
Real Return
Years 1 Thru 10*
Real Return
Years 11 and
Thereafter**
Global Equity %50.00 %4.80 %5.98
Fixed Income %28.00 %1.00 %2.62
Real Assets %13.00 %3.75 %4.93
Private Equity %8.00 %6.30 %7.23
Liquidity %1.00 %- %(0.92)
Total %100.00
* An Expected Inflation Rate of 2.00% was used for this period. ** An Expected Inflation Rate of 2.92% was used for this period.

Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Plan for the measurement date June 30, 2022, are as follows:

Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balances as of June 30, 2021 $ 189,495,804 $ 137,971,710 $ 51,524,094 Changes in the Year:

Service Cost 2,973,338 - 2,973,338
Interest on the Total Pension Liability 13,327,612 - 13,327,612 Changes in Assumptions - - -
Differences between Expected and Actual Experience (46,529) - (46,529) Net Plan to Plan Resource Movement - - -
Contribution - Employer - 5,285,825 (5,285,825)
Contribution - Employee - 1,324,417 (1,324,417)
Net Investment Income - 31,158,920 (31,158,920)
Benefit Payments, including Refunds of Employee Contributions (9,071,539) (9,071,539) - Administrative Expenses - (137,825) 137,825
Net changes 7,182,882 28,559,798 (21,376,916)
Balance at June 30, 2022 $ 196,678,686 $ 166,531,508 $ 30,147,178 76 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan, as of the measurement date, calculated using the discount rate of

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

Discount Rate
Less One Percent

6.15 Percent
Current
Discount Rate

7.15 Percent
Discount Rate
Plus One Percent

8.15 Percent
Plan's Net Pension Liability $ 55,348,847 $ 30,147,178 $ 9,171,192 Pension plan fiduciary net position:

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

C. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30,
2022, the City recognized pension expense of $1,581,319. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Contributions made Subsequent to the Measurement Date $ 5,935,743 $ - Difference between Expected and Actual Experience 391,110 30,485 Net Difference between Projected and Actual Earnings on Plan Investments - 15,487,299 Total $ 6,326,853 $ 15,517,784
The amount of $5,935,743 r eported as deferred outflows of resources related to contributions made subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2023.

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

Year Ended June 30,
2023 $ (3,533,617)
2024 (3,592,884)
2025 (3,718,103)
2026 (4,282,070)
Total pension expense $ (15,126,674)
77 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
16 - Public Agency Retirement Systems
For all of its part-time employees not covered by PERS, a defined contribution pension plan is made available through the Public Agency Retirement System (PARS) pursuant to the requirements of 3121(B)(7)(F) of the Internal Revenue Code. This was created in accordance with Internal Revenue Code Sections 401(a) and 501 and adm inistered by Phase II Systems. Benefit terms, including contribution requirements for PARS are established by Internal Revenue Code 3121(b)(7)(F). Employees are required to contribute 7.5 percent of their salary to the pension plan, up to applicable Internal Revenue Code limits. The City does not contribute to Employees PARS account. Employees are immediately vested in their contributions and earnings on those contributions. For the year ended June 30, 2022, employee contribution amounts were $258,895.

The City is required to contribute 3.75 percent of the elected Council Members annual salary to the individual account. The individuals are immediately vested in their own and the City’s contributions and earnings on those contributions. For the year ended June 30, 2022, employee and employer contribution amounts were $3,188. 17 - Post-Employment Benefits Other Than Pensions
A. General Information about the Other Than Pensions-Plan (OPEB) Plan Description:

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

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

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

B. Defined Benefit Plan
Funding Policies:

Plan membership - At June 30, 2022, the Defined Benefit Plan membership consisted of the following:

Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 25 Inactive Plan Members Entitled to But Not Yet Receiving Benefit Payments 3 Active Plan Members 60
88 78
City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Benefits provided
The Plan provides medical insurance benefits to eligible retirees. Current retirees receive a maximum of $250 deposited into the Plan per month beginning January 1, 2009. Employees age 45 and greater on December 31, 2008 that choose a defined benefit plan deposit of $250 per month at retirement, will receive either a maximum contribution of $250 per month or a pro-rated contribution for less than 10 years of service.

Contributions
The contribution requirements of the plan members and the City are established as described above under each plan and may be amended by the City Council. The Council establishes rates based on an actuarially determined rate. For the year ended June 30, 2022, the City contributed $0 to the Defined Benefit Plan.

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

Rate of Return
For the year ended June 30,
2022, the annual money-weighted rate of return on investments, net of investment expense was 5.25 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Net OPEB Liability (Asset)
The City’s net OPEB liability (Asset) was measured as of June 30, 2022, and the total OPEB liability (Asset) used to calculate the net OPEB liability (Asset) was determined by an actuarial valuation as of June 30, 2022.

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

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

2.25 p ercent. All results are then rounded to the nearest quarter percentage point.

The best-estimates of expected future asset class returns were published in the 2016 Survey of Capital Market Assumptions produced by Horizon Actuarial Services. These expected returns, along with expected asset class standard deviations and correlation coefficients, are based on Horizon’s annual survey of investment advisory firms. The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data.
79 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Best-estimates of geometric real and nominal rates of return for each major asset class included in the OPEB plan’s asset allocation as of the measurement date are summarized in the following table:

Asset Class
Estimated
Long-Term
Allocations
Long-Term
Expected
Real Rate of Return
Domestic equity 45.00% 4.42%
International equity 10.00% 4.91%
Fixed Income 40.00% 1.00%
Real Estate and Alternatives 0.00% 3.98%
Cash and Cash Equivalents 5.00% (3.30)%
Total 100.00%
Discount Rate
The discount rate used to measure the total OPEB liability w as 4.06 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to m ake all projected future benefit payments of current plan members through 2036 and the long-term expected rate of return on OPEB plan investments was applied to those periods. A projected “crossover” date occurs in 2037 and unfunded benefit payments for the years thereafter were discounted using the expected 3.69% municipal bond index rate. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of June 30, 2022, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2022
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 4.06 percent
Investment Rate of Return 5.25 percent (1)
General Inflation Rate 2.25 percent
Healthcare Cost Trend Rate 6.30 percent for FY2022, gradually decreasing over several decades to an ultimate rate of 3.8 percent in
FY2076 and later years.
(1) Net of OPEB Plan Investment, including inflation
80 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Changes in the Net OPEB Liability (Asset):

OPEB Plan Increase (Decrease)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability (Asset)
Balances as of June 30,2021 $ 1,016,013 $ 922,990 $ 93,023 Changes in the Year:

Service Cost 18,642 - 18,642
Interest 27,510 - 27,510
Differences between Expected and Actual Experience (128,567) - (128,567) Changes in Assumptions (106,880) - (106,880)
Net Investment Income - (181,366) 181,366
Benefit Payments, including Refunds of Employee Contributions (8,617) (8,617) - Administrative Expenses - (37,432) 37,432
Net changes (197,912) (227,415) 29,503
Balance at June 30, 2022 $ 818,101 $ 695,575 $ 122,526
Administrative Expenses for Fiscal Year Ended 2022, include $36,741 in payables for which the Trust is expected to reimburse the City after Fiscal Year End 2022, plus $691 in estimated costs paid directly from the Trust during Fiscal Year 2022.

Sensitivity of the Net OPEB Liability (Asset) to Changes in the Discount Rate The following presents the net OPEB liability (asset) of the City, as well as what the City’s OPEB liability (asset) would be if it were calculated using a discount rate that is one percentage point lower (3.06% percent) or one percentage point higher ( 5.06% percent) than the current discount rate:

Decrease 1%
Discount Rate of

3.06%
Current
Discount Rate of

4.06%
Increase 1%
Discount Rate of

5.06%
Net OPEB Liability (Asset) $ 176,060 $ 122,526 $ 74,361 Sensitivity of the Net OPEB liability (Asset) to Changes in the Healthcare Cost Trend Rates The following presents the Net OPEB Liability (Asset) of the City, as well as what the City’s Net OPEB Liability (Asset) would be if it were calculated using healthcare cost trend rates that are one percentage point lower (

5.3 percent decreasing to 2.8
percent) or one percentage point higher (7.3 percent decreasing to 4.8 percent) than the current healthcare cost rates:

Healthcare
Cost Rates

5.3 percent
decreasing to 2.8
percent
Current
Healthcare
Cost Rates

6.3% Decreasing
to 3.8%
Healthcare
Cost Rates

7.3 percent
decreasing to 4.8
percent
Net OPEB Liability (Asset) $ 94,107 $ 122,526 $ 153,999 81 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
OPEB Expense and Deferred Outflows/Inflows of Resources related to OPEB:

For the Year ended June 30, 2022, the City recognized OPEB expense of $156,373. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Difference between Expected and Actual Experience $ 355,293 $ 99,869 Change of assumptions 47,724 99,928
Net Difference between Projected and Actual Investments Earnings 67,046 - Total $ 470,063 $ 199,797
Other amounts reported as deferred outflows of resources r elated to OPEB will be recognized as future OPEB expense as follows:

Measurement Period
Year Ended June 30,
2023 $ 128,862
2024 108,568
2025 12,386
2026 20,450
Total $ 270,266
C. Defined Contribution OPEB Plan
Plan membership
At June 30, 2022, the Defined Contribution OPEB Plan membership consisted of the following:

Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 14 Inactive Plan Members Entitled to But Not Yet Receiving Benefit Payments 0 Active Plan Members 71
Total defined contribution benefit plan membership 85
Benefits provided
Full time employees under age 45 on December 31, 2008 and employees aged 45 and greater who choose a defined contribution option will receive a defined contribution account. Annual allocations begin at $100 and increase with age up to a maximum $2,000 annual allocation. Individual balances grow w ith investment earnings and annual City contributions.

Beginning account balances were determined based on years of service, annual benefit times the life annuity factory at expected retirement age. Annual contributions for the beginning account balances and the annual contribution is made when the employee is fully vested as described above.
82 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Contributions
The contribution requirements of the plan members and the City are established as described above under the defined contribution plan and may be amended by the City Council. Currently, plan members and beneficiaries are not required to contribute to the plan. For the year ended June 30, 2022, the City contributed $117,400 to the Defined Contribution Plan.

Condensed Financial Statements:

Separate GAAP-basis reports are not currently available for the defined benefit and contribution plans. In lieu of separate issued financial statements for the City administered post-employment health care benefit trust funds, condensed financial statements are presented below for the year ended June 30, 2022:

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

Cash and cash equivalents $ 22,484 $ 1,698,084 $ 1,720,568 Investments:

Mutual Funds 1,116,162 2,002,459 3,118,621
Interfund Receivable - 17,278 17,278
Total assets 1,138,646 3,717,821 4,856,467
Liabilities:

Accounts Payable 425,793 - 425,793
Interfund Payable 17,278 - 17,278
Total liabilities 443,071 - 443,071
Total net position restricted
for OPEB benefits $ 695,575 $ 3,717,821 $ 4,413,396
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution Plan Total
Additions:

Employer Contributions to Retiree Medical Trust $ - $ 117,400 $ 117,400 Investment and Interest Income 62,155 102,266 164,421
Net Realized and Unrealized Gains (Losses) (243,521) (371,929) (615,450) Total additions (deletions) (181,366) (152,263) (333,629) Deductions:

Benefits Paid to Participants and expenses 46,049 404,386 450,435 Total deductions 46,049 404,386 450,435
Change in Net Position (227,415) (556,649) (784,064)
Net Position as of July 1, 2021 922,990 4,274,470 5,197,460 Net Position as of June 30, 2022 $ 695,575 $ 3,717,821 $ 4,413,396 83 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
18 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency A. General Discussion
On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (“the Bill”) that provides for the dissolution of all Redevelopment Agencies in the State of California. This action impacted the reporting entity of the City of Palmdale that previously had reported a Redevelopment Agency within the reporting entity of the City as a blended component unit.

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

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

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

B. Land Held for Development
Land held for development is recorded at the lower of acquisition cost or estimated fair market value. During fiscal year 2010- 2011, properties were conveyed to the City pursuant to Section 33220(g) of the Health and Safety Code to provide redevelopment and retain local control. As a result of AB1484, the same properties were reconvened back to the Successor Agency Trust Fund through a quitclaim process on November 9, 2012. The reconveyance was legally deemed to be reported as of June 30, 2015. Land Held for Development was transferred at a carrying value of $11,673,527. After the sale of land in accordance with the Successor Agency’s Long Range Property Management Plan, the carrying value of remaining land held is $1,693,515 as of June 30, 2022.

C. Capital Assets
Capital Assets of the Successor Agency Trust Fund as of June 30, 2022 consisted of the following:

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

Land and improvements $ 3,477,722 $ - $ - $ 3,477,722
Capital assets being depreciated:

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

Buildings and structures 244,665 8,763 - 253,428
Total accumulated depreciation 244,665 8,763 - 253,428
Total capital assets, being depreciated, net 193,487 (8,763) - 184,724 Total capital assets, net $ 3,671,209 $ (8,763) $ - $ 3,662,446 84 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
For the Year Ended June 30, 2022, Depreciation Expense on capital assets was charged to the private purpose trust fund in the amount of $8,763.

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

Housing Authority - Housing Asset Fund $ 5,159,777 $ -
Successor Agency Trust Fund:

Dissolved - CAR Project Area No. 1 and No. 2A - 5,159,777 Total $ 5,159,777 $ 5,159,777
In fiscal years 2004-2005 and 2005-2006, the State required the former Community Redevelopment Agency (CRA) to shift tax increment of $1,862,827 to the Education Revenue Augmentation Fund (ERAF). To assist in funding this shift, the former CRA Housing Development fund advanced $355,538 and $1,507,289 (50% of the total requirement) to the former CRA Project Area No. 1 and 2A Debt Service Funds, respectively. The 2004-2005 advance of $939,215 and the 2005-2006 advance of $923,612 will be repaid by the Successor Agency from available future property tax revenues with no interest charged.

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

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

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

During Fiscal Year 2021-22, the Housing Authority received $250,000 f rom the Successor Agency during the Recognized Obligation Payment Schedule (ROPS) Period of July-June 2022 or ROPS 21-22A and B. The next payment is expected to be received during the ROPS Period of July-December 2022 or ROPS 22-23A and is estimated to be approximately $250,000.

E. Due to Other Governmental Units
The Successor Agency has advances due to the City as of June 30, 2022 of $599,147 for approved obligations paid by the City on behalf of the Agency.
85 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
F. Successor Agency Long-Term Debt

1. Notes Payable
2010 Series A and Series B Refunding Notes – T he former Community Redevelopment Agency (CRA) issued a promissory Note for the purchase of 120 acres of industrial property known as the Fairway Business Park. On May 16, 2007, the former Community Redevelopment Agency approved a Settlement Agreement and Mutual General Release, which provided for the former Community Redevelopment Agency to pay a settlement amount of $23,043,000 for the property and $4,975,309 for accrued, unpaid interest. On September 1, 2010, the former Community Redevelopment Agency of the City of Palmdale issued $11,001,339 of 2010 Series A Tax Allocation Refunding Revenue Notes (2010 Series A Notes) and $16,504,000 of 2010 Series B Tax Allocation Refunding Revenue Notes (2010 Series B Notes). The net proceeds of the 2010 Series A & B Tax Allocation Refunding Revenue Notes were used to refinance the former Community Redevelopment Agency’s outstanding Fairway Business Park note payable.

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

Upon dissolution of the former Community Redevelopment Agency, the Note Payable was an approved enforceable obligation by the State Department of Finance, therefore beginning February 1, 2012, the pledge and payments will be made from future property tax revenues received by the Private Purpose Trust. The current year payments of principal and interest were $2,750,661. The outstanding balance of the notes as of June 30, 2022 is $9,951,720.

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

Year Ending Principal Interest Total
2023 $ 2,187,598 $ 563,063 $ 2,750,661
2024 2,321,278 429,382 2,750,660
2025 2,461,926 288,734 2,750,660
2026 2,980,918 139,563 3,120,481
Totals $ 9,951,720 $ 1,420,742 $ 11,372,462

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

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

The proceeds of the 2002 Bonds were used to finance redevelopment activities in or of benefit to Project Area No. 2A. The former Community Redevelopment Agency has pledged incremental property tax generated in Project Area No. 2A to pay principal and interest with respect to the 2002 Bonds as they become due. The current year payment of principal w as $965,000.

No interest was paid for the current year. Property taxes received after negotiated, statutory, and residual distributions totaled $11,450,000 for the year. At year-end, pledged future revenues totaled $11,450,000 of which $8,482,789 was the amount of the remaining principal and $2,967,211 interest on the Bonds. 86 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
In event of default, outstanding amounts become immediately due to the Trustee who act on behalf of the bond owners. An acceleration clause exists that allows the owners of the bonds to accelerate payment of the entire principal amount outstanding in the event of default. If acceleration occurs, then all pledged tax revenues and all sums of funds are to be held by Trustee under the indenture and will be applied by the Trustee.

Year Ending Principal Interest Total
2023 $ 948,412 $ 21,588 $ 970,000
2024 902,646 72,354 975,000
2025 849,907 120,093 970,000
2026 808,320 166,680 975,000
2027 759,953 210,047 970,000
2028-2032 3,530,096 1,834,904 5,365,000
2032-2033 683,455 541,545 1,225,000
Totals $ 8,482,789 $ 2,967,211 $ 11,450,000
2016 Tax Allocation Bonds Payable ($31,490,000) – O n April 26, 2016, the Successor Agency issued $31,490,000 of 2016 Series A Tax Allocation Refunding Bonds (2016 Series A Bonds). Interest on the 2016 Series A Bonds is payable semi- annually on March 1 and September 1 at rates ranging from 2.00% to 5.00% per annum. Principal installments are payable September 1 of each year to 2034.

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

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

The Successor Agency has pledged incremental property tax generated in the Successor Agency’s project areas to pay principal and interest on the 2016 Series A Bonds. The current year payments of principal and interest were $2,952,750. Property taxes
received after negotiated, statutory, and residual distributions totaled $33,903,147 for the year. At year-end, pledged future revenues totaled $28,532,750 of which $21,950,000 was the amount of the remaining principal and $6,582,750 interest on the Bonds.

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

Year Ending Principal Interest Total
2023 $ 1,910,000 $ 1,049,750 $ 2,959,750
2024 1,990,000 952,250 2,942,250
2025 2,095,000 850,125 2,945,125
2026 2,200,000 742,750 2,942,750
2027 2,310,000 630,000 2,940,000
2028-2032 5,550,000 1,750,500 7,300,500
2033-2036 5,895,000 607,375 6,502,375
Totals $ 21,950,000 $ 6,582,750 $ 28,532,750
87 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
2016 Tax Allocation Bonds Payable ($41,645,000) – O n June 23, 2016, the Successor Agency issued $41,645,000 of 2016 Series B Tax Allocation Refunding Bonds (2016 Series B Bonds). Interest on the 2016 Series B Bonds is payable semi- annually on March 1st and September 1st at rates ranging from 3.00 percent to 5.00 percent per annum. Principal installments are payable September 1st of each year to 2034. The 2016 Series B Bonds maturing on or after September 1, 2027, may be redeemed on or after September 1, 2026, at par together with accrued interest, without premium.

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

The Successor Agency has pledged incremental property tax generated in the Successor Agency’s project areas to pay principal and interest on the 2016 Series B Bonds. The current year payments of principal and interest were $3,551,775. Property taxes received after negotiated, statutory, and residual distributions totaled $36,152,870 for the year. At year-end, pledged future revenues totaled $43,341,350 of which $32,940,000 was the amount of the remaining principal and $10,401,350 interest on the Bonds.

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

Year Ending Principal Interest Total
2023 $ 2,005,000 $ 1,538,775 $ 3,543,775
2024 2,095,000 1,436,275 3,531,275
2025 2,205,000 1,328,775 3,533,775
2026 2,310,000 1,215,900 3,525,900
2027 2,625,000 1,092,525 3,717,525
2028-2032 11,100,000 2,886,350 13,986,350
2033-2036 10,600,000 902,750 11,502,750
Totals $ 32,940,000 $ 10,401,350 $ 43,341,350

3. Change in Long Term Liabilities
The following debt activity for the year ended June 30, 2022 are not debts or obligations of the City. They were transferred to the Successor Agency of the former Community Redevelopment Agency which are now accounted for in the Private Purpose Trust Fund:

Balances at July
01, 2021 Additions Retirements
Balance at June
30, 2022
Due Within One
Year
Bonds Payable:
2002 Tax Allocation Bonds $ 8,971,568 $ 476,221 $ 965,000 $ 8,482,789 $ 948,412 2016 Tax Allocation Bonds Series A 23,760,000 - 1,810,000 21,950,000 1,910,000 2016 Tax Allocation Bonds Series B 34,855,000 - 1,915,000 32,940,000 2,005,000 Plus: Deferred Issuance Premiums 6,488,141 - 1,166,235 5,321,906 1,034,385 Total bonds payable 74,074,709 476,221 5,856,235 68,694,695 5,897,797 Notes from Direct Borrowing and
Direct Placements:

Fairway Business Park 12,010,262 - 2,058,543 9,951,719 2,187,598 $ 86,084,971 $ 476,221 $ 7,914,778 $ 78,646,414 $ 8,085,395 88 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
19 - Commitments and Contingencies
A. Contracts and Purchase Orders
The City has contracted with the County of Los Angeles for various services, principally law enforcement until June 30, 2024.

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

The following was the contract cost for the fiscal year ending June 30, 2022:

Fiscal Year 2021-22 $ 28,494,027
Total Cost $ 28,494,027
The City also has other various outstanding contracts and purchase orders for services, supplies, materials, and capital projects that have not been completed at year-end. These commitments total approximately $28,494,027 a t June 30, 2022, with the following breakdown between major funds and non-major funds.

Major Funds:

General Fund $ 6,329,325
Housing Asset Fund 187,206
Measure AV Fund 1,679,722
ARPA Fund 74,770
Total Major Funds 8,271,023
Internal Service Funds
Information Technology 975,042
Fleet Maintenance 104,223
Total Internal Service Funds 1,079,265
Non-Major Special Revenue Funds 19,143,739
Total Contract and Purchase Orders
Outstanding for Governmental Funds $ 28,494,027
B. Grants
The City has received State and Federal funds for specific purposes that are subject to review by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grant, it is believed that any disallowed amounts will not be material.
89 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
C. Claims and Judgments
There are certain legal actions pending against the City that have arisen in the normal course of operations and are covered under the risk management liability. These actions include filed lawsuits and asserted claims for personal injury, property damage, and wrongful death – auto accident. The City is a defendant on several employment related lawsuits, which are anticipated to be settled in the near future. The liability for the settlement is estimated at $2,923,620, and has been accrued as a liability in the financial statements as of June 30, 2022.

D. Obligations of the Successor Agency Private Purpose Trust Fund As more fully described at Note 18, the former Community Redevelopment Agency of the City of Palmdale was dissolved on January 31, 2012. Obligations to be paid out to the Successor Agency Private Purpose Trust Fund are included in the Required Obligation Payment Schedules (ROPS) which are subject to approval by the State Department of Finance. All obligations of the Successor Agency have been approved by the State Department of Finance, however, are still subject to audit by the County Auditor-Controller and the State Controller. Additionally, obligations on a future ROPS may be denied even if it was not questioned from a preceding ROPS. The City is not legally obligated for any of the Successor Agency Private Purpose Trust Fund debt.
20 - Related Party Loan
On June 30, 2021, the City authorized a home loan for the former City Manager totaling $1,200,000 with a 30-year term and bearing a fixed interest rate of 1.04 percent. The loan is secured by the residence and has a provision that any outstanding balance is due within 12 months of termination of employment. In December 2022, the home loan agreement was amended to extend the repayment of the balance of the loan from 12 to 36 months after termination of employment. The loan will be due in full in March 2025.

The City has made loans available for graffiti reimbursement charges. The loans were for graffiti abatement and total $42,329 as of June 30, 2022.
21 - New Accounting Pronouncements
The following pronouncements were issued prior to June 30, 2022 and have effective dates that may impact future financial statement presentation. The effects of the statements are currently under review.

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

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

Governmental Accounting Standard No. 96
GASB Statement No. 96, Subscription-based Information Technology Arrangements. The objectives of this Statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). The Statement is effective for reporting periods beginning after June 15, 2022.
90 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2022
Governmental Accounting Standard No. 99
GASB Statement No. 99 – In April 2022, the GASB issued Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accounting and reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The requirements of this Statement related to extension of the use of the London Interbank Offered Rate (LIBOR), accounting for Supplemental Nutrition Assistance Program (SNAP) distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement No. 34, as amended, and terminology updates related to Statements No. 53 and No. 63 are effective upon issuance. The requirements of this Statement related to leases, Public-Private and Public-Public Partnerships (PPPs), and Subscription-Based Information Technology Arrangements (SBITAs) are effective for fiscal years beginning after June 15, 2022, and all reporting periods thereafter. The requirements of this Statement related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement No. 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter.

Governmental Accounting Standard No. 100
GASB Statement No. 100 – In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections—An Amendment of GASB Statement No. 62 . The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The requirements of this Statement are effective for accounting changes and error corrections made in fiscal years beginning after June 15, 2023, and all reporting periods thereafter.

Governmental Accounting Standard No. 101
GASB Statement No. 101 – In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The requirements of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. 91 This page intentionally left blank
This page intentionally left blank



This page intentionally left blank
City of Palmdale
Schedule of Changes in Net Pension Liability and Related Ratios-Public Employees Retirement System - Miscellaneous Plan Year Ended June 30, 2022
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021 2022
Total pension liability
Service costs $ 2,590,160 $ 2,387,436 $ 2,233,050 $ 2,601,354 $ 2,649,090 $ 2,767,665 $ 2,918,406 $ 2,973,338 Interest on the total pension liability 10,116,430 10,398,124 10,825,834 11,018,183 11,570,800 12,220,037 12,822,978 13,327,612 Differences between expected and actual experience - (2,606,465) - 9,269,931 (1,358,574) - 1,368,882 - Changes in assumptions - (3,032,525) (948,090) (3,510,853) 2,354,023 2,310,424 1,368,882 (46,529) Benefit payments, including refunds of member
contributions (5,808,324) (6,049,238) (6,289,370) (6,542,229) (7,277,711) (7,740,973) (8,257,460) (9,071,539) Net change in total pension liability 6,898,266 1,097,332 5,821,424 12,836,386 7,937,628 9,557,153 10,221,688 7,182,882 Total pension liability - beginning 136,494,809 143,393,075 144,490,407 150,311,831 163,148,217 171,085,845 180,642,998 189,495,804 Total pension liability - ending (a) $ 143,393,075 $ 144,490,407 $ 150,311,831 $ 163,148,217 $ 171,085,845 $ 180,642,998 $ 190,864,686 $ 196,678,686 Plan fiduciary net position
Net plan to plan resource movement $ - $ - $ - $ - $ (297) $ - $ - $ - Contributions - employer 3,673,903 3,871,255 4,262,274 5,157,320 3,514,327 4,117,304 4,771,554 5,285,825 Contributions - employee 1,106,027 1,030,304 1,016,500 1,165,598 1,138,029 1,195,002 1,335,708 1,324,417 Net investment income 16,152,589 2,406,554 545,870 12,177,480 10,157,757 8,331,569 6,631,133 31,158,920 Benefit payments, including refunds of member
contributions (5,808,324) (6,049,238) (6,289,370) (6,542,229) (7,277,711) (7,740,973) (8,257,460) (9,071,539) Administrative expense - (127,281) (66,805) (161,055) (188,366) (91,249) (188,455) (137,825) Other - - - - (357,711) 297 - -
Net change in plan fiduciary net position 15,124,195 1,131,594 (531,531) 11,797,114 6,986,028 5,811,950 4,292,480 28,559,798 Plan fiduciary net position - beginning 93,359,880 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 137,971,710 Plan fiduciary net position - ending (b) 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 137,971,710 166,531,508 Net pension liability - ending (a) - (b) $ 34,909,000 $ 34,874,738 $ 41,227,693 $ 42,266,965 $ 43,218,565 $ 46,963,768 $ 52,892,976 $ 30,147,178 Plan fiduciary net position as a percentage of the total net pension liability %75.66 %75.86 %72.57 %74.09 %74.74 %74.00 %72.29 %84.67 Covered payroll $ 13,588,668 $ 13,287,152 $ 12,550,868 $ 13,529,154 $ 14,797,277 $ 15,030,592 $ 16,449,558 $ 17,567,263 Net pension liability as a percentage of covered payroll %256.90 %262.47 %328.48 %312.41 %292.07 %312.45 %321.55 %171.61 Measurement date June 30 , 2014 June 30 , 2015 June 30 , 2016 June 30 , 2017 June 30 , 2018 June 30 , 2019 June 30 , 2020 June 30 , 2021 *Fiscal year 2015 is the first year of implementation.
92 City of Palmdale
Schedule of Contributions - Public Employees Retirement System - Miscellaneous Plan Year Ended June 30, 2022
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021 2022
Actuarially determined contribution $ 3,871,255 $ 4,262,274 $ 5,157,320 $ 3,509,493 $ 4,112,469 $ 4,766,182 $ 5,287,313 $ 5,935,743 Contributions in relation to the actuarially
determined contribution 3,871,255 4,262,274 5,157,320 3,509,493 4,112,469 4,766,182 5,287,313 5,935,743 Contribution deficiency $ - $ - $ - $ - $ - $ - $ - $ - Covered payroll 13,287,152 12,550,868 13,529,154 14,797,277 15,030,592 16,449,558 17,567,263 19,230,822 Contributions as a percentage of covered
payroll %29.14 %33.96 %38.12 %23.72 %27.36 %28.97 %30.10 %30.87 Valuation date: 2014 2015 2016 2017 2018 2019 2020 2021 Methods and assumptions used to
determine contribution rates:

Actuarial cost method Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age Amortization method
Level
percentage of
payroll, closed
Level
percentage of
payroll, closed
Level
percentage of
payroll, closed
Level
percentage of
payroll, closed
Level
percentage of
payroll, closed
Level
percentage of
payroll, closed
Level
percentage of
payroll, closed
Level
percentage of
payroll, closed
Remaining amortization period 15 years 20 years 25 years 30 years 30 years 30 years 30 years 30 years Asset valuation method
5-year
smoothed
15-year
smoothed
5-year
smoothed
5-year
smoothed
5-year
smoothed
5-year
smoothed
5-year
smoothed
5-year
smoothed
Inflation %2.75 %2.75 %2.75 %2.75 %2.75 %2.75 %2.75 %2.75 Salary increase 4.5% average,
including
inflation of 3%

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

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.375% net of
pension plan
investment
expense,
including
inflation

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

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

Mortality:

The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 20 years of projected mortality improvements using Scale BB published by the Society of Actuaries.
*Fiscal year 2015 was the first year of implementation. 93 City of Palmdale
Schedule of Changes in Net OPEB Liability and Related Ratios Other Postemployment Benefits (OPEB)
Year Ended June 30, 2022
Last Ten Years*
2017 2018 2019 2020 2021 2022
Total OPEB liability
Service costs $ 9,380 $ 9,801 $ 10,241 $ 19,286 $ 26,370 $ 18,642 Interest 42,190 41,817 41,771 49,286 31,829 27,510
Differences between expected and actual experience 162,410 117,475 272,638 - 439,617 (128,567) Changes in assumptions - - (45,786) 103,650 (7,331) (106,880) Benefit payments, including refunds of member contributions (244,316) (195,980) (144,496) (139,429) (346,268) (8,617) Net change in total OPEB liability (30,336) (26,887) 134,368 32,793 144,217 (197,912) Total OPEB liability - beginning 761,858 731,522 704,635 839,003 871,796 1,016,013 Total OPEB liability - ending (a) $ 731,522 $ 704,635 $ 839,003 $ 871,796 $ 1,016,013 $ 818,101 Plan fiduciary net position
Contributions - employer $ - $ - $ - $ - $ - $ -
Contributions - member - - - - - -
Net investment income 165,897 122,424 68,284 64,325 263,944 (181,366) Differences between projected and actual earnings on plan investments - - - - - - Administrative expense (45,852) (42,234) (51,637) (34,922) (34,421) (37,432) Benefit payments, including refunds of employee contributions (244,316) (195,980) (144,496) (139,429) (346,268) (8,617) Net change in plan fiduciary net position $ (124,271) $ (115,790) $ (127,849) $ (110,026) $ (116,745) $ (227,415) Plan fiduciary net position - beginning 1,517,671 1,393,400 1,277,610 1,149,761 1,039,735 922,990 Plan fiduciary net position - ending $ 1,393,400 $ 1,277,610 $ 1,149,761 $ 1,039,735 $ 922,990 $ 695,575 Net OPEB liability ending $ (661,878) $ (572,975) $ (310,758) $ (167,939) $ 93,023 $ 122,526 Plan fiduciary net position as a percentage of the total net pension liability %190.48 %181.32 %137.04 %119.26 %90.84 %85.02 Covered-employee payroll1 840,010 874,002 914,074 941,496 897,776 766,192 City's net OPEB asset as a percentage of covered-employee payroll %(78.79) %(65.56) %(34.00) %(17.84) %10.36 %15.99 Measurement date June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 Notes to Schedule
* Fiscal year 2017 was the first year of implementation. 1 Contributions to the OPEB plan are not based on measure of pay, as such, covered employee payroll is used as the measure of payroll 94 City of Palmdale
Schedule of Investment Returns for OPEB
Other Postemployment Benefits (OPEB)
Year Ended June 30, 2022
Last Ten Years*
2017 2018 2019 2020
Annual money-weighted rate of return -
net of investment expense %11.23 %10.31 %5.50 %5.73
Notes to Schedule
* Fiscal year 2017 was the first year of implementation. 95 Supplementary Information
This page intentionally left blank
City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2022
Special Revenue Funds – Are used to account for specific revenues that are legally restricted to expenditures for a particular purpose. The following special revenue funds have been classified as non-major funds:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Proposition C Fund – T his fund accounts for special sales tax revenues and expenditures related to street and road improvements and transit.

Public Art Fund - This fund accounts for the revenues and expenditures generated under the Public Art policy, derived from gifts or donations for public art. Private and municipal development projects are required to contribute to the fund per PMC 97 City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2022
Section 15.01.020.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Community Facilities District (CFD) – T his fund accounts for the revenues and expenditures of community facilities districts and assessment districts, which are funded entirely from district bond proceeds. 98 City of Palmdale
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2022
Debt Service Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale Civic
Authority
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Assets:

Cash $ 1,066 $ - $ - $ 1 $ 1,067
Investments 164,233,966 1,050,301 - - 165,284,267
Receivables:

Accounts and interest receivable 11,664,228 1,144 - 5 11,665,377 Property tax receivable 621,087 - - - 621,087
Due from other funds 62 - - - 62
Advances due from fiduciary funds - - - 583,859 583,859 Notes and Liens 9,636,150 - - - 9,636,150
Advances due from other funds 4,100,000 - - - 4,100,000 Prepaid Items and Other Assets 1,114 - - - 1,114
Restricted Assets
Investments - - - 2,756,045 2,756,045
Total assets $ 190,257,673 $ 1,051,445 $ - $ 3,339,910 $ 194,649,028 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable $ 2,123,566 $ - $ - $ - $ 2,123,566
Due to fiduciary funds - - - 1,565 1,565
Due to other funds 200,216 - - 380,635 580,851
Advances due to other funds 9,100,000 - - - 9,100,000
Deposits 1,784,124 - - - 1,784,124
Notes payable 34,433 - - - 34,433
Total liabilities 13,242,339 - - 382,200 13,624,539
Deferred Inflows of Resources:

Unavailable revenue 9,360,961 - - - 9,360,961
Fund Balances:

Restricted 167,782,480 1,051,445 - 2,957,710 171,791,635 Unassigned (128,107) - - - (128,107)
Total fund balances 167,654,373 1,051,445 - 2,957,710 171,663,528 Total liabilities, deferred inflows of resources and
fund balances $ 190,257,673 $ 1,051,445 $ - $ 3,339,910 $ 194,649,028 99 City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Year Ended June 30, 2022
Debt Service Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale Civic
Authority
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Revenues:

Other taxes $ 4,483,729 $ - $ - $ - $ 4,483,729
Subventions and grants 29,612,814 - - - 29,612,814
Park development fees 2,413,127 - - - 2,413,127
Licenses and Permits 66,779 - - - 66,779
Fines and forfeitures 285,971 - - - 285,971
Special Assessments 19,263,188 - - - 19,263,188
Charges for current services 2,447,693 - - - 2,447,693
Drainage fees 3,329,104 - - - 3,329,104
Traffic impact fees 891,289 - - - 891,289
Facilities impact fees 1,422,618 - - - 1,422,618
Interfund interest 26,251 - - - 26,251
Interest 1,563,316 9,867 5 775 1,573,963
Net increase (decrease) in fair value of investments (6,036,326) (39,294) - (142) (6,075,762) Developer contributions 51,380 - - - 51,380
State contributions 944,145 - - - 944,145
Other agency contributions 722,844 - - - 722,844
County contributions 681,443 - - - 681,443
Other Revenue 486,007 - - - 486,007
Total revenues 62,655,372 (29,427) 5 633 62,626,583
Expenditures:

Current:

General Government 365,241 - - - 365,241
Public safety 532,600 - - - 532,600
Public services 21,680,496 - - - 21,680,496
Community development 1,042,926 - - - 1,042,926
Cultural and recreational 1,546,949 - - - 1,546,949
Health and welfare 312,924 - - - 312,924
Capital Outlay 17,919,367 - - 360,814 18,280,181
Debt service:

Principal 1,050,563 - 2,532,457 - 3,583,020
Interest 292,302 - 1,160,673 - 1,452,975
Interfund interest 265,451 - - - 265,451
Total expenditures 45,008,819 - 3,693,130 360,814 49,062,763 Excess (deficiency) of revenues over expenditures 17,646,553 (29,427) (3,693,125) (360,181) 13,563,820 Other Financing Sources (Uses):

Transfers In (18,904) - 3,693,125 - 3,674,221
Transfers Out (4,638,830) - - - (4,638,830)
Total other financing sources (uses) (4,657,734) - 3,693,125 - (964,609) Net Change in Fund Balances 12,988,819 (29,427) - (360,181) 12,599,211 Fund Balances (Deficit) - Beginning of Year 154,665,554 1,080,872 - 3,317,891 159,064,317 Fund Balances (Deficit) - End of Year $ 167,654,373 $ 1,051,445 $ - $ 2,957,710 $ 171,663,528 100
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2022
Air Quality
Improvement
Fund
Community
Development
Block Grant Drainage Funds
Drainage Benefit
Assmnt Dist Federal Funds
Assets:

Cash $ - $ - $ - $ - $ -
Investments 42,036 1,810,057 4,849,376 1,223,307 -
Receivables:

Accounts Receivable - 366,530 5,283 1,332 -
Property tax receivable - - - 33,559 -
Due from other funds - 62 - - -
Notes and Liens - 2,183,613 - - -
Advances due from other funds - - 4,100,000 - -
Prepaid Items and Other Assets - 1,114 - - -
Total assets $ 42,036 $ 4,361,376 $ 8,954,659 $ 1,258,198 $ - Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable $ - $ 15,062 $ - $ - $ 924
Due to other funds - - 18,476 - 118,197
Advances due to other funds - - - - -
Notes payable - - - - -
Deposits - 1,755,523 - - -
Total liabilities - 1,770,585 18,476 - 119,121
Deferred Inflows of Resources:

Unavailable revenue - 33,344 - - -
Total deferred inflows of resources - 33,344 - - -
Fund Balances:

Restricted 42,036 2,557,447 8,936,183 1,258,198 -
Unassigned - - - - (119,121)
Total fund balances 42,036 2,557,447 8,936,183 1,258,198 (119,121) Total liabilities, deferred inflows of
resources and fund balances $ 42,036 $ 4,361,376 $ 8,954,659 $ 1,258,198 $ - 101
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2022
Federal Home
Program
Federal Jobs
Programs
Federal Home
ARP Fund
Fire Facilities
Impact Gas Tax
Housing
Authority
Landscape
Maintenance
$ - $ - $ - $ - $ - $ - $ -
673,261 - - 8,080,019 7,894,397 215,927 13,376,162
2,569,228 51,788 2,922 8,798 372,669 30,733 14,562
- - - - - - 134,051
- - - - - - -
7,452,537 - - - - - -
- - - - - - -
- - - - - - -
$ 10,695,026 $ 51,788 $ 2,922 $ 8,088,817 $ 8,267,066 $ 246,660 $ 13,524,775 $ 23,573 $ 6,123 $ - $ - $ 195,097 $ 3,107 $ 343,102
50 54,651 2,922 - - - -
- - - - - - -
- - - - - - -
- - - - - 1,000 -
23,623 60,774 2,922 - 195,097 4,107 343,102
2,494,553 - - - - 20,508 -
2,494,553 - - - - 20,508 -
8,176,850 - - 8,088,817 8,071,969 222,045 13,181,673
- (8,986) - - - - -
8,176,850 (8,986) - 8,088,817 8,071,969 222,045 13,181,673 $ 10,695,026 $ 51,788 $ 2,922 $ 8,088,817 $ 8,267,066 $ 246,660 $ 13,524,775 102
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2022
Local
Transportation
Article 3
Local
Transportation
Article 8
Measure A LA
County Parks Measure R Measure M
Assets:

Cash $ - $ - $ - $ - $ -
Investments 55,956 2,716,957 - 7,405,355 7,882,123
Receivables:

Accounts Receivable - 569,852 - 2,135,535 171,196
Property tax receivable - - - - -
Due from other funds - - - - -
Notes and Liens - - - - -
Advances due from other funds - - - - -
Prepaid Items and Other Assets - - - - -
Total assets $ 55,956 $ 3,286,809 $ - $ 9,540,890 $ 8,053,319 Liabilities, Deferred Inflows of Resources
and Fund Balances
Liabilities:

Accounts payable $ - $ 41,269 $ - $ 83,452 $ 54,517
Due to other funds - - - - -
Advances due to other funds - - - - -
Notes payable - - - 34,433 -
Deposits - - - - -
Total liabilities - 41,269 - 117,885 54,517
Deferred Inflows of Resources:

Unavailable revenue - - - 1,760,564 -
Total deferred inflows of resources - - - 1,760,564 -
Fund Balances:

Restricted 55,956 3,245,540 - 7,662,441 7,998,802
Unassigned - - - - -
Total fund balances 55,956 3,245,540 - 7,662,441 7,998,802 Total liabilities, deferred inflows of
resources and fund balances $ 55,956 $ 3,286,809 $ - $ 9,540,890 $ 8,053,319 103
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2022
Misc Grants/
Developer
Contributions
Park
Assessments
Park
Development Proposition A Proposition C
Public Facilities
Fund Public Safety
$ - $ - $ - $ - $ - $ - $ -
2,979,975 3,180,276 12,804,418 8,863,036 14,754,909 1,484,360 911,874 4,100,140 3,463 13,938 9,649 1,030,629 1,616 22,663
- 103,160 - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
$ 7,080,115 $ 3,286,899 $ 12,818,356 $ 8,872,685 $ 15,785,538 $ 1,485,976 $ 934,537 $ 26,930 $ 160,258 $ 417,844 $ 90,977 $ - $ 11,798 $ -
- - - - - - -
- - 5,000,000 - - - -
- - - - - - -
- - - - - - -
26,930 160,258 5,417,844 90,977 - 11,798 -
4,100,043 - - - 951,949 - -
4,100,043 - - - 951,949 - -
2,953,142 3,126,641 7,400,512 8,781,708 14,833,589 1,474,178 934,537 - - - - - - -
2,953,142 3,126,641 7,400,512 8,781,708 14,833,589 1,474,178 934,537 $ 7,080,115 $ 3,286,899 $ 12,818,356 $ 8,872,685 $ 15,785,538 $ 1,485,976 $ 934,537 104
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2022
Road
Maintenance and
Rehab SAVES
Sewer
Maintenance
Assmnt Dist Sewer Upgrade
States Grants
Fund
Assets:

Cash $ - $ - $ 250 $ - $ -
Investments 4,086,967 11,678 31,041,253 490,125 186,812 Receivables:

Accounts Receivable - - 35,727 533 347
Property tax receivable - - 172,046 - -
Due from other funds - - - - -
Notes and Liens - - - - -
Advances due from other funds - - - - -
Prepaid Items and Other Assets - - - - -
Total assets $ 4,086,967 $ 11,678 $ 31,249,276 $ 490,658 $ 187,159 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts payable $ 4,753 $ - $ 300,773 $ 9,238 $ 75,941 Due to other funds - - - - -
Advances due to other funds - - 4,100,000 - -
Notes payable - - - - -
Deposits - - 26,936 - 665
Total liabilities 4,753 - 4,427,709 9,238 76,606
Deferred Inflows of Resources:

Unavailable revenue - - - - -
Total deferred inflows of resources - - - - -
Fund Balances:

Restricted 4,082,214 11,678 26,821,567 481,420 110,553
Unassigned - - - - -
Total fund balances 4,082,214 11,678 26,821,567 481,420 110,553 Total liabilities, deferred inflows of resources
and fund balances $ 4,086,967 $ 11,678 $ 31,249,276 $ 490,658 $ 187,159 105
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2022
Street
Lighting
Assmnt Dist
Traffic
Impact
Communications
PEG Solid Waste
Palmdale
Community
Foundation Water Park Public Art
Total Special
Revenue Funds
$ - $ - $ - $ - $ 816 $ - $ - $ 1,066
18,654,723 2,741,839 556,837 367,138 314,505 3,639,446 938,862 164,233,966 20,476 2,984 119,940 - - 1,695 - 11,664,228
178,271 - - - - - - 621,087
- - - - - - - 62
- - - - - - - 9,636,150
- - - - - - - 4,100,000
- - - - - - - 1,114
$18,853,470 $ 2,744,823 $ 676,777 $ 367,138 $ 315,321 $ 3,641,141 $ 938,862 $ 190,257,673 $ 129,740 $ - $ - $ 23,722 $ 53,260 $ 52,106 $ - $ 2,123,566 - - - - 5,920 - - 200,216
- - - - - - - 9,100,000
- - - - - - - 34,433
- - - - - - - 1,784,124
129,740 - - 23,722 59,180 52,106 - 13,242,339
- - - - - - - 9,360,961
- - - - - - - 9,360,961
18,723,730 2,744,823 676,777 343,416 256,141 3,589,035 938,862 167,782,480 - - - - - - - (128,107)
18,723,730 2,744,823 676,777 343,416 256,141 3,589,035 938,862 167,654,373 $18,853,470 $ 2,744,823 $ 676,777 $ 367,138 $ 315,321 $ 3,641,141 $ 938,862 $ 190,257,673 106
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2022
Air Quality
Improvement
Fund
Community
Development
Block Grant Drainage Funds
Drainage Benefit
Assmnt Dist Federal Funds
Revenues:

Other taxes $ - $ - $ - $ - $ -
Subventions and grants - 1,712,355 - - 313,827
Park development fees - - - - -
Licenses and Permits - - - - -
Fines and forfeitures - - - - -
Special Assessments - - - 129,346 -
Charges for current services - - - - -
Drainage fees - - 2,192,980 - -
Traffic impact fees - - - - -
Facilities impact fees - - - - -
Interfund interest - - 26,251 - -
Interest 391 13,913 38,809 11,296 -
Net increase (decrease) in fair value of
investments (1,573) (67,632) (179,497) (45,694) -
Developer contributions - - - - -
State contributions - - - - -
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue - - - - -
Total revenues (1,182) 1,658,636 2,078,543 94,948 313,827 Expenditures:

Current:

General Government - 14 - - 23,084
Public safety - - - - -
Public services - 40,445 8,862 28,525 532
Community development - 767,696 - - -
Cultural and recreational - - - - -
Health and welfare - 232,809 - - -
Capital Outlay - 15,468 1,016 - (2,503)
Debt service:

Principal - 325,000 - - -
Interest - 53,343 - - -
Interfund interest - - 7,496 - -
Total expenditures - 1,434,775 17,374 28,525 21,113
Excess (deficiency) of revenues over expenditures (1,182) 223,861 2,061,169 66,423 292,714 Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out - - (78,024) - (51,718)
Total other financing sources (uses) - - (78,024) - (51,718) Net Change in Fund Balances (1,182) 223,861 1,983,145 66,423 240,996 Fund Balances (Deficit) - Beginning of Year 43,218 2,333,586 6,953,038 1,191,775 (360,117) Fund Balances (Deficit) - End of Year $ 42,036 $ 2,557,447 $ 8,936,183 $ 1,258,198 $ (119,121) 107
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2022
Federal Home
Program
Federal Jobs
Programs
Federal Home
ARP Fund
Fire Facilities
Impact Gas Tax
Housing
Authority
Landscape
Maintenance
$ - $ - $ - $ - $ 3,668,344 $ - $ -
634,670 - 2,922 - - - -
- - - - - - -
- - - - - - -
- - - - - - 1,439
- - - - - - 6,157,231
- - - - - 40,405 -
- - - - - - -
- - - - - - -
- - - 860,059 - - -
- - - - - - -
119,850 - - 73,287 25,154 1,936 123,509
- - - (301,663) (38,013) (8,068) (499,561)
- - - - - - 14,095
- - - - - - -
- - - - - - -
- - - - 225,505 - -
- 81,067 - - - - 4,834
754,520 81,067 2,922 631,683 3,880,990 34,273 5,801,547 - - - 43,002 - - -
- - - - - - -
- 52,903 - - 5,496,410 - 5,595,378
243,233 - 2,922 - - 28,576 -
- - - - - - -
- - - - - - -
- - - - 2,002,696 - 66,856
- - - - - - -
- - - - - - -
- - - - - - -
243,233 52,903 2,922 43,002 7,499,106 28,576 5,662,234
511,287 28,164 - 588,681 (3,618,116) 5,697 139,313
- - - - (18,904) - -
- - - - (137,346) - (30,000)
- - - - (156,250) - (30,000)
511,287 28,164 - 588,681 (3,774,366) 5,697 109,313
7,665,563 (37,150) - 7,500,136 11,846,335 216,348 13,072,360 $ 8,176,850 $ (8,986) $ - $ 8,088,817 $ 8,071,969 $ 222,045 $ 13,181,673 108
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2022
Local
Transportation
Article 3
Local
Transportation
Article 8
Measure A LA
County Parks Measure R Measure M
Revenues:

Other taxes $ - $ - $ - $ - $ -
Subventions and grants 11,000 6,761,056 - 3,954,205 3,784,444 Park development fees - - - - -
Licenses and Permits - - - - -
Fines and forfeitures - - - - -
Special Assessments - - - - -
Charges for current services - - - - -
Drainage fees - - - - -
Traffic impact fees - - - - -
Facilities impact fees - - - - -
Interfund interest - - - - -
Interest 494 52,402 - 69,239 67,840
Net increase (decrease) in fair value of
investments (2,091) (336,972) - (269,479) (299,686)
Developer contributions - - - - -
State contributions - - - - -
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue - - - - -
Total revenues 9,403 6,476,486 - 3,753,965 3,552,598
Expenditures:

Current:

General Government - 135,496 - - -
Public safety - - - - -
Public services - 1,908,132 - 129,486 47,935
Community development - - - - -
Cultural and recreational - - - - -
Health and welfare - - - - -
Capital Outlay 10,970 2,271,589 - 2,010,408 1,070,620
Debt service:

Principal - - - - -
Interest - - - - -
Interfund interest - - - - -
Total expenditures 10,970 4,315,217 - 2,139,894 1,118,555 Excess (deficiency) of revenues over expenditures (1,567) 2,161,269 - 1,614,071 2,434,043 Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out - (25,848) - - -
Total other financing sources (uses) - (25,848) - - -
Net Change in Fund Balances (1,567) 2,135,421 - 1,614,071 2,434,043 Fund Balances (Deficit) - Beginning of Year 57,523 1,110,119 - 6,048,370 5,564,759 Fund Balances (Deficit) - End of Year $ 55,956 $ 3,245,540 $ - $ 7,662,441 $ 7,998,802 109
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2022
Misc Grants/
Developer
Contributions
Park
Assessments
Park
Development Proposition A Proposition C
Public Facilities
Fund Public Safety
$ - $ - $ - $ - $ - $ - $ -
- - - 3,559,707 4,963,870 - 688,178
- - 2,413,127 - - - -
- - - - - - -
- - - - - - 284,532
- 2,860,343 - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - 562,559 -
- - - - - - -
31,144 23,756 118,435 82,626 133,023 11,996 7,891
(112,186) (117,389) (479,147) (331,466) (552,194) (55,099) (33,892) - - - - - - -
- - - - - - -
722,844 - - - - - -
455,938 - - - - - -
119,078 - - - - - -
1,216,818 2,766,710 2,052,415 3,310,867 4,544,699 519,456 946,709 - 51,042 - - - - -
121,590 - - 372,687 - 3,611 -
(10,703) - 38,164 2,289,778 66,789 - -
- - - - - - -
17,144 40,620 8,205 - - - -
- - - - - - -
1,143,200 296,605 2,205,164 111,480 2,802,523 22,236 -
- - - - - - -
- - - - - - -
- - 239,200 - - - -
1,271,231 388,267 2,490,733 2,773,945 2,869,312 25,847 - (54,413) 2,378,443 (438,318) 536,922 1,675,387 493,609 946,709 - - - - - - -
- (2,544,156) - - (582,790) - (282,700)
- (2,544,156) - - (582,790) - (282,700)
(54,413) (165,713) (438,318) 536,922 1,092,597 493,609 664,009 3,007,555 3,292,354 7,838,830 8,244,786 13,740,992 980,569 270,528 $ 2,953,142 $ 3,126,641 $ 7,400,512 $ 8,781,708 $ 14,833,589 $ 1,474,178 $ 934,537 110
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2022
Road
Maintenance and
Rehab SAVES
Sewer
Maintenance
Assmnt Dist Sewer Upgrade
States Grants
Fund
Revenues:

Other taxes $ - $ - $ - $ - $ -
Subventions and grants 3,153,280 73,300 - - -
Park development fees - - - - -
Licenses and Permits - - 66,779 - -
Fines and forfeitures - - - - -
Special Assessments - - 5,433,382 - -
Charges for current services - - - - -
Drainage fees - - 1,136,124 - -
Traffic impact fees - - - - -
Facilities impact fees - - - - -
Interfund interest - - - - -
Interest 31,211 - 285,751 4,631 7,106
Net increase (decrease) in fair value of investments (152,116) - (1,159,368) (18,351) (28,722) Developer contributions - - - - -
State contributions - 4,055 - - 880,428
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue - - - - -
Total revenues 3,032,375 77,355 5,762,668 (13,720) 858,812 Expenditures:

Current:

General Government - - - - -
Public safety - - - - 34,712
Public services 14,107 - 2,702,999 - 31,145
Community development - - - - 499
Cultural and recreational - - - - -
Health and welfare - 32,503 - - -
Capital Outlay 1,493,526 - 1,704,636 26,974 301,847
Debt service:

Principal - - - - -
Interest - - - - -
Interfund interest - - 18,755 - -
Total expenditures 1,507,633 32,503 4,426,390 26,974 368,203 Excess (deficiency) of revenues over expenditures 1,524,742 44,852 1,336,278 (40,694) 490,609 Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out - - (30,000) - -
Total other financing sources (uses) - - (30,000) - -
Net Change in Fund Balances 1,524,742 44,852 1,306,278 (40,694) 490,609 Fund Balances (Deficit) - Beginning of Year 2,557,472 (33,174) 25,515,289 522,114 (380,056) Fund Balances (Deficit) - End of Year $ 4,082,214 $ 11,678 $ 26,821,567 $ 481,420 $ 110,553 111
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2022
Street
Lighting
Assmnt Dist
Traffic
Impact
Communications
PEG Solid Waste
Palmdale
Community
Foundation Water Park Public Art
Total Special
Revenue Funds
$ 551,881 $ - $ 263,504 $ - $ - $ - $ - $ 4,483,729
- - - - - - - 29,612,814
- - - - - - - 2,413,127
- - - - - - - 66,779
- - - - - - - 285,971
4,682,886 - - - - - - 19,263,188
- - - 349,007 - 1,999,604 58,677 2,447,693
- - - - - - - 3,329,104
- 891,289 - - - - - 891,289
- - - - - - - 1,422,618
- - - - - - - 26,251
170,412 24,972 - - - 32,242 - 1,563,316
(707,425) (102,803) - - - (136,239) - (6,036,326)
37,285 - - - - - - 51,380
- - - 59,662 - - - 944,145
- - - - - - - 722,844
- - - - - - - 681,443
- - - - 281,028 - - 486,007
4,735,039 813,458 263,504 408,669 281,028 1,895,607 58,677 62,655,372 - - 112,603 - - - - 365,241
- - - - - - - 532,600
3,023,912 76 - 215,621 - - - 21,680,496
- - - - - - - 1,042,926
- - - - - 1,476,551 4,429 1,546,949
- - - - 47,612 - - 312,924
21,626 2,044 - - 225,000 - 115,386 17,919,367
725,563 - - - - - - 1,050,563
238,959 - - - - - - 292,302
- - - - - - - 265,451
4,010,060 2,120 112,603 215,621 272,612 1,476,551 119,815 45,008,819 724,979 811,338 150,901 193,048 8,416 419,056 (61,138) 17,646,553 - - - - - - - (18,904)
(15,000) (861,248) - - - - - (4,638,830)
(15,000) (861,248) - - - - - (4,657,734)
709,979 (49,910) 150,901 193,048 8,416 419,056 (61,138) 12,988,819 18,013,751 2,794,733 525,876 150,368 247,725 3,169,979 1,000,000 154,665,554 $18,723,730 $ 2,744,823 $ 676,777 $ 343,416 $ 256,141 $ 3,589,035 $ 938,862 $ 167,654,373 112
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Air Quality Improvement Fund - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 50,000 $ 253,500 $ - $ (253,500) Interest - - 391 391
Net increase (decrease) in fair value of investments - - (1,573) (1,573) Total revenues 50,000 253,500 (1,182) (254,682)
Expenditures:

Capital Outlay - 203,500 - 203,500
Total expenditures - 203,500 - 203,500
Excess (deficiency) of revenues over (under)
expenditures 50,000 50,000 (1,182) (51,182)
Net Change in Fund Balance 50,000 50,000 (1,182) (51,182) Fund Balance (Deficit) - Beginning of Year 43,218 43,218 43,218 - Fund Balance (Deficit) - End of Year $ 93,218 $ 93,218 $ 42,036 $ (51,182) 113
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Development Block Grant - Special Revenue Funds Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,785,600 $ 5,846,740 $ 1,712,355 $ (4,134,385) Interest - - 13,913 13,913
Net increase (decrease) in fair value of investments - - (67,632) (67,632) Total revenues 2,785,600 5,846,740 1,658,636 (4,188,104) Expenditures:

Current:

General Government - - 14 (14)
Public services - - 40,445 (40,445)
Community development 652,700 2,293,410 767,696 1,525,714 Health and welfare 264,500 264,500 232,809 31,691
Capital Outlay 1,122,000 2,464,970 15,468 2,449,502
Debt service:

Principal 325,000 325,000 325,000 -
Interest 53,700 53,700 53,343 357
Total expenditures 2,417,900 5,401,580 1,434,775 3,966,805 Excess (deficiency) of revenues over (under)
expenditures 367,700 445,160 223,861 (221,299)
Net Change in Fund Balance 367,700 445,160 223,861 (221,299) Fund Balance (Deficit) - Beginning of Year 2,333,586 2,333,586 2,333,586 - Fund Balance (Deficit) - End of Year $ 2,701,286 $ 2,778,746 $ 2,557,447 $ (221,299) 114
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Drainage Funds - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Drainage fees $ 340,000 $ 1,467,000 $ 2,192,980 $ 725,980 Interfund interest 150,000 150,000 26,251 (123,749)
Interest 23,000 23,000 38,809 15,809
Net increase (decrease) in fair value of investments - - (179,497) (179,497) Total revenues 513,000 1,640,000 2,078,543 438,543
Expenditures:

Current:

Public services - - 8,862 (8,862)
Capital Outlay 2,970,000 4,633,590 1,016 4,632,574
Debt service:

Interfund interest 75,000 75,000 7,496 67,504
Total expenditures 3,045,000 4,708,590 17,374 4,691,216 Excess (deficiency) of revenues over (under)
expenditures (2,532,000) (3,068,590) 2,061,169 5,129,759 Other Financing Sources (Uses):

Transfers In 468,700 468,700 - (468,700)
Transfers Out (87,900) (87,900) (78,024) 9,876
Total other financing sources (uses) 380,800 380,800 (78,024) (458,824) Net Change in Fund Balance (2,151,200) (2,687,790) 1,983,145 4,670,935 Fund Balance (Deficit) - Beginning of Year 6,953,038 6,953,038 6,953,038 - Fund Balance (Deficit) - End of Year $ 4,801,838 $ 4,265,248 $ 8,936,183 $ 4,670,935 115
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Drainage Benefit Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Special Assessments $ 66,000 $ 66,000 $ 129,346 $ 63,346 Interest 2,000 2,000 11,296 9,296
Net increase (decrease) in fair value of investments - - (45,694) (45,694) Total revenues 68,000 68,000 94,948 26,948
Expenditures:

Current:

Public services 35,000 34,700 28,525 6,175
Total expenditures 35,000 34,700 28,525 6,175
Excess (deficiency) of revenues over (under)
expenditures 33,000 33,300 66,423 33,123
Net Change in Fund Balance 33,000 33,300 66,423 33,123
Fund Balance (Deficit) - Beginning of Year 1,191,775 1,191,775 1,191,775 - Fund Balance (Deficit) - End of Year $ 1,224,775 $ 1,225,075 $ 1,258,198 $ 33,123 116
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Funds - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,952,700 $ 8,119,330 $ 313,827 $ (7,805,503) Total revenues 3,952,700 8,119,330 313,827 (7,805,503)
Expenditures:

Current:

General Government - 127,470 23,084 104,386
Public services - - 532 (532)
Capital Outlay 975,700 6,113,100 (2,503) 6,115,603
Total expenditures 975,700 6,240,570 21,113 6,219,457
Excess (deficiency) of revenues over (under)
expenditures 2,977,000 1,878,760 292,714 (1,586,046)
Other Financing Sources (Uses):

Transfers Out - - (51,718) (51,718)
Total other financing sources (uses) - - (51,718) (51,718) Net Change in Fund Balance 2,977,000 1,878,760 240,996 (1,637,764) Fund Balance (Deficit) - Beginning of Year (360,117) (360,117) (360,117) - Fund Balance (Deficit) - End of Year $ 2,616,883 $ 1,518,643 $ (119,121) $ (1,637,764) 117
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Home Program - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 577,800 $ 1,570,250 $ 634,670 $ (935,580) Interest 219,700 219,700 119,850 (99,850)
Total revenues 797,500 1,789,950 754,520 (1,035,430)
Expenditures:

Current:

Community development 581,000 1,566,160 243,232 1,322,928 Total expenditures 581,000 1,566,160 243,232 1,322,928
Excess (deficiency) of revenues over (under)
expenditures 216,500 223,790 511,288 287,498
Net Change in Fund Balance 216,500 223,790 511,288 287,498 Fund Balance (Deficit) - Beginning of Year 7,665,562 7,665,562 7,665,562 - Fund Balance (Deficit) - End of Year $ 7,882,062 $ 7,889,352 $ 8,176,850 $ 287,498 118
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Jobs Programs - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Revenue $ 45,000 $ 85,000 $ 81,067 $ (3,933)
Total revenues 45,000 85,000 81,067 (3,933)
Expenditures:

Current:

Public services 82,100 82,100 52,903 29,197
Total expenditures 82,100 82,100 52,903 29,197
Excess (deficiency) of revenues over (under)
expenditures (37,100) 2,900 28,164 25,264
Other Financing Sources (Uses):

Transfers In 37,100 37,100 - (37,100)
Total other financing sources (uses) 37,100 37,100 - (37,100) Net Change in Fund Balance - 40,000 28,164 (11,836)
Fund Balance (Deficit) - Beginning of Year (37,150) (37,150) (37,150) - Fund Balance (Deficit) - End of Year $ (37,150) $ 2,850 $ (8,986) $ (11,836) 119
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Federal Home ARP Fund - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Subventions and grants $ - $ 5,000 $ 2,922 $ (2,078)
Total revenues - 5,000 2,922 (2,078)
Expenditures
Current:

Community development - 5,000 2,922 2,078
Total expenditures - 5,000 2,922 2,078
Excess (deficiency) of revenues over expenditures - - - 2,078 Net Change in Fund Balance - - - 2,078
Fund Balance (Deficit) - Beginning of Year - 85,000 - (85,000) Fund balances, beginning of year as restated - 85,000 - (85,000) Fund Balance (Deficit) - End of Year $ - $ 85,000 $ - $ (82,922) 120
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Fire Facilities Impact - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Facilities impact fees $ 450,000 $ 500,000 $ 860,059 $ 360,059 Interest 10,000 10,000 73,287 63,287
Net increase (decrease) in fair value of investments - - (301,663) (301,663) Total revenues 460,000 510,000 631,683 121,683
Expenditures:

Current:

General Government 22,500 25,500 43,002 (17,502)
Total expenditures 22,500 25,500 43,002 (17,502)
Excess (deficiency) of revenues over (under)
expenditures 437,500 484,500 588,681 104,181
Net Change in Fund Balance 437,500 484,500 588,681 104,181 Fund Balance (Deficit) - Beginning of Year 7,500,136 7,500,136 7,500,136 - Fund Balance (Deficit) - End of Year $ 7,937,636 $ 7,984,636 $ 8,088,817 $ 104,181 121
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Gas Tax - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other taxes $ 3,979,200 $ 4,032,340 $ 3,668,344 $ (363,996) Interest 100,000 100,000 25,154 (74,846)
Net increase (decrease) in fair value of investments - - (38,013) (38,013) State contributions 2,000 1,000 - (1,000)
County contributions 154,000 180,000 225,505 45,505
Total revenues 4,235,200 4,313,340 3,880,990 (432,350)
Expenditures:

Current:

Public services 5,680,800 6,635,860 5,496,410 1,139,450 Capital Outlay - 6,904,700 2,002,696 4,902,004
Total expenditures 5,680,800 13,540,560 7,499,106 6,041,454 Excess (deficiency) of revenues over (under)
expenditures (1,445,600) (9,227,220) (3,618,116) 5,609,104 Other Financing Sources (Uses):

Transfers In - - (18,904) (18,904)
Transfers Out (438,700) (438,700) (137,346) 301,354
Total other financing sources (uses) (438,700) (438,700) (156,250) 282,450 Net Change in Fund Balance (1,884,300) (9,665,920) (3,774,366) 5,891,554 Fund Balance (Deficit) - Beginning of Year 11,846,335 11,846,335 11,846,335 - Fund Balance (Deficit) - End of Year $ 9,962,035 $ 2,180,415 $ 8,071,969 $ 5,891,554 122
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Authority - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 90,600 $ 90,600 $ 40,405 $ (50,195) Interest 500 500 1,936 1,436
Net increase (decrease) in fair value of investments - - (8,068) (8,068) Total revenues 91,100 91,100 34,273 (56,827)
Expenditures:

Current:

Community development 66,900 72,680 28,576 44,104
Total expenditures 66,900 72,680 28,576 44,104
Excess (deficiency) of revenues over (under)
expenditures 24,200 18,420 5,697 (12,723)
Net Change in Fund Balance 24,200 18,420 5,697 (12,723) Fund Balance (Deficit) - Beginning of Year 216,348 216,348 216,348 - Fund Balance (Deficit) - End of Year $ 240,548 $ 234,768 $ 222,045 $ (12,723) 123
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Landscape Maintenance - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Fines and forfeitures $ 6,000 $ 4,000 $ 1,439 $ (2,561) Special Assessments 6,237,400 6,237,400 6,157,231 (80,169) Interest 86,700 86,700 123,509 36,809
Net increase (decrease) in fair value of investments - - (499,561) (499,561) Developer contributions 15,800 15,800 14,095 (1,705)
Other Revenue 3,000 5,000 4,834 (166)
Total revenues 6,348,900 6,348,900 5,801,547 (547,353)
Expenditures:

Current:

Public services 6,263,700 6,502,410 5,595,378 907,032
Capital Outlay - 1,087,790 66,856 1,020,934
Total expenditures 6,263,700 7,590,200 5,662,234 1,927,966 Excess (deficiency) of revenues over (under)
expenditures 85,200 (1,241,300) 139,313 1,380,613
Other Financing Sources (Uses):

Transfers Out (30,000) (30,000) (30,000) -
Total other financing sources (uses) (30,000) (30,000) (30,000) - Net Change in Fund Balance 55,200 (1,271,300) 109,313 1,380,613 Fund Balance (Deficit) - Beginning of Year 13,072,360 13,072,360 13,072,360 - Fund Balance (Deficit) - End of Year $ 13,127,560 $ 11,801,060 $ 13,181,673 $ 1,380,613 124
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Local Transportation Article 3 - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 114,800 $ 114,800 $ 11,000 $ (103,800) Interest - - 494 494
Net increase (decrease) in fair value of investments - - (2,091) (2,091) Total revenues 114,800 114,800 9,403 (105,397)
Expenditures:

Current:

Capital Outlay 10,000 20,000 10,970 9,030
Total expenditures 10,000 20,000 10,970 9,030
Excess (deficiency) of revenues over (under)
expenditures 104,800 94,800 (1,567) (96,367)
Net Change in Fund Balance 104,800 94,800 (1,567) (96,367) Fund Balance (Deficit) - Beginning of Year 57,523 57,523 57,523 - Fund Balance (Deficit) - End of Year $ 162,323 $ 152,323 $ 55,956 $ (96,367) 125
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Local Transportation Article 8 - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 6,761,100 $ 6,761,100 $ 6,761,056 $ (44) Interest 10,000 10,000 52,402 42,402
Net increase (decrease) in fair value of investments - - (336,972) (336,972) Total revenues 6,771,100 6,771,100 6,476,486 (294,614)
Expenditures:

Current:

General Government 200,000 200,730 135,496 65,234
Public services 2,625,000 2,320,550 1,908,132 412,418
Capital Outlay 3,950,000 5,243,740 2,271,589 2,972,151
Total expenditures 6,775,000 7,765,020 4,315,217 3,449,803 Excess (deficiency) of revenues over (under)
expenditures (3,900) (993,920) 2,161,269 3,155,189
Other Financing Sources (Uses):

Transfers Out (116,200) (116,200) (25,848) 90,352
Total other financing sources (uses) (116,200) (116,200) (25,848) 90,352 Net Change in Fund Balance (120,100) (1,110,120) 2,135,421 3,245,541 Fund Balance (Deficit) - Beginning of Year 1,110,119 1,110,119 1,110,119 - Fund Balance (Deficit) - End of Year $ 990,019 $ (1) $ 3,245,540 $ 3,245,541 126
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure A LA County Parks -
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Park development fees $ 510,900 $ 2,043,550 $ - $ (2,043,550) Total revenues 510,900 2,043,550 - (2,043,550)
Expenditures:

Current:

Capital Outlay - 2,043,550 - 2,043,550
Total expenditures - 2,043,550 - 2,043,550
Excess (deficiency) of revenues over (under)
expenditures 510,900 - - -
Transfers Out (121,800) - - -
Total other financing sources (uses) (121,800) - - -
Net Change in Fund Balance 389,100 - - -
Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ 389,100 $ - $ - $ - 127
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure R - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 12,004,100 $ 25,653,060 $ 3,954,205 $ (21,698,855) Interest 25,000 25,000 69,239 44,239
Net increase (decrease) in fair value of investments - - (269,479) (269,479) Total revenues 12,029,100 25,678,060 3,753,965 (21,924,095) Expenditures:

Current:

Public services - - 129,486 (129,486)
Capital Outlay 17,627,000 54,580,000 2,010,408 52,569,592 Total expenditures 17,627,000 54,580,000 2,139,894 52,440,106 Excess (deficiency) of revenues over (under)
expenditures (5,597,900) (28,901,940) 1,614,071 30,516,011 Net Change in Fund Balance (5,597,900) (28,901,940) 1,614,071 30,516,011 Fund Balance (Deficit) - Beginning of Year 6,048,370 6,048,370 6,048,370 - Fund Balance (Deficit) - End of Year $ 450,470 $ (22,853,570) $ 7,662,441 $ 30,516,011 128
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure M - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,231,700 $ 10,703,300 $ 3,784,444 $ (6,918,856) Interest 10,000 10,000 67,840 57,840
Net increase (decrease) in fair value of investments - - (299,686) (299,686) Total revenues 2,241,700 10,713,300 3,552,598 (7,160,702) Expenditures:

Current:

Public services - - 47,935 (47,935)
Capital Outlay 4,218,500 13,227,850 1,070,620 12,157,230 Total expenditures 4,218,500 13,227,850 1,118,555 12,109,295 Excess (deficiency) of revenues over (under)
expenditures (1,976,800) (2,514,550) 2,434,043 4,948,593 Net Change in Fund Balance (1,976,800) (2,514,550) 2,434,043 4,948,593 Fund Balance (Deficit) - Beginning of Year 5,564,759 5,564,759 5,564,759 - Fund Balance (Deficit) - End of Year $ 3,587,959 $ 3,050,209 $ 7,998,802 $ 4,948,593 129
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Misc Grants/ Developer Contributions - Special Revenue Funds Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 3,000 $ 3,000 $ 31,144 $ 28,144
Net increase (decrease) in fair value of investments - - (112,186) (112,186) Other agency contributions 212,500 4,394,120 722,844 (3,671,276) County contributions 128,900 215,660 455,938 240,278
Other Revenue 50,000 9,000 119,078 110,078
Total revenues 394,400 4,621,780 1,216,818 (3,404,962)
Expenditures:

Current:

Public safety 136,800 140,660 121,590 19,070
Public services - - (10,703) 10,703
Cultural and recreational 50,000 9,000 17,144 (8,144)
Capital Outlay 1,391,600 5,778,850 1,143,200 4,635,650
Total expenditures 1,578,400 5,928,510 1,271,231 4,657,279 Excess (deficiency) of revenues over (under)
expenditures (1,184,000) (1,306,730) (54,413) 1,252,317 Other Financing Sources (Uses):

Net Change in Fund Balance (1,184,000) (1,306,730) (54,413) 1,252,317 Fund Balance (Deficit) - Beginning of Year 3,007,555 3,007,555 3,007,555 - Fund Balance (Deficit) - End of Year $ 1,823,555 $ 1,700,825 $ 2,953,142 $ 1,252,317 130
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Park Assessments - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Special Assessments $ 2,831,300 $ 2,831,300 $ 2,860,343 $ 29,043 Interest 25,500 25,500 23,756 (1,744)
Net increase (decrease) in fair value of investments - - (117,389) (117,389) Total revenues 2,856,800 2,856,800 2,766,710 (90,090)
Expenditures:

Current:

General Government 61,600 71,600 51,042 20,558
Cultural and recreational - 96,500 40,620 55,880
Capital Outlay 150,000 1,155,900 296,605 859,295
Total expenditures 211,600 1,324,000 388,267 935,733
Excess (deficiency) of revenues over (under)
expenditures 2,645,200 1,532,800 2,378,443 845,643
Other Financing Sources (Uses):

Transfers Out (2,374,600) (2,374,600) (2,544,156) (169,556) Total other financing sources (uses) (2,374,600) (2,374,600) (2,544,156) (169,556) Net Change in Fund Balance 270,600 (841,800) (165,713) 676,087 Fund Balance (Deficit) - Beginning of Year 3,292,354 3,292,354 3,292,354 - Fund Balance (Deficit) - End of Year $ 3,562,954 $ 2,450,554 $ 3,126,641 $ 676,087 131
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Park Development - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Park development fees $ 1,000,000 $ 1,000,000 $ 2,413,127 $ 1,413,127 Interest 10,000 10,000 118,435 108,435
Net increase (decrease) in fair value of investments - - (479,147) (479,147) Total revenues 1,010,000 1,010,000 2,052,415 1,042,415
Expenditures:

Current:

Public services - - 38,164 (38,164)
Cultural and recreational - - 8,205 (8,205)
Capital Outlay 10,000 6,064,920 2,205,164 3,859,756
Debt service:

Interfund interest 81,700 81,700 239,200 (157,500)
Total expenditures 91,700 6,146,620 2,490,733 3,655,887 Excess (deficiency) of revenues over (under)
expenditures 918,300 (5,136,620) (438,318) 4,698,302
Other Financing Sources (Uses):

Transfers In 2,000,000 4,000,000 - (4,000,000)
Transfers Out (150,000) (150,000) - 150,000
Total other financing sources (uses) 1,850,000 3,850,000 - (3,850,000) Net Change in Fund Balance 2,768,300 (1,286,620) (438,318) 848,302 Fund Balance (Deficit) - Beginning of Year 7,838,830 7,838,830 7,838,830 - Fund Balance (Deficit) - End of Year $ 10,607,130 $ 6,552,210 $ 7,400,512 $ 848,302 132
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Proposition A - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,165,200 $ 3,165,200 $ 3,559,707 $ 394,507 Interest 30,000 30,000 82,626 52,626
Net increase (decrease) in fair value of investments - - (331,466) (331,466) Total revenues 3,195,200 3,195,200 3,310,867 115,667
Expenditures:

Current:

Public safety 374,300 374,300 372,687 1,613
Public services 2,202,900 2,217,700 2,289,778 (72,078)
Capital Outlay 2,531,100 3,147,850 111,480 3,036,370
Total expenditures 5,108,300 5,739,850 2,773,945 2,965,905 Excess (deficiency) of revenues over (under)
expenditures (1,913,100) (2,544,650) 536,922 3,081,572
Other Financing Sources (Uses):

Transfers Out (15,000) (15,000) - 15,000
Total other financing sources (uses) (15,000) (15,000) - 15,000 Net Change in Fund Balance (1,928,100) (2,559,650) 536,922 3,096,572 Fund Balance (Deficit) - Beginning of Year 8,244,786 8,244,786 8,244,786 - Fund Balance (Deficit) - End of Year $ 6,316,686 $ 5,685,136 $ 8,781,708 $ 3,096,572 133
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Proposition C - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,625,500 $ 9,296,820 $ 4,963,870 $ (4,332,950) Interest 25,000 25,000 133,023 108,023
Net increase (decrease) in fair value of investments - - (552,194) (552,194) Total revenues 2,650,500 9,321,820 4,544,699 (4,777,121) Expenditures:

Current:

Public services - - 66,789 (66,789)
Capital Outlay 2,300,000 16,515,630 2,802,523 13,713,107 Total expenditures 2,300,000 16,515,630 2,869,312 13,646,318 Excess (deficiency) of revenues over (under)
expenditures 350,500 (7,193,810) 1,675,387 8,869,197
Other Financing Sources (Uses):

Transfers Out (582,800) (582,800) (582,790) 10
Total other financing sources (uses) (582,800) (582,800) (582,790) 10 Net Change in Fund Balance (232,300) (7,776,610) 1,092,597 8,869,207 Fund Balance (Deficit) - Beginning of Year 13,740,992 13,740,992 13,740,992 - Fund Balance (Deficit) - End of Year $ 13,508,692 $ 5,964,382 $ 14,833,589 $ 8,869,207 134
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Facilities Fund - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Facilities impact fees $ 200,000 $ 300,000 $ 562,559 $ 262,559 Interest 500 500 11,996 11,496
Net increase (decrease) in fair value of investments - - (55,099) (55,099) Total revenues 200,500 300,500 519,456 218,956
Expenditures:

Current:

Public safety - - 3,611 (3,611)
Capital Outlay 486,100 844,470 22,236 822,234
Total expenditures 486,100 844,470 25,847 818,623
Excess (deficiency) of revenues over (under)
expenditures (285,600) (543,970) 493,609 1,037,579
Net Change in Fund Balance (285,600) (543,970) 493,609 1,037,579 Fund Balance (Deficit) - Beginning of Year 980,569 980,569 980,569 - Fund Balance (Deficit) - End of Year $ 694,969 $ 436,599 $ 1,474,178 $ 1,037,579 135
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Safety - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ - $ - $ 688,178 $ 688,178
Fines and forfeitures 150,000 150,000 284,532 134,532
Interest 500 500 7,891 7,391
Net increase (decrease) in fair value of investments - - (33,892) (33,892) Total revenues 150,500 150,500 946,709 796,209
Excess (deficiency) of revenues over (under)
expenditures 150,500 150,500 946,709 796,209
Other Financing Sources (Uses):

Transfers Out (150,000) (150,000) (282,700) (132,700)
Total other financing sources (uses) (150,000) (150,000) (282,700) (132,700) Net Change in Fund Balance 500 500 664,009 663,509
Fund Balance (Deficit) - Beginning of Year 270,528 270,528 270,528 - Fund Balance (Deficit) - End of Year $ 271,028 $ 271,028 $ 934,537 $ 663,509 136
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Road Maintenance and Rehab - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,085,200 $ 3,232,680 $ 3,153,280 $ (79,400) Interest 4,000 4,000 31,211 27,211
Net increase (decrease) in fair value of investments - - (152,116) (152,116) Total revenues 3,089,200 3,236,680 3,032,375 (204,305)
Expenditures:

Current:

Public services - - 14,107 (14,107)
Capital Outlay 2,500,000 4,824,650 1,493,526 3,331,124
Total expenditures 2,500,000 4,824,650 1,507,633 3,317,017 Excess (deficiency) of revenues over (under)
expenditures 589,200 (1,587,970) 1,524,742 3,112,712
Net Change in Fund Balance 589,200 (1,587,970) 1,524,742 3,112,712 Fund Balance (Deficit) - Beginning of Year 2,557,472 2,557,472 2,557,472 - Fund Balance (Deficit) - End of Year $ 3,146,672 $ 969,502 $ 4,082,214 $ 3,112,712 137
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual SAVES - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 25,000 $ 60,500 $ 73,300 $ 12,800 State contributions - 40,360 4,055 (36,305)
Total revenues 25,000 100,860 77,355 (23,505)
Expenditures:

Current:

Health and welfare 25,000 37,040 32,503 4,537
Total expenditures 25,000 37,040 32,503 4,537
Excess (deficiency) of revenues over (under)
expenditures - 63,820 44,852 (18,968)
Net Change in Fund Balance - 63,820 44,852 (18,968)
Fund Balance (Deficit) - Beginning of Year (33,174) (33,174) (33,174) - Fund Balance (Deficit) - End of Year $ (33,174) $ 30,646 $ 11,678 $ (18,968) 138
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Sewer Maintenance Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Licenses and Permits $ 95,400 $ 94,800 $ 66,779 $ (28,021) Special Assessments 5,597,500 5,597,500 5,433,382 (164,118) Drainage fees 403,100 803,100 1,136,124 333,024
Interest 86,700 86,700 285,751 199,051
Net increase (decrease) in fair value of investments - - (1,159,368) (1,159,368) Total revenues 6,182,700 6,582,100 5,762,668 (819,432)
Expenditures:

Current:

Public services 3,250,200 3,524,840 2,702,999 821,841
Capital Outlay 3,465,000 9,380,260 1,704,636 7,675,624
Debt service:

Interfund interest - - 18,755 (18,755)
Total expenditures 6,715,200 12,905,100 4,426,390 8,478,710 Excess (deficiency) of revenues over (under)
expenditures (532,500) (6,323,000) 1,336,278 7,659,278
Other Financing Sources (Uses):

Transfers Out (348,700) (348,700) (30,000) 318,700
Total other financing sources (uses) (348,700) (348,700) (30,000) 318,700 Net Change in Fund Balance (881,200) (6,671,700) 1,306,278 7,977,978 Fund Balance (Deficit) - Beginning of Year 25,515,289 25,515,289 25,515,289 - Fund Balance (Deficit) - End of Year $ 24,634,089 $ 18,843,589 $ 26,821,567 $ 7,977,978 139
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Sewer Upgrade - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final Actual Variance
Revenues
Interest $ - $ - $ 4,631 $ 4,631
Net increase (decrease) in fair value of investments - - (18,352) (18,352) Total revenues - - (13,721) (13,721)
Expenditures
Capital Outlay - 462,890 26,973 435,917
Debt service:

Total expenditures - 462,890 26,973 435,917
Excess (deficiency) of revenues over expenditures - (462,890) (40,694) 422,196 Net Change in Fund Balance - (462,890) (40,694) 422,196 Fund Balance (Deficit) - Beginning of Year 768,078 63,578 522,114 458,536 Fund Balance (Deficit) - End of Year $ 768,078 $ (399,312) $ 481,420 $ 880,732 140
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual States Grants Fund - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 5,000 $ 5,000 $ 7,106 $ 2,106
Net increase (decrease) in fair value of investments - - (28,722) (28,722) State contributions 872,600 9,430,050 880,428 (8,549,622) Total revenues 877,600 9,435,050 858,812 (8,576,238)
Expenditures:

Current:

Public safety 184,600 268,930 34,712 234,218
Public services - - 31,145 (31,145)
Community development - 30,000 499 29,501
Capital Outlay 688,000 8,977,990 301,847 8,676,143
Total expenditures 872,600 9,276,920 368,203 8,908,717
Excess (deficiency) of revenues over (under)
expenditures 5,000 158,130 490,609 332,479
Other Financing Sources (Uses):

Net Change in Fund Balance 5,000 158,130 490,609 332,479 Fund Balance (Deficit) - Beginning of Year (380,056) (380,056) (380,056) - Fund Balance (Deficit) - End of Year $ (375,056) $ (221,926) $ 110,553 $ 332,479 141
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Street Lighting Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other taxes $ 230,000 $ 230,000 $ 551,881 $ 321,881
Fines and forfeitures 20,200 20,200 - (20,200)
Special Assessments 4,207,400 4,207,400 4,682,886 475,486 Interest 98,900 98,900 170,412 71,512
Net increase (decrease) in fair value of investments - - (707,425) (707,425) Developer contributions 20,400 40,000 37,285 (2,715)
Total revenues 4,576,900 4,596,500 4,735,039 138,539
Expenditures:

Current:

Public services 3,452,500 3,559,050 3,023,912 535,138
Capital Outlay - 97,500 21,626 75,874
Debt service:

Principal 725,600 725,600 725,563 37
Interest 238,900 238,900 238,959 (59)
Total expenditures 4,417,000 4,621,050 4,010,060 610,990 Excess (deficiency) of revenues over (under)
expenditures 159,900 (24,550) 724,979 749,529
Other Financing Sources (Uses):

Transfers Out (40,000) (40,000) (15,000) 25,000
Total other financing sources (uses) (40,000) (40,000) (15,000) 25,000 Net Change in Fund Balance 119,900 (64,550) 709,979 774,529 Fund Balance (Deficit) - Beginning of Year 18,013,751 18,013,751 18,013,751 - Fund Balance (Deficit) - End of Year $ 18,133,651 $ 17,949,201 $ 18,723,730 $ 774,529 142
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Traffic Impact - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Traffic impact fees $ 600,000 $ 950,000 $ 891,289 $ (58,711) Interest 5,000 5,000 24,972 19,972
Net increase (decrease) in fair value of investments - - (102,803) (102,803) Total revenues 605,000 955,000 813,458 (141,542)
Expenditures:

Current:

Public services - - 76 (76)
Capital Outlay 1,033,200 1,779,550 2,044 1,777,506
Total expenditures 1,033,200 1,779,550 2,120 1,777,430
Excess (deficiency) of revenues over (under)
expenditures (428,200) (824,550) 811,338 1,635,888
Other Financing Sources (Uses):

Transfers Out (861,300) (861,300) (861,248) 52
Total other financing sources (uses) (861,300) (861,300) (861,248) 52 Net Change in Fund Balance (1,289,500) (1,685,850) (49,910) 1,635,940 Fund Balance (Deficit) - Beginning of Year 2,794,733 2,794,733 2,794,733 - Fund Balance (Deficit) - End of Year $ 1,505,233 $ 1,108,883 $ 2,744,823 $ 1,635,940 143
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Communications PEG - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Other taxes $ 358,100 $ 358,100 $ 263,504 $ (94,596)
Total revenues 358,100 358,100 263,504 (94,596)
Expenditures
Current:

General Government 181,900 324,100 112,603 211,497
Total expenditures 181,900 324,100 112,603 211,497
Excess (deficiency) of revenues over expenditures 176,200 34,000 150,901 328,398 Net Change in Fund Balance 176,200 34,000 150,901 328,398 Fund Balance (Deficit) - Beginning of Year 273,300 186,000 525,876 339,876 Fund Balance (Deficit) - End of Year $ 449,500 $ 220,000 $ 676,777 $ 668,274 144
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Solid Waste - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Charges for current services $ 347,300 $ 347,300 $ 349,007 $ 1,707 State contributions 480,900 488,490 59,662 (428,828)
Total revenues 828,200 835,790 408,669 (427,121)
Expenditures
Current:

Public services 302,100 303,000 215,621 87,379
Total expenditures 302,100 303,000 215,621 87,379
Excess (deficiency) of revenues over expenditures 526,100 532,790 193,048 (252,363) Net Change in Fund Balance 526,100 532,790 193,048 (252,363) Fund Balance (Deficit) - Beginning of Year 138,220 140,000 150,368 10,368 Fund Balance (Deficit) - End of Year $ 664,320 $ 672,790 $ 343,416 $ (241,995) 145
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Community Foundation - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Revenue $ 275,010 $ 275,010 $ 281,028 $ 6,018
Total revenues 275,010 275,010 281,028 6,018
Expenditures:

Current:

Health and welfare 58,180 58,180 47,612 10,568
Capital Outlay 225,000 225,000 225,000 -
Total expenditures 283,180 283,180 272,612 10,568
Excess (deficiency) of revenues over (under)
expenditures (8,170) (8,170) 8,416 16,586
Net Change in Fund Balance (8,170) (8,170) 8,416 16,586 Fund Balance (Deficit) - Beginning of Year 247,725 247,725 247,725 - Fund Balance (Deficit) - End of Year $ 239,555 $ 239,555 $ 256,141 $ 16,586 146
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Water Park - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 692,000 $ 1,503,770 $ 1,999,604 $ 495,834 Interest - - 32,242 32,242
Net increase (decrease) in fair value of investments - - (136,239) (136,239) Total revenues 692,000 1,503,770 1,895,607 391,837
Expenditures:

Current:

Cultural and recreational 1,491,800 1,707,060 1,476,551 230,509 Capital Outlay 70,000 - - -
Total expenditures 1,561,800 1,707,060 1,476,551 230,509 Excess (deficiency) of revenues over (under)
expenditures (869,800) (203,290) 419,056 622,346
Other Financing Sources (Uses):

Transfers In 1,894,400 2,394,400 - (2,394,400)
Total other financing sources (uses) 1,894,400 2,394,400 - (2,394,400) Net Change in Fund Balance 1,024,600 2,191,110 419,056 (1,772,054) Fund Balance (Deficit) - Beginning of Year 3,169,979 3,169,979 3,169,979 - Fund Balance (Deficit) - End of Year $ 4,194,579 $ 5,361,089 $ 3,589,035 $ (1,772,054) 147
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Art - Special Revenue Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 518,700 $ 50,000 $ 58,677 $ 8,677 Total revenues 518,700 50,000 58,677 8,677
Expenditures:

Current:

Cultural and recreational 12,200 10,000 4,429 5,571
Capital Outlay 280,000 185,000 115,386 69,614
Total expenditures 292,200 195,000 119,815 75,185
Excess (deficiency) of revenues over (under)
expenditures 226,500 (145,000) (61,138) 83,862
Transfers Out (41,300) (41,300) - 41,300
Net Change in Fund Balance 185,200 (186,300) (61,138) 125,162 Fund Balance (Deficit) - Beginning of Year - 939,500 1,000,000 60,500 Fund Balance (Deficit) - End of Year $ 185,200 $ 753,200 $ 938,862 $ 185,662 148
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Civic Authority - Debt Service Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 19,400 $ 19,400 $ 9,867 $ (9,533)
Net increase (decrease) in fair value of investments - - (39,296) (39,296) Total revenues 19,400 19,400 (29,429) (48,829)
Expenditures:

Debt service:

Principal 560,000 560,000 - 560,000
Interest 931,800 931,800 - 931,800
Total expenditures 1,491,800 1,491,800 - 1,491,800
Excess (deficiency) of revenues over (under)
expenditures (1,472,400) (1,472,400) (29,429) 1,442,971 Other Financing Sources (Uses):

Transfers In 1,491,800 1,491,800 - (1,491,800)
Total other financing sources (uses) 1,491,800 1,491,800 - (1,491,800) Net Change in Fund Balance 19,400 19,400 (29,429) (48,829) Fund Balance (Deficit) - Beginning of Year 1,080,874 1,080,874 1,080,874 - Fund Balance (Deficit) - End of Year $ 1,100,274 $ 1,100,274 $ 1,051,445 $ (48,829) 149
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Financing Authority - Debt Service Funds
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

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

Debt service:

Principal 1,775,000 1,775,000 2,532,457 (757,457)
Interest 709,900 709,900 1,160,673 (450,773)
Total expenditures 2,484,900 2,484,900 3,693,130 (1,208,230) Excess (deficiency) of revenues over (under)
expenditures (2,484,700) (2,484,700) (3,693,125) (1,208,425) Other Financing Sources (Uses):

Transfers In 2,484,900 2,484,900 3,693,125 1,208,225
Total other financing sources (uses) 2,484,900 2,484,900 3,693,125 1,208,225 Net Change in Fund Balance 200 200 - (200)
Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ 200 $ 200 $ - $ (200) 150
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual CFD/Assessment Districts - Capital Projects Fund
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 781,800 $ 781,800 $ 775 $ (781,025)
Net increase (decrease) in fair value of investments - - (145) (145) Total revenues 781,800 781,800 630 (781,170)
Expenditures:

Capital Outlay - 360,820 360,811 9
Total expenditures - 360,820 360,811 9
Excess (deficiency) of revenues over (under)
expenditures 781,800 420,980 (360,181) (781,161)
Net Change in Fund Balance 781,800 420,980 (360,181) (781,161) Fund Balance (Deficit) - Beginning of Year 3,317,891 3,317,891 3,317,891 - Fund Balance (Deficit) - End of Year $ 4,099,691 $ 3,738,871 $ 2,957,710 $ (781,161) 151
This page intentionally left blank
City of Palmdale
Combining Statement of Net Position
Internal Service Funds
June 30, 2022
Information
Technology Fleet Maintenance
Total Internal
Service Funds
Assets
Current Assets
Cash $ 3,374,810 $ 1,043,329 $ 4,418,139
Receivables - 17,550 17,550
Total current assets 3,374,810 1,060,879 4,435,689
Capital Assets and Right of use assets
Depreciable capital assets
Vehicles - 9,287,697 9,287,697
Equipment 5,665,091 - 5,665,091
Less accumulated depreciation (5,451,078) (5,307,855) (10,758,933) Capital assets, net 214,013 3,979,842 4,193,855
Total assets $ 3,588,823 $ 5,040,721 $ 8,629,544
Liabilities
Accounts payable $ 117,004 $ 10,244 $ 127,248
Total liabilities 117,004 10,244 127,248
Net Position
Net Investment in capital assets 214,012 3,979,843 4,193,855 Unrestricted (Deficit) 3,257,807 1,050,634 4,308,441
Total net position $ 3,471,819 $ 5,030,477 $ 8,502,296
152
City of Palmdale
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
Year Ended June 30, 2022
Information
Technology Fleet Maintenance
Total Internal
Service Funds
Operating Revenues:

Charges for current services $ 2,705,620 $ 1,111,360 $ 3,816,980 Other Revenue - 29,267 29,267
Total operating revenues 2,705,620 1,140,627 3,846,247
Operating Expenses:

Salaries, Wages and Benefits 957,640 422,120 1,379,760
Material and Supplies 119,383 505,085 624,468
Utilities 12,885 480 13,365
Administrative 3,429 1,388 4,817
Depreciation 214,018 570,996 785,014
Repairs and Maintenance 1,612,289 180,720 1,793,009
Other Expenditures - 1,567 1,567
Total operating expenses 2,919,644 1,682,356 4,602,000
Operating income (loss) (214,024) (541,729) (755,753)
Nonoperating Revenues (Expenses)
Investment and interest income 44,182 21,599 65,781
Net realized and unrealized gains (losses) (127,696) (40,894) (168,590) Total nonoperating revenues (expenses) (83,514) (19,295) (102,809) Change in Net Position (297,538) (561,024) (858,562)
Net Position (Deficit) - Beginning of Year 3,769,357 5,591,501 9,360,858 Net Position (Deficit) - End of Year $ 3,471,819 $ 5,030,477 $ 8,502,296 153
City of Palmdale
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2022
Information
Technology
Fleet
Maintenance
Total Internal
Service Funds
Cash from Operating Activities:

Cash received from interfund services provided $ 2,705,620 $ 1,110,765 $ 3,816,385 Cash paid to employees for services (957,640) (422,121) (1,379,761) Cash paid to suppliers for goods and services (1,771,988) (744,794) (2,516,782) Cash (paid)/received for other services - 29,267 29,267 Net cash provided (used) by operating activities (24,008) (26,883) (50,891) Cash from Capital and Related Financing Activities:

Acquisition and construction of capital assets (155,983) (1,255,740) (1,411,723) Net cash provided (used) by capital and related financing activities (155,983) (1,255,740) (1,411,723) Cash from Investing Activities:

Gain/(Loss) on investments (127,696) (40,894) (168,590) Investment income 44,182 21,599 65,781
Change in investments 3,638,315 2,345,247 5,983,562
Net cash provided (used) by investing activities 3,554,801 2,325,952 5,880,753 Total Cash Flow increase/(decrease) 3,374,810 1,043,329 4,418,139 Beginning Cash and Cash Equivalents - - -
Ending Cash and Cash Equivalents 3,374,810 1,043,329 4,418,139 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities
Net income/loss from operating activities (214,025) (541,728) (755,753) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation exp 214,018 570,996 785,014
Changes in assets and liabilities:

Change in accounts receivable - (595) (595)
Change in accounts payable (24,001) (55,555) (79,556)
Net cash provided (used) by operating activities: $ (24,008) $ (26,882) $ (50,890) 154
City of Palmdale
Statement of Fiduciary Net Position
For the Year Ended June 30, 2022
Assessment and Community Facilities District Fund - This fund is used to account for receipts and disbursements associated with 1915 Act Assessment Bonds and Special Tax Bonds which are administered by, but are not the liability of, the City.

Retiree Health Premium Trust Funds - These funds are used to account for the receipt of City funds held in trust to provide Eligible Retirees with a supplement to reduce their premiums for participating in the City’s Health Plan. 155
City of Palmdale
Statement of Fiduciary Net Position
June 30, 2022
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution
Plan Total
Assets :

Cash $ 22,484 $ 1,698,084 $ 1,720,568
Investments:

Mutual funds 1,116,162 2,002,459 3,118,621
Interfund receivable - 17,278 17,278
Total assets 1,138,646 3,717,821 4,856,467
Liabilities:

Accounts payable 425,793 - 425,793
Interfund receivable 17,278 - 17,278
Total liabilities 443,071 - 443,071
Total net position restricted for OPEB benefits $ 695,575 $ 3,717,821 $ 4,413,396 156
City of Palmdale
Statement of Net Position Assets and Liabilities
Assessment and Community Facilities District Custodial Funds June 30, 2022
AD 88-1
Redevelopment
CFD 99-1
Redevelopment
AD 90-2
Redevelopment
AD 87-1
Redevelopment Anaverde
Trade and
Commerce
Assets:

Cash $ 2,000 $ - $ 195,376 $ - $ - $ -
Receivables
Property tax receivable - - - - 29,790 35,536
Due from other governmental units - - - - - -
Restricted assets:

Cash and investments 390,903 - - 147,613 1,911,465 1,543,529 Interest receivable 427 - 212 160 2 3
Total assets $ 393,330 $ - $ 195,588 $ 147,773 $ 1,941,257 $ 1,579,068 Liabilities:

Accounts payable $ - $ - $ - $ - $ 6,328 $ 4,223
Advances due to general fund - - - - - -
Advances due to City of Palmdale 269,908 - 313,952 - - - Deposits 57,580 - 7,210 19,917 - -
Total liabilities 327,488 - 321,162 19,917 6,328 4,223
Net Position
Restricted
Held on behalf of others 65,842 - (125,574) 127,856 1,934,929 1,574,845 Total net position $ 65,842 $ - $ (125,574) $ 127,856 $ 1,934,929 $ 1,574,845 157
City of Palmdale
Statement of Net Position Assets and Liabilities
Assessment and Community Facilities District Custodial Funds June 30, 2022
Sierra
Gateway
AD 91-2
Redevelopment Ritter Ranch Godde Hills
Joshua
Ranch Total
$ - $ - $ - $ - $ - $ 197,376
- - - 8,025 341,514 414,865
1,565 - - - - 1,565
19,657 22,920 255,295 248,362 1,697,933 6,237,677
21 25 277 - 1,847 2,974
$ 21,243 $ 22,945 $ 255,572 $ 256,387 $ 2,041,294 $ 6,854,457 $ 2,115 $ - $ - $ 1,077 $ 1,147 $ 14,890
74,071 - - - - 74,071
- - - - - 583,860
- - - - - 84,707
76,186 - - 1,077 1,147 757,528
(54,943) 22,945 255,572 255,310 2,040,147 6,096,929
$ (54,943) $ 22,945 $ 255,572 $ 255,310 $ 2,040,147 $ 6,096,929 158
City of Palmdale
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds
Year Ended June 30, 2022
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution
Plan Total
Additions:

Employer contributions to retiree medical trust $ - $ 117,400 $ 117,400 Investment and interest income 62,155 102,266 164,421
Net realized and unrealized gains (losses) (243,521) (371,929) (615,450) Total additions (181,366) (152,263) (333,629)
Deductions:

Benefits paid to participants and expenses 46,049 404,386 450,435 Total deductions 46,049 404,386 450,435
Change in net position (227,415) (556,649) (784,064)
Net Position Held in Trust at Beginning of Year 922,990 4,274,470 5,197,460 Net Position Held in Trust at End of Year $ 695,575 $ 3,717,821 $ 4,413,396 159
City of Palmdale
Statement of Fiduciary Change in Net Position
Assessment and Community Facilities District Custodial Funds Year Ended June 30, 2022
AD 88-1
Redevelopment
CFD 99-1
Redevelopment
AD 90-2
Redevelopment
AD 87-1
Redevelopment Anaverde
Trade and
Commerce
Additions
Other taxes $ - $ - $ - $ - $ 1,544,511 $ 958,870
Investment and interest income 3,690 - 1,834 1,386 2,707 3,017 Net realized and unrealized gains (losses) (14,699) - (7,309) (5,523) (319) (483) Total additions (11,009) - (5,475) (4,137) 1,546,899 961,404 Deductions:

Administrative expense - 3 - - 102,083 113,527
Interest expense - - - - 730,750 238,931
Principal payments on long-term debt - - - - 690,000 640,000 Total deductions - 3 - - 1,522,833 992,458
Change in Net Position (11,009) (3) (5,475) (4,137) 24,066 (31,054) Net Position (Deficit) at Beginning of Year 76,851 3 (120,099) 131,993 1,910,863 1,605,899 Net Position (Deficit) at End of Year $ 65,842 $ - $ (125,574) $ 127,856 $ 1,934,929 $ 1,574,845 160
City of Palmdale
Statement of Fiduciary Change in Net Position
Assessment and Community Facilities District Custodial Funds Year Ended June 30, 2022
Sierra
Gateway
AD 91-2
Redevelopment Ritter Ranch Godde Hills
Joshua
Ranch Total
$ - $ - $ - $ 138,731 $ 782,053 $ 3,424,165
235 216 2,436 294 17,782 33,597
(744) (857) (9,563) (30) (63,696) (103,223)
(509) (641) (7,127) 138,995 736,139 3,354,539
16,046 - 14,050 32,969 539,001 817,679
- - - 52,864 - 1,022,545
- - - 105,000 - 1,435,000
16,046 - 14,050 190,833 539,001 3,275,224
(16,555) (641) (21,177) (51,838) 197,138 79,315
(38,388) 23,586 276,750 307,148 1,843,009 6,017,615
$ (54,943) $ 22,945 $ 255,572 $ 255,310 $ 2,040,147 $ 6,096,929 161
This page intentionally left blank



This page intentionally left blank
City of Palmdale
Statistical Section
June 30, 2022
This part of the City's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health.

Contents Page
Financial Trends 163
These schedules contain information to help the reader understand how the City's financial performance and well-being have changed over time.

Revenue Capacity 170
These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.

Debt Capacity 175
These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information 182
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.

Operating Information 185
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.

Source: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. 162
City of Palmdale
Net Position by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
Governmental Activities Total Governmental
Net Investments
in
Capital Assets Restricted Unrestricted
Activities
Net
Position
2013 $ 648,717,242 $ 171,783,181 $ 17,175,066 $ 837,675,489 2014 655,895,266 179,662,667 20,804,395 856,362,328
2015 651,915,581 160,152,582 20,470,245 832,538,408
2016 662,351,171 144,651,291 30,980,820 837,983,282
2017 659,365,081 149,318,498 36,278,228 844,961,807
2018 643,077,802 158,892,011 43,372,746 845,342,559
2019 644,332,182 168,327,294 38,660,581 851,320,057
2020 649,681,476 172,484,623 44,530,808 866,696,907
2021 635,725,018 206,139,337 39,155,744 881,020,099
2022 618,136,264 233,562,972 45,438,999 897,138,235
Source: The information is derived from the Annual Comprehensive Financial Reports for the relevant year.

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

Note 1: The City of Palmdale does not have any business-type activities to report 163
City of Palmdale
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2013 2014 2015 2016
Expenses
Governmental Activities:

General government $ 17,227,290 $ 24,150,674 $ 17,167,502 $ 14,771,775 Public safety 22,873,718 22,973,910 23,763,312 24,453,097 Public services 49,082,866 47,723,268 51,743,421 53,165,326 Community development 6,480,832 5,418,368 5,852,056 7,900,847 Cultural and recreational 9,732,400 10,863,071 9,878,585 9,704,499 Health and welfare - - - -
Interest on long-term debt 5,624,571 5,152,837 4,953,848 6,116,645 Total governmental activities expenses $ 111,021,677 $ 116,282,128 $ 113,358,724 $ 116,112,189 Program Revenues
Governmental Activities
Charges for services:

General Government 8,912,099 8,451,711 5,272,710 5,967,654 Public safety 2,394,095 2,462,495 2,411,614 3,478,453
Public services 13,044,551 13,521,227 16,223,970 16,469,772 Community development 5,227,628 5,173,147 4,798,108 6,541,258 Cultural and recreational 4,628,582 4,820,809 5,157,093 5,226,101 Health and welfare 245,701 275,289 198,531 344,932
Operating Grants and Contributions 9,142,066 12,637,721 14,681,296 9,206,823 Capital Grants and Contributions 19,661,447 35,822,039 38,039,564 29,098,236 Total primary governmental activities program revenues 63,256,169 83,164,438 86,782,886 76,333,229 Net Revenues (Expenses) (47,765,508) (33,117,690) (26,575,838) (39,778,960) Governmental Revenues and other Changes in Net Position Governmental activities:

Taxes:

Property taxes 4,831,816 5,269,406 6,098,318 6,154,152
Sales and use taxes 15,649,190 16,396,713 17,084,411 19,186,043 Motor vehicle in lieu 10,400,447 10,651,753 11,484,571 12,523,079 Franchise taxes 4,556,419 5,847,596 5,526,119 5,562,090 Transient occupancy taxes 2,907,995 2,824,182 3,089,802 3,278,724 Property Transfer Taxes - - - -
Business license taxes 468,830 515,815 551,202 569,381
Land sale proceeds - - - -
Unrestricted investment earnings/(loss) (136,096) 391,725 260,322 537,396 Other 270,275 274,312 288,740 412,936
Extraordinary item-dissolution of RDA (note 1) (3,547,799) 10,346,241 - - Total governmental activities 35,401,077 52,517,743 44,383,485 48,223,801 Special Item - Write off of Permit Held for Sale - - - - Change in Net Position $ (12,364,431) $ 19,400,053 $ 17,807,647 $ 8,444,841 Note 1: Effective February 1, 2012, all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity. All assets and liabilities of the former Redevelopment Agency of the City of Palmdale was transferred to a Private Purpose Trust Fund to be held until they are distributed to other units of the state and local government. All Tax Increment is reported under a fiduciary Fund statements (Private Purpose Trust Fund). The FY2011-12 extraordinary gain recognized on the Government Wide statements is the net assets and liabilities transferred to the Fiduciary Fund at February 1, 2012. For FY2012-13, the extraordinary loss recognized are assets returned to the Private Purpose Trust Fund as the result of California's Department of Finance review and determination of transfers made prior to the dissolution of the former RDA.

Note 2: The Motor Vehicle in Lieu Taxes include property tax in lieu of VLF revenues Source: The information is derived from the Annual Comprehensive Financial Reports for the relevant year. 164
City of Palmdale
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2017 2018 2019 2020 2021 2022
$ 15,162,734 $ 16,416,215 $ 18,136,297 $ 19,602,733 $ 23,661,402 $ 26,570,018 26,436,495 28,284,134 29,586,144 31,440,137 34,120,577 35,668,009 51,989,170 55,006,590 59,682,264 60,561,501 64,363,055 75,158,621 8,715,698 7,584,015 8,645,117 8,673,102 10,337,092 9,269,097 10,405,253 11,463,299 12,060,182 12,643,328 8,681,441 9,648,980 - - - 1,287,612 1,136,316 316,031
3,948,940 3,327,586 3,237,967 2,955,972 2,966,821 2,182,745 $ 116,658,290 $ 122,081,839 $ 131,347,971 $ 137,164,385 $ 145,266,704 $ 158,813,501 6,095,516 6,716,003 6,933,948 10,430,987 8,697,930 7,060,041 3,188,196 2,687,364 2,667,432 3,658,425 3,352,082 5,889,031 16,853,232 17,545,979 17,712,240 18,427,062 23,981,954 25,124,723 6,674,317 6,775,750 7,486,493 7,588,544 8,177,023 7,993,491 5,320,091 5,255,553 5,262,707 3,643,056 5,885,950 8,258,640 354,054 311,587 322,559 289,499 220,105 216,738
9,058,728 8,540,307 13,858,198 9,552,177 3,828,357 2,740,434 30,874,206 23,778,358 38,211,672 40,280,273 34,148,793 32,939,685 78,418,340 71,610,901 92,455,249 93,870,023 88,292,194 90,222,783 (38,239,950) (50,470,938) (38,892,722) (43,294,362) (56,974,510) (68,590,718) 7,026,181 7,689,753 9,298,991 10,058,703 9,962,884 26,366,000 18,577,244 19,267,083 21,798,640 21,587,441 30,305,927 50,484,625 13,062,518 13,925,859 14,171,324 15,024,455 16,133,114 180,305 5,352,221 5,463,623 6,225,233 5,458,426 7,441,119 7,497,156 3,716,154 4,028,350 4,653,290 3,697,656 4,667,137 5,540,832 - - - - - 952,103
589,805 628,303 628,479 666,997 468,666 677,197
- 133,981 - - - -
(71,826) 519,275 2,365,811 1,504,089 401,101 (7,686,544) 592,876 594,975 569,791 673,444 1,267,638 697,180
- - - - - -
48,845,173 52,251,202 59,711,559 58,671,211 70,647,586 84,708,854 - - (10,158,182) - - -
$ 10,605,223 $ 1,780,264 $ 10,660,655 $ 15,376,849 $ 13,673,076 $ 16,118,136 165
City of Palmdale
Fund Balance, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
The following fund balances are classified in compliance to GASB 54:
2013 2014 2015 2016 2017
General Fund
Nonspendable $ 10,574,731 $ 10,491,577 $ 10,884,095 $ 11,433,344 $ 10,889,726 Restricted 4,135,688 3,053,154 3,004,896 3,363,298 3,433,942 Assigned 5,432,558 5,717,857 11,946,745 7,816,109 10,808,898 Unassigned 18,391,993 21,637,632 17,200,108 29,139,751 31,648,004 Total general fund $ 38,534,970 $ 40,900,220 $ 43,035,844 $ 51,752,502 $ 56,780,570 All Other Governmental Funds
Restricted 147,398,476 163,742,301 169,737,885 165,219,475 164,464,462 Unassigned (16,444,270) (15,388,578) (14,667,579) (13,624,754) (15,208,273) Total all other governmental funds 130,954,206 148,353,723 155,070,306 151,594,721 149,256,189 Total governmental funds $ 169,489,176 $ 189,253,943 $ 198,106,150 $ 203,347,223 $ 206,036,759 The information is derived from the Annual Comprehensive Financial Reports for the relevant year.

FY2011 is the first year that the City implemented GASB issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. The City chose not to restate the prior year information. 166
City of Palmdale
Fund Balance, Governmental Funds (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
The following fund balances are classified in compliance to GASB 54:
2018 2019 2020 2021 2022
$ 11,072,269 $ 876,958 $ 470,243 $ 2,390,182 $ 2,554,221 3,507,069 4,414,580 2,580,329 2,923,365 6,297,363
11,838,025 14,021,843 15,564,685 35,798,239 23,989,477
35,914,833 43,846,622 47,795,298 17,389,479 40,428,440
$ 62,332,196 $ 63,160,003 $ 66,410,555 $ 58,501,265 $ 73,269,501 179,943,144 184,867,493 194,970,111 215,685,053 240,397,464 (13,373,212) (16,523,119) (11,305,691) (5,848,882) (3,713,302) 166,569,932 168,344,374 183,664,420 209,836,171 236,684,162 $ 228,902,128 $ 231,504,377 $ 250,074,975 $ 268,337,436 $ 309,953,663 167
City of Palmdale
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
Modified Accrual Basis of Accounting
2013 2014 2015 2016
Revenues:

Taxes (see page 188) $ 42,329,440 $ 46,089,020 $ 48,122,305 $ 50,600,450 Subventions and grants 15,156,355 18,645,952 21,563,749 25,690,529 Fees and charges 17,248,834 22,906,797 14,528,075 18,823,349 Licenses and Permits 1,513,526 1,652,670 1,802,758 2,539,507 Special Assessments 14,179,059 14,402,577 17,269,746 17,227,611 Interfund interest 661,662 636,401 606,114 577,052
Interest 601,227 683,854 830,588 1,342,135
Successor agency contributions 3,553,656 3,389,127 5,758,733 17,265,417 Capital contributions 443,774 315,299 11,358,487 463,304 Net increase (decrease) in fair value of investments (736,165) 480,776 21,262 320,522 Other revenue 3,556,653 4,227,192 3,939,117 4,218,962
Interest Revenue - - - -
Total revenues 98,508,021 113,429,665 125,800,934 139,068,838 Expenditures:

Current:

General Government 16,049,207 19,285,105 19,755,437 14,681,150 Public safety 22,692,501 22,926,361 23,904,831 24,785,404 Public services 16,929,292 17,238,982 21,215,460 22,095,709 Community development 5,962,701 4,874,350 5,119,951 7,242,971 Cultural and recreational 8,899,259 9,963,444 9,121,236 9,206,904 Health and welfare 1,388,304 2,824,602 2,178,496 3,031,167 Capital Outlay 12,456,560 10,777,668 25,664,366 28,470,675 Debt service:

Principal 13,623,679 4,453,442 30,144,672 5,433,042
Interfund interest 661,662 636,401 606,114 577,052
Interest 5,506,918 5,139,543 4,950,664 4,627,754
Cost of issuance 320,404 - 207,500 361,287
Total expenditures 104,490,487 98,119,898 142,868,727 120,513,115 Excess (deficiency) of revenue over (under) expenditures (5,982,466) 15,309,767 (17,067,793) 18,555,723 Other Financing Sources (Uses):

Capital lease proceeds 1,345,884 - - 1,234,862
Gain (loss) on resale land - - - -
Issuance of notes - - - -
Issuance of bonds 8,695,000 - 25,920,000 4,235,000
Payments to refunded bond escrow - - - (18,784,512)
Debt issuance premiums (discounts) 35,543 - - -
Transfers in 25,593,919 11,001,936 34,083,575 8,824,216 Transfers out (25,593,919) (11,001,936) (34,083,575) (8,824,216) Total other financing sources (uses) 10,076,427 - 25,920,000 (13,314,650) Special Item:

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

Extraordinary gain (loss) upon dissolution of the redevelopment agency (3,547,799.00) - - -
Net Change in Fund Balances $ 546,162 $ 15,309,767 $ 8,852,207 $ 5,241,073 Debt services as a percentage of non-capital expenditures %22.01 %15.07 %31.36 %13.21 Source: City of Palmdale, Finance Department and Audited Annual Financial Reports

1.Transfers In excludes $6,565,097 of Interservice Funds Capital Assets that were transferred in 2021 (Proprietary Funds) and are not Governmental funds.
168
City of Palmdale
Changes in Fund Balances, Governmental Funds (Continued) Last Ten Fiscal Years
Modified Accrual Basis of Accounting
2017 2018 2019 2020 2021 20221
$ 51,283,788 $ 54,229,982 $ 59,912,769 $ 59,928,123 $ 73,442,350 $ 95,738,138 26,057,852 28,470,216 31,759,025 41,727,112 28,048,936 29,955,623 18,711,910 18,692,915 14,995,901 22,247,921 23,850,691 26,552,574 2,667,827 2,180,693 1,998,982 3,528,336 3,385,143 5,747,192 17,579,851 18,204,324 18,569,358 18,397,067 19,505,242 19,263,188 543,708 516,103 481,194 882,858 440,665 26,251
1,695,340 2,260,381 3,487,106 3,528,323 1,203,208 2,316,885 41,258 35,953 35,925 - - -
153,796 126,153 161,608 5,898,413 3,506,182 2,418,565
(1,648,795) (941,708) 2,401,196 1,317,573 (483,057) (10,179,175) 4,483,380 3,925,523 9,361,216 3,657,594 3,728,242 3,828,120 - - - - - 2,611
121,569,915 127,700,535 143,164,280 161,113,320 156,627,602 175,669,972 15,276,501 15,629,948 16,266,972 20,039,498 17,797,687 20,406,075 26,793,853 28,107,228 29,083,581 30,684,148 33,615,289 35,754,740 20,952,691 20,980,917 22,432,301 23,487,783 28,455,439 32,762,556 7,229,495 6,566,458 7,324,760 7,192,095 9,388,083 7,913,877 9,736,509 10,086,436 10,783,255 11,246,819 7,369,676 9,231,767 3,650,042 1,872,018 1,774,890 1,209,687 1,088,504 312,924 26,733,173 25,935,646 37,329,350 38,890,472 24,579,551 20,405,381 3,391,747 3,425,667 3,587,279 5,744,341 4,764,954 5,188,550 543,708 516,103 481,194 882,858 3,052,447 2,393,414
3,663,254 3,348,492 3,416,038 3,245,817 706,665 26,251
383,662 157,280 - - 141,893 -
118,354,635 116,626,193 132,479,620 142,623,518 130,960,188 134,395,535 3,215,280 11,074,342 10,684,660 18,489,802 25,667,414 41,274,437 - 14,161 - - - -
- 377,481 91,753 80,796 - 341,784
- - 1,252,500 - 14,103,744 -
17,475,000 11,397,102 - - - -
(19,420,000) - - - (14,943,599) -
1,419,256 - - - - -
29,471,537 8,153,168 9,104,075 7,644,581 42,407,576 8,709,061 (29,471,537) (8,153,168) (9,104,075) (7,644,581) (48,972,673) (8,709,061) (525,744) 11,788,744 1,344,253 80,796 (7,404,952) 341,784 - - (10,158,182.00) - - -
- - - - - -
$ 2,689,536 $ 22,863,086 $ 1,870,731 $ 18,570,598 $ 18,262,462 $ 41,616,221 %9.87 %12.35 %7.60 %8.52 %5.25 %3.97
169
City of Palmdale
General Governmental Tax Revenue by Source
Last Ten Fiscal Years
Fiscal
Year
Property and
Tax Increment
Revenuea
Sales and
Use Taxes
Business
License
Tax
Franchise
Tax
Gasoline
Tax
Transient
Occupancy
Taxb
Real Property
Transfer
Tax Total
2012-13 $ 14,791,598 $ 15,649,190 $ 468,830 $ 4,556,419 $ 3,593,343 $ 2,907,995 $ 362,065 $ 42,329,440 2013-14 15,478,125 16,396,713 515,815 5,847,596 4,649,226 2,824,182 377,364 46,089,021 2014-15 17,152,560 17,084,411 551,202 5,526,119 4,351,675 3,089,802 366,535 48,122,304 2015-16 18,118,214 19,186,043 569,381 5,562,090 3,392,713 3,278,724 493,284 50,600,449 2016-17 19,514,208 18,577,244 589,805 5,352,221 3,031,375 3,716,154 502,781 51,283,788 2017-18 20,983,338 19,267,083 628,303 5,463,623 3,310,498 4,028,350 548,787 54,229,982 2018-19 22,953,195 21,798,640 628,479 6,225,233 3,213,087 4,653,290 440,845 59,912,769 2019-20 24,442,179 21,587,441 666,997 5,458,426 3,559,379 3,697,656 516,045 59,928,123 2020-21 26,631,165 30,305,927 468,666 7,441,119 3,566,382 4,667,137 650,123 73,730,519 2021-22 27,318,103 50,484,625 677,197 7,497,156 3,668,344 5,540,832 952,103 96,138,360 a The City's property and tax increment revenue has increased over the last ten years due to the increases in the City's population and housing boom. However, the City has a significant decrease in 2012-13 as the result of the dissolution of all California Redevelopment Agencies during 2011-12. The Tax Increment previously reported under the City of Palmdale's Redevelopment Agency, a component unit of the City of Palmdale, is now reported under a Private Purpose Trust Fund effective February 1, 2012.
b Sales and Use Taxes for 2021 includes the City's local transactions and use tax (Measure AV) and this is a special district tax that became effective April 1, 2021.
c Transient Occupancy Tax has increased by 80.24 percent as the result of additional hotels opening since 2009-10.

Source: City of Palmdale, Finance Department
170
City of Palmdale
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Secured Property
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Dry Farm
Property
Governmental
Property
Institutional
Property
Irrigated
Property
Miscellaneous
Property
2012-13 $ 6,090,761,455 $ 1,272,332,319 $ 503,277,273 $ 3,011 $ 127,500 $ 143,862,691 $ 2,102,483 $ 2,844,875 2013-14 6,272,332,777 1,297,491,324 470,738,935 3,070 273,000 218,014,208 2,143,503 3,254,005 2014-15 7,077,476,628 1,327,043,593 371,182,157 3,083 292,000 222,889,982 2,152,995 5,245,552 2015-16 7,635,291,990 1,365,232,525 511,346,775 3,144 452,000 225,436,801 2,386,169 3,365,234 2016-17 8,037,144,588 1,420,981,536 538,952,556 3,191 - 243,902,415 2,422,533 5,191,041 2017-18 8,533,219,339 1,469,739,955 591,126,895 3,254 - 255,229,741 2,470,953 5,416,084 2018-19 9,092,073,933 1,539,003,968 637,402,588 1,311,427 - 264,757,053 2,520,345 6,346,928 2019-20 9,604,501,555 1,615,682,922 461,649,492 1,337,654 - 280,936,547 2,973,968 9,002,895 2020-21 10,110,405,114 1,748,162,062 467,272,879 1,364,404 - 332,597,730 3,033,418 9,255,140 2021-22 10,576,572,497 1,776,996,314 499,665,315 1,378,537 - 286,951,575 3,064,824 13,722,590 Secured Property
Fiscal
Year
Recreational
Property
Vacant Land
Property
Cross Reference
Property
Exempt
Property
Unknown
Property
Total
Secured
SBE Nonunitary
Property
Unsecured
Property
Total Taxable
Assessed Value
Total Direct
Tax
Rate
2012-13 $ 30,041,270 $ 548,640,377 $ 160,682,096 $ (79,247,893) 6,000 $ 8,675,433,457 $ 963,200 $ 373,414,517 $ 9,049,811,174 %0.46508 2013-14 30,562,607 549,530,339 157,243,314 (78,516,112) 6,000 8,923,076,970 963,200 354,680,993 9,278,721,163 %0.07637 2014-15 30,665,697 558,074,395 174,080,817 (78,416,749) 6,000 9,690,696,150 963,200 362,362,996 10,054,022,346 %0.07933 2015-16 31,833,238 577,190,707 200,289,742 (75,198,398) 6,000 10,477,635,927 963,200 415,364,218 10,893,963,345 %0.07867 2016-17 32,269,300 605,292,964 176,381,014 (75,989,372) 6,000 10,986,557,766 963,200 392,307,216 11,379,828,182 %0.07878 2017-18 35,235,135 652,028,634 201,337,611 (68,143,060) 6,000 11,677,670,541 836,266 448,141,048 12,126,647,855 %0.07858 2018-19 40,385,529 649,821,664 196,505,558 (67,773,322) 6,000 12,362,361,671 836,266 499,037,306 12,862,235,243 %0.07875 2019-20 40,807,956 646,784,750 261,764,983 (76,302,878) 6,000 12,849,145,844 836,266 741,701,115 13,591,683,225 %0.07893 2020-21 53,368,986 690,821,809 262,686,124 (75,151,870) - 13,603,815,796 836,266 1,014,356,469 14,619,008,531 %0.07824 2021-22 51,999,974 696,688,023 272,762,641 (75,763,812) - $ 14,104,038,478 743,841 793,603,730 $14,898,386,049 %0.07858 Note 1: Exempt values are not included in total taxable assessed value Note 2: In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Data Source: L.A County Assessor 2012/13 - 2021/22 Combined Tax Rolls 171
City of Palmdale
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of Taxable Value)
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Basic Levy1 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 Acton-Agua Dulce USD DS 2008 Series A %0.03390 %0.03271 %0.03386 %0.03538 %0.03886 %0.03652 %0.03875 %0.04022 %0.03906 %0.03903 Antelope Valley Community College %0.02949 %0.02740 %0.02480 %0.02556 %0.02560 %0.04869 %0.04847 %0.04722 %0.04247 %0.04424 Antelope Valley Union High %0.03075 %0.02602 %0.02585 %0.02428 %0.02474 %0.02357 %0.02317 %0.02187 %0.02163 %0.02360 Antelope Valley East Kern Water Agency %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 Eastside Union School District %0.08302 %0.08677 %0.08893 %0.08176 %0.08449 %0.08029 %0.07257 %0.07363 %0.06430 %0.06774 Lancaster School District %0.03380 %0.05503 %0.04837 %0.05449 %0.05511 %0.06398 %0.05620 %0.05864 %0.06540 %0.06567 Palmdale School District %0.02527 %0.04839 %0.04591 %0.04973 %0.03819 %0.07534 %0.07211 %0.07059 %0.07264 %0.07121 Palmdale Water District %0.33361 %0.32898 %0.34586 %0.29922 %0.27726 %0.26591 %0.22356 %0.21817 %0.19676 %0.26418 Westside Union School District %0.05526 %0.05615 %0.08166 %0.08107 %0.07929 %0.07904 %0.07895 %0.07507 %0.07656 %0.07546 Total Direct & OverlappingTax Rates2 %1.69559 %1.73194 %1.76573 %1.72198 %1.69403 %1.74383 %1.68427 %1.67590 %1.64931 %1.72162 City Share of 1% Levy per Prop 133 %0.06629 %0.06629 %0.10374 %0.10374 %0.10374 %0.10374 %0.10367 %0.10367 %0.10367 %0.10367 Total Direct Rate4 %0.43604 %0.07637 %0.07933 %0.07867 %0.07878 %0.07858 %0.07875 %0.07893 %0.07824 %0.07858 Notes:
1 In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values of the payment of any approved bonds. 2 Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
3 City's share of 1% levy is based on the City's share of the general fund tax rate area with the largest net taxable value with the City. ERAF general fund tax shifts may not be included in tax ratio figures. 4 Total direct rate is the weighted average of all individual direct rates and applied by the City of Palmdale.

Data Source: L.A. County Assessor 2013/12 - 2022/21 Tax Rate Table 172
City of Palmdale
Principal Property Tax Payers
Current Year and Nine Years Ago
2021-22 2012-13
Tax Payer
Taxable
Assessed
Value
Percentage
of Total City
Taxable
Assessed
Valuation
Taxable
Assessed
Value
Percentage
of Total City
Taxable
Assessed
Valuation
Lockheed Corporation $ 455,048,686 %3.04 $ 350,850,910 %3.84 Northrop Grumman Systems Corporation 342,981,449 %2.29 131,126,526 %1.44 Lancaster Hospital Corporation 257,630,036 %1.72 140,702,984 %1.54 Antelope Valley Mall LLC 208,525,723 %1.39 117,836,051 %1.29 Walmart/Sam's Club 83,864,174 %0.56 74,861,697 %0.82
MGP X Properties LLC 69,447,836 %0.46 92,294,519 %1.01
Spectrum Pacific West LLC 66,367,223 %0.44 53,350,852 %0.58 Forest City Harris AVM LLC 51,476,211 %0.34 - %0.00
Golden Spectrum Property LLC 46,681,961 %0.31 - %0.00
Target Corporation 43,586,081 %0.29 39,126,045 %0.43
Amargosa Palmdale Investments LLC - %0.00 33,920,052 %0.37 Target Corporation - %0.00 29,511,702 %0.32
Top Ten Total 1,625,609,380 %10.86 1,063,581,338 %11.65 Total City Taxable Assessed Value $ 14,974,149,861 %100.00 $ 9,129,059,067 %100.00 Source: HdL Coren & Cone, Los Angeles County Assessor 2021/22 and 2012/13 Combined Tax Roll 173
City of Palmdale
City Property Taxes Levies and Collections
Last Ten Fiscal Years
Fiscal
Year City Property Tax Subsequent Collections
Total
Collections
Levy (1)
Collections
(2)
Percentage
of Levy
Supplemental
(3)
Redemption(
(4)
Refunds
Adjustments
(5)
Percentage
of Levy
2012-13 4,702,797 4,168,372 88.64% 198,103 102,478 119,284 4,588,237 97.56% 2013-14 4,866,006 4,295,755 88.28% 323,668 79,763 118,794 4,817,980 99.01% 2014-15 5,181,707 4,561,031 88.02% 159,671 54,300 338,739 5,113,741 98.69% 2015-16 5,564,458 4,851,602 87.19% 186,674 60,744 362,953 5,461,973 98.16% 2016-17 5,402,998 4,987,980 92.32% 140,425 61,470 155,603 5,345,478 98.94% 2017-18 5,828,578 5,228,633 89.71% 147,686 55,389 324,312 5,756,020 98.76% 2018-19 6,806,674 5,583,646 82.03% 181,836 55,887 912,182 6,733,551 98.93% 2019-20 7,618,313 5,801,915 76.16% 175,030 66,903 1,338,234 7,382,082 96.90% 2020-21 7,448,412 6,270,301 84.18% 122,110 112,061 879,714 7,384,186 99.14% 2021-22 7,499,947 6,530,266 87.07% 193,286 112,685 700,093 7,536,330 100.49% (1) Billings represents the Secured, Unsecured, and Homeowners Property Tax billed amounts for each fiscal year (2) Collections represents the Secured, Unsecured, and Homeowners Property Tax collected amounts for each fiscal year (3) SB813 requires than a supplemental assessment be enrolled for the amount of the difference in value between regular assessment roll and the new fair market value after a change of ownership. The Supplemental figures were taken from LA County remittances and may include supplemental amounts from prior fiscal years. (4) Redemption collections represent tax-defaulted secured property taxes that were unpaid at the end of a fiscal year. The Redemption figures were taken from LA County remittances and may include redemption amounts from prior fiscal years. (5) Refunds represent overpayments of taxes due because of a decrease in value; whereas adjustments represent changes to the tax roll. The Refund and Adjustment figures were taken from LA County remittances and may include refunds and/or adjustments from prior fiscal years.
174
City of Palmdale
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal
Year
Certificates
of
Participation
Tax
Allocation
Bondsa
Revenue
Bonds
Capital
Leases
Other
Notes
Payable
Total
Governmental
Activities
Percentage
of Personal
Income (1)
Per
Capita (1)
2013 $ 67,773,873 $ - $ 32,356,201 $ 1,219,846 $ 7,665,342 $ 109,015,262 %3.77 705 2014 66,537,300 - 30,392,752 962,260 7,084,485 104,976,797 %3.63 674 2015 65,097,544 - 28,337,814 697,150 6,474,923 100,607,431 %3.32 629 2016 62,879,049 - 12,440,000 1,636,893 6,117,000 83,072,942 %2.76 524 2017 41,160,000 - 30,736,782 1,310,146 5,862,000 79,068,928 %2.53 498 2018 39,815,000 - 28,901,224 1,091,639 17,614,522 87,422,385 %2.80 550 2019 38,315,000 - 26,982,753 964,360 18,271,625 84,533,738 %2.54 536 2020 36,655,000 - 25,054,801 832,294 15,984,014 78,526,109 %2.25 501 2021 33,649,908 - 22,635,000 1,183,278 15,035,845 72,504,031 %2.04 465 2022 31,542,451 - 21,088,805 1,019,884 13,918,357 67,569,497 %1.90 404 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. a A decrease in Tax Allocation Bonds reported is the direct result of the dissolution of all California Redevelopment Agencies during 2011-12. The Debt previously reported under the City of Palmdale's Redevelopment Agency, a component unit of the City of Palmdale, is now being reported under a Private Purpose Trust Fund effective February 1, 2012. (1) These ratios are calculated using per capita personal income and population for the prior calendar year provided by HdL, Coren & Cone
Source: City of Palmdale, Finance Department
175
City of Palmdale
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Year
Tax Allocation
Bondsa
Revenue*
Bonds Total
Percent of
Assessed
Value (1)
Per
Capita
2013 $ - $ 32,356,202 $ 32,356,202 %0.36 209
2014 - 30,392,752 30,392,752 %0.33 195
2015 - 28,337,814 28,337,814 %0.28 177
2016 - 8,205,000 8,205,000 %0.08 52
2017 - 25,180,000 b 25,180,000 %0.22 158
2018 - 23,685,000 23,685,000 %0.19 149
2019 - 22,090,000 22,090,000 %0.17 140
2020 - 20,465,000 20,465,000 %0.15 131
2021 - 18,800,000 18,800,000 %0.15 120
2022 - 17,025,000 17,025,000 %0.11 102
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

General bonded debt is debt payable with governmental fund resources recorded in Palmdale Financing Authority (of which the City has none).
(1) Assessed value has been used because the actual value of taxable property is not readily available in the State of California. a A decrease in Tax Allocation Bonds reported is the direct result of the dissolution of all California Redevelopment Agencies during 2011-12. The Debt previously reported under the City of Palmdale's Redevelopment Agency, a component unit of the City of Palmdale, is now being reported under a Private Purpose Trust Fund effective February 1, 2012. b A increase in total Revenue Bonds reported in 2017 as compared to 2016 is the result of refunding revenue bonds issued to pay off certificates of participation during 2016-17.
*During FY2012-13, $8,695,000 Lease Revenue Bonds were issued. 176
City of Palmdale
Direct and Overlapping Governmental Activities Debt
June 30, 2022
City Assessed Valuation $ 7,853,446,094
Redevelopment Agency Incremental Valuation 7,120,703,767 Total Assessed Valuation $ 14,974,149,861
OVERLAPPING DEBT:

Gross Bonded
Debt Balance
Percentage
Applicable
Estimated Share
of Overlapping
Debt
308.60-Palmdale Water District $ 121,958,014 %91.683 $ 111,815,205 464.50-Eastside Union Elem School District 1998 Series A Debt Service 394,872 %17.322 68,401 464.54-Eastside Union School District Debt Service 2016 REF 3,020,000 %17.322 523,131 529.50-Lancaster School District Debt Service 1999 Series A 1,120,464 %0.503 5,641 529.51-Lancaster School District Debt Service 1999 Series 2001 5,454,026 %0.503 27,456 529.53-Lancaster School District Debt Service 2012 Series 2013A Bond 9,910,000 %0.503 49,888 529.55-Lancaster School District Debt Service 2012 Series 2018C 11,000,000 %0.503 55,375 529.56-Lancaster School District Debt Service 2012 Series 2020D 33,779,908 %0.503 170,052 593.53-Palmdale School District Debt Service 2010 Ref Bonds 1,259,827 %94.764 1,193,867 593.54-Palmdale School District Debt Service 2012 Series 2013A Bonds 100,000 %94.764 94,764 593.55-Palmdale School District Debt Service Ref Series 2013B Bonds 1,550,000 %94.764 1,468,848 593.56-Palmdale School District Debt Service Ref Series 2015B 23,470,000 %94.764 22,241,195 593.57-Palmdale School District Debt Service Ref Series 2017A 24,420,000 %94.764 23,141,457 593.58-Palmdale School District Debt Service Ref Series B 28,705,000 %94.764 27,202,109 593.59-Palmdale School District Debt Service 2012 SER C 17,205,000 %94.764 16,304,208 593.60-Palmdale School District Debt Service 2016 SER C 69,855,972 %94.764 66,198,565 689.54-Westside Union School District 1998 Series A Debt Service 850,965 %40.042 340,741 689.55-Westside Union School District 1998 Series S-2001 A Debt Service 2,254,901 %40.042 902,901 689.56-Westside Union School District 1998 Series S-2002 A Debt Service 1,578,308 %40.042 631,982 689.61-Westside Union School District 2008 Series A Debt Service 8,370,255 %40.042 3,351,595 689.63-Westside Union School District Debt Service 2012 Series A 18,788,931 %40.042 7,523,412 689.65-Westside Union School District Debt Service 2020 12,185,000 %40.042 4,879,084 717.52-Antelope Valley Unified High School District DS 02 SER B 3,806,694 %41.432 1,577,198 717.53 ANTELOPE VALLEY UNIFIED HSD DS 2002 SERIES 2005 698,179 41.432 289,271 717.54-Antelope Valley Unified High School District Refund SR 2012 2,910,000 %41.432 1,205,666 717.55 Antelope Valley Union High School District Refund 2015 14,105,000 %41.432 5,843,960 717.56 Antelope Valley Union High School District DS 19 RF BD 17,400,000 %41.432 7,209,139 792.55-Antelope Valley CCD Debt Service 2014 Ref Series A 13,795,000 %38.920 5,368,958 792.56-Antelope Valley CCD Debt Service 2014 Ref Series B 3,150,000 %38.920 1,225,967 792.58-Antelope Valley CCD Debt Service 2016 Series A 46,220,000 %38.920 17,988,636 792.59-Antelope Valley CCD Debt Service 2016 Series A 18,895,000 %38.920 7,353,857 792.60-Antelope Valley CCD Debt Service 2016 Series B 86,215,000 %38.920 33,554,527 792.61-Antelope Valley CCD Debt Service 2020 REF BDS 218,695,000 %38.920 85,115,204 935.53-Action-Agua Dulce USD DS 2016 RE BD 9,425,664 %0.006 582 Total overlapping debt $ 454,922,842
City of Palmdale's Direct Debt $ 67,569,497
Total Direct and Overlapping Debt $ 522,492,339
Notes:

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

Data Source HDL Coren & Cone, L. A. County Assessor and Auditor Combined 2018/19 Lien Date Tax Rolls. 177
City of Palmdale
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year
Assessed
Evaluation
Debt Limit
(1)
Total Net Debt
Applicable to the
Limit (2)
Total Debt
Applicable to the
Limit as a Percentage
of Debt Limit
2012-13 $ 9,129,059,067 $ 342,339,715 $ 116,925,374 %34.15 2013-14 9,357,237,275 350,896,398 115,840,632 %33.01
2014-15 10,380,860,342 389,282,263 112,074,317 %28.79
2015-16 10,969,161,743 441,343,565 121,994,744 %27.64
2016-17 11,455,817,554 429,593,158 121,593,787 %28.30
2017-18 12,194,790,915 457,304,659 114,426,984 %25.02
2018-19 12,930,008,625 484,875,323 105,383,212 %21.73
2019-20 13,667,986,103 512,549,479 98,452,808 %19.21
2020-21 14,694,160,401 551,031,015 91,438,375 %16.59
2021-22 14,974,149,861 561,530,620 83,819,392 %14.93
Source: Los Angeles County
Note (1): The legal debt limit is statutorily computed at 3.75% of assessed valuation. Amounts applicable to the former Community Redevelopment Agency of the City of Palmdale are included in years 2002-03 through 2010-11.

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

Note (3): The aggregate principal amount of the City's general obligation debt for public improvements is statutorily limited to 15.0 percent of the City's total reported assessed valuation. The City has no general obligation debt outstanding as of June 30, 2020.
178
City of Palmdale
Former Community Redevelopment Agency - Project Area 1 & 1 A Pledged-Revenue Coverage Last Ten Fiscal Years
1993 Revenue Bonds
Debt Service (1)
2003 Revenue Bonds 19.2
Debt Service (3)
2009 Note Payable 6.0
Debt Service (4)
2010 Tax Allocation Note

27.5 Debt Service (5)
Fiscal
Year Principal Interest Principal Interest Principal Interest Principal Interest 2013 $ - $ - $ 810,000 $ 705,837 $ 100,000 $ 380,442 $ 1,190,968 $ 1,559,692 2014 - - 845,000 672,737 105,000 373,713 1,265,627 1,485,033 2015 - - 875,000 638,338 115,000 366,491 1,344,967 1,405,693 2016 - - 910,000 602,638 125,000 358,613 1,429,282 1,321,378 2017 - - - - - - 1,518,883 1,231,777
2018 - - - - - - 1,614,102 1,136,558
2019 - - - - - - 1,715,292 1,035,369
2020 - - - - - - 1,822,825 927,835
2021 - - - - - - 1,937,100 813,560
2022 - - - - - - 2,058,542 692,118
Debt Summary Pledge Revenue
Fiscal
Year Total Principal Total Interest
Total Debt
Service
Gross Tax
Increment (6)
Less: Operating
Expenses (7) Net Available Coverage
2013 $ 2,100,968 $ 2,645,971 $ 4,746,939 $ 9,961,671 $ 356,493 $ 9,605,178 2.02 2014 2,215,627 2,531,483 4,747,110 8,696,225 341,547 8,354,678 1.76 2015 2,334,967 2,410,522 4,745,489 8,956,435 327,804 8,628,631 1.82 2016 2,464,282 2,282,629 4,746,911 9,245,959 352,357 8,893,602 1.87 2017 1,518,883 1,231,777 2,750,660 9,666,704 393,523 9,273,181 3.37 2018 1,614,102 1,136,558 2,750,660 10,236,117 402,461 9,833,656 3.58 2019 1,715,292 1,035,369 2,750,661 10,529,801 429,833 10,099,968 3.67 2020 1,822,825 927,835 2,750,660 11,393,921 452,757 10,941,164 3.98 2021 1,937,100 813,560 2,750,660 11,560,764 477,635 11,083,129 4.03 2022 2,058,542 692,118 2,750,660 11,060,256 474,743 10,585,513 3.85 Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes
Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18)
Source: City of Palmdale, Finance Department
(1) Revenue Bonds were fully matured and paid off in FY 2011. (2) 2003 Bond Anticipation Note was fully defeased in June 2009 by the CRA Loan associated with the 2009 Revenue Bonds. (3) 2003 Revenue Bonds were fully defeased in April 2016 by the Successor Agency 2016 Series A Tax Allocation Refunding Bonds.
(4) 2009 Revenue Bonds were fully defeased in June 2016 by the Successor Agency 2016 Series B Tax Allocation Refunding Bonds.
(5) Sole source of payment on 2011 Tax Allocation Notes is Available Tax Increment, but is subordinate to any existing or future indebtedness.
(6) Gross Tax Increment consist of property taxes generated from Project Area No. 1&1A (7) Operating Expenses consist of the 20% set-aside property taxes generated from Project Area No. 1&1A up until 2011, pass through payments pursuant to agreements to allocate tax increment funds to various Local Agencies, and other charges related to administering Area 1&1A debt.
179
City of Palmdale
Former Community Redevelopment Agency - Project Area 2A Pledged-Revenue Coverage Last Ten Fiscal Years
1999 Sublien TAB 2.7
Debt Service (2)
2002 TAB 5.3
Debt Service
2004 TAB 6.09
Debt Service (3)
2004 TAB 18.5
Debt Service (3)
1998 TAB 30.6
Debt Services (2)
1994 Revenue Bonds Debt
Service (1)
1997 Revenue Bonds
Debt Service (1)
Fiscal Year Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2013 $ 100,000 $ 156,475 $ - $ - $ 145,000 $ 268,508 $ 290,000 $ 888,500 $ 640,000 $ 1,315,250 $ 195,000 $ - $ 765,000 $ 163,919 2014 105,000 150,837 - - 155,000 263,780 300,000 873,750 675,000 1,282,375 205,000 - 805,000 120,820 2015 110,000 144,925 - - 160,000 258,580 310,000 858,500 710,000 1,247,750 205,000 - 850,000 74,480 2016 115,000 70,950 - - 165,000 252,890 320,000 842,750 740,000 1,211,500 215,000 - 905,000 25,340 2017 - - 970,000 - - - - - - - - - - -
2018 - - - - - - - - - - - - - -
2019 - - - - - - - - - - - - - -
2020 - - - - - - - - - - - - - -
2021 - - - - - - - - - - - - - -
2022 - - - - - - - - - - - - - -
2016 TAB A&B 73.1
Debt Service Debt Summary Pledge Revenue
Fiscal Year Total Principal Total Interest Total Principal Total Interest Total Debt Service Sales Tax (4) Gross Tax
Increment (6)
Less: Operating
Expenses (7) Net Available Coverage
2013 $ - $ - $ 2,135,000 $ 2,792,652 $ 4,927,652 Note (6) $ 29,606,177 $ 21,450,574 Note (6) Note (6) 2014 - - 2,245,000 2,691,562 4,936,562 Note (6) 29,406,998 17,777,381 Note (6) Note (6) 2015 - - 2,345,000 2,584,235 4,929,235 Note (6) 32,813,662 19,508,055 Note (6) Note (6) 2016 - - 2,460,000 2,403,430 4,863,430 Note (6) 34,915,819 20,449,662 Note (6) Note (6) 2017 1,235,000 2,611,743 2,205,000 2,611,743 4,816,743 Note (7) 40,469,941 22,224,293 18,245,648 3.79 2018 3,130,000 3,394,850 3,130,000 3,394,850 6,524,850 Note (7) 40,400,227 22,619,322 17,780,905 2.73 2019 3,250,000 3,282,900 3,250,000 3,282 3,253,282 Note (7) 44,929,524 24,908,918 20,020,606 3.06 2020 3,365,000 3,133,775 3,365,000 3,133,775 6,498,775 Note (7) 45,399,840 27,528,918 17,870,922 2.75 2021 3,540,000 2,961,150 3,540,000 2,961,150 6,501,150 Note (7) 55,069,687 29,999,947 25,069,740 3.86 2022 3,725,000 2,779,525 3,725,000 2,779,525 6,504,525 Notes (7) 51,713,436 25,024,544 26,688,892 4.10 Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes to the financial statements.

Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18)
Source: City of Palmdale, Finance Department
(1) The 1994 and 1997 Revenue Bonds were fully matured and paid off in FY 2016. (2) The 1998 and 1999 Tax Allocation Bonds were fully defeased in April 2016 by the Successor Agency 2016 Series A Tax Allocation Refunding Bonds.
(3) The 2004 $18.5M and 2004 $6.1 Tax Allocation Bonds w ere fully defeased in June 2016 by the Successor Agency 2016 Series B Tax Allocation Refunding Bonds.
(4) (Gross sales tax and tax increment consist of property taxes and sales tax generated from Project Area No. 2A. (5) Operating Expenses consist of the 20% set-aside property taxes generated from Project Area No. 2A up until 2011, pass through payments pursuant to agreements to allocate tax increment funds to various Local Agencies, and other charges related to administering Area 2A debt.
(6) Due to the dissolution of the Community Redevelopment Agency in 2012, the Sales Tax generated by Project Area was not available therefore the "Net Available" and "Coverage" percent is not available. (7) Due to the FY 2016 refunding of bond issues with a sales tax pledge, there is no longer any pledge of sales tax towards any Successor Agency debt.
180
City of Palmdale
Former Community Redevelopment Agency - Project Area 2A (20 Percent Set Aside) Pledged-Revenue Coverage Last Ten Fiscal Years
2003 TAB 5.9
Debt Service (1)
2003 TAB 7.2
Debt Service (1)
2005 TAB 14.115
Debt Service (1)
2005 TAB 2.8
Debt Service (1)
Fiscal Year Principal Interest Principal Interest Principal Interest Principal Interest 2013 $ 175,000 $ 198,516 $ 30,000 $ 342,428 $ 500,000 $ 472,541 $ 35,000 $ 114,802 2014 180,000 192,523 30,000 341,168 525,000 452,104 35,000 113,599 2015 180,000 186,043 35,000 339,803 550,000 430,541 35,000 112,356 2016 190,000 179,103 35,000 338,333 570,000 407,479 40,000 110,976 2017 - - - - - - - -
2018 - - - - - - - -
2019 - - - - - - - -
2020 - - - - - - - -
2021 - - - - - - - -
2022 - - - - - - - -
Debt Summary Pledge Revenue
Fiscal Year Total Principal Total Interest
Total Debt
Service
20 Percent Set
Aside Tax
Increment (2) Net Available Coverage
2013 $ 740,000 $ 1,128,287 $ 1,868,287 $ 5,921,235 $ 5,921,235 3.17 2014 770,000 1,099,394 1,869,394 5,881,400 5,881,400 3.15 2015 800,000 1,068,743 1,868,743 6,562,732 6,562,732 3.51 2016 835,000 1,035,891 1,870,891 6,983,164 6,983,164 3.73 2017 - - - - - -
2018 - - - - - -
2019 - - - - - -
2020 - - - - - -
2021 - - - - - -
2022 - - - - - -
Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes to the financial statements
Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18)
Source: City of Palmdale, Finance Department
(1) The 2003 Series C & D TAB's and the 2005 Series E & F TAB's were fully defeased in April 2016 by the Successor Agency 2016 Series B TAB's.
(2) The pledged revenues represent 20% property tax increments generated from Project Area 2A and set aside as required by State law for low and moderate income housing.
(3) Due to the dissolution of the Community Redevelopment Agency during 2012, the 20% set aside is no longer required. The 20% set aside calculated is based on what it should have been if legally required. 181
City of Palmdale
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal
Year
(1)
Population
(2)
Personal
Income
(thousands
of dollars)
(2)
Per
Capita
Personal
Income
(2)
Median
Age
(3)
School
Enrollment
(4)
Unemployment
Rate
(5)
Percent of Pop
25+
with HS
Degree
(5)
Percent of Pop
25+
with Bachelor's
Degree
2012 154,535 $ 2,859,670 $ 18,505 28.90 31,372 %11.6 %74.1 %15.4 2013 154,629 2,890,789 18,695 28.70 31,226 %10.8 %73.0 %14.7 2014 155,734 2,892,448 18,573 29.10 35,356 %11.0 %74.2 %15.3 2015 160,072 3,028,678 18,920 29.30 34,932 %9.0 %73.6 %15.5 2016 158,605 3,010,803 18,983 30.10 33,874 %7.1 %74.2 %14.8 2017 158,905 3,121,978 19,646 30.40 36,785 %6.2 %74.0 %15.0 2018 157,854 3,327,236 21,077 31.30 35,799 %6.4 %74.4 %14.7 2019 156,737 3,598,995 22,962 31.90 22,166 %14.9 %75.8 %16.5 2020 156,074 3,545,820 22,718 32.00 4,946 %15.3 %74.6 %15.5 2021 167,398 3,565,478 21,299 32.30 35,812 %12.4 %75.6 %15.7 Source:
(1) California State Department of Finance, Demographic Research Unit E-1: City/County Population Estimates (2) 2010-2013 Income, Age, and Education Data: ESRA - Demographic Estimates are based on the last available Census.

Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's Boundaries. U.S. Census Bureau, most recent American Community Survey. 2010, and later - Income, Age and Education Data - US Census Bureau, most recent American Community Survey. (3) Palmdale School District, California Department of Education - SARC Not Available for Palmdale School District and AVUHSD. Only Westside School District is available
(4) California Employment Development Department.
(5) U.S. Census Bureau
182
City of Palmdale
Principal Employers - Antelope Valley
Calendar Year 2022 and Calendar Year 2012
2022 2012
Employer
Number of
Employees
Percentage of
Total Valley
Employment Employer
Number of
Employees
Percentage of
Total Valley
Employment
Northrop Grumman 7,000 6.34% Edwards Air Force Base 10,808 17.45% Lockeed Martin 3,750 4.33% China Lake NWC 9,172 14.81%
Antelope Valley Union High Schood
Dist. 3,089 3.56% County of Los Angeles 3,953 6.38%
Palmdale School District 2,100 2.42% Lockheed Martin 3,000 4.84% Antelope Valley Mall 1,800 2.08% Palmdale School District 2,682 4.33% Palmdale Regional Medical Center 1,200 1.38% Antelope Valley Hospital Medical Center 2,619 4.23% Palmdale Walmart 800 0.92% Northrop-Grumman 2,573 4.16% Robertson's Ready Mix Concrete 500 0.58% A.V. High School District 2,037 3.29% Palmdale Auto Mall 410 0.47% AV Walmart 1,922 3.10%
Granite Construction 400 0.46% Tehachapi State Prison 1,915 3.09% Source: City of Palmdale Economic Development Department 183
City of Palmdale
Full-time-Equivalent City Government Employees by Function:Program Last Ten Fiscal Years
Function 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 City council - - - - - - - - 0.50 1.00
City manager 5.00 7.00 5.00 6.00 8.00 8.00 12.00 25.00 46.50 52.00 City attorney 4.00 4.00 4.00 4.00 4.00 4.00 6.00 6.00 8.00 8.00 Administrative services 18.00 17.00 20.00 20.00 21.00 21.00 21.00 13.00 - - Economic & community development* 35.00 33.00 39.00 25.00 27.00 29.00 29.00 30.00 31.00 33.00 Neighborhood services 19.00 24.00 21.00 20.00 21.00 24.00 23.00 23.00 24.00 31.00 Public works* 89.00 83.00 81.00 97.00 103.00 110.00 112.00 114.00 116.00 119.00 Recreation & culture 14.00 13.00 14.00 14.00 14.00 16.00 16.00 17.00 19.00 22.00 Total 184.00 181.00 184.00 186.00 198.00 212.00 219.00 228.00 245.00 266.00 1 2021 reorganization resulted in consolidation of Administrative Services full time employees into City Manager's Office. 2 2016 Fluctuation in full time employees was caused by a reorganization.

Source: City of Palmdale, Finance Department
184
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Communications:

Video segments produced1 18 7 10 16 12 21 94 127 113 124 Commercials/Social media1 2 4 5 7 8 7 5 8 8 932
Photos/Graphics produced1 - 2 24 39 33 39 65 68 72 985
Publications produced1 3 3 3 3 3 3 15 15 15 104
Newsletters/Media releases1 - 51 102 148 109 188 224 265 309 251 Economic and Community
Development:

Film permits issued 22 15 19 36 35 29 30 19 28 39
Businesses licensed 4,973 6,240 8,873 9,585 10,099 9,929 9,456 9,372 6,560 8,692 Building permits issued 862 1,168 1,517 1,814 1,742 1,566 1,674 1,935 1,951 4,853 Engineer grading permits issued 9 23 17 22 26 18 16 41 27 48 Engineer Geotechnical review 16 18 10 20 12 12 17 20 16 45 Engineer Improvement plans 74 80 70 139 - - - - - 251
Engineer Inspections 1,921 2,189 3,200 2,219 965 1,101 1,543 1,311 1,009 1,575 Financial assistance to
businesses - - - - - - - - 70 34
SBDC business counseling
hours 275 275 275 206 374 286 351 249 358 444
Business retention site visits 32 32 35 34 36 35 25 8 290 385 General Government:

Buildings maintained 40 48 57 64 65 57 60 60 60 75
Square footage of facilities 387,300 312,600 415,830 424,488 418,000 418,000 423,000 432,000 432,000 405,000 Neighborhood Services
Neighborhood watch
presentations 172 115 118 66 86 88 32 14 16 21
Business watch presentations 56 36 11 52 57 63 11 3 2 2 PAC presentations 23 62 11 25 8 11 8 4 5 3
Administration Citations
Processed 768 641 741 361 818 630 559 1,242 968 1,081
Parking Enforcement:

Vehicle Impounds 410 330 205 500 483 462 396 405 351 268 Citations Issued 8,648 5,585 5,195 3,560 5,430 7,233 6,014 6,633 3,065 3,073 Calls for Service 719 757 1,086 2,837 9,346 2,007 2,626 2,485 3,445 1,620 Number of law violations::

Part 1 crimes 4,305 4,093 4,750 4,200 5,946 4,082 3,757 2,895 3,232 3,327 Part 2 crimes 5,787 7,775 6,614 4,835 10,743 7,876 7,985 5,387 6,985 4,866 Crime reports taken - 20,612 19,254 15,630 16,689 11,958 11,742 8,268 12,232 12,325 Arrests 7,435 5,267 6,206 5,976 9,061 6,583 6,652 6,554 5,355 4,606 Accident reports taken 1,278 1,572 1,967 2,081 2,226 1,435 1,850 1,720 2,320 1,855 Animal licenses issued 8,504 8,314 8,318 9,643 11,416 11,616 11,747 10,656 8,111 8,923 Code Enforcement cases closed 3,254 3,421 3,835 4,190 4,607 4,390 3,045 3,572 2,271 3,680 Mobile Home Parks paid
occupied spaces 787 787 787 787 787 787 787 787 791 784 Affordable Housing - Apartment
Units4 - - - 291 291 291 291 299 299 296
185
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Health and Welfare:

Family members assisted with
food and/or shelter 5,561 10,281 7,184 7,516 6,573 9,143 3,080 5,563 4,346 5,846 SAVES meals provided 86,037 575,085 361,956 94,170 94,595 118,321 209,100 347,511 387,610 314,740 SAVES motel vouchers
provided (night) 19 25 29 59 160 101 61 42 298 490
Public Services:

Number of landscape districts
maintained 245 245 248 230 230 230 233 233 248 246
Landscaped area (acres)
maintained 253 253 253 376 377 377 377 377 381 482
Irrigation controllers maintained 542 542 542 532 413 413 534 534 534 518 Landscape median area
maintained (sq. ft.) 2,500,344 2,500,344 2,500,344 2,500,344 2,553,144 2,553,144 2,553,144 2,553,114 2,553,144 2,581,950 SR 14 Interchange area
maintained (sq. ft.) 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 Park-n-ride spaces maintained 2,009 2,009 2,009 2,009 2,009 2,009 2,006 2,006 2,006 2,006 Park-n-ride Acres maintained 22 22 22 22 22 22 22 22 22 22 Detention basins maintained 226 226 226 267 267 267 267 267 267 294 Detention basins (acres)
maintained 94 94 94 110 110 110 110 110 110 613
Service requests - landscape
maint. 215 365 1,109 1,236 1,016 1,016 1,297 1,297 1,310 3,791 Vandalism repair hours 200 20 20 23 13 13 42 42 42 2,772 Graffiti abatement hours 4,775 3,246 1,211 4,720 1,204 1,210 1,573 1,573 1,781 2,085 Lighting districts 171 150 164 164 164 164 170 170 170 5 Number of street lights in
districts 18,692 18,437 18,513 18,515 18,515 18,515 18,523 18,523 18,523 18,592 Commercial acreage in street
lighting districts 625 625 2,090 2,111 2,111 2,111 2,115 2,115 2,115 2,166 Commercial acreage in street
lighting districts 37,038 40,730 40,770 40,785 40,785 40,792 40,790 40,790 40,790 46,329 Striping and marking ln. ft. and
sq. ft. 1,068,911 2,500,000 2,500,000 2,500,000 1,713,453 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 Trees planted 500 130 320 45 100 75 141 141 142 104
Trees pruned 980 947 410 455 455 1,678 959 959 755 2,843 Street signs maintained 8,650 9,100 9,100 9,150 14,500 14,500 14,500 14,500 14,560 14,560 Street centerline miles 518 504 504 504 508 508 508 508 508 508 Street curb miles swept 26,400 - - - - - - - - -
Street pavement area (acres) 2,109 2,109 2,109 2,109 2,172 2,172 2,172 2,172 2,172 2,172 Bridges maintained 9 9 9 9 9 9 9 9 9 9
Box culverts maintained 6 7 7 7 7 7 7 7 7 7
Number of passengers served3 3,493,239 3,641,482 3,500,593 3,462,497 2,534,682 2,442,282 2,301,868 - - 1,113,754 Number of commuter and fixed
routes3 18 18 18 18 18 19 21 22 22 20
Cultural and Recreational:

Library circulation 332,010 318,006 284,027 263,750 315,639 198,361 179,521 179,521 60,700 144,407 Library volumes owned 89,210 - - 73,045 73,612 78,073 88,214 88,214 33,100 26,923 Library programs 139 233 190 271 339 428 528 528 180 185 Playhouse general attendance 8,735 - - N/A 8,900 10,800 16,200 8,000 - 5,000 Larry Chimbole Center
attendance 57,850 - 75,000 80,000 80,000 80,120 80,500 40,000 9,200 35,577 Legacy Commons Attendance 36,000 36,000 37,000 40,000 55,875 55,900 59,556 49,825 5,000 39,500 186
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Oasis Park Recreation Center
attendance 11,000 - - N/A 47,000 47,000 47,200 15,000 1,500 61,522 Amphitheater attendance 25,800 - - N/A 47,500 50,800 48,600 10,000 7,500 8,507 Day Camp participants 920 - - N/A N/A N/A N/A N/A N/A N/A After school participants 11,000 - - N/A N/A N/A N/A N/A N/A N/A Tiny Tot Participants 1,630 - - N/A N/A N/A N/A N/A N/A N/A Recreational swimming
attendance 3,330 - - N/A 2,450 2,500 2,400 3,081 2,218 1,200 Lesson swimming attendance 16,802 - - N/A 2,680 2,587 2,450 1,665 1,415 2,646 Youth sports participants 16,000 1,700 1,661 1,784 1,664 1,586 1,718 1,169 818 1,229 Adult sports participants 119,136 2,500 2,446 2,530 2,574 2,560 1,712 1,192 60 1,200 General Program Registrants2 - 7,193 13,701 11,328 11,510 11,264 12,000 9,000 7,600 8,100 Aquatic Program Registrants2 - 8,934 8,378 2,833 2,910 2,999 2,800 3,200 2,300 2,900 Facility Rental Bookings2 - 2,259 4,819 2,600 4,452 925 698 400 90 6,419 Airpark Attendance2 - 11,874 16,918 17,100 16,336 17,000 20,210 3,000 600 10,000 Airpark Guided Tours2 - 258 51 60 22 30 34 10 2 1
Community Event Attendance2 - 64,750 43,000 44,000 44,000 44,000 50,600 10,000 200 9,000 Playhouse Performance
Attendance2 - 5,155 10,125 9,416 13,345 15,230 16,200 5,000 - 4,428 DryTown Admissions2 - 81,000 85,000 91,400 92,000 92,000 77,137 34,443 10,000 84,096 Tournament Attendance2 - 50,000 46,500 47,320 58,032 65,000 85,000 65,000 4,500 70,000 *Source: City of Palmdale, various City departments
Note
(1) New methodology used beginning FY 2021-22
(2) Began reporting in FY 2013-14
(3) Figures provided by Antelope Valley Transit Authority (4) Four multifamily apartment buildings purchased in September 2015 187
City of Palmdale
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Function/Program 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 General Government:

Number of City owned building facilities 47 47 47 55 55 55 55 55 55 75 City Vehicles 4 4 4 4 4 4 4 4 4 4
Public Safety Vehicles 8 8 8 12 12 16 26 31 33 34
Public Services:

Streets and Bikeways (miles) 580 580 580 580 580 580 580 580 580 580 Landscaped area (acres) 260 260 260 260 260 260 260 260 260 482 Park-n-ride 22 22 22 22 22 22 22 22 22 22
Storm drainage systems (feet) 95,000 95,000 95,000 95,000 95,000 95,000 95,000 100,000 100,000 100,000 Retention and detention basins 11 11 11 11 11 11 11 11 11 300 Storm drainage pump stations 3 3 3 3 3 3 19 19 19 19
Detention basins (acres) 207 207 207 207 207 207 207 207 207 613 Traffic signals 168 168 168 184 188 195 195 199 200 252 Traffic signs 8,700 8,700 8,700 8,700 8,750 8,750 8,750 8,750 8,750 14,560 Transportation Center 1 1 1 1 1 1 1 1 1 1
Bridges 9 9 9 9 9 9 9 9 9 9
Street Lights1 4,150 4,150 4,200 4,200 4,200 18,523 18,523 18,523 18,523 18,523 Vehicles 75 75 75 91 91 104 102 101 101 101
Traffic Operation Center - - - - - - - - - 1
Community Development:

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

Number of Parks 21 21 21 21 22 22 22 22 22 23
Developed park acreage 576 576 576 576 576 588 588 588 588 592 Number of swimming pools 4 3 3 3 3 3 4 4 4 4
Number of tennis courts 9 9 9 10 10 10 10 10 10 10
Number of Libraries 1 1 1 1 1 1 1 1 1 1
Number of Community Centers 3 3 3 3 3 3 3 3 3 3
Skate Parks 2 2 2 2 2 2 2 2 2 2
Soccer Fields 27 27 27 29 30 30 30 30 30 30
Basketball courts 8 8 8 9 9 9 9 9 9 9
Softball diamonds 20 20 20 13 13 13 15 15 15 15
Volleyball courts 6 6 6 7 7 7 7 7 7 7
Little league fields 11 11 11 11 11 11 11 11 11 11
Roller Hockey rinks 2 2 2 2 2 2 2 2 2 2
Aquatics Facility - Water Park 1 1 1 1 1 1 1 1 1 1
Community Theatre 1 1 1 1 1 1 1 1 1 1
Amphitheater 1 1 1 1 1 1 1 1 1 1
Vehicles 3 4 4 6 6 5 6 6 6 6
Health and Welfare:

Vehicles 2 2 2 2 2 2 2 3 3 3
Source: City of Palmdale, various City departments
(1) The City of Palmdale obtained jurisdiction of 14,315 Los Angeles County street lights in 2013; currently in the process of acquisition of street lights.
188

ANNUAL FINANCIAL REPORT

CITY OF PALMDALE, CALIFORNIA

HOUSING AUTHORITY
(A Component Unit of the City of Palmdale)
For the Fiscal Year Ended
June 30, 2022

This page intentionally left blank
City of Palmdale Housing Authority
June 30, 2022

TABLE OF CONTENTS
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3 MANAGEMENT DISCUSSION AND ANALYSIS................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................14 Fund Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................18 Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19 Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 Statement of Revenue, Expenditures and Changes in Fund Balances – Budget and Actual General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 Special Revenue Fund-Housing Asset Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 Special Revenue Fund-Housing Facilities Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 REQUIRED SUPPLEMENTARY INFORMATION................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................45 Schedule of the Authority's Proportionate Share of the City's Net Pension Liability................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................47 Schedules of Contributions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................48 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................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................49 This page intentionally left blank
3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we:

Exercise professional judgment and maintain professional skepticism throughout the audit.

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed.

Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Authority’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedules of changes in the Authority’s proportionate share of the City’s 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 is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 30, 2023, on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance.

Rancho Cucamonga, California
March 30, 2023
5 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, 2022.

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 $73,418,682.
 The Authority’s total net position increased in the current year by $869,362. 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 $47,195,336, an increase of $1,243,429 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 page 13 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 18 - 20. Budget and actual statements can be found on pages 24 - 26.

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 Asset 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
6 City of Palmdale Housing Authority
Management Discussion and Analysis
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 $(3,585,195).

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 were 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 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 $50,558,486.

The Authority adopts an annual appropriated budget for its General Fund, Housing Facilities Fund, and Housing Asset 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 28 - 44 of this report.

See Notes to Financial Statements
7 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 $73,418,682 as of June 30, 2022.

Housing Authority Net Position
Governmental
Activites
Governmental
Activites
2022 2021
Current and Other Assets $ 57,109,091 $ 55,359,587
Capital Assets 26,311,950 27,066,936
Total Assets 83,421,041 82,426,523
Deferred Outflows of Resources 126,691 156,738
Current and Other Liabilities 4,997,645 5,074,462
Long-Term Liabilities Outstanding 4,217,949 3,928,889
Net Pension Liabilities 603,083 1,030,590
Total Liabilities 9,818,677 10,033,941
Deferred Inflows of Resources 310,373 -
Net position
Net Investment in Capital Assets 22,920,723 23,581,702
Restricted
Community development 50,275,910 48,845,159
Unrestricted 222,049 122,459
Total net position $ 73,418,682 $ 72,549,320
The Authority’s net investment restricted in capital assets reflects a balance of $22,920,723. 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 $50,275,910 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 $4,217,949, consisting of $- of 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 $77,949 and claims payable of $400,000.

The Authority’s Current and Other Liabilities reflect a balance of $5,552,095. Current and Other Liabilities consists of liabilities totaling $1,453,808 that are considered payable within a year, and consist of accounts payable, accrued interest and accrued salaries.

The remaining balance consists of $12,509 due to other funds and $4,085,778 of refundable deposits and unearned revenue.

See Notes to Financial Statements
8 City of Palmdale Housing Authority
Management Discussion and Analysis
Housing Authority's Changes in Net Position
Governmental
Activities
Governmental
Activities
2022 2021
Revenues:

Program Revenue:

Charges for Services $ 7,930,166 $ 7,886,631
Operating Grants and Contributions 582,754 720,584
General Revenue:

Unrestricted investment earnings/(loss) (354,414) 17,089 Other 1,537 28,120
Total Revenues 8,160,043 8,652,424
Expenses
Community development 7,108,573 7,798,151
Interest on long-term debt 182,108 185,386
Total Expenses 7,290,681 7,983,537
Change in Net Position 869,362 668,887
Net Position - Beginning of Year 72,549,320 71,880,433
Net Position - End of Year $ 73,418,682 $ 72,549,320
Governmental Activities. Governmental activities increased the Authority’s net position by $869,362. The increase is primarily the result of increased Community Development program activities during the year.  Charges for services increased by $43,535, or 0.55 percent 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 decreased by $137,830, or 19.13 percent.  Community Development expenses decreased by $689,578 or 8.84 percent due to increases in bad debt expense in the prior y ear, 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 $47,195,336, an increase of $1,243,429 in comparison with the prior year. The fund balances were classified as follows:
 $50,558,486 i s “Restricted” due to the existence of externally enforceable legal restrictions that are related primarily to special revenue funding sources.
 $(3,585,195) is “Unassigned” and represents negative residual resources.

The General Fund has a fund balance of $222,045, which was an increase of $5,697 from the prior fiscal year.

The Housing Asset Fund has a fund balance of $50,558,486 which was a decrease of $258,678 from the prior fiscal year. The decrease is attributable to an increase in operating expenditures The Housing Facilities Fund has a fund balance of $(3,585,195), which was an increase of $1,496,410 from the prior fiscal year. The increase is primarily due to annual repayment of interfund promissory note.

General Fund Budgetary Highlights
See Notes to Financial Statements
9 City of Palmdale Housing Authority
Management Discussion and Analysis
Differences between the original budget and the final amended budget resulted in an increase of appropriations by $5,780 as the result of anticipated increases in expenditures for contract and professional services throughout the budget. Differences between the final amended budget and actual resulted in a $44,104 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 $56,827 decrease in appropriations due to the Asset Management Fees that were received in the subsequent fiscal year.

Capital Asset and Debt Administration
Capital Assets. The Authority’s investment in capital assets for its governmental activities as of June 30, 2022, amounts to $26,311,950 ( net of accumulated depreciation). This investment in capital assets includes land, buildings and structures, and infrastructure. A $754,986 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 $52,237 and no disposals in the current year.

Housing Authority's Capital Assets
(Net of Depreciation)
Governmental
Activities
Governmental
Activities
2022 2021
Land $ 11,962,311 $ 11,962,311
Buildings & Structures 7,096,408 7,268,447
Improvements Other than Buildings 524,953 565,694
Infrastructure 6,728,278 7,270,484
Total $ 26,311,950 $ 27,066,936
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 $-. 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
2022 2021
2015 Multifamily Housing Revenue bonds $ - $ 3,835,000
The Authority’s total long-term liability was $-, 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 Palm dale Housing Authority, Office of the Director of Finance, 38300 Sierra Highway, Suite D, Palmdale, California, 93550.

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

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental
Activities
Assets
Cash $ 2,887,076
Investments 12,498,356
Accounts Receivable 389,012
Interest receivable 4,790,734
Due from other governmental units 5,159,777
Notes and liens 24,846,208
Deposits and prepaids 9,670
Land held for development 2,070,652
Restricted assets:

Cash and Investments 4,457,606
Capital assets:

Not being depreciated:

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

Buildings and structures 7,096,408
Improvements other than buildings 524,953
Infrastructure 6,728,278
Total assets 83,421,041
Deferred outflows of resources
Pension related amounts 126,691
Liabilities
Accounts payable 884,347
Accrued interest payable 14,913
Due to City 12,509
Deposits 179,778
Accrued salaries and employee benefits 98
Unearned Revenue 3,906,000
Total current liabilities 4,997,645
Noncurrent liabilities:

Due within one year 554,450
Due In more than one year 3,663,499
Net pension liability 603,083
Total noncurrent liabilities 4,821,032
Total liabilities 9,818,677
Deferred inflows of resources
Pension related amounts 310,373
Net Position
Net investment in capital assets 22,920,723
Restricted
Community development 50,275,910
Unrestricted 222,049
Total net position $ 73,418,682
See Notes to Financial Statements
13 City of Palmdale Housing Authority

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Program Revenues Total
Expenses
Charges for
Services
Operating
Grants and
Contributions
Net (Expense)
Revenues and
Changes in Net
Position
Governmental activities:

Community development $ 7,108,573 $ 7,930,166 $ 582,754 $ 1,404,347 Interest on long-term debt 182,108 - - (182,108)
Total governmental activities $ 7,290,681 $ 7,930,166 $ 582,754 $ 1,222,239 General Revenue:

Unrestricted investment earnings/(loss) $ (354,414)
Other 1,537
Total general revenues (352,877)
Change in Net Position 869,362
Net Position - Beginning of Year 72,549,320
Net Position - End of Year $ 73,418,682
See Notes to Financial Statements
14 This page intentionally left blank
Governmental Fund Financial Statements
16 The General Fund is the Housing Authority’s primary operating fund and has been classified as 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 restricted to be used in accordance with California’s Housing Authorities Law. Revenues 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 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 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 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. 17 City of Palmdale Housing Authority
Balance Sheet
Governmental Funds
June 30, 2022
Special Revenue Funds
General Fund
Housing
Authority
Facilities Fund
HA Housing
Asset Fund
Total
Governmental
Funds
Assets:

Cash $ - $ 2,887,076 $ - $ 2,887,076
Investments 215,927 1,410,407 10,872,022 12,498,356
Receivables:

Accounts and interest receivable 30,733 197,677 4,951,336 5,179,746 Advances due from other funds - - 1,186,001 1,186,001
Deposits and prepaid - 9,670 - 9,670
Interfund promissory note - - 7,385,000 7,385,000
Notes and Liens - - 24,846,208 24,846,208
Advances due from fiduciary funds - - 5,159,777 5,159,777 Restricted Assets:

Investments - - 3,018,542 3,018,542
Cash - 1,439,064 - 1,439,064
Land held for development - - 2,070,652 2,070,652
Total assets $ 246,660 $ 5,943,894 $ 59,489,538 $ 65,680,092 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable $ 3,107 $ 779,310 $ 102,028 $ 884,445
Deposits 1,000 178,778 - 179,778
Unearned revenue - - 3,906,000 3,906,000
Advances due to other funds - 1,186,001 - 1,186,001
Due to City - - 12,509 12,509
Interfund promissory note - 7,385,000 - 7,385,000
Total liabilities 4,107 9,529,089 4,020,537 13,553,733
Deferred Inflows of Resources
Unavailable revenue 20,508 - 4,910,515 4,931,023
Fund Balances
Restricted - - 50,558,486 50,558,486
Unassigned 222,045 (3,585,195) - (3,363,150)
Total fund balances (Deficit) 222,045 (3,585,195) 50,558,486 47,195,336 Total liabilities, deferred inflows of resources and fund balances $ 246,660 $ 5,943,894 $ 59,489,538 $ 65,680,092 See Notes to Financial Statements
18 City of Palmdale Housing Authority
Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Position
June 30, 2022
Total Fund Balances - Total Governmental Funds (page 15) $ 47,195,336 Amounts reported for governmental activities in the Statement of Net Position (page 10) 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 37,852,022
Less accumulated amortization and depreciation (11,540,072) 26,311,950 Accounts receivable not available to pay for current-period expenditures are reported as deferred inflows of resources in the funds. 4,931,023
Deferred outflows related to pensions are not reported in the Governmental Fund Balance Sheet.

Deferred outflows related to pensions 126,691
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 (14,913)
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 (77,949)
Net pension liability (603,083)
Bonds Payable (3,740,000)
Claims payable (400,000) (4,821,032)
Deferred Inflows related to pensions and OPEB benefits are deferred inflows of resources and are not reported in the Governmental Funds Balance Sheet. (310,373) Net Position of Governmental Activities (page 10) $ 73,418,682 See Notes to Financial Statements
19 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2022
Special Revenue Funds
General Fund
Housing
Authority
Facilities Fund
HA Housing
Asset Fund
Total
Governmental
Funds
Revenues:

Charges for current services $ 40,405 $ - $ 264,246 $ 304,651 Use of property - 7,625,664 - 7,625,664
Interest 1,936 13,597 96,824 112,357
Net increase (decrease) in fair value of investments (8,068) (52,852) (405,852) (466,772) Other revenue - - 1,537 1,537
Total revenues 34,273 7,586,409 (43,245) 7,577,437
Expenditures:

Current:

Community development 28,576 5,114,833 527,064 5,670,473 Capital Outlay - 331,026 - 331,026
Debt service:

Principal - 95,000 - 95,000
Interest - 182,395 - 182,395
Total expenditures 28,576 5,723,254 527,064 6,278,894
Excess (deficiency) of revenues over (under)
expenditures 5,697 1,863,155 (570,309) 1,298,543
Other Financing Sources (Uses)
Transfers In - - 366,744 366,744
Transfers Out - (366,745) - (366,745)
Transfers to City's General Fund - - (55,113) (55,113)
Total other financing sources (uses) - (366,745) 311,631 (55,114) Net Change in Fund Balances 5,697 1,496,410 (258,678) 1,243,429 Fund Balances (Deficit) - Beginning of Year 216,348 (5,081,605) 50,817,164 45,951,907 Fund Balances (Deficit) - End of Year $ 222,045 $ (3,585,195) $ 50,558,486 $ 47,195,336 See Notes to Financial Statements
20 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, 2022
Net Change in Fund Balances - Total Governmental Funds (page 17) $ 1,243,429 Amounts reported for governmental activities in the Statement of Activities and Changes in Net Position (page 11) 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 52,237
Less Depreciation Expense (807,220) (754,983)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 582,602
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 95,000
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 15,940
Self insurance liability claims (400,000)
Accrued interest on debt 287
Pension expense 87,087 (296,686)
Net change in net position - governmental activities (page 11) $ 869,362 See Notes to Financial Statements
21 This page intentionally left blank
Budgetary Comparison Statements
23 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund
Year Ended June 30, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 90,600 $ 90,600 $ 40,405 $ (50,195) Interest 500 500 1,936 1,436
Net increase (decrease) in fair value of investments - - (8,068) (8,068) Total revenues 91,100 91,100 34,273 (56,827)
Expenditures:

Current:

Community development 66,900 72,680 28,576 44,104
Total expenditures 66,900 72,680 28,576 44,104
Excess (deficiency) of revenues over (under) expenditures 24,200 18,420 5,697 (12,723) Net Changes in Fund Balance 24,200 18,420 5,697 (12,723) Fund Balance (Deficit) - Beginning of Year 216,348 216,348 216,348 - Fund Balance (Deficit) - End of Year $ 240,548 $ 234,768 $ 222,045 $ (12,723) See Notes to Financial Statements
24 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, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 170,000 $ 286,440 $ 264,246 $ (22,194) Interest 750,300 750,300 96,824 (653,476)
Net increase (decrease) in fair value of investments - - (405,852) (405,852) Other Revenue 251,200 251,350 1,537 (249,813)
Total revenues 1,171,500 1,288,090 (43,245) (1,331,335) Expenditures:

Current:

Community development 4,594,600 9,323,570 527,064 8,796,506 Total expenditures 4,594,600 9,323,570 527,064 8,796,506 Excess (deficiency) of revenues over (under) expenditures (3,423,100) (8,035,480) (570,309) 7,465,171 Other Financing Sources (Uses):

Transfers In 632,200 631,200 366,744 (264,456)
Transfers to City's General Fund (55,100) (55,100) (55,113) (13) Total other financing sources (uses) 577,100 576,100 311,631 (264,469) Net Changes in Fund Balance (2,846,000) (7,459,380) (258,678) 7,200,702 Fund Balance (Deficit) - Beginning of Year 50,817,164 50,817,164 50,817,164 - Fund Balance (Deficit) - End of Year $ 47,971,164 $ 43,357,784 $ 50,558,486 $ 7,200,702 See Notes to Financial Statements
25 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, 2022
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Use of property $ 3,278,400 $ 3,618,240 $ 7,625,664 $ 4,007,424 Interest 4,000 4,000 13,597 9,597
Net increase (decrease) in fair value of investments - - (52,852) (52,852) Total revenues 3,282,400 3,622,240 7,586,409 3,964,169
Expenditures:

Current:

Community development 5,301,400 5,215,020 5,114,833 100,187 Capital Outlay 20,000 15,000 331,026 (316,026)
Debt service:

Principal 8,100 9,500 95,000 (85,500)
Interest 15,500 17,100 182,395 (165,295)
Total expenditures 5,345,000 5,256,620 5,723,254 (466,634) Excess (deficiency) of Revenues: Over (Under) Expenditures (2,062,600) (1,634,380) 1,863,155 3,497,535
Other Financing Sources (Uses):

HA Facilities Fund to Housing Auth Housing Asset Fund (271,700) (271,700) (366,745) (95,045) Total other financing sources (uses) (271,700) (271,700) (366,745) (95,045) Net Changes in Fund Balance (2,334,300) (1,906,080) 1,496,410 3,402,490 Fund Balance (Deficit) - Beginning of Year (5,081,605) (5,081,605) (5,081,605) - Fund Balance (Deficit) - End of Year $ (7,415,905) $ (6,987,685) $ (3,585,195) $ 3,402,490 See Notes to Financial Statements
26 This page intentionally left blank
City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2022
(1) Summary of Significant Accounting Policies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 A. Description of the Reporting Entity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 C. Budgets and Budgetary Accounting................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 D. Cash and Investments ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 E. Land Held for Resale................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 F. Capital Assets................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 G. Deferred Outflows/Inflows of Resources................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 H. Compensated Absences................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 I. Pensions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 J. Fund Equity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 K. Deficit Fund Equity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 L. Use of Estimates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 M. Implemented Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 (2) Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 A. Investments Authorized by the California Government Code and the Authority's Investment Policy................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 B. Disclosures Relating to Interest Rate Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 C. Disclosures Relating to Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 D. Custodial Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 E. Disclosures relating to Fair Value of Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 (3) Notes Receivable................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 (4) Fund Balance Classification................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 (5) Interfund Transfers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 (6) Interfund Due To/From and Advances Due To/From................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 A. Advances and Due To/From Other Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 B. Interfund Promissory Note Between the Housing Facilities Fund and the Housing Asset Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 C. Advances Due from Successor Agency at June 30, ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ (7) Capital Assets................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................37 (8) Deposits and Prepaids................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 (9) Due to City................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 (10) Risk Management and Litigation Liability................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 (11) Unearned Revenue/Unavailable Revenues................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 (12) Public Employee's Retirement System (PERS) Pension Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................39 A. General Information about the Pension Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................39 B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................40 (13) Long-Term Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................42 A. Revenue Bonds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................42 B. Changes in Long-Term Liabilities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................43 (14) Contingencies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................43 (15) New Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................43 28 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2022
(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 29 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2022
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 18.

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, to the extent the amounts are in the general fund, since they do not constitute expenditures or liabilities and are added to the subsequent year’s adopted appropriations. In other funds, encumbrances would be part of restricted fund balance.

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 Director of Finance 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
30 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2022
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 assets 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 assets 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.