Agenda packet, first session — Palmdale City Council, February 21, 2024 (part 2 of 3)

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
(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 Annual Financial Statements are intended to reflect the financial position, results of operation and net position of the Housing Authority of the City of Palmdale. They do not present fairly the financial position and results of operations of the City of Palmdale, California, in conformity with accounting principles generally accepted in the United States of America. 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, deferred inflows/outflows, 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 30 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
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 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 2022- 066, 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 $2,710,024 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
31 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Asset Years
Improvements other than buildings 5-10
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.

Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

J. Fund Equity
In the Fund Financial Statements, governmental funds may classify fund balances into five components whereby each component identifies the extent to which the Authority is bound to observe constraints imposed upon the use of the resources reported in governmental funds. The five components of the fund balance are as follows:

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

Restricted: Resources that are subject to externally enforceable legal restrictions; these restrictions would be either 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments or 2) imposed by law through constitutional provisions or enabling legislation. 32 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Committed: Revenues that are constrained to specific purposes by a formal action of the Authority’s Board, which constitutes the most binding constraint such as an ordinance. The constraint remains binding unless removed in the same formal manner by the Authority’s Board. The Authority’s Board action to commit fund balance must occur within the fiscal reporting period while the amount committed may be determined subsequently.

Assigned: Resources that are constrained by the Authority’s intent to be used for specific purposes, but that neither restricted nor committed. This policy delegates to the Finance Manager the authority to assign unrestricted fund balance amounts where the Authority’s intent is for those amounts to be used for specific purposes. This delegation of authority is for the sole purpose of reporting these amounts in the annual financial statements.

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

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

K. Deficit Fund Equity
The following funds had a deficit fund balance at June 30, 2023 in the amount indicated:

Major Special Revenue Funds:

Housing Facilities Fund $ (2,462,215)
Management anticipates that these deficits will be resolved in future years as additional operating revenues become available. It is anticipated occupancy levels at the Mobile Home Parks will continue to remain high and consistent and continue to reduce the deficit in the Housing Authority Mobile Home Park Fund to positive levels once the Mobile Home Park loan is paid off.

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

M. Implemented Accounting Pronouncements
The Governmental Accounting Standards Board (GASB) releases new accounting and financial reporting standards which may have a significant impact on the Authority’s financial reporting process. New standards applicable to the year ending June 30, 2023 are as follows:

GASB Statement No. 91 – Conduit Debt Obligations. T he objective of the Statement is to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice. The Statement is effective for reporting periods beginning after December 15, 2021. The Authority has determined that this statement does not apply.

GASB Statement No. 94 – Public-Private and Public-Public Partnerships (PPPs) and Availability Payment Arrangements (APAs).

The objective of the Statement is to establish standards of accounting and financial reporting for PPPs and APAs. The Statement requires recognition of certain assets, receivables, deferred inflows of revenue (transferor) and liabilities and deferred outflows of resources (operators) for PPP arrangements. This Statement is effective for reporting periods beginning after June 15, 2022. T he Authority has determined that this statement does not apply.

GASB Statement No. 96 – Subscription Based Information Technology Arrangements (SBITAs). The implementation of this standard establishes that a SBITA results in a right to use subscription IT asset - an intangible asset - and a corresponding liability. The standard provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA. The Statement requires recognition of certain SBITA assets and liabilities for SBITAs that previously were recognized as outflows of resources based on the payment provisions of the contract. This Statement is effective for reporting periods beginning after June 15, 33 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
2022. The Authority has determined that this statement does not apply.

GASB Statement No. 99 – Omnibus 2022. The objective of this Statement is to enhance comparability in account and financial reporting and to improve consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statement, and (2) accounting and financial reporting for financial guarantees. The requirements of this Statement related to the extension the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenue by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance. The requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022. The Authority has determined that this statement does not apply.
(2) Cash and Investments
Cash and investments as of June 30, 2023 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash $ 2,660,161
Investments 10,527,248
Restricted cash and investments 4,543,999
Total cash and investments $ 17,731,408
Cash and investments as of June 30, 2023 consist of the following:

Cash held by third party $ 2,660,161
Cash and investments with City of Palmdale Investment Pool 10,527,248 Investments held by Trustee 4,543,999
Total cash and investments $ 17,731,408
Cash and investments of the Authority are pooled with funds of the City for deposit and investment purposes, except for funds required to be held by third parties for the operations of the mobile home parks and apartment facilities or to be held by outside fiscal agents.

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

Detailed information concerning the City’s pooled cash and investments can be found in the City’s Annual Comprehensive Financial Report for the year ended June 30, 2023.

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

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Authorized
Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio*
Maximum
Investment
in One Issuer**
Negotiable Certificates of Deposit 5 years 30% 15%
Overnight Bank Investment Pool N/A 10% None
Mutual Funds N/A 15% 10%
Local Agency Investment Fund (LAIF) N/A None $75,000,000 California Asset Management Program (CAMP) N/A None $75,000,000 *Excluding amounts held by bond trustees that are not subject to California Government Code Restrictions **Per account
The City’s Investment Policy also authorizes Demand Deposits of up to $2,000,000 (and $2,500,000 in the aggregate) with Bank of America or Wells Fargo Bank.

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

Information about the sensitivity of the fair values of the Authority'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 Authority's Investments by Maturity.

Remaining Maturity in Months
Investment Type: Total
12 Months or
Less 13-24 Months 25-60 Months
Held by bond trustees:

Local Agency Investment Pool $ 10,527,248 $ 10,527,248 $ - $ - Money Market Funds 4,543,999 4,543,999 - -
Total $ 15,071,247 $ 15,071,247 $ - $ -
C. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below i s the minimum rating required by (where applicable) the California Government Code, the City of Palmdale’s Investment Policy, or the Authority’s debt agreements, and the actual rating as of year-end for each investment type.

Investment Type: Total
Minimum
Legal
Rating
Not Required
To
Be Rated AAA/Aaa*
Cash and Investments with City of
Palmdale Investment Pool $ 10,527,248 N/A $ 10,527,248 $ - Held by bond trustees:

Money market funds 4,543,999 A - 4,543,999
Total $ 15,071,247 $ 10,527,248 $ 4,543,999
35 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
D. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.

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

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

Housing Authority deposits with financial institutions in excess of federal depository insurance limits of $250,000 were held in collateralized accounts held with the City of Palmdale. As of June 30, 2023, City investments were held by the safekeeping department of the broker-dealer (counterparty) used by the City of Palmdale to buy the securities in the name of the City.

E. Disclosures relating to Fair Value of Investments
The Authority categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

Deposits and withdrawals in governmental investment pools, such as the City’s Investment Pool are made on the basis of $1 and not fair value. Accordingly, the measurement of fair value of these types of investments is based on an uncategorized input not defined as a Level 1, Level 2, or Level 3 input. Money market investments are carried at amortized cost.The fair value of the Authority’s investment in LAIF pool is reported in the accompanying financial statements at amounts based upon the Authority’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). (3) Notes Receivable
Notes Receivable in the amount of $27,911,166, are reported on the governmental fund financial statements and the government-wide financial statements. The balances consist of Affordable Housing Project loans made through various grants for low t o moderate- income homeowners seeking to improve their homes. As the Notes are repaid, proceeds are used to continue the Affordable Housing Programs.
(4) Fund Balance Classification
The Governmental Fund Balances at June 30, 2023 were classified as follows:

HA
General
Fund
Special
Revenue Fund
HA Facilities
Fund
Special
Revenue Fund
Housing
Asset Fund
Total
Governmental
Funds
Restricted:

Low and moderate income housing $ - $ - $ 49,686,425 $ 49,686,425 Unassigned Fund Balance 1,456,441 (2,462,215) - (1,005,774) Total fund balance (deficit) $ 1,456,441 $ (2,462,215) $ 49,686,425 $ 48,680,651 (5) Interfund Transfers
Transfers between funds for the year ended June 30, 2023, consisted of the following:

Transfer to: Transfer From: Amount
Housing Asset Fund Housing Facilities Fund $ (322,554)
36 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Transfer to: Transfer From: Amount
Total Interfund Transfers $ (322,554)
City of Palmdale Housing Asset Fund $ 55,075
Total Transfers to City's General Fund $ 55,075
The transfers resulted from Promissory Note principal and interest that was paid by Housing Asset Fund and reimbursed by the Housing Facilities Fund in the amount of $(322,554).
(6) Interfund Due To/From and Advances Due To/From
A. Advances and Due To/From Other Funds
The advances due to/from are reported on the Governmental Fund Balance Sheet of the Housing Asset Fund and Housing Facilities Fund as a result of the dissolution of the former Community Redevelopment Agency of the City of Palmdale resulting from the acquisition of three mobile home parks purchased during fiscal year 2002-2003. Upon acquisition, the Authority assumed the prior park owner’s liabilities which were payable to the former CRA Low and Moderate Income Housing fund and City under the terms of an operating agreement. The operating agreement establishes priorities for the use of revenues from operation of the parks and provides for repayment of the advances from net income once expenses, debt service, operating, and capital reserve requirements are met. In the interim, additional liabilities and program/project management fees will continue to accrue to the long-term advances due the Authority - Housing Asset Fund if there are shortfalls in expected payment. These advances will be repaid when net income is sufficient under the operating agreement. As of June 30, 2023, the balance of these liabilities was $1,186,001.

Advances Due To/From Other Funds for the year ended June 30, 2023 were as follows:

Payable To: Payable From: Amount
Housing Asset Fund Housing Authority Facilities $ 1,186,001 Advances Total Due From/To Other Funds $ 1,186,001
B. Interfund Promissory Note Between the Housing Facilities Fund and the Housing Asset Fund The Authority and the City of Palmdale former Community Redevelopment Agency (Agency) previously entered into loan and repayment agreements whereby the Agency loaned the proceeds of a 1997 Series A (refunded by 2005 Series E) and Series B (refunded by 2003 Series C) Tax Allocation Bond debt issuances to the Authority.

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

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

Repayment agreements between the former Community Redevelopment Agency and the Authority require the Authority to pay the former Community Redevelopment Agency under the same terms as the Bonds were issued. The 2003 Series C Bonds and 2005 Series E Bonds were secured by Project Area No. 2A’s Housing Set-Aside revenue and certain related reimbursements provided for in the Affordable Housing Agreement. The Housing Authority was to use operating income from the Parks to repay the former Agency, which was supposed to in turn, pay principal and interest with respect to the 2003 Series C Bonds and 2005 Series E Bonds as they 37 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
become due. Under the 2003 amended Indenture, the Bonds were to be paid and secured by the tax increment of the former Community Redevelopment Agency and principal and interest was no longer required to be paid from the Authority.

As the result of the dissolution of the former Community Redevelopment Agency and the Authority assuming the duties of the former Community Redevelopment Housing Development Fund, the agreement will be maintained by the Housing Asset Fund which is now classified as an Interfund Promissory Note effective February 1, 2012. All proceeds from repayment of the note must be used in accordance with applicable housing related provisions of Community Redevelopment Law. During FY 2022-23, the Boulder Mobile Home parks paid $1,031,667 of principal and $323,471 interest for a total $1,355,138 to the Housing Asset Fund. The balance of the Note as of June 30, 2023 is $6,353,333. The remaining debt service schedule below uses a blended interest rate ranging from 3.7% to

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

Year Ending Principal Interest Total
2024 $ 1,075,000 $ 277,990 $ 1,352,990
2025 1,123,333 230,356 1,353,689
2026 1,170,000 180,331 1,350,331
2027 1,221,667 128,019 1,349,686
2028 1,313,333 73,310 1,386,643
2029-2030 450,000 64,125 514,125
Total $ 6,353,333 $ 954,131 $ 7,307,464
C. Advances Due from Successor Agency at June 30, 2023
Payable To: Payable From: Amount
Housing Asset Fund City Of Palmdale Successor Agency $ 4,909,777 In fiscal years 2004-2005 and 2005-2006, the state required the former Community Redevelopment Agency (CRA) to shift tax increment of $1,862,827 to the Education Revenue Augmentation Fund (ERAF). To assist in funding this shift, the former CRA Housing Development fund advanced $355,538 and $1,507,289 (50% of the total requirements) to the former CRA Project Area No. 1 and 2A Debt Service funds, respectively.

In 2009-2010, the State required the former Community Redevelopment Agency (CRA) to shift tax increment of $11,605,102 to the Supplemental Education Revenue Augmentation Fund (SERAF). To assist in funding this shift, the former CRA Housing Development fund advanced $2,533,394 and $9,071,708 (100% of the total requirement) to the former CRA Project Area No. 1 and 2A Debt Service Fund, respectively.

In fiscal year 2010-11, the State required the former Community Redevelopment Agency (CRA) to shift tax increment of $2,389,286 to the Supplemental Education Revenue Augmentation Fund (SERAF). To assist in funding this shift, the former CRA Housing Development fund advanced $521,581 and $1,867,705 (100% of the total requirement) to the former CRA Project Area No. 1 and 2ADebt Service funds, respectively.

The Successor Agency Private Trust Fund was formed for the purpose of holding the assets and liabilities of the former Community Redevelopment Agency. All assets and liabilities were transferred to the Successor Agency Private Purpose Trust Fund which is used to account for assets and liabilities held by the City for the former Community Redevelopment Agency. The Advances Due to the Authority described above are approved enforceable obligations in existence at the date of dissolution and will be repaid by the Successor Agency from future property tax revenues. The repayment amount cannot exceed one-half of the increase between the amount distributed to the taxing entities and the 2012-13 base year (or residuals). During FY 2022-23, the Authority received $250,000 from the Successor Agency during the Recognized Obligations Payment Schedule (ROPS) period of July-December 2023 or ROPS 22-23A.
(7) Capital Assets
Capital Assets of the Housing Authority for the year ended June 30, 2023 consisted of the following:

Beginning Balance Additions Deletions Ending Balance
38 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Beginning Balance Additions Deletions Ending Balance
Capital assets not being depreciated:

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

Buildings and structures 8,601,907 - - 8,601,907
Improvements other than buildings 955,892 130,071 - 1,085,963 Infrastructure 16,331,912 - - 16,331,912
Total capital assets being depreciated 25,889,711 130,071 - 26,019,782 Less: accumulated depreciation for:

Buildings and Improvements 1,505,499 172,038 - 1,677,537 Improvements other than buildings 430,939 102,093 - 533,032 Infrastructure 9,603,634 542,205 - 10,145,839
Total accumulated depreciation 11,540,072 816,336 - 12,356,408 Total capital assets being depreciated, net 14,349,639 (686,265) - 13,663,374 Governmental activities capital assets, net $ 26,311,950 $ (686,265) $ - $ 25,625,685 For the year ended June 30, 2023, depreciation expense on capital assets was charged to the Community Development function in the amount of $816,336.
(8) Deposits and Prepaids
For the year ended June 30, 2023, deposits in the amount of $1,170 are reported on the governmental fund statements and government- wide statements and consist of $1,170 from contract services. (9) Due to City
2018 Habitat for Heroes Development Loan
A Cooperative Agreement, dated as of September 3, 2014, was entered into by and between the City of Palmdale and the Housing Authority of the City of Palmdale. The City of Palmdale is the owner of certain real property located at the northeast corner of Division Street and Avenue R (“Property”). Habitat for Humanity of San Fernando/Santa Clarita, Inc., a California nonprofit public benefit corporation (the “Developer”) proposes to develop on the Property 50 units of single-family housing to be sold at affordable cost to income qualified military veterans (“Project”) with financial assistance from the Authority.

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

To implement the Affordable Housing Agreement and facilitate the Project, the Authority agrees to pay the City the fair market value of the Property at $25,000 per acre (“Purchase Price”). The Authority agrees to pay the Purchase Price and the Project Fees to the City in ten equal installments at zero interest, commencing on a date that is one year after the closing of the Authority’s sale of the Property to Developer. As a condition of the City’s sale of Property to the Authority, the Authority executed a promissory note with the City, in a form approved by the City, setting forth the payment terms in this Agreement. The amount due will be in an original principal amount equal to the Purchase Price of the Property plus the final amount of the Project Fees determined by the City. During the Fiscal Year 2022-23, the City incurred costs in the amount of $12,509. (10) Risk Management and Litigation Liability
39 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
The Authority is covered under the City of Palmdale’s risk management program for general liability claims, automobile insurance and health plan.
(11) Unearned Revenue/Unavailable Revenues
Unearned Revenue - Governmental funds report unearned revenue on the balance sheet in connection with resources that have been received, but not yet earned. Accordingly, this type of unearned revenue is also reported on the Statement of Net Position. At the end of the current fiscal year, the components of unearned revenue were as follows:

Housing Asset Fund: Lease Revenues Received in Advance $ 3,880,000 Total Housing Authority Unearned Revenue $ 3,880,000
Unavailable Revenue - Governmental funds also report deferred inflows of resources on the balance sheet in connection with resources that have been earned but are not yet available to finance expenditures of the current fiscal period. This type of deferred revenue is unique to governmental funds since it is tied to the modified accrual basis of accounting. Accordingly, these unavailable revenues are not reported on the Statement of Net Position. At the end of the current fiscal year, the components of unavailable revenues result from accrued interest revenue not received with the 60-day period were as follows:

Housing Asset Fund $ 5,355,662
(12) Public Employee's Retirement System (PERS) Pension Plan A. General Information about the Pension Plan
The Authority participates in the City of Palmdale’s Miscellaneous pension plan by sharing the costs related to pensions with the City for eligible employees. All plan information described below pertains to the overall plan for the City.

Plan Description -All qualified permanent probationary employees are eligible to participate in the City of Palmdale’s Miscellaneous Plan, an agent multiple employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website at: http://www.calpers.ca.gov/index.jap?bc=/about/forms-pubs/calpers-reports/actuarial- reports/home.xml Benefits Provided - CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan 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 Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:

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

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

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

2.0 Percent @ Age 62
Benefit vesting schedule 5 years of service 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Monthly for life 40 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Miscellaneous Plan
Hire Date
On or Prior to
April 10, 2011

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

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

2.0 Percent @ Age 62
Retirement age Age 50 to 55 Age 50 to 63 Age 50 to 67
Monthly benefits, as a % of annual salary 2.0 to 2.7 percent 1.092 to 2.418 percent 1.0 to 2.5 percent Required employee contribution rates 8.0 percent 7.0 percent 7.75 percent Required employer contribution rates 11.06 percent 11.06 percent 11.06 percent Contributions - Section 20814(c) of the California Public Employees’ Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees.

For the year ended June 30, 2023, the Authority’s proportionate share of the City’s contribution to the Plan was $129,378.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2023, the Authority reported a liability of $1,172,453 for its proportionate share of the City’s net pension liability.

The net pension liability of the Plan was measured as of June 30, 2022 and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022. The Authority’s proportion of the City’s net pension liability was based on the Authority’s Fiscal Year 2022 actual contributions to the City’s pension plan relative to the total contribution of the City as a whole.

At June 30, 2022, the Authority’s proportion was 2.00% which is flat to its proportion measured as of June 30, 2021.

For the year ended June 30, 2023, the Authority’s recognized pension expense was $75,688. At June 30, 2023, the Authority reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Contributions made subsequent to the measurement date $ 129,378 $ - Change of assumptions 89,543 -
Difference between expected and actual experience - 5,571 Net difference between projected and actual earnings on plan investments 150,900 - Total $ 369,821 $ 5,571
The amount of $129,378 reported as deferred outflows of resources related to pensions resulting from the Authority’s contributions to the City’s plan subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. 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,
2024 $ 62,030
2025 59,526
2026 17,600
2027 95,716
$ 234,872
41 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Actuarial Assumptions - The Authority’s proportion of the City’s total pension liability was derived from the June 30, 2021 valuation being rolled forward to determine the June 30, 2022 total pension liability, based on the following actuarial methods and assumptions:

Actuarial Valuation Date June 30, 2021
Actuarial Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation Rate 2.50%
Investment Rate of Return 7.00%
Projected Salary Increase Rate 3.2% - 12.2% (1)
Mortality Society of Actuaries Scale BB (2)
(1) Depending on age, service and type of employment.
(2) The mortality table used was developed based on CalPERS' specific data.

The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For more details on this table, please refer to the 2017 experience study report.

The discount rate used to measure the total pension liability was 6.90 p ercent. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the contributions w ill be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to m ake all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

In determining the long-term expected 6.90 percent rate of return on pension plan investments, CalPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the pension funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to the account for assumed
The table below reflects long-term expected real rate of return by asset class. The rate of return w as calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

Asset Class
Target
Allocations
Real Return
Years 1 Thru 10*
Real Return
Years 11 and
Thereafter+**
Global Equity 46.30% 4.80% 5.98%
Fixed Income 23.50% 1.00% 2.62%
Real Assets 17.10% 3.75% 4.93%
Private Equity 11.60% 6.30% 7.23%
Inflation Assets 1.50% 0.77% 1.81%
Total 100%
* An Expected Inflation Rate of 2.30% was used for this period. ** An Expected Inflation Rate of 2.92% was used for this period. 42 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
Discount Rate - The discount rate used to measure the total pension liability was 6.90 percent, a decrease from 7.15 percent the prior year. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. The tests revealed the assets would not run out. Therefore, the current 6.90 percent discount rate is appropriate, and the use of the municipal bond rate calculation is not deemed necessary. The long-term expected discount rate of 6.90 percent is applied to all plans in the Public Employees Retirement Fund. The cash flows used in the testing were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB 68 section.

Sensitivity of the Authority’s proportionate share of the City’s Net Pension Liability to Changes in the Discount Rate - The following table presents the Authority’s proportionate share of the City of Palmdale’s Miscellaneous Plan net pension liability as of the measurement date, calculated using the discount rate of 6.90 percent, as well as what the Authority’s proportionate share of the City’s net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.90 percent) or 1 percentage- point higher (7.90 percent) than the current rate.

Discount Rate
-1% 5.90
Current
Discount Rate

6.90 Discount Rate
+1% 7.90
Authority's proportionate share
of the City's Net Pension Liability $ 1,718,600 $ 1,172,453 $ 719,000 Pension Plan Fiduciary Net Position - Detailed information about the City’s collective net pension liability is available in the City separate issued Annual Comprehensive Financial Report (ACFR) or in the separately issued CalPERS financial report which can be obtained from the CalPERS website. The City’s ACFR may be obtained by contacting the City of Palmdale, Office of the Finance Manager, 38300 Sierra Highway, Suite D, Palmdale, California, 93550. Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial report which can be obtained from the CalPERS website. (13) Long-Term Debt
A. Revenue Bonds
2015 Multifamily Housing Revenue Bonds Payable ($4,235,000) - O n September 3, 2015, the Housing Authority of the City of Palmdale issued $4,235,000 of Multifamily Housing Revenue Bonds (2015 Bonds). The Authority did not apply for a rating on the bonds, and no such rating should be assumed based upon any other Authority or City rating that may be obtained. Interest on the 2015 Bonds is payable semi-annually on December 1 and June 1 at rates ranging from 2.625 percent to 5.25 percent per annum. Principal installments are payable June 1 of each year from 2017 to 2045.

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

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

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

The proceeds of the 2015 Bonds were used to finance the acquisition of the Impressions, La Quinta, Park Vista, and Summerwood Apartments (collectively, the “Housing Facilities”) all located within the City of Palmdale, to finance the costs to renovate portions of the Housing Facilities, pay costs related to the issuance of the bonds, and make a deposit to a Bond Reserve Account for the Bonds. 43 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
The 2015 Bonds are lim ited obligations of the Housing Authority of the City of Palmdale and are secured by a first pledge of all of the Net Revenues of the Housing Facilities and by the Trustee’s interest in a Deed of Trust for each of the Housing Facilities. Net Revenues are derived primarily from rents received by the Authority from the operation of the Housing Facilities, less the costs of the operation and maintenance of the Housing Facilities. The 2015 Bonds are payable solely from the Net Revenues and other assets pledged under the Indenture. The 2015 Bonds do not constitute a debt or liability of the City, the State, or any political subdivision thereof, other than the Authority to the limited extent of the pledge.

Failure by the Authority to pay debt service on the Bonds constitutes an event of default under the Indenture and the Trustee is permitted to pursue remedies at law or in equity to enforce the Authority's obligation to make such payments. The Trustee has no right to accelerate the total unpaid principal amount of the debt service on the Bonds by reason of the occurrence of an event of default under the Indenture. If there is a default under the Indenture, the primary remedy of the Trustee is to foreclose on the real and personal property security granted pursuant to the Deeds of Trust and related documents. All amounts collected upon foreclosure of the Housing Facilities pursuant to the Deeds of Trust, after payment of costs of foreclosure, will first be used to pay amounts owing under the Indenture, including the payment of the Bonds.

Year Ending Principal Interest Total
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 115,000 158,445 273,445
2029-2033 675,000 713,285 1,388,285
2034-2038 835,000 548,043 1,383,043
2039-2043 1,070,000 310,275 1,380,275
2044-2045 515,000 40,950 555,950
Totals $ 3,640,000 $ 2,449,195 $ 6,089,195
B. Changes in Long-Term Liabilities
Activity for the year ended June 30, 2023 were as follows:

Balance at
June 30,2022 Additions Retirements
Balance at
June 30,2023
Due Within
One Year
Compensated Absences Payable $ 77,949 $ 17,765 $ - $ 95,714 $ 51,898 2015 Multifamily Housing Revenue Bonds 3,740,000 - 100,000 3,640,000 100,000 Total Long Term Liabilities $ 3,817,949 $ 17,765 $ 100,000 $ 3,735,714 $ 151,898 (14) Contingencies
Obligations of the Successor Agency Private Purpose Trust Fund The former Community Redevelopment Agency of the City of Palmdale was dissolved on January 31, 2012. Obligations to be paid out to the Successor Agency Private Purpose Trust Fund are included in the Required Obligation Payment Schedules (ROPS) which are subject to approval by the State Department of Finance. All obligations of the Successor Agency have been approved by the State Department of Finance, however, are still subject to audit by the County Auditor-Controller and the State Controller. Additionally, obligations on a future ROPS may be denied even if it was not questioned from a preceding ROPS. (15) New Accounting Pronouncements
The 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. 99
44 City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
GASB 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 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. The Authority has not determined the effect on the financial statements.

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. The Authority has not determined the effect on the financial statements.

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. The Authority has not determined the effect on the financial statements. 45 Required Supplementary Information
46 This page intentionally left blank
Schedules of Required Supplementary Information
Schedule of the Authority's Proportionate Share of the City's Net Pension Liability Last Ten Years*
2015 2016 2017 2018 2019 2020 2021 2022 2023
Authority's proportion of the net pension liability %2.10 %1.96 %2.00 %2.00 %2.00 %2.00 %2.00 %2.00 %2.00 Authority's proportionate share of the net pension liability $ 728,131 $ 727,471 $ 824,554 $ 845,339 $ 864,469 $ 939,373 $ 1,030,590 $ 603,083 $ 1,172,453 Authority's Covered Payroll $ 262,490 $ 260,428 $ 251,017 $ 264,742 $ 295,946 $ 300,612 $ 328,991 $ 384,616 $ 422,481 Authority's proportionate share of the net pension liability as apercentage of its covered payroll 277.39% 279.34% 328.48% 319.31% 292.10% 312.49% 313.26% 156.80% 277.52% Plan fiduciary net postion as a percentage of the total pension liability 75.66% 75.86% 72.57% 74.09% 74.74% 74.00% 72.81% 84.67% 72.09% * - Fiscal year 2015 was the first year of implementation, thus only eight years are presented. 48 Schedules of Required Supplementary Information
Schedule of Contributions
Last Ten Years*
Contribution Years 2015 2016 2017 2018 2019 2020 2021 2022 2023 Contribution $ 81,237 $ 83,721 $ 103,146 $ 70,190 $ 82,346 $ 95,420 $ 105,686 $ 118,715 $ 129,378 Contributions in relation to the contractually required contribution (81,237) (83,721) (103,146) (70,190) (82,346) (95,420) (105,686) (118,715) (129,378) Covered payroll $ 260,428 $ 251,017 $ 264,742 $ 295,946 $ 300,612 $ 328,991 $ 351,345 $ 384,616 $ 422,481 Contributions as a percentage of covered payroll %31.19 %- %38.96 %23.72 %27.39 %29.00 %30.08 %30.87 %30.62 * - Fiscal year 2015 was the first year of implementation, thus only eight years are presented. 49 ANNUAL FINANCIAL REPORT
City of Palmdale, California
Palmdale Civic Authority
(A Component Unit of the City of Palmdale)
For the Fiscal Year Ended
June 30, 2023
This page intentionally left blank
Palmdale Civic Authority
Annual Financial Report
Table of Contents
For the Year Ended June 30, 2023
INDEPENDENT AUDITOR'S REPORT................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1

BASIC FINANCIAL STATEMENTS
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5 Statement of Revenues, Expenses and Changes in Fund Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6 Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................7 NOTES TO THE BASIC FINANCIAL STATEMENTS................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................9 This page intentionally left blank
1 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
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by the missing information.
2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 29, 2024, 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
January 29, 2024
3 City of Palmdale Civic Authority
Statement of Net Position
June 30, 2023
Assets:

Cash and Investments $ -
Interest Receivable -
Total Assets -
Liabilities
Total Liabilities -
Net Position:

Unrestricted -
Total Net Position $ -
The accompanying notes are an integral part of these financial statements. 5 City of Palmdale Civic Authority
Statement of Revenues, Expenses and
Changes in Fund Net Position
For the Year Ending June 30, 2023
Non-Operating Revenues:

Interest $ 12,033
Net increase (decrease) in fair value of investments (830) Total Non-Operating Revenues 11,203
Transfers Out 1,062,648
Total Non-Operating Expenses 1,062,648
Change in Net Position (1,051,445)
Net Position, Beginning of Year 1,051,445
Net Position, End of Year $ -
The accompanying notes are an integral part of these financial statements. 6 City of Palmdale Civic Authority
Statement of Cash Flows
For the Year Ending June 30, 2023
Cash flows from investing activities:

Interest on Investments $ 12,347
Net cash provided by investing activities 12,347
Cash flows from non-capital financing activities:

Transfers to other funds (1,062,648)
Net cash used for non-capital financing activities (1,062,648) Net decreases in Cash and Investments (1,050,301)
Cash and Investments - Beginning of Year 1,050,301
Cash and Investments - End of Year $ -
The accompanying notes are an integral part of these financial statements. 7

City of Palmdale Civic Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
Notes to the Financial Statements
(1) Summary of Significant Accounting Policies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 A. Description of the Reporting Entity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 B. Financial Statement Presentation, Basis of Accounting and Measurement Focus................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 C. Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 E. Use of Estimates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 F. Implemented Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 (2) Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 A. Investments Authorized by the California Government Code and the Authority's Investment Policy................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 B. Interest Rate Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 C. Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 D. Concentration of Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 E. Custodial Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Disclosures Relating to Fair Value of Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 (3) Dissolution................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 9 City of Palmdale Civic Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(1) Summary of Significant Accounting Policies
A. Description of the Reporting Entity
The Palmdale Civic Authority of the City of Palmdale, California (Authority) was originally created under a joint powers agreement between the City of Palmdale (City) and the former Community Redevelopment Agency of the City of Palmdale (Agency) on May 1, 1976 for the purpose of financing public improvements in the City. The Authority is financially accountable to the City and, accordingly, is a component unit of the City although it is a separate legal entity. Assets of the Authority, after providing for all debts and obligations, are to be transferred to the City upon final payment of the loans.

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

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

B. Financial Statement Presentation, Basis of Accounting and Measurement Focus The Authority’s basic financial statements are prepared in conformity with generally accepted accounting principles (GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for governmental accounting and financial reporting principles.

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

Proprietary funds distinguish operating revenues and expenses from those revenues and expenses that are non-operating.

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

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

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

C. 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. There are no cash or investments reported as of June 30, 2023.

The Authority categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. 10 City of Palmdale Civic Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(1) Summary of Significant Accounting Policies
D. Net Position
Net position is classified in the following category:

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

E. 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.

F. Implemented Accounting Pronouncements
GASB Statement No. 91 – Conduit Debt Obligations. The objective of the Statement is to provide a single method of reporting conduit debt obligations by issuer and eliminate diversity in practice. The Statement is effective for reporting periods beginning after December 15, 2021. The Authority has determined that this statement does not apply.

GASB Statement No. 94 – Public-Private and Public-Public Partnerships (PPPs) and Availability Payment Arrangements (APAs). The objective of the Statement is to establish standards of accounting and financial reporting for PPPs and APAs. The Statement requires recognition of certain assets, receivables, deferred inflows of revenue (transferor) and liabilities and deferred outflows of resources (operators) for PPP arrangements. This Statement is effective for reporting periods beginning after June 15, 2022. The Authority has determined that this statement does not apply.

GASB Statement No. 99 – Omnibus 2022. The objective of this Statem ent is to enhance comparability in account and financial reporting and to improve consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statement, and (2) accounting and financial reporting for financial guarantees. The requirements of this Statement related to the extension the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenue by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance.

The requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022. The Authority has determined that this statement does not apply. (2) Cash and Investments
Cash and investments of the Authority are pooled with funds of the City for deposit and investment purposes, except for funds required to be held by outside fiscal agents. Interest earned on pooled cash and investments is credited to the Authority based on the Authority’s month-end cash balance. In addition, restricted cash and investments were held by fiscal agents in accordance with bond indenture agreements. As of June 30, 2023, the Authority had no cash and investments.

Detailed information concerning the City's pooled cash and investments can be found in the City's Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2023. 11 City of Palmdale Civic Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(2) Cash and Investments
A. Investments Authorized by the California Government Code and the Authority's Investment Policy Investments of the Authority are pooled with funds of the City and therefore adhere to the City’s Investment Policy. The table following identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements with the Authority, rather than the general provisions of the California Government Code or the City’s investment policy.

Authorized
Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio*
Maximum
Investment
in One Issuer**
U.S. Treasury Obligation 5 years None None
U.S. Federal Agency Securities 5 years None None
Banker's Acceptance 180 days 40% 2%
Municipal Obligations 5 years 10% 15%
Medium Term Corporate Notes 3 years 10% None
Negotiable Certificates of Deposit 5 years 30% 15%
Overnight Bank Investment Pool N/A 10% None
Mutual Funds N/A 15% 10%
Local Agency Investment Fund (LAIF) N/A None $ 75,000,000 California Asset Management Program (CAMP) N/A None $ 75,000,000 *Excluding amounts held by bond trustees that are not subject to California Code Restrictions **Per account
The City’s investment policy also authorizes Demand Deposits of up to $2,000,000 (and $2,500,000 in the aggregate) with Bank of America or Wells Fargo Bank.

B. 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, Sections 4.1 and 4.2, provide guidelines for managing risk. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

C. Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

D. Concentration of Credit Risk
The investment policy of the Authority contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no Investments in any one issuer that represent 5% or more of total Authority’s investments.
12 City of Palmdale Civic Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(2) Cash and Investments
E. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or 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 Authority’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure Authority deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

Cash in City of Palmdale Investment Pool included City deposits with financial institutions in excess of federal depository insurance limits held in collateralized accounts, but not in the name of the City or the Authority. Detailed information concerning the City’s pooled cash and investments can be found in the City’s ACFR for the year ended June 30, 2023. The report can be obtained from the City's website at www.cityofpalmdale.org (3) Dissolution
On September 26, 2012, the Palmdale Financing Authority of the City of Palmdale, California (PFA) was created under a joint powers agreement between the City of Palmdale (City) and the Housing Authority of the City of Palmdale (Agency) for the purpose of financing public improvements in the City going forward. As a result of the creation of the PFA and given that all of Palmdale Civic Authority's (PCA) obligations oustanding have been fully paid, the City dissolved the PCA as of June 30, 2023.

The balance of $1,062,648 that remained in the bond reserve fund was transferred to the City for use on capital improvements. 13 ANNUAL FINANCIAL REPORT
City of Palmdale, California
Palmdale Financing Authority
(A Component Unit of the City of Palmdale)
For the Fiscal Year Ended
June 30, 2023
This page intentionally left blank
Palmdale Financing Authority
Annual Financial Report
Table of Contents
For the Year Ended June 30, 2023
INDEPENDENT AUDITOR'S REPORT................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1

BASIC FINANCIAL STATEMENTS
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5 Statement of Revenues, Expenses and
Changes in Fund Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6 Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................7 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8 This page intentionally left blank
1 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.

Required Supplementary Information
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America requires to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.
2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 29, 2024, 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
January 29, 2024
3 Palmdale Financing Authority
Statement of Net Position
June 30, 2023
Assets:

Cash and Cash Equivalents $ 124
Interest receivable 247,541
Receivable - City of Palmdale:

Current 2,890,246
Non-Current 24,544,140
Total Assets 27,682,051
Liabilities:

Accrued interest payable 247,539
Non-current Liabilities:

Due Within One Year 2,890,246
Due in more than one year 24,544,140
Total Liabilities 27,681,925
Net Position:

Unrestricted 2
Restricted 124
Total Net Position $ 126
See Accompanying Notes to the Financial Statements
5 Palmdale Financing Authority
Statement of Revenues, Expenses and
Changes in Fund Net Position
For the Fiscal Year Ending June 30, 2023
Non-Operating Revenues
Interest Income from Receivable $ 6,475,147
Interest 632
Total Non-Operating Revenues 6,475,779
Non-Operating Expenses
Principal 5,247,798
Interest 1,227,856
Total Non-Operating Expenses 6,475,654
Change in Net Position 125
Net Position, Beginning of Year 1
Net Position, End of Year $ 126
See Accompanying Notes to the Financial Statements
6 Palmdale Financing Authority
Statement of Cash Flows
For the Fiscal Year Ending June 30, 2023
Cash flows from non-capital financing activities:

Principal received from Receivable 2,623,899
Interest income from Receivable 1,042,443
Net cash used for non-capital financing activities 3,666,342 Cash flows from capital and related financing activities:

Principal paid on Long-term Debt (2,623,899)
Interest on Debt (1,042,952)
Net cash used for capital and related financing activities (3,666,851) Cash flows from investing activities:

Interest on Investments 632
Net cash used for investing activities 632
Net increases (decreases) in cash and cash equivalents 123 Cash and cash equivalents - Beginning of year $ 1
Cash and cash equivalents - End of year $ 124
See Accompanying Notes to the Financial Statements
7 This page intentionally left blank
Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(1) Summary of Significant Accounting Policies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 A. Description of the Reporting Entity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 B. Financial Statement Presentation, Basis of Accounting and Measurement Focus................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 C. Cash and Cash Equivalents................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 D. Long Term Obligations................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 E. Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................10 F. Use of Estimates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 G. Implemented Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 (2) Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 A. Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................11 B. Investments Authorized by Debt Agreements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 C. Interest Rate Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 D. Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 E. Custodial Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 F. Disclosures Relating to Fair Value of Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 (3) Long-Term Receivables................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Contract Receivable................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 (4) Long-Term Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................14 A. Lease Revenue Bonds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................14 B. Changes in Long-Term Liabilities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................17 (5) Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................17 9 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(1) Summary of Significant Accounting Policies
A. Description of the Reporting Entity
The Palmdale Financing Authority of the City of Palmdale, California (Authority) was originally created under a joint powers agreement between the City of Palmdale (City) and the Housing Authority of the City of Palmdale (Agency) on September 26, 2012 for the purpose of financing public improvements in the City. The Authority is financially accountable to the City and, accordingly, is a component unit of the City although it is a separate legal entity. Assets of the Authority, after providing for all debts and obligations, are to be transferred to the City upon final payment of the leases.

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

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

Proprietary funds distinguish operating revenues and expenses from those revenues and expenses that are non-operating.

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

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

C. Cash and Cash Equivalents
Cash includes amounts in demand deposits and petty cash on hand. Investments include amounts in 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, 2023. 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, 2023.

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

E. Net Position
Net position is classified in the following categories:
10 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(1) Summary of Significant Accounting Policies
E. Net Position
Unrestricted – This component of net position consists of resources that are available to the Authority.

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

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

G. Implemented Accounting Pronouncements
GASB Statement No. 91 – Conduit Debt Obligations. The objective of the Statement is to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice. The Statement is effective for reporting periods beginning after December 15, 2021. The Authority has determined that this statement does not apply.

GASB Statement No. 99 – Omnibus 2022. The objective of this Statem ent is to enhance comparability in account and financial reporting and to improve consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statement, and (2) accounting and financial reporting for financial guarantees. The requirements of this Statement related to the extension the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenue by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective upon issuance.

The requirements related to leases, PPPs, and SBITAs are effective for fiscal years beginning after June 15, 2022. The Authority has determined that this statement does not apply. (2) Cash and Investments
A. Cash and Investments
Cash and investments of the Authority are pooled with funds of the City for deposit and investment purposes, except for funds required to be held by outside fiscal agents. Interest earned on pooled cash and investments is credited to the Authority based on the Authority’s month-end cash balance. In addition, restricted cash and investments were held by fiscal agents in accordance with bond indenture agreements.
11 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(2) Cash and Investments
A. Cash and Investments
Cash and investments as of June 30, 2023 consist of the following:

Investments:

Held by Bond Trustees $ 124
Total Cash and Investments $ 124
Restricted cash and investments were held by a fiscal agent in accordance with the bond indenture agreement.

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 rather than the general provisions of the California Government Code. Revenue Bond indentures specify the types of securities in which proceeds may be invested as well as any related insurance, collateral, or minimum credit rating requirements. Although requirements may vary between debt issues, money market funds are all required to be investment grade. Guaranteed investment contracts are required to be acceptable to the municipal bond insurer. The fair value of investments is based on the valuation provided by trustee banks.

C. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, more sensitive it is to changes in market interest rates. Information about the sensitivity of the fair values of the Authority’s investments held by bond trustees to market interest rate fluctuations is provided by the following table that shows the distribution of the Authority’s investments by maturity:

Remaining Maturity (in months) Total 12 Months or Less
Investment Type:

Held by bond trustees:

Money market funds $ 124 $ 124
Total $ 124 $ 124
D. 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 the debt agreement, and the actual rating as of year- end for each investment type:

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

Money market funds $ 124 A $ 124
Total $ 124 $ 124
E. Custodial Credit Risk
12 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(2) Cash and Investments
E. Custodial Credit Risk
Custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code does not contain legal or policy requirements that would limit the exposure to custodial credit risk for investments.

F. Disclosures Relating to Fair Value of Investments
The Authority categorized its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

When quoted prices in active markets are available, investments are classified within Level 1. For investments classified within Level 2, the Authority’s custodians generally use asset market prices derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, broker-dealer quotes and matrix pricing. The Authority does not have any investments classified with Level 3. Money market investments are carried at amortized cost. The Authority does not have any investments classified with Level 1, 2 or 3.

Detailed information concerning the fair value measurement of the Authority’s pooled cash and investments can be found in the City’s ACFR for the year ended June 30, 2023. The report can be obtained from the City's website at www.cityofpalmdale.org. (3) Long-Term Receivables
A. Contract Receivable
The Authority and the City of Palmdale have entered into agreements that obligate the City to make payments to the Authority in consideration of the City’s use and enjoyment of certain property and improvements. Title in such property and improvements, transfers to the City by the end of the contract. Accordingly, the Palmdale Financing Authority has accounted for these transactions as financed purchases. The payment schedules and detailed descriptions of the facilities subject to the contracts are included in Note 4 A – Lease Revenue Bonds. Contract receivable activity for the year ended June 30, 2023, was as follows:

Balance at
July 1,2022 Additions Payments
Balance at
June 30,2023
Amount Due
Within One Year
Contract Receivable Related to:
2012 Lease Revenue Bonds $ 4,970,000 $ - $ 590,000 $ 4,380,000 $ 610,000 2017 Lease Revenue Bonds: 12,055,000 - 1,330,000 10,725,000 1,465,000 Plus: Deferred Inssuance Premium $17.4M 323,804 - 117,970 205,834 81,700 2021 Lease Revenue Bonds (private placement) 12,827,451 - 703,899 12,123,552 733,546 Total Contract Receivables $ 30,176,255 $ - $ 2,741,869 $ 27,434,386 $ 2,890,246 As of June 30, 2023, future payments for 2012 Lease Revenue Bonds are as follows:

Fiscal
Year 2012 Contract Receivable
Ended Principal Interest Total
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 690,000 49,436 739,436
13 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(3) Long-Term Receivables
A. Contract Receivable
Fiscal
Year 2012 Contract Receivable
Ended Principal Interest Total
2029-2030 1,145,000 38,856 1,183,856
$ 4,380,000 $ 493,033 $ 4,873,033
As of June 30, 2023, future payments for 2017 Lease Revenue Bonds are as follows:

Fiscal
Year 2017 Lease Receivable
Ended Principal Interest Total
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 920,000 241,288 1,161,288
2029-2033 6,075,000 562,606 6,637,606
$ 10,725,000 $ 2,186,046 $ 12,911,046
As of June 30, 2023, future payments for 2021 Certificates of Participation are as follows:

Year Ended Principal Interest Total
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 855,041 354,345 1,209,386
2029-2033 4,803,098 1,240,847 6,043,945
2034-2036 3,358,264 267,284 3,625,548
Totals $ 12,123,552 $ 3,590,842 $ 15,714,394
(4) Long-Term Debt
A. Lease Revenue Bonds
2012 Lease Revenue Bond Payable ($8,695,000) - O n December 19, 2012, the Authority issued $8,695,000 of Lease Refunding Revenue Bonds (2012 Bonds). Interest on the 2012 Bonds is payable semi-annually on March 1 and September 1 at rates ranging from 2.00% to 4.00% per annum. Principal installments are payable September 1 of each year from 2015 to 2029.

As of June 30, 2023, a total principal of $4,380,000 was outstanding.

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 contract payments.

The 2012 Bonds maturing on or after September 1, 2023, may be redeemed on or after September 1, 2022, from proceeds of 14 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(4) Long-Term Debt
A. Lease Revenue Bonds
optional prepayments made by the City, without premium.

The proceeds of the 2012 Bonds were used to refinance an existing contract 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 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 contract and the 2012 Bonds is vested in the Authority, for the benefit of the 2012 Bond holders, during the contract term.

Upon completion of the term 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 payments, at which time the agreement shall cease and terminate and title to the property shall vest in the City.

If the City defaults in performance of its obligations under the Agreement it shall be lawful for the Trustee, as assignee of the Authority, to exercise any and all remedies available pursuant to law or granted pursuant to the Agreement; provided, however, that notwithstanding anything to the contrary in the Agreement or in the Indenture, there shall be no right under any circumstances to accelerate the Payments or otherwise declare any Payments not then in default to be immediately due and payable or to terminate the Agreement or to cause the fee interest or the leasehold interest of the City in the Property to be sold, assigned or otherwise alienated. The City has consented to the Authority's repossession of the Property if an Event of Default shall occur and consented to the Authority's re-letting of the Property for the account of the City. Notwithstanding any re-entry by the Authority, the City shall continue to remain liable for the Payments and /or damages for breach of the Agreement and the performance of all conditions contained in the Agreement. The City shall remain liable for all the 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 Payments to the end of the Term o f the Agreement, but said Payments and /or deficiency shall be payable only at the same time and in the same manner as provided for the payment of Payments, notwithstanding such entry or re-entry by the Authority or any suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property or the exercise of any other remedy by the Authority.

Year Ending Principal Interest Total
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 690,000 49,436 739,436
2029-2030 1,145,000 38,856 1,183,856
Totals $ 4,380,000 $ 493,033 $ 4,873,033
2017 Lease Revenue Bonds Payable ($17,475,000) - On April 5, 2017, the Palmdale Financing Authority issued $17,475,000 of Lease Revenue Refunding Bonds, Series 2017. Interest on the 2017 Series Bonds is payable semi-annually on November 1 and May 1 at rates ranging from 2.00% to 3.50% per annum. Principal installments are payable November 1 of each year to 2032. As of June 30, 2023, a total principal of $10,725,000 w as outstanding.

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 15 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(4) Long-Term Debt
A. Lease Revenue Bonds
be used for such purpose, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium.

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

The Bonds are payable from the revenues pledged under the Indenture, consisting primarily of payments to be made by the City of Palmdale to the Palmdale Financing Authority as rental for certain properties pursuant to a Agreement. The 2017 Bonds represent direct, undivided fractional interests in a contract 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 contract.

The 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 contract and the 2017 Bonds is vested in the Authority, for the benefit of the 2017 Bond holders, during the contract term.

Upon completion of the term of the contract 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 payments, at which time the agreement shall cease and terminate and title to the property shall vest in the City.

Should the City default under the Agreement, the Trustee, as assignee of the Authority, may terminate the Agreement and re- lease the Property or may retain the Agreement and hold the City liable for all Payments thereunder on an annual basis. Under no circumstances will the Trustee have the right to accelerate Payments.

Year Ending Principal Interest Total
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 920,000 241,288 1,161,288
2029-2033 6,075,000 562,606 6,637,606
Totals $ 10,725,000 $ 2,186,046 $ 12,911,046
2021 Certificates of Participation Payable ($13,584,908) - O n May 27, 2021, the City issued the Refunding of the 2007 Certificates with a private placement loan with Western Alliance Bank, in the amount of $13,584,908 with annual interest rate of 3.93 percent. The Refunding loan and other available funds in the trust accounts were used to refund the outstanding principal of the 2007 Certificates carried on Palmdale Civic Authority’s books. As a result of the refunding, the City entered into a new Site Contract Agreement with Palmdale Financing Authority and terminated its existing agreement with Palmdale Civic Authority. As of June 30, 2023, a total principal of $12,123,552 w as outstanding. The 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 contract and the 2021 Bonds is vested in the Authority, for the benefit of the 2021 Bond holders, during the contract term.

Upon completion of the term of the contract and payment in full to the lender, Western Alliance Bank, title to the property shall 16 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(4) Long-Term Debt
A. Lease Revenue Bonds
vest in the City. The City may, on any date, deposit sufficient funds into an irrevocable trust to pay all remaining payments on or after April 1, 2023 (option 1) or on or after April 1, 2029 (option 2), at which time the 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 agreement. The City will only be liable for payments on an annual basis as they come due and the Lender would be required to seek separate judgements for the annual payments that may include foreclosure of the property.

Year Ending Principal Interest Total
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 855,041 354,345 1,209,386
2029-2033 4,803,098 1,240,847 6,043,945
2034-2036 3,358,264 267,284 3,625,548
Totals $ 12,123,552 $ 3,590,842 $ 15,714,394
B. Changes in Long-Term Liabilities
Long-term liability activity for the year ended June 30, 2023, was as follows:

Balance at
July 1,2022 Additions Payments
Balance at
June 30,2023
AmountsDue
Within One
Year
2012 Lease Revenue Bonds $ 4,970,000 $ - $ 590,000 $ 4,380,000 $ 610,000 2017 Lease Revenue Bonds 12,055,000 - 1,330,000 10,725,000 1,465,000 2021 Lease Revenue Bonds (private placement) 12,827,451 - 703,899 12,123,552 733,546 Plus: Deferred Inssuance Premium 323,804 - 117,970 205,834 81,700 Total $ 30,176,255 $ - $ 2,741,869 $ 27,434,386 $ 2,890,246 (5) Accounting Pronouncements
The GASB has issued the following pronouncements that have effective dates which may impact future financial statement presentation. The Authority has not determined the effect of the following Statements:

Governmental Accounting Standard No. 99
GASB 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 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. The Authority has not determined the effect on the financial statements.

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, 17 Palmdale Financing Authority
Notes to the Financial Statements
For the Year Ended June 30, 2023
(5) Accounting Pronouncements
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. The Authority has not determined the effect on the financial statements.

PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

FINANCIAL STATEMENTS
With

INDEPENDENT AUDITOR'S REPORT THEREON

FOR THE YEAR ENDING
JUNE 30, 2023
The accompanying notes are an integral part of these financial statements 1 Palmdale Community Foundation
(A California Non-Profit Corporation)
Table of Contents
For the Year Ended June 30, 2023
INDEPENDENT AUDITOR'S REPORT................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3

FINANCIAL STATEMENTS
Statement of Net Position and General Fund Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6 Statement of Activities and General Fund Revenues, Expenditures and Change in Fund Balance................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................7 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................8

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures and Changes in Fund Balance –General Fund – Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 Note to the Required Supplementary Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Independent Auditor's Report on Internal Control................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................14 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.

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 Palmdale Community Foundation’s internal control.

Accordingly, no such opinion is expressed.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that budgetary comparison information as listed in the table 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 4 any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

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

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 29, 2024, on our consideration of the Palmdale Community Foundation’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 Palmdale Community Foundation’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Palmdale Community Foundation’s internal control over financial reporting and compliance.

Rancho Cucamonga, California
January 29, 2024
5 Palmdale Community Foundation
Statement of Net Position and General Fund Balance Sheet June 30, 2023
General
Fund
Statement of
Net Position
Assets
Cash $ 240,159 $ 240,159
Total assets 240,159 240,159
Liabilities
Due to City 3,673 3,673
Total liabilities 3,673 3,673
Fund Balances
Restricted 240,159 -
Unassigned (3,673) -
Total fund balances 236,486 -
Total liabilities and fund balance $ 240,159
Net Position:

Restricted 240,159
Unrestricted (Deficit) (3,673)
Total Net Position $ 236,486
The accompanying notes are an integral part of these financial statements 6 Palmdale Community Foundation
Statement of Activities and General Fund Revenues, Expenditures and Changes in Fund Balances For the Year Ending June 30, 2023
General
Fund
Statement of
Activities
Revenues:

Other revenue $ 143,143 $ 143,143
Total revenues 143,143 143,143
Expenditures/Expenses:

Current:

Health and welfare 162,798 162,798
Total expenditures/expenses 162,798 162,798
Change in Fund Balance/Net Position (19,655) (19,655)
Fund Balance/Net Position, Beginning of Year 256,141 256,141 Fund Balance/Net Position, End of Year $ 236,486 $ 236,486 The accompanying notes are an integral part of these financial statements 7 Palmdale Community Foundation
(A California Non-Profit Corporation)
Notes to the Financial Statements
June 30, 2023
Note 1 - ORGANIZATION
The Palmdale Community Foundation (the “Foundation”), a non-profit organization, is organized under the California Nonprofit Public Benefit Corporation Law for public purposes.

The specific purpose of the Foundation is to receive contributions and donations from the public and to use such contributions and donations to support charitable, literary, and educational activities authorized by Section 501 (c) (3) of the Internal Revenue Code, including the support of programs, projects, and activities sponsored by the City of Palmdale.

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

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

Note 2 - SIGNIFICANT ACCOUNTING POLICIES
Measurement Focus, Basis of Accounting and Financial Statement Presentation The statement of net position and the statement of activities include all of the financial activities of the Foundation. All of the Foundation’s activities are considered governmental in nature; therefore, the Foundation does not report any business-type activities.

Governmental activities are typically supported by intergovernmental revenues and other nonexchange transactions.

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

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available if they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the Foundation considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting. The Foundation accounts for all of its operating activities in its General Fund.

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

Cash and Cash Equivalents
Cash and cash equivalents are stated at cost and consist of unrestricted demand deposits as of June 30, 2023. Investments include amounts in money market funds. Amounts invested in money market funds are reported at fair value or guaranteed amounts per investment agreement, which is equal to cost as of June 30, 2023 The Foundation 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.

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

Nonspendable: Resources that 1) not in spendable form, such as inventories, prepaids, long-term receivables, or non-financial assets 8 Palmdale Community Foundation
(A California Non-Profit Corporation)
Notes to the Financial Statements
June 30, 2023
Note 2 - SIGNIFICANT ACCOUNTING POLICIES
Fund Balance
held for resale, or 2) required to be maintained intact such as an endowment.

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

Assigned: Resources that are constrained by the Foundation’s intent to be used for specific purposes, but that neither restricted nor committed. This policy delegates to the Finance Manager the authority to assign unrestricted fund balance amounts where the Foundation’s intent is for those amounts to be used for specific purposes. This delegation of authority is for the sole purpose of reporting these amounts in the annual financial statements.

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

Net Position
Net position is classified in the following categories:

Restricted: This component of net position consists of resources (net assets) that are not available to the Foundation and are subject to externally enforceable legal restrictions (imposed by laws, regulations or external creditors and/or donors). Net assets consist of amounts received by the Foundation and are donor restricted if they are received with donor stipulations that limit the use of the donated asset.

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

Income Taxes
The Foundation is a non-profit public benefit corporation that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code and classified by the Internal Revenue Service as other than a private foundation and qualifies for deductible contributions as provided in Section 170(b) (A) (vi). It is also exempt from State Franchise and income taxes under Section 23701(d) of the California Revenue and Taxation Code. Accordingly, no provision for income taxes has been reflected in these financial statements. Income tax returns for 2017 and forward may be audited by regulatory agencies; however, the Foundation is not aware of any such actions at this time. The Foundation annually files forms 990, 199 and RRF-1 with the appropriate agencies.

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

Note 3 - CASH AND CASH EQUIVALENTS
Custodial credit risk is the risk that in the event of a bank failure, the Foundation’s deposits may not be returned. The Foundation's cash balance of $240,159 as of June 30, 2023 represents amounts held with third-party depository financial institutions and cash on hand. As of June 30, 2023, the bank balance was $241,222, all of which was insured by the Federal Deposit Insurance Corporation (FDIC), up to $250,000.

Note 4 - RELATED PARTY TRANSACTIONS
The Foundation reimburses the City of Palmdale for the cost of providing the Foundation with various services, including accounting, 9 Palmdale Community Foundation
(A California Non-Profit Corporation)
Notes to the Financial Statements
June 30, 2023
Note 4 - RELATED PARTY TRANSACTIONS
administration, insurance and other services. Additionally, the Foundation provides various services to the community on behalf of the City of Palmdale. Amounts due to the City of Palmdale as of June 30, 2023 was $3,673.

Note 5 - RESTRICTED FUND BALANCE
Amounts received by the Foundation are donor restricted if they are received with donor stipulations that limit the use of the donated asset. At June 30, 2023, the Foundation had an unassigned fund balance of $(3,673) with donor restrictions in the amount of $240,159 and held for the following programs and purposes:

Community Supported Programs
Total Restricted
Fund Balance
Arts & Cultural Programs $ 565
Best of the West Snack Bar 100
Community Gardens 152
Community Outreach 755
Community Programs 8,583
Emancipated Youth Program 13,386
Gabriel's House 20,458
Legacy Senior Center Programs 89
Library 2,983
Neighborhood Service Programs 10,611
Parks & Recreation 11,063
Pelona Vista Fitness Court 566
Playhouse 3,910
R. Lee Ermey Memorial Avenue 1,247
SAVES Programs 87,726
Vietnam Memorial Wall 4,629
Warnack Foundation Programs 73,336
Undesignated (3,673)
Total restricted fund balance by program $ 236,486
Note 6 - RISK MANAGEMENT
The Foundation is exposed to various risks of loss related to torts, theft of assets, errors and omissions, and natural disasters. The Foundation participates in the City of Palmdale’s commercial insurance programs, who obtains the appropriate insurance coverage needed by the Foundation from insurance companies. In the past three years, there have not been any settled claims which have exceeded insurance coverage.
10 Required Supplementary Information
Palmdale Community Foundation
Schedule of Revenues, Expenditures and Changes in Fund balances - General Fund - Budget and Actual For the Year Ending June 30, 2023
Budgeted Amounts
Variance
with
Final
Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Revenue $ 60,700 $ 32,160 $ 143,143 $ 110,983
Total revenues 60,700 32,160 143,143 110,983
Expenditures:

Current:

Health and welfare 189,230 51,110 162,798 (111,688)
Total expenditures 189,230 51,110 162,798 (111,688)
Excess (deficiency) of revenues
over (under) expenditures (128,530) (18,950) (19,655) (705) Net Change in Fund Balances (128,530) (18,950) (19,655) (705) Fund Balance - Beginning of Year 256,141 256,141 256,141 - Fund Balance - End of Year $ 127,611 $ 237,191 $ 236,486 $ (705) 12 PALMDALE COMMUNITY FOUNDATION
(A California Non-Profit Corporation)

NOTE TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE YEAR ENDING JUNE 30, 2023
Budgetary Information
The Foundation's budget is prepared and adopted on a modified accrual basis, w here all expenditures are accounted for when liabilities are incurred. The budgetary level of control is at the fund level. 14 Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Palmdale Community Foundation’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

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

Rancho Cucamonga, California
January 29, 2024
15 Joint Staff Report
DATE: FEBRUARY 21, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL

HONORABLE CHAIR AND COMMISSIONERS

HONORABLE CHAIR AND MEMBERS

HONORABLE CHAIR AND DIRECTORS
FROM: OPERATIONS DEPARTMENT

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: REVIEW AND APPROVE FY 2023 -24 MID -YEAR BUDGET

ADJUSTMENTS

RECOMMENDATION
Staff recommends that the City Council:

1. Review and approve the FY 2023-24 mid-year budget adjustments.

BACKGROUND
Each year, the Cityis required to adopt a balanced budget for its operations. The budget serves as the City’s financial plan for the fiscal year beginning July 1 through June 30.

It defines the City’s priorities for the provision of services to the community.

On June 21, 2023, the City Council approved the FY 202 3-24 Annual Operating and Maintenance Budget and Capital Improvement Program. Since budget adoption, financial and operational needs not accommodated by the current budget have been identified and need to be incorporated into the FY 2023-24 budget. This is necessary to better to reflect program costs for the benefit of the community.

Carryforwards of encumbrances and unspent funds are also included from the previous fiscal year . Encumbrances are funds that are assigned to a Purchase Order , and completion of the purchase or services have not been completed in the current fiscal year; therefore, they need to be carried forward for use in the next fiscal year. Unspent budget funds are carried forward by approval of the City Manager when projects or purchases are delayed for reasons beyond the City’s control.

Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 2 ends

DISCUSSION
The Citywide FY 2023-24 Annual Operating, Maintenance and Capital Budget is:

FY 2023-24
Adopted
FY 2023-24
Adjusted Difference
Beginning Fund Balance $ 394,975,472 $ 394,975,472 Revenues/Transfers In 514,998,020 539,656,400 24,658,380 Expenditures/Transfers Out 605,966,200 617,704,110 11,732,910 Projected Ending Fund
Balance (Before
Reserves) $ 304,007,292 $ 316,927,762
The table above represents all funds, which include reimbursable grants for restricted purposes.

Revenues are projected to increase by $24.6 million due primarily to:
 $9.6 million in American Rescue Plan Act funds to be recognized as revenue in accordance with revenue recognition principles. Grant funds are recognized as revenue in the period they are spent.
 $7.0 million in insurance proceeds received in FY 2023-24.  $2.6 million increase in anticipated revenues generated by Energy for Palmdale’s Independent Choice (EPIC), following the residential launch in October 2022 and the commercial launch in March 2023.
 $2.0 million in Measure A LA County Grant funds.
 $1.2 million increase in vehicle license fees.
 $1.4 million increase in franchise fees for Gas, Electric, and Waste Haulers.  $1.6 million increase in property taxes due to higher valuations.  $252 thousand in State Grants for Tobacco Enforcement efforts.  $2.5 million in proceeds from the sale of Successor Agency property.

Revenue increases are offset by a decrease in sales tax of $839,000. This is the result of a one-time allocation error in the County pool, combined with ongoing impacts stemming from reduced sales in response to the current state of the economy. The City, Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 3 ends

in conjunction with sales tax consultants at HdL Companies, continues to monitor economic trends in relation to projected sales tax revenues.

Expenditures are projected to increase by $11.7 million primarily due to:
 $8 million increase in Operating expenditures primarily due to:
o $8.0 million in legal settlements.
 $2.6 million increase in Contract Services primarily for:
o $2.6 million in power procurement costs for EPIC, due to rising energy costs.
 ($2.8) million decreases in Capital Improvement projects. Details for Capital Projects will be provided in the CIP section of this report.

Sufficient fund balance remains to maintain the City in a favorable financial position.

General Fund
The FY 2023-24 Annual Operating and Maintenance Budget for the General Fund is:

FY 2023-24
Adopted
FY 2023-24
Adjusted Difference
Beginning Fund Balance $ 92,576,350 $ 92,576,350 Revenues/Transfers In 101,829,150 112,124,560 10,295,410 Expenditures/Transfers Out 104,963,930 114,816,990 9,853,060 Projected Ending Fund
Balance (Before
Reserves) $ 89,441,570 $ 89,883,920
Revenues for the General Fund are projected to increase by $10.2 million primarily due to:
 $7.0 million in insurance proceeds received in FY 2024.  $1.2 million increase in vehicle license fees.
 $1.1 million increase in property taxes due to higher valuations.

Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 4 ends

Expenditures are projected to increase by $9.8 million primarily due to:
 $8.0 million in legal settlements.
 $1.5 million in contributions to the Multi-Agency Regional Resiliency Center.

Measure AV
The FY 2023-24 Annual Budget for Measure AV is:

FY 2023-24
Adopted
FY 2023-24
Adjusted Difference
Beginning Fund Balance $ 24,565,678 $ 24,565,678 Revenues/Transfers In 22,923,000 22,307,000 (616,000)
Expenditures/Transfers Out 43,517,020 42,102,790 (1,414,230) Projected Ending Fund
Balance (Before
Reserves) $ 3,971,658 $ 4,769,888
Revenues are projected to decrease by $616,000 as the result of a one-time allocation error in the county pool, combined with the ongoing impacts stemming from reduced sales in response to the current state of the economy. The City, in conjunction with sales tax consultants at HdL Companies, continues to monitor economic trends in relation to projected sales tax revenues.

Expenditures for Measure AV are projected to decrease by $1,414,230 primarily due to:
 Decreases of $1,396,230 in Beautification/Infrastructure/Capital Improvement Program (CIP), made up of:
o ($250,000) Ecological Preservation Study.
o ($301,000) McAdam Park Battery Storage.
o ($705,890) Marie Kerr Park Swim Deck.
o ($262,000) General Park Improvements.
o ($300,000) Street Sweeping/Signage/Enforcement.
o ($27,340) Reduction for other completed projects.
o $250,000 Facility Improvements at Aero Institute.

Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 5 ends

o $200,000 Chimbole Cultural Center remediation and design.  ($18,000) in Community Programs
o ($25,000) Program costs for the Fentanyl campaign will be shifted to other funding sources.
 $7,000 Senior Center operational costs.

The Measure AV proposed mid-year adjustments have gone before the Measure AV Oversight Committee on January 31, 2024. The committee has provided a general consensus that the proposed adjustments are an appropriate use of Measure AV funds.

Special Revenue/Other Funds
Special Revenue and other funds consist of transportation funds, grants, and other forms of restricted funding. Use of the money in certain funds is governed by memorandums of understanding, contracts, or law. Required audits are conducted each year to ensure compliance with the granting agency.

FY 2023-24 Annual Budget for Special Revenue/Other funds is:

FY 2023-24
Adopted
FY 2023-24
Adjusted Difference
Beginning Fund Balance $ 302,399,122 $ 302,399,122 Revenues/Transfers In 377,224,330 382,605,090 5,380,760 Expenditures/Transfers Out 435,165,500 438,464,580 3,299,080 Projected Ending Fund
Balance (Before
Reserves) $ 244,457,952 $ 246,539,632
Revenues are projected to increase by $5.4 million primarily due to:
 $2.6 million increase in anticipated revenues generated by Energy for Palmdale’s Independent Choice (EPIC), following the residential launch in October 2022 and the commercial launch in March 2023.
 $2 million increase in Measure A LA County Grant funds.  $469 thousand in Federal HSIP Grant funds.
 $252 thousand in State Grants for Tobacco Enforcement efforts.

Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 6 ends

Expenditures are projected to increase by $3.3 million primarily due to:
 $2.6 million in power procurement costs for EPIC, due to rising energy costs.  $952 thousand in forgiveness of debt relating to the Handy Worker Grant.

Transportation Funds
One of the largest sources of revenue used by the City to pay for the maintenance, repair, and improvement of streets and facilities is transportation funding. These are sales tax revenues collected by the State or County and allocated to the City based on the percentage of the population. The table below shows the FY 2023-24 Transportation fund expenditure budgets.

Transportation Funds
FY 2023-24
Adopted
FY 2023-24
Adjusted
Amount
Change % Chg
GAS TAX FUND $ 14,837,650 $ 12,356,500 $ (2,481,150) -16.7% PROP A FUND 7,614,130 7,790,970 176,840 2.3%
PROP C FUND 15,178,050 15,178,050 0 0.0%

LOCAL TRANSP FUND
ART 3
156,000 220,000 64,000 41.0%

LOCAL TRANSP FUND
ART 8
11,725,830 14,266,980 2,541,150 21.7%
MEASURE R FUND 91,317,570 91,317,570 0 0%
MEASURE M FUND 12,717,000 12,717,000 0 0%
Grand Total $ 153,546,230 $ 153,847,070 $ 300,840 0.2% The City uses these funds specifically to fund street repair maintenance and improvement activities such as traffic engineering, geographical information system software and staffing, bus stop and transportation center maintenance, and public works staffing.

Depending on the source of funding, balances may build up in order to complete a large project.

American Rescue Plan Act (ARPA) Funds
The City of Palmdale’s allocation from American Rescue Plan Act funds is $35.4 million.

In June 2023, the City Council adopted a budget for the use of ARPA funds. It is proposed to reallocate funds from several projects to fund the tenant improvements of the new SAVES building.
 ($325) thousand decrease in Hammack Center demolition costs.

Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 7 ends

 ($300) thousand decrease for dump station/illegal dumping projects.  ($80) thousand decrease for HVAC replacement at existing SAVES building.  $705 thousand increase for SAVES relocation and tenant improvements.

Capital Improvement Program
The following adjustments to Capital Projects are being proposed:

Project Description
Adopted
Budget Adjustment
Proposed
Total
ADA COMPLIANCE 643,870 (27,630) 616,240
AVE R 45TH ST E TRAFFIC SIGNAL 706,760 (100,000) 606,760 AVE S LMD LANDSCAPE ENHANCEMNT 178,080 (178,080) -
AVENUE R ITS SIGNAL SYNC 3,569,600 (100,000) 3,469,600
AVTA BUS STOPS - 100,000 100,000
BATTERY STORAGE MCADAM 2,656,150 (301,000) 2,355,150
CHIMBOLE EMERGENCY CLEANUP 117,770 200,000 317,770
CITY FACILITIES 171,180 120,470 291,650
DOMENIC MASSARI BIKE LANE 243,410 (178,690) 64,720
DRY TOWN WP-REFURBISHMENT 346,290 38,710 385,000
ECOLOGICAL PRESERVATION STUDY 250,000 (250,000) -
FIRE SUPRESSION RETROFITTING 34,470 (24,470) 10,000
HAMMACK CNT DEMO 734,950 (325,000) 409,950
HSIP ROUNDABOUT @ S-8 & 40TH E 2,175,960 469,580 2,645,540 MAV CITY FACILITIES 200,000 250,000 450,000
MEMORIAL & HONOR WALL 11,370 (11,370) -
MK PARK REC CNTR CANOPY 57,288 75,000 132,288
MK PARK SWIM DECK & COVER 1,905,890 (705,890) 1,200,000 MULTIAGENCY REGIONAL RES CNTR - 1,500,000 1,500,000
PARKING ENF/SIGNAGE/SWEEPING 750,000 (300,000) 450,000
PLAYHOUSE HVAC UPGRADE 486,970 (86,870) 400,100
POCKET PARK - 260,000 260,000
PTC PARCEL MERGE 16,160 (16,160) -
PTC SECURITY UPGRADE - 60,000 60,000
REGIONAL RECREATION CENTER 15,970 (15,970) -
SAVES BUILDING - 705,000 705,000
SAVES HVAC 80,000 (80,000) -
SAVES/OASIS GENERATORS 28,390 590 28,980
SCAG REAP GRANT-UTILITY INVEN 276,000 (276,000) -
SPORTS FIELD MAINTENANCE 3,569,270 (262,000) 3,307,270
Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 8 ends

ST GRT-AVE S LMD LANDSCAPE ENH 394,750 (394,750) -
SUST TRANSP PLN 157,100 (157,100) -
TRAFFIC SIGNAL LEFT PHASING - 100,000 100,000
TS HILARY-BERNARDIN WALL RPR 100,000 100,000 200,000
Grant Total $ 45,241,028 $ 188,370 $ 45,429,398
Capital improvement projects are funded from a variety of sources. The attached schedules provide a comprehensive listing of all approved capital projects.

Personnel
In an effort to address the ongoing needs of the community, staff are requesting three (3) additional Maintenance Worker I/II positions. These positions would provide support in combatting graffiti and perform other related duties, as assigned. The City has held a Meet and Confer with the bargaining unit on February 14, 2024, and all parties support adding these three positions.

There is no fiscal impact in the current year, as vacancy savings recognized throughout the year are sufficient to cover costs for the remainder of the fiscal year. The ongoing fiscal impact of $323,710 in FY 2024-25, subject to cost of living and merit increases, is consistent with general positions.

FISCAL IMPACT
The proposed adjustments to the FY 2023-24 Operating and Capital budget is compliant with all financial policies, including the City’s 20% General Fund Reserve Policy. It is anticipated that revenues will be sufficient to cover all expenditures proposed.

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

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

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

Prepared by: Janelle Samson, Director of Operations
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Ronda Perez, City Manager
Approved as to form: William P. Curley, III, City Attorney Report to Mayor and City Council
Re: Mid-Year Budget FY 2023-24
February 21, 2024

Page 9 ends

ATTACHMENTS
Rpt Mid-Year Budget FY 2023-24
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
FY 2023
Actuals
FY 2024
Adopted
FY 2024
Proposed
FY 2025
Projected
FY 2026
Projected
FY 2027
Projected
FY 2027
Projected
1 BEGINNING FUND BALANCE 73,269,500 92,576,350 92,576,350 92,329,530 81,350,178 70,036,751 58,363,770 2 REVENUES/TRANSFERS IN
3 Property Tax 29,208,527 27,069,450 29,841,680 28,422,920 29,844,070 31,336,270 32,903,080 4 Sales And Use Tax 27,808,626 28,265,620 27,429,330 27,977,920 28,537,480 29,108,230 29,690,390 5 Transient Occupancy Tax 4,608,941 4,896,000 4,896,000 5,042,880 5,194,170 5,350,000 5,510,500 6 Franchise Fees 7,595,391 6,379,910 7,724,910 6,443,710 6,508,150 6,573,230 6,638,960 7 Use Of Property 3,783,921 3,043,870 3,055,870 3,104,750 3,166,850 3,230,190 3,294,790 8 License And Permits 5,525,829 3,954,070 3,954,070 4,033,150 4,113,810 4,196,090 4,280,010 9 Charges For Services 1,524,521 1,379,920 1,380,920 1,448,920 1,521,370 1,597,440 1,677,310 10 Development Charges For Services 3,190,946 2,489,150 2,489,150 2,563,820 2,640,730 2,719,950 2,801,550 11 Fines And Forfeitures 784,947 799,800 799,800 815,800 832,120 848,760 865,740 12 Other Revenue 5,790,501 10,824,820 17,826,290 6,000,000 6,000,000 6,000,000 6,000,000 13 Gain (Loss) Fair Value of Investments -654,783 0 0 0 0 0 0 14 Transfer In 14,281,368 12,726,540 12,726,540 8,146,600 8,146,600 8,146,600 8,146,600 15 Total Revenues 103,448,734 101,829,150 112,124,560 94,000,470 96,505,350 99,106,760 101,808,930 16 EXPENDITURES/TRANSFERS OUT
17 Salaries 16,911,909 19,861,550 19,145,300 20,457,400 21,275,700 22,126,730 23,011,800 18 Benefits 6,226,421 9,665,740 9,477,670 9,955,710 10,353,940 10,768,100 11,198,820 19 Organizational Development 443,678 748,090 752,850 750,000 750,000 750,000 750,000 20 Operating (materials, supplies) 8,841,748 8,207,550 17,910,720 8,289,630 8,372,530 8,456,260 8,540,820 21 Contract Services 13,732,984 17,128,640 18,151,570 17,299,930 17,472,930 17,647,660 17,824,140 22 Capital Outlay 1,806,038 1,681,830 4,444,980 1,000,000 1,000,000 1,000,000 1,000,000 23 County Contracts - Law Enforcement 12,992,270 19,499,530 18,866,530 22,572,000 23,813,460 25,123,200 26,504,980 24 County Contracts - Liability 2,773,013 3,307,590 3,307,590 3,373,742 3,441,217 3,510,041 3,580,242 25 County Contracts - Animal Control 1,491,007 1,600,000 2,270,000 1,600,000 1,600,000 1,600,000 1,600,000 26 Utilities 2,318,811 2,823,230 2,926,940 2,879,690 2,937,280 2,996,030 3,055,950 27 Debt Service 6,045,840 6,351,720 6,351,720 6,351,720 6,351,720 6,351,720 6,351,720 28 Transfers Out/Internal Svc Alloc. 10,558,167 8,934,000 8,944,620 8,200,000 8,200,000 8,200,000 8,200,000 29 Transfer Out to Reserves - 2,266,500 2,266,500 2,250,000 2,250,000 2,250,000 2,250,000 30 Total Expenditures 84,141,884 102,075,970 114,816,990 104,979,822 107,818,777 110,779,741 113,868,472 31 Surplus/(Deficit) (Revenue - Expenditures) 19,306,850 (246,820) (2,692,430) (10,979,352) (11,313,427) (11,672,981) (12,059,542) 32 FUND BALANCE BEFORE RESERVES/RESTRICTIONS 92,576,350 92,329,530 89,883,920 81,350,178 70,036,751 58,363,770 46,304,228 33 20 % Reserve Requirement (30% Recommended) 16,828,377 30,622,791 34,445,097 20,995,964 21,563,755 22,155,948 22,773,694 34 Restricted, Nonspendable and Assigned 23,493,168 25,000,000 25,000,000 25,000,000 25,000,000 25,000,000 25,000,000 35 ENDING AVAILABLE BALANCE 52,254,805 36,706,739 30,438,823 35,354,214 23,472,996 11,207,822 (1,469,466)

CITY OF PALMDALE

FIVE YEAR GENERAL FUND AND CONSOLIDATED FUNDS PROJECTION

Page 1 of 27 ends

Fund Fund Description
FY 2024
Beginning
Available Fund
Balance
FY 2024
Revenues
FY 2024
Operating
Expenditures
FY 2024
Capital
Expenditures
Reserve
Requirement

Nonspendable
, Restricted
and Assigned
FY 2024
Projected
Ending
Available Fund
Balance
101, 150,
151 General Fund 92,576,350 112,124,560 111,054,520 3,762,470 34,445,097 30,000,000 25,438,823 153 Information Technology 3,680,952 5,168,560 5,477,370 - 3,300,000 72,142 154 Fleet Maintenance 4,655,397 2,701,600 3,250,710 - 4,000,000 106,287 156 Public Art Fund 1,491,630 100,000 62,000 187,840 1,341,790 157 Measure AV 24,565,678 22,307,000 15,659,290 26,443,500 4,210,279 559,609 158 American Rescue Funds 323,465 22,619,750 8,878,180 13,441,570 623,465 200 PEG Fund 753,699 265,000 376,300 - 642,399 201 Gas Tax Fund 8,803,877 5,049,570 683,490 11,673,010 1,496,947 202 Public Safety Fund 1,354,668 300,500 150,000 - 1,505,168 203 Prop A Fund 9,964,023 4,867,980 3,893,450 3,897,520 7,041,033 204/214 Prop C Funds 14,099,022 12,619,630 581,200 14,596,850 11,540,602 205 Air Quality Improvement Fund 312,647 220,000 197,000 23,000 312,647 206 Local Transp Fund Art 3 (2,753) 222,760 - 220,000 7 207 Local Transp Fund Art 8 2,720,834 11,546,140 9,800,810 4,466,170 (6) 208/218 Measure R Funds 9,923,012 90,088,700 - 91,317,570 8,694,142 209/219 Measure M Funds 9,545,366 10,627,250 - 12,717,000 7,455,616 210 Road Maint & Rehab Acct Fund 7,477,865 4,189,880 - 10,341,200 1,326,545 211 Measure A LA County Parks (6,350) 4,671,750 - 4,036,360 629,040 220 Park Development Fund 7,345,074 2,050,000 150,000 9,032,880 212,194 221 Traffic Impact Fund 1,488,105 960,000 867,100 706,760 874,245 222 Drainage Funds 10,301,471 1,177,300 87,900 6,032,240 5,358,631 227 Fire Facilities Impact Fund 8,644,380 700,000 140,000 - 9,204,380 228 Sewer Upgrade Fund 482,095 - - 434,110 47,985 229 Public Facilities Fund 1,692,169 455,000 - 525,570 1,621,599 240 Federal Funds Fund (386,297) 23,152,510 - 23,092,380 (326,167) 241 State Grants Fund (1,176,868) 6,016,600 3,416,610 2,478,890 (1,055,768) 242 Misc Grant/Developer Contrib 2,850,972 5,731,120 1,070,980 5,594,000 1,917,112 243 Federal Home Program 7,898,494 2,739,580 2,739,580 - 7,898,494 244 Federal Jobs Programs (18,012) 105,120 87,100 - 8 245 HOME ARP Fund (1,355) 2,091,050 2,089,690 - 5 250 Park Assessments Fund 2,797,415 3,129,100 2,852,250 385,000 2,689,265 251 Landscape Maintenance Fund 14,021,830 7,517,000 8,200,600 817,240 12,520,990 252 Street Lighting Assmnt Distr 20,327,807 1,133,500 1,180,420 - 20,280,887 253 Drainage Benefit Assessment 1,377,967 149,000 48,000 - 1,478,967 254 Sewer Maint Assessment Dist 30,166,683 6,532,700 4,491,740 9,836,290 9,050,005 13,321,348 255 Street Light County District 15,649,854 3,227,500 4,324,520 98,850 14,453,984 256 Street Light Dist #2 Anaverde 866,390 166,200 215,160 - 817,430 257 Street Light Dist #3 Ritter 345,370 64,700 114,710 - 295,360 258 Enhanced Infrastructure Financing Dist. 297,756 300,000 - - 597,756 259 CFD 2022-1 Maintenance Service District - - - - - 260 Solid Waste 1,077,751 995,150 1,182,460 - 890,441 280 CDBG Fund 2,137,433 6,235,840 2,624,210 5,175,730 573,333 281 SAVES Grant Fund (8,512) 50,000 41,490 - (2) 291 Housing Authority Fund 1,456,441 93,750 90,370 - 1,459,821 292 Housing Facilities Fund (2,462,215) 7,929,380 8,135,610 - (2,668,445) 293 Housing Asset Fund 49,686,425 2,465,370 9,594,170 - 42,557,625 300 Water Park 4,087,392 2,374,500 2,072,950 - 4,388,942 350 Palmdale CCA (1,078,410) 68,107,300 67,000,520 - 2,010,020 (1,981,650) 460 Successor Agency 8,730,744 65,242,690 64,959,070 - 9,014,364 480 AD88-1 10Th St West Improv (65,787) - - - (65,787) 481 AD90-2 7Th St West Improvement 146,247 - - 20,640 125,607 482 CFD 2003-1 Improvement Fund 13,093 - - - 13,093 483 CFD 91-1 Sierra Gateway Improv 158,266 - - - 158,266 484 CFD 93-1 Ritter Ranch Impr Fund 2,670,897 17,000 - - 2,687,897 523 Debt Svc-Pwr Pl Land $19.9 COP - 1,500,900 1,491,500 - 9,400 524 Debt Svc-Revenue Bonds - 10,000 - - 10,000 525 Debt Svc-PFA 124 3,427,300 2,806,300 - 621,124 580 OPEB Fiduciary Trust Funds 4,524,040 374,000 395,000 - 4,503,040 710 Palmdale Community Foundation 236,486 44,200 167,540 - 113,146 730 AD 88-1 10Th St West Redemption 67,885 5,000 - - 72,885 732 AD 90-2 7Th St West Redemption (125,572) 3,000 - - (122,572) 733 AD 87-1 Rancho Vista Rdmpt Fund 128,037 2,000 - - 130,037 734 CFD 03-1 Anaverde Redemption 1,953,387 1,546,000 1,544,900 - 1,954,487 735 CFD 2005-1 Redemption Fund 1,685,706 1,069,830 969,200 - 1,786,336 736 CFD 91-1 Sierra Gateway Redempt (74,481) 87,660 111,920 - (98,741) 737 AD 91-2 52Nd St West Redemption 23,128 400 - - 23,528 738 CFD 93-1 Ritter Ranch Rdmpt Fnd 237,403 2,500 50,580 - 189,323 739 AD 2006-01 Godde Hill Rdmp Fd 271,332 136,720 137,600 - 270,452 740 CFD 16-1 Joshua Ranch Wtr Rdmp 2,287,550 847,300 833,400 - 2,301,450 Total 394,975,472 539,656,400 356,349,470 261,354,640 57,015,401 30,000,000 229,912,361

CITY OF PALMDALE

ESTIMATED FUND BALANCE
FISCAL YEAR 2024

Page 2 of 27 ends

Category 2023 Actual 2024 Adopted 2024 Proposed $ Chg % Chg 60 PROPERTY TAXES 103,684,186$ 91,989,540$ 94,761,770$ 2,772,230$ 3.0% 61 SALES & USE TAXES 63,427,168$ 66,460,340$ 65,008,050$ (1,452,290)$ -2.2% 62 OTHER TAXES 7,931,808$ 8,954,450$ 8,954,450$ 0.0% 63 TRANSIENT OCC TAX 4,608,941$ 4,896,000$ 4,896,000$ 0.0% 64 FRANCHISE FEES 7,830,872$ 6,644,910$ 7,989,910$ 1,345,000$ 20.2% 65 SUBVENTIONS & GRANTS 29,861,992$ 167,675,790$ 177,705,720$ 10,029,930$ 6.0% 66 DEVELOPER CONTRIB 17,690$ 60,400$ 60,400$ 0.0% 67 COUNTY CONTRIB 295,903$ 4,070,850$ 6,039,300$ 1,968,450$ 48.4% 68 STATE CONTRIBUTIONS -$ 1,000$ 1,000$ 0.0% 69 OTHER AGENCY CONTRIB 522,378$ 4,217,890$ 4,217,890$ 0.0% 71 USE OF PROPERTY 16,279,987$ 12,926,280$ 13,452,500$ 526,220$ 4.1% 72 FAIR VALUE OF INVEST (1,751,064)$ -$ -$ 0.0% 75 PARK DEVELOPMENT FEE 1,339,284$ 2,000,000$ 2,000,000$ 0.0% 76 DRAINAGE FEES 1,397,889$ 687,000$ 687,000$ 0.0% 77 SEWER UPGRADE FEES 900$ 900$ 900$ 0.0% 78 TRAFFIC IMPACT FEES 677,674$ 950,000$ 950,000$ 0.0% 79 FACILITY IMPACT FEE 798,263$ 1,100,000$ 1,100,000$ 0.0% 80 LICENSES AND PERMITS 5,690,705$ 4,067,670$ 4,067,670$ 0.0% 81 CHRGS FOR SERVICES 33,308,633$ 69,843,550$ 72,365,300$ 2,521,750$ 3.6% 82 DEV CHRGS FOR SVCS 3,852,193$ 2,589,150$ 2,589,150$ 0.0% 83 FINES & FORFEITURES 1,148,943$ 1,124,000$ 1,124,000$ 0.0% 84 SPECIAL ASSESSMENTS 24,079,062$ 24,001,700$ 23,946,700$ (55,000)$ -0.2% 90 OTHER - REVENUE 6,533,683$ 12,084,800$ 19,076,270$ 6,991,470$ 57.9% 95 GN/LS-SALE OF ASSET 113,064$ 700,000$ 700,000$ 0.0% 98 TRANSFERS IN 24,009,476$ 27,951,800$ 27,962,420$ 10,620$ 0.0% Grand Total 335,659,629$ 514,998,020$ 539,656,400$ 24,658,380$ 4.8%

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

REVENUES-ALL FUNDS

Page 3 of 27 ends

Category 2023 Actual 2024 Adopted 2024 Proposed $ Chg % Chg 60 PROPERTY TAXES 29,208,527$ 27,069,450$ 29,841,680$ 2,772,230$ 10.2% 61 SALES & USE TAXES 27,808,626$ 28,265,620$ 27,429,330$ (836,290)$ -3.0% 63 TRANSIENT OCC TAX 4,608,941$ 4,896,000$ 4,896,000$ 0.0% 64 FRANCHISE FEES 7,595,391$ 6,379,910$ 7,724,910$ 1,345,000$ 21.1% 65 SUBVENTIONS & GRANTS 908$ -$ -$ 0.0% 69 OTHER AGENCY CONTRIB 500,358$ 50,000$ 50,000$ 0.0% 71 USE OF PROPERTY 3,783,921$ 3,043,870$ 3,055,870$ 12,000$ 0.4% 72 FAIR VALUE OF INVEST (654,783)$ -$ -$ 0.0% 80 LICENSES AND PERMITS 5,525,829$ 3,954,070$ 3,954,070$ 0.0% 81 CHRGS FOR SERVICES 1,524,521$ 1,379,920$ 1,380,920$ 1,000$ 0.1% 82 DEV CHRGS FOR SVCS 3,190,946$ 2,489,150$ 2,489,150$ 0.0% 83 FINES & FORFEITURES 784,947$ 799,800$ 799,800$ 0.0% 90 OTHER - REVENUE 5,289,234$ 10,774,820$ 17,776,290$ 7,001,470$ 65.0% 98 TRANSFERS IN 14,281,368$ 12,726,540$ 12,726,540$ 0.0% Grand Total 103,448,734$ 101,829,150$ 112,124,560$ 10,295,410$ 10.1%

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

REVENUES-GENERAL FUND

Page 4 of 27 ends

Category 2023 Actual 2024 Adopted 2024 Proposed $ Chg % Chg 10 SALARIES 29,316,642$ 33,010,520$ 32,539,890$ (470,630)$ -1.4% 11 BENEFITS 11,617,235$ 17,434,840$ 17,245,680$ (189,160)$ -1.1% 15 ORG DEVELOPMENT 570,037$ 1,010,550$ 1,023,390$ 7,840$ 0.8% 20 OPERATING EXP 21,007,670$ 30,153,140$ 38,770,670$ 8,617,530$ 28.6% 21 CONTRACT SERVICES 54,813,132$ 98,983,520$ 101,652,100$ 2,668,580$ 2.7% 22 SOFTWARE 1,222,547$ 3,097,490$ 3,097,490$ 0.0% 23 CAPITAL OUTLAY 632,121$ 715,160$ 801,660$ 86,500$ 12.1% 24 COUNTY CONTRACTS 30,468,171$ 34,048,230$ 34,108,140$ 59,910$ 0.2% 25 UTILITIES 7,075,245$ 8,672,000$ 8,838,710$ 166,710$ 1.9% 26 PROGRAM EXP 2,256,227$ 12,654,850$ 13,115,490$ 460,640$ 3.6% 30 INTER-GOV SHARING 61,704,794$ 52,044,210$ 52,044,210$ 0.0% 40 CAPITAL 27,495,286$ 264,657,150$ 264,971,520$ 314,370$ 0.1% 50 DEBT SERVICE 24,822,980$ 26,598,580$ 26,598,580$ 0.0% 55 CONTINGENCY 117,289$ -$ -$ 0.0% 59 TRANSFERS OUT 19,893,053$ 22,885,960$ 22,896,580$ 10,620$ 0.0% Grand Total 293,012,428$ 605,966,200$ 617,704,110$ 11,732,910$ 1.9%

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL FUNDS

Page 5 of 27 ends

Category 2023 Actual 2024 Adopted 2024 Proposed $ Chg % Chg 10 SALARIES 16,911,909$ 19,851,550$ 19,145,300$ (706,250)$ -3.6% 11 BENEFITS 6,226,421$ 9,665,740$ 9,477,670$ (188,070)$ -1.9% 15 ORG DEVELOPMENT 443,678$ 756,310$ 752,850$ (8,460)$ -1.1% 20 OPERATING EXP 8,841,748$ 9,811,510$ 17,910,720$ 8,099,210$ 82.5% 21 CONTRACT SERVICES 13,731,349$ 17,312,180$ 18,149,470$ 837,290$ 4.8% 22 SOFTWARE 1,635$ 2,100$ 2,100$ 0.0% 23 CAPITAL OUTLAY 103,468$ 274,150$ 311,650$ 37,500$ 13.7% 24 COUNTY CONTRACTS 17,256,289$ 24,407,120$ 24,444,120$ 37,000$ 0.2% 25 UTILITIES 2,318,811$ 2,823,230$ 2,926,940$ 103,710$ 3.7% 40 CAPITAL 1,702,571$ 2,507,820$ 4,133,330$ 1,625,510$ 64.8% 50 DEBT SERVICE 6,045,840$ 6,351,720$ 6,351,720$ 0.0% 59 TRANSFERS OUT 9,740,003$ 11,200,500$ 11,211,120$ 10,620$ 0.1% Grand Total 83,323,720$ 104,963,930$ 114,816,990$ 9,848,060$ 9.4%

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-GENERAL FUND

Page 6 of 27 ends

Department/Division Category 2023 Actual 2024 Adopted 2024
Proposed $ Chg % Chg

1. City Council
CITY COUNCIL SALARIES 151,617$ 328,390$ 328,390$ 0.0% BENEFITS 114,445$ 266,390$ 266,390$ 0.0% ORG DEVELOPMENT 29,175$ 30,750$ 30,750$ 0.0% OPERATING EXP 3,029$ 77,700$ 77,700$ -$ 0.0% CAPITAL OUTLAY -$ 1,000$ 1,000$ 0.0% UTILITIES 3,510$ 3,000$ 3,000$ 0.0% TRANSFERS OUT 54,450$ 81,960$ 81,960$ 0.0% CITY COUNCIL Total 356,226$ 789,190$ 789,190$ -$ 0.0%

1. City Council Total 356,226$ 789,190$ 789,190$ -$ 0.0%

2. City Manager Department
CITY CLERK SALARIES 563,624$ 573,050$ 573,050$ 0.0% BENEFITS 223,629$ 270,200$ 270,200$ 0.0% ORG DEVELOPMENT 17,093$ 25,900$ 25,900$ -$ 0.0% OPERATING EXP 13,324$ 16,060$ 21,060$ 5,000$ 31.1% CONTRACT SERVICES 271,576$ 84,050$ 84,050$ 0.0% CAPITAL OUTLAY -$ 1,500$ 1,500$ 0.0% UTILITIES 491$ 500$ 500$ 0.0% CAPITAL -$ -$ -$ 0.0% DEBT SERVICE -$ -$ -$ 0.0% TRANSFERS OUT 119,830$ 180,380$ 180,380$ 0.0% CITY CLERK Total 1,209,566$ 1,151,640$ 1,156,640$ 5,000$ 0.4% CITY MANAGER SALARIES 1,090,338$ 1,126,780$ 1,175,900$ 49,120$ 4.4% BENEFITS 411,168$ 802,360$ 812,470$ 10,110$ 1.3% ORG DEVELOPMENT 34,661$ 68,100$ 68,100$ 0.0% OPERATING EXP 1,323,327$ 87,100$ 87,100$ 0.0% CONTRACT SERVICES -$ 126,000$ 101,000$ (25,000)$ -19.8% CAPITAL OUTLAY 3,978$ 5,000$ 5,000$ 0.0% UTILITIES 1,202$ 2,000$ 2,000$ 0.0% TRANSFERS OUT 68,282$ 103,660$ 103,660$ 0.0% CITY MANAGER Total 2,932,958$ 2,321,000$ 2,355,230$ 34,230$ 1.5% COMMUNICATIONS SALARIES 500,989$ 684,320$ 375,730$ (308,590)$ -45.1% BENEFITS 237,230$ 345,900$ 345,900$ 0.0% ORG DEVELOPMENT 13,606$ 25,980$ 14,480$ (11,500)$ -44.3% OPERATING EXP 4,726$ 6,800$ 5,750$ (1,050)$ -15.4% CONTRACT SERVICES 312,768$ 772,000$ 1,172,000$ 400,000$ 51.8% CAPITAL OUTLAY -$ 35,000$ 70,000$ 35,000$ 100.0% UTILITIES 2,252$ 2,200$ 2,200$ 0.0% CAPITAL -$ -$ -$ 0.0% DEBT SERVICE -$ -$ -$ 0.0% TRANSFERS OUT 65,359$ 98,390$ 98,390$ 0.0% COMMUNICATIONS Total 1,136,929$ 1,970,590$ 2,084,450$ 113,860$ 5.8% DIVERSITY, EQUITY & INCLUSION SALARIES 111,664$ 123,130$ 41,350$ (81,780)$ -66.4% BENEFITS 45,022$ 57,290$ 17,710$ (39,580)$ -69.1% ORG DEVELOPMENT 7,300$ 8,410$ 1,000$ (7,410)$ -88.1% OPERATING EXP 2,780$ 7,040$ 600$ (6,440)$ -91.5% DIVERSITY, EQUITY & INCLUSION Total 166,767$ 195,870$ 60,660$ (135,210)$ -69.0% LEGISLATIVE AFFAIRS SALARIES 466,601$ 267,620$ 267,620$ 0.0% BENEFITS 122,098$ 123,440$ 123,440$ 0.0% ORG DEVELOPMENT 10,375$ 15,000$ 16,000$ 1,000$ 6.7% OPERATING EXP 752$ 1,500$ 1,500$ 0.0% CONTRACT SERVICES 346,300$ 273,000$ 273,000$ 0.0% CAPITAL OUTLAY -$ 1,000$ 1,000$ 0.0% UTILITIES -$ 780$ 500$ (280)$ -35.9% LEGISLATIVE AFFAIRS Total 946,125$ 682,340$ 683,060$ 720$ 0.1%

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL BY DEPARTMENT/DIVISION

Page 7 of 27 ends

Department/Division Category 2023 Actual 2024 Adopted 2024
Proposed $ Chg % Chg

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL BY DEPARTMENT/DIVISION
RECORDS MANAGEMENT SALARIES 70,356$ 72,910$ 72,910$ 0.0% BENEFITS 18,626$ 38,250$ 38,250$ 0.0% ORG DEVELOPMENT -$ -$ -$ 0.0% OPERATING EXP 2,435$ 8,000$ 8,000$ 0.0% CONTRACT SERVICES 15,764$ 24,600$ 24,600$ 0.0% CAPITAL OUTLAY -$ 1,000$ 1,000$ 0.0% UTILITIES 12,093$ 14,000$ 14,290$ 290$ 2.1% CAPITAL -$ -$ -$ 0.0% DEBT SERVICE -$ -$ -$ 0.0% RECORDS MANAGEMENT Total 119,274$ 158,760$ 159,050$ 290$ 0.2%

2. City Manager Department Total 6,511,619$ 6,480,200$ 6,499,090$ 18,890$ 0.3%

3. City Attorney
CITY ATTORNEY SALARIES 245,915$ 384,090$ 72,090$ (312,000)$ -81.2% BENEFITS 119,182$ 187,120$ 35,620$ (151,500)$ -81.0% ORG DEVELOPMENT 22,784$ 29,000$ 18,650$ (10,350)$ -35.7% OPERATING EXP 2,652$ 4,000$ 4,000$ 0.0% CONTRACT SERVICES 1,796,160$ 1,632,000$ 1,982,000$ 350,000$ 21.4% CAPITAL OUTLAY -$ 1,000$ 1,000$ 0.0% UTILITIES 1,027$ 2,500$ 500$ (2,000)$ -80.0% TRANSFERS OUT 65,359$ 98,390$ 98,390$ 0.0% CITY ATTORNEY Total 2,253,078$ 2,338,100$ 2,212,250$ (125,850)$ -5.4%

3. City Attorney Total 2,253,078$ 2,338,100$ 2,212,250$ (125,850)$ -5.4%

4. Operations Department
AMERICAN RESCUE PLAN ACT SALARIES 1,005,500$ 75,000$ 75,000$ -$ 0.0% OPERATING EXP 4,082,652$ 5,958,780$ 5,658,780$ (300,000)$ -5.0% CONTRACT SERVICES 385,367$ 1,086,600$ 1,086,600$ -$ 0.0% CAPITAL OUTLAY 2,862$ 47,000$ 47,000$ 0.0% COUNTY CONTRACTS 4,500,000$ 2,000,000$ 2,000,000$ 0.0% UTILITIES 5,255$ 10,800$ 10,800$ 0.0% CAPITAL -$ -$ -$ 0.0% AMERICAN RESCUE PLAN ACT Total 9,981,636$ 9,178,180$ 8,878,180$ (300,000)$ -3.3% ASSESSMENT DIST / CFD CONTRACT SERVICES 747,524$ 1,180,000$ 1,071,000$ (109,000)$ -9.2% DEBT SERVICE 2,354,682$ 2,361,700$ 2,361,700$ 0.0% TRANSFERS OUT 122,700$ 214,900$ 214,900$ 0.0% ASSESSMENT DIST / CFD Total 3,224,906$ 3,756,600$ 3,647,600$ (109,000)$ -2.9% FINANCE SALARIES 1,171,532$ 1,566,380$ 1,566,380$ 0.0% BENEFITS 565,170$ 843,290$ 843,290$ 0.0% ORG DEVELOPMENT 20,206$ 51,900$ 67,400$ 15,500$ 29.9% OPERATING EXP 22,421$ 111,000$ 112,500$ 1,500$ 1.4% CONTRACT SERVICES 652,462$ 904,070$ 890,960$ (13,110)$ -1.5% CAPITAL OUTLAY 19,184$ 32,000$ 32,000$ 0.0% UTILITIES 1,326$ 2,000$ 2,000$ 0.0% DEBT SERVICE 197,519$ -$ -$ 0.0% TRANSFERS OUT 5,953,879$ 5,646,930$ 5,657,550$ 10,620$ 0.2% GN/LS-SALE OF ASSET -$ -$ -$ 0.0% FINANCE Total 8,603,698$ 9,157,570$ 9,172,080$ 14,510$ 0.2% GENERAL CITY SALARIES 314,631$ 268,990$ 268,990$ 0.0% BENEFITS 189,339$ 260,000$ 260,000$ 0.0% ORG DEVELOPMENT 93,801$ 193,500$ 193,500$ 0.0% OPERATING EXP 1,067,285$ 2,651,840$ 2,606,840$ (45,000)$ -1.7% CONTRACT SERVICES 285,537$ 680,500$ 675,500$ (5,000)$ -0.7% CAPITAL OUTLAY 2,178$ -$ -$ 0.0% UTILITIES 91,366$ 152,500$ 152,500$ 0.0% CAPITAL -$ 217,860$ 217,860$ 0.0% DEBT SERVICE 9,749,615$ 10,593,220$ 10,593,220$ 0.0% CONTINGENCY -$ -$ -$ 0.0% TRANSFERS OUT 6,980,047$ 6,911,100$ 6,911,100$ 0.0% GENERAL CITY Total 18,773,798$ 21,929,510$ 21,879,510$ (50,000)$ -0.2%

Page 8 of 27 ends

Department/Division Category 2023 Actual 2024 Adopted 2024
Proposed $ Chg % Chg

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL BY DEPARTMENT/DIVISION
HUMAN RESOURCES SALARIES 459,432$ 536,680$ 461,680$ (75,000)$ -14.0% BENEFITS 186,387$ 240,920$ 240,920$ 0.0% ORG DEVELOPMENT 8,843$ 16,350$ 16,350$ 0.0% OPERATING EXP 1,903,844$ 1,875,500$ 1,875,500$ 0.0% CONTRACT SERVICES 1,188,812$ 1,423,820$ 1,498,820$ 75,000$ 5.3% CAPITAL OUTLAY -$ 8,500$ 8,500$ 0.0% UTILITIES -$ -$ -$ 0.0% CAPITAL -$ -$ -$ 0.0% TRANSFERS OUT 76,255$ 114,790$ 114,790$ 0.0% HUMAN RESOURCES Total 3,823,572$ 4,216,560$ 4,216,560$ -$ 0.0% INFORMATION TECHNOLOGY SALARIES 894,645$ 890,710$ 890,710$ 0.0% BENEFITS 436,970$ 485,400$ 485,400$ 0.0% ORG DEVELOPMENT 11,684$ 17,000$ 17,000$ 0.0% OPERATING EXP 989,776$ 21,500$ 21,500$ 0.0% CONTRACT SERVICES 38,725$ 40,200$ 40,200$ 0.0% SOFTWARE 1,210,212$ 3,084,390$ 3,084,390$ 0.0% CAPITAL OUTLAY 416,537$ 198,810$ 198,810$ 0.0% UTILITIES 76,628$ 117,400$ 117,400$ 0.0% CAPITAL -$ 1,253,800$ 1,253,800$ 0.0% INFORMATION TECHNOLOGY Total 4,075,177$ 6,109,210$ 6,109,210$ 0.0% PALMDALE COMMUNITY FOUNDATION OPERATING EXP 45,510$ 160,540$ 167,540$ 7,000$ 4.4% CONTRACT SERVICES -$ -$ -$ 0.0% CONTINGENCY 117,289$ -$ -$ 0.0% PALMDALE COMMUNITY FOUNDATION Total 162,799$ 160,540$ 167,540$ 7,000$ 4.4% RISK MANAGEMENT ORG DEVELOPMENT 535$ 1,100$ 11,300$ 5,200$ 472.7% OPERATING EXP 4,929,155$ 3,430,750$ 11,480,750$ 8,050,000$ 234.6% CONTRACT SERVICES 1,011,062$ 1,054,750$ 1,054,750$ 0.0% RISK MANAGEMENT Total 5,940,752$ 4,486,600$ 12,546,800$ 8,055,200$ 179.5% SUCCESSOR AGENCY SALARIES -$ 600$ 600$ 0.0% BENEFITS 15$ 400$ 400$ 0.0% OPERATING EXP 61$ 700,300$ 700,300$ 0.0% CONTRACT SERVICES 1,188,797$ 1,224,270$ 1,224,270$ 0.0% UTILITIES 97,506$ 107,100$ 107,100$ 0.0% PROGRAM EXP -$ 365,000$ 365,000$ 0.0% INTER-GOV SHARING 61,704,794$ 52,044,210$ 52,044,210$ 0.0% DEBT SERVICE 10,259,844$ 10,481,190$ 10,481,190$ 0.0% TRANSFERS OUT 477,940$ 36,000$ 36,000$ 0.0% SUCCESSOR AGENCY Total 73,728,957$ 64,959,070$ 64,959,070$ 0.0%

4. Operations Department Total 128,315,295$ 123,953,840$ 131,576,550$ 7,617,710$ 6.1%

5. Economic and Community Development
ADMIN - ECONOMIC DEVELOPMENT SALARIES 313,031$ 602,650$ 602,650$ 0.0% BENEFITS 111,061$ 298,630$ 298,630$ 0.0% ORG DEVELOPMENT 9,614$ 14,500$ 14,500$ 0.0% OPERATING EXP 7,372$ 7,500$ 7,500$ 0.0% CONTRACT SERVICES 44,107$ 35,000$ 35,000$ 0.0% UTILITIES -$ 1,300$ 1,300$ 0.0% TRANSFERS OUT 141,614$ 213,170$ 213,170$ 0.0% ADMIN - ECONOMIC DEVELOPMENT Total 626,798$ 1,172,750$ 1,172,750$ 0.0% BUILDING AND SAFETY SALARIES 1,321,488$ 1,492,710$ 1,492,710$ 0.0% BENEFITS 652,211$ 826,010$ 826,010$ 0.0% ORG DEVELOPMENT 33,684$ 34,700$ 34,700$ 0.0% OPERATING EXP 4,123$ 4,500$ 4,500$ 0.0% CONTRACT SERVICES 702,975$ 750,750$ 750,750$ 0.0% CAPITAL OUTLAY 822$ 6,000$ 6,000$ 0.0% UTILITIES 5,923$ 6,000$ 6,000$ 0.0% CAPITAL -$ -$ -$ 0.0% TRANSFERS OUT 209,309$ 325,620$ 325,620$ 0.0% BUILDING AND SAFETY Total 2,930,535$ 3,446,290$ 3,446,290$ 0.0%

Page 9 of 27 ends

Department/Division Category 2023 Actual 2024 Adopted 2024
Proposed $ Chg % Chg

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL BY DEPARTMENT/DIVISION
ECONOMIC DEVELOPMENT SALARIES 268,036$ 395,670$ 395,670$ 0.0% BENEFITS 139,568$ 210,340$ 210,340$ 0.0% ORG DEVELOPMENT 39,911$ 50,070$ 50,070$ 0.0% OPERATING EXP 589,166$ 2,665,100$ 2,665,100$ -$ 0.0% CONTRACT SERVICES 769,674$ 672,110$ 672,110$ 0.0% CAPITAL OUTLAY -$ 1,500$ 1,500$ 0.0% UTILITIES 632$ 28,850$ 28,850$ 0.0% TRANSFERS OUT 65,359$ 98,390$ 98,390$ 0.0% ECONOMIC DEVELOPMENT Total 1,872,346$ 4,122,030$ 4,122,030$ -$ 0.0% PLANNING SALARIES 902,373$ 962,770$ 962,770$ 0.0% BENEFITS 388,266$ 520,060$ 520,060$ 0.0% ORG DEVELOPMENT 19,278$ 23,610$ 23,610$ 0.0% OPERATING EXP 8,433$ 12,300$ 12,300$ 0.0% CONTRACT SERVICES 87,501$ 81,470$ 81,470$ 0.0% CAPITAL OUTLAY 2,233$ 3,000$ 3,000$ 0.0% UTILITIES -$ -$ -$ 0.0% DEBT SERVICE -$ -$ -$ 0.0% TRANSFERS OUT 130,718$ 196,770$ 196,770$ 0.0% PLANNING Total 1,538,802$ 1,799,980$ 1,799,980$ 0.0%

5. Economic and Community Development Total 6,968,481$ 10,541,050$ 10,541,050$ -$ 0.0%

6. Public Safety
COMMUNITY COMPLIANCE SALARIES 1,923,915$ 2,877,240$ 2,877,240$ 0.0% BENEFITS 689,934$ 1,185,540$ 1,186,140$ 600$ 0.1% ORG DEVELOPMENT 11,275$ 16,000$ 16,000$ 0.0% OPERATING EXP 27,892$ 85,000$ 85,000$ 0.0% CONTRACT SERVICES 77,087$ 116,200$ 119,800$ 3,600$ 3.1% CAPITAL OUTLAY -$ 2,000$ 7,500$ 5,500$ 275.0% COUNTY CONTRACTS 1,488$ -$ 22,910$ 22,910$ 0.0% UTILITIES 14,274$ 25,300$ 25,850$ 550$ 2.2% CAPITAL 57,814$ 164,500$ 274,500$ 110,000$ 66.9% TRANSFERS OUT 95,418$ 172,360$ 172,360$ 0.0% COMMUNITY COMPLIANCE Total 2,899,096$ 4,644,140$ 4,787,300$ 143,160$ 3.1% PUBLIC SAFETY SALARIES 395,229$ 676,600$ 676,600$ 0.0% BENEFITS 217,340$ 324,640$ 316,640$ (8,000)$ -2.5% ORG DEVELOPMENT 612$ 10,400$ 7,900$ (2,500)$ -24.0% OPERATING EXP 66,191$ 44,000$ 44,200$ 200$ 0.5% CONTRACT SERVICES 115,527$ 650,050$ 618,300$ (31,750)$ -4.9% CAPITAL OUTLAY -$ 5,500$ 5,500$ 0.0% COUNTY CONTRACTS 25,966,683$ 32,048,230$ 32,085,230$ 37,000$ 0.1% UTILITIES 19,522$ 19,600$ 20,100$ 500$ 2.6% CAPITAL -$ -$ -$ 0.0% TRANSFERS OUT 424,842$ 639,520$ 639,520$ 0.0% PUBLIC SAFETY Total 27,205,946$ 34,418,540$ 34,413,990$ (4,550)$ 0.0%

6. Public Safety Total 30,105,042$ 39,062,680$ 39,201,290$ 138,610$ 0.4%

7. Neighborhood Services
ADMIN - ECONOMIC DEVELOPMENT SALARIES 6,717$ -$ -$ 0.0% BENEFITS 451$ -$ -$ 0.0% OPERATING EXP 1,485$ -$ -$ 0.0% PROGRAM EXP -$ -$ -$ 0.0% ADMIN - ECONOMIC DEVELOPMENT Total 8,653$ -$ -$ 0.0% CAPITAL OUTLAY 54,060$ 29,000$ 29,000$ 0.0% UTILITIES 1,259,358$ 1,491,370$ 1,520,870$ 29,500$ 2.0% PROGRAM EXP 2,256,227$ 12,186,650$ 12,413,460$ 226,810$ 1.9% CAPITAL 364,018$ 563,980$ 489,980$ (74,000)$ -13.1% DEBT SERVICE 636,580$ 1,766,340$ 1,766,340$ 0.0% AFFORDABLE HOUSING Total 9,994,780$ 25,122,270$ 26,435,430$ 1,313,160$ 5.2%

Page 10 of 27 ends

Department/Division Category 2023 Actual 2024 Adopted 2024
Proposed $ Chg % Chg

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL BY DEPARTMENT/DIVISION
CDBG SALARIES 163,541$ 46,050$ 189,050$ 143,000$ 310.5% BENEFITS 20,328$ 21,140$ 21,140$ 0.0% ORG DEVELOPMENT 4,552$ 5,500$ 5,500$ 0.0% OPERATING EXP 63,658$ 1,177,780$ 1,002,570$ (175,210)$ -14.9% CONTRACT SERVICES 99,825$ 153,120$ 153,120$ 0.0% CAPITAL OUTLAY -$ 100$ 100$ 0.0% UTILITIES 4,704$ -$ 23,500$ 23,500$ 0.0% PROGRAM EXP -$ 103,200$ 337,030$ 233,830$ 226.6% CAPITAL 795,275$ -$ -$ 0.0% DEBT SERVICE 579,095$ 321,870$ 321,870$ 0.0% CDBG Total 1,730,978$ 1,828,760$ 2,053,880$ 225,120$ 12.3%

7. Neighborhood Services Total 11,734,411$ 26,951,030$ 28,489,310$ 1,538,280$ 5.7%

8. Parks & Recreation
AQUATICS BENEFITS 165$ -$ -$ 0.0% AQUATICS Total 165$ -$ -$ 0.0% COMMUNITY PROGRAMS SALARIES 323,016$ 467,840$ 467,840$ 0.0% BENEFITS 84,876$ 114,190$ 114,190$ 0.0% ORG DEVELOPMENT 2,190$ 6,350$ 6,350$ 0.0% OPERATING EXP 136,932$ 386,500$ 380,990$ (5,510)$ -1.4% CONTRACT SERVICES 5,921$ 12,500$ 12,500$ 0.0% CAPITAL OUTLAY -$ -$ -$ 0.0% UTILITIES 10,960$ -$ -$ 0.0% COMMUNITY PROGRAMS Total 563,896$ 987,380$ 981,870$ (5,510)$ -0.6% EMERGENCY MANAGEMENT SALARIES 132,460$ 153,880$ 153,880$ 0.0% BENEFITS 70,553$ 86,040$ 86,040$ 0.0% ORG DEVELOPMENT 7,639$ 10,200$ 10,500$ 300$ 2.9% OPERATING EXP 19,233$ 32,550$ 32,550$ 0.0% CONTRACT SERVICES 2,500$ 10,800$ 10,800$ 0.0% CAPITAL OUTLAY 2,495$ 4,000$ 4,000$ 0.0% UTILITIES 478$ 2,400$ 2,400$ 0.0% CAPITAL (142,237)$ -$ -$ 0.0% TRANSFERS OUT -$ -$ -$ 0.0% EMERGENCY MANAGEMENT Total 93,121$ 299,870$ 300,170$ 300$ 0.1% EVENTS & CULTURE SALARIES 1,032,806$ 1,415,460$ 1,439,460$ 24,000$ 1.7% BENEFITS 314,465$ 421,660$ 421,660$ 0.0% ORG DEVELOPMENT 4,470$ 12,100$ 12,100$ 0.0% OPERATING EXP 343,607$ 964,450$ 986,450$ 22,000$ 2.3% CONTRACT SERVICES 810,448$ 1,458,250$ 1,416,750$ (41,500)$ -2.8% SOFTWARE 1,635$ 2,100$ 2,100$ 0.0% CAPITAL OUTLAY 27,550$ 45,800$ 45,800$ 0.0% UTILITIES 80,240$ 58,400$ 72,400$ 14,000$ 24.0% CAPITAL -$ 38,000$ 38,000$ 0.0% TRANSFERS OUT -$ -$ -$ 0.0% EVENTS & CULTURE Total 2,615,219$ 4,416,220$ 4,434,720$ 18,500$ 0.4% LIBRARY SALARIES 41,478$ 49,440$ 49,440$ 0.0% BENEFITS 2,510$ 2,200$ 2,200$ 0.0% ORG DEVELOPMENT -$ 500$ 500$ 0.0% OPERATING EXP 243,850$ 523,180$ 523,180$ 0.0% CONTRACT SERVICES 1,061,350$ 1,092,270$ 1,092,270$ 0.0% CAPITAL OUTLAY 789$ 10,000$ 10,000$ 0.0% UTILITIES 55,964$ 52,000$ 52,000$ 0.0% TRANSFERS OUT 130,718$ 196,770$ 196,770$ 0.0% LIBRARY Total 1,536,659$ 1,926,360$ 1,926,360$ 0.0%

Page 11 of 27 ends

Department/Division Category 2023 Actual 2024 Adopted 2024
Proposed $ Chg % Chg

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL BY DEPARTMENT/DIVISION
PARKS & FACILITIES SALARIES 2,035,422$ 2,035,660$ 2,128,280$ 92,620$ 4.5% BENEFITS 499,478$ 613,660$ 613,660$ 0.0% ORG DEVELOPMENT 13,794$ 30,600$ 30,600$ 0.0% OPERATING EXP 260,602$ 405,880$ 420,880$ 15,000$ 3.7% CONTRACT SERVICES 147,051$ 252,300$ 255,300$ 3,000$ 1.2% SOFTWARE 10,701$ 11,000$ 11,000$ 0.0% CAPITAL OUTLAY 28,558$ 80,000$ 120,000$ 40,000$ 50.0% UTILITIES 392,067$ 458,100$ 478,750$ 20,650$ 4.5% CAPITAL 75,603$ 292,250$ 262,250$ (30,000)$ -10.3% TRANSFERS OUT 737,152$ 1,163,160$ 1,163,160$ 0.0% PARKS & FACILITIES Total 4,200,428$ 5,342,610$ 5,483,880$ 141,270$ 2.6% RECREATION SERVICES SALARIES 2,106,479$ 2,361,940$ 2,361,940$ 0.0% BENEFITS 318,009$ 427,330$ 427,330$ 0.0% ORG DEVELOPMENT 8,638$ 16,040$ 16,040$ 0.0% OPERATING EXP 180,944$ 197,450$ 197,450$ 0.0% CONTRACT SERVICES 171,405$ 257,700$ 227,700$ (30,000)$ -11.6% CAPITAL OUTLAY 16,477$ 78,350$ 78,350$ 0.0% UTILITIES 73,938$ 75,500$ 75,500$ 0.0% CAPITAL 26,859$ -$ -$ 0.0% RECREATION SERVICES Total 2,902,749$ 3,414,310$ 3,384,310$ (30,000)$ -0.9%

8. Parks & Recreation Total 11,912,237$ 16,386,750$ 16,511,310$ 124,560$ 0.8%

9. Public Works
CAPITAL IMPROVEMENT PROJECTS SALARIES 371,384$ -$ -$ 0.0% BENEFITS 388,331$ 1,186,600$ 1,186,600$ 0.0% CAPITAL 26,175,716$ 260,433,870$ 260,622,240$ 188,370$ 0.1% CAPITAL IMPROVEMENT PROJECTS Total 26,935,431$ 261,620,470$ 261,808,840$ 188,370$ 0.1% ENGINEERING SALARIES 1,993,373$ 2,209,900$ 2,209,900$ 0.0% BENEFITS 906,947$ 1,369,420$ 1,369,720$ 300$ 0.0% ORG DEVELOPMENT 29,103$ 57,720$ 59,720$ 2,000$ 3.5% OPERATING EXP 530,995$ 984,760$ 986,760$ 2,000$ 0.2% CONTRACT SERVICES 196,654$ 987,100$ 987,100$ 0.0% CAPITAL OUTLAY 5,784$ 31,200$ 31,200$ 0.0% UTILITIES 1,941,358$ 2,244,900$ 2,244,900$ 0.0% CAPITAL -$ -$ -$ 0.0% DEBT SERVICE 1,009,405$ 1,037,460$ 1,037,460$ 0.0% TRANSFERS OUT 1,570,932$ 2,417,510$ 2,417,510$ 0.0% ENGINEERING Total 8,184,552$ 11,339,970$ 11,344,270$ 4,300$ 0.0% ENVIRONMENTAL SALARIES 322,612$ 395,660$ 395,660$ 0.0% BENEFITS 147,956$ 200,760$ 200,760$ 0.0% ORG DEVELOPMENT -$ 14,180$ 24,780$ 10,600$ 74.8% OPERATING EXP 4,788$ 9,300$ 9,300$ 0.0% CONTRACT SERVICES 246,983$ 788,390$ 920,580$ 132,190$ 16.8% UTILITIES 53$ -$ -$ 0.0% ENVIRONMENTAL Total 722,392$ 1,408,290$ 1,551,080$ 142,790$ 10.1% MAINTENANCE SALARIES 6,976,902$ 7,821,540$ 7,821,540$ 0.0% BENEFITS 4,001,177$ 4,730,490$ 4,730,490$ 0.0% ORG DEVELOPMENT 83,322$ 151,740$ 156,740$ 5,000$ 3.3% OPERATING EXP 3,561,259$ 3,973,680$ 4,096,680$ 123,000$ 3.1% CONTRACT SERVICES 8,347,480$ 12,356,000$ 11,498,000$ (858,000)$ -6.9% CAPITAL OUTLAY 48,615$ 77,900$ 83,900$ 6,000$ 7.7% UTILITIES 2,921,985$ 3,789,000$ 3,869,000$ 80,000$ 2.1% CAPITAL 142,237$ 1,495,890$ 1,615,890$ 120,000$ 8.0% DEBT SERVICE 26,092$ 26,500$ 26,500$ 0.0% TRANSFERS OUT 2,386,162$ 3,965,650$ 3,965,650$ 0.0% MAINTENANCE Total 28,495,230$ 38,388,390$ 37,864,390$ (524,000)$ -1.4%

Page 12 of 27 ends

Department/Division Category 2023 Actual 2024 Adopted 2024
Proposed $ Chg % Chg

CITY OF PALMDALE
FY 2024 MID-YEAR BUDGET

EXPENDITURES-ALL BY DEPARTMENT/DIVISION
PALMDALE CCA SALARIES 124,743$ 199,520$ 199,520$ 0.0% BENEFITS 54,309$ 104,440$ 104,440$ 0.0% ORG DEVELOPMENT 3,181$ 25,000$ 25,000$ 0.0% OPERATING EXP 307$ 692,730$ 692,730$ 0.0% CONTRACT SERVICES 29,267,614$ 63,364,580$ 65,973,830$ 2,609,250$ 4.1% CAPITAL OUTLAY -$ 5,000$ 5,000$ 0.0% TRANSFERS OUT 10,893$ -$ -$ 0.0% PALMDALE CCA Total 29,461,048$ 64,391,270$ 67,000,520$ 2,609,250$ 4.1% PUBLIC WORKS - ADMINISTRATION SALARIES 1,133,393$ 1,143,690$ 1,143,690$ 0.0% BENEFITS (235,092)$ 532,290$ 532,290$ 0.0% ORG DEVELOPMENT 11,431$ 20,050$ 20,050$ 0.0% OPERATING EXP 6,794$ 9,600$ 9,600$ 0.0% CONTRACT SERVICES 123,742$ 383,000$ 383,000$ 0.0% CAPITAL OUTLAY -$ 4,000$ 4,000$ 0.0% UTILITIES 1,132$ 4,500$ 4,500$ 0.0% CAPITAL -$ 197,000$ 197,000$ 0.0% DEBT SERVICE 10,149$ 10,300$ 10,300$ 0.0% TRANSFERS OUT 5,835$ 10,540$ 10,540$ 0.0% PUBLIC WORKS - ADMINISTRATION Total 1,057,384$ 2,314,970$ 2,314,970$ 0.0%

9. Public Works Total 94,856,037$ 379,463,360$ 381,884,070$ 2,420,710$ 0.6% Grand Total 293,012,428$ 605,966,200$ 617,704,110$ 11,732,910$ 1.9%

Page 13 of 27 ends

Measure AV Category Project Description
FY 2021
Actual
FY 2022
Actual
FY 2023
Actual
FY 2024
Actual YTD
FY 2024
Adopted
FY 2024
Proposed $ Chg

REVENUES
Revenue General Sales Tax 5,188,745 22,685,307 22,675,911 9,199,528 22,923,000 22,307,000 (616,000) Revenue Total 5,188,745 22,685,307 22,675,911 9,199,528 22,923,000 22,307,000 (616,000)

EXPENDITURES
A. Public Safety Animal Services
Independent Operation Feasibility - - 30,921 67,359 69,080 69,080 - Animal Health Services - - 183,073 76,975 362,930 362,930 - Emergency Management - 131,009 60,776 92,141 239,320 239,320 - Community Compliance - 380,784 859,321 744,610 2,358,400 2,358,400 - Public Safety Equipment - 66,500 60,000 - - - - Sheriff Contract
General Contract - 7,595,700 2,819,060 612,823 1,838,470 1,838,470 - Infrastructure/Commercial - - 227,120 75,793 227,380 227,380 - Community Programs - - 4,461,080 1,364,217 4,092,650 4,092,650 - Economic Development - - 989,140 350,200 1,050,600 1,050,600 - A. Public Safety Total - 8,173,993 9,690,491 3,384,118 10,238,830 10,238,830 - B. Infrastructure / CIP
Safe and Clean Parks
Sam Yellen Park - - 613 536,957 9,998,780 9,998,780 - Ecological Preservation Study - - - - 250,000 - (250,000) McAdam Park Improvements - Schoolhouse - 1,770 197 - - - - McAdam Park Battery Storage - - 670,213 5,106 1,106,150 805,150 (301,000) McAdam Park Renovation - Design - - 53,361 2,772 508,100 508,100 - MK Park Pool Enclosure - - - - 550,000 550,000 - MK Park Swim Deck & Cover - 350 57,670 13,275 905,890 200,000 (705,890) Parks Master Plan - 70 161,708 73,345 126,530 126,530 - Courtney's Playground - 61,613 5,852 - - - - Roller Hockey Rink Renovation - 512 - - - - - Rugby Goal Purch & Install - 12,925 - - - - - General Park Improvements - 53,600 455,737 821,609 3,454,270 3,192,270 (262,000) Sports Field Lighting - 5,968 788,134 4,004 6,667,500 6,667,500 - Graffiti Abatement -
Graffiti Abatement Vehicles - - 142,237 145,077 158,780 158,780 - Abatement/Prevention/Maintenance Programs - - 310,980 73,117 639,650 639,650 - Street Sweeping/Signage/Enforcement - - - 9,514 750,000 450,000 (300,000) CIP Multi-Year Projects -
Citywide Security - 150,176 680,183 137,989 2,187,490 2,187,490 - Facility Improvements - Aero - - 213,392 112,020 200,000 450,000 250,000 Chimbole - - 84,323 - 107,680 307,680 200,000 Memorial Honor Wall - - 13,627 2,275 11,370 - (11,370) Regional Recreation Complex - 343,097 87,791 - 15,970 - (15,970) Veteran Resource Center 3,636 - - - - - - Avenue M Grade Separation - - - - 1,000,000 1,000,000 - B. Infrastructure / CIP Total 3,636 630,081 3,726,018 1,937,060 28,638,160 27,241,930 (1,396,230) C. Community Programs
SAVES - 80,498 71,976 40,467 319,870 319,870 - Unhoused Programs - - 199,729 81,840 200,000 200,000 - Mental Health Programs 148,807 149,593 - - - - - Community Partnership Programs - - 29,975 - 50,000 25,000 (25,000) Senior Programs/Legacy Commons - - 300,994 161,688 405,440 412,440 7,000 Community Grant Programs - 179,000 1,087,458 - - - - Veteran Support - - - 1,900 25,000 25,000 - Recreation Scholarships - - - - 20,000 20,000 - Community Events -
Community Events - - 309,787 595,104 986,450 986,450 - C. Community Programs Total 148,807 409,091 1,999,919 880,999 2,006,760 1,988,760 (18,000) D. Economic Development
Economic Development
Business Retention - 250,817 105,928 13,863 140,000 140,000 - Auto Mall Partnership - - 450,000 500,000 500,000 - Aerospace Incentive Program - - - 250,000 250,000 - Property Acquisition & Entitlement - - 6,309 1,500,000 1,500,000 - Film & Tourism - - 22,718 26,915 150,000 150,000 - Holidays on Parade - 150,000 - - D. Economic Development Total - 400,817 584,955 40,778 2,540,000 2,540,000 - Administrative Costs Program Administration - 5% cap - 84,783 121,694 44,801 83,270 83,270 - Independent Audit - - 10,000 10,000 10,000 10,000 - Administrative Costs Total - 84,783 131,694 54,801 93,270 93,270 - Expenditure Total 152,443 9,698,765 16,133,077 6,297,756 43,517,020 42,102,790 (1,414,230) Surplus/(Deficit) 5,036,302 12,986,543 6,542,834 2,901,772 (20,594,020) (19,795,790) Beginning Fund Balance - 5,036,302 18,022,844 24,565,678 24,565,678 24,565,678 Change in Fund Balance 5,036,302 12,986,543 6,542,834 2,901,772 (20,594,020) (19,795,790) Ending Fund Balance - Before Reserves 5,036,302 18,022,844 24,565,678 27,467,451 3,971,658 4,769,888 Reserve Requirement - 10% 629,776 4,351,702 4,210,279 Ending Fund Balance - After Reserves 5,036,302 18,022,844 24,565,678 26,837,675 (380,044) 559,609

MEASURE AV
FY 2024 MID-YEAR OPERATING & CIP BUDGET

REVENUES & EXPENDITURES BY PROGRAM

Page 14 of 27 ends

ARPA Reporting Category Project Description
FY 2022
Actual
FY 2023
Actual
FY 2024
Adopted
FY 2024
Proposed $ Chg
U.S. Treasury Allocation: 35,455,019$
REVENUES 10,445,600 10,445,600
Revenue American Rescue Plan Act Allocation 342,808$ 12,580,662 12,721,540 12,721,540 - Program Income - Interest 24,499 703,801 300,000 300,000 - Revenue Total 367,307 13,284,463 13,021,540 13,021,540 -

EXPENDITURES

1. Public Health and Safety SAVES HVAC Replacement - - 80,000 - (80,000) Public Facility Health & Safety, Energy Efficiency - - 4,966,600 4,966,600 - Mental Health Partnerships - - 2,175,000 2,175,000 - SAVES Facility Improvements - - - 705,000 705,000 Dump Stations / Illegal Dumping - - 300,000 - (300,000) Mutual Aid Regional Response 40,333 - - - - Oasis vaccine clinic vinyl floor covering - 14,983 5,020 5,020 - Sheriff Contract - 4,500,000 2,000,000 2,000,000 - Emergency Operations Center Relocation - - 2,000,000 2,000,000 - Well-Being Lab - Mental Health Services - 146,300 453,700 453,700 -

1. Public Health Total 40,333 4,661,283 11,980,320 12,305,320 325,000

2. Negative Economic Impacts
Business Retention 212,142 195,000 600,000 600,000 - Film Incentive Programs 30,000 49,256 - - - Business Grants - 54,966 45,040 45,040 - Tourism - 68,993 160,740 160,740 -

2. Negative Economic Impacts Total 242,142 368,215 805,780 805,780 -

3.Services to Disproportionately Impacted Communities
Library Services 17,306 86,617 131,300 131,300 - SAVES - - 150,000 150,000 - Public Parks/Facilities Improvements - 250,000 250,000 - Battery Storage Project - - 1,550,000 1,550,000 - Park Facility Energy Improvements - - 355,000 355,000 - Affordable Housing Programs 2,000,000 - - - Community Choice Aggregate Programs 1,754,220 745,780 745,780 - Recreation Sponsorship Program - - 75,000 75,000 -

3. Services to Disproportionately Impacted Communities Total 17,306 3,840,837 3,257,080 3,257,080 -

4. Premium Pay
Premium Pay - 1,005,500 75,000 75,000 -

4. Premium Pay Total - 1,005,500 75,000 75,000 -

5. Water, Sewer & Broadband Infrastructure
Storm Water Basin & Recycled Water Projects - - 400,000 400,000 -

5. Water, Sewer & Broadband Infrastructure Total - - 400,000 400,000 -

6. Revenue Replacement
Multiagency Regional Resiliency Center (MARRC) - 2,500,000 - - - Technology Infrastructure 35,500 122,832 - - - Unhoused Programs - - 2,000,000 2,000,000 - Hammack Center Demolition - 15,050 734,950 409,950 (325,000) Park Improvements - 500,000 500,000 - Records Digitization - - 2,200,000 2,200,000 - Film Consultants - 59,300 59,300 59,300 -

6. Revenue Replacement Total 35,500 2,697,182 5,494,250 5,169,250 (325,000)

7. Administrative & Other
AdministrativeCosts 7,527 7,645 307,320 307,320 -

7. Administrative & Other Total 7,527 7,645 307,320 307,320 - Expenditure Total 342,808 12,580,662 22,319,750 22,319,750 - Ending Available Fund Balance 35,112,211 22,531,549 211,799 211,799

AMERICAN RESCUE PLAN ACT
FY 2024 MID-YEAR OPERATING & CIP BUDGET

REVENUES & EXPENDITURES BY PROGRAM

Page 15 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg
B0004 ADA COMPLIANCE 203 PROP A FUND 296,240 396,240 100,000 B0004 ADA COMPLIANCE 206 LOCAL TRANSP FUND ART 3 10,000 220,000 210,000 B0004 ADA COMPLIANCE 280 CDBG FUND 337,630 - (337,630) B0004 Total 643,870 616,240 (27,630) B0013 ADA COMP-AVE Q 12/10TH-12TH E 280 CDBG FUND 175,730 175,730 B0013 ADA COMP-AVE Q 12/10TH-12TH E 214 PROP C LOCAL RETURN 6,180 6,180 B0013 Total 181,910 181,910
D0001 AMARGOSA DRAINAGE 222 AMARGOSA DRAINAGE FUND 20,000 20,000 D0001 Total 20,000 20,000
D0002 ANAVERDE DRAINAGE 223 ANAVERDE DRAINAGE FUND 20,000 20,000 D0002 Total 20,000 20,000
D0003 PORTAL RIDGE DRAINAGE 224 PORTAL RIDGE DRAINAGE FUND 20,000 20,000 D0003 Total 20,000 20,000
D0004 PEARLAND DRAINAGE 225 PEARLAND DRAINAGE FUND 20,000 20,000 D0004 Total 20,000 20,000
D0008 AMARGOSA CRK UPPER RECHG PROJ 211 MEASURE A LA COUNTY PARKS 1,000,000 1,000,000 D0008 AMARGOSA CRK UPPER RECHG PROJ 222 AMARGOSA DRAINAGE FUND 339,020 339,020 D0008 AMARGOSA CRK UPPER RECHG PROJ 223 ANAVERDE DRAINAGE FUND 386,920 386,920 D0008 AMARGOSA CRK UPPER RECHG PROJ 224 PORTAL RIDGE DRAINAGE FUND 448,700 448,700 D0008 AMARGOSA CRK UPPER RECHG PROJ 225 PEARLAND DRAINAGE FUND 944,200 944,200 D0008 AMARGOSA CRK UPPER RECHG PROJ 226 LITTLEROCK DRAINAGE FUND 50,000 50,000 D0008 AMARGOSA CRK UPPER RECHG PROJ 230 BIG ROCK DRAINAGE FUND 73,400 73,400 D0008 Total 3,242,240 3,242,240
D0101 DETENTION BASIN MAINT & REPAIR 101 GENERAL FUND 160,000 160,000 D0101 Total 160,000 160,000
D0118 PEARLAND DRAINAGE PLAN STUDY 225 PEARLAND DRAINAGE FUND 530,000 530,000 D0118 Total 530,000 530,000

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE

Page 16 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE D0119 OASIS PARK BASIN UPGRADE 225 PEARLAND DRAINAGE FUND 1,160,000 1,160,000 D0119 Total 1,160,000 1,160,000
D0120 40TH E/AVE R DRAINAGE IMPRV 225 PEARLAND DRAINAGE FUND 300,000 300,000 D0120 Total 300,000 300,000
D0171 DRNG IMPR 25 W OLIVE DR/AVE S 225 PEARLAND DRAINAGE FUND 500,000 500,000 D0171 Total 500,000 500,000
D0173 TS HILARY-BERNARDIN WALL RPR 225 PEARLAND DRAINAGE FUND 100,000 200,000 100,000 D0173 Total 100,000 200,000 100,000 D0174 TS HILARY STORM DR RPR 225 PEARLAND DRAINAGE FUND 20,000 20,000 D0174 Total 20,000 20,000
F0010 CITY FACILITIES 101 GENERAL FUND 171,180 171,180 F0010 CITY FACILITIES 229 PUBLIC FACILITIES FUND - 120,470 120,470 F0010 MAV CITY FACILITIES 157 MEASURE AV 200,000 450,000 250,000 F0010 CITY FACILITIES ARPA 158 AMERICAN RESCUE PLAN FUND 2,000,000 2,000,000 F0010 Total 2,371,180 2,741,650 370,470 F0028 PTC WAYFINDING SIGNAGE 203 PROP A FUND 58,200 58,200 F0028 Total 58,200 58,200
F0047 LIBRARY IMPROVEMENTS 241 STATE GRANTS FUND 698,000 698,000 F0047 Total 698,000 698,000
F0052 PLAYHOUSE HVAC UPGRADE 220 PARK DEVELOPMENT FUND 265,870 200,000 (65,870) F0052 PLAYHOUSE HVAC UPGRADE 229 PUBLIC FACILITIES FUND 221,100 200,100 (21,000) F0052 Total 486,970 400,100 (86,870) F0056 CIVIC CENTER WAYFINDING 218 MEASURE R LOCAL RETURN 50,000 50,000 F0056 Total 50,000 50,000
F0059 SAVES RELOCATION 280 CDBG FUND 5,000,000 5,000,000 F0059 Total 5,000,000 5,000,000

Page 17 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE F0060 PTC TRANSIT INFRSTR IMPR 209 MEASURE M FUND 1,662,790 1,662,790 F0060 Total 1,662,790 1,662,790
F0061 PTC SECURITY UPGRADE 203 PROP A FUND - 60,000 60,000 F0061 Total - 60,000 60,000 F0062 SAVES/OASIS GENERATORS 241 STATE GRANTS FUND 28,390 28,980 590 F0062 Total 28,390 28,980 590 F0082 PALMDALE FILM STAGE 101 GENERAL FUND 100,000 100,000 F0082 Total 100,000 100,000
F0083 CITY WIDE SECURITY 157 MEASURE AV 2,187,490 2,187,490 F0083 Total 2,187,490 2,187,490
F0121 CITY DEV SVCS ELEVATOR REPAIR 229 PUBLIC FACILITIES FUND 120,000 120,000 F0121 Total 120,000 120,000
F0122 FIRE SUPRESSION RETROFITTING 229 PUBLIC FACILITIES FUND 34,470 10,000 (24,470) F0122 Total 34,470 10,000 (24,470) F0136 SAVES HVAC 158 AMERICAN RESCUE PLAN FUND 80,000 - (80,000) F0136 Total 80,000 - (80,000) F0137 OASIS GENERATOR 158 AMERICAN RESCUE PLAN FUND 155,000 155,000 F0137 Total 155,000 155,000
F0148 MK PARK REC CNTR ROOF 101 GENERAL FUND 200,000 200,000 F0148 Total 200,000 200,000
F0149 MK PARK REC CNTR CANOPY 101 GENERAL FUND 57,288 132,288 75,000 F0149 Total 57,288 132,288 75,000 F0150 DEV SVCS BLDG PAINT 101 GENERAL FUND 100,000 100,000 F0150 Total 100,000 100,000

Page 18 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE F0156 HAMMACK CNT DEMO 158 AMERICAN RESCUE PLAN FUND 734,950 409,950 (325,000) F0156 Total 734,950 409,950 (325,000) F0158 OASIS VINYL FLOORS 158 AMERICAN RESCUE PLAN FUND 5,020 5,020 F0158 Total 5,020 5,020
F0161 CHIMBOLE EMERGENCY CLEANUP 101 GENERAL FUND 10,090 10,090 F0161 CHIMBOLE EMERGENCY CLEANUP 157 MEASURE AV 107,680 307,680 200,000 F0161 Total 117,770 317,770 200,000 F0164 FACILITIES IT WALL DEMO 229 PUBLIC FACILITIES FUND 75,000 75,000 F0164 Total 75,000 75,000
F0XXX SAVES BUILDING 158 AMERICAN RESCUE PLAN FUND - 705,000 705,000 F0XXX Total - 705,000 705,000 G0007 PAVEMENT MANAGEMENT PROGRAM 214 PROP C LOCAL RETURN 300,620 300,620 G0007 Total 300,620 300,620
G0026 PUBLIC WORKS SOFTWARE UPGRADE 201 GAS TAX FUND 175,320 175,320 G0026 PUBLIC WORKS SOFTWARE UPGRADE 254 SEWER MAINT ASSESSMENT DIST 92,810 92,810 G0026 PUBLIC WORKS SOFTWARE UPGRADE 255 STREET LIGHT COUNTY DISTRICT 98,850 98,850 G0026 Total 366,980 366,980
G0028 HIGH SPEED RAIL ADM REIMB AGMT 241 STATE GRANTS FUND 570 570 G0028 Total 570 570
G0030 GENERAL PLAN UPDATE 101 GENERAL FUND 638,200 638,200 G0030 GENERAL PLAN UPDATE 241 STATE GRANTS FUND 68,760 68,760 G0030 Total 706,960 706,960
G0087 REGIONAL RECREATION CENTER 157 MEASURE AV 15,970 - (15,970) G0087 Total 15,970 - (15,970)

Page 19 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE G0092 SUST TRANSP PLN CITY MATCH 101 GENERAL FUND 59,490 - (59,490) G0092 SUSTAINABLE TRANSP PLN GRNT 241 STATE GRANTS FUND 97,610 - (97,610) G0092 Total 157,100 - (157,100) G0093 SCAG REAP GRANT-UTILITY INVEN 241 STATE GRANTS FUND 276,000 - (276,000) G0093 Total 276,000 - (276,000) G0095 PUB FAC ENERGY EFFICIENCY 158 AMERICAN RESCUE PLAN FUND 4,966,600 4,966,600 G0095 Total 4,966,600 4,966,600
G0096 BATTERY STORAGE MCADAM 157 MEASURE AV 1,106,150 805,150 (301,000) G0096 BATTERY STORAGE MCADAM 158 AMERICAN RESCUE PLAN FUND 1,550,000 1,550,000 - G0096 BATTERY STORAGE PROJECT 205 AIR QUALITY IMPROVEMENT FUND 23,000 23,000 G0096 Total 2,679,150 2,378,150 (301,000) G0157 DIGITAL EQUITY STUDY 241 STATE GRANTS FUND 325,000 325,000 G0157 BROADBAND INFRASTRUCTURE 158 AMERICAN RESCUE PLAN FUND 100,000 100,000 G0157 Total 425,000 425,000
G0162 LOCAL ROADWAY SAFETY PLAN 101 GENERAL FUND 8,000 8,000 G0162 LOCAL ROADWAY SAFETY PLAN 241 STATE GRANTS FUND 72,000 72,000 G0162 Total 80,000 80,000
G0165 EECBG GRANT 241 STATE GRANTS FUND 197,390 197,390 G0165 Total 197,390 197,390
G0166 SPORTSFIELD LIGHTING 157 MEASURE AV 5,606,180 5,606,180 G0166 Total 5,606,180 5,606,180
G0167 FACILITY ENERGY EFFICIENCY 101 GENERAL FUND 592,712 592,712 G0167 Total 592,712 592,712
G0168 RECORD DIGITIZATION 158 AMERICAN RESCUE PLAN FUND 2,200,000 2,200,000 G0168 Total 2,200,000 2,200,000

Page 20 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE G0171 MULTIAGENCY REGIONAL RES CNTR 101 GENERAL FUND - 1,500,000 1,500,000 G0171 Total - 1,500,000 1,500,000 L0011 AUTO MALL LANDSCAPE PROJECT 481 AD90-2 7TH ST WEST IMPROVEMENT 20,640 20,640 L0011 Total 20,640 20,640
L0012 AVE S LMD LANDSCAPE ENHANCEMNT 251 LANDSCAPE MAINTENANCE FUND 178,080 - (178,080) L0012 ST GRT-AVE S LMD LANDSCAPE ENH 241 STATE GRANTS FUND 394,750 - (394,750) L0012 Total 572,830 - (572,830) L0013 LMD DESIGN AND RENOVATION 251 LANDSCAPE MAINTENANCE FUND 817,240 817,240 L0013 Total 817,240 817,240
L0088 PALM BLVD/47TH LNDSCP 214 PROP C LOCAL RETURN 236,790 236,790 L0088 Total 236,790 236,790
P0009 SAM YELLEN PARK 157 MEASURE AV 9,998,780 9,998,780 P0009 SAM YELLEN PARK 211 MEASURE A LA COUNTY PARKS 1,549,300 1,549,300 P0009 SAM YELLEN PARK 220 PARK DEVELOPMENT FUND 8,393,100 8,393,100 P0009 Total 19,941,180 19,941,180
P0027 DRY TOWN WP-REFURBISHMENT 250 PARK ASSESSMENTS FUND 346,290 385,000 38,710 P0027 Total 346,290 385,000 38,710 P0042 COMMUNITY PUBLIC ART PROJECTS 156 PUBLIC ART FUND 60,000 60,000 P0042 COMMUNITY PUBLIC ART PROJECTS 242 MISC GRANT/DEVELOPER CONTRIB 44,760 44,760 P0042 Total 104,760 104,760
P0052 MARIE KERR PARK N RIDE 203 PROP A FUND 2,023,000 2,023,000 P0052 MARIE KERR PARK N RIDE 211 MEASURE A LA COUNTY PARKS 487,060 487,060 P0052 Total 2,510,060 2,510,060
P0054 RANCHO VISTA PARK 156 PUBLIC ART FUND 2,840 2,840 P0054 RANCHO VISTA PARK 220 PARK DEVELOPMENT FUND 322,780 322,780 P0054 Total 325,620 325,620

Page 21 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE P0105 MK PARK SWIM DECK & COVER 157 MEASURE AV 905,890 200,000 (705,890) P0105 MK PARK SWIM DECK & COVER 211 MEASURE A LA COUNTY PARKS 1,000,000 1,000,000 P0105 Total 1,905,890 1,200,000 (705,890) P0107 MEMORIAL & HONOR WALL 157 MEASURE AV 11,370 - (11,370) P0107 Total 11,370 - (11,370) P0109 SPORTS FIELD MAINTENANCE 157 MEASURE AV 3,454,270 3,192,270 (262,000) P0109 SPORTS FIELD MAINTENANCE 242 MISC GRANT/DEVELOPER CONTRIB 115,000 115,000 P0109 Total 3,569,270 3,307,270 (262,000) P0110 PARK MASTER PLAN 157 MEASURE AV 126,530 126,530 P0110 Total 126,530 126,530
P0111 SPORTS FIELD LED LIGHT RETROFI 157 MEASURE AV 1,061,320 1,061,320 P0111 Total 1,061,320 1,061,320
P0116 MK PARK IMPROVEMENTS 158 AMERICAN RESCUE PLAN FUND 100,000 100,000 P0116 Total 100,000 100,000
P0117 BOTW SNACK BAR 158 AMERICAN RESCUE PLAN FUND 500,000 500,000 P0117 Total 500,000 500,000
P0130 MCADAM PARK RENO 242 MISC GRANT/DEVELOPER CONTRIB 275,000 275,000 P0130 MCADAM PARK RENOV 157 MEASURE AV 508,100 508,100 P0130 Total 783,100 783,100
P0131 COURSON REVITALIZATION GRNT 242 MISC GRANT/DEVELOPER CONTRIB 3,959,140 3,959,140 P0131 COURSON REVITALIZATION 101 GENERAL FUND 150,000 150,000 P0131 COURSON REVITALIZATION 158 AMERICAN RESCUE PLAN FUND 250,000 250,000 P0131 Total 4,359,140 4,359,140
P0140 MK PARK POOL ENCLOSURE 157 MEASURE AV 550,000 550,000 - P0140 Total 550,000 550,000 -

Page 22 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE P0144 BARREL SPRINGS TRL IMPR 220 PARK DEVELOPMENT FUND 42,000 42,000 P0144 BARREL SPRINGS TRL IMPR 242 MISC GRANT/DEVELOPER CONTRIB 308,000 308,000 P0144 Total 350,000 350,000
P0151 MCADAM CULTURAL ART 156 PUBLIC ART FUND 75,000 75,000 P0151 MCADAM CULTURAL ART 220 PARK DEVELOPMENT FUND 75,000 75,000 P0151 MCADAM CULTURAL ART 242 MISC GRANT/DEVELOPER CONTRIB 150,000 150,000 P0151 Total 300,000 300,000
P0152 ECOLOGICAL PRESERVATION STUDY 157 MEASURE AV 250,000 - (250,000) P0152 Total 250,000 - (250,000) P0172 PELONA VISTA P&R LIGHTING 203 PROP A FUND 285,000 285,000 P0172 Total 285,000 285,000
PXXXX POCKET PARK 241 STATE GRANTS FUND - 260,000 260,000 PXXXX Total - 260,000 260,000 S0025 STREET RESURFACING PROGRAM 201 GAS TAX FUND 11,811,100 9,329,950 (2,481,150) S0025 STREET RESURFACING PROGRAM 207 LOCAL TRANSP FUND ART 8 - 2,481,150 2,481,150 S0025 STREET RESURFACING PROGRAM 210 ROAD MAINT & REHAB ACCT FUND 6,505,670 6,505,670 S0025 STREET RESURFACING PROGRAM 214 PROP C LOCAL RETURN 5,246,610 5,246,610 S0025 Total 23,563,380 23,563,380 -
S0044 NO CO FORUM ITS EXPANSION 203 PROP A FUND 385,650 385,650 S0044 NO CO FORUMITS EXPANSION 204 PROP C FUND 4,106,110 4,106,110 S0044 Total 4,491,760 4,491,760
S0049 SR 138 PALMDALE BLVD 5TH/10TH 208 MEASURE R FUND 19,856,960 19,856,960 S0049 Total 19,856,960 19,856,960
S0050 SR 138/10TH ST W INTERCHANGE 208 MEASURE R FUND 24,151,430 24,151,430 S0050 Total 24,151,430 24,151,430

Page 23 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE S0051 SR 138/PLMDL BLVD SB 14 RAMP 208 MEASURE R FUND 31,253,250 31,253,250 S0051 SR 138/PLMDL BLVD SB 14 RAMP 209 MEASURE M FUND 3,351,220 3,351,220 S0051 Total 34,604,470 34,604,470
S0055 SR 138 AVE N OVERCROSSING 208 MEASURE R FUND 6,303,190 6,303,190 S0055 Total 6,303,190 6,303,190
S0058 AVE R COMPLETE STRT & SAFE RTS 201 GAS TAX FUND 500,000 500,000 S0058 AVE R COMPLETE STRT & SAFE RTS 207 LOCAL TRANSP FUND ART 8 1,716,720 1,716,720 S0058 AVE R COMPLETE STRT & SAFE RTS 209 MEASURE M FUND 1,636,720 1,636,720 S0058 AVE R COMPLETE STRT & SAFE RTS 240 FEDERAL FUNDS FUND 9,786,900 9,786,900 S0058 Total 13,640,340 13,640,340
S0061 AVENUE R ITS SIGNAL SYNC 203 PROP A FUND 689,430 589,430 (100,000) S0061 AVENUE R ITS SIGNAL SYNC 204 PROP C FUND 2,880,170 2,880,170 S0061 Total 3,569,600 3,469,600 (100,000) S0062 COUNTY PAVEMENT PROJECT 218 MEASURE R LOCAL RETURN 365,550 365,550 S0062 COUNTY PAVEMENT PROJECT 219 MEASURE M LOCAL RETURN 575,090 575,090 S0062 COUNTY PAVEMENT PROJ CONTRIB 201 GAS TAX FUND 491,310 491,310 S0062 COUNTY PAVEMENT PROJ 207 LOCAL TRANSP FUND ART 8 268,300 268,300 S0062 COUNTY PAVEMENT PROJ 210 ROAD MAINT & REHAB ACCT FUND 1,191,380 1,191,380 S0062 Total 2,891,630 2,891,630
S0066 HSIP ROUNDABOUT @ S-8 & 40TH E 208 MEASURE R FUND 60,360 60,360 S0066 HSIP ROUNDABOUT @ S-8 & 40TH E 240 FEDERAL FUNDS FUND 2,115,600 2,585,180 469,580 S0066 S8 & 40TH EST 156 PUBLIC ART FUND 50,000 50,000 S0066 S8 & 40TH EAST 218 MEASURE R LOCAL RETURN 1,636,570 1,636,570 S0066 Total 3,862,530 4,332,110 469,580 S0067 CIVIC CENTER COMPLETE STREETS 201 GAS TAX FUND 604,080 604,080 S0067 CIVIC CENTER COMPLETE STREETS 241 STATE GRANTS FUND 763,470 763,470 S0067 CIVIC CENTER COMPLETE STREETS 218 MEASURE R LOCAL RETURN 119,000 119,000 S0067 CIVIC CENTER COMPLETE STREETS 219 MEASURE M LOCAL RETURN 2,602,350 2,602,350 S0067 Total 4,088,900 4,088,900

Page 24 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE S0069 PTC PARCEL MERGE 203 PROP A FUND 16,160 - (16,160) S0069 Total 16,160 - (16,160) S0072 RV AND SIERRA AT GRADE SEP 204 PROP C FUND 1,273,150 1,273,150 S0072 Total 1,273,150 1,273,150
S0075 RV BLVD SH RR SAFETY CROSSING 240 FEDERAL FUNDS FUND 3,862,380 3,862,380 S0075 Total 3,862,380 3,862,380
S0077 20TH STREET WEST BRIDGE 242 MISC GRANT/DEVELOPER CONTRIB 742,100 742,100 S0077 Total 742,100 742,100
S0094 DOMENIC MASSARI BIKE LANE 206 LOCAL TRANSP FUND ART 3 146,000 - (146,000) S0094 DOMENIC MASSARI BIKE LANE 241 STATE GRANTS FUND 97,410 64,720 (32,690) S0094 Total 243,410 64,720 (178,690) S0124 AVE M RESURFACING 214 PROP C LOCAL RETURN 300,000 300,000 S0124 Total 300,000 300,000
S0125 AVE M SR14 TO 10TH PUB ART 218 MEASURE R LOCAL RETURN 255,000 255,000 S0125 Total 255,000 255,000
S0126 AVE M INTERCHG IMPRV 208 MEASURE R FUND 6,615,380 6,615,380 S0126 Total 6,615,380 6,615,380
S0142 AVE M GRADE SEPARATION EARMARK 157 MEASURE AV 1,000,000 1,000,000 S0142 Total 1,000,000 1,000,000
S0143 GUARDRAIL MAINTENANCE 201 GAS TAX FUND 479,000 479,000 S0143 Total 479,000 479,000
S0145 AVE R SH RR SAFETY CRS 240 FEDERAL FUNDS FUND 1,000,000 1,000,000 S0145 Total 1,000,000 1,000,000
S0146 SR138 PLMD BLVD SIDEWALK GAP C 209 MEASURE M FUND 550,000 550,000 S0146 Total 550,000 550,000

Page 25 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE S0147 NEC AVE R & SH RT TURN LANE 219 MEASURE M LOCAL RETURN 750,000 750,000 S0147 Total 750,000 750,000
S0155 MUSICAL ROAD 158 AMERICAN RESCUE PLAN FUND 100,000 100,000 - S0155 Total 100,000 100,000 - S0169 PARKING ENF/SIGNAGE/SWEEPING 157 MEASURE AV 750,000 450,000 (300,000) S0169 Total 750,000 450,000 (300,000) S0XXX AVTA BUS STOPS 203 PROP A FUND - 100,000 100,000 S0XXX Total - 100,000 100,000 T0006 TRAFFIC SIGNAL LEFT PHASING 221 TRAFFIC IMPACT FUND - 100,000 100,000 T0006 Total - 100,000 100,000 T0027 15 E/SR 138 INTRSCTN IMPRVMT 204 PROP C FUND 247,220 247,220 T0027 Total 247,220 247,220
T0031 AVE R 45TH ST E TRAFFIC SIGNAL 221 TRAFFIC IMPACT FUND 706,760 606,760 (100,000) T0031 Total 706,760 606,760 (100,000) T0032 RVB & DIVISION ST TRAFFIC 210 ROAD MAINT & REHAB ACCT FUND 802,970 802,970 T0032 Total 802,970 802,970
T0033 Traffic Signal - Auto Ctr & 5t 201 GAS TAX FUND 93,350 93,350 T0033 Total 93,350 93,350
T0127 TRAFFIC SIGNAL M & 20TH E 219 MEASURE M LOCAL RETURN 1,588,830 1,588,830 T0127 Total 1,588,830 1,588,830
T0129 RVB & ARMFIELD SIGNAL 210 ROAD MAINT & REHAB ACCT FUND 691,180 691,180 T0129 Total 691,180 691,180
T0163 CITYWIDE SIGNAL MOD 240 FEDERAL FUNDS FUND 5,857,920 5,857,920 T0163 CITYWIDE SIGNAL MOD 218 MEASURE R LOCAL RETURN 650,880 650,880 T0163 Total 6,508,800 6,508,800

Page 26 of 27 ends

CIP Org Description Fund Fund Description
FY 2024
Adopted
FY 2024
Proposed $ Chg

CITY OF PALMDALE
FY 2024 PROPOSED BUDGET

CAPITAL IMPROVEMENT PROGRAM - BY PROJECT AND FUNDING SOURCE T0170 TECHNOLOGY DR & 3 ST E 210 ROAD MAINT & REHAB ACCT FUND - 1,150,000 1,150,000 T0170 TECHNOLOGY DR & 3 ST E 221 TRAFFIC IMPACT FUND 1,150,000 - (1,150,000) T0170 Total 1,150,000 1,150,000 - U0001 STORM DRAIN @ 45TH/AVE R TO S 225 PEARLAND DRAINAGE FUND 1,000,000 1,000,000 U0001 STORM DRAIN @ 45TH/AVE R TO S 228 SEWER UPGRADE FUND 434,110 434,110 U0001 STORM DRAIN @ 45TH/AVE R TO S 254 SEWER MAINT ASSESSMENT DIST 2,700,000 2,700,000 U0001 Total 4,134,110 4,134,110
U0002 LIFT STATION ELIM SEWER REPAIR 254 SEWER MAINT ASSESSMENT DIST 1,955,810 1,955,810 U0002 Total 1,955,810 1,955,810
U0004 SEWER MANHOLE REPAIR AND RAISE 254 SEWER MAINT ASSESSMENT DIST 1,087,670 1,087,670 U0004 Total 1,087,670 1,087,670
U0134 FLEET MAINTENANCE BLDG 254 SEWER MAINT ASSESSMENT DIST 4,000,000 4,000,000 U0134 Total 4,000,000 4,000,000
U0135 PRWA ADV RCYCL WATER PRJ 158 AMERICAN RESCUE PLAN FUND 400,000 400,000 U0135 Total 400,000 400,000
Grand Total 261,166,270 261,354,640 188,370

Page 27 of 27 ends

City Council Staff Report
DATE: FEBRUARY 21, 2024
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: OPERATIONS DEPARTMENT

FINANCE DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2024-019, A RESOLUTION OF THE

CITY COUNCIL OF THE CITY OF PALMDALE OF CONSIDERATION

TO ALTER THE RATE AND METHOD OF APPORTIONMENT OF

SPECIAL TAXES FOR THE CITY OF PALMDALE COMMUNITY
FACILITIES DISTRICT NO. 2022-3 (RITTER RANCH PHASE 1

PUBLIC FACILITIES)

RECOMMENDATION
Staff recommends that the City Council:

1. Adopt Resolution No. CC 2024-019, a Resolution of the City Council of the City of Palmdale of consideration to alter the Rate and Method of Special Tax for the City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities).

BACKGROUND
In connection with the proposed master planned development of an area known as Ritter Ranch (“Project”), the City formed the City of Palmdale Community Facilities District 93- 1 (“CFD 93-1”) to finance certain public facilities for the Project.The property in CFD 93- 1 was purchased in 2020 by Preston Hollow Capital, LLC (“PHC”), who later transferred the land to RdR Development Holdings, LLC (“RdR”), a limited liability company for which PHC is the sole member . The City issued Special Tax Bonds for CFD 93 -1 in 1995 to finance certain public facilities (“93-1 Bonds”). Collectively, PHC and RdR are referred to below as the RdR Parties.

In September 2022, the RdR Parties were prepared to proceed with the development of the first phase of the Project, expected to include up to 1,180 residential units (“Phase 1”). They requested, and the City formed, a new community facilities district for the Phase 1 property portion of the Project (“CFD 2022-3”) to fund public infrastructure and Report to Mayor and City Council
Re: Adopt Resolution CC 2024-019
February 21, 2024

Page 2 ends

improvements necessary for the development of the Project. The RdR parties expect to cancel all the outstanding CFD 93-1 Bonds prior to proceeding with the issuance of special tax bonds for CFD 2022-3.

The RdR Parties have requested that the City proceed with the approval of the first series of Special Tax Bonds (“Bonds”) for CFD 2022-3. The housing market has changed since CFD 2022-3 was formed in September 2022 and Tentative Tract Maps now have been filed with actual lot sizes. As a result, the City and the RdR Parties determined that reductions to the special tax rates originally approved in 2022 for property within CFD 2022-3 are now required before the City approves the issuance of the Bonds.

DISCUSSION
During the CFD 2022-3 formation process, special tax rates were established pursuant to a Rate and Method of Apportionment of Special Taxes (“RMA”), which is the document that governs how special taxes will be levied on property within CFD 2022-3 going forward. The special tax rates for CFD 2022-3 to pay for Bonds issued to fund public facilities were designed so that the total property tax burden on each dwelling unit will not exceed 2% of the projected/assumed assessed value of such property. This tax burden incorporates all ad valorem taxes – the 1% general levy and any school, college, or AVEK general obligation bond tax levy – as well as any special assessments or fees included on the property tax bill. These additional special assessments also include the special taxes for the City’s Services CFD 2022-2, which is contiguous with the property in CFD 2022-3.

The 2022 RMA required that a new Price Point Study be completed within 180 days of the issuance of the Bonds, in case home prices had declined and the original special tax rates approved in 2022 caused the overall effective tax rate to exceed 2% of the current estimated home price when the Bonds are to be sold. In addition, since September 2022, the RdR Parties have filed Tentative Tract Maps and have a clear idea of the lot sizes in Phase 1.

To calculate any adjustments to the maximum CFD 2022-3 special tax rates, the City commissioned a new Price Point Study (“2023 PPS”) to determine a reasonable sales price for each unit type proposed for Phase 1. As a result of the prices shown in the 2023 PPS, as well as adjustments needed resulting from better lot size information, special tax rates need to be reduced and lot size adjustments need to be made in the RMA. The City’s Special Tax Consultant prepared an Amended and Restated Rate and Method of Apportionment (“Amended and Restated RMA”) that includes the special tax rate adjustments.

The special tax rates in CFD 2022-3 are being reduced in the Amended and Restated RMA by approximately 15%-18% for smaller homes and approximately 9% to 12% for Report to Mayor and City Council
Re: Adopt Resolution CC 2024-019
February 21, 2024

Page 3 ends

larger homes. In addition, the RdR Parties requested an additional special tax reduction to be applied to the first three tracts they expect to sell to merchant builders.

The City Council can now consider adopting a resolution of consideration to amend the RMA for CFD 2022-3 to reduce the special tax rates in anticipation of the sale of Bonds later this spring.

Future Actions
The resolution sets a time and place for the public hearing on the alteration of the RMA for CFD 2022-3, which is proposed to be March 20, 2024, at 5 pm.

On that date, the City Council will conduct the public hearing and take related actions required to alter the RMA for CFD 2022-3.

FISCAL IMPACT
$0; there is no fiscal impact associated with the proposed action.

Special taxes levied on undeveloped property or developed homes within CFD 2022-3 will pay debt service on Bonds issued to finance public facilities necessary to proceed with the proposed residential development of up to 1,180 new dwelling units. The special taxes levied on property in CFD 2022-3 have no fiscal impact on the City. The issuance of any CFD 2022-3 Bonds will be the subject of a future City Council resolution.

The cost of the 2022 PPS and the 2023 PPS, as well as the cost of the preparation of the Amended and Restated RMA, are paid from funds deposited with the City by PHC for this purpose.

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

A. Seek innovative, cost-effective, customer-focused methods of service delivery.

C. Plan and maintain safe and attractive neighborhoods, streets, facilities, and public spaces with exciting programming that promotes active fun for everyone.

ATTACHMENTS
Reso No. CC 2024-019

CITY OF PALMDALE

COUNTY OF LOS ANGELES, CALIFORNIA
RESOLUTION NO. CC 2024-019

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE OF

CONSIDERATION TO ALTER THE RATE AND METHOD OF APPORTIONMENT OF

SPECIAL TAXES FOR THE CITY OF PALMDALE COMMUNITY FACILITIES DISTRICT NO. 2022-3 (RITTER RANCH PHASE 1 PUBLIC FACILITIES) WHEREAS, on October 24, 2022, this City Council adopted Resolution No.

CC 2022-109 (the “Resolution of Formation”) forming City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Improvements) (the “District”) pursuant to the Mello-Roos Community Facilities Act of 1982, as amended, constituting Chapter 2.5 of Part 1 of Division 2 of Title 5, commencing with Section 53311, of the California Government Code (the “Act”), for the purpose of financing certain public improvements (the “Facilities”), as further provided in the Resolution of Formation; and WHEREAS, under proceedings pursuant to the Resolution of Formation and the Act, the City Council has authorized the levy of a special tax (the “Special Tax”) on real property in the District, as specified in the Rate and Method of Apportionment for City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities) (the “Original Rate and Method”), with the proceeds of the Special Tax to be used to pay debt service on bonds issued for the District to finance the Facilities and administrative expenses related to the District; and
WHEREAS, the owner of all of the property in the District, RdR Development Holdings, LLC, has requested that the City Council take the actions necessary to alter the Original Rate and Method; and
WHEREAS, the City Council now desires to undertake the proceedings required by the Act to authorize the District to alter the Original Rate and Method.

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

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

SECTION 1 . The City Council hereby finds and determines that public convenience and necessity require that the Original Rate and Method be changed.

SECTION 2. The name of the District is “City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities),” and the territory included in the District is as shown on the map of the District recorded on September 26, 2022 in Book 196 of Maps of Assessment and Community Facilities Districts at Page 37 (Instrument No. 20220937555), in the Office of the County Recorder for the County of Los Angeles, State of California.

Resolution No. CC 2024-019
February 21, 2024

Page 2 of 27 ends

SECTION 3. It is proposed that the Original Rate and Method be amended and restated as set forth in Exhibit A attached hereto and by this reference incorporated herein.

SECTION 4. Wednesday, March 20, 2024, at 5:00 p.m., in the regular meeting place of this City Council, Council Chambers, City Hall, 38300 Sierra Highway, Suite B, Palmdale, California, are hereby designated as the time and place when and where this City Council, as legislative body for the District, will conduct a public hearing on the proposed alteration of the rate and method of apportionment of the special tax to be as set forth in Exhibit A hereto, and consider and finally determine whether the public interest, convenience and necessity require the amendment and restatement of the Original Rate and Method, as described above.

SECTION 5. The City Clerk is hereby directed to cause notice of the public hearing to be given by publication one time in a newspaper of general circulation circulated within the District. The publication of the notice shall be completed at least seven (7) days before the date herein set for the public hearing. The notice shall be substantially in the form of Exhibit B hereto.

Resolution No. CC 2024-019
February 21, 2024

Page 3 of 27 ends

SECTION 6. This Resolution shall take effect upon its adoption.

PASSED, APPROVED and ADOPTED this 21st day of February 2024. _________________________________
Approved as to form: Austin Bishop, Mayor
ATTEST:
___________________________ _________________________________ William P. Curley III Rochelle Scott, Acting City Clerk City Attorney
I, Rochelle Scott, Acting City Clerk of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 21st day of February 2024 by the following roll call vote:

AYES:__________________________________________________________ NOES:__________________________________________________________ ABSTAIN:____________________ABSENT: ___________________________ Date: ___________________________ ___________________________ Rochelle Scott, Acting City Clerk
Resolution No. CC 2024-019
February 21, 2024

Page 4 of 27 ends

Exhibit A

Page 1 ends

EXHIBIT A

AMENDED AND RESTATED

RATE AND METHOD OF APPORTIONMENT OF SPECIAL TAXES

FOR CITY OF PALMDALE
COMMUNITY FACILITIES DISTRICT NO. 2022-3
(RITTER RANCH PHASE 1 PUBLIC FACILITIES)
A Special Tax, as hereinafter defined, shall be levied and collected in the City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities) (“CFD No. 2022-3”) each Fiscal Year commencing in Fiscal Year 2023/24, in an amount determined by the application of the procedures below.

All Taxable Property, as hereinafter defined, unless exempted by law or by the provisions hereof, shall be taxed for the purposes, to the extent and in the manner herein provided.

A. DEFINITIONS
The terms hereinafter set forth have the following meaning:
“Accessory Dwelling Unit” or “ADU” means all Assessor’s Parcels of Residential Property for which a building permit(s) has been issued for an “Accessory Dwelling Unit” as defined in California Government Code Section 65852.2(j)(1), as may be amended from time to time, that is accessory to a primary Unit. The ADU may be located on the same Assessor’s Parcel as the primary Unit that is the primary Unit or on a separate Assessor’s Parcel. For purposes of clarification, where an ADU and primary Unit are on the same Assessor’s Parcel, the ADU located on such Assessor’s Parcel is considered a separate Unit from the primary Unit on such Assessor’s Parcel for purposes of the Special Tax. Should an Assessor’s Parcel contain only an ADU, such Assessor’s Parcel will be taxed as an ADU Unit only.
"Acre” or “Acreage" means the land area of an Assessor’s Parcel as shown on an Assessor’s Parcel Map. In the event that the Assessor’s Parcel Map shows no acreage, the Acreage for any Assessor’s Parcel may be determined by the CFD Administrator based upon, in the CFD Administrator’s discretion, the applicable condominium plan, final map, parcel map, Assessor’s Data or by using available spatial data and GIS.
"Act" means the Mello-Roos Community Facilities Act of 1982, as amended, being Chapter 2.5 of Part 1, Division 2 of Title 5 of the Government Code of the State. "Administrative Expenses" means the actual or reasonably estimated costs directly related to the administration of CFD No. 2022-3 including, but not limited to, the following: the costs of any paying agents/fiscal agents/trustees related to CFD No. 2022-3 Bond payments (including the fees and expenses of related counsel); the costs of computing the Annual Special Tax Requirement, the Special Taxes and of preparing the collection schedules for the Special Taxes; the costs of collecting the Special Taxes, including any charges levied by the County Auditor’s Office, County Tax Collector’s Office or County Treasurer’s Office; the costs of the City or designee in complying with the disclosure requirements associated with applicable federal and state securities laws, or otherwise related to CFD No. 2022-3 or CFD No. 2022-3 Bonds; the City’s annual administration fees and third party expenses; costs of responding to public inquiries regarding the Special Taxes; the costs of the City or designee related to an appeal of the Special Tax or interpretation of this Rate and Method of Apportionment of Special Taxes; amounts needed to pay any required arbitrage rebate to the federal government related to CFD No. 2022-3 Bonds; the costs associated with the release of funds from any escrow account; and the costs of commencing and pursuing to completion any foreclosure action arising from delinquent Special Taxes in CFD No. 2022-3.

Resolution No. CC 2024-019
February 21, 2024

Page 5 of 27 ends

Exhibit A

Page 2 ends

Administrative Expenses shall also include amounts estimated or advanced by the City or CFD No. 2022-3 for any other administrative purposes of CFD No. 2022-3. "Annual Special Tax Requirement" means that amount required in any Fiscal Year for CFD No. 2022-3 to (1) pay Debt Service on all Outstanding CFD No. 2022-3 Bonds due in the Debt Year that commences in such Fiscal Year; (2) pay debt service on bonds expected to be issued by CFD No. 2022-3 due in the Debt Year that commences in such Fiscal Year; (3) Administrative Expenses; (4) provide any amount required to establish or replenish a reserve fund in connection with any CFD No. 2022-3 Bonds; (5) provide an amount equal to reasonably anticipated Special Tax delinquencies based on the delinquency rate for Special Taxes levied in the previous Fiscal Year as determined by the CFD Administrator, as limited by the Act, and without duplicating any amounts described in clauses (3) or (4). The amounts referred to in clauses (1) through (5) of the preceding sentence may be reduced in any Fiscal Year (in the City's sole discretion) by (i) surplus balances in funds and accounts for CFD No. 2022-3 Bonds to the extent that such balances are available to apply against Debt Service pursuant to the Indenture, (ii) proceeds from the collection of penalties associated with delinquent Special Tax, and (iii) any other revenues available to pay Debt Service on the Outstanding CFD No. 2022-3 Bonds or other indebtedness as determined by the CFD Administrator.
“Assessor’s Data” means the property characteristic data compiled and maintained by the County Assessor for each Assessor’s Parcel, including, but not limited to, Assessor’s Parcel Number, Acreage, Building Square Footage, Lot Square Footage and Units. "Assessor’s Parcel" or “Parcel” means a lot or parcel shown in an Assessor’s Parcel Map with an assigned Assessor’s Parcel Number.
"Assessor’s Parcel Map" means an official map of the County Assessor designating parcels by Assessor’s Parcel Number.
“Assessor’s Parcel Number” or “APN” means, with respect to an Assessor’s Parcel, that number assigned to such Assessor’s Parcel by the County for purposes of identification. “Assigned Special Tax” means the Assigned Special Tax determined in accordance with Section C below, that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property. "Backup Special Tax" means the Backup Special Tax applicable to each Assessor’s Parcel of Developed Property, as determined in accordance with the applicable subsection of Section C below.
“Building Permit” means a permit issued by the City for new construction of a residential or non- residential building on an Assessor’s Parcel.
“Building Square Feet” or “BSF” means all of the square footage of living area within the perimeter of a residential structure, not including any carport, walkway, garage, overhang, patio, enclosed patio, or similar area. The determination of Building Square Feet shall be made by reference to the building permit(s) issued for such residential dwelling unit. In the event that the building permit does not show Building Square Feet, other records of the City or Assessor’s Data shall be used as determined by the CFD Administrator.
"CFD Administrator" means an official of the City, or designee thereof, responsible for determining the Annual Special Tax Requirement, and otherwise providing for the levy and collection of the Special Taxes.
"CFD No. 2022-3" means City of Palmdale Community Facilities District No. 2022-3 (Ritter Ranch Phase 1 Public Facilities), established by the City Council pursuant to the Act.

Resolution No. CC 2024-019
February 21, 2024

Page 6 of 27 ends

Exhibit A

Page 3 ends

“CFD No. 2022-3 Bonds” means bonds or other Debt (as defined in section 53317 of the Act), whether in one or more series, issued or assumed by or on behalf of the City for CFD No. 2022-3 under the Act, and secured by pledge of the Special Taxes. “City” means the City of Palmdale, California.
“City Council” means the City Council of the City, acting as the legislative body of CFD No. 2022-

3. "County" means the County of Los Angeles, California. “Debt Service” means for each Debt Year, the total amount of principal and interest due on any Outstanding CFD No. 2022-3 Bonds.
“Debt Year” means the twelve (12) month period ending on the second debt service payment date of each calendar year.
"Developed Property" means, in any Fiscal Year, all Taxable Property in CFD No. 2022-3 for which a Building Permit for new construction was issued by the City prior to March 1 of the preceding Fiscal Year.
“Exempt Property” means all property located within the boundaries of CFD No. 2022-3 which is exempt from the Special Tax pursuant to Section E below. “Final Map Property” means, in any Fiscal Year, all Taxable Property, exclusive of Developed Property, Taxable Property Owner Association Property, and Taxable Public Property, for which a Final Subdivision Map has recorded prior to January 1 of the preceding Fiscal Year. "Final Subdivision Map" means a final subdivision map, parcel map or lot line adjustment, approved by the City pursuant to the Subdivision Map Act (California Government Code Section 66410 et seq.) or recordation of a condominium plan pursuant to California Civil Code 4285, that creates individual lots for which Building Permits may be issued without further subdivision of such property.
"Fiscal Year" means the period starting July 1 and ending on the following June 30. “GIS” or “Geographic Information System” means a system designed to capture, store, manipulate, analyze, manage, and present spatial or geographic data. “Indenture” means the indenture, fiscal agent agreement, resolution, or other instrument pursuant to which CFD No. 2022-3 Bonds are issued, as modified, amended, and/or supplemented from time to time, and any instrument replacing or supplementing the same. “Land Use Class” means any of the classes listed in Table 1 or Table 2. “Lot Square Feet” or “LSF” means, for any Assessor’s Parcel, the Acreage divided by 43,560. "Maximum Special Tax” means the Maximum Special Tax, determined in accordance with Section C below, that can be levied in any Fiscal Year on any Assessor’s Parcel of Taxable Property.
“Non-Residential Property” means, in any Fiscal Year all Assessor’s Parcels of Developed Property for which a building permit(s) was issued for a structure intended for non-residential use. “Open Space Property” means property within the boundaries of CFD No. 2022-3 which (i) has been designated with specific boundaries and Acreage on a final subdivision map as open space, (ii) has been irrevocably offered for dedication as open space to the federal government, the State, the County, the City, or any other public agency, or (iii) is encumbered by an easement or other restriction required by the City limiting the use of such property to open space.

Resolution No. CC 2024-019
February 21, 2024

Page 7 of 27 ends

Palmdale City CouncilFebruary 21, 2024

Palmdale City Council
February 21, 2024