Palmdale City Council
February 21, 2024

1. CALL MEETING TO ORDER

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

2. ROLL CALL

MAYOR BISHOP, MAYOR PRO TEM LOA, COUNCILMEMBERS OHLSEN,

BETTENCOURT, ALARC
Ó
N

COMMISSIONERS FRAGA-SAENZ, BETTS

3. PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

4. PRESENTATIONS

4.1 Declaring Black History Month.

4.2 Declaring National Cancer Prevention Month.

4.3 Presentation update from Economic and Community Development - Planning and Building and Safety Divisions.

CITY COUNCIL

SUCCESSOR AGENCY

HOUSING AUTHORITY

INDUSTRIAL DEVELOPMENT AUTHORITY

PALMDALE AIRPORT AUTHORITY

PALMDALE CIVIC AUTHORITY

PALMDALE FINANCING AUTHORITY

CITY COUNCIL CHAMBER
38300 SIERRA HIGHWAY

SUITE B
PALMDALE, CA 93550
WEDNESDAY, FEBRUARY 21, 2024
5:00 PM
www.cityofpalmdale.org

WELCOME
City Council
Wednesday, February 21, 2024

PPT Planning and Building and Safety Divisions.pptx

4.4 Presentation of Measure AV Ad Hoc Committee Annual Report

PPT Measure AV Ad Hoc Committee Annual Rpt.pptx

PUBLIC COMMENT RULES
“(California Government Code Section 54954.3).
(a) Every agenda for regular meetings shall provide an opportunity for members of the public to directly address the legislative body on any item of interest to the public, before or during the legislative body’s consideration of the item, that is within the subject matter jurisdiction of the legislative body, provided that no action shall be taken on any item not appearing on the agenda unless the action is otherwise authorized by subdivision (b) of Section 54954.2 [section omitted].

(b) (1) The legislative body of a local agency may adopt reasonable regulations to ensure that the intent of the subdivision (a) is carried out, including, but not limited to, regulations limiting the total amount of time allocated for public testimony on particular issues and for each individual speaker.
(2) Notwithstanding paragraph (1), when the legislative body of a local agency limits time for public comment, the legislative body of a local agency shall provide at least twice the allotted time to a member of the public who utilizes a translator to ensure that non- English speakers receive the same opportunity to directly address the legislative body of a local agency.”

In furtherance of Section 54954.3 of the Brown Act, the public is allotted to speak a total of two (2) minutes on the entirety of the Consent Calendar(s), Appointment(s), New Business and Closed Session, with two (2) minutes on each Public Hearing, and, if desired, an additional two (2) minutes on items not on the agenda that are within the subject matter jurisdiction of the City Council. As specified in the Brown Act, a speaker utilizing a translator will receive twice the amount of time specified.

5. PUBLIC COMMENTS

CONSENT CALENDAR(S), APPOINTMENT(S), NEW BUSINESS, AND CLOSED SESSION: Now is the time for public participation on items listed on the Consent Calendar(s), Appointment(s), New Business, and Closed Session. Each speaker is allotted two (2) minutes in total for the entirety of the above sections.

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

6.1 Receive and File the Annual Comprehensive Financial Reports for the year ended June 30, 2023, for the City of Palmdale, the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation.

City Council
Wednesday, February 21, 2024

SR Annual Comprehensive Financial Report June 30 2023.docx

Rpt City of Palmdale ACFR June 30 2023.pdf

Rpt Housing Authority ACFR June 30 2023.pdf

Rpt Civic Authority ACFR June 30 2023.pdf

Rpt Financing Authority ACFR June 30 2023.pdf

Rpt Palmdale Community Foundation ACFR June 30 2023.pdf

6.2 Review and approve FY 2023-24 Mid-Year Budget Adjustments.

SR Mid-Year Budget FY 2023-24.docx

Rpt Mid-Year Budget FY 2023-24.pdf

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

7.1 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).

SR Amendment to CFD 2022-3 Rate and Method of Apportionment RMA.docx

Reso. No. CC 2024-019 Consider Alteration of RMA.docx

7.2 Notice of Completion - Accept public landscape improvements for Tract 60789 located on the west side of 40th Street East and Hollowglen Drive.

SR NOC.docx

Exh A List of Complete Public Improvements.docx

Exh B Site Map Location.docx

NOC.docx

Photo of Site.pdf

7.3 Award Construction Agreement with Square Signs, LLC., dba Front Signs, for PN 888, Street Sweeping Signage, for $391,150 for a term of 100 working days from the date of the Notice to Proceed.

SR Agrmt No. A-8618 with Square Signs LLC. dba Front Signs.docx

Agrmt No. A-8618 with Square Signs, LLC., dba Front Signs.pdf

Atch 1 Street Sweeping Zones.pdf

Atch 2 Street Sweeping Days.pdf

Atch 3 Sign Standards.pdf

Atch 4 Sign Map-Sample Neighborhood.pdf

7.4 Approve the Master Power Purchase and Sale Agreement and Confirmation Letter between Energy for Palmdale's Independent Choice (EPIC) and Southern California Edison (SCE) for the purchase of resource adequacy capacity.

SR Agrmt No. A-8712 for EPIC Master Power Agreement.docx City Council
Wednesday, February 21, 2024

Agrmt No. A-8712 with Southern California Edison.docx

Atch 1 Paragraph 10 to the Collateral Annex SCE Version 2020.10.08.pdf

Atch 2 MCAM Resource Adequacy Capacity Confirmation Letter 2022.08.26 Redacted.pdf

7.5 Adopt Resolution No. CC 2024-011, a Resolution of the City Council of the City of Palmdale authorizing the acceptance of the California Department of Justice Tobacco Grant Program funds of $793,710 and approve the related agreement for the term of November 1, 2023, through June 30, 2026.

SR Agrmt No. A-8670 with CA DOJ Tobacco Grant Program.docx

Reso. No. CC 2024-011.docx

Agrmt No. A-8670 with the California Department of Justice Tobacco Grant Program

7.6 Approve the City's 2024 State and Federal Legislative Platform to promote Palmdale's priorities and legislative initiatives at the State and Federal levels.

SR 2024 Legislative Platform.docx

2024 Fed State Legislative Platform.pdf

7.7 Approve the minutes from the previous meetings.

CC/SA - February 7, 2024

Minutes 02 07 2024 CC SA.pdf

8. COUNCIL REPORTS, ANNOUNCEMENTS AND REQUESTS FOR FUTURE AGENDA ITEMS

8.1 Council reports, announcements, and requests for future agenda items.

9. CITY MANAGER’S REPORT

10. NON-AGENDA PUBLIC COMMENTS
:

Now is the time for public participation on
items not listed on the agenda. Each speaker is allotted two (2) minutes total.

11. PRESENTATION BY CITY ATTORNEY

11.1 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION William Robert Herrera, et al vs. City of Palmdale, et al.

Central District of California Federal District Court
Case No. 2:16-cv-09453-MWF-MAR
This closed session is being held pursuant to the authority of California Government Code Section 54956.9.

11.2 CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION Priscilla Huerta, et al vs. City of Palmdale, et al.

City Council
Wednesday, February 21, 2024
Central District of California Federal District Court
Case No. 2:18-10354-MWF-FFM
This closed session is being held pursuant to the authority of California Government Code Section 54956.9.

12. ANNOUNCEMENT BY CITY ATTORNEY

13. ADJOURN
meeting to March 6, 2024, at 5:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

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

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

City Council
Wednesday, February 21, 2024

E C O N O M I C A N D C O M M U N I T Y D E V E L O P M E N T

D E P A R T M E N T

PLANNING DIVISION
B.E.S.T GOALS

BUILDING CULTURE AND COMMUNITY

ECONOMIC VITALITY AND INNOVATION

SOCIAL UNITY

TRANSPORTATION AND INFRASTRUCTURE

GENERAL PLAN GOALS

HOUSING

JOB CREATION

TRANSPORTATION

AEROSPACE

PALMDALE BOULEVARD

SUSTAINABILITY

HOUSING

ADU STANDARD PLANS

JOB CREATION/AEROSPACE

TRANSPORTATION

PALMDALE BOULEVARD

SUSTAINABILITY

E C O N O M I C A N D C O M M U N I T Y D E V E L O P M E N T

D E P A R T M E N T

BUILDING AND SAFETY

DIVISION

ROLES AND RESPONSIBILITIES

PROCESS BUILDING
PERMIT

APPLICATIONS AND

PAYMENTS

PLAN REVIEW

BUILDING

INSPECTIONS

PARTICIPATE IN

DEVELOPMENT

ADVISORY BOARD

MEETINGS

COORDINATE WITH

DEVELOPERS AND

ASSIST CUSTOMERS

OVER THE COUNTER

MAINTAIN COMPLIANCE

WITH FEDERAL AND STATE

LEGISLATION

BUILDING AND SAFETY STATS
2023
Applications
Processed
Plan Reviews Inspections
Performed
ADUs Multi-family
Single-family
6,502 5,120 24,894 76 197

PROJECTS

COMING IN 2024

E C O N O M I C A N D C O M M U N I T Y D E V E L O P M E N T

D E P A R T M E N T

M E A S U R E A V A D H O C C O M M I T T E E
Annual Report
Report Period: July 1, 2022 – June 30, 2023
Members Title Term Expires
Cyndi Garcia Chair April 2025
Judy Vaccaro-Fry Vice Chair April 2025
Steve Angebrandt Committee Member April 2025
Chuck Murphy Committee Member April 2025
Rick Carr Committee Member April 2025
Barbara Smart Committee Member April 2025
Marina Hickerson Committee Member April 2025
Measure AV Oversight
Committee Members
Summary of Committee Responsibilities
• Ensure all funds from the three-quarter cent sales tax are spent to maintain essential City services
• Prepare an annual written report setting forth the
purposes for which Measure AV funds were
expended in the preceding year and the amount
spent in each category
Committee Meeting Dates
2022 2023
July 27 January 25
September 28 March 22
November 30 May 31
Ordinance 1549
• Ordinance 1549 states that “all of the proceeds from the [measure] shall be placed in the City’s general fund and be available for any legal municipal purpose”
• Measure AV is subject to Ordinance 1549
• The City Council appointed a seven-member Oversight Committee in accordance with Ordinance 1549
Revenue Totals by Fiscal Year

Expenditures
Category Total
Public Safety $9,690,491
Beautification/
Infrastructure/CIP $3,726,020
Community Programs $1,999,919
Economic Development $584,954
Administrative Costs $131,694
Measure AV
Dollars at Work
Public Safety
“Maintain 911 emergency response times.”

Beautification,
Infrastructure
and CIP
Battlefield Cross Monument at Poncitlán Square

Yellen Park – Phase II

“Say It, Don’t Spray It” campaign is a multi-faceted effort by City staff and partners to combat the vandalism in the City of Palmdale, which includes:
• Two graffiti removal trucks purchased – valued at $287,430 • Numerous volunteer events
• Distribution of 55 – $35 Dunn Edwards gift cards to victims of graffiti • Citywide marketing campaign
• Supplement removal services contract
103 signal boxes wrapped with graffiti resistant coating

Soil
conditioning
for new turf
at Poncitlán
Square
Domenic
Massari Park
soccer field
renovation
Sam Yellen
Park
soccer field
renovation
Repainting
Civic Center
fixtures
Community
Programs
New! Jolly Holiday on the Square
Featuring:
• Live music
• Visits with Santa and Mrs. Claus
• Photo booths
• Carnival games
• Snow play
Legacy Commons for
Active Seniors
Legacy Commons allows
adults aged 55 and up to
remain young at heart with
a wide range of drop-in
recreational activities in a
modern, contemporary
center.

Programs include:
• Billiards
• Tai Chi
• Indoor Power Walking
• Karaoke for All
SAVES
2,067 motel nights
12,111 individuals assisted with
food and/or shelter (unduplicated number)
372,260 meals
20,014 food orders
1,020,648 lbs. of in-kind food
donations (937,137 lbs. are rescue food
from local vendors)
10 local community partners receive food
donations from SAVES
Economic
Development
Shop Palmdale
• Partnered with eight auto dealerships in the
Palmdale Auto Mall on a joint match marketing
campaign
Business of the Week
• Partnered with Lamar Advertising and over 30
local small businesses
Palmdale Film Stage
• Palmdale is in the secondary TMZ filming zone
• The Strategic Plan for Film Palmdale was presented to the Council on December 6, 2023.
• Open for rentals and student filming

Thank You

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: RECEIVE AND FILE THE ANNUAL COMPREHENSIVE FINANCIAL REPORTS FOR THE YEAR ENDED JUNE 30, 2023, FOR THE CITY

OF PALMDALE, THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE, THE PALMDALE CIVIC AUTHORITY, THE PALMDALE

FINANCING AUTHORITY, AND THE PALMDALE COMMUNITY

FOUNDATION

RECOMMENDATION
Staff recommends that the City Council receive and file the independent auditor’s unmodified (clean) report for the City’s Annual Comprehensive Financial Report for the Year Ended June 30, 2023, for the City of Palmdale, the Housing Authority of the City of Palmdale, the Palmdale Civic Authority, the Palmdale Financing Authority, and the Palmdale Community Foundation.

BACKGROUND
The Annual Comprehensive Financial Report (ACFR) communicates the City’s financial condition and activity for the Year Ended June 30, 202 3. Overall, the City’s operations show signs of stability, a result of the City of Palmdale's prudent and sound management practices and efforts . The most important fact to note is tha t management will remain diligent and continue to recommend caution during this time of uncertainty. The following is an explanation of some key indicators shown in the ACFR.

The City contracted with Eide Bailly, LLP , to perform the annual audit of the City’s financial transactions for the Year End ed June 30, 202 3. The independent auditors’ unmodified (clean) report provides the assurance that the ACFR and audited information within present fairly the City’s financial position for the Year Ended June 30, 2023.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2023 February 21, 2024

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

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

The format and content of the ACFR document are prescribed mainly to meet governmental accounting standards. In an effort to make this complicated and extensive document more user-friendly, staff have provided a more in-depth explanation of the ACFR in the staff report.

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

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

Financial Section (the main body of the ACFR for current-year information)  Independent Auditor’s Report (pages 1-4) – The City’s report card on the content of the ACFR.
 Management’s Discussion and Analysis (MD&A) (pages 5-19) – provides an analytical overview of the City’s financial status.
 Basic Financial Statements – show finances at a point in time (assets – liabilities) and throughout the year (revenues – expenses, and budget to actual revenues and expenditures).

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2023 February 21, 2024

o City-Wide Statements (pages 20-22) – overview of financial information. o Fund Financial Statements (pages 26-27) – a detailed look at funds, showing Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance.
o Budget to Actual Comparisons (pages 28-32) – for the General Fund and other select major funds.
o Proprietary Fund Financial Statement (pages 33-35) – shows finances for Internal Service Funds.
o Fiduciary Fund Financial Statement (pages 36-38) – shows finances for Custodial Funds, Retiree Health Premium Trust Funds and Private- purpose Trust Funds.
o Notes to the Financial Statements (pages 39-96) – a narrative explanation accompanying the Basic Financial Statements.

Required Supplementary Information Sections
 Pension Information (pages 99-98) – information on changes in Net Pension Liability and related ratios and schedule of contributions.  Other Post Employment Defined Benefit information (OPEB) (pages 99-100) – information on changes in Net OPEB Liability and related ratios and schedule of investment returns.
 Combining Financial Statements (pages 105-120) - A detailed schedule of the non-major individual funds for funds that were presented cumulatively in the Financial Section.
 Budget to Actual Comparisons (pages 121-164) – for the non-major funds cumulated in the Financial Section.
 Combining Financial Statements (pages 165-167) – for internal service funds presented cumulatively in the Financial Section.
 Combining Financial Statements (pages 168-174) – for fiduciary funds presented cumulatively in the Financial Section.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2023 February 21, 2024

Statistical Section (current and historical information starting at page 175 – up to 10 years)
 Financial Trends
 Revenue Capacity Information
 Debt Capacity Information
 Demographic and Economic Information
 Operating Information
Overview of the Citywide Net Position
The Statement of Net position, similar to a balance sheet, shows the total assets and liabilities of the City as of June 30, 2023. The total net position (assets less liabilities) was $929.7 million. Net position is broken into three categories: capital, restricted, and unrestricted.
 Net Investment in Capital Assets ($609.7 million)
Capital is the largest of the three categories and is net of depreciation and debt.

Capital assets include land, buildings, improvements, infrastructure and utility systems, and construction in progress.
 Restricted Net Position ($236.2 million)
These assets are subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. Approximately 26.7 percent of this amount is restricted to affordable housing, and 68.2 percent is restricted to committed projects such as streets, sewer, and drainage public service projects.

The remaining amount is committed to debt obligations and community projects.  Unrestricted Net Position ($83.8 million)
These assets may be used to meet the government’s ongoing obligations to citizens and creditors. These assets are made up of positive unrestricted balances of $69,083,182 in the General Fund.
 Liabilities and Deferred Inflows of Resources ($187.9 million) o The short-term liabilities totaling $53.1 million are considered current and payable within a year and consist of unpaid expenditures, accrued Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2023 February 21, 2024

salaries, unearned revenue, and accrued due within the year. Non-current liabilities totaling $134.3 million are the largest component of the City’s liabilities. The deferred inflows of resources consist of resources related to pensions and other post-employment benefits, and deferred inflows from leases totaling $ .5 million.
o The long-term liabilities consist of $48.4 million balances owed on bonds issued to fund redevelopment projects and various city, building, and park improvements. The remainder of the long-term liabilities were comprised of Notes Payable for Streetlight Acquisition totaling $8.5 million, Capital Leases Payable for Equipment Leases, Section 108 HUD Loan, HOME Loan, Bill Financing with Southern California Edison, and $10.9 million on unpaid liability claims and compensated balances. More information on the debt can be found in the Notes to the Financial Statements (Notes) section starting on page 39. The second largest component of long-term liabilities consists of the Net Pension Liabilities totaling $58.6 million for future unpaid retirement benefits due to employees. A detailed explanation of the net pension liability is included in the Notes section. (Note 15 pages 79 through 82).
o Schedules of Changes in Net Pension Liability and Related Ratios and Schedule of Contributions can be found on pages 97 and 98 of the Required Supplementary Information Section. Schedules of Changes in the City’s Net Other Postemployment Benefits (OPEB) Liability and Related Ratios can be found on pages 99 and 100 of the Required Supplementary Information Section.
 Cash and Investments
The ACFR also includes detailed information on the City’s cash and investments.

As of June 30, 2023, the City had $340.5 million in total cash and investments.

More information on cash and investments can be found in the Notes Section on page 49.
 General Fund Balance
The General Fund balance is a good measure of the City’s financial health. As presented in the Basic Financial Statements, the City’s General Fund (page 24) had a balance of $92.6 million as of June 30, 2023. The balance consists of several categories, as follows:
o $2.6 million nonspendable, resources not in a spendable form such as permit held for development, prepaids, and long-term receivables.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2023 February 21, 2024

o $7.8 million restricted resources subject to externally enforceable legal restrictions such as donations and grants.
o $13.1 million assigned resources that are constrained by the City’s intent to be used for a specific purpose, such as covering the City’s self-insured liability claims and healthcare claims liabilities and unpaid accrued employee compensated absence balances.
o $69.1 million in unassigned resources that can be used for ongoing obligations of the City.

The City’s 2023-24 budget projects continuing operating revenues aligning with the continuing operating expenditures while the unassigned fund balance resources are used to maintain an operating reserve and set aside reserves for purposes considered most volatile and complex to forecast. The City’s policy is to maintain a minimum General Fund reserve of 20 percent of operating expenditures. The operating reserve is projected to be 20 percent on June 30, 2024, while reserves are also set aside for future contingent liability requirements, capital replacement requirements, information technology replacements, and infrastructure improvement requirements.

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

FISCAL IMPACT
$0; There is no fiscal impact associated with this action.

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

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

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

Prepared by: Janelle Samson, Director of 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: Annual Comprehensive Financial Reports for Year Ended June 30, 2023 February 21, 2024

ATTACHMENTS
Rpt City of Palmdale Annual Comprehensive Financial Report (ACFR) for the Year Ended June 30, 2023
Rpt Housing Authority of the City of Palmdale Annual Comprehensive Financial Report (ACFR) for the Year Ended June 30, 2023
Rpt Palmdale Civic Authority Annual Comprehensive Financial Report (ACFR) for the Year Ended June 30, 2023
Rpt Palmdale Financing Authority Annual Comprehensive Financial Report (ACFR) for the Year Ended June 30, 2023
Rpt Palmdale Community Foundation Financial Statements for the Year Ended June 30, 2023

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City of Palmdale
Table of Contents
For the Year Ended June 30, 2023

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

FINANCIAL SECTION
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1 Management's Discussion and Analysis................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5 Basic Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 Governmental Fund Financial Statements
Balance Sheet - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................27 Budgetary Comparison Statements - General and Major Special Revenue Funds Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual - General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 Budget and Actual - HA - Housing Asset Fund Special Revenue Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 Budget and Actual - HA - Housing Authority Facilities Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 Budget and Actual - ARPA Fund ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 Budget and Actual - Measure AV Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 Proprietary Fund Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 Statement of Revenues, Expenses and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 Statement of Cash Flows - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position - Fiduciary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................37 Statement of Changes in Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................39 Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios-Public Employees Retirement System- Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................97 City of Palmdale
Table of Contents
For the Year Ended June 30, 2023
Schedule of Contributions-Public Employees Retirement System-Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................98 Schedule of Changes in Net OPEB Liability and Related Ratios................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................99 Schedule of Investment Returns for OPEB................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................100 Supplementary Information
Combining Balance Sheet - Nonmajor Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................105 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................106 Combining Balance Sheet - Nonmajor Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................107 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................114 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Air Quality Improvement Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................121 Community Development Block Grant - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................122 Citywide Maintenance and Services (CFD 2022-1) - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................123 Drainage - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................124 Drainage Benefit Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................125 Enhanced Infrastructure Financing District................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................126 Federal Funds - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................127 Federal Home Program - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................128 Federal Jobs Programs - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................129 Federal Home ARP Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................130 Fire Facilities Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................131 Gas Tax - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................132 Housing Authority - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................133 Landscape Maintenance - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................134 Local Transport Article 3 - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................135 Local Transport Article 8 - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................136 Measure A LA County Parks................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................137 Measure R - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................138 Measure R Local Return................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................139 Measure M - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................140 Measure M Local Return................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................141 Miscellaneous Grants/Developer Contributions - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................142 Park Assessments - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................143 Park Development - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................144 Proposition A - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................145 Proposition C - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................146 Prop C Local Return................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................147 Public Facilities Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................148 Public Safety - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................149 Road Maintenance & Rehabilitation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................150 South Antelope Valley Emergency Services (SAVES) - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................151 Sewer Maintenance Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................152 City of Palmdale
Table of Contents
For the Year Ended June 30, 2023
Measure A LA County Parks - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................153 State Grants Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................154 Street Lighting Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................155 Traffic Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................156 Communications PEG - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................157 Solid Waste - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................158 Palmdale Community Foundation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................159 Water Park - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................160 Public Art - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................161 Palmdale Civic Authority - Debt Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................162 Palmdale Financing Authority - Debt Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................163 CFD/Assessment Districts - Capital Projects Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................164 Statement of Internal Service Fund Net Position
Combining Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................165 Combining Statement of Revenues, Expenses and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................166 Combining Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................167 Statement of Fiduciary Net Position and Assets and Liabilities Statement of Fiduciary Net Position Retiree Health Premium Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................169 Statement of Fiduciary Net Position and Assets and Liabilities Assessment and Community Facilities District Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................170 Statement of Changes in Net Position and Assets and Liabilities Combining Statement of Changes in Fiduciary Net Position Retiree Health Premium Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................172 Combining Statement of Fiduciary Net Position Assessment and Community Facilities District Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................173

STATISTICAL SECTION
Statistical Section................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................175 Net Position by Component................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................176 Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................178 Fund Balances - Governmental Funds, (continued)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................182 Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................184 General Governmental Tax Revenue by Source................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................186 Assessed Value and Estimated Actual Value of Taxable Property................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................187 Direct and Overlapping Property Tax Rates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................188 Principal Property Tax Payers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................189 City Property Taxes Levies and Collections................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................190 Ratios of Outstanding Debt by Type................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................191 Ratios of General Bonded Debt Outstanding................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................192 Direct and Overlapping Governmental Activities Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................193 Legal Debt Margin Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................194 Former Community Redevelopment Agency - Project Area 1 & 1 A Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................195 Former Community Redevelopment Agency - Project Area 2A Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................196 City of Palmdale
Table of Contents
For the Year Ended June 30, 2023
Former Community Redevelopment Agency - Project Area 2A (20 Percent Set Aside) Pledged-Revenue Coverage ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................197 Demographic and Economic Statistics................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................198 Principal Employers - Antelope Valley................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................199 Full-time-Equivalent City Government Employees by Function:Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................200 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................201 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................202 Operating Indicators by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................203 Capital Asset Statistics by Function/Program................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................204 This page intentionally left blank
Palmdale, California
Year Ended June 30, 202
Introductory Section
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January 2 , 2024
Honorable Mayor, Members of the City Council,
and Citizens of the City of Palmdale:

We are pleased to submit the Annual Comprehensive Financial Report (ACFR) of the City of Palmdale for the fiscal year ended June 30, 2023. This report is published in accordance with local ordinance and state law requirements that financial statements be presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by an independent public accounting firm of licensed, certified public accountants.

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

The City of Palmdale’s financial statements have been audited by Eide Bailly, LLP, a firm of licensed certified public accountants. The goal of the independent audit was to opine on whether the City’s financial statements for the fiscal year ended June 30, 2023, are free of material misstatement.

The independent audit involved examination on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.

Based upon the audit, the independent auditor concluded that there was a reasonable basis for rendering an unmodified opinion that the City of i

Palmdale’s basic financial statements for the fiscal year ended June 30, 2023, are fairly presented in conformity with GAAP. The independent auditors’ report is presented as the first component of the financial section of this report.

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

Palmdale Profile

The City of Palmdale was incorporated on August 24, 1962, and became a charter City in November 2009. The City is located 60 miles north of Los Angeles, situated in the high desert at an elevation of 2,600 feet with an average mean temperature of 72 degrees Fahrenheit. Palmdale is an upper-middle class community, with a median household income of $78,414 in 2022, comparable to Los Angeles at $76,244. Palmdale residents enjoy a comfortable hometown feel with a strong family orientation, an excellent education system, and abundant opportunities in a safe environment.

There are 88 cities in Los Angeles County, with a total population of 10 million. Palmdale is the sixth-largest and one of the fastest-growing cities in the county. The City currently occupies a land area of 104 square miles and serves a population of 165,917. The City is empowered by state statute to extend its corporate limits by annexation, which occurs periodically when deemed appropriate by the governing council.

Palmdale is a Charter City governed under the council/manager form of local government. It is divided into five geographic areas, and voters in each district elect one council representative who also lives in that district. All Council seats serve four-year terms. The Mayor and Mayor Pro-Tem serve on a rotational basis and rotate at the December meeting each year.

The City Council is responsible for passing ordinances, adopting the budget, appointing committees, and hiring both the City Manager and City Attorney.

The City Manager serves at the pleasure of the City Council, administers the City’s affairs, oversees the day-to-day operations of the government, appoints department heads, and carries out policies and ordinances established by the Council.

The City provides the following municipal services:

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

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

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

Factors Affecting Financial Condition

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

Local Economy

Palmdale is charting a dynamic course toward a future defined by innovation, opportunity, and strength. The City’s community-minded, business-driven approach continues to attract new developments and businesses, which bolsters our local economy and enables ongoing enhancements to our community.

To foster growth and flexibility, the City Council approved the first comprehensive General Plan Update in over two decades in September 2022. This update solidified the City’s commitment to enhancing livability, supporting businesses, strengthening partnerships, and creating flexibility for developers. In March 2023, the City Council approved an updated zoning ordinance to further solidify the vision of the General Plan by streamlining processes and ensuring the use of best practices.

Palmdale celebrated the addition of 217 new businesses, including the opening of Nothing Bundt Cakes, Sprouts, Pier 88, Skechers, and Pilot Flying J. The City’s unwavering commitment to small business support and training persisted, leading to the successful launch of the Small Business iii

Assistance program in August 2022, which included the Business of the Week marketing program. The program also included free courses in accounting, in partnership with the Small Business Development Center, to support the longevity and success of the City’s many small businesses. In January 2023, Phase II of the program was launched to provide grants for businesses still struggling from the negative impacts of the pandemic.

In collaboration with the Palmdale Auto Mall, the first public/private partnership for public art was created. The striking new sculpture, titled “Revolution,” was unveiled in December 2022, and now graces the Palmdale Auto Mall. Enhancing the community’s aesthetic and cultural landscape, it serves as a captivating testament to the synergy between public and private entities.

The City is currently processing over 11 million square feet of industrial space, creating thousands of new jobs. Noteworthy among these is the Trader Joe’s Distribution Center, a $200 million investment covering 108 acres, expected to generate nearly 1,000 job opportunities.

As the first step toward meeting the City’s goal of attracting filming opportunities and supporting the film industry, the Palmdale Film Stage opened in February 2023. At 6,000 square feet, this versatile film stage is designed to accommodate a diverse range of productions and is the first of several initiatives being undertaken to support the future growth of the film industry in Palmdale.

With job opportunities surging, the demand for quality housing is being met with nearly 5,400 new residential units in the pipeline to accommodate a variety of housing categories, income levels and life stages.

Long-Term Financial Planning

As part of its land use planning process, the City’s completed General Plan is at the top of the City’s land use regulation hierarchy. It is the foundation for most of the Council’s budgeting decisions in terms of capital facilities, staffing, programs, utility infrastructure, and levels of service; it establishes a land use pattern for areas beyond City limits; it provides the vision and guidance for capital improvements and the development of City infrastructure; and it is used to create development impact fees and provides the basis for environmental analysis of the growth of the City. The plan is intended to guide development for a period of 10 years and will be the basis of the City’s annual 5-year operating and capital forecast.

To finance current growth, the City has a variety of user and developer fees in place to pay for streets, parks, and sewer lines. The City reviews these fees on an annual basis to ensure that the fee structure is in line with the iv

cost of construction. As growth in the City’s economically sensitive revenues remained on pace with a solid fiscal year 2022-23, the City’s focus is to maintain the long-term health of the organization in order to deliver needed services to our residents. We continue to preserve the City’s ability to respond to external financial challenges such as continued increases in the law enforcement contract, required pension contributions, and healthcare costs, as well as federal and state funding uncertainty.

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

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

Strategic Plan

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

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

Preparing for an uncertain future requires consideration of a wide range of factors as well as direct and indirect influences on the City providing the community’s desired service level on a sustainable basis. Long-term financial planning involves financial forecasting and strategizing how to meet both current and future needs of the community.
v
The Strategic Plan, in conjunction with the detailed Business Plans, will continue to serve as a roadmap for our organization and the framework for our important programming and budgetary decisions. Processes involving strategic planning allow the City the opportunity to not only reflect on five decades of growth and success, but also to revisit its focus for the future.

Creating a successful future in Palmdale will depend on continued implementation of the Strategic Plan, as well as making necessary adjustments that will sustain the City in the years and decades ahead.

Award and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Palmdale for its Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2022. This was the 32
nd consecutive year that
the City received this prestigious award. To be awarded a Certificate of Achievement, the government published an easily readable and efficiently organized ACFR. This report satisfied both GAAP and applicable legal requirements.

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

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

The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Operations Department - Finance Division. I would like to express my appreciation to all members of the department who assisted and contributed to the preparation of this report. Credit also must be given to the Mayor, City Council members, and the City Manager for their support in maintaining the highest standards of professionalism in the management of the City of Palmdale’s finances.

Respectfully submitted,
Janelle Samson
Director of Operations/City Treasurer
vi
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Palmdale
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2022
Executive Director/CEO
vii

viii
City Officials

Year Ended June 30, 2023

City Council
Laura Bettencourt Mayor
Andrea Alarcón Mayor Pro Tem
Austin Bishop Councilmember
Richard J. Loa Councilmember
Eric Ohlsen Councilmember

Administration and Department Heads

City Manager Ronda Perez
Assistant City Manager Michael Miller
Interim City Attorney William P. Curley
Deputy City Manager Sara Gallagher
Deputy City Manager Nardy Lopez
Director of Economic & Community Development Luis Garibay Director of Finance Janelle Samson
Director of Parks & Recreation Keri Smith
Director of Neighborhood Services Sophia Reyes
Director of Public Works Lynn Glidden
ix
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Palmdale, California
Year Ended June 30, 202
Financial Section
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1 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

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

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

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

Exercise professional judgment and maintain professional skepticism throughout the audit.

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

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

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

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

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

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

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

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 3 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 City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Rancho Cucamonga, California
January 29, 2024
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City of Palmdale
Management's Discussion and Analysis
As management of the City of Palmdale, we offer readers of the City of Palmdale's financial statements this narrative overview and analysis of the financial activities of the City of Palmdale for the Fiscal Year Ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with additional information that we have furnished in our letter of transmittal, which can be found on pages i through vi of this report.

Financial Highlights
 The Assets and Deferred Outflows of Resources of the City of Palmdale exceeded its Liabilities and Deferred Inflows of Resources at the close of Fiscal Year Ending June 30, 2023, resulting in a Total Net Position of Governmental Activities of $929,738,354. The City’s Change in Net Position of Government Activities increased in Fiscal Year 2022-23 by $32,418,470 or 3.6 percent. Further details on reported Fiscal Year Net Position are discussed on page

16.  Included in the Statement of Net Position, the Total Net Position amount was a result of Total Assets increased to $1,098,871,921; Deferred Outflows of Resources reported a balance of $18,760,726 for an increase of $11,963,811 or 176.0 percent; Total Liabilities increased by 23.8 percent to $187,393,089; and Deferred Inflows of Resources decreased by 96.8 percent to $501,204.
 Within Total Net Position, the Net Investment in Capital Assets was reported as $609,762,857, Restricted Net Position was reported as $236,174,325, and Unrestricted Net Position reported as $83,801,172. Unrestricted Net Position increased by 84.4 percent and may be used to meet the government's ongoing obligations to citizens and creditors.
 As of the close of Fiscal Year 2022-23, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $351,146,730, an increase of $41,193,067 in comparison with the Prior Year. Of the Total Ending Fund Balance of $351,146,730, the General Fund Balance was $92,576,320 or an increase of $19,306,819 from the prior fiscal year. Of the $92,576,320 General Fund Balance, Nonspendable Fund Balance was $2,569,673, Restricted Fund Balance was $7,830,725, Assigned Fund Balance was $13,092,740 and Unassigned Fund Balance was $69,083,182.

Details are discussed on page 24.
 The City of Palmdale's Total Governmental Long-Term Liabilities increased by $54,107,594 or 67.5 percent, during the Fiscal Year Ended June 30, 2023. The increase is primarily due to increases in the City's net pension liability.

During Fiscal Year 2022-23, Additions and Retirements offsetting the increase in liabilities included:
 Compensated Absences Additions of $2,404,974 and Retirements of $1,954,936;  Self-Insurance Liability Claims Additions of $2,942,055 and Retirements of $4,970,777;  Lease Payable Additions of $66,285 and Retirements of $97,943;  Bonds Payable Additions of $0 and Retirements of $4,241,869; and  Note Payable Additions of $0 and Retirements of $1,341,772 5 City of Palmdale
Management's Discussion and Analysis
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City of Palmdale's basic financial statements. The City of Palmdale's basic financial statements are comprised of three components:
(1) Government-Wide Financial Statements,
(2) Fund Financial Statements, and
(3) Notes to the Financial Statements.

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

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

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

Both of the Government-Wide Financial Statements distinguish functions of the City of Palmdale that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City of Palmdale include General Government, Public Safety, Public Services, Community Development, Cultural and Recreational, Health and Welfare, and Interest on Debt. During the Fiscal Year, the City launched one business-type activity, a Palmdale Community Choice Aggregate program (Palmdale CCA).

The Government-Wide Financial Statements include not only the City of Palmdale as the primary government, but also a legally separate Palmdale Civic Authority, Palmdale Financing Authority, Housing Authority of the City of Palmdale, and Palmdale Community Foundation. Financial information for these component units is reported on a blended basis. The government-wide financial statements can be found on pages 20-22 of this report.

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

Governmental Funds. Governmental Funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the Government-Wide Financial Statements, Governmental Fund Financial Statements focus on near term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government's near-term financing requirements.
6 City of Palmdale
Management's Discussion and Analysis
Because the focus of Governmental Funds is narrower than that of the Government-Wide Financial Statements, it is useful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the Government-Wide Financial Statements. By doing so, the readers may better understand the long-term impact of the government's near-term financing decisions. The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances, provide a reconciliation to facilitate this comparison between Governmental Funds and Governmental Activities. The Governmental Fund Statements can be found on pages 24 - 26.

The City of Palmdale maintains 46 individual Governmental Funds. Information is presented separately in the Governmental Fund Balance Sheet and in the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances for the General Fund, the Housing Authority-Housing Asset Fund Special Revenue Fund, the Housing Authority - Facilities Fund Special Revenue Fund, the American Rescue Plan Act Fund (ARPA), and Measure AV fund, all of which are considered to be major funds. Data from the remaining 41 governmental funds are combined into a single, aggregated presentation. Individual fund data for these non-major governmental funds is provided in the form of combining statements on pages 105 - 164.

The City of Palmdale adopts an annual appropriated budget for its General Fund, its Housing Authority - Housing Asset Fund - Special Revenue Fund, its Housing Authority Facilities Fund – Special Revenue Fund, its ARPA fund, and its Measure AV fund. A budgetary comparison statement has been provided for each of these funds to demonstrate compliance with their respective budgets. The budgetary comparison statements can be found on pages 28 - 32.

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

The resources of those funds are solely to support the City of Palmdale's own programs. The basic Proprietary Fund Financial Statement can be found on pages 33 - 35.

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

Fiduciary funds are not reflected in the Government-Wide financial statements because the resources of those funds are not available to support the City of Palmdale's own programs. The basic Fiduciary Fund Financial Statement can be found on pages 37 - 38 of this report.

Notes to the Financial Statements . The Notes to the Financial Statements provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Fund Financial Statements. The Notes Section provides greater detail on Significant Accounting Policies, Cash and Investments, capitalization consistency, fiscal activities and debt service. Generally accepted accounting principles are used to create the City’s financial statements and the Notes Section helps the reader to understand the objective of the financial reporting. The Notes can be found on pages 39 - 96 of this report.

Government-Wide Financial Analysis
As noted earlier, Net Position may serve over time as a useful indicator of a government's financial position. In the case of the City of Palmdale, Assets and Deferred Outflows of Resources exceeded Liabilities and Deferred Inflows of Resources by $928,609,458 as of June 30, 2023.

The City of Palmdale’s Net Investment in Capital Assets reflects a balance of $609,762,857. Investment in capital assets is
defined as land, buildings, machinery and equipment, infrastructure, and construction in progress, net of Accumulated Depreciation, and less any related debt or deferred outflows of resources used to acquire these assets that is still outstanding.

The City of Palmdale capital assets are used to provide services to citizens; consequently, these assets are not available for future spending. And, although the City of Palmdale's investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources and the capital assets themselves cannot be used to liquidate these liabilities.
7 City of Palmdale
Management's Discussion and Analysis
In addition, the City has reported the City’s Net Pension Liability and related Deferred Inflows and Outflows in the City’s Financial Statements. Additional detailed information can be found in Note (15) of the Notes to the Financial Statements.

Separate sections are included and report:
 Total Assets totaling $1,105,440,244 as a sum of Current and Other Assets of $434,539,771 and Capital Assets of $670,900,473.
 Deferred Outflows of Resources totaling $18,760,726 as a sum of Pension Related Amounts for a future period totaling $18,483,338 and Other Postemployment Benefits Related Amounts totaling $277,388. This section represents a consumption of net position that applies to a future period.  Total Liabilities totaling $195,090,308 as a sum of Long-Term Liabilities Outstanding (including net pension liability and net OPEB liability) of $141,968,907 and Other Liabilities of $53,121,401.  Total Deferred Inflows of Resources totaling $501,204 as Other Postemployment Benefit Related Amounts of $164,314 and pension related amounts of $277,671, and lease amounts of $59,219. The Deferred Inflows Related to Pension Liability is the result of GASB 68 and will be recognized in the subsequent measurement period.  Total Net Position reported totaling $928,609,458 represents a sum of the Net Investment in Capital Assets $609,762,857; Restricted Net Position of $236,174,325; and Unrestricted Net Position of $82,672,276. 8 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Net Position
Governmental
Activities
2023
Governmental
Activities
2022
Business-type
Activities
2023
Business-type
Activities
2022
Primary
Government
2023
Primary
Government
2022
Assets
Current and other assets $ 427,971,448 $ 375,224,928 $ 6,568,323 $ - $ 434,539,771 $ 375,224,928 Capital assets 670,900,473 682,308,267 - 670,900,473 682,308,267 Total assets 1,098,871,921 1,057,533,195 6,568,323 - 1,105,440,244 1,057,533,195 Deferred outflows of resources
Pension related amounts 18,483,338 6,326,852 - - 18,483,338 6,326,852 Other postemployment benefits related
amounts 277,388 470,063 - - 277,388 470,063
Total deferred outflows of resources 18,760,726 6,796,915 - - 18,760,726 6,796,915 Liabilities
Long-term liabilities outstanding 134,271,688 80,164,094 7,697,219 - 141,968,907 80,164,094 Other liabilities 53,121,401 71,219,105 - - 53,121,401 71,219,105 Total liabilities 187,393,089 151,383,199 7,697,219 - 195,090,308 151,383,199 Deferred Inflows of Resources
Pension related amounts 277,671 15,517,784 - - 277,671 15,517,784 Other postemployment benefits related
amounts 164,314 199,797 - - 164,314 199,797
Deferred inflows from leases 59,219 91,095 - - 59,219 91,095 Total deferred inflows of resources 501,204 15,808,676 - - 501,204 15,808,676 Net position
Net investment in capital assets 609,762,857 618,136,264 - - 609,762,857 618,136,264 Restricted 236,174,325 233,562,972 - - 236,174,325 233,562,972 Unrestricted 83,801,172 45,438,999 (1,128,896) - 82,672,276 45,438,999 Total net position $ 929,738,354 $ 897,138,235 $ (1,128,896) $ - $ 928,609,458 $ 897,138,235 The City of Palmdale's Restricted Net Position of $236,174,325 represents resources that are subject to external restrictions on how they may be used. The Unrestricted Net Position of $82,672,276 may be used to meet the government's ongoing obligations to citizens and creditors. The Net Investment in Capital Assets is $609,762,857 and is the amount of capital assets net depreciation. At the end of the Fiscal Year, the City of Palmdale is able to report positive balances in Restricted and Unrestricted categories of Net Position for its governmental activities. 9 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Changes in Net Position
Governmental
Activities
2023
Governmental
Activities
2022
Business-type
Activities
2023
Business-type
Activities
2022
Primary
Government
2023
Primary
Government
2022
Revenues:

Program Revenues:

Charges for services $ 54,903,286 $ 54,542,664 $ 29,406,756 $ - $ 84,310,042 $ 54,542,664 Operating grants and
contributions 19,313,133 2,740,434 - - 19,313,133 2,740,434 Capital grants and
contributions 33,403,301 32,939,685 - - 33,403,301 32,939,685 Total Program Revenues 107,619,720 90,222,783 29,406,756 - 137,026,476 90,222,783 General revenue:

Property taxes 28,779,848 26,366,000 - - 28,779,848 26,366,000 Sales and use taxes 50,484,537 50,484,625 - - 50,484,537 50,484,625 Other Taxes 14,642,731 14,847,593 - - 14,642,731 14,847,593 Unrestricted investment
earnings/(loss) 1,417,412 (7,686,544) 1,321 - 1,418,733 (7,686,544) Other 2,666,630 697,180 - - 2,666,630 697,180
Total General Revenues 97,991,158 84,708,854 1,321 - 97,992,479 84,708,854 Total revenues 205,610,878 174,931,637 29,408,077 - 235,018,955 174,931,637 Expenses:

General government 31,726,963 26,570,018 - - 31,726,963 26,570,018 Public safety 38,133,053 35,668,009 - - 38,133,053 35,668,009 Public service 75,322,520 75,158,621 - - 75,322,520 75,158,621 Community development 12,005,237 9,269,097 - - 12,005,237 9,269,097 Culture and Recreation 13,634,111 9,648,980 - - 13,634,111 9,648,980 Health and welfare 588,116 316,031 - - 588,116 316,031
Transportation 305,266 - - - 305,266 -
Interest on long-term debt 2,555,060 2,182,745 - - 2,555,060 2,182,745 Palmdale CCA - - 29,459,055 - 29,459,055 -
Total expenses 174,270,326 158,813,501 29,459,055 - 203,729,381 158,813,501 Transfers 1,077,918 - (1,077,918) - - -
Change in Net Position 32,418,470 16,118,136 (1,128,896) - 31,289,574 16,118,136 Net Position, Beginning of Year 897,138,235 881,020,099 - - 897,138,235 881,020,099 Change in accounting principle
GASB 96 181,649 - - - 181,649 -
Net Position, Beginning of Year
as restated 897,319,884 881,020,099 - - 897,319,884 881,020,099 Net Position, End of Year $ 929,738,354 $ 897,138,235 $ (1,128,896) $ - $ 928,609,458 $ 897,138,235

10 City of Palmdale
Management's Discussion and Analysis
Governmental Activities. Governmental activities increased the City of Palmdale’s net position by $32,418,470 or 3.61 percent, during the Fiscal Year 2022-23. Key elements of the Governmental activities Net Position increase are as follows:
 Charges for Services increased by $360,622 or 0.7 percent primarily due to inflationary pressure.  Operating Grants and Contributions increased by $16,572,699 or 604.8 percent from the prior fiscal year primarily due to the allocation of American Rescue Plan Act Funds.  Capital Grants and Contribution proceeds increased by $463,616 or 1.4 percent primarily due capital grants awarded during the year for park improvements and other capital projects.  The City reported increases in Property Taxes of $2,413,848 or 9.2 percent. The improvement can be attributed to an increase in property values within the City and continued restoration of prior Proposition 8 Property Tax reductions.  Other Taxes decreased by $204,862 or 1.4 percent as a result of decreases in collections of Franchise Taxes, Transient Occupancy Taxes, Property Transfer Taxes and Business Licenses Fees.  The City’s Unrestricted Investment Earnings increased by $9,103,956 as the result of increase in interest rates due to the Federal Open Market Committee (FOMC) executing its fiscal and monetary policy to reduce inflation down to 2 percent.
 Other Revenue increased by $1,969,450 or 282.5 percent due to the sale of City owned property that occurred during the year.
 General Government expenses increased by $5,156,945, or 19.4 percent primarily due to increases in asset write-offs, salary increases due to increase in City staff, as well as increases in health insurance claims paid during the Fiscal Year.
 Public Safety expenses increased $2,465,044 or 6.9 percent. This is largely due to the budgeted increase in the County Sheriff’s contract for services.
 Public Service expenses increased $163,899 or 0.2 percent. This is primarily due to City services increasing for programs such as illegal dumping and graffiti abatement.  Community Development expenses increased $2,736,140 or 29.5 percent due to an increase in City-owned rental unit operation expenses and an increase in housing development, such as Transit Village community and Homes 4 Families veteran housing.
 Cultural and Recreational expenses increased $3,985,131 or 41.3 percent primarily due to park and water park repairs and refurbishments.
 Health and Welfare expenses increased $272,085 or 86.1 percent due to project studies and demolition expenses.  Interest on Long-Term Debt increased by $372,315 or 17.1 percent. 11 City of Palmdale
Management's Discussion and Analysis
Program Expenses and Program Revenues-Governmental Activities The Statement of Activities reflects total expenses of $174,270,326. Total Revenues in the Statement of Activities for the Year Ended June 30, 2023 were $205,610,878. Of this amount, $107,619,720 of the resources came from Program Revenues, and $97,991,158 came from General Revenues received by the government. The largest revenues are Charges for Services, followed by Sales Tax, Capital Grants and Contributions, Property Taxes, and Other Taxes. 12 City of Palmdale
Management's Discussion and Analysis
Revenues by Source-Governmental Activities
13 City of Palmdale
Management's Discussion and Analysis
Businesst-Type Activities. Total net position for business-type activities for Palmdale Community Choice Aggregate (Palmdale-CCA) totaled $(1,128,896) for the Fiscal Year 2022-23. Key elements of this year’s activity in relation to the prior year are as follows:
 Charges for services were $29,406,756 for the Fiscal Year 2022-23 as the program began its operations starting on October 1, 2022. There were also investment earnings totaling $1,321  Overall expenses were $29,459,055 as operational expenses officially began in the Fiscal Year 2022-23.

Program Expenses and Program Revenues-Business-Type Activities 14 City of Palmdale
Management's Discussion and Analysis
Revenues by Source-Business-Type Activities
Financial Analysis of the Government's Funds
As noted earlier, the City of Palmdale uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Governmental Funds The focus of the City of Palmdale's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the City of Palmdale's financing requirements. In particular, fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
15 City of Palmdale
Management's Discussion and Analysis
As of the end of the Fiscal Year 2022-23, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $351,146,730, an increase of $41,193,067 over the prior year. The General Fund is the chief operating fund of the City of Palmdale. At the end of Fiscal Year 2022-23, the Total Fund Balance of the General Fund was $92,576,320. Of the Total Fund Balance:
 Nonspendable Fund Balance totaled $2,569,673. “Nonspendable” because the resources are not in a spendable form (i.e., prepaids, long-term receivables, or non-financial assets held for resale). Nonspendable Fund Balance includes Advances totaling $1,114,403; Deposits and Prepaids totaling $321,250; and Notes and Liens totaling $1,134,020.  Restricted Fund Balance totaling $269,267,659. “Restricted” due to the existence of externally enforceable legal restrictions that are related primarily to special revenue funding sources and debt service reserves. Restricted Fund Balance includes City Investments of 7,830,725.
 Assigned Fund Balance totaling
$13,092,740. “Assigned” for specific purposes such as Continuing Appropriations, Encumbrances, Compensated Absences, Self-Insurance and Health Insurance Claims, and Capital Projects. Assigned Fund Balance includes Compensated Absences totaling
$2,224,370; Self-Insurance Claims totaling $3,584,772 and Health Insurance obligations totaling $7,283,598.
 Unassigned Fund Balance totaling $66,216,658. “Unassigned” and represents residual resources that cannot be properly classified in one of the other fund balance categories. As a measure of the General Fund's liquidity, it may be useful to compare both Unassigned and Total Fund Balance to Total Fund Expenditures. At the end of the Fiscal Year 2022-23 the Unassigned Fund Balance in the General Fund is 74.6 percent of Total Fund Balance for the General Fund and 95.2 percent of Total General Fund Expenditures.

The Housing Authority - Housing Asset Fund has a Fund Balance of $49,686,425 and is restricted for low and moderate- income housing purposes. This Fund is used to record the assets formally held by the Community Redevelopment Agency Low and Moderate Income Housing Fund. The assets that were approved by the State Department of Finance to be retained by the Low and Moderate Housing Fund were transferred to the Housing Authority-Housing Asset Fund as the City has control of those assets, which may be used in accordance affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code 34176.1. The housing asset fund balance decreased by $872,061 in the Fiscal Year 2022-23, primarily due to cost and expenditures exceeding program revenue. Program revenues were $432,050, primarily due to gains on investments, and expenditures were $1,571,590 in Fiscal Year 2022-23. Expenditures exceed program revenues in the Housing Asset Fund as the result of regular ongoing operations. Revenues into the fund consist primarily of debt service payments, while expenditures consist of payments for multi-year capital projects that are funded through available fund balance.

The Housing Authority – Facilities Fund is used to account for revenues and expenditures related to the operation of three mobile home parks, four apartments, and two multi-residential properties who were separate funds and were consolidated into one fund in 2021. The total beginning fund balance in Fiscal Year 2022-23 was at a deficit of $3,585,195. The deficit was reduced by $1,122,980 as the result of a decline in operating expenditures and capital outlay. There was an excess in revenues due to funds from debt service and fees of about $1.4M and $250,000 for 29364011 ERAF/SERAF. The Housing Division has commitments for Affordable Housing Agreements that may take more than one year to complete and to receive the request for draws against approved loans.

ARPA Fund - For the fiscal year ended June 30, 2023, the ARPA fund had total revenues of $12,879,628 and total expenditures of $12,580,662 resulting in an increase in the fund balance of $298,966. The fund balance at the beginning of the year was $24,499. The beginning fund balance with this net increase results in a fund balance at fiscal year end of $323,465.

Measure AV Fund - For the fiscal year ended June 30, 2023, Measure AV had total revenues of $22,675,911 and total
expenditures of $16,133,077 resulting in an increase in the fund balance of $6,542,834. The fund balance at the beginning of the year was $18,022,844. The beginning fund balance with this net increase results in a fund balance at fiscal year end of 16 City of Palmdale
Management's Discussion and Analysis
$24,565,678.

General Fund Budgetary Highlights
Differences between original budget and final budget resulted in a increase of appropriations for General Fund expenditures of $1,439,410 as a result of an adjustment in budget needs in operating expenses primarily in General Government, as well as carry forward of budgets for multi-year Capital Projects. Differences between final amended budget and actual resulted in a $13,560,113 decrease in appropriations and can be briefly summarized as follows:
 $6,499,350 decrease in General Governmental expenditures as a result of vacancies in various departments.  $1,759,564 decrease in Public Safety expenditures as a result of a multi-year I.T. project implementation.  $4,165,403 decrease in Public Services expenditures primarily due to supply shortages of fleet equipment.  $277,388 decrease in Community Development program expenditures.  $823,515 decrease in Parks and Recreation program expenditures (see paragraph below).  $37,712 decrease in capital outlay expenditures.
 $15,919 increase in Debt Service Principal and Interest  $1,840 increase in Interfund Interest
These decreases are due to not only Expenditures coming in less than anticipated but also the result of activities that were budgeted but not completed during Fiscal Year 2022-23 (many were carried forward as encumbrances and continuing appropriations) and reclassifying activities to Special Revenue Funds to comply with GASB 54. Parks and Recreastion had a reduction in program expenditures as a result of a multi-year I.T. project implementation. Overall, the reclassifying of Expenditures resulted in a reduction of transfers in and offsetting reduction to expenditures. See Note (1).

Capital Assets and Debt Administration
Capital Assets. The City of Palmdale's investment in capital assets for Governmental Activities as of June 30, 2023, amounts to
$670,900,473 (Net of Accumulated Depreciation). This investment in capital assets includes land, buildings and structures, improvements, machinery and equipment, infrastructure and construction in progress. The Capital Assets decreased by $11,407,794 in Fiscal Year 2022-23 as compared to prior year.

City of Palmdale's Capital Assets (Net of Depreciation) Governmental
Activities 2023
Governmental
Activities 2022
Land and improvements $ 122,859,591 $ 119,352,146
Intangible Assets 153,090 153,090
Construction in progress 30,834,212 28,091,702
Buildings and structures 53,206,455 52,481,574
Improvements other than buildings 1,018,329 1,144,746
Infrastructure 452,568,964 475,932,110
Machinery and equipment 7,407,096 5,094,077
Right to Use Assets 2,852,736 58,822
$ 670,900,473 $ 682,308,267
17 City of Palmdale
Management's Discussion and Analysis
Major capital asset events during the current fiscal year included the following:
 Additions of Land and Improvements totaling $3,507,445  Additions of Construction In Progress totaling $26,279,139.  Additions of Building and Structures totaling $2,429,636.  Additions of Machinery and Equipment totaling $3,317,180.  Additions of Infrastructure Improvement totaling $12,432,289.  Additions of Total Accumulated Depreciation totaling $38,760,839.  Deletions of Depreciated and Non-Depreciated Assets totaling $23,536,629.

Additional information on the City of Palmdale's capital assets can be found on page 63, Note (10).

Long-Term Debt. At the end of the current fiscal year, the City of Palmdale had total bonded debt outstanding of $48,389,386.

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

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

City of Palmdale's Outstanding Debt
Revenue Bonds, Certificates of Participation, Loans, and Leases Governmental
Activities 2023
Governmental
Activities 2022
Revenue Bonds $ 15,105,000 $ 17,025,000
Mortgage Revenue Bonds 3,640,000 3,740,000
Certificates of Participation 29,438,552 31,542,451
Bond Premiums 205,834 323,804
Loans & direct borrowings 12,573,357 13,915,129
Financing Arrangements 3,566,927 1,080,857
Total $ 64,529,670 $ 67,627,241
The City of Palmdale’s Total Long-Term Liabilities total was $64,529,670 of which $48,389,386 was Revenue Bonds, Mortgage Revenue Bonds, Certificates of Participation and Bond Premiums as noted on the schedule above.

The remainder of the debt was comprised of Financial Arrangements Payable for Equipment Leases totaling $3,566,927; Notes Payable for Street Light Acquisition totaling $8,529,109; Section 108 HUD Loan totaling $1,000,000; HOME Loan totaling $2,850,000; SCE Parks LED Retrofit OBF A-5963 totaling $101,456; SCE LED Retrofit OBF A-5806 totaling $3,001; SCE LED Retrofit OBF A-5807 totaling $19,497, and SCE LED Retrofit OBF A-7251 totaling $70,294.

Additional information on the City of Palmdale's long-term debt can be found on page 65, Note (12). 18 City of Palmdale
Management's Discussion and Analysis
Economic Factors and Next Year's Budget
The City took into consideration the following factors in preparing the budget for the 2023-24 fiscal year.  Positive Property tax increases as property values increase.  Continued slow paced growth in housing development.
 Stable Sales Tax revenue and Measure AV Sales Tax revenues as a result of economic trends.  Conservative escalators and only add known future development.  Implementing Fee Structures that align revenues with cost-recovery objectives.  Using onetime revenues for onetime expenditures.
 Building reserves for future capital replacements and economic uncertainties.  Prefunding retiree pension cost.
 City funds impacted by State and Federal budget actions.

While Actual Fiscal Year 2022-23 revenue growth in tax collections were above estimates, staff continues to follow a moderate approach to protecting these revenues. Staff will continue to monitor actual revenues versus projections and provide any needed mid-year adjustments.

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

Requests for Information
This financial report is designed to provide a general overview of the City of Palmdale's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report, requests for any of the separately issued component unit financial statements or additional financial information should be addressed to the City of Palmdale, Finance Department, 38300 Sierra Highway, Suite D, Palmdale, California, 93550. 19 This page intentionally left blank
City of Palmdale
Statement of Net Position
June 30, 2023
Primary Government
Governmental
Activities
Business-Type
Activities Total
Assets
Cash $ 3,400,570 $ 1,280,822 $ 4,681,392
Investments 320,625,267 - 320,625,267
Accounts Receivable 19,482,905 10,446,240 29,929,145
Interest receivable 9,063,943 - 9,063,943
Property tax receivable 777,909 - 777,909
Due from other governmental units 12,354,194 - 12,354,194 Notes and liens 38,764,675 - 38,764,675
Deposits and prepaids 336,420 19,375 355,795
Internal Balances 5,178,114 (5,178,114) -
Land held for development 2,710,024 - 2,710,024
Short-term lease receivable 31,257 - 31,257
Restricted assets:

Cash and Investments 15,216,833 - 15,216,833
Long-term lease receivable 29,337 - 29,337
Capital assets and Right to use assets:

Not being depreciated:

Land and improvements 122,859,591 - 122,859,591
Water credit CFD 16-1 153,090 - 153,090
Construction in progress 30,834,212 - 30,834,212
Being depreciated/amortized, net of accumulated depreciation/amoritzation:

Buildings and structures 53,206,455 - 53,206,455
Machinery, equipment, and other improvements 7,407,096 - 7,407,096 Improvements other than buildings 1,018,329 - 1,018,329 Infrastructure 452,568,964 - 452,568,964
Machinery and Equipment - Right to Use 31,504 - 31,504
SBITA Assets 2,821,232 - 2,821,232
Total assets 1,098,871,921 6,568,323 1,105,440,244
Deferred outflows of resources
Pension related amounts 18,483,338 - 18,483,338
Other postemployment benefits related amounts 277,388 - 277,388 Total deferred outflows of resources 18,760,726 - 18,760,726 See Notes to Financial Statements
20 City of Palmdale
Statement of Net Position
June 30, 2023
Primary Government
Governmental
Activities
Business-Type
Activities Total
Liabilities
Accounts payable 12,412,344 6,345,917 18,758,261
Accrued salaries and employee benefits 2,552,608 - 2,552,608 Due to other governmental units 18,479 - 18,479
Deposits 6,744,768 1,289,922 8,034,690
Accrued interest payable 2,042,379 - 2,042,379
Unearned revenue 29,350,823 61,380 29,412,203
Noncurrent liabilities:

Due within one year 11,494,253 - 11,494,253
Due in more than one year 63,964,916 - 63,964,916
Net pension liability 58,613,322 - 58,613,322
Net OPEB liability 199,197 - 199,197
Total liabilities 187,393,089 7,697,219 195,090,308
Deferred Inflows of Resources
Pension related amounts 277,671 - 277,671
Other postemployment benefits related amounts 164,314 - 164,314 Deferred inflows from leases 59,219 - 59,219
Total deferred inflows of resources 501,204 - 501,204
Net Position
Net investment in capital assets 609,762,857 - 609,762,857 Restricted
Public safety 14,403,839 - 14,403,839
Public services 146,747,965 - 146,747,965
Community development 63,093,986 - 63,093,986
Debt service 124 - 124
Culture and recreation 11,928,411 - 11,928,411
Unrestricted 83,801,172 (1,128,896) 82,672,276
Total net position $ 929,738,354 $ (1,128,896) $ 928,609,458 See Notes to Financial Statements
21 City of Palmdale
Statement of Activities
For the Year Ended June 30, 2023
Program Revenues
Operating Capital
Net (Expenses) Revenues and
Changes in Net Position
Expenses
Charges for
Services
Grants and
Contributions
Grants and
Contributions
Governmental
Activities
Business-type
Activities Total
Primary Government:

Governmental activities:

General government $ 31,726,963 $ 7,868,872 $ 13,007,004 $ - $ (10,851,087) $ - $ (10,851,087) Public safety 38,133,053 5,273,458 587,539 - (32,272,056) - (32,272,056) Community development 12,005,237 8,053,093 5,074,368 - 1,122,224 - 1,122,224 Cultural and recreational 13,634,111 8,052,680 109,595 - (5,471,836) - (5,471,836) Health and welfare 588,116 184,106 34,534 - (369,476) - (369,476) Transportation 305,266 - - - (305,266) - (305,266)
Public service 75,322,520 25,471,077 500,093 33,403,301 (15,948,049) - (15,948,049) Interest on long-term debt 2,555,060 - - - (2,555,060) - (2,555,060) Total governmental activities 174,270,326 54,903,286 19,313,133 33,403,301 (66,650,606) - (66,650,606) Business-type activities:

Palmdale CCA 29,459,055 29,406,756 - - - (52,299) (52,299) Total business-type activities 29,459,055 29,406,756 - - - (52,299) (52,299) Total primary government $ 203,729,381 $ 84,310,042 $ 19,313,133 $ 33,403,301 $ (66,650,606) $ (52,299) $ (66,702,905) General revenues and transfers:

Taxes:

Property taxes $ 28,779,848 $ - $ 28,779,848
Sales and use taxes 50,484,537 - 50,484,537
Unrestricted motor vehicle in lieu 173,567 - 173,567
Franchise taxes 8,684,132 - 8,684,132
Transient occupancy taxes 4,608,941 - 4,608,941
Property Transfer Taxes 551,908 - 551,908
Business license taxes 624,183 - 624,183
Unrestricted investment earnings/(loss) 1,417,412 1,321 1,418,733 Other 2,666,630 - 2,666,630
Transfers 1,077,918 (1,077,918) -
Total general revenues and transfers 99,069,076 (1,076,597) 97,992,479 Change in Net Position 32,418,470 (1,128,896) 31,289,574 Net Position - Beginning of Year 897,138,235 - 897,138,235 Restatement of net position for GASB 96 181,649 - 181,649 Net Position - Beginning of Year restated 897,319,884 - 897,319,884 Net Position - End of Year $ 929,738,354 $ (1,128,896) $ 928,609,458 See Notes to Financial Statements
22 City of Palmdale
Governmental Fund Financial Statements
For the Year Ended June 30, 2023
The General Fund – is the City’s primary operating fund and has been classified as a major fund. It accounts for all financial resources of the general government that are not already required legally or by sound financial management to be accounted for in another fund.

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

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

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

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

Measure AV Fund - This fund is used to account for the revenues and expenditures incurred as a result of the 3/4 cent sales tax increase that was passed by voters in November 2020 and took effect April 1, 2021 See Notes to Financial Statements
23 City of Palmdale
Balance Sheet - Governmental Funds
June 30, 2023
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund Measure AV
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Assets:

Cash $ - $ - $ 2,660,161 $ - $ - $ 240,409 $ 2,900,570
Investments 69,718,714 8,866,012 1,419,054 23,301,438 22,674,259 191,494,341 317,473,818 Receivables:

Accounts and interest receivable 6,653,156 5,336,547 251,500 192,173 3,901,241 12,181,541 28,516,158 Property tax receivable 442,448 - - - - 335,461 777,909 Due from other funds 14,539,863 - - - - 229,558 14,769,421 Due from custodial funds 74,071 - - - - - 74,071
Advances due from fiduciary funds 1,114,403 4,909,777 - - - 583,859 6,608,039 Due from other governmental units 5,659,575 - - - - - 5,659,575 Notes and Liens 1,134,020 26,711,166 - - - 10,919,489 38,764,675 Interfund promissory note - 6,353,333 - - - - 6,353,333 Advances due from other funds 5,000,000 1,186,001 - - - 3,800,000 9,986,001 Deposits and prepaid 321,250 1,170 - - - 14,000 336,420 Short-term lease receivable 31,257 - - - - - 31,257
Restricted Assets:

Investments 7,830,725 3,019,115 - - - 2,846,009 13,695,849 Cash - - 1,524,884 - - - 1,524,884
Land held for development - 2,710,024 - - - - 2,710,024 Long-term lease receivable 29,337 - - - - - 29,337
Total assets $ 112,548,819 $ 59,093,145 $ 5,855,599 $ 23,493,611 $ 26,575,500 $ 222,644,667 $ 450,211,341 Liabilities, Deferred Inflows of
Resources and Fund Balances
Liabilities:

Accounts payable 6,489,709 158,549 608,936 648,598 2,009,822 4,890,694 14,806,308 Due to fiduciary funds 4,405 - - - - 1,565 5,970
Due to other funds - 12,509 - - - 7,848,813 7,861,322
Self insurance liability 2,640,271 - - - - - 2,640,271
Advances due to other funds - - 1,186,001 - - 8,800,000 9,986,001 Interfund promissory note - - 6,353,333 - - - 6,353,333 Deposits 4,781,153 - 169,544 - - 1,794,071 6,744,768
Unearned revenue 163,824 3,880,000 - 22,521,548 - 2,785,451 29,350,823 Notes payable 173,665 - - - - 10,471 184,136
Total liabilities 14,253,027 4,051,058 8,317,814 23,170,146 2,009,822 26,131,065 77,932,932 Deferred Inflows of Resources
Unavailable revenue 5,660,253 5,355,662 - - - 10,056,545 21,072,460 Deferred inflows related to lease
receivables 59,219 - - - - - 59,219
Total deferred inflows of resources 5,719,472 5,355,662 - - - 10,056,545 21,131,679 Fund Balances
Nonspendable 2,569,673 - - - - - 2,569,673
Restricted 7,830,725 49,686,425 - 323,465 24,565,678 186,861,366 269,267,659 Assigned 13,092,740 - - - - - 13,092,740
Unassigned 69,083,182 - (2,462,215) - - (404,309) 66,216,658 Total fund balances (deficits) 92,576,320 49,686,425 (2,462,215) 323,465 24,565,678 186,457,057 351,146,730 Total liabilities, deferred inflows of
resources and fund balances $ 112,548,819 $ 59,093,145 $ 5,855,599 $ 23,493,611 $ 26,575,500 $ 222,644,667 $ 450,211,341 See Notes to Financial Statements
24 City of Palmdale
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Year Ended June 30, 2023
Fund Balances - Total Governmental Funds $ 351,146,730
Amounts reported for governmental activities in the Statement of Net Position are different because:

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

Governmental capital assets 1,420,847,854
Less accumulated amortization and depreciation (759,153,498) 661,694,356 Accounts receivable not available to pay for current-period expenditures are unavailable in the funds. 21,072,460
Interest due on long-term debt do not require current financial resources and therefore are not reported as a liability in the Governmental Funds Balance Sheet.

Interest payable (2,001,566)
Deferred Outflows related to pensions and OPEB benefits are not reported in the Governmental Fund Balance Sheet.

Deferred outflows related to pensions 18,483,338
Deferred outflows related to OPEB benefits 277,388
Long-Term Liabilities are not due and payable in the current period and therefore are not reported as a liability in the Governmental Funds Balance Sheet.

Compensated absences (3,953,455)
Claims payable (4,335,772)
Lease liability (32,302)
Net pension liability (58,613,322)
Net OPEB liabilities (199,197)
Financing leases payable (905,167)
SCE LED Notes Payable (10,112)
Notes payable (12,379,109)
Bonds & certificates of participation payable (48,183,552) Plus issuance premiums (205,834) (128,817,822)
Deferred Inflows related to pensions and OPEB benefits are not reported in the Governmental Funds Balance Sheet.

Deferred inflows related to pensions (277,671)
Deferred inflows related to OPEB benefits (164,314)
Internal service fund net position less business-type allocation 8,325,455 Net Position of Governmental Activities $ 929,738,354
See Notes to Financial Statements
25 City of Palmdale
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Year Ended June 30, 2023
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund Measure AV
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Revenues:

Property taxes $ 29,034,961 $ - $ - $ - $ - $ - $ 29,034,961 Sales taxes 27,808,626 - - - 22,675,911 - 50,484,537
Other taxes 13,681,776 - - - - 5,104,715 18,786,491
Subventions and grants - - - 12,580,662 - 30,840,753 43,421,415 Park development fees - - - - - 1,339,284 1,339,284
Licenses and Permits 4,901,645 - - - - 164,876 5,066,521 Motor vehicle license fees 173,567 - - - - - 173,567
Fines and forfeitures 498,451 - - - - 363,996 862,447
Special Assessments - - - - - 21,355,867 21,355,867
Use of property 957,210 - 7,812,246 - - - 8,769,456
Charges for current services 7,610,378 171,699 - - - 3,383,734 11,165,811 Drainage fees - - - - - 1,397,889 1,397,889
Traffic impact fees - - - - - 677,674 677,674
Facilities impact fees - - - - - 798,263 798,263
Interfund interest 132,700 - - - - 64,819 197,519
Interest 1,811,480 334,674 23,490 681,526 - 2,845,325 5,696,495 Net increase (decrease) in fair value of
investments (2,531,788) (75,797) (12,146) (404,835) - (1,509,788) (4,534,354) Developer contributions - - - - - 17,690 17,690
State contributions 908 - - - - 1,882,899 1,883,807
Other agency contributions - - - - - 22,020 22,020
County contributions - - - - - 301,403 301,403
Other revenue 5,735,468 1,474 - 22,275 - 1,481,756 7,240,973 Lease interest 1,840 - - - - - 1,840
Total revenues 89,817,222 432,050 7,823,590 12,879,628 22,675,911 70,533,175 204,161,576 Expenditures:

Current:

General Government 23,300,070 - - 5,481,636 1,753,448 842,774 31,377,928 Public safety 22,826,666 - - - 9,690,491 554,997 33,072,154 Public services 12,729,757 - - 7,030,033 1,442,986 27,903,899 49,106,675 Community development 1,350,322 1,571,590 5,736,826 - 584,953 3,393,221 12,636,912 Cultural and recreational 8,726,795 - - - 461,405 1,852,891 11,041,091 Health and welfare - - - - - 473,993 473,993
Capital Outlay 1,452,378 - 362,279 68,993 2,199,794 14,283,241 18,366,685 Debt service:

Principal 1,580,972 - 100,000 - - 3,367,455 5,048,427
Interest 703,047 - 178,951 - - 1,356,145 2,238,143
Interfund interest - - - - - 184,419 184,419
Total expenditures 72,670,007 1,571,590 6,378,056 12,580,662 16,133,077 54,213,035 163,546,427 Excess (deficiency) of revenues
over (under) expenditures 17,147,215 (1,139,540) 1,445,534 298,966 6,542,834 16,320,140 40,615,149 Other Financing Sources (Uses)
Transfers In 6,892,578 322,554 - - - 4,258,794 11,473,926 Transfers Out (4,732,974) (55,075) (322,554) - - (5,785,405) (10,896,008) Total other financing sources
(uses) 2,159,604 267,479 (322,554) - - (1,526,611) 577,918 Net Change in Fund Balances 19,306,819 (872,061) 1,122,980 298,966 6,542,834 14,793,529 41,193,067 Fund Balances (Deficit) - Beginning of
Year 73,269,501 50,558,486 (3,585,195) 24,499 18,022,844 171,663,528 309,953,663 Fund Balances (Deficit) - End of Year $ 92,576,320 $ 49,686,425 $ (2,462,215) $ 323,465 $ 24,565,678 $ 186,457,057 $ 351,146,730 See Notes to Financial Statements
26 City of Palmdale
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2023
Net Change in Fund Balances - Total Governmental Funds $ 41,193,067 Amounts reported for governmental activities in the statement of activities are different because:

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

Capital Asset additions and other adjustments - Current year 21,395,734 Less depreciation expense (37,854,728)
Lease amortization expense (27,318) (16,486,312)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.

Grant revenues earned, but not received within the 60-day accrual period offset by reversal of larger amount of prior period accruals due to write off of federal and state receivables 1,335,448 Long-term debt issuance provide current financial resources to Governmental Funds, but issuing debt increases long-term liabilities in the Government-Wide Statement of Net Position. Principal repayments of long-term debt and escrow agent payments are expenditures/uses in the Governmental Funds, but they reduce long-term liabilities in the Government-Wide Statement of Net Position. Also premiums are recognized in the current period in the Governmental Funds, whereas these amounts are amortized in the Government-Wide Statement of Activities. This is the amount by which repayments exceeded proceeds.

Principal Repayments:

Financing Arrangements 180,972
Lease payments 28,846
Notes payable 1,279,556
Bonds & Certificates of Participation payable 4,123,899 5,613,273 Internal service fund change in net position with business-type allocation (358,490) Some expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the Governmental Funds.

Compensated absences (450,040)
Self insurance liability claims payable 3,015,880
Pension expense (1,069,546)
OPEB expense (233,863)
Accrued interest on debt (270,000)
Amortization of bond premiums 129,053 1,121,484
Change in Net Position of Governmental Activities $ 32,418,470 See Notes to Financial Statements
27 City of Palmdale
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Property taxes $ 26,790,360 $ 25,690,510 $ 29,034,961 $ 3,344,451 Sales taxes 28,894,710 28,117,570 27,808,626 (308,944)
Other taxes 12,482,300 12,205,360 13,681,776 1,476,416
Licenses and Permits 3,890,200 4,038,100 4,901,645 863,545 Motor vehicle license fees - 173,560 173,567 7
Fines and forfeitures 439,400 990,240 498,451 (491,789) Use of property 787,600 847,030 957,210 110,180
Charges for current services 7,166,630 8,026,100 7,610,378 (415,722) Interfund interest - 119,600 132,700 13,100
Interest 1,010,200 557,030 1,811,480 1,254,450
Net increase (decrease) in fair value of investments - - (2,531,788) (2,531,788) State contributions - - 908 908
Other Revenue 12,307,800 4,966,690 5,735,468 768,778
Interest revenue - - 1,840 1,840
Total revenues 93,769,200 85,731,790 89,817,222 4,085,432 Expenditures:

Current:

General Government 28,425,500 29,799,420 23,300,070 6,499,350 Public safety 27,665,840 24,586,230 22,826,666 1,759,564 Public services 15,513,420 16,895,160 12,729,757 4,165,403 Community development 1,099,750 1,627,710 1,350,322 277,388 Cultural and recreational 9,252,640 9,550,310 8,726,795 823,515 Capital Outlay 432,760 1,490,090 1,452,378 37,712
Debt service:

Principal 1,568,100 1,568,100 1,580,972 (12,872)
Interest 700,000 700,000 703,047 (3,047)
Total expenditures 84,658,010 86,217,020 72,670,007 13,547,013 Excess (deficiency) of revenues over (under) expenditures 9,111,190 (485,230) 17,147,215 17,632,445 Other Financing Sources (Uses):

Transfers In 4,899,300 4,827,700 6,892,578 2,064,878
Transfers Out (6,699,160) (4,699,160) (4,732,974) (33,814) Total other financing sources (uses) (3,049,860) (1,121,460) 2,159,604 3,281,064 Net Change in Fund Balance 6,061,330 (1,606,690) 19,306,819 20,913,509 Fund Balance - Beginning of Year 73,269,501 73,269,501 73,269,501 - Fund Balance (Deficit) - End of Year $ 79,330,831 $ 71,662,811 $ 92,576,320 $ 20,913,509 See Notes to Financial Statements
28 City of Palmdale
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual HA Housing Asset Fund - Housing Asset Fund Special Revenue Fund Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 180,300 $ 207,340 $ 171,699 $ (35,641) Interest 750,300 675,300 334,674 (340,626)
Net increase (decrease) in fair value of investments - - (75,797) (75,797) Other Revenue 251,350 251,480 1,474 (250,006)
Total revenues 1,181,950 1,134,120 432,050 (702,070)
Expenditures:

Current:

Community development 3,793,480 6,655,220 1,571,590 5,083,630 Total expenditures 3,793,480 6,655,220 1,571,590 5,083,630 Excess (deficiency) of revenues over (under) expenditures (2,611,530) (5,521,100) (1,139,540) 4,381,560 Other Financing Sources (Uses):

Transfers In 458,100 457,100 322,554 (134,546)
Transfers Out (55,500) (55,500) (55,075) 425
Total other financing sources (uses) 402,600 401,600 267,479 (134,121) Net Change in Fund Balance (2,208,930) (5,119,500) (872,061) 4,247,439 Fund Balance (Deficit) - Beginning of Year 50,558,486 50,558,486 50,558,486 - Fund Balance (Deficit) - End of Year $ 48,349,556 $ 45,438,986 $ 49,686,425 $ 4,247,439 See Notes to Financial Statements
29 City of Palmdale
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Authority Facilities Fund Special Revenue Fund
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Use of property $ 7,835,970 $ 7,750,080 $ 7,812,246 $ 62,166 Interest 4,000 4,000 23,490 19,490
Net increase (decrease) in fair value of investments - - (12,146) (12,146) Total revenues 7,839,970 7,754,080 7,823,590 69,510
Expenditures:

Current:

Community development 6,052,960 5,746,420 5,736,826 9,594 Capital Outlay 319,370 335,000 362,279 (27,279)
Debt service:

Principal 99,300 87,800 100,000 (12,200)
Interest 184,100 189,600 178,951 10,649
Total expenditures 6,655,730 6,358,820 6,378,056 (19,236) Excess (deficiency) of revenues over (under) expenditures 1,184,240 1,395,260 1,445,534 50,274 Other Financing Sources (Uses):

Transfers Out (458,600) (424,900) (322,554) 102,346
Total other financing sources (uses) (458,600) (424,900) (322,554) 102,346 Net Change in Fund Balance 725,640 970,360 1,122,980 152,620 Fund Balance (Deficit) - Beginning of Year (3,585,195) (3,585,195) (3,585,195) - Fund Balance (Deficit) - End of Year $ (2,859,555) $ (2,614,835) $ (2,462,215) $ 152,620 See Notes to Financial Statements
30 City of Palmdale
Statement of Revenues and Expenditures and Changes In Fund Balance - Budget and Actual ARPA Fund Special Revenue Fund
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final Actual
Positive
(Negative)
Revenues
Subventions and grants $ - $ 22,390,670 $ 12,580,662 $ (9,810,008) Interest - 307,510 681,526 374,016
Net increase (decrease) in fair value of investments - - (404,835) (404,835) Other Revenue - - 22,275 22,275
Total revenues - 22,698,180 12,879,628 (9,818,552)
Expenditures
Current
General Government 2,881,100 1,919,070 5,481,636 (3,562,566) Public services 10,520,000 8,920,000 7,030,033 1,889,967 Capital Outlay 5,050,000 6,621,600 68,993 6,552,607
Total expenditures 18,451,100 17,460,670 12,580,662 4,880,008 Excess (deficiency) of revenues over expenditures (18,451,100) 5,237,510 298,966 (6,611,143) Net Change in Fund Balance (18,451,100) 5,237,510 298,966 (6,611,143) Fund Balance (Deficit) - Beginning of Year 24,499 24,499 24,499 - Fund Balance (Deficit) - End of Year $ (18,426,601) $ 5,262,009 $ 323,465 $ (6,611,143) See Notes to Financial Statements
31 City of Palmdale
Statement of Revenues and Expenditures and Changes In Fund Balance - Budget and Actual Measure AV
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget
Original Final Actual
Positive
(Negative)
Revenues
Sales taxes $ 23,116,000 $ 22,965,000 $ 22,675,911 $ (289,089) Total revenues 23,116,000 22,965,000 22,675,911 (289,089) Expenditures
Current
General Government 979,480 1,713,570 1,753,448 (39,878) Public safety 3,309,990 2,985,470 9,690,491 (6,705,021) Public services 9,257,800 8,000,000 1,442,986 6,557,014 Community development 600,000 470,000 584,953 (114,953) Cultural and recreational 1,038,890 536,790 461,405 75,385 Capital Outlay 6,221,360 3,758,540 2,199,794 1,558,746
Total expenditures 21,407,520 17,464,370 16,133,077 1,331,293 Excess (deficiency) of revenues over expenditures 1,708,480 5,500,630 6,542,834 814,751 Net Change in Fund Balance 1,708,480 5,500,630 6,542,834 814,751 Fund Balance (Deficit) - Beginning of Year 18,022,844 18,022,844 18,022,844 - Fund Balance (Deficit) - End of Year $ 19,731,324 $ 23,523,474 $ 24,565,678 $ 814,751 See Notes to Financial Statements
32 This page intentionally left blank
City of Palmdale
Statement of Net Position
Proprietary Funds
June 30, 2023
Palmdale CCA
Internal Service
Funds
Assets
Current Assets
Cash $ 1,280,822 $ 500,000
Investments - 3,147,549
Receivables 10,446,240 30,690
Prepaid items and other assets 19,375 -
Total current assets 11,746,437 3,678,239
Capital assets
Depreciable/amortizable capital assets:

Vehicles - 12,103,860
Equipment - 5,946,069
SBITA assets - 3,459,051
Less accumulated depreciation/amortization - (12,302,863) Capital assets, net - 9,206,117
Total assets $ 11,746,437 $ 12,884,356
Liabilities
Current Liabilities
Accounts payable $ 6,345,917 $ 158,644
Interest payable - 40,813
Deposits 1,289,922 -
Subscription liability - 625,223
Unearned revenue 61,380 -
Due to other funds 5,189,007 1,719,092
Total current liabilities 12,886,226 2,543,772
Noncurrent Liabilities
Subscription liability - 2,004,236
Total liabilities 12,886,226 4,548,008
Net Position
Investment in capital assets - 6,576,658
Unrestricted (1,139,789) 1,759,690
Total net position $ (1,139,789) $ 8,336,348
Adjustment reflects consolidation of internal service fund activities related to enterprise funds $ 10,893 Total net position of business-type activities $ (1,128,896) See Notes to Financial Statements
33 City of Palmdale
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
Year Ended June 30, 2023
Palmdale CCA
Internal Service
Funds
Operating Revenues:

Charges for current services $ 29,228,626 $ 4,646,759
Other Revenue 178,130 31,452
Total operating revenues 29,406,756 4,678,211
Operating Expenses:

Salaries, Wages and Benefits 174,388 1,624,631
Material and Supplies 307 901,058
Utilities 28,009,611 77,588
Administrative 14,074 15,019
Depreciation/amortization - 1,543,930
Repairs and Maintenance - 1,307,691
Other Expenditures 2 1,425
Professional services 1,258,466 -
Total operating expenses 29,456,848 5,471,342
Operating income (loss) (50,092) (793,131)
Nonoperating Revenues (Expenses)
Interest income - 74,429
Net realized and unrealized gains (losses) - (16,677)
Interest expense - (112,218)
Interfund interest (13,100) -
Investment Income 1,321 -
Total nonoperating revenues (expenses) (11,779) (54,466) Transfers In - 500,000
Transfers Out (1,077,918) -
Change in Net Position (1,139,789) (347,597)
Net Position - Beginning of Year - 8,502,296
Change in accounting principal GASB 96 - 181,649
Net Position - Beginning of Year, Restated - 8,683,945
Net Position - End of Year $ (1,139,789) $ 8,336,348
Adjustment reflects the consolidation of internal service fund activity related to enterprise funds $ 10,893 Change in net position of business-type activities $ (1,128,896) See Notes to Financial Statements
34 City of Palmdale
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2023
Palmdale CCA
Internal Service
Funds
Cash from Operating Activities:

Cash received from customers $ 22,710,903 $ -
Cash received from interfund services provided - 4,633,619 Cash paid to employees for services (174,388) (1,624,631) Cash paid to suppliers for goods and services (21,685,135) (2,990,734) Cash (paid)/received for other services - 31,452
Net cash provided (used) by operating activities 851,380 49,706 Cash from Non Capital Financing Activities:

Transfers from other funds 441,221 500,000
Transfers to other funds - 1,719,092
Net cash provided (used) by noncapital financing activities 441,221 2,219,092 Cash from Capital and Related Financing Activities:

Acquisition and construction of capital assets - (3,097,140) Net cash provided (used) by capital and related financing activities - (3,097,140) Cash from Investing Activities:

Gain/(Loss) on investments - (16,677)
Interest income - 74,429
Change in investments - (3,147,549)
Interest income (11,779) -
Net cash provided (used) by investing activities (11,779) (3,089,797) Net increase/(decrease) in cash 1,280,822 (3,918,139)
Beginning Cash - 4,418,139
Ending Cash $ 1,280,822 $ 500,000
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities
Operating income/loss from operating activities $ (50,092) $ (793,131) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation and amortization expense - 1,543,930
SBITA adjustment to operating - (719,349)
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (10,446,240) (13,140) (Increase) decrease in due from others 3,689,007 -
(Increase) decrease in prepaid expenses (19,375) -
(Decrease) increase in accounts payable 6,326,778 31,396 (Decrease) increase in wages payable 61,380 -
(Decrease) increase in customer deposits 1,289,922 -
Net cash provided (used) by operating activities: 851,380 49,706 Schedule of Non-Cash Investing, Capital and Financing Activities Noncash transfer (1,519,139) -
Subscription liability for the acquisition of rights to use subscription asset $ - $ 231,512 See Notes to Financial Statements
35 City of Palmdale
Fiduciary Fund Financial Statements
For the Year Ended June 30, 2023
The City’s Fiduciary Funds are Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds. Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds are used to account for assets held by the City in a fiduciary capacity for other governmental units, private organizations, individuals and/or other funds.

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

Retiree Health Premium Trust Funds – This fund is used to account for the receipt of City funds held in trust to provide Eligible Retirees with a supplement to reduce their premiums for participating in the City’s Health Plan.

Successor Agency Private-purpose Trust Funds – This fund is used to account for the assets, liabilities and activities of the former Community Redevelopment Agency of the City of Palmdale in a trustee capacity to pay enforceable obligations of the former Community Redevelopment Agency. As more fully explained at Note 18, on February 1, 2012 in accordance with Assembly Bill (AB X1 26 and 1484) all redevelopment agencies in the State of California were dissolved. Assets and liabilities were transferred to the Successor Agency Private Purpose Trust Fund that is used to account for assets held by the City of Palmdale’s former Redevelopment Agency. The City has agreed to serve as the successor agency to hold the assets until all enforceable obligations of the prior redevelopment agency have been paid in full and they are distributed to other units of state and local government.

See Notes to Financial Statements
36 City of Palmdale
Statement of Fiduciary Net Position - Fiduciary Funds
June 30, 2023
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Assets:

Cash $ - $ 13,845,008 $ 2,000
Cash - OPEB trust money market funds 1,927,058 - -
Mutual funds 2,596,982 - -
Receivables
Property tax receivable - - 32,345
Interest receivable - 29,981 -
Due from other governmental units - 4,405 1,565
Land held for development - 146,788 -
Restricted assets
Cash and investments - 545,147 7,175,450
Interest receivable - - 10,707
Capital assets:

Not being depreciated:

Land - 372,073 -
Being depreciated, net of accumulated depreciation:

Buildings and structures - 175,961 -
Total assets $ 4,524,040 $ 15,119,363 $ 7,222,067
Deferred outflows of resources
Deferred loss on refunding - 1,768,982 -
Liabilities:

Accounts payable - 13,466 22,785
Advances due to general fund - 1,114,403 74,071
Advances due to City of Palmdale - 4,909,777 583,859
Deposits - - 84,707
Interest payable - 1,019,618 -
Long-term liabilities:

Due within one year - 8,264,140 -
Due in more than one year - 62,725,402 -
Total liabilities - 78,046,806 765,422
Net Position
Restricted:

OPEB benefits 4,524,040 - -
Redevelopment dissolution - (61,158,461) -
Held on behalf of others - - 6,456,645
Total net position (deficit) $ 4,524,040 $ (61,158,461) $ 6,456,645 See Notes to Financial Statements
37 City of Palmdale
Statement of Changes in Fiduciary Net Position
Year Ended June 30, 2023
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Additions:

Employer contributions to retiree medical trust $ 116,300 $ - $ - Property taxes - 73,535,339 -
Other taxes - - 3,523,512
Investment and interest income 167,263 129,466 96,288
Gain on sale of land - 88,644 -
Net realized and unrealized gains (losses) 553,303 (197,060) (35,174) Total additions 836,866 73,556,389 3,584,626
Deductions:

Benefits paid to participants and expenses 726,222 15 - Administrative expense - - 870,227
Community development - 2,326,667 -
Intergovernmental - tax sharing - 61,178,088 -
Depreciation/amortization - 8,763 -
Interest expense - 2,509,348 1,068,024
Principal payments on long-term debt - - 1,286,658
Loss on sale of capital assets - 3,105,649 -
Total deductions 726,222 69,128,530 3,224,909
Changes in Net Position 110,644 4,427,859 359,717
Net Position (Deficit) at Beginning of Year 4,413,396 (65,586,320) 6,096,928 Net Position (Deficit) at End of Year $ 4,524,040 $ (61,158,461) $ 6,456,645 See Notes to Financial Statements
38 This page intentionally left blank
Palmdale, California
Year Ended June 30, 202
Notes to the Financial Statements
City of Palmdale
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 City of Palmdale (the City) was incorporated on August 24, 1962, under the general laws of the State of California and became a Charter City in 2009. The City operates under a Council-Manager form of government and provides the following services: library, recreational and culture, public improvements, planning and zoning, building and safety, street maintenance, utility services, and general administrative services. The City contracts with the County of Los Angeles to provide law enforcement, animal control, limited street maintenance for snow and hazardous materials removal, and emergency services.

Fire service is provided by a separate County Fire Protection District and is not under the City’s jurisdiction.

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

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

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

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

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

The Authority is a distinct legal entity separate and apart from the City and the former Community Redevelopment Agency. The City Council acts as the governing body of the Authority by serving as its board members. The activity of the Authority is reported in the Palmdale Civic Authority Debt Service and Capital Projects Funds. There are no further activities being accounted for under the Palmdale Civic Authority, and it is the intent of the City to dissolve the Authority.

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

The Palmdale Financing Authority is a distinct legal entity separate and apart from the City and the Housing Authority, and its debts and obligations are not debts or obligations of the City or the Housing Authority. The City Council acts as the governing body of the Palmdale Financing Authority by serving as its board members. The activity of the Palmdale Financing Authority is reported in the Palmdale Financing Authority Debt Service Fund. 39 City of Palmdale
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 Industrial Development Authority was organized under Section 91500 et seq. of the California Government Code on February 8, 1995, for the purpose of financing industrial development in the City. The IDA works with manufacturers and industrial companies to develop new industrial sites in Palmdale. The IDA is a distinct legal entity separate and apart from the City and the Agency, and its debts and obligations are not debts or obligations of the City or the Agency. The City Council acts as the governing body of the IDA by serving as its board members. There has been no activity in the Industrial Development Authority Fund during the fiscal year.

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

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

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

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

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

Governmental activities are reported separately from business-type activities and, likewise, the primary government is reported separately from discretely presented component units. The City of Palmdale has recently instituted limited business-type activities as reported in the government-wide financial statements. Interfund activity, including payables and receivables has been eliminated in the Statement of Activities and the Statement of Net Position. Balances between the funds included in governmental activities (i.e. the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in business-type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in the business- type activities column.
40 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus Government-Wide Financial Statements
Interfund services provided are treated as revenues and expenditures/expenses. Reimbursements occur when one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental funds are netted as part of the reconciliation to the Government-Wide presentation. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function. Program revenues include 1) charges for services to customers who purchase, use or directly benefit from goods, services, or privileges provided by a given function, 2) grants and contributions that are restricted to meeting the operational requirements of a particular function and 3) grants and contributions that are restricted to meeting the capital requirements of a particular function. Taxes and other items not properly included among program revenues are reported instead as general revenues. The Government-Wide Financial Statements are presented using the economic resources measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities and deferred inflows of resources (including capital assets, infrastructure assets, and long-term liabilities) are reported in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized as soon as they are earned and expenses are recognized as soon as a liability is incurred, regardless of the timing of related cash flows.

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

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

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

The City has presented all major funds that qualified as major funds, which included the General Fund, the Housing Authority Housing Asset Special Revenue Fund, the Housing Authority Facilities Fund, Measure AV and the American Rescue Plan Act Fund. Specific fund descriptions and purpose of each fund can be found on page 23 for all major funds. Summarization of all
non-major governmental funds is presented under the Other Governmental Funds column. The individual fund statements and descriptions and purpose of the non-major funds can be found on pages 102 - 104.

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

Enterprise funds are separate accounting and financial reporting mechanisms for which revenues and expenditures are 41 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus Proprietary Fund Financial Statements
segregated into a fund with financial statements separate from all other governmental activities. Enterprise Funds are reported using the economic resources measurement focus and the accrual basis of accounting. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with an Enterprise fund’s principal ongoing operations. The principal operating revenues of the enterprise fund is charges to customers for services. Operating expenses for the proprietary fund includes the cost of services and administrative expenses. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses. The City of Palmdale has established such a fund to set up a program where bulk electricity is purchased and subsequently resold to City residents.

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

The Custodial Fund is used to account for receipts and disbursements associated with 1915 Act Assessment Bonds and Special Tax Bonds which are administered by, but are not the liability of, the City.

The OPEB Trust Funds are used to account for the City’s Other Post-Employment Benefits Plans. Employer contributions are recognized when due. Benefits and refunds are recognized when due and payable in accordance with the terms of each plan.

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

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

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

The legal level of budgetary control (i.e., the level at 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 between funds, except for shifts in appropriations relating to personnel changes that may be done administratively by the City Manager. The City Manager can approve budget transfers up to $100,000 within a fund. Supplemental appropriations were made during the year and are reflected in the budgeted numbers contained in the accompanying financial statements.

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

A budgetary report-comparing budget to actual at the category level has been issued for the General Fund, Special Revenue Funds, and Debt Service Funds. General Fund and major special revenue funds are audited. Budgetary reports are not prepared for the Capital Projects Funds. This budgetary report is available from the City’s Finance Department, 38300 Sierra Highway, Suite D, Palmdale, California 93550, or on the City's website www.cityofpalmdaleca.gov Encumbrance accounting is employed in governmental funds. Encumbrances (i.e., purchase orders, contracts, and other commitments) outstanding at year-end are reported as assigned fund balance in the General Fund since they do not constitute 42 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
C. Budgets and Budgetary Accounting
expenditures or liabilities and are added to the subsequent year’s adopted appropriations.

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

Treasury and Agency Securities were adjusted to fair value based on market prices on June 30, 2023. The Local Agency Investment Fund is also reported at fair market value. 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.

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

E. Short-Term Interfund Receivables and Payables
During the course of operations, numerous transactions occur between individual funds for goods provided or services rendered. These receivables and payables are classified as “due from other funds” or “due to other funds” in the balance sheet.

F. Advances Between Funds and Internal Balances
Non-current portions of interfund loans receivable, reported as advances from other funds, are offset by a restricted fund balance account to indicate that they are not available for appropriation and are not expendable available financial resources.

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

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

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

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

J. Capital Assets
Capital assets, which include property, plant, equipment, right to use assets, and public domain infrastructure assets (e.g., roads, bridges, curbs, and gutters, streets, and sidewalks, drainage systems, and lighting systems), are reported in the applicable governmental columns in the Government-Wide Financial Statements. Capital assets and intangible assets are defined by the government as assets with an initial, individual cost of more than $5,000 and $125,000 respectively and an estimated useful life in excess of two years. Such assets are recorded at cost where historical costs are available and at an estimated original cost where no historical records exist. Donated capital assets are recorded at acquisition value at the date of donation. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. 43 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
J. Capital Assets
Capital assets used in operations are depreciated over their estimated useful lives using the straight-line method in the Government-Wide Financial Statements. Depreciation is charged as an expense against operations and accumulated depreciation is reported on the Statement of Net Position. For depreciation purposes, the range of useful life used for each depreciable capital asset class are as follows:

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

The City has two items that qualify for reporting in this category. 1) The deferred outflows related to pension liability and 2) the deferred outflows related to the total OPEB liability,
In addition to liabilities, the Statement of Net Position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period and so will not be recognized as an inflow of resources (revenue) until that time. The City has two types of items, one which arises only under a modified accrual basis of accounting that qualifies for reporting in this category.

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

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

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

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

The remaining amounts are categorized as Deferred Outflows and Deferred Inflows of Resources related to pensions and are 44 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
M. Pension Plan
recognized in future pension expense. The amortization period differs depending on the source of gain or loss. The difference between projected and actual earnings is amortized straight-line over five years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period. The General Fund is used to liquidate the governmental fund net pension liability.

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

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

O. Long-Term Obligations
In the Government-Wide Financial Statements long-term debt and other long-term obligations are reported as liabilities. Bond premiums/discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as charges in the period the cost is incurred.

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

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

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

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

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

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

Assigned: Resources that are constrained by the City’s intent to be used for specific purposes, but that are neither restricted nor committed or the residual balance of all other governmental funds except the General Fund. This policy delegates to the 45 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
P. Fund Balance
Finance Manager the authority to assign fund balances where the City’s intent is for the amounts to be used for specific purposes. This delegation of authority is for the sole purpose of reporting these amounts in the annual financial statements.

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

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

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

Major Special Revenue Funds:

Housing Authority Facilities Fund $ (2,462,215)
Non-Major Special Revenue Funds:

Federal Funds $ (386,297)
Federal Jobs Program (18,012)
Federal Home ARP Fund (1,355)
Local Transportation Article 3 (2,753)
Measure A LA County Parks (6,350)
Measure R (4,357,538)
Measure M (5,488)
SAVES (8,512)
State Grants Fund (1,176,868)
Enterprise Funds:

Palmdale CCA Fund (1,139,789)
Management anticipates that these deficits will be resolved in future years as outstanding reimbursable grants are received and as additional operating revenues become available. It is anticipated occupancy levels at the Mobile Home Parks and Apartments will continue to remain high and consistent and continue to reduce the deficit in the Housing Authority Facilities Fund.

R. Expenditures Exceeding Appropriations
The legal level of budgetary control is at the category level: personnel, training and meetings, operating, capital and debt expenditure level. In the adopted budget, certain appropriations are reported as being paid out of General Fund and funded through transfers in from special revenue funds. In the fund financial statements, these transfers are reclassified to the expenditure function level to comply with GASB 54 requirements. The following funds reported expenditures exceeding appropriations.
46 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
R. Expenditures Exceeding Appropriations
The following is a summary of the Excess of Expenditures Over Appropriations:

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

Community Development Block Grant $ 21,795 $ - $ - $ 21,795 $ - Drainage Funds 998 - - 998 -
Gas Tax - Special Revenue Fund 145,978 145,978 - - -
Measure R - Special Revenue Fund 30,177 - - 30,177 -
Measure R - Local Returns 31,569 - - 31,569 -
Misc. Grant/Developer Contributions 33,326 246 32,452 628 - Park Development - Special Revenue Fund 63,788 - - 63,788 - Proposition A - Special Revenue Fund 98,094 - - 98,094 - Proposition C - Special Revenue Fund 23,743 - - 23,743 - Palmdale Community Foundation 104,618 - - 104,618 -
Public Facilities - Special Revenue Fund 933 - - 933 -
Road Maintenance and Rehab - Special
Revenue Fund 9,866 - - 9,866 -
S A V E S - Special Revenue Fund 544 - - 544 -
Sewer Upgrade - Special Revenue Fund 3,161 - - 3,161 -
Traffic Impact - Special Revenue Fund 46,378 - - 46,378 - Public Art - Special Revenue Fund 21,603 - - - 21,603
Federal Funds - Special Revenue Fund 2 2 - - -
Federal Home ARP - Special Revenue Fund 1 1 - - -
Local Transportation Article 8 2,565,433 - - 2,565,433 - Total excess of expenditures over
appropriations $ 3,202,007 $ 146,227 $ 32,452 $ 3,001,725 $ 21,603 S. Property Taxes
With the passage of Assembly Bill No. 1197, the City of Palmdale, previously a “no property tax” city began to receive property taxes in fiscal year 1989-90. In addition, the former Community Redevelopment Agency (CRA) received incremental property taxes on property within its project areas over a base-assessed valuation on the date the project area was established.

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

T. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
47 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
U. Implemented Accounting Pronouncements
The Governmental Accounting Standards Board (GASB) releases new accounting and financial reporting standards which may have a significant impact on the City’s financial reporting process. New standards applicable to the year ending June 30, 2023 are as follows:

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 City 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 City 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, 2022. The effect of the implementation of this standard on beginning net position as required is included in Note 21.

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 City has determined that this statement does not apply.

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

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

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

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

The City has elected to recognize payments for short-term leases with a lease term of 12 months or less as expenses as incurred, and these leases are not included as lease liabilities or right-to-use lease assets on the statements of net position. For individual contracts where information about the discount rate implicit in the lease are not included, the City has elected to use the incremental borrowing rate to calculate the present value of expected lease payments. 48 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
1 - Summary of Significant Accounting Policies
W. Subscription-Based IT Arrangements
Subscription-Based IT Arrangements (SBITA's) are City contracts that convey control of the right to use another party's information technology software, alone or in combination with tangible capital assets, as specified in the contract for a period of time in an exchange or exchange-like transaction Right to use SBITA assets are recognized at the subscription commencement date and represent the City's right to use the underlying asset for the subscription term.Right to use SBITA assets are measured at the initial value of the subscription liability plus any payments made to the vendor at the commencement of the subscription term, less any subscription incentives received from the vendor at or before the commencement of the subscription term, plus any capitalizable initial implementation costs necessary to place the subscription asset into service. Right to use SBITA assets are amortized over the shorter of the subscription term or useful live of the underlying asset using the straight-line method.

SBITA Liabilities represent the City's obligation to make subscription payments arising from subscription agreements.

Subscription liabilities are recognized at the subscription commencement date based on the present value of future subscription payments expected to be made during the subscription term. The present value of subscription payments is discounted based on a borrowing rate determined by the City.
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 $ 4,681,392
Investments 320,625,267
Restricted cash and investments 15,216,833
Total 340,523,492
Statement of Fiduciary Net Position:

Cash 13,847,008
Cash - OPEB Trust Money Market Funds 1,927,058
Investments - OPEB Trust Mutual Funds 2,596,982
Restricted cash and investments 7,720,597
Total 26,091,645
Total cash and investments $ 366,615,137
Cash and investments as of June 30, 2023 consist of the following:

Cash on hand $ 18,363
Deposits with financial institutions 9,242,824
Investments:

Pooled $ 321,019,562
Held by trustees 23,979,623
Held by trustees - PARS section 115
Money Market Funds 313,229
Mutual Funds 7,517,496
Held by OPEB Trust Money Market Fund 1,927,058
Held by OPEB Trust Mutual Fund 2,596,982
Total 357,353,950
Total cash and investments $ 366,615,137
49 City of Palmdale
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 City of Palmdale’s Investment Policy The table below identifies the investment types that are authorized for the City of Palmdale, for the OPEB Trust Fund, and the Pension Stabilization Trust Fund by the California Government Code (or the City of Palmdale’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City of Palmdale’s investment policy, where more restrictive) that addresses interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements with the City of Palmdale or cash deposits held in restricted accounts, rather than the general provisions of the California Government Code or the City of Palmdale’s investment policy.

Authorized
Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio*
Maximum
Investment
in One Issuer**
U.S. Treasury Obligation 5 years None None
U.S. Federal Agency Securities 5 Years None None
Banker's Acceptance 180 days 40% 2%
Municipal Obligations 5 years 10% 15%
Medium Term Corporate Notes 5 years 15% None
Negotiable Certificates of Deposit 5 years 25% 15%
Overnight Bank Investment Pool N/A 10% None
Local Agency Investment Fund (LAIF) N/A None $65,000,000 California Asset Management Program (CAMP) N/A None $65,000,000 Mutual Funds N/A 15% None
*Excluding amounts held by bond trustees that are not subject to California Code Restrictions **Per account
The City of Palmdale’s and OPEB Trust Fund investment policy also authorizes Demand Deposits of up to $2,000,000 (and $2,500,000 in the aggregate) with Bank of America or Wells Fargo Bank. As of June 30, 2023, a demand deposit of $1,053,255 is expected to be expended in a short period of time and is held on behalf of the Successor Agency Private Purpose Trust Fund as cash on hand.

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

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

Information about the sensitivity of the fair values of the City of Palmdale’s investments (including investments held by bond 50 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
2 -Cash and Investments
C. Disclosures Relating to Interest Rate Risk
trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City of Palmdale’s Investments by Maturity.

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

Treasury Notes $ 68,492,947 $ 33,329,433 $ 21,692,398 $ 13,471,116 Federal Agency Securities 100,905,283 4,772,678 38,924,219 57,208,386 Local Agency Investment Fund 148,108,783 148,108,783 - - CAMP Investment Fund 259,310 259,310 - -
Corporate Notes 2,946,904 - - 2,946,904
UBS Money Market Funds 306,335 306,335 - -
Held by Trustees
Money Market Mutual Funds 11,187,870 11,187,870 - -
PARS Section 115
Money Market Funds 313,229 313,229 - -
Mutual Funds 7,517,496 7,517,496 - -
OPEB Trust Money Market Funds 1,927,058 1,927,058 - -
OPEB Trust Mutual Funds 2,596,982 2,596,982 - -
Local Agency Investment Fund 12,791,753 12,791,753 - -
Total investments by maturity $ 357,353,950 $ 223,110,927 $ 60,616,617 $ 73,626,406 D. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City of Palmdale’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type:
51 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
2 -Cash and Investments
D. Disclosures Relating to Credit Risk
Total
Minimum
Legal Rating
Not Required
To Be Rated AA- to Aa1 AAA to Aaa
Investment Type:

Treasury Notes $ 68,492,947 N/A $ - $ 68,492,947 $ -
Federal Agency Securities 100,905,283 N/A - 100,905,283 - Local Agency Investment Pool 148,108,783 N/A 148,108,783 - - CAMP Investment Fund 259,310 N/A 259,310 - -
Corporate Notes 2,946,904 A - 2,946,904 -
UBS Money Market Funds 306,335 N/A 306,335 - -
Held by Trustees:

Money Market Funds 11,187,870 A - - 11,187,870
PARS Section 115
Money Market Funds 313,229 N/A 313,229 - -
Mutual Funds 7,517,496 N/A 7,517,496 - -
OPEB Trust Money Market Funds 1,927,058 N/A 1,927,058 - - OPEB Trust Mutual Funds 2,596,982 N/A 2,596,982 - -
Local Agency Investment Fund 12,791,753 N/A 12,791,753 - - $ 357,353,950 $ 173,820,946 $ 172,345,134 $ 11,187,870
E. Concentration of Credit Risk
The investment policy of the City of Palmdale contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. Reportable investments in any one issuer that represent five percent or more of the total City of Palmdale’s investments are as follows:

Issuer Investment Type Reported Amount
Federal Home Loan Bank Federal Agency Securities $ 42,442,513 Federal Farm Credit Bank Federal Agency Securities 37,155,410 Freddie Mac Federal Agency Securities 16,422,327
F. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or 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 of Palmdale’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits.

As of June 30, 2023, a total of $12,075,309 of City of Palmdale’s deposits with financial institutions in excess of federal depository insurance limits was held in collateralized accounts, but not in the name of the City. In addition, as of June 30, 2023, City of Palmdale investments in the following investment types were held by the safekeeping department of the broker-dealer (counterparty) used by the City of Palmdale to buy the securities:
52 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
2 -Cash and Investments
F. Custodial Credit Risk
Investment Type Reported Amount
Treasury Notes 68,492,947
Federal Agency Securities 100,905,283
Corporate Notes 2,946,904
G. Investment in State Investment Pool
The City of Palmdale is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City of Palmdale’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City of Palmdale’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on the amortized cost basis. LAIF is not rated and not registered with the Securities and Exchange Commission (SEC).

H. Investment in California Asset Management Program
The City of Palmdale is a voluntary participant in the California Asset Management Program (CAMP) that is regulated by the California Government Code Section 53601 (p) and managed by a Board of Trustees comprised of finance directors and treasurers of California public agencies that are members of the Joint Powers Authority. The value of pool shares in CAMP that may be withdrawn is determined on an amortized cost basis, which is the same as the fair value of the City’s portion in the pool.

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

When quoted prices in active markets are available, investments are classified within Level 1. For investments classified within Level 2, the City’s custodians generally use asset market prices derived from closing bid prices as of the last business day of the month as supplied by Interactive Data, broker-dealer quotes and matrix pricing. The City does not have any investments classified with Level 3. Deposits and withdrawals in governmental investment pools, such as LAIF are made on the basis of $1 and not fair value. Accordingly, the fair value measurement of these types of investments is based on an uncategorized input not defined as a Level 1, Level 2, or Level 3 input.
53 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
2 -Cash and Investments
I. Disclosures Relating to Fair Value of Investments
As of June 30, 2023, the City has the following recurring fair value measurements:

Fair Value Measurements on A Recurring Basis Using
Balance
June 30, 2023
Quoted Prices
in Active
Markets for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Investments by fair value level:

Treasury Notes $ 68,492,947 $ - $ 68,492,947 $ -
Federal Agency Securities 100,905,283 - 100,905,283 -
Corporate Notes 2,946,904 - 2,946,904 -
PARS Section 115 - Mutual Funds 7,517,496 7,517,496 - - OPEB Trust Mutual Funds 2,596,982 2,596,982 - -
Total investments by fair value level 182,459,612 $ 10,114,478 $ 172,345,134 $ - Investments Measured Using Uncategorized Inputs:

Local Agency Investment Fund 160,900,536
CAMP Investment Fund 259,310
UBS Money Market Funds 306,335
Money Market Mutual Funds 11,187,870
PARS Section 115 - Money Market Funds 313,229
OPEB Trust - Money Market Mutual Funds 1,927,058
Total investments - uncategorized inputs 174,894,338
Total investments $ 357,353,950
J. PARS Section 115 - Pension Stabilization Trust
In April 2018, the City approved and adopted the Public Agencies Post-Retirement Pension Plan Document and Trust Agreement. The asset is classified and reported as a restricted asset in the General Fund. The Pension Stabilization Trust is a tax-qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to pre-fund pension obligations as described in GASB Statement No. 75.

The Plan Discretionary Trustee is U.S. Bank (U.S. Bank has delegated investment management responsibilities to High Mark Capital Management, Inc.), and Public Agencies Retirement Services (PARS) is the Trust Administrator. The City elected 'Moderately Conservative HighMark PLUS' investment approach with a blended investment objective strategy. The primary objective is to provide current income with capital appreciation as a secondary objective.

The Plan’s targeted Rate of Return is 3.2 percent. The asset allocation ranges for this objective are zero percent to 20 percent cash source, 50 percent to 80 percent fixed income mutual funds, and 20 percent to 40 percent equity mutual funds, in accordance with a blended investment objective strategy. With the net investment earnings of $802,981, the ending balance as of June 30, 2023 is $7,830,725.
54 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
3 -Interfund Transfers
Interfund transfers for the year ended June 30, 2023 were as follows:

Transfer To Transfer From Amount
General Fund Non-Major Governmental Funds $ 5,759,585
General Fund Housing Asset Fund 55,075
Non-Major Governmental Funds General Fund 4,232,974
Non-Major Governmental Funds Non-Major Governmental Funds 25,820 Housing Asset Fund Housing Authority Fund 322,554
Internal Service Funds General Fund 500,000
General Fund Enterprise Fund 1,077,918
Total interfund transfers $ 11,973,926
Transfers resulted from the following transactions:

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

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

3. Using unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.

4. Transferring negative fund balance from the General Fund to the Enterprise fund for Palmdale CCA. 4 -Interfund Assets/Liabilities
A. Due From/To Other Funds as of June 30, 2023 were as follows:

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

Payable To Payable From Amount
General Fund Non-Major Governmental Funds $ 7,619,255 $ Housing Asset Fund 12,509
Palmdale CCA Fund 5,189,007
Internal service Funds 1,719,092 14,539,863
Non-Major Governmental Funds Non-Major Governmental Funds 229,558 Total due to/due from other funds $ 14,769,421
B. Advances Due From/To Fiduciary Funds as of June 30, 2023 The amounts payable to the General Fund and due from Fiduciary Funds relate to administrative fees that are scheduled to be collected in the subsequents year and total $74,071.

C. Advances Due From/To Drainage Funds as of June 30, 2023 Beginning in fiscal year ending June 30, 1993, advances were made from the Amargosa, Portal Ridge, and Pearland Drainage funds to cover shortfalls in funding in the Anaverde Drainage Funds. Government Code Section 66006 stipulates that developer impact fees shall be kept in a separate fund and earn interest until expended for the purpose for which the fee was originally 55 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
4 -Interfund Assets/Liabilities
C. Advances Due From/To Drainage Funds as of June 30, 2023 collected. In accordance with this Government Code Section, interest has been accrued on a monthly basis with a rate equal to the monthly LAIF rate since the inception of the advances.

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

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

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

Fund Name Fund Equity
Amargosa Drainage $ 1,267,310
Anaverde Drainage (3,276,353)
Big Rock Drainage 48,322
Portal Ridge Drainage 107,046
Pearland Drainage 12,151,294
Littlerock Drainage 3,850
$ 10,301,469
D. Advances Due From Fiduciary Funds
The amounts due from the Private Purpose Trust Funds are advances due to the General Fund, Housing Asset Fund that are approved enforceable obligations of the Successor Agency Trust of the Former Redevelopment Agency of the City of Palmdale and will be paid from future property tax. The amount due from the Custodial Funds includes advances to Assessment Districts that are scheduled to be collected in the subsequent year.

Advances Due From Fiduciary Funds
Payable To Payable From Amount
Major Fund
General Fund Private Purpose Trust Funds $ 1,114,403
Housing Asset Fund Private Purpose Trust Funds 4,909,777 Total Major Funds 6,024,180
Non-Major Governmental Funds Custodial Funds 583,859
$ 6,608,039
56 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
4 -Interfund Assets/Liabilities
E. Interfund Promissory Note Receivable and Payable as of June 30, 2023 The Housing Authority Facilities - Fund issued a Promissory Note to the former Redevelopment Low and Moderate Income Housing Fund to generate proceeds to fund additional housing programs. The Promissory Note is to be repaid from the Mobile Home Parks operating revenue when net income is sufficient under the operating agreement. As the result of the dissolution of the Community Redevelopment Agency, the Promissory Note asset was transferred to the Housing Authority Housing Asset Fund. All proceeds from repayment of the Promissory Note must be used in accordance with applicable housing related provisions of Community Redevelopment Law. During fiscal year 2022-2023, the Housing Authority Facilities fund paid
$1,031,667 principal and $323,471 interest for a total of $1,355,138 to the Housing Authority Housing Asset Fund. The balance of the Promissory Note as of June 30, 2023 is $6,353,333.

F. Advances Due to/Due From Other Funds as of June 30, 2023 Receivable Payable
Major Funds
General Fund $ 5,000,000 $ -
Housing Auth - Housing Asset Fund 1,186,001 -
Housing Auth Facilities Fund - 1,186,001
Non-Major Governmental Funds
Park Development Fund - 5,000,000
Pearland Drain Fund 3,800,000 -
Sewer Maintenance Assmnt District Fund - 3,800,000
Total $ 9,986,001 $ 9,986,001
The Park Development Fund has advances due to the General of $5,000,000 resulting from a loan to provide funding to accelerate the planning, public outreach, design and construction of prioritized Park Development Fund projects, including community engagement, and establish a budget for construction based on completed design parameters. These advances shall be repaid in over a period of 27 years. Payments will be interest only for the first seven years, beginning on July 1, 2020, and both principal and interest payment for twenty years, beginning on July 1, 2027. The last payment shall be in June 30, 2047.

The Housing Authority Facilities Fund has advances due to the Housing Authority-Housing Asset Fund of $1,186,001 resulting from the acquisition and operation of three mobile home parks purchased during fiscal year 2002-2003. Upon acquisition, the Housing Authority assumed the Mobile Home Park's prior owner’s liabilities which were payable to the former CRA Low and Moderate Income Housing fund and City under the terms of an operating agreement. The operating agreement establishes priorities for the use of revenues from operation of the parks and provides for repayment of the advances from net income once expenses, debt service, operating, and capital reserve requirements are met. In the interim, additional liabilities and program/project management fees will continue to accrue to the long-term advances due the Housing Authority - Housing Asset Fund if there are shortfalls in expected payment. These advances will be repaid when net income is sufficient under the operating agreement.
57 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
5 -Notes Receivable and Liens
The City has the following Note Receivables outstanding at the end of June 30, 2023:

June 30,2023
Major Funds
General Fund:

Related Party Loan $ 1,134,020
Housing Authority Fund:

Housing Asset Fund 26,711,166
Non-Major Governmental Funds
Federal Home Program 7,645,389
CDBG/NSP Program 2,074,100
Housing Authority Fund 1,200,000
Total Non-Major Governmental Funds 10,919,489
Total $ 38,764,675
A. City Loans
The City wrote off a total of $42,329 in Graffiti Loans as uncollectable in FY 2022-23. The City authorized a home loan for the former City Manager totaling $1,200,000 with a 30-year term. The outstanding balance of the loan was $1,134,020 as of June 30, 2023. Refer to Note 20 - Related Party Loan for more information.

B. Federal Home Program Loans
The City provides loans to developers for development and rehabilitation of affordable housing. All loan payments will be used to pay for future program expenditures. The balances of the loans were $7,645,389 as of June 30, 2023.

C. CDBG/NSP Program Loans
Through the Community Development Block Grant and the Neighborhood Stabilization Program, the City provides subsidies to families for purchase of single family affordable housing. Each year a portion of the loan is forgiven if the participant is compliant or repayment of the loan would be received if the home is sold during the compliance period. The balances of the loans were $2,074,100 as of June 30, 2023.

D. Housing Program
The Housing Program provides loans for mortgage assistance, mobile home rehabilitation, development of affordable homes, and Veteran's Purchasing Assistance loans. All loan payments will be used to pay for future program expenditures. The balances of the loans were $26,711,166 as of June 30, 2023. 58 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
6 -Fund Balance Classification
The Fund Balances at June 30, 2023 were classified as follows:

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

Advances $ 1,114,403 $ - $ - $ - $ - $ - $ 1,114,403
Note and liens 1,134,020 - - - - - 1,134,020
Deposits and prepaids 321,250 - - - - - 321,250
Total nonspendable 2,569,673 - - - - - 2,569,673
Restricted:

General Government - - - - 24,565,678 - 24,565,678
Pension stabilization program 7,830,725 - - - - - 7,830,725 Debt service - - - - - 124 124
Public safety programs - - - - - 10,675,825 10,675,825
Public services programs - - - - - 150,931,931 150,931,931 Low and moderate income housing - 49,686,425 - - - 11,482,501 61,168,926 Recreation and culture programs - - - - - 12,924,096 12,924,096 Health and welfare programs - - - 323,465 - 549,133 872,598 Street Projects and Maintenance - - - - - 297,756 297,756 Total restricted 7,830,725 49,686,425 - 323,465 24,565,678 186,861,366 269,267,659 Assigned:

Compensated absences 2,224,370 - - - - - 2,224,370
Self insurance claims 3,584,772 - - - - - 3,584,772
Health insurance 7,283,598 - - - - - 7,283,598
Total assigned 13,092,740 - - - - - 13,092,740
Unassigned Fund Balance 69,083,182 - (2,462,215) - - (404,309) 66,216,658 Total fund balance (deficit) $ 92,576,320 $ 49,686,425 $ (2,462,215) $ 323,465 $ 24,565,678 $ 186,457,057 $ 351,146,730 7 -Joint Ventures
A. Antelope Valley Transit Authority
The City of Palmdale is a member of the Antelope Valley Transit Authority (Authority), a joint powers authority of the County of Los Angeles and the cities of Palmdale and Lancaster. The Authority was formed to provide public transit service to Palmdale and Lancaster. The governing board consists of one person from each member agency. Each member has one vote.

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

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

B. Palmdale Recycled Water Authority
As of September 26, 2012, the City of Palmdale became a member of the Palmdale Recycled Water Authority (Authority), a joint exercise of powers agreement between the City of Palmdale and Palmdale Water District. The Authority was formed to jointly study, promote, develop, distribute, construct, install, finance, use, and manage recycled water resources created by the Los Angeles County Sanitation District Nos. 14 and 20 for any and all reasonable and beneficial uses, including irrigation and recharge, and to finance the acquisition and construction or installation of recycled water facilities, recharge facilities, and irrigation systems. The governing board consists of five Directors. The governing body of each Member shall appoint and designate two Directors who shall be authorized to act for and on behalf of the Member on matters within the powers of the Authority. The fifth Director shall be appointed jointly by both Members. The Authority is funded by Member contributions. 59 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
7 -Joint Ventures
B. Palmdale Recycled Water Authority
Separate financial statements of the Authority are available from the City of Palmdale Finance Department at 38300 Sierra Highway, Suite D, Palmdale, California 93550.
8 -Risk Management
The City is self-insured and exposed to various risk of loss related to general liability and health, dental, and vision needs of employees. Under the City’s risk management program, the City retains the risk for general liability claims for the first $500,000 per occurrence and carries excess general liability and automobile insurance with total policy limits of $35,000,000.

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

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

During fiscal year 2022-2023, $331,741 was paid in liability administrative costs. On June 30, 2023, general liability claims totaled $6,014,772. The portion estimated to be due within one year is $2,430,000 and is calculated based on a three-year average of settlements paid during the fiscal year. These accruals, based on the results of an actuarial study and the Risk Management department, represent estimates of amounts to be paid for reported claims and incurred but unreported claims.

During fiscal year 2022-2023, $1,388,736 was paid in health claims and $494,123 was paid in health administrative costs. On June 30, 2023, $865,071 was accrued for health liability claims in the Government-Wide Financial Statements. The accruals, based on the results of an actuarial study, represent estimates of amounts to be paid for reported claims and incurred but unreported claims. All administrative costs were paid during the fiscal year and no unpaid amounts are due and payable as of June 30, 2023.

During fiscal year 2022-2023, $258,420 was paid in dental and vision claims and $21,736 was paid in dental and vision administrative costs. On June 30, 2023, $96,200 was accrued for dental and vision claims in the Government-Wide Financial Statements. The accruals, based on the results of an actuarial study, represent estimates of amounts to be paid for reported claims and incurred but unreported claims.

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

It is the City’s practice to obtain a full actuarial study annually to perform an analysis of the City’s potential liability for the City’s retained risk portions of the various self-insurance programs. The amounts recorded as liabilities represent estimates of amounts to be paid for reported claims, as well as incurred but not reported claims based upon past experience, modified for current trends, and information. While the ultimate amounts of losses incurred through June 30, 2023, are dependent on future developments, the City’s management believes that the aggregate accrual is adequate to cover such losses. The liabilities for general liability claims are reported using a discount rate of 3.0% while a 25.0% margin was added to the estimated health, dental, and vision claims for potential adverse deviation. The estimates do not include any additional provision for administrative expenses associated with the adjudicating or processing the unpaid claims. 60 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
8 -Risk Management
Changes in the balances of the City’s claims liabilities for the current and prior fiscal year are as follows:

General
Liability
Health
Claims
Dental and
Vision
Claims Total
Balance of June 30, 2021 $ 1,948,497 $ 1,006,315 $ 98,654 $ 3,053,466 Claims incurred 6,307,154 435,842 792,223 7,535,219
Claims paid - (773,040) (810,880) (1,583,920)
Balance of June 30, 2022 8,255,651 669,117 79,997 9,004,765 Claims incurred 1,082,742 1,584,690 274,623 2,942,055
Claims paid (3,323,621) (1,388,736) (258,420) (4,970,777) Balance as of June 30, 2023 $ 6,014,772 $ 865,071 $ 96,200 $ 6,976,043 9 -Unearned Revenue and Unavailable Revenue
Unearned Revenue - Governmental Funds and governmental activities report unearned revenues on the balance sheet in connection with resources that have been received, but not yet earned. Accordingly, this type of unearned revenue is also reported on the Statement of Net Position. At the end of the current fiscal year, the components of unearned revenue were as follows:

General Fund
Fees received for Recreational Program Not Yet Held $ 163,824 Total general fund unearned revenue 163,824
American Rescue Plan Act Fund
U.S. Treasury Funds received for Coronavirus Aid 22,521,548 Housing Asset Fund:

Lease revenues received in Advance 3,880,000
Misc Grants/Developer Contributions 85,451
State Grants Fund 2,700,000
Total unearned revenues for governmental funds $ 29,350,823 61 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
9 -Unearned Revenue and Unavailable Revenue
Unavailable Revenue - Governmental funds also report deferred inflows of resources on the balance sheet in connection with resources that have been earned, but are not yet available to finance expenditures of the current fiscal period. This type of Unavailable Revenue is unique to governmental funds and is tied to the modified accrual basis of accounting. Accordingly, these Unavailable Revenues are not reported on the Statement of Net Position. At the end of Fiscal Year 2022-23, the
components of Unavailable Revenue resulting from grant revenue not received with 60-day accrual period were detailed as follows:

Major Funds
General Fund $ 5,660,253
HA Housing Asset Fund 5,355,662
Non-Major Special Revenue Funds
Community Development Block Grant 46,558
Federal Funds 10,216
Federal Home Program 2,889,166
Measure R 1,779,394
Misc. Grants/ Developer Contributions 4,131,565
Proposition C 1,086,508
Measure M 111,876
States Grants Fund 1,262
Total unavailable revenue for governmental funds $ 21,072,460 62 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
10 - Capital Assets and Right to Use Assets
Capital Assets of the City for year ended June 30, 2023, consisted of the following:

Governmental Activities
Beginning
Balance, as
Restated Additions Deletions
Ending
Balance
Capital Assets, Not being Depreciated:

Land and Improvements $ 119,352,146 $ 3,507,445 $ - $ 122,859,591 CFD 16-1 Water Credits 153,090 - - 153,090
Construction in Progress 28,091,702 26,279,139 (23,536,629) 30,834,212 Total Capital Assets, Not being Depreciated 147,596,938 29,786,584 (23,536,629) 153,846,893 Capital Assets, Being Depreciated:

Buildings and Structures 80,501,821 2,429,636 - 82,931,457 Improvements Other than Buildings 2,606,911 130,071 - 2,736,982 Machinery and Equipment 18,384,711 3,317,180 - 21,701,891 Infrastructure 1,165,166,317 12,432,289 - 1,177,598,606 Total Capital Assets, Being Depreciated 1,266,659,760 18,309,176 - 1,284,968,936 Less: Accumulated Depreciation for:

Buildings and Structures 28,020,247 1,704,755 - 29,725,002 Improvements Other than Buildings 1,462,165 256,488 - 1,718,653 Machinery and Equipment 13,290,634 1,004,161 - 14,294,795 Infrastructure 689,234,207 35,795,435 - 725,029,642
Total Accumulated Depreciation 732,007,253 38,760,839 - 770,768,092 Total Capital Assets, Being Depreciated, Net 534,652,507 (20,451,663) - 514,200,844 Right to Use Assets:

SBITA Assets 3,227,539 231,512 - 3,459,051
Machinery and Equipment - Right to Use $ 81,954 $ - $ - $ 81,954 Total Right to Use 3,309,493 231,512 - 3,541,005
Accumulated Amortization
SBITA Assets - 637,819 - 637,819
Machinery and Equipment $ 23,132 $ 27,318 $ - $ 50,450
Total Accumulated Amortization 23,132 665,137 - 688,269 Total Right to Use Assets, Net $ 3,286,361 $ (433,625) $ - $ 2,852,736 Total Governmental Activities Capital Assets,
Net $ 685,535,806 $ 8,901,296 $ (23,536,629) $ 670,900,473 63 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
10 - Capital Assets and Right to Use Assets
For the year ended June 30, 2023, depreciation on capital assets was charged to the governmental functions as follows:

Governmental Function
Depreciation
Expense
General Government $ 571,240
Cultural and Recreational 881,513
Community Development 816,336
Public Safety 15,497
Public Services 35,570,143
Internal Service Funds 906,110
Total Depreciation Expense $ 38,760,839
11 - Financed Purchases
Canon Copier – On December 23, 2015, the City entered into a five-year agreement with Canon Financial Services, Inc. to finance the acquisition of copier machines throughout the City. Interest on the contract is payable monthly at 4.11 percent per annum.

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

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

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

In September 2022, the City added amendments 4 & 5 with Canon Financial Services, Inc to finance the acquisition of two new copier machines. These amendments are for 49 months with an implicit interest rate of 2.26 percent per annum.

Payments for the year ended June 30, 2023, amounted to $97,943 under the agreement and are sourced by the General Fund. In the event of default, Canon Financial Services may repossess the equipment but may not accelerate the entire balance outstanding due and payable.

For Year Ending Principal Interest Total
2024 $ 102,913 $ 6,706 $ 109,619
2025 105,269 4,352 109,621
2026 107,677 1,943 109,620
2027 27,394 103 27,497
Total value of minimum lease payments $ 343,253 $ 13,104 $ 356,357 64 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
11 - Financed Purchases
Energy Efficient Equipment - On June 29, 2016, the City entered into a thirteen- year agreement with Capital One Public Funding, LLC to finance the acquisition of energy efficient equipment. Interest on the contract is payable semi-annually at 3.44 percent per annum. Payments for the year ended June 30, 2023, amounted to $83,059 and are sourced by the General Fund. In the Event of Default, Capital One Public Funding may repossess the equipment but may not accelerate the entire balance outstanding due and payable.

For Year Ending Principal Interest Total
2024 $ 85,916 $ 19,330 $ 105,246
2025 88,871 16,374 105,245
2026 91,928 13,317 105,245
2027 95,091 10,155 105,246
2028 98,362 6,884 105,246
2028-2029 101,745 3,500 105,245
Total value of minimum lease payments $ 561,913 $ 69,560 $ 631,473 12 - Long-Term Debt
A. Notes Payable
Section 108 HUD Note Payable – On January 11, 2006, the City issued a Variable Rate Note by entering into the Department of Housing and Urban Development contract for Loan Guarantee Assistance under Section 108 of the Housing and Urban Development Act of 1974. The City received advanced proceeds of $5,000,000 and used the proceeds for property acquisition, relocation, and demolition costs associated with the development of the proposed Senior Center. Interest on the note is equal to

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

On March 20, 2019, the U.S. Department of Housing and Urban Development refinanced $327,338,000 of its debt for Section 108 Participating Certificates, new Series HUD 2019-A, in which the City participated by refinancing $2,056,000 of its $2,464,000 outstanding principal balance and thus generating new blended rates ranging from 2.54 percent to 3.365 percent where the remaining $408,000 and original terms and schedule of payments remaining the same. Debt payments are to be paid from Community Development Block Grant funds and there are no remedies for Event of Default explicitly stated. The principal balance outstanding as of June 30, 2023, is $1,000,000.

Year Ending Principal Interest Total
2024 $ 299,000 $ 22,874 $ 321,874
2025 333,000 14,518 347,518
2026 368,000 5,038 373,038
Totals $ 1,000,000 $ 42,430 $ 1,042,430
HOME Loan Note Payable – In December of 2005, the City entered into an agreement with the Department of Housing and Community Development for the State of California HOME Investment Partnerships Program (HOME) to help approve the construction loan closing for the Courson Connection Project. The City has received advanced proceeds of $2,850,000 from HOME and has passed through those funds to the developer, Courson Senior Partners LP, for the construction of the 75 units of Senior Housing in the Courson Connection Project. The repayment of the loan will be over a 55-year term through residual receipts from the Project. As of June 30, 2023, no residual receipts from the project have been received from developer. Interest on the note is equal to 3 percent.
65 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
A. Notes Payable
If any installment under the Promissory Note is not paid when due or any default occurs in the agreements contained in the Note or the Loan Documents, the entire principal amount outstanding and any accrued interest thereon shall become due and payable immediately. The outstanding balance as of June 30, 2023, is $2,850,000 with $1,423,438 of unpaid accrued interest. 2017 Installment Payable of Street light Acquisition ($11,397,102) – During the Fiscal Year 2016-17, the City of Palmdale submitted a request to acquire street lights from Southern California Edison. In preparation for the acquisition of street lights, the City created a comprehensive inventory of light poles and their locations. Additionally, the City retained Utility Cost Management (UCM) to perform an analysis of the financial feasibility to acquire and maintain the City street lights. One of the key advantages of the street lights ownership is savings in energy cost by retrofitting existing street lights into Light Emitting Diode (LED) lighting. Retrofitting also provides the City with a greater ability to control future updates as technology develops.

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

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

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

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

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

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

Installment payments are computed based on the amount drawn upon during each six month period and represent the maximum payment assuming all project funds are drawn on the closing date. The 2017 Installment Sale Agreement is payable semi- annually on February 1st and August 1st at the rate of 2.48 percent per annum. Principal installments are payable August 1st of each year to 2032 commencing August 1, 2019. Up to 10 percent of outstanding principal can be prepaid every year without prepayment penalty or limitation, as long as such payment is not through refinancing. Such prepayments will be applied against the back end of the amortization schedule. On January 31, 2018, the City made the first interest payment of $1,565.87 on the $157,850 draw related to the cost of financing.
66 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
A. Notes Payable
On January 25, 2018, the City drew upon $6,869,454 for the acquisition of approximately 10,538 street lights from Southern California Edison. On March 23, 2018, the remaining balance of available proceeds was drawn upon in the amount of $4,369,798, which was used to acquire additional 7,234 street lights from Southern California Edison. As a result of these two advances, all project funds are drawn to its maximum amount of $11,239,252. In accepting the inventory listing provided by Southern California Edison, the City acquired 17,772 street lights in total, which are 420 more street lights than the initial estimate of 17,352.

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

Year Ending Principal Interest Total
2024 $ 761,997 $ 202,073 $ 964,070
2025 780,894 182,941 963,835
2026 800,260 163,335 963,595
2027 820,107 143,242 963,349
2028 840,446 122,652 963,098
2029-2033 4,525,405 286,072 4,811,477
Totals $ 8,529,109 $ 1,100,315 $ 9,629,424
2017 On Bill Financing (OBF) – The City of Palmdale and Southern California Edison (“SCE”) entered into the Energy Management Solution Incentive Application (“EMS Agreement”) with the California Public Utilities Commission (“CPUC”) in May 2014. After submission of the application, the City has completed installation of energy efficient equipment (“Equipment”) at the sites as set forth in the EMS Agreement. In Decision 12-11-015, the CPUC authorized SCE to provide zero-percent financing for the installation of Equipment, which is to be repaid over a specified period through the City’s electric utility bill through a process called On-Bill Financing (“OBF”).

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

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

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

The outstanding balance as of June 30, 2023 is $101,456.

B. In October 2020, The City entered into another OBF Agreement with SCE. The City has completed installation of eligible energy efficient equipment at the Marie Kerr Park Site set forth in the EMS Agreement and has accepted the equipment as being operational and in good working order. The amount financed is $116,203, and the repayment will be sixty-nine (69) months in the amount of $1,700 per month. The outstanding balance as of June 30, 2023 is $70,294. 67 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
A. Notes Payable
Year Ending Principal A Interest Total Year Ending Principal B Interest Total 2024 $ 23,016 $ - $ 23,016 2024 $ 20,404 $ - $ 20,404
2025 23,016 - 23,016 2025 20,404 - 20,404
2026 23,016 - 23,016 2026 20,404 - 20,404
2027 23,016 - 23,016 2027 9,082 - 9,082
2028 9,392 - 9,392 2028 - - -
Total $ 101,456 $ - $ 101,456 Total 70,294 - $ 70,294
Street Lights Retrofitting – In March 2017, the City entered into four (4) OBF Agreements with SCE for installation of the safety street lights at Sites 1-25, 26-50, 51-75 and Sites 76-105 in accordance with Energy Management Solution Incentive Application (EMS) Agreement. The safety street lights are components of the traffic signal infrastructure, and Sites 1-105 consist of the various street lights located throughout the City. The repayment of all four (4) Agreements will be over 120 months. The first payments were made in January 2018.

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

The amounts financed and outstanding balances as of June 30, 2023 are as follows:

A. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5806 for $20,258 with an outstanding balance of $3,001
as of June 30, 2023.

Year Ending Principal Interest Total
2024 $ 3,001 $ - $ 3,001
B. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5807 for $100,761 with an outstanding balance of $19,497 as of June 30, 2023
Year Ending Principal Interest Total
2024 $ 15,455 $ - $ 15,455
2025 4,042 - 4,042
Totals $ 19,497 $ - $ 19,497
68 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
B. Revenue Bonds
2012 Lease Revenue Bonds Payable ($8,695,000) – On December 19, 2012, Palmdale Financing Authority issued $8,695,000 of Lease Refunding Revenue Bonds (2012 Bonds). Interest on the 2012 Bonds is payable semi-annually on March 1 and September 1 at rates ranging from 2 percent to 4 percent per annum. Principal installments are payable September 1 of each year from 2015 to 2029.

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

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

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

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

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

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

Year Ending Principal Interest Total
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
69 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
B. Revenue Bonds
2015 Multifamily Housing Revenue Bonds Payable ($4,235,000) – On September 3, 2015, the Housing Authority of the City of Palmdale issued $4,235,000 of Multifamily Housing Revenue Bonds (2015 Bonds). Interest on the 2015 Bonds is payable semi-annually on December 1st and June 1st at rates ranging from 2.62 percent to 5.25 percent per annum. Principal installments are payable June 1st of each year from 2017 to 2045.

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

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

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

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

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

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

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

Year Ending Principal Interest Total
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
70 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
B. Revenue Bonds
2017 Lease Revenue Bonds Payable ($17,475,000) – On April 5, 2017, the Palmdale Financing Authority issued $17,475,000 of Lease Revenue Refunding Bonds, Series 2017. Interest on the 2017 Series Bonds is payable semi-annually on November 1 and May 1 at rates ranging from 2.00 percent to 3.50 percent per annum. Principal installments are payable November 1 of each year to 2032.

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

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

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

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

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

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

Year Ending Principal Interest Total
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
71 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
C. Certificates of Participation
2021 Certificates of Participation Payable ($13,584,908) - On May 27, 2021, the City issued the Refunding of the 2007 Certificates with a private placement loan with Western Alliance Bank, in the amount of $13,584,908 with annual interest rate of 3.93 percent. The Refunding loan and other available funds in the trust accounts were used to refund the outstanding principal of the 2007 Certificates. As a result of the refunding, the City entered into a new Site Lease Agreement with Palmdale Financing Authority and terminated its existing lease agreement with Palmdale Civic Authority. As of June 30, 2021, a total of $13,584,908 was outstanding. The lease agreement requires the City to pay a semi-annual base rental on August 15 and February 15 to the Authority for the use of the facilities through September 2029. The rentals will be used by the Authority to pay principal and interest with respect to the 2021 Bonds as they become due. Title to the land and facilities covered by the lease and the 2021 Bonds is vested in the Authority, for the benefit of the 2021 Bond holders, during the lease term.

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

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

Year Ending Principal Interest Total
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
72 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
C. Certificates of Participation
2014 Lease Payable ($25,920,000) – On October 16, 2014, the Palmdale Financing Authority assigned the future lease revenues from the Lease Agreement dated as of October 1, 2014, by and between the City of Palmdale and the Authority, to TPB Investments, Inc., a wholly owned subsidiary of Western Alliance Bank, an Arizona corporation, in exchange for $25,920,000 as a private placement loan. These funds were used to redeem $25,445,000 of outstanding 2002 Palmdale Civic Authority Certificates of Participation, pay $262,893 of interest on the outstanding 2002 Palmdale Civic Authority Certificates of Participation, and pay financing costs of $212,107.

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

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

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

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

Year Ending Principal Interest Total
2024 $ 1,455,000 $ 617,055 $ 2,072,055
2025 1,510,000 561,906 2,071,906
2026 1,570,000 504,618 2,074,618
2027 1,630,000 445,098 2,075,098
2028 1,690,000 383,346 2,073,346
2029-2033 9,460,000 905,820 10,365,820
Totals $ 17,315,000 $ 3,417,843 $ 20,732,843
73 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
D. Change in Long-Term Liabilities
Activity for the year ended June 30, 2023 were as follows:

Governmental Activities
June 30,2022,
As Restated Additions Retirements June 30,2023
Due Within
One Year
Compensated Absences Payable:

Compensated Absences Payable: $ 3,503,417 $ 2,404,974 $ 1,954,936 $ 3,953,455 $ 1,692,898 Total compensated absences payable 3,503,417 2,404,974 1,954,936 3,953,455 1,692,898 Liability Claims (General Fund)
Health, Dental and Vision Claims 749,114 1,859,313 1,647,156 961,271 961,271 Liability Claims 8,255,651 1,082,742 3,323,621 6,014,772 2,430,000 Total liability claims 9,004,765 2,942,055 4,970,777 6,976,043 3,391,271 Bonds payable:
2012 Lease Revenue Bond 4,970,000 - 590,000 4,380,000 610,000 2015 Mortgage Revenue Bonds 3,740,000 - 100,000 3,640,000 100,000 2017 Lease Revenue Bonds 12,055,000 - 1,330,000 10,725,000 1,465,000 2014 Certificates of Participation 18,715,000 - 1,400,000 17,315,000 1,455,000 2021 Certificates of Participation 12,827,451 - 703,899 12,123,552 733,546 Plus: Deferred Issuance Premiums $17.4 Million 323,804 - 117,970 205,834 81,700 Total bonds payable 52,631,255 - 4,241,869 48,389,386 4,445,246 Direct Borrowings and Direct Placements:

Notes Payable:

Section 108 HUD Loan 1,536,000 - 536,000 1,000,000 299,000 Home Loan 2,850,000 - - 2,850,000 -
Street Light Purchase Loan 9,272,665 - 743,556 8,529,109 761,997 SCE Parks LED Retrofit OBF A-5962 124,473 - 23,017 101,456 23,016 SCE LED Retrofit OBF A-5806 6,341 - 3,340 3,001 3,001
SCE LED Retrofit OBF A-5807 34,952 - 15,455 19,497 15,455 SCE LED Retro OBF A-7251 90,698 - 20,404 70,294 20,404
Total notes payable 13,915,129 - 1,341,772 12,573,357 1,122,873 Financial Arrangements:

Lease Liability 60,974 - 28,672 32,302 27,912
Financed Purchase-Copier 374,911 66,285 97,943 343,253 102,913 Financed Purchase-Energy Efficient Equipment 644,972 - 83,059 561,913 85,916 SBITA Liability 3,045,891 231,512 647,944 2,629,459 625,223 Total payable 4,126,748 297,797 857,618 3,566,927 841,964 Total governmental activities long-term liabilities $ 83,181,314 $ 5,644,826 $ 13,366,972 $ 75,459,168 $ 11,494,252 Business-type activities
The City is subject to a legal debt limit statutorily computed at 3.75 percent of assessed valuation. As of June 30, 2023, the City’s total debt limit was $605,799,826, and the total outstanding debt applicable to the limit was $76,912,668, which is 12.7 percent of the total debt limit. The aggregate principal amount of the City's general obligation debt for public improvements is statutorily limited to 15.0 percent of the City's total reported assessed valuation.

E. Lease receivable
As of year-end June 30, 2023 , the City had entered into two lease agreements as the lessor where it had leased its assets, ranging from ten to twenty-five years. As of June 30, 2023 the outstanding leases receivable total $60,594. These leases require the lessees to make periodic payments to the City, and range in interest rates from 1.46% to 2.46%. The offsetting entry to the leases receivable is a deferred inflow and the value of the deferred inflow at June 30, 2023 is $59,219. The City will be systematically recognizing revenue over the terms of the lease, and in the current fiscal year, the City recognized $35,740 in lease principal and $1,840 in interest.
74 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
12 - Long-Term Debt
F. Lease liability
During fiscal year 2023, the City has entered into one lease agreement as the lessee for the use of a lease asset, at a term of 2 years. The lease terminates on August 2024. Under the term of the lease, the City pays a base fee of $2,100 every four weeks increasing by 5% on the anniversary of the agreement. The City has the option to extend the term by 1 year, which the City believes it will exercise with reasonable certainty.

At June 30,
2023, the City recognized a right to use the lease asset of $81,954 and a lease liability of $32,302 related to this agreement. During the fiscal year, the City recorded $27,318 in amortization expense and $175 of interest expense for the right to use lease asset. The City used a discount rate of 3.87% based on its estimated incremental borrowing rate.

The remaining obligations associated with the lease are as follows:

Year Ending Principal Interest Total
2024 $ 27,912 $ 270 $ 28,182
2025 4,390 1 4,391
Totals $ 32,302 $ 271 $ 32,573
G. Subscription Based Information Technology Arrangements During fiscal year 2023, the City has entered into 7 Subscription Based Information Technology Arrangements (SBITA) for the use of a different software solutions, with a range of terms from 1 to 7 years. The subscription terminates in February 2030.

At June 30, 2023, the City recognized a SBITA asset of
$3,459,051 and a SBITA liability of $2,629,459 related to these agreements. During the fiscal year, the City recorded $637,820 in amortization expense and $112,218 of interest expense for the SBITA asset. The City used a discount rate ranged from 4.69% for 1 - 3 year arrangements to 5.28% for arrangements greater then 10 Years, these rates were based on its estimated incremental borrowing rate.

The remaining obligations associated with the SBITA's are as follows:

Year Ending Principal Interest Total
2024 $ 625,224 $ 102,951 $ 728,175
2025 433,131 78,894 512,025
2026 398,240 62,545 460,785
2027 423,457 46,691 470,148
2028 440,248 29,901 470,149
2029 - 2033 309,159 12,307 321,466
Totals $ 2,629,459 $ 333,289 $ 2,962,748
13 - Special Assessment District and Community Facilities District Bonds None of the Bonds described below constitute indebtedness of the City, and the City is in no way obligated for their repayment except to the extent of any assessments, or special taxes collected and pledged for their repayment. The City is only acting on behalf of the Bondholders in collecting the assessments and special taxes levied to repay the Bonds, forwarding the collections to the Bondholders and initiating foreclosure proceedings, if necessary. Accordingly, these special assessment and special tax Bonds payable are not recorded as a liability in the accompanying financial statements. The amounts collected and held by the City pending disbursement to the Bondholders are accounted for in a custodial fund. 75 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
13 - Special Assessment District and Community Facilities District Bonds A. Bonds Outstanding
Community Facilities District No. 91-1 (Sierra Gateway) Special Tax Bonds – In December 1991, the City issued $7,970,000 of special tax Bonds. Proceeds were used for the development of public improvements for the Sierra Gateway Center, a master-planned, mixed-use business park, which is proposed to ultimately include 2.5 million square feet of industrial, office, and retail buildings. The Bond issue provided for the acquisition of land, acquisition and construction of storm drainage retention facilities, landscaping, and street, water, and utility improvements. As of June 30, 2023, a total of $7,425,000 in
Bonds was outstanding. No principal and interest payments are due on the Bonds after the maturity in December 2016. No additional special taxes will be levied on the property in the Sierra Gateway Community Facilities District No. 91-1.

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

Community Facilities District No. 93-1 (Ritter Ranch) Special Tax Bonds – In April 1995, the City issued $50,000,000 of special tax Bonds for the design, acquisition and construction of public improvements for a master-planned community known as Ritter Ranch consisting of facility, recreational, school, and commercial uses. As of June 30, 2023, a total of $22,665,000 in Bonds was outstanding for Ritter Ranch Community Facilities District No. 93-1. The principal and interest on the Bonds are to be paid from the collection of special taxes levied on the property in the Ritter Ranch Community Facilities District No. 93-1.

On February 1, 2023, the City approved Supplemental Agreement No. 6 to the Amended and Restated Fiscal Agent Agreement with the Fiscal Agent related to Community Facilities District No. 93-1 (Ritter Ranch). Under the amended fiscal agent agreement, principal is not due, and interest is deferred until September 1, 2024. Thereafter, principal is due annually. Interest due on the bonds occurring on March 1, 2020 to and including September 1, 2024, shall be due and payable on September 1, 2024. Principal payments are due annually through the bond’s maturity date of September 1, 2024.

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

Community Facilities District No. 2003-1 (Anaverde Improvement Area A) Special Tax Bonds – On July 17, 2019 on behalf of the Improvement Area A of the City of Palmdale Community Facilities District No. 2003-1 (Anaverde Public Improvements), the City issued the Special Tax Refunding Bonds, Series 2019 in the amount of $15,565,000 with annual interest rate of 5 percent and $3,500,000 of issuance premium. The Special Tax Refunding Bond, Series 2019, issuance premium, and other available funds of the District were used to refund the outstanding principal of the Special Tax Bonds, Series 2005-A and Special Tax Bonds, Subordinate Series 2005-B. The Series 2005-A and Series 2005- B bonds were issued for the acquisition and construction of certain public capital improvements necessary for the development of a 5,200-unit master-planned community known as Anaverde. As of June 30, 2023, a total of $13,540,000 in Series 2019 Bonds was
outstanding. The principal and interest on the Bonds are to be paid from the collection of special taxes on the property in the Anaverde Community Facilities District No. 2003-1.

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

Community Facilities District No. 05-1 (Trade & Commerce Center Area) 2021 Special Tax Refunding Bonds, - On June 17, 2021, the City issued the Refunding of the 2005 Series A and B and 2007 refunding bonds with a private placement loan with Western Alliance Bank, in the amount of $10,442,992, with annual interest rate of 3.39 percent. The Refunding loan and other available funds in the trust accounts were used to refund the outstanding principal of the 2005 and 2007 bonds. As a result of the refunding, the City entered into a new Fiscal Agreement with US Bank as Trustee. As of June 30, 2023, a total of $9,291,334 was outstanding. The Fiscal agreement requires the Community Facilities District to pay a semi-annual base rental on September 1 and March 1 to the trustee in order to pay Western Alliance Bank through September 2037.

The Refunding at an interest rate of 3.39% produces a total estimated $2.9 million reduction in debt service payments over 16 years, or approximately $188,000 per year.
76 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
13 - Special Assessment District and Community Facilities District Bonds A. Bonds Outstanding
In the event of default, all outstanding amounts may become immediately due to the bond owners, including foreclosure proceedings of the properties within the area if the District is unable to make the debt service payment. The principal of the bonds shall not be subject to acceleration hereunder.

Assessment District No. 2006-1 (Godde Hills Estates Sewer Improvements) Limited Obligation Improvement Bonds – In November 2006, the City issued $2,220,000 of Special Assessment Bonds for the construction of sewer improvements in the community known as Godde Hills Estates. As of June 30,
2023, a total of $960,000 in Bonds was outstanding. The principal and interest on the Bonds are to be paid from the collection of special assessments on the Property in the Godde Hills Estates Sewer Improvements Assessment District No. 2006-1.

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

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

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

Under the Assignment Agreement between AVEK and CV Communities, AVEK will timely perform all the AVEK Obligations (as defined in the Assignment Agreement) on and after January 1, 2017 as they apply to the Assigned Water Rights and the City Water Allocation. CV Communities is obligated to pay the Annual Water Rights charges, and AVEK Administrative Expenses and any AVEK Energy Charges payable in calendar year 2017 (collectively, the “2017 Expenses”). In order to assure the City that the foregoing payments will be made, CV Communities provided the City with a Letter of Credit issued by Wells Fargo Bank on June 10, 2016. The City is entitled to draw on the amount available under the Letter of Credit in the event that CV Communities does not timely pay expenses. The current Letter of Credit was renewed in June 2023 and is effective through July
12, 2024. As of June 30, 2023, a total of $379,491 in Letter of Credit was outstanding.

B. Default in Payment of Debt Service on Bonds Outstanding Community Facilities District No. 91-1 (Sierra Gateway) Special Tax Bonds – On December 1, 1997, there were insufficient funds on hand to make the full payment of the scheduled principal and interest on the Community Facilities District No. 91-1 Bonds due to delinquencies within the District. In accordance with procedures for Community Facilities Districts (which are different from those for Assessment Districts), payments of interest only were made proportionally to the Bondholders as listed in the table below. During fiscal year 2015-16, foreclosure proceedings were initiated against the owner of Defaulted Properties. During the fiscal year 2016-17, the City, on behalf of CFD 91-1, obtained judgments against the property owner of the Defaulted Properties (“Property”). The Property went to a foreclosure sale on September 28, 2016, but 77 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
13 - Special Assessment District and Community Facilities District Bonds B. Default in Payment of Debt Service on Bonds Outstanding no bids were received. The County of Los Angeles’ Treasurer and Tax Collector office (“TTC”) also conducted ad valorem foreclosure sale with respect to the Defaulted Properties. This foreclosure sale also failed.

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

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

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

Year Ending Interest Paid Year Ending Interest Paid
1998-1999 $ 241,881 2008-2009 $ 141,179
1998-1999 148,474 2009-2010 147,131
1999-2000 148,283 2010-2011 149,729
2000-2001 123,693 2011-2012 154,943
2001-2002 141,376 2012-2013 158,128
2002-2003 130,703 2013-2014 160,207
2003-2004 129,454 2014-2015 161,823
2004-2005 126,712 2015-2016 164,925
2005-2006 140,404 2016-2017 137,100
2006-2007 144,418 2017-2018 128,454
2007-2008 142,787 2018-2019 -
2019-2020 -
2020-2021 -
2020-2021 -
2021-2022 -
2022-2023 -
$ 3,121,804
14 - Residential Mortgage Revenue Bond Programs
The Multifamily Mortgage Program is designed to provide funds for the construction and permanent financing of apartment complexes. Bonds are paid from monthly rental payments generated by the development and from remaining bond proceeds held by Wells Fargo against loan number ending in 0039. The loan is administered by California Community Reinvestment Corp. (CCRC) and the loan is under the name Courson Senior Partners LP. As of June 30, 2023, there was $820,763 of Multifamily Mortgage Revenue Bonds outstanding.

On February 2, 2021, the City approved the issuance of tax-exempt revenue bonds by the California Public Finance Authority (CalPFA) to finance or refinance the acquisition and construction of a 118-unit multi family rental housing project located on 65th Street East and East Avenue S. The property is to be owned by Maison's Palmdale LP (the "Borrower") or a partnership with Ravello Holdings, Inc. (the "Developer"). As of June 30, 2023, there was $24,119,000 of Multifamily Mortage Revenue Bonds outstanding.
78 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
14 - Residential Mortgage Revenue Bond Programs
The bonds described above do not constitute indebtedness of the Housing Authority or the City, and there exists no legal or moral obligation on the part of the Housing Authority or the City to make payments on such bonds from any source other than the revenue and assets pledged thereto. The program is completely administered by the trustees. Accordingly, these programs and the mortgage revenue bonds issued there under have been excluded from the accompanying financial statements. 15 - Public Employees’ Retirement System (PERS) Pension Plan A. General Information about the Pension Plan
Plan Description - All qualified permanent and probationary employees are eligible to participate in the City’s Miscellaneous Plan, an agent multiple employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers.

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

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

The Plan’s provisions and benefits in effect at June 30, 2023, are summarized as follows:

On or Prior to
April 10, 2011

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

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

2.0 Percent @ Age 62
Benefit Vesting Schedule 5 year of Service 5 year of Service 5 year of Service Benefit Payments Monthly for Life Monthly for Life Monthly for Life Retirement Age Age 50 to 55 Age 50 to 63 Age 50 to 67
Monthly Benefits, as a Percent of Annual Salary 2.0 to 2.7 percent 1.092 to 2.418 percent 1.0 to 2.5 percent Retired Employee Contribution Rates 8.0 percent 7.0 percent 7.75 percent Required Employer Contribution Rates 11.06 percent 11.06 percent 11.06 percent Employees Covered
At June 30, 2023, the following employees were covered by the benefit terms for each Plan:

On or Prior to
April 10, 2011

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

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

2.0 Percent @ Age 62
Inactive Employees or Beneficiaries Currently
Receiving Benefits 299 - -
Inactive Employees to But Not Yet Receiving
Benefits 246 4 -
Active Employees 95 4 145
640 8 145
79 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
15 - Public Employees’ Retirement System (PERS) Pension Plan A. General Information about the Pension Plan
Contributions
Section 20814(c) of the California Public Employees’ Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rates of employees. The employer contributions during the year ended June 30, 2023 were $6,468,879.

B. Net Pension Liability
The City’s net pension liability for the Plan was measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021, rolled forward to June 30, 2022.

Actuarial Assumptions
The total pension liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions.

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

Discount Rate 6.9 percent
Inflation Rate 2.50 percent
Projected Salary Increase Rate (1) 3.2 to 12.2 percent
Investment Rate of Return 7.00 percent
Mortality (2)
Notes:
(1) Depending on Age, Service and Type of Employment
(2) The Mortality Table used was developed based on CalPERS specific data The mortality table used was developed based on CalPERS’ specific data. The table includes 20 years of mortality improvements using Society of Actuaries Scale BB. For details on this table, please refer to the 2017 experience study report.

Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent, a decrease from 7.15 percent the prior year. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the City’s contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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 80 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
15 - Public Employees’ Retirement System (PERS) Pension Plan B. Net Pension Liability
Discount Rate
expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to the account for assumed administrative expenses.

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

Asset Class
Target
Allocations
Real Return
Years 1 Thru 10*
Real Return
Years 11 and
Thereafter**
Global Equity %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 %100.00
* An Expected Inflation Rate of 2.30% was used for this period. ** An Expected Inflation Rate of 2.92% was used for this period.

Changes in the Net Pension Liability
The changes in the Net Pension Liability for the Plan for the measurement date June 30, 2023, are as follows:

Increase (Decrease)
Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balances as of June 30,2022 $ 196,678,686 $ 166,531,508 $ 30,147,178 Changes in the Year:

Service Cost 3,338,892 - 3,338,892
Interest on the Total Pension Liability 13,768,037 - 13,768,037 Changes in Assumptions 6,512,225 - 6,512,225
Differences between Expected and Actual Experience (382,880) - (382,880) Net Plan to Plan Resource Movement - - -
Contribution - Employer - 5,938,095 (5,938,095)
Contribution - Employee - 1,449,303 (1,449,303)
Net Investment Income - (12,513,528) 12,513,528
Benefit Payments, including Refunds of Employee Contributions (9,881,408) (9,881,408) - Administrative Expenses 1 (103,739) 103,740
Net changes 13,354,867 (15,111,277) 28,466,144
Balance at June 30, 2023 $ 210,033,553 $ 151,420,231 $ 58,613,322 81 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
15 - Public Employees’ Retirement System (PERS) Pension Plan B. Net Pension Liability
Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the Plan, as of the measurement date, calculated using the discount rate of

6.90 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage- point lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate.

Discount Rate
Less One Percent

5.90 Percent
Current
Discount Rate

6.90 Percent
Discount Rate
Plus One Percent

7.90 Percent
Plan's Net Pension Liability $ 85,927,891 $ 58,613,322 $ 35,948,505 Pension plan fiduciary net position:

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

C. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City recognized pension expense of $7,538,425. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Contributions made Subsequent to the Measurement Date $ 6,468,879 $ - Change of assumptions 4,477,155 -
Difference between Expected and Actual Experience - 277,671 Net Difference between Projected and Actual Earnings on Plan Investments 7,537,304 - Total $ 18,483,338 $ 277,671
The amount of $6,468,879 reported as deferred outflows of resources related to contributions made subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2024.

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

Year Ended June 30,
2024 $ 3,101,516
2025 2,976,297
2026 879,995
2027 4,778,979
Total pension expense $ 11,736,787
82 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
16 - Public Agency Retirement Systems
For all of its part-time employees not covered by PERS, a defined contribution pension plan is made available through the Public Agency Retirement System (PARS) pursuant to the requirements of 3121(B)(7)(F) of the Internal Revenue Code. This was created in accordance with Internal Revenue Code Sections 401(a) and 501 and administered by Phase II Systems. Benefit terms, including contribution requirements for PARS are established by Internal Revenue Code 3121(b)(7)(F). Employees are required to contribute 7.5 percent of their salary to the pension plan, up to applicable Internal Revenue Code limits. The City does not contribute to Employees PARS account. Employees are immediately vested in their contributions and earnings on those contributions. For the year ended June 30, 2023, employee contribution amounts were $312,117.

The City is required to contribute 3.75 percent of the elected Council Members annual salary to the individual account. The individuals are immediately vested in their own and the City’s contributions and earnings on those contributions. For the year ended June 30, 2023, employee and employer contribution amounts were $3,842. 17 - Post-Employment Benefits Other Than Pensions
A. General Information about the Other Than Pensions-Plan (OPEB) Plan Description:

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

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

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

B. Defined Benefit Plan
Funding Policies:

Plan membership - At June 30, 2023, the Defined Benefit Plan membership consisted of the following:

Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 17 Inactive Plan Members Entitled to But Not Yet Receiving Benefit Payments 1 Active Plan Members 4
22 83
City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
17 - Post-Employment Benefits Other Than Pensions
B. Defined Benefit Plan
Benefits provided
The Plan provides medical insurance benefits to eligible retirees. Current retirees receive a maximum of $250 deposited into the Plan per month beginning January 1, 2009. Employees age 45 and greater on December 31, 2008 that choose a defined benefit plan deposit of $250 per month at retirement, will receive either a maximum contribution of $250 per month or a pro-rated contribution for less than 10 years of service.

Contributions
The contribution requirements of the plan members and the City are established as described above under each plan and may be amended by the City Council. The Council establishes rates based on an actuarially determined rate. For the year ended June 30, 2023, the City contributed $0 to the Defined Benefit Plan.

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

Rate of Return
For the year ended June 30, 2023, the annual money-weighted rate of return on investments, net of investment expense was 5.25 percent. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Net OPEB Liability (Asset)
The City’s net OPEB liability (Asset) was measured as of June 30, 2023, and the total OPEB liability (Asset) used to calculate the net OPEB liability (Asset) was determined by an actuarial valuation as of June 30, 2023.

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

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

2.50 percent. All results are then rounded to the nearest quarter percentage point.

The best-estimates of expected future asset class returns were published in the 2016 Survey of Capital Market Assumptions produced by Horizon Actuarial Services. These expected returns, along with expected asset class standard deviations and correlation coefficients, are based on Horizon’s annual survey of investment advisory firms. The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data.
84 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
17 - Post-Employment Benefits Other Than Pensions
B. Defined Benefit Plan
Net OPEB Liability (Asset)
Best-estimates of geometric real and nominal rates of return for each major asset class included in the OPEB plan’s asset allocation as of the measurement date are summarized in the following table:

Asset Class
Estimated
Long-Term
Allocations
Long-Term
Expected
Real Rate of Return
Domestic equity 45.00% 4.91%
International equity 10.00% 5.32%
Fixed Income 40.00% 2.30%
Real Estate and Alternatives 0.00% 3.79%
Cash and Cash Equivalents 5.00% 0.77%
Total 100.00%
Discount Rate
The discount rate used to measure the total OPEB liability was 4.53 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members through 2036 and the long-term expected rate of return on OPEB plan investments was applied to those periods. A projected “crossover” date occurs in 2037 and unfunded benefit payments for the years thereafter were discounted using the expected 3.90% municipal bond index rate. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

Actuarial Assumptions
The total OPEB liability was determined by an actuarial valuation as of June 30, 2023, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2023
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 4.53 percent
Investment Rate of Return 6.25 percent (1)
General Inflation Rate 2.50 percent
Healthcare Cost Trend Rate 6.30 percent for FY2022, gradually decreasing over several decades to an ultimate rate of 3.9 percent in
FY2076 and later years.
(1)
The long-term investment return assumption was changed from 5.25% to

6.25% based on updated capital market assumptions.
85 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
17 - Post-Employment Benefits Other Than Pensions
B. Defined Benefit Plan
Changes in the Net OPEB Liability (Asset):

OPEB Plan Increase (Decrease)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability (Asset)
Balances as of June 30, 2022 $ 818,101 $ 695,575 $ 122,526 Changes in the Year:

Service Cost 15,469 - 15,469
Interest 34,266 - 34,266
Differences between Expected and Actual Experience 53,031 - 53,031 Contribution - Employer - (78,141) 78,141
Changes in Assumptions (34,685) - (34,685)
Net Investment Income - 87,761 (87,761)
Benefit Payments, including Refunds of Employee Contributions 20,852 20,852 - Administrative Expenses - (18,210) 18,210
Net changes 88,933 12,262 76,671
Balance at June 30, 2023 $ 907,034 $ 707,837 $ 199,197
Administrative Expenses for Fiscal Year Ended 2023, include $18,210 in excess draw from the Trust, which is expected to cover expenses through 2024. The Plan's fiduciary net position represnts 78% of the total OPEB liability.

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

3.53% percent) or one percentage point higher ( 5.53%
percent) than the current discount rate:

Decrease 1%
Discount Rate of

3.53%
Current
Discount Rate of

4.53%
Increase 1%
Discount Rate of

5.53%
Net OPEB Liability (Asset) $ 253,695 $ 199,197 $ 149,221 Sensitivity of the Net OPEB liability (Asset) to Changes in the Healthcare Cost Trend Rates The following presents the Net OPEB Liability (Asset) of the City, as well as what the City’s Net OPEB Liability (Asset) would be if it were calculated using healthcare cost trend rates that are one percentage point lower ( 5.3 percent decreasing to 2.9 percent) or one percentage point higher (7.3 percent decreasing to 4.9 percent) than the current healthcare cost rates:

Healthcare
Cost Rates

5.3 percent
decreasing to 2.9
percent
Current
Healthcare
Cost Rates

6.3% Decreasing
to 3.9%
Healthcare
Cost Rates

7.3 percent
decreasing to 4.9
percent
Net OPEB Liability (Asset) $ 165,914 $ 199,197 $ 235,655 86 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
17 - Post-Employment Benefits Other Than Pensions
B. Defined Benefit Plan
OPEB Expense and Deferred Outflows/Inflows of Resources related to OPEB:

For the Year ended June 30, 2023, the City recognized OPEB expense of $155,722. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Difference between Expected and Actual Experience $ 232,915 $ 71,171 Change of assumptions 29,082 93,143
Net Difference between Projected and Actual Investments Earnings 15,391 - Total $ 277,388 $ 164,314
Other amounts reported as deferred outflows of resources related to OPEB will be recognized as future OPEB expense as follows:

Measurement Period
Year Ended June 30,
2024 $ 102,018
2025 5,836
2026 13,900
2027 (8,680)
Total $ 113,074
C. Defined Contribution OPEB Plan
Plan membership
At June 30, 2023, the Defined Contribution OPEB Plan membership consisted of the following:

Inactive Plan Members or Beneficiaries Currently Receiving Benefit Payments 6 Inactive Plan Members Entitled to But Not Yet Receiving Benefit Payments 12 Active Plan Members 55
Total defined contribution benefit plan membership 73
Benefits provided
Full time employees under age 45 on December 31, 2008 and employees aged 45 and greater who choose a defined contribution option will receive a defined contribution account. Annual allocations begin at $100 and increase with age up to a maximum $2,000 annual allocation. Individual balances grow with investment earnings and annual City contributions.

Beginning account balances were determined based on years of service, annual benefit times the life annuity factory at expected retirement age. Annual contributions for the beginning account balances and the annual contribution is made when the employee is fully vested as described above.
87 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
17 - Post-Employment Benefits Other Than Pensions
C. Defined Contribution OPEB Plan
Contributions
The contribution requirements of the plan members and the City are established as described above under the defined contribution plan and may be amended by the City Council. Currently, plan members and beneficiaries are not required to contribute to the plan. For the year ended June 30, 2023, the City contributed $116,300 to the Defined Contribution Plan.

Condensed Financial Statements:

Separate GAAP-basis reports are not currently available for the defined benefit and contribution plans. In lieu of separate issued financial statements for the City administered post-employment health care benefit trust funds, condensed financial statements are presented below for the year ended June 30, 2023:

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

Cash and cash equivalents $ 1,688 $ 1,925,370 $ 1,927,058 Investments:

Mutual Funds 706,149 1,890,833 2,596,982
Total assets 707,837 3,816,203 4,524,040
Total net position restricted
for OPEB benefits $ 707,837 $ 3,816,203 $ 4,524,040
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution Plan Total
Additions:

Employer Contributions to Retiree Medical Trust $ - $ 116,300 $ 116,300 Investment and Interest Income 34,277 132,986 167,263
Net Realized and Unrealized Gains (Losses) 479,275 74,028 553,303 Total additions 513,552 323,314 836,866
Deductions:

Benefits Paid to Participants and expenses 518,568 207,654 726,222 Interfund Transfers (17,278) 17,278 -
Total deductions 501,290 224,932 726,222
Change in Net Position 12,262 98,382 110,644
Net Position as of July 1, 2022 695,575 3,717,821 4,413,396 Net Position as of June 30, 2023 $ 707,837 $ 3,816,203 $ 4,524,040 88 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
18 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency A. General Discussion
On December 29, 2011, the California Supreme Court upheld Assembly Bill X1 26 (“the Bill”) that provides for the dissolution of all Redevelopment Agencies in the State of California. This action impacted the reporting entity of the City of Palmdale that previously had reported a Redevelopment Agency within the reporting entity of the City as a blended component unit.

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

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

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

B. Land Held for Development
Land held for development is recorded at the lower of acquisition cost or estimated fair market value. During fiscal year 2010- 2011, properties were conveyed to the City pursuant to Section 33220(g) of the Health and Safety Code to provide redevelopment and retain local control. As a result of AB1484, the same properties were reconvened back to the Successor Agency Trust Fund through a quitclaim process on November 9, 2012. The reconveyance was legally deemed to be reported as of June 30, 2015. Land Held for Development was transferred at a carrying value of $11,673,527. After the sale of land in accordance with the Successor Agency’s Long Range Property Management Plan, the carrying value of remaining land held is $146,788 as of June 30, 2023.

C. Capital Assets
Capital Assets of the Successor Agency Trust Fund as of June 30, 2023 consisted of the following:

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

Land and improvements $ 3,477,722 $ - $ (3,105,649) $ 372,073 Capital assets being depreciated:

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

Buildings and structures 253,428 8,763 - 262,191
Total accumulated depreciation 253,428 8,763 - 262,191
Total capital assets, being depreciated, net 184,724 (8,763) - 175,961 Total capital assets, net $ 3,662,446 $ (8,763) $ (3,105,649) $ 548,034 89 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
18 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency C. Capital Assets
For the Year Ended June 30, 2023, depreciation expense on capital assets was charged to the private purpose trust fund in the amount of $8,763.

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

Housing Authority - Housing Asset Fund $ 4,909,777 $ -
Successor Agency Trust Fund:

Dissolved - CRA Project Area No. 1 and No. 2A - 4,909,777 Total $ 4,909,777 $ 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 requirement) to the former CRA Project Area No. 1 and 2A Debt Service Funds, respectively. The 2004-2005 advance of $939,215 and the 2005-2006 advance of $923,612 will be repaid by the Successor Agency from available future property tax revenues with no interest charged.

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

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

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

During Fiscal Year 2022-23, the Housing Authority received $250,000 from the Successor Agency during the Recognized Obligation Payment Schedule (ROPS) Period of July-June 2023 or ROPS 22-23A and B. The next payment is expected to be received during the ROPS Period of July-December 2023 or ROPS 23-24A and is estimated to be approximately $250,000.

E. Due to Other Governmental Units
The Successor Agency has advances due to the City as of June 30, 2023 of $1,114,403 for approved obligations paid by the City on behalf of the Agency.
90 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
18 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency F. Successor Agency Long-Term Debt

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

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

Upon dissolution of the former Community Redevelopment Agency, the Note Payable was an approved enforceable obligation by the State Department of Finance, therefore beginning February 1, 2012, the pledge and payments will be made from future property tax revenues received by the Private Purpose Trust. The current year payments of principal and interest were $2,750,661. The outstanding balance of the notes as of June 30, 2023 is $7,764,122.

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

Year Ending Principal Interest Total
2024 $ 2,321,278 $ 429,382 $ 2,750,660
2025 2,461,926 288,734 2,750,660
2026 2,980,918 139,563 3,120,481
Totals $ 7,764,122 $ 857,679 $ 8,621,801

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

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

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

No interest was paid for the current year. Property taxes received after negotiated, statutory, and residual distributions totaled $10,480,000 for the year. At year-end, pledged future revenues totaled $10,480,000 of which $7,962,900 was the amount of the remaining principal and $2,517,100 interest on the Bonds. 91 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
18 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency F. Successor Agency Long-Term Debt
In event of default, outstanding amounts become immediately due to the Trustee who act on behalf of the bond owners. An acceleration clause exists that allows the owners of the bonds to accelerate payment of the entire principal amount outstanding in the event of default. If acceleration occurs, then all pledged tax revenues and all sums of funds are to be held by Trustee under the indenture and will be applied by the Trustee.

Year Ending Principal Interest Total
2024 $ 953,063 $ 21,937 $ 975,000
2025 897,640 72,360 970,000
2026 853,889 121,111 975,000
2027 803,100 166,900 970,000
2028 758,970 211,030 970,000
2029-2033 3,696,238 1,923,762 5,620,000
Totals $ 7,962,900 $ 2,517,100 $ 10,480,000
2016 Tax Allocation Bonds Payable ($31,490,000) – On April 26, 2016, the Successor Agency issued $31,490,000 of 2016 Series A Tax Allocation Refunding Bonds (2016 Series A Bonds). Interest on the 2016 Series A Bonds is payable semi- annually on March 1 and September 1 at rates ranging from 2.00% to 5.00% per annum. Principal installments are payable September 1 of each year to 2034.

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

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

The Successor Agency has pledged incremental property tax generated in the Successor Agency’s project areas to pay principal and interest on the 2016 Series A Bonds. The current year payments of principal and interest were $2,959,750. Property taxes received after negotiated, statutory, and residual distributions totaled $33,903,147 for the year. At year-end, pledged future revenues totaled $25,573,000 of which $20,040,000 was the amount of the remaining principal and $5,533,000 interest on the Bonds.

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

Year Ending Principal Interest Total
2024 $ 1,990,000 $ 952,250 $ 2,942,250
2025 2,095,000 850,125 2,945,125
2026 2,200,000 742,750 2,942,750
2027 2,310,000 630,000 2,940,000
2028 1,290,000 540,000 1,830,000
2029-2033 7,065,000 1,661,375 8,726,375
2034-2037 3,090,000 156,500 3,246,500
Totals $ 20,040,000 $ 5,533,000 $ 25,573,000
92 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
18 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency F. Successor Agency Long-Term Debt
2016 Tax Allocation Bonds Payable ($41,645,000) – On June 23, 2016, the Successor Agency issued $41,645,000 of 2016 Series B Tax Allocation Refunding Bonds (2016 Series B Bonds). Interest on the 2016 Series B Bonds is payable semi- annually on March 1st and September 1st at rates ranging from 3.00 percent to 5.00 percent per annum. Principal installments are payable September 1st of each year to 2034. The 2016 Series B Bonds maturing on or after September 1, 2027, may be redeemed on or after September 1, 2026, at par together with accrued interest, without premium.

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

The Successor Agency has pledged incremental property tax generated in the Successor Agency’s project areas to pay principal and interest on the 2016 Series B Bonds. The current year payments of principal and interest were $3,543,775. Property taxes
received after negotiated, statutory, and residual distributions totaled $36,152,870 for the year. At year-end, pledged future revenues totaled
$39,797,575 of which $30,935,000 was the amount of the remaining principal and $8,862,575 interest on the Bonds.

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

Year Ending Principal Interest Total
2024 $ 2,095,000 $ 1,436,275 $ 3,531,275
2025 2,205,000 1,328,775 3,533,775
2026 2,310,000 1,215,900 3,525,900
2027 2,625,000 1,092,525 3,717,525
2028 3,985,000 927,275 4,912,275
2029-2033 12,435,000 2,640,125 15,075,125
2034-2037 5,280,000 221,700 5,501,700
Totals $ 30,935,000 $ 8,862,575 $ 39,797,575

3. Change in Long Term Liabilities
The following debt activity for the year ended June 30, 2023 are not debts or obligations of the City. They were transferred to the Successor Agency of the former Community Redevelopment Agency which are now accounted for in the Private Purpose Trust Fund:

Balances at July
01, 2022 Additions Retirements
Balance at June
30, 2023
Due Within One
Year
Bonds Payable:
2002 Tax Allocation Bonds $ 8,482,789 $ 450,111 $ 970,000 $ 7,962,900 $ 953,063 2016 Tax Allocation Bonds Series A 21,950,000 - 1,910,000 20,040,000 1,990,000 2016 Tax Allocation Bonds Series B 32,940,000 - 2,005,000 30,935,000 2,095,000 Plus: Deferred Issuance Premiums 5,321,906 - 1,034,386 4,287,520 904,799 Total bonds payable 68,694,695 450,111 5,919,386 63,225,420 5,942,862 Notes from Direct Borrowing and
Direct Placements:

Fairway Business Park 9,951,719 - 2,187,597 7,764,122 2,321,278 $ 78,646,414 $ 450,111 $ 8,106,983 $ 70,989,542 $ 8,264,140 93 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
19 - Commitments and Contingencies
A. Contracts and Purchase Orders
The City has contracted with the County of Los Angeles for various services, principally law enforcement until June 30, 2024.

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

The following was the contract cost for the fiscal year ending June 30, 2023:

Fiscal Year 2022-23 $ 54,091,457
Total Cost $ 54,091,457
The City also has other various outstanding contracts and purchase orders for services, supplies, materials, and capital projects that have not been completed at year-end. These commitments total approximately $44,069,156 at June 30, 2023, with the following breakdown between major funds and non-major funds.

Major Funds:

General Fund $ 12,910
Housing Asset Fund 3,360
Measure AV Fund 6,699,232
ARPA Fund 5,633,555
Total Major Funds 12,349,057
Internal Service Funds
Information Technology 150,000
Non-Major Special Revenue Funds 31,570,099
Total Contract and Purchase Orders
Outstanding for Governmental Funds $ 44,069,156
B. Grants
The City has received State and Federal funds for specific purposes that are subject to review by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grant, it is believed that any disallowed amounts will not be material.
94 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
19 - Commitments and Contingencies
C. Claims and Judgments
There are certain legal actions pending against the City that have arisen in the normal course of operations and are covered under the risk management liability. These actions include filed lawsuits and asserted claims for personal injury, property damage, and wrongful death – auto accident. The City is a defendant on several employment related lawsuits, which are anticipated to be settled in the near future. The liability for the settlement is estimated at $751,000, and has been accrued as a
liability in the financial statements as of June 30, 2023.

D. Obligations of the Successor Agency Private Purpose Trust Fund As more fully described at Note 18, the former Community Redevelopment Agency of the City of Palmdale was dissolved on January 31, 2012. Obligations to be paid out to the Successor Agency Private Purpose Trust Fund are included in the Required Obligation Payment Schedules (ROPS) which are subject to approval by the State Department of Finance. All obligations of the Successor Agency have been approved by the State Department of Finance, however, are still subject to audit by the County Auditor-Controller and the State Controller. Additionally, obligations on a future ROPS may be denied even if it was not questioned from a preceding ROPS. The City is not legally obligated for any of the Successor Agency Private Purpose Trust Fund debt.
20 - Related Party Loan
On June 30, 2021, the City authorized a home loan for the former City Manager totaling $1,200,000 with a 30-year term and bearing a fixed interest rate of 1.04 percent. The loan is secured by the residence and has a provision that any outstanding balance is due within 12 months of termination of employment. In December 2022, the home loan agreement was amended to extend the repayment of the balance of the loan from 12 to 36 months after termination of employment. The loan is to be paid in full in March 2025.
21 - Adoption of New Standard
As of July 1, 2022, the City of Palmdale adopted GASB Statement No. 96, Subscription-Based Information Technilogy Arrangements (SBITAs). As a result, the City restated its governmental activities and Information Technology internal service funds net position as of July 1, 2022 to properly reflect the beginning equity and the change in accounting related to this implementation. The restatement is summarized as follows:

Internal
Service Fund
Governmental
Activities
Information
Technology
Fund
Net position at July 1, 2022, as previously stated $897,138,235 $ 3,471,819 Change in accounting principal GASB 96
Recognition of right to use subscription IT assets 3,227,539 3,227,539 Recognition of subscription IT liabilities (3,045,890) (3,045,890) Net Position at July 1, 2022, as restated $897,319,884 $ 3,653,468 22 - New Accounting Pronouncements
The following pronouncements were issued prior to June 30, 2023 and have effective dates that may impact future financial statement presentation. The effects of the statements are currently under review. 95 City of Palmdale
Notes to the Financial Statements
For the Year Ended June 30, 2023
22 - New Accounting Pronouncements
Governmental Accounting Standard No. 99
GASB Statement No. 99 – In April 2022, the GASB issued Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accounting and reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The requirements of this Statement related to extension of the use of the London Interbank Offered Rate (LIBOR), accounting for Supplemental Nutrition Assistance Program (SNAP) distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement No. 34, as amended, and terminology updates related to Statements No. 53 and No. 63 are effective upon issuance. The requirements of this Statement related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement No. 53 are effective for fiscal years beginning after June 15, 2023, and all reporting periods thereafter.

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

Governmental Accounting Standard No. 101
GASB Statement No. 101 – In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The requirements of this Statement are effective for fiscal years beginning after December 15, 2023, and all reporting periods thereafter. 23 - Subsequent Events
The City is a defendant on several employment related lawsuits, which are anticipated to be settled in the near future. The liability for the settlement is estimated at
$751,000, and has been accrued as a liability in the financial statements as of June 30, 2023. The City has settled one personal injury case for an amount of $7,500,000, which has been paid in November 2023.

Insurance proceeds have been received in Fiscal Year 2024 in the amount of $7,000,000 in relation to this settlement. One employment case has been settled in November 2023 and payment has been made in the amount of $251,000.

On November 30, 2023, the City issued Lease Revenue Bonds Series 2023 A and B for $26,370,000 and $14,560,000, repspectively, through the Palmdale Finance Authority. The purpose of the bonds is to finance and refinance the costs of the acquisition of real property, capital improvements, and economic development. 96 This page intentionally left blank
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Palmdale, California
Year Ended June 30, 202
Required Supplementary Information
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City of Palmdale
Schedule of Changes in Net Pension Liability and Related Ratios-Public Employees Retirement System - Miscellaneous Plan Year Ended June 30, 2023
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021 2022 2023
Total pension liability
Service costs $ 2,590,160 $ 2,387,436 $ 2,233,050 $ 2,601,354 $ 2,649,090 $ 2,767,665 $ 2,918,406 $ 2,973,338 $ 3,338,892 Interest on the total pension liability 10,116,430 10,398,124 10,825,834 11,018,183 11,570,800 12,220,037 12,822,978 13,327,612 13,768,037 Differences between expected and actual experience - (2,606,465) - 9,269,931 (1,358,574) - 1,368,882 - (382,880) Changes in assumptions - (3,032,525) (948,090) (3,510,853) 2,354,023 2,310,424 1,368,882 (46,529) 6,512,225 Benefit payments, including refunds of member contributions (5,808,324) (6,049,238) (6,289,370) (6,542,229) (7,277,711) (7,740,973) (8,257,460) (9,071,539) (9,881,408) Net change in total pension liability 6,898,266 1,097,332 5,821,424 12,836,386 7,937,628 9,557,153 10,221,688 7,182,882 13,354,866 Total pension liability - beginning 136,494,809 143,393,075 144,490,407 150,311,831 163,148,217 171,085,845 180,642,998 189,495,804 196,678,686 Total pension liability - ending (a) $ 143,393,075 $ 144,490,407 $ 150,311,831 $ 163,148,217 $ 171,085,845 $ 180,642,998 $ 190,864,686 $ 196,678,686 $ 210,033,552 Plan fiduciary net position
Net plan to plan resource movement $ - $ - $ - $ - $ (297) $ - $ - $ - $ - Contributions - employer 3,673,903 3,871,255 4,262,274 5,157,320 3,514,327 4,117,304 4,771,554 5,285,825 5,938,095 Contributions - employee 1,106,027 1,030,304 1,016,500 1,165,598 1,138,029 1,195,002 1,335,708 1,324,417 1,449,303 Net investment income 16,152,589 2,406,554 545,870 12,177,480 10,157,757 8,331,569 6,631,133 31,158,920 (12,513,528) Benefit payments, including refunds of member contributions (5,808,324) (6,049,238) (6,289,370) (6,542,229) (7,277,711) (7,740,973) (8,257,460) (9,071,539) (9,881,408) Administrative expense - (127,281) (66,805) (161,055) (188,366) (91,249) (188,455) (137,825) (103,739) Other - - - - (357,711) 297 - - -
Net change in plan fiduciary net position 15,124,195 1,131,594 (531,531) 11,797,114 6,986,028 5,811,950 4,292,480 28,559,798 (15,111,277) Plan fiduciary net position - beginning 93,359,880 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 137,971,710 166,531,508 Plan fiduciary net position - ending (b) 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 137,971,710 166,531,508 151,420,231 Net pension liability - ending (a) - (b) $ 34,909,000 $ 34,874,738 $ 41,227,693 $ 42,266,965 $ 43,218,565 $ 46,963,768 $ 52,892,976 $ 30,147,178 $ 58,613,321 Plan fiduciary net position as a percentage of the total net pension liability %75.66 %75.86 %72.57 %74.09 %74.74 %74.00 %72.29 %84.67 %72.09 Covered payroll $ 13,588,668 $ 13,287,152 $ 12,550,868 $ 13,529,154 $ 14,797,277 $ 15,030,592 $ 16,449,558 $ 17,567,263 $ 19,230,822 Net pension liability as a percentage of covered payroll %256.90 %262.47 %328.48 %312.41 %292.07 %312.45 %321.55 %171.61 %304.79 Measurement date June 30 , 2014 June 30 , 2015 June 30 , 2016 June 30 , 2017 June 30 , 2018 June 30 , 2019 June 30 , 2020 June 30 , 2021 June 30 , 2022 *Fiscal year 2015 is the first year of implementation.
97 City of Palmdale
Schedule of Contributions - Public Employees Retirement System - Miscellaneous Plan Year Ended June 30, 2023
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021 2022 2023
Actuarially determined contribution $ 3,871,255 $ 4,262,274 $ 5,157,320 $ 3,509,493 $ 4,112,469 $ 4,766,182 $ 5,287,313 $ 5,935,743 $ 6,468,879 Contributions in relation to the actuarially determined contribution 3,871,255 4,262,274 5,157,320 3,509,493 4,112,469 4,766,182 5,287,313 5,935,743 6,468,879 Contribution deficiency $ - $ - $ - $ - $ - $ - $ - $ - $ - Covered payroll 13,287,152 12,550,868 13,529,154 / 14,797,277 15,030,592 16,449,558 17,567,263 19,230,822 21,124,060 Contributions as a percentage of covered payroll %29.14 %33.96 %38.12 %23.72 %27.36 %28.97 %30.10 %30.87 %30.62 Valuation date:
2014 2015 2016 2017 2018 2019 2020 2021 2022
Methods and assumptions used to determine contribution
rates:

Actuarial cost method
Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age 1 Entry age Amortization method Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Remaining amortization period
15 years 20 years 25 years 30 years 30 years 30 years 30 years 30 years 30 years Asset valuation method
5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed 5-year smoothed Inflation
%2.00 %2.75 %2.75 %2.75 %2.75 %2.75 %2.75 %2.75 %2.50
Salary increase

4.5% average,
including
inflation of 3%

3.30% to 14.20
including
inflation of 3%
Varies on entry
age and servce,
including
inflation of 3%
Varies on entry
age and servce,
including
inflation of 3%
Varies on entry
age and servce,
including
inflation of 3%
Varies on entry
age and servce,
including
inflation of 3%
Varies on entry
age and servce,
including
inflation of 3%
Varies on entry
age and servce,
including
inflation of 3%
Varies on entry
age and servce,
including
inflation of

2.75%
Investment rate of return 7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.5% net of
pension plan
investment
expense,
including
inflation

7.375% net of
pension plan
investment
expense,
including
inflation

7.375% net of
pension plan
investment
expense,
including
inflation

7.0% net of
pension plan
investment
expense,
including
inflation
Retirement age:

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

Mortality:

The probabilities of mortality are based on the 2014 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and post-retirement mortality rates include 20 years of projected mortality improvements using Scale BB published by the Society of Actuaries. *Fiscal year 2015 was the first year of implementation. 98 City of Palmdale
Schedule of Changes in Net OPEB Liability and Related Ratios Other Postemployment Benefits (OPEB)
Year Ended June 30, 2023
Last Ten Years*
2017 2018 2019 2020 2021 2022 2023
Total OPEB liability
Service costs $ 9,380 $ 9,801 $ 10,241 $ 19,286 $ 26,370 $ 18,642 $ 15,469 Interest 42,190 41,817 41,771 49,286 31,829 27,510 34,266 Differences between expected and actual experience 162,410 117,475 272,638 - 439,617 (128,567) 53,031 Changes in assumptions - - (45,786) 103,650 (7,331) (106,880) (34,685) Benefit payments, including refunds of member contributions (244,316) (195,980) (144,496) (139,429) (346,268) (8,617) 20,852 Net change in total OPEB liability (30,336) (26,887) 134,368 32,793 144,217 (197,912) 88,933 Total OPEB liability - beginning 761,858 731,522 704,635 839,003 871,796 1,016,013 818,101 Total OPEB liability - ending (a) $ 731,522 $ 704,635 $ 839,003 $ 871,796 $ 1,016,013 $ 818,101 $ 907,034 Plan fiduciary net position
Contributions - employer $ - $ - $ - $ - $ - $ - $ (78,141) Contributions - member - - - - - - -
Net investment income 165,897 122,424 68,284 64,325 263,944 (181,366) 87,761 Differences between projected and actual earnings on plan investments - - - - - - - Administrative expense (45,852) (42,234) (51,637) (34,922) (34,421) (37,432) (18,210) Benefit payments, including refunds of employee contributions (244,316) (195,980) (144,496) (139,429) (346,268) (8,617) 20,852 Net change in plan fiduciary net position $ (124,271) $ (115,790) $ (127,849) $ (110,026) $ (116,745) $ (227,415) $ 12,262 Plan fiduciary net position - beginning 1,517,671 1,393,400 1,277,610 1,149,761 1,039,735 922,990 695,575 Plan fiduciary net position - ending $ 1,393,400 $ 1,277,610 $ 1,149,761 $ 1,039,735 $ 922,990 $ 695,575 $ 707,837 Net OPEB liability ending $ (661,878) $ (572,975) $ (310,758) $ (167,939) $ 93,023 $ 122,526 $ 199,197 Plan fiduciary net position as a percentage of the total net pension liability %190.48 %181.32 %137.04 %119.26 %90.84 %85.02 %78.04 Covered-employee payroll1 840,010 874,002 914,074 941,496 897,776 766,192 497,546 City's net OPEB asset as a percentage of covered-employee payroll %(78.79) %(65.56) %(34.00) %(17.84) %10.36 %15.99 %40.04 Measurement date June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 Notes to Schedule
* Fiscal year 2017 was the first year of implementation. 1 Contributions to the OPEB plan are not based on measure of pay, as such, covered employee payroll is used as the measure of payroll 99 City of Palmdale
Schedule of Investment Returns for OPEB
Other Postemployment Benefits (OPEB)
Year Ended June 30, 2023
Last Ten Years*
2017 2018 2019 2020 2021 2022 2023
Annual money-weighted rate of return -
net of investment expense %11.23 %10.31 %5.55 %5.73 %26.04 %(20.25) %5.25 Notes to Schedule
* Fiscal year 2017 was the first year of implementation. 100
Supplementary Information
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City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2023
Special Revenue Funds – Are used to account for specific revenues that are legally restricted to expenditures for a particular purpose. The following special revenue funds have been classified as non-major funds:

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

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

Citywide Maintenance and Services (CFD 2022-1) Fund - This fund accounts for the maintenance and services for lighting of parks, parkways, streets, roads, and open space as well as maintenance of landscaping, storm drains, and appurtenances located within the City.

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

Drainage Funds – This fund accounts for revenues collected under the City’s Drainage Fee, which are used for the development of drainage improvements.

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

Enhanced Infrastructure Financing District (EIFD) – This fund represents a partnership between the City of Palmdale and the County of Los Angeles as taxing entities contributing tax increment to help fund public infratrsucture improvements.

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

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

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

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

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

Housing Authority Fund – This fund accounts for compliance monitoring expenditures and Bond Issuer’s Fees collected for Housing Authority.

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

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

Local Transportation Article 8 Fund – This fund accounts for State funds provided to the City for street-related purposes only. 102
City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2023
Measure R Fund – This fund accounts for State Funds provided to the City for street-related purposes only.

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

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

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

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

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

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

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

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

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

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

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

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

Sewer Upgrade Fund – This fund accounts for revenues collected under the City’s Sewer Upgrade Fee, which are used for sewer improvements.

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

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

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

Traffic Impact Fund – This fund accounts for revenues collected under the City’s Traffic Impact Fee, which are used for traffic 103
City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2023
related projects, such as traffic signals and street improvements.

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

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

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

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

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

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

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

Community Facilities District (CFD) – This fund accounts for the revenues and expenditures of community facilities districts and assessment districts, which are funded entirely from district bond proceeds. 104
City of Palmdale
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Debt Service Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale Civic
Authority
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Assets:

Cash $ 240,409 $ - $ - $ - $ 240,409
Investments 191,494,341 - - - 191,494,341
Receivables:

Accounts and interest receivable 12,181,529 - - 12 12,181,541 Property tax receivable 335,461 - - - 335,461
Due from other funds 229,558 - - - 229,558
Advances due from fiduciary funds - - - 583,859 583,859 Notes and Liens 10,919,489 - - - 10,919,489
Advances due from other funds 3,800,000 - - - 3,800,000 Prepaid items and other assets 14,000 - - - 14,000
Restricted Assets
Investments - - 124 2,845,885 -
Total assets $ 219,214,787 $ - $ 124 $ 3,429,756 $ 222,644,667 Liabilities, Deferred Inflows of Resources and Fund
Balances
Liabilities:

Accounts payable $ 4,811,548 $ - $ - $ 79,146 $ 4,890,694 Due to fiduciary funds - - - 1,565 1,565
Due to other funds 7,422,486 - - 426,327 7,848,813
Advances due to other funds 8,800,000 - - - 8,800,000
Deposits 1,794,071 - - - 1,794,071
2,785,451 - - - 2,785,451
Notes payable 10,471 - - - 10,471
Total liabilities 25,624,027 - - 507,038 26,131,065
Deferred Inflows of Resources:

Unavailable revenue 10,056,545 - - - 10,056,545
Fund Balances:

Restricted 183,938,524 - 124 2,922,718 186,861,366
Unassigned (404,309) - - - (404,309)
Total fund balances 183,534,215 - 124 2,922,718 186,457,057 Total liabilities, deferred inflows of resources and fund balances $ 219,214,787 $ - $ 124 $ 3,429,756 $ 222,644,667 105
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Year Ended June 30, 2023
Debt Service Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale Civic
Authority
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Revenues:

Other taxes $ 5,104,715 $ - $ - $ - $ 5,104,715
Subventions and grants 30,840,753 - - - 30,840,753
Park development fees 1,339,284 - - - 1,339,284
Licenses and Permits 164,876 - - - 164,876
Fines and forfeitures 363,996 - - - 363,996
Special Assessments 21,355,867 - - - 21,355,867
Charges for current services 3,383,734 - - - 3,383,734
Drainage fees 1,397,889 - - - 1,397,889
Traffic impact fees 677,674 - - - 677,674
Facilities impact fees 798,263 - - - 798,263
Interfund interest 64,819 - - - 64,819
Interest 2,746,656 12,033 632 86,003 2,845,324
Net increase (decrease) in fair value of investments (1,508,923) (830) - (34) (1,509,787) Developer contributions 17,690 - - - 17,690
State contributions 1,882,899 - - - 1,882,899
Other agency contributions 22,020 - - - 22,020
County contributions 301,403 - - - 301,403
Other Revenue 1,481,756 - - - 1,481,756
Total revenues 70,435,371 11,203 632 85,969 70,533,175
Expenditures:

Current:

General Government 842,778 - - (1) 842,777
Public safety 554,997 - - - 554,997
Public services 27,903,904 - - - 27,903,904
Community development 3,393,218 - - - 3,393,218
Cultural and recreational 1,852,890 - - - 1,852,890
Health and welfare 473,991 - - - 473,991
Capital Outlay 14,162,277 - - 120,962 14,283,239
Debt service:

Principal 743,556 - 2,623,899 - 3,367,455
Interest 220,742 - 1,135,403 - 1,356,145
Interfund interest 184,419 - - - 184,419
Total expenditures 50,332,772 - 3,759,302 120,961 54,213,035 Excess (deficiency) of revenues over expenditures 20,102,599 11,203 (3,758,670) (34,992) 16,320,140 Other Financing Sources (Uses):

Transfers In 500,000 - 3,758,794 - 4,258,794
Transfers Out (4,722,757) (1,062,648) - - (5,785,405)
Total other financing sources (uses) (4,222,757) (1,062,648) 3,758,794 - (1,526,611) Net Change in Fund Balances 15,879,842 (1,051,445) 124 (34,992) 14,793,529 Fund Balances (Deficit) - Beginning of Year 167,654,373 1,051,445 - 2,957,710 171,663,528 Fund Balances (Deficit) - End of Year $ 183,534,215 $ - $ 124 $ 2,922,718 $ 186,457,057 106
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2023
Air Quality
Improvement
Fund
Community
Development
Block Grant
Citywide
Maintenance and
Services Drainage Funds
Drainage Benefit
Assmnt Dist
Assets:

Cash $ - $ - $ - $ - $ -
Investments 312,647 1,854,959 - 6,499,981 1,373,501
Receivables:

Accounts Receivable - 27,929 - 19,964 4,167
Property tax receivable - - - - 299
Due from other funds - 62 - - -
Notes and Liens - 2,074,100 - - -
Advances due from other funds - - - 3,800,000 -
Prepaid items and other assets - - 14,000 - -
Total assets $ 312,647 $ 3,957,050 $ 14,000 $ 10,319,945 $ 1,377,967 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts payable $ - $ 17,536 $ - $ - $ -
Due to other funds - - 14,000 18,476 -
Advances due to other funds - - - - -
Notes payable - - - - -
Deposits - 1,755,523 - - -
Unearned revenue - - - - -
Total liabilities - 1,773,059 14,000 18,476 -
Deferred Inflows of Resources:

Unavailable revenue - 46,558 - - -
Total deferred inflows of resources - 46,558 - - -
Fund Balances:

Restricted 312,647 2,137,433 - 10,301,469 1,377,967
Unassigned - - - - -
Total fund balances 312,647 2,137,433 - 10,301,469 1,377,967 Total liabilities, deferred inflows of
resources and fund balances $ 312,647 $ 3,957,050 $ 14,000 $ 10,319,945 $ 1,377,967 107
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2023
Enhanced
Infrastructure
Financing
District Federal Funds
Federal Home
Program
Federal Jobs
Programs
Federal Home
ARP Fund
Fire Facilities
Impact Gas Tax
$ - $ - $ - $ - $ - $ - $ -
294,148 130 458,497 - - 8,618,341 8,350,893
961 151,119 2,714,101 16,677 - 26,039 413,857
2,647 - - - - - -
- - - - - - 229,496
- - 7,645,389 - - - -
- - - - - - -
- - - - - - -
$ 297,756 $ 151,249 $ 10,817,987 $ 16,677 $ - $ 8,644,380 $ 8,994,246 $ - $ 297,834 $ 30,277 $ 5,724 $ - $ - $ 190,369
- 229,496 50 28,965 1,355 - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- 527,330 30,327 34,689 1,355 - 190,369
- 10,216 2,889,166 - - - -
- 10,216 2,889,166 - - - -
297,756 - 7,898,494 - (1,355) 8,644,380 8,803,877
- (386,297) - (18,012) - - -
297,756 (386,297) 7,898,494 (18,012) (1,355) 8,644,380 8,803,877 $ 297,756 $ 151,249 $ 10,817,987 $ 16,677 $ - $ 8,644,380 $ 8,994,246 108
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2023
Housing
Authority
Landscape
Maintenance
Local
Transportation
Article 3
Local
Transportation
Article 8
Measure A LA
County Parks
Assets:

Cash $ - $ - $ - $ - $ -
Investments 242,182 14,270,571 53,207 2,163,442 844
Receivables:

Accounts Receivable 15,681 43,117 - 739,913 -
Property tax receivable - 76,276 - - -
Due from other funds - - - - -
Notes and Liens 1,200,000 - - - -
Advances due from other funds - - - - -
Prepaid items and other assets - - - - -
Total assets $ 1,457,863 $ 14,389,964 $ 53,207 $ 2,903,355 $ 844 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts payable $ 422 $ 368,134 $ 55,960 $ 182,521 $ 7,194 Due to other funds - - - - -
Advances due to other funds - - - - -
Notes payable - - - - -
Deposits 1,000 - - - -
Unearned revenue - - - - -
Total liabilities 1,422 368,134 55,960 182,521 7,194
Deferred Inflows of Resources:

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

Restricted 1,456,441 14,021,830 (2,753) 2,720,834 (6,350) Unassigned - - - - -
Total fund balances 1,456,441 14,021,830 (2,753) 2,720,834 (6,350) Total liabilities, deferred inflows of
resources and fund balances $ 1,457,863 $ 14,389,964 $ 53,207 $ 2,903,355 $ 844 109
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2023
Measure R
Measure R Local
Return Measure M
Measure M
Local Return
Misc Grants/
Developer
Contributions
Park
Assessments
Park
Development
$ - $ - $ - $ - $ - $ - $ -
2,778,714 14,247,602 136,342 9,527,839 2,968,323 3,405,784 13,153,904 1,864,730 34,723 181,831 32,154 4,166,812 2,353 39,617
- - - - - 46,538 -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
$ 4,643,444 $ 14,282,325 $ 318,173 $ 9,559,993 $ 7,135,135 $ 3,454,675 $ 13,193,521 $ 92,713 $ 1,775 $ 211,785 $ 9,139 $ 67,147 $ 657,260 $ 848,447 7,118,404 - - - - - -
- - - - - - 5,000,000
10,471 - - - - - -
- - - - - - -
- - - - 85,451 - -
7,221,588 1,775 211,785 9,139 152,598 657,260 5,848,447 1,779,394 - 111,876 - 4,131,565 - -
1,779,394 - 111,876 - 4,131,565 - -
(4,357,538) 14,280,550 (5,488) 9,550,854 2,850,972 2,797,415 7,345,074 - - - - - - -
(4,357,538) 14,280,550 (5,488) 9,550,854 2,850,972 2,797,415 7,345,074 $ 4,643,444 $ 14,282,325 $ 318,173 $ 9,559,993 $ 7,135,135 $ 3,454,675 $ 13,193,521 110
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2023
Proposition A Proposition C
Prop C Local
Return
Public Facilities
Fund Public Safety
Assets:

Cash $ - $ - $ - $ - $ -
Investments 10,100,907 888,357 13,300,381 1,687,046 1,304,606 Receivables:

Accounts Receivable 30,678 1,083,507 37,859 5,123 50,062 Property tax receivable - - - - -
Due from other funds - - - - -
Notes and Liens - - - - -
Advances due from other funds - - - - -
Prepaid items and other assets - - - - -
Total assets $ 10,131,585 $ 1,971,864 $ 13,338,240 $ 1,692,169 $ 1,354,668 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts payable $ 167,562 $ 124,053 $ 521 $ - $ -
Due to other funds - - - - -
Advances due to other funds - - - - -
Notes payable - - - - -
Deposits - - - - -
Unearned revenue - - - - -
Total liabilities 167,562 124,053 521 - -
Deferred Inflows of Resources:

Unavailable revenue - 1,086,508 - - -
Total deferred inflows of resources - 1,086,508 - - -
Fund Balances:

Restricted 9,964,023 761,303 13,337,719 1,692,169 1,354,668 Unassigned - - - - -
Total fund balances 9,964,023 761,303 13,337,719 1,692,169 1,354,668 Total liabilities, deferred inflows of
resources and fund balances $ 10,131,585 $ 1,971,864 $ 13,338,240 $ 1,692,169 $ 1,354,668 111
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2023
Road
Maintenance and
Rehab SAVES
Sewer
Maintenance
Assmnt Dist Sewer Upgrade
States Grants
Fund
Street
Lighting
Assmnt Dist
Traffic
Impact
Communications
PEG
$ - $ - $ 250 $ - $ - $ - $ - $ -
7,508,982 - 33,909,418 480,653 1,574,462 20,392,034 2,178,816 699,454 - - 164,023 1,442 198,427 70,856 3,563 54,245
- - 75,250 - - 134,451 - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
$ 7,508,982 $ - $ 34,148,941 $ 482,095 $ 1,772,889 $20,597,341 $ 2,182,379 $ 753,699 $ 31,117 $ 445 $ 145,648 $ - $ 247,557 $ 269,534 $ 694,274 $ - - 8,067 - - - - - -
- - 3,800,000 - - - - -
- - - - - - - -
- - 36,610 - 938 - - -
- - - - 2,700,000 - - -
31,117 8,512 3,982,258 - 2,948,495 269,534 694,274 -
- - - - 1,262 - - -
- - - - 1,262 - - -
7,477,865 (8,512) 30,166,683 482,095 (1,176,868) 20,327,807 1,488,105 753,699 - - - - - - - -
7,477,865 (8,512) 30,166,683 482,095 (1,176,868) 20,327,807 1,488,105 753,699 $ 7,508,982 $ - $ 34,148,941 $ 482,095 $ 1,772,889 $20,597,341 $ 2,182,379 $ 753,699 112
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2023
Solid Waste
Palmdale
Community
Foundation Water Park Public Art
Total Special
Revenue Funds
Assets:

Cash $ - $ 240,159 $ - $ - $ 240,409
Investments 1,099,037 - 4,159,690 1,498,647 191,494,341 Receivables:

Accounts Receivable - - (14,001) - 12,181,529
Property tax receivable - - - - 335,461
Due from other funds - - - - 229,558
Notes and Liens - - - - 10,919,489
Advances due from other funds - - - - 3,800,000
Prepaid items and other assets - - - - 14,000
Total assets $ 1,099,037 $ 240,159 $ 4,145,689 $ 1,498,647 $ 219,214,787 Liabilities, Deferred Inflows of Resources and Fund
Balances
Liabilities:

Accounts payable $ 21,286 $ - $ 58,297 $ 7,017 $ 4,811,548 Due to other funds - 3,673 - - 7,422,486
Advances due to other funds - - - - 8,800,000
Notes payable - - - - 10,471
Deposits - - - - 1,794,071
Unearned revenue - - - - 2,785,451
Total liabilities 21,286 3,673 58,297 7,017 25,624,027
Deferred Inflows of Resources:

Unavailable revenue - - - - 10,056,545
Total deferred inflows of resources - - - - 10,056,545
Fund Balances:

Restricted 1,077,751 236,486 4,087,392 1,491,630 183,938,524 Unassigned - - - - (404,309)
Total fund balances 1,077,751 236,486 4,087,392 1,491,630 183,534,215 Total liabilities, deferred inflows of resources and fund balances $ 1,099,037 $ 240,159 $ 4,145,689 $ 1,498,647 $ 219,214,787 113
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2023
Air Quality
Improvement
Fund
Community
Development
Block Grant
Citywide
Maintenance and
Services Drainage Funds
Drainage Benefit
Assmnt Dist
Revenues:

Other taxes $ - $ - $ - $ - $ -
Subventions and grants 270,863 3,046,360 - - -
Park development fees - - - - -
Licenses and Permits - - - - -
Fines and forfeitures - - - - -
Special Assessments - - - - 138,504
Charges for current services - - - - -
Drainage fees - - - 1,397,889 -
Traffic impact fees - - - - -
Facilities impact fees - - - - -
Interfund interest - - - 64,819 -
Interest 2,398 23,506 - 95,436 21,754
Net increase (decrease) in fair value of
investments (2,650) (15,430) - (55,439) (11,767)
Developer contributions - - - - -
State contributions - - - - -
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue - 12,000 - - -
Total revenues 270,611 3,066,436 - 1,502,705 148,491
Expenditures:

Current:

General Government - - - - -
Public safety - - - - -
Public services - 21,796 - 998 28,722
Community development - 1,879,709 - - -
Cultural and recreational - - - - -
Health and welfare - 230,719 - - -
Capital Outlay - 1,354,226 - 917 -
Debt service:

Principal - - - - -
Interest - - - - -
Interfund interest - - - 47,604 -
Total expenditures - 3,486,450 - 49,519 28,722
Excess (deficiency) of revenues over expenditures 270,611 (420,014) - 1,453,186 119,769 Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out - - - (87,900) -
Total other financing sources (uses) - - - (87,900) -
Net Change in Fund Balances 270,611 (420,014) - 1,365,286 119,769 Fund Balances (Deficit) - Beginning of Year 42,036 2,557,447 - 8,936,183 1,258,198 Fund Balances (Deficit) - End of Year $ 312,647 $ 2,137,433 $ - $ 10,301,469 $ 1,377,967 114
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2023
Enhanced
Infrastructure
Financing
District Federal Funds
Federal Home
Program
Federal Jobs
Programs
Federal Home
ARP Fund
Fire Facilities
Impact Gas Tax
$ - $ - $ - $ - $ - $ - $ 4,225,712
- 249,598 (125,818) - - - -
- - - - - - -
- - - - - - -
- - - - - - -
296,795 - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - 515,830 -
- - - - - - -
961 - 10,334 - - 139,310 133,423
- - - - - (73,783) (94,731)
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - 128,471
- - - 46,427 - - -
297,756 249,598 (115,484) 46,427 - 581,357 4,392,875
- 2 - - 1 25,794 414,898
- - - - - - -
- 380,033 - 55,453 - - 1,246,326
- - 162,872 - 1,354 - -
- - - - - - -
- - - - - - -
- 136,739 - - - - 1,843,493
- - - - - - -
- - - - - - -
- - - - - - -
- 516,774 162,872 55,453 1,355 25,794 3,504,717
297,756 (267,176) (278,356) (9,026) (1,355) 555,563 888,158 - - - - - - -
- - - - - - (156,250)
- - - - - - (156,250)
297,756 (267,176) (278,356) (9,026) (1,355) 555,563 731,908 - (119,121) 8,176,850 (8,986) - 8,088,817 8,071,969
$ 297,756 $ (386,297) $ 7,898,494 $ (18,012) $ (1,355) $ 8,644,380 $ 8,803,877 115
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2023
Housing
Authority
Landscape
Maintenance
Local
Transportation
Article 3
Local
Transportation
Article 8
Measure A LA
County Parks
Revenues:

Other taxes $ - $ - $ - $ - $ -
Subventions and grants - - - 8,658,196 -
Park development fees - - - - -
Licenses and Permits - - - - -
Fines and forfeitures - 400 - - -
Special Assessments - 6,896,895 - - -
Charges for current services 65,635 - - - -
Drainage fees - - - - -
Traffic impact fees - - - - -
Facilities impact fees - - - - -
Interfund interest - - - - -
Interest 3,646 226,373 732 31,537 -
Net increase (decrease) in fair value of
investments (2,078) (123,384) (455) - -
Developer contributions - 9,095 - - -
State contributions - - - - -
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue 1,200,000 2,451 - - -
Total revenues 1,267,203 7,011,830 277 8,689,733 -
Expenditures:

Current:

General Government - 45,050 - 146,309 -
Public safety - - - - -
Public services - 6,092,643 - 6,505,653 (844)
Community development 32,807 - - - -
Cultural and recreational - - - - -
Health and welfare - - - - -
Capital Outlay - 3,980 58,986 2,446,657 7,194
Debt service:

Principal - - - - -
Interest - - - - -
Interfund interest - - - - -
Total expenditures 32,807 6,141,673 58,986 9,098,619 6,350 Excess (deficiency) of revenues over expenditures 1,234,396 870,157 (58,709) (408,886) (6,350) Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out - (30,000) - (115,820) -
Total other financing sources (uses) - (30,000) - (115,820) - Net Change in Fund Balances 1,234,396 840,157 (58,709) (524,706) (6,350) Fund Balances (Deficit) - Beginning of Year 222,045 13,181,673 55,956 3,245,540 - Fund Balances (Deficit) - End of Year $ 1,456,441 $ 14,021,830 $ (2,753) $ 2,720,834 $ (6,350) 116
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2023
Measure R
Measure R Local
Return Measure M
Measure M
Local Return
Misc Grants/
Developer
Contributions
Park
Assessments
Park
Development
$ - $ - $ - $ - $ - $ - $ -
1,106,719 2,551,356 124,828 2,886,129 - - -
- - - - - - 1,339,284
- - - - - - -
- - - - - - -
- - - - - 2,930,228 -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- 153,101 446 153,939 40,203 27,830 215,936
- (84,755) - (83,013) (25,427) (10,114) (112,680)
- - - - - - -
- - - - - - -
- - - - 22,020 - -
- - - - 172,932 - -
- - - - 43,934 - -
1,106,719 2,619,702 125,274 2,957,055 253,662 2,947,944 1,442,540 - - - - 246 51,919 -
- - - - 128,572 - -
30,176 31,569 5,408 1,348,395 628 - 105,788
- - - - - - -
- - - - 36,581 30,000 -
- - - - - - -
1,078,518 325,587 181,962 - 189,805 759,362 1,272,590
- - - - - - -
- - - - - - -
- - - - - - 119,600
1,108,694 357,156 187,370 1,348,395 355,832 841,281 1,497,978 (1,975) 2,262,546 (62,096) 1,608,660 (102,170) 2,106,663 (55,438) - - - - - - -
- - - - - (2,435,889) -
- - - - - (2,435,889) -
(1,975) 2,262,546 (62,096) 1,608,660 (102,170) (329,226) (55,438) (4,355,563) 12,018,004 56,608 7,942,194 2,953,142 3,126,641 7,400,512 $ (4,357,538) $ 14,280,550 $ (5,488) $ 9,550,854 $ 2,850,972 $ 2,797,415 $ 7,345,074 117
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2023
Proposition A Proposition C
Prop C Local
Return
Public Facilities
Fund Public Safety
Revenues:

Other taxes $ - $ - $ - $ - $ -
Subventions and grants 4,102,357 420,922 3,402,788 - 414,607 Park development fees - - - - -
Licenses and Permits - - - - -
Fines and forfeitures - - - - 363,596
Special Assessments - - - - -
Charges for current services - - - - -
Drainage fees - - - - -
Traffic impact fees - - - - -
Facilities impact fees - - - 282,433 -
Interfund interest - - - - -
Interest 162,531 15,636 200,020 26,673 16,932
Net increase (decrease) in fair value of
investments (86,420) (7,506) (99,176) (14,440) (11,408) Developer contributions - - - - -
State contributions - - - - -
Other agency contributions - - - - -
County contributions - - - - -
Other Revenue - - - - -
Total revenues 4,178,468 429,052 3,503,632 294,666 783,727 Expenditures:

Current:

General Government - - - - 1
Public safety 424,936 - - - -
Public services 2,396,124 23,742 2,967,766 933 -
Community development - - - - -
Cultural and recreational - - - - -
Health and welfare - - - - -
Capital Outlay 160,093 1,094,562 - 75,742 -
Debt service:

Principal - - - - -
Interest - - - - -
Interfund interest - - - - -
Total expenditures 2,981,153 1,118,304 2,967,766 76,675 1 Excess (deficiency) of revenues over expenditures 1,197,315 (689,252) 535,866 217,991 783,726 Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out (15,000) - (581,181) - (363,595)
Total other financing sources (uses) (15,000) - (581,181) - (363,595) Net Change in Fund Balances 1,182,315 (689,252) (45,315) 217,991 420,131 Fund Balances (Deficit) - Beginning of Year 8,781,708 1,450,555 13,383,034 1,474,178 934,537 Fund Balances (Deficit) - End of Year $ 9,964,023 $ 761,303 $ 13,337,719 $ 1,692,169 $ 1,354,668 118
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2023
Road
Maintenance and
Rehab SAVES
Sewer
Maintenance
Assmnt Dist Sewer Upgrade
States Grants
Fund
Street
Lighting
Assmnt Dist
Traffic
Impact
Communications
PEG
$ - $ - $ - $ - $ - $ 643,523 $ - $ 235,480
3,706,098 25,750 - - - - - -
- - - - - - - -
- - 164,876 - - - - -
- - - - - - - -
- - 5,980,072 - - 5,113,373 - -
- - - - - - - -
- - - - - - - -
- - - - - - 677,674 -
- - - - - - - -
- - - - - - - -
79,753 - 536,092 7,951 18,697 316,400 34,816 -
(64,132) - (290,827) (4,114) (17,104) (174,919) (11,775) - - - - - - 8,595 - -
- 34,534 - - 1,495,239 - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
3,721,719 60,284 6,390,213 3,837 1,496,832 5,906,972 700,715 235,480 - - - - - - - 158,558
- - - - 1,489 - - -
9,866 - 2,702,652 3,162 20,381 3,294,772 46,378 -
- - - - 1,316,476 - - -
- - - - - - - -
- 80,474 - - - - - -
316,202 - 295,230 - 1,445,907 3,825 1,043,933 -
- - - - - 743,556 - -
- - - - - 220,742 - -
- - 17,215 - - - - -
326,068 80,474 3,015,097 3,162 2,784,253 4,262,895 1,090,311 158,558 3,395,651 (20,190) 3,375,116 675 (1,287,421) 1,644,077 (389,596) 76,922 - - - - - - - -
- - (30,000) - - (40,000) (867,122) -
- - (30,000) - - (40,000) (867,122) -
3,395,651 (20,190) 3,345,116 675 (1,287,421) 1,604,077 (1,256,718) 76,922 4,082,214 11,678 26,821,567 481,420 110,553 18,723,730 2,744,823 676,777 $ 7,477,865 $ (8,512) $ 30,166,683 $ 482,095 $ (1,176,868) $20,327,807 $ 1,488,105 $ 753,699 119
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2023
Solid Waste
Palmdale
Community
Foundation Water Park Public Art
Total Special
Revenue Funds
Revenues:

Other taxes $ - $ - $ - $ - $ 5,104,715
Subventions and grants - - - - 30,840,753
Park development fees - - - - 1,339,284
Licenses and Permits - - - - 164,876
Fines and forfeitures - - - - 363,996
Special Assessments - - - - 21,355,867
Charges for current services 966,593 - 1,690,258 661,248 3,383,734 Drainage fees - - - - 1,397,889
Traffic impact fees - - - - 677,674
Facilities impact fees - - - - 798,263
Interfund interest - - - - 64,819
Interest - - 50,290 - 2,746,656
Net increase (decrease) in fair value of investments - - (31,396) - (1,508,923) Developer contributions - - - - 17,690
State contributions 353,126 - - - 1,882,899
Other agency contributions - - - - 22,020
County contributions - - - - 301,403
Other Revenue - 143,143 33,801 - 1,481,756
Total revenues 1,319,719 143,143 1,742,953 661,248 70,435,371 Expenditures:

Current:

General Government - - - - 842,778
Public safety - - - - 554,997
Public services 585,384 - - - 27,903,904
Community development - - - - 3,393,218
Cultural and recreational - - 1,744,596 41,713 1,852,890 Health and welfare - 162,798 - - 473,991
Capital Outlay - - - 66,767 14,162,277
Debt service:

Principal - - - - 743,556
Interest - - - - 220,742
Interfund interest - - - - 184,419
Total expenditures 585,384 162,798 1,744,596 108,480 50,332,772 Excess (deficiency) of revenues over expenditures 734,335 (19,655) (1,643) 552,768 20,102,599 Other Financing Sources (Uses):

Transfers In - - 500,000 - 500,000
Transfers Out - - - - (4,722,757)
Total other financing sources (uses) - - 500,000 - (4,222,757) Net Change in Fund Balances 734,335 (19,655) 498,357 552,768 15,879,842 Fund Balances (Deficit) - Beginning of Year 343,416 256,141 3,589,035 938,862 167,654,373 Fund Balances (Deficit) - End of Year $ 1,077,751 $ 236,486 $ 4,087,392 $ 1,491,630 $ 183,534,215 120
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Air Quality Improvement Fund - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 50,000 $ 223,500 $ 270,863 $ 47,363 Interest - - 2,398 2,398
Net increase (decrease) in fair value of investments - - (2,650) (2,650) Total revenues 50,000 223,500 270,611 47,111
Expenditures:

Excess (deficiency) of revenues over (under)
expenditures 50,000 223,500 270,611 47,111
Net Change in Fund Balance 50,000 223,500 270,611 47,111 Fund Balance (Deficit) - Beginning of Year 42,036 42,036 42,036 - Fund Balance (Deficit) - End of Year $ 92,036 $ 265,536 $ 312,647 $ 47,111 121
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Community Development Block Grant - Special Revenue Funds Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 1,723,100 $ 5,355,410 $ 3,046,360 $ (2,309,050) Interest - - 23,506 23,506
Net increase (decrease) in fair value of investments - - (15,430) (15,430) Other Revenue - 16,000 12,000 (4,000)
Total revenues 1,723,100 5,371,410 3,066,436 (2,304,974) Expenditures:

Current:

Public services - - 21,795 (21,795)
Community development 1,406,490 2,803,440 1,879,710 923,730 Health and welfare 226,560 409,320 230,719 178,601
Capital Outlay 362,000 2,483,140 1,354,226 1,128,914
Debt service:

Total expenditures 1,995,050 5,695,900 3,486,450 2,209,450 Excess (deficiency) of revenues over (under)
expenditures (271,950) (324,490) (420,014) (95,524)
Net Change in Fund Balance (271,950) (324,490) (420,014) (95,524) Fund Balance (Deficit) - Beginning of Year 2,557,447 2,557,447 2,557,447 - Fund Balance (Deficit) - End of Year $ 2,285,497 $ 2,232,957 $ 2,137,433 $ (95,524) 122
City of Palmdale
Schedule of Revenues and Expenditures and Changes In Fund Balance - Budget and Actual Citywide Maintenance and Services
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Expenditures
Current
Fund Balance (Deficit) - Beginning of Year $ - $ - $ - $ - Fund Balance (Deficit) - End of Year $ - $ - $ - $ -
123
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Drainage Funds - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Drainage fees $ 1,012,000 $ 687,000 $ 1,397,889 $ 710,889 Interfund interest 150,000 - 64,819 64,819
Interest 23,000 24,000 95,436 71,436
Net increase (decrease) in fair value of investments - - (55,439) (55,439) Total revenues 1,185,000 711,000 1,502,705 791,705
Expenditures:

Current:

Public services - - 998 (998)
Capital Outlay 360,000 2,473,550 917 2,472,633
Debt service:

Interfund interest 75,000 - 47,604 (47,604)
Total expenditures 435,000 2,473,550 49,519 2,424,031
Excess (deficiency) of revenues over (under)
expenditures 750,000 (1,762,550) 1,453,186 3,215,736
Other Financing Sources (Uses):

Transfers In 467,300 467,300 - (467,300)
Transfers Out (87,900) (87,900) (87,900) -
Total other financing sources (uses) 379,400 379,400 (87,900) (467,300) Net Change in Fund Balance 1,129,400 (1,383,150) 1,365,286 2,748,436 Fund Balance (Deficit) - Beginning of Year 8,936,183 8,936,183 8,936,183 - Fund Balance (Deficit) - End of Year $ 10,065,583 $ 7,553,033 $ 10,301,469 $ 2,748,436 124
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Drainage Benefit Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Special Assessments $ 66,900 $ 66,900 $ 138,504 $ 71,604 Interest 2,000 2,000 21,754 19,754
Net increase (decrease) in fair value of investments - - (11,767) (11,767) Total revenues 68,900 68,900 148,491 79,591
Expenditures:

Current:

Public services 37,630 36,590 28,723 7,867
Total expenditures 37,630 36,590 28,723 7,867
Excess (deficiency) of revenues over (under)
expenditures 31,270 32,310 119,768 87,458
Net Change in Fund Balance 31,270 32,310 119,768 87,458 Fund Balance (Deficit) - Beginning of Year 1,258,199 1,258,199 1,258,199 - Fund Balance (Deficit) - End of Year $ 1,289,469 $ 1,290,509 $ 1,377,967 $ 87,458 125
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Enhanced Infrastructure Financing District
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Special Assessments $ - $ 300,000 $ 296,795 $ (3,205)
Interest - - 961 961
Total revenues - 300,000 297,756 (2,244)
Expenditures
Current
Excess (deficiency) of revenues over expenditures - 300,000 297,756 (2,244) Net Change in Fund Balance - 300,000 297,756 (2,244)
Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ - $ 300,000 $ 297,756 $ (2,244) 126
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Funds - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ - $ 4,508,990 $ 249,598 $ (4,259,392) Total revenues - 4,508,990 249,598 (4,259,392)
Expenditures:

Current:

General Government - - 2 (2)
Public services - 4,200,000 380,033 3,819,967
Capital Outlay - 2,365,600 136,739 2,228,861
Total expenditures - 6,565,600 516,774 6,048,826
Excess (deficiency) of revenues over (under)
expenditures - (2,056,610) (267,176) 1,789,434
Other Financing Sources (Uses):

Total other financing sources (uses) - - - -
Net Change in Fund Balance - (2,056,610) (267,176) 1,789,434 Fund Balance (Deficit) - Beginning of Year (119,121) (119,121) (119,121) - Fund Balance (Deficit) - End of Year $ (119,121) $ (2,175,731) $ (386,297) $ 1,789,434 127
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Home Program - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 400,000 $ 1,922,050 $ (125,818) $ (2,047,868) Interest - - 10,334 10,334
Total revenues 400,000 1,922,050 (115,484) (2,037,534)
Expenditures:

Current:

Community development 236,100 1,500,650 162,872 1,337,778 Total expenditures 236,100 1,500,650 162,872 1,337,778
Excess (deficiency) of revenues over (under)
expenditures 163,900 421,400 (278,356) (699,756)
Net Change in Fund Balance 163,900 421,400 (278,356) (699,756) Fund Balance (Deficit) - Beginning of Year 8,176,850 8,176,850 8,176,850 - Fund Balance (Deficit) - End of Year $ 8,340,750 $ 8,598,250 $ 7,898,494 $ (699,756) 128
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Federal Jobs Programs - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Revenue $ 50,000 $ 64,800 $ 46,427 $ (18,373)
Total revenues 50,000 64,800 46,427 (18,373)
Expenditures:

Current:

Public services 79,300 81,500 55,453 26,047
Total expenditures 79,300 81,500 55,453 26,047
Excess (deficiency) of revenues over (under)
expenditures (29,300) (16,700) (9,026) 7,674
Other Financing Sources (Uses):

Transfers In 29,700 29,700 - (29,700)
Total other financing sources (uses) 29,700 29,700 - (29,700) Net Change in Fund Balance 400 13,000 (9,026) (22,026)
Fund Balance (Deficit) - Beginning of Year (8,986) (8,986) (8,986) - Fund Balance (Deficit) - End of Year $ (8,586) $ 4,014 $ (18,012) $ (22,026) 129
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Federal Home ARP Fund - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Subventions and grants $ 2,088,970 $ 1,921,760 $ - $ (1,921,760) Total revenues 2,088,970 1,921,760 - (1,921,760)
Expenditures
Current:

General Government - - 1 (1)
Community development 2,088,970 1,912,000 1,354 1,910,646 Total expenditures 2,088,970 1,912,000 1,355 1,910,645
Excess (deficiency) of revenues over expenditures - 9,760 (1,355) 1,899,530 Net Change in Fund Balance - 9,760 (1,355) 1,899,530
Fund Balance (Deficit) - Beginning of Year - 85,000 - (85,000) Fund balances, beginning of year as restated - 85,000 - (85,000) Fund Balance (Deficit) - End of Year $ - $ 94,760 $ (1,355) $ 1,814,530 130
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Fire Facilities Impact - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Facilities impact fees $ 650,000 $ 650,000 $ 515,830 $ (134,170) Interest 10,000 10,000 139,310 129,310
Net increase (decrease) in fair value of investments - - (73,783) (73,783) Total revenues 660,000 660,000 581,357 (78,643)
Expenditures:

Current:

General Government 33,000 33,000 25,794 7,206
Total expenditures 33,000 33,000 25,794 7,206
Excess (deficiency) of revenues over (under)
expenditures 627,000 627,000 555,563 (71,437)
Net Change in Fund Balance 627,000 627,000 555,563 (71,437) Fund Balance (Deficit) - Beginning of Year 8,088,817 8,088,817 8,088,817 - Fund Balance (Deficit) - End of Year $ 8,715,817 $ 8,715,817 $ 8,644,380 $ (71,437) 131
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Gas Tax - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other taxes $ 4,495,040 $ 4,495,040 $ 4,225,712 $ (269,328) Interest 100,000 100,000 133,423 33,423
Net increase (decrease) in fair value of investments - - (94,731) (94,731) State contributions 2,000 1,000 - (1,000)
County contributions 180,000 180,000 128,471 (51,529)
Total revenues 4,777,040 4,776,040 4,392,875 (383,165)
Expenditures:

Current:

General Government 180,550 268,920 414,898 (145,978)
Public services 5,838,200 6,606,940 1,246,326 5,360,614 Capital Outlay 500,000 4,592,590 1,843,493 2,749,097
Total expenditures 6,518,750 11,468,450 3,504,717 7,963,733 Excess (deficiency) of revenues over (under)
expenditures (1,741,710) (6,692,410) 888,158 7,580,568
Other Financing Sources (Uses):

Transfers Out (438,700) (438,700) (156,250) 282,450
Total other financing sources (uses) (438,700) (438,700) (156,250) 282,450 Net Change in Fund Balance (2,180,410) (7,131,110) 731,908 7,863,018 Fund Balance (Deficit) - Beginning of Year 8,071,969 8,071,969 8,071,969 - Fund Balance (Deficit) - End of Year $ 5,891,559 $ 940,859 $ 8,803,877 $ 7,863,018 132
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Authority - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 91,700 $ 91,700 $ 65,635 $ (26,065) Interest 500 500 3,646 3,146
Net increase (decrease) in fair value of investments - - (2,078) (2,078) Other Revenue - - 1,200,000 1,200,000
Total revenues 92,200 92,200 1,267,203 1,175,003
Expenditures:

Current:

Community development 81,400 75,310 32,807 42,503
Total expenditures 81,400 75,310 32,807 42,503
Excess (deficiency) of revenues over (under)
expenditures 10,800 16,890 1,234,396 1,217,506
Net Change in Fund Balance 10,800 16,890 1,234,396 1,217,506 Fund Balance (Deficit) - Beginning of Year 222,045 222,045 222,045 - Fund Balance (Deficit) - End of Year $ 232,845 $ 238,935 $ 1,456,441 $ 1,217,506 133
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Landscape Maintenance - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Fines and forfeitures $ 4,000 $ 4,000 $ 400 $ (3,600)
Special Assessments 6,361,900 6,815,300 6,896,895 81,595 Interest 86,700 86,700 226,373 139,673
Net increase (decrease) in fair value of investments - - (123,384) (123,384) Developer contributions 50,000 30,000 9,095 (20,905)
Other Revenue 3,000 3,000 2,451 (549)
Total revenues 6,505,600 6,939,000 7,011,830 72,830
Expenditures:

Current:

General Government 91,880 47,410 45,050 2,360
Public services 7,174,440 7,318,630 6,092,643 1,225,987 Capital Outlay - 431,720 3,980 427,740
Total expenditures 7,266,320 7,797,760 6,141,673 1,656,087 Excess (deficiency) of revenues over (under)
expenditures (760,720) (858,760) 870,157 1,728,917
Other Financing Sources (Uses):

Transfers Out (30,000) (30,000) (30,000) -
Total other financing sources (uses) (30,000) (30,000) (30,000) - Net Change in Fund Balance (790,720) (888,760) 840,157 1,728,917 Fund Balance (Deficit) - Beginning of Year 13,181,673 13,181,673 13,181,673 - Fund Balance (Deficit) - End of Year $ 12,390,953 $ 12,292,913 $ 14,021,830 $ 1,728,917 134
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Local Transportation Article 3 - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 146,930 $ 9,030 $ - $ (9,030)
Interest - - 732 732
Net increase (decrease) in fair value of investments - - (455) (455) Total revenues 146,930 9,030 277 (8,753)
Expenditures:

Current:

Capital Outlay - 64,990 58,986 6,004
Total expenditures - 64,990 58,986 6,004
Excess (deficiency) of revenues over (under)
expenditures 146,930 (55,960) (58,709) (2,749)
Net Change in Fund Balance 146,930 (55,960) (58,709) (2,749) Fund Balance (Deficit) - Beginning of Year 55,956 55,956 55,956 - Fund Balance (Deficit) - End of Year $ 202,886 $ (4) $ (2,753) $ (2,749) 135
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Local Transportation Article 8 - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 8,658,200 $ 8,658,200 $ 8,658,196 $ (4) Interest 10,000 10,000 31,537 21,537
Total revenues 8,668,200 8,668,200 8,689,733 21,533
Expenditures:

Current:

General Government 190,240 171,900 146,309 25,591
Public services 2,671,770 3,940,220 6,505,653 (2,565,433) Capital Outlay 5,689,980 1,088,480 2,446,657 (1,358,177) Total expenditures 8,551,990 5,200,600 9,098,619 (3,898,019) Excess (deficiency) of revenues over (under)
expenditures 116,210 3,467,600 (408,886) (3,876,486)
Other Financing Sources (Uses):

Transfers Out (116,200) (116,200) (115,820) 380
Total other financing sources (uses) (116,200) (116,200) (115,820) 380 Net Change in Fund Balance 10 3,351,400 (524,706) (3,876,106) Fund Balance (Deficit) - Beginning of Year 3,245,540 3,245,540 3,245,540 - Fund Balance (Deficit) - End of Year $ 3,245,550 $ 6,596,940 $ 2,720,834 $ (3,876,106) 136
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure A LA County Parks -
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

County contributions $ 2,000,000 $ 2,143,550 $ - $ (2,143,550) Total revenues 2,000,000 2,143,550 - (2,143,550)
Expenditures:

Current:

Public services 2,000,000 100,000 (844) 100,844
Capital Outlay - 1,556,490 7,194 1,549,296
Total expenditures 2,000,000 1,656,490 6,350 1,650,140
Excess (deficiency) of revenues over (under)
expenditures - 487,060 (6,350) (493,410)
Total other financing sources (uses) - - - -
Net Change in Fund Balance - 487,060 (6,350) (493,410)
Fund Balance (Deficit) - Beginning of Year 389,100 - - - Fund Balance (Deficit) - End of Year $ 389,100 $ 487,060 $ (6,350) $ (493,410) 137
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure R - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 2,368,790 $ 13,395,150 $ 1,106,719 $ (12,288,431) Interest 25,000 - - -
Total revenues 2,393,790 13,395,150 1,106,719 (12,288,431) Expenditures:

Current:

Public services - - 30,176 (30,176)
Capital Outlay 43,095,000 17,953,140 1,078,518 16,874,622 Total expenditures 43,095,000 17,953,140 1,108,694 16,844,446 Excess (deficiency) of revenues over (under)
expenditures (40,701,210) (4,557,990) (1,975) 4,556,015 Net Change in Fund Balance (40,701,210) (4,557,990) (1,975) 4,556,015 Fund Balance (Deficit) - Beginning of Year (4,355,563) (4,355,563) (4,355,563) - Fund Balance (Deficit) - End of Year $ (45,056,773) $ (8,913,553) $ (4,357,538) $ 4,556,015 138
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Measure R Local Return
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Subventions and grants $ - $ 2,368,790 $ 2,551,356 $ 182,566 Interest - 25,000 153,101 128,101
Net increase (decrease) in fair value of investments - - (84,755) (84,755) Total revenues - 2,393,790 2,619,702 225,912
Expenditures
Current
Public services - - 31,569 (31,569)
Capital Outlay - 953,980 325,587 628,393
Total expenditures - 953,980 357,156 596,824
Excess (deficiency) of revenues over expenditures - 1,439,810 2,262,546 791,167 Net Change in Fund Balance - 1,439,810 2,262,546 791,167 Fund Balance (Deficit) - Beginning of Year 12,018,004 12,018,004 12,018,004 - Fund Balance (Deficit) - End of Year $ 12,018,004 $ 13,457,814 $ 14,280,550 $ 791,167 139
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure M - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,234,630 $ 1,135,000 $ 124,828 $ (1,010,172) Interest 10,000 - 446 446
Total revenues 3,244,630 1,135,000 125,274 (1,009,726)
Expenditures:

Current:

Public services 1,300,000 550,000 5,408 544,592
Capital Outlay - 585,000 181,962 403,038
Total expenditures 1,300,000 1,135,000 187,370 947,630
Excess (deficiency) of revenues over (under)
expenditures 1,944,630 - (62,096) (62,096)
Net Change in Fund Balance 1,944,630 - (62,096) (62,096) Fund Balance (Deficit) - Beginning of Year 56,608 56,608 56,608 - Fund Balance (Deficit) - End of Year $ 2,001,238 $ 56,608 $ (5,488) $ (62,096) 140
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Measure M Local Return
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Subventions and grants $ - $ 2,684,630 $ 2,886,129 $ 201,499 Interest - 10,000 153,939 143,939
Net increase (decrease) in fair value of investments - - (83,013) (83,013) Total revenues - 2,694,630 2,957,055 262,425
Expenditures
Current
Public services - 3,715,680 1,348,395 2,367,285
Total expenditures - 3,715,680 1,348,395 2,367,285
Excess (deficiency) of revenues over expenditures - (1,021,050) 1,608,660 4,996,995 Net Change in Fund Balance - (1,021,050) 1,608,660 4,996,995 Fund Balance (Deficit) - Beginning of Year 7,942,194 7,942,194 7,942,194 - Fund Balance (Deficit) - End of Year $ 7,942,194 $ 6,921,144 $ 9,550,854 $ 4,996,995 141
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Misc Grants/ Developer Contributions - Special Revenue Funds Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 3,000 $ 3,000 $ 40,203 $ 37,203
Net increase (decrease) in fair value of investments - - (25,427) (25,427) Other agency contributions 1,350,500 1,101,750 22,020 (1,079,730) County contributions - 96,120 172,932 76,812
Other Revenue 50,000 30,000 43,934 13,934
Total revenues 1,403,500 1,230,870 253,662 (977,208)
Expenditures:

Current:

General Government - - 246 (246)
Public safety 9,880 96,120 128,572 (32,452)
Public services - - 628 (628)
Cultural and recreational 50,000 53,250 36,581 16,669
Capital Outlay 1,558,000 1,940,100 189,805 1,750,295
Total expenditures 1,617,880 2,089,470 355,832 1,733,638 Excess (deficiency) of revenues over (under)
expenditures (214,380) (858,600) (102,170) 756,430
Other Financing Sources (Uses):

Net Change in Fund Balance (214,380) (858,600) (102,170) 756,430 Fund Balance (Deficit) - Beginning of Year 2,953,142 2,953,142 2,953,142 - Fund Balance (Deficit) - End of Year $ 2,738,762 $ 2,094,542 $ 2,850,972 $ 756,430 142
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Park Assessments - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Special Assessments $ 2,887,700 $ 2,802,000 $ 2,930,228 $ 128,228 Interest 25,500 25,500 27,830 2,330
Net increase (decrease) in fair value of investments - - (10,114) (10,114) Total revenues 2,913,200 2,827,500 2,947,944 120,444
Expenditures:

Current:

General Government 67,600 73,600 51,919 21,681
Cultural and recreational 30,000 30,000 30,000 -
Capital Outlay 330,000 927,890 759,362 168,528
Total expenditures 427,600 1,031,490 841,281 190,209
Excess (deficiency) of revenues over (under)
expenditures 2,485,600 1,796,010 2,106,663 310,653
Other Financing Sources (Uses):

Transfers Out (2,435,900) (2,435,900) (2,435,889) 11
Total other financing sources (uses) (2,435,900) (2,435,900) (2,435,889) 11 Net Change in Fund Balance 49,700 (639,890) (329,226) 310,664 Fund Balance (Deficit) - Beginning of Year 3,126,641 3,126,641 3,126,641 - Fund Balance (Deficit) - End of Year $ 3,176,341 $ 2,486,751 $ 2,797,415 $ 310,664 143
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Park Development - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Park development fees $ 1,000,000 $ 1,500,000 $ 1,339,284 $ (160,716) Interest 10,000 10,000 215,936 205,936
Net increase (decrease) in fair value of investments - - (112,680) (112,680) Total revenues 1,010,000 1,510,000 1,442,540 (67,460)
Expenditures:

Current:

Public services 117,000 42,000 105,788 (63,788)
Capital Outlay 6,500,000 10,314,970 1,272,590 9,042,380 Debt service:

Interfund interest - - 119,600 (119,600)
Total expenditures 6,617,000 10,356,970 1,497,978 8,858,992 Excess (deficiency) of revenues over (under)
expenditures (5,607,000) (8,846,970) (55,438) 8,791,532 Other Financing Sources (Uses):

Transfers In 2,000,000 - - -
Transfers Out (150,000) (150,000) - 150,000
Total other financing sources (uses) 1,850,000 (150,000) - 150,000 Net Change in Fund Balance (3,757,000) (8,996,970) (55,438) 8,941,532 Fund Balance (Deficit) - Beginning of Year 7,400,512 7,400,512 7,400,512 - Fund Balance (Deficit) - End of Year $ 3,643,512 $ (1,596,458) $ 7,345,074 $ 8,941,532 144
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Proposition A - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,807,710 $ 3,807,710 $ 4,102,357 $ 294,647 Interest 30,000 30,000 162,531 132,531
Net increase (decrease) in fair value of investments - - (86,420) (86,420) Total revenues 3,837,710 3,837,710 4,178,468 340,758
Expenditures:

Current:

Public safety 502,920 537,240 424,936 112,304
Public services 2,331,170 2,298,030 2,396,124 (98,094)
Capital Outlay 544,050 1,310,890 160,093 1,150,797
Total expenditures 3,378,140 4,146,160 2,981,153 1,165,007 Excess (deficiency) of revenues over (under)
expenditures 459,570 (308,450) 1,197,315 1,505,765
Other Financing Sources (Uses):

Transfers Out (15,000) (15,000) (15,000) -
Total other financing sources (uses) (15,000) (15,000) (15,000) - Net Change in Fund Balance 444,570 (323,450) 1,182,315 1,505,765 Fund Balance (Deficit) - Beginning of Year 8,781,708 8,781,708 8,781,708 - Fund Balance (Deficit) - End of Year $ 9,226,278 $ 8,458,258 $ 9,964,023 $ 1,505,765 145
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Proposition C - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,158,390 $ 4,582,350 $ 420,922 $ (4,161,428) Interest 25,000 - 15,636 15,636
Net increase (decrease) in fair value of investments - - (7,506) (7,506) Total revenues 3,183,390 4,582,350 429,052 (4,153,298)
Expenditures:

Current:

Public services - - 23,742 (23,742)
Capital Outlay 2,350,000 5,572,370 1,094,562 4,477,808
Total expenditures 2,350,000 5,572,370 1,118,304 4,454,066 Excess (deficiency) of revenues over (under)
expenditures 833,390 (990,020) (689,252) 300,768
Other Financing Sources (Uses):

Transfers Out (581,200) - - -
Total other financing sources (uses) (581,200) - - -
Net Change in Fund Balance 252,190 (990,020) (689,252) 300,768 Fund Balance (Deficit) - Beginning of Year 1,450,555 1,450,555 1,450,555 - Fund Balance (Deficit) - End of Year $ 1,702,745 $ 460,535 $ 761,303 $ 300,768 146
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Prop C Local Return
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Subventions and grants $ - $ 3,158,390 $ 3,402,788 $ 244,398 Interest - 25,000 200,020 175,020
Net increase (decrease) in fair value of investments - - (99,176) (99,176) Total revenues - 3,183,390 3,503,632 320,242
Expenditures
Current
Public services - 3,826,230 2,967,766 858,464
Total expenditures - 3,826,230 2,967,766 858,464
Excess (deficiency) of revenues over expenditures - (642,840) 535,866 2,037,170 Other Financing Sources (Uses)
Transfers Out - (581,200) (581,181) 19
Total other financing sources (uses) - (581,200) (581,181) 19 Net Change in Fund Balance - (1,224,040) (45,315) 2,037,189 Fund Balance (Deficit) - Beginning of Year 13,383,034 13,383,034 13,383,034 - Fund Balance (Deficit) - End of Year $ 13,383,034 $ 12,158,994 $ 13,337,719 $ 2,037,189 147
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Facilities Fund - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Facilities impact fees $ 450,000 $ 450,000 $ 282,433 $ (167,567) Interest 500 500 26,673 26,173
Net increase (decrease) in fair value of investments - - (14,440) (14,440) Total revenues 450,500 450,500 294,666 (155,834)
Expenditures:

Current:

Public services - - 933 (933)
Capital Outlay 355,000 391,100 75,742 315,358
Total expenditures 355,000 391,100 76,675 314,425
Excess (deficiency) of revenues over (under)
expenditures 95,500 59,400 217,991 158,591
Net Change in Fund Balance 95,500 59,400 217,991 158,591 Fund Balance (Deficit) - Beginning of Year 1,474,178 1,474,178 1,474,178 - Fund Balance (Deficit) - End of Year $ 1,569,678 $ 1,533,578 $ 1,692,169 $ 158,591 148
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Safety - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ - $ - $ 414,607 $ 414,607
Fines and forfeitures 150,000 306,750 363,596 56,846
Interest 500 500 16,932 16,432
Net increase (decrease) in fair value of investments - - (11,408) (11,408) Total revenues 150,500 307,250 783,727 476,477
General Government - - 1 (1)
Total expenditures - - 1 (1)
Excess (deficiency) of revenues over (under)
expenditures 150,500 307,250 783,726 476,476
Other Financing Sources (Uses):

Transfers Out (150,000) (150,000) (363,595) (213,595)
Total other financing sources (uses) (150,000) (150,000) (363,595) (213,595) Net Change in Fund Balance 500 157,250 420,131 262,881
Fund Balance (Deficit) - Beginning of Year 934,537 934,537 934,537 - Fund Balance (Deficit) - End of Year $ 935,037 $ 1,091,787 $ 1,354,668 $ 262,881 149
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Road Maintenance and Rehab - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 3,557,650 $ 3,557,650 $ 3,706,098 $ 148,448 Interest 4,000 4,000 79,753 75,753
Net increase (decrease) in fair value of investments - - (64,132) (64,132) Total revenues 3,561,650 3,561,650 3,721,719 160,069
Expenditures:

Current:

Public services - - 9,866 (9,866)
Capital Outlay 3,557,660 2,740,000 316,202 2,423,798
Total expenditures 3,557,660 2,740,000 326,068 2,413,932 Excess (deficiency) of revenues over (under)
expenditures 3,990 821,650 3,395,651 2,574,001
Net Change in Fund Balance 3,990 821,650 3,395,651 2,574,001 Fund Balance (Deficit) - Beginning of Year 4,082,214 4,082,214 4,082,214 - Fund Balance (Deficit) - End of Year $ 4,086,204 $ 4,903,864 $ 7,477,865 $ 2,574,001 150
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual SAVES - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Subventions and grants $ 40,000 $ 44,250 $ 25,750 $ (18,500) State contributions - 34,540 34,534 (6)
Total revenues 40,000 78,790 60,284 (18,506)
Expenditures:

Current:

Health and welfare 40,000 79,930 80,474 (544)
Total expenditures 40,000 79,930 80,474 (544)
Excess (deficiency) of revenues over (under)
expenditures - (1,140) (20,190) (19,050)
Net Change in Fund Balance - (1,140) (20,190) (19,050)
Fund Balance (Deficit) - Beginning of Year 11,678 11,678 11,678 - Fund Balance (Deficit) - End of Year $ 11,678 $ 10,538 $ (8,512) $ (19,050) 151
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Sewer Maintenance Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Licenses and Permits $ 95,400 $ 113,600 $ 164,876 $ 51,276 Special Assessments 6,512,200 5,924,400 5,980,072 55,672 Interest 86,700 86,700 536,092 449,392
Net increase (decrease) in fair value of investments - - (290,827) (290,827) Total revenues 6,694,300 6,124,700 6,390,213 265,513
Expenditures:

Current:

Public services 8,476,850 4,588,340 2,702,652 1,885,688 Capital Outlay - 2,325,000 295,230 2,029,770
Debt service:

Interfund interest - - 17,215 (17,215)
Total expenditures 8,476,850 6,913,340 3,015,097 3,898,243 Excess (deficiency) of revenues over (under)
expenditures (1,782,550) (788,640) 3,375,116 4,163,756
Other Financing Sources (Uses):

Transfers Out (347,300) (347,300) (30,000) 317,300
Total other financing sources (uses) (347,300) (347,300) (30,000) 317,300 Net Change in Fund Balance (2,129,850) (1,135,940) 3,345,116 4,481,056 Fund Balance (Deficit) - Beginning of Year 26,821,567 26,821,567 26,821,567 - Fund Balance (Deficit) - End of Year $ 24,691,717 $ 25,685,627 $ 30,166,683 $ 4,481,056 152
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Sewer Upgrade - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final Actual Variance
Revenues
Interest $ - $ - $ 7,951 $ 7,951
Net increase (decrease) in fair value of investments - - (4,115) (4,115) Total revenues - - 3,836 3,836
Expenditures
Public services - - 3,161 (3,161)
Capital Outlay - 200,000 - 200,000
Debt service:

Total expenditures - 200,000 3,161 196,839
Excess (deficiency) of revenues over expenditures - (200,000) 675 197,514 Net Change in Fund Balance - (200,000) 675 197,514
Fund Balance (Deficit) - Beginning of Year 768,078 (399,312) 481,420 880,732 Fund Balance (Deficit) - End of Year $ 768,078 $ (599,312) $ 482,095 $ 1,078,246 153
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual States Grants Fund - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 5,000 $ 5,000 $ 18,697 $ 13,697
Net increase (decrease) in fair value of investments - - (17,104) (17,104) State contributions 1,975,340 5,656,800 1,495,239 (4,161,561) Total revenues 1,980,340 5,661,800 1,496,832 (4,164,968) Expenditures:

Current:

Public safety 15,760 15,760 1,489 14,271
Public services - 397,000 20,381 376,619
Community development 1,962,260 2,463,110 1,316,476 1,146,634 Capital Outlay 50,000 3,612,810 1,445,907 2,166,903
Total expenditures 2,028,020 6,488,680 2,784,253 3,704,427 Excess (deficiency) of revenues over (under)
expenditures (47,680) (826,880) (1,287,421) (460,541)
Other Financing Sources (Uses):

Net Change in Fund Balance (47,680) (826,880) (1,287,421) (460,541) Fund Balance (Deficit) - Beginning of Year 110,553 110,553 110,553 - Fund Balance (Deficit) - End of Year $ 62,873 $ (716,327) $ (1,176,868) $ (460,541) 154
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Street Lighting Assmnt Dist - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other taxes $ 230,000 $ 230,000 $ 643,523 $ 413,523
Fines and forfeitures 20,200 20,200 - (20,200)
Special Assessments 4,207,400 4,207,400 5,113,373 905,973 Interest 98,900 98,900 316,400 217,500
Net increase (decrease) in fair value of investments - - (174,919) (174,919) Developer contributions 30,400 30,400 8,595 (21,805)
Total revenues 4,586,900 4,586,900 5,906,972 1,320,072
Expenditures:

Current:

Public services 4,038,020 4,148,910 3,294,772 854,138
Capital Outlay - 26,800 3,825 22,975
Debt service:

Principal 725,600 740,050 743,556 (3,506)
Interest 238,900 238,900 220,742 18,158
Total expenditures 5,002,520 5,154,660 4,262,895 891,765 Excess (deficiency) of revenues over (under)
expenditures (415,620) (567,760) 1,644,077 2,211,837
Other Financing Sources (Uses):

Transfers Out (40,000) (40,000) (40,000) -
Total other financing sources (uses) (40,000) (40,000) (40,000) - Net Change in Fund Balance (455,620) (607,760) 1,604,077 2,211,837 Fund Balance (Deficit) - Beginning of Year 18,723,730 18,723,730 18,723,730 - Fund Balance (Deficit) - End of Year $ 18,268,110 $ 18,115,970 $ 20,327,807 $ 2,211,837 155
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Traffic Impact - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Traffic impact fees $ 950,000 $ 950,000 $ 677,674 $ (272,326) Interest 5,000 5,000 34,816 29,816
Net increase (decrease) in fair value of investments - - (11,775) (11,775) Total revenues 955,000 955,000 700,715 (254,285)
Expenditures:

Current:

Public services - - 46,378 (46,378)
Capital Outlay 100,000 1,277,270 1,043,933 233,337
Total expenditures 100,000 1,277,270 1,090,311 186,959
Excess (deficiency) of revenues over (under)
expenditures 855,000 (322,270) (389,596) (67,326)
Other Financing Sources (Uses):

Transfers Out (867,100) (867,100) (867,122) (22)
Total other financing sources (uses) (867,100) (867,100) (867,122) (22) Net Change in Fund Balance (12,100) (1,189,370) (1,256,718) (67,348) Fund Balance (Deficit) - Beginning of Year 2,744,823 2,744,823 2,744,823 - Fund Balance (Deficit) - End of Year $ 2,732,723 $ 1,555,453 $ 1,488,105 $ (67,348) 156
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Communications PEG - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Other taxes $ 358,100 $ 358,100 $ 235,480 $ (122,620)
Total revenues 358,100 358,100 235,480 (122,620)
Expenditures
Current:

General Government 226,600 376,600 158,558 218,042
Total expenditures 226,600 376,600 158,558 218,042
Excess (deficiency) of revenues over expenditures 131,500 (18,500) 76,922 313,464 Net Change in Fund Balance 131,500 (18,500) 76,922 313,464 Fund Balance (Deficit) - Beginning of Year 449,500 220,000 676,777 456,777 Fund Balance (Deficit) - End of Year $ 581,000 $ 201,500 $ 753,699 $ 770,241 157
City of Palmdale
Schedule of Revenues and Expenditures and Changes In fund Balance - Budget and Actual Solid Waste - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues
Charges for current services $ 356,100 $ 741,000 $ 966,593 $ 225,593 State contributions 55,900 120,650 353,126 232,476
Total revenues 412,000 861,650 1,319,719 458,069
Expenditures
Current:

Public services 780,920 832,220 585,384 246,836
Total expenditures 780,920 832,220 585,384 246,836
Excess (deficiency) of revenues over expenditures (368,920) 29,430 734,335 951,741 Net Change in Fund Balance (368,920) 29,430 734,335 951,741 Fund Balance (Deficit) - Beginning of Year 664,320 672,790 343,416 (329,374) Fund Balance (Deficit) - End of Year $ 295,400 $ 702,220 $ 1,077,751 $ 622,367 158
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Community Foundation - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Other Revenue $ 275,010 $ 275,010 $ 143,143 $ (131,867) Total revenues 275,010 275,010 143,143 (131,867)
Expenditures:

Current:

Health and welfare 58,180 58,180 162,798 (104,618)
Capital Outlay 225,000 225,000 - 225,000
Total expenditures 283,180 283,180 162,798 17,278
Excess (deficiency) of revenues over (under)
expenditures (8,170) (8,170) (19,655) (11,485)
Net Change in Fund Balance (8,170) (8,170) (19,655) (11,485) Fund Balance (Deficit) - Beginning of Year 256,141 256,141 256,141 - Fund Balance (Deficit) - End of Year $ 247,971 $ 247,971 $ 236,486 $ (11,485) 159
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Water Park - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 1,252,500 $ 1,929,500 $ 1,690,258 $ (239,242) Interest - - 50,290 50,290
Net increase (decrease) in fair value of investments - - (31,396) (31,396) Other Revenue - - 33,801 33,801
Total revenues 1,252,500 1,929,500 1,742,953 (186,547)
Expenditures:

Current:

Cultural and recreational 1,796,380 1,893,860 1,744,596 149,264 Total expenditures 1,796,380 1,893,860 1,744,596 149,264 Excess (deficiency) of revenues over (under)
expenditures (543,880) 35,640 (1,643) (37,283)
Other Financing Sources (Uses):

Transfers In 500,000 500,000 500,000 -
Total other financing sources (uses) 500,000 500,000 500,000 - Net Change in Fund Balance (43,880) 535,640 498,357 (37,283) Fund Balance (Deficit) - Beginning of Year 3,589,035 3,589,035 3,589,035 - Fund Balance (Deficit) - End of Year $ 3,545,155 $ 4,124,675 $ 4,087,392 $ (37,283) 160
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Art - Special Revenue Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 276,810 $ 535,300 $ 661,248 $ 125,948 Total revenues 276,810 535,300 661,248 125,948
Expenditures:

Current:

Public services 175,000 50,000 - 50,000
Cultural and recreational 40,000 20,110 41,713 (21,603) Capital Outlay 55,000 69,610 66,767 2,843
Total expenditures 270,000 139,720 108,480 31,240
Excess (deficiency) of revenues over (under)
expenditures 6,810 395,580 552,768 157,188
Transfers Out (41,900) (41,900) - 41,900
Net Change in Fund Balance (35,090) 353,680 552,768 199,088 Fund Balance (Deficit) - Beginning of Year 185,200 753,200 938,862 185,662 Fund Balance (Deficit) - End of Year $ 150,110 $ 1,106,880 $ 1,491,630 $ 384,750 161
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Civic Authority - Debt Service Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ 19,400 $ 19,400 $ 12,033 $ (7,367)
Net increase (decrease) in fair value of investments - - (830) (830) Total revenues 19,400 19,400 11,203 (8,197)
Expenditures:

Debt service:

Principal 595,000 595,000 - 595,000
Interest 896,500 896,500 - 896,500
Total expenditures 1,491,500 1,491,500 - 1,491,500
Excess (deficiency) of revenues over (under)
expenditures (1,472,100) (1,472,100) 11,203 1,483,303
Other Financing Sources (Uses):

Transfers In 1,491,500 1,491,500 - (1,491,500)
Transfers Out - - (1,062,648) (1,062,648)
Total other financing sources (uses) 1,491,500 1,491,500 (1,062,648) (2,554,148) Net Change in Fund Balance 19,400 19,400 (1,051,445) (1,070,845) Fund Balance (Deficit) - Beginning of Year 1,051,445 1,051,445 1,051,445 - Fund Balance (Deficit) - End of Year $ 1,070,845 $ 1,070,845 $ - $ (1,070,845) 162
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Palmdale Financing Authority - Debt Service Funds
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ - $ - $ 632 $ 632
Total revenues - - 632 632
Expenditures:

Debt service:

Principal 1,920,000 1,920,000 2,623,899 (703,899)
Interest 631,300 883,360 1,135,403 (252,043)
Total expenditures 2,551,300 2,803,360 3,759,302 (955,942) Excess (deficiency) of revenues over (under)
expenditures (2,551,300) (2,803,360) (3,758,670) (955,310) Other Financing Sources (Uses):

Transfers In 2,560,200 3,427,300 3,758,794 331,494
Total other financing sources (uses) 2,560,200 3,427,300 3,758,794 331,494 Net Change in Fund Balance 8,900 623,940 124 (623,816)
Fund Balance (Deficit) - Beginning of Year - - - -
Fund Balance (Deficit) - End of Year $ 8,900 $ 623,940 $ 124 $ (623,816) 163
City of Palmdale
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual CFD/Assessment Districts - Capital Projects Fund
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Interest $ - $ - $ 86,004 $ 86,004
Net increase (decrease) in fair value of investments - - (34) (34) Total revenues - - 85,970 85,970
Expenditures:

General Government - - (1) 1
Capital Outlay - 141,600 120,963 20,637
Total expenditures - 141,600 120,962 20,638
Excess (deficiency) of revenues over (under)
expenditures - (141,600) (34,992) 106,608
Net Change in Fund Balance - (141,600) (34,992) 106,608 Fund Balance (Deficit) - Beginning of Year 2,957,710 2,957,710 2,957,710 - Fund Balance (Deficit) - End of Year $ 2,957,710 $ 2,816,110 $ 2,922,718 $ 106,608 164
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City of Palmdale
Combining Statement of Net Position
Internal Service Funds
June 30, 2023
Information
Technology Fleet Maintenance
Total Internal
Service Funds
Assets
Current Assets
Cash $ 250,000 $ 250,000 $ 500,000
Investments 3,147,549 - 3,147,549
Receivables - 30,690 30,690
Total current assets 3,397,549 280,690 3,678,239
Capital Assets and Right of use assets
Depreciable capital assets
Vehicles - 12,103,860 12,103,860
Equipment 5,946,069 - 5,946,069
SBITA assets 3,459,051 - 3,459,051
Less accumulated depreciation (6,316,713) (5,986,150) (12,302,863) Capital assets, net 3,088,407 6,117,710 9,206,117
Total assets $ 6,485,956 $ 6,398,400 $ 12,884,356
Liabilities
Accounts payable $ 134,732 $ 23,912 $ 158,644
Due to other funds - 1,719,092 1,719,092
Interest payable 40,813 - 40,813
Subscription liability 625,223 - 625,223
Due in more than one year
Subscription liability 2,004,236 - 2,004,236
Total due in more than one year 2,004,236 - 2,004,236
Total liabilities 2,805,004 1,743,004 4,548,008
Net Position
Net Investment in capital assets 458,948 6,117,710 6,576,658 Unrestricted (Deficit) 3,222,004 (1,462,314) 1,759,690
Total net position $ 3,680,952 $ 4,655,396 $ 8,336,348
165
City of Palmdale
Combining Statement of Revenues, Expenses and Changes in Net Position Internal Service Funds
Year Ended June 30, 2023
Information
Technology Fleet Maintenance
Total Internal
Service Funds
Operating Revenues:

Charges for current services $ 3,300,679 $ 1,346,080 $ 4,646,759 Other Revenue 762 30,690 31,452
Total operating revenues 3,301,441 1,376,770 4,678,211
Operating Expenses:

Salaries, Wages and Benefits 1,047,671 576,960 1,624,631 Material and Supplies 355,004 546,054 901,058
Utilities 77,108 480 77,588
Administrative 11,684 3,335 15,019
Depreciation/amortization 865,635 678,295 1,543,930
Repairs and Maintenance 1,089,865 217,826 1,307,691
Other Expenditures - 1,425 1,425
Total operating expenses 3,446,967 2,024,375 5,471,342
Operating income (loss) (145,526) (647,605) (793,131)
Nonoperating Revenues (Expenses)
Investment and interest income 49,690 24,739 74,429
Net realized and unrealized gains (losses) (14,462) (2,215) (16,677) Interest expense (112,218) - (112,218)
Total nonoperating revenues (expenses) (76,990) 22,524 (54,466) Transfers In 250,000 250,000 500,000
Change in Net Position 27,484 (375,081) (347,597)
Net Position (Deficit) - Beginning of Year 3,471,819 5,030,477 8,502,296 Change in accounting principal GASB 96 181,649 - 181,649 Net Position (Deficit) - Beginning of Year, Restated 3,653,468 5,030,477 8,683,945 Net Position (Deficit) - End of Year $ 3,680,952 $ 4,655,396 $ 8,336,348 166
City of Palmdale
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2023
Information
Technology
Fleet
Maintenance
Total Internal
Service Funds
Cash from Operating Activities:

Cash received from interfund services provided $ 3,300,679 $ 1,332,940 $ 4,633,619 Cash paid to employees for services (1,047,671) (576,960) (1,624,631) Cash paid to suppliers for goods and services (2,235,281) (755,453) (2,990,734) Cash (paid)/received for other services 762 30,690 31,452 Net cash provided (used) by operating activities 18,489 31,217 49,706 Cash from Noncapital Financing Activities:

Transfers from other funds 250,000 250,000 500,000
Transfers to other funds - 1,719,092 1,719,092
Net cash provided (used) by noncapital financing activities 250,000 1,969,092 2,219,092 Cash from Capital and Related Financing Activities:

Acquisition and construction of capital assets (280,978) (2,816,162) (3,097,140) Net cash provided (used) by capital and related financing activities (280,978) (2,816,162) (3,097,140) Cash from Investing Activities:

Gain/(Loss) on investments (14,462) (2,215) (16,677)
Investment income 49,690 24,739 74,429
Change in investments (3,147,549) - (3,147,549)
Net cash provided (used) by investing activities (3,112,321) 22,524 (3,089,797) Total Cash Flow increase/(decrease) (3,124,810) (793,329) (3,918,139) Beginning Cash and Cash Equivalents 3,374,810 1,043,329 4,418,139 Ending Cash and Cash Equivalents 250,000 250,000 500,000 Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities
Net income/loss from operating activities (145,526) (647,605) (793,131) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation and amortization expense 865,635 678,295 1,543,930 Changes in assets and liabilities:

Increase (decrease) in accounts receivable - (13,140) (13,140) (Increase) decrease in accounts payable 17,729 13,667 31,396 SBITA adjustment to operating (719,349) - (719,349)
Net cash provided (used) by operating activities: 18,489 31,217 49,706 Schedule of Non-cash investing, Capital and Financing Activities Subscription liability for the acquisition of rights to use subscription asset $ 231,512 $ - $ 231,512 167
City of Palmdale
Statement of Fiduciary Net Position
For the Year Ended June 30, 2023
Assessment and Community Facilities District Fund - This fund is used to account for receipts and disbursements associated with 1915 Act Assessment Bonds and Special Tax Bonds which are administered by, but are not the liability of, the City.

Retiree Health Premium Trust Funds - These funds are used to account for the receipt of City funds held in trust to provide Eligible Retirees with a supplement to reduce their premiums for participating in the City’s Health Plan. 168
City of Palmdale
Statement of Fiduciary Net Position
June 30, 2023
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution
Plan Total
Assets :

Cash $ 1,688 $ 1,925,370 $ 1,927,058
Investments:

Mutual funds 706,149 1,890,833 2,596,982
Total assets 707,837 3,816,203 4,524,040
Total net position restricted for OPEB benefits $ 707,837 $ 3,816,203 $ 4,524,040 169
City of Palmdale
Statement of Net Position Assets and Liabilities
Assessment and Community Facilities District Custodial Funds June 30, 2023
AD 88-1
Redevelopment
CFD 99-1
Redevelopment
AD 90-2
Redevelopment
AD 87-1
Redevelopment Anaverde
Trade and
Commerce
Assets:

Cash $ 2,000 $ - $ - $ - $ - $ -
Receivables
Property tax receivable - - - - 6,411 20,675
Due from other governmental units - - - - - -
Restricted assets:

Cash and investments 393,282 - 196,559 148,507 1,951,970 1,669,588 Interest receivable 91 - 302 446 418 1,520
Total assets $ 395,373 $ - $ 196,861 $ 148,953 $ 1,958,799 $ 1,691,783 Liabilities:

Accounts payable $ - $ - $ - $ - $ 5,411 $ 6,078
Advances due to general fund - - - - - -
Advances due to City of Palmdale 269,908 - 313,951 - - - Deposits 57,580 - 7,210 19,917 - -
Total liabilities 327,488 - 321,161 19,917 5,411 6,078
Net Position
Restricted
Held on behalf of others 67,885 - (124,300) 129,036 1,953,388 1,685,705 Total net position $ 67,885 $ - $ (124,300) $ 129,036 $ 1,953,388 $ 1,685,705 170
City of Palmdale
Statement of Net Position Assets and Liabilities
Assessment and Community Facilities District Custodial Funds June 30, 2023
Sierra
Gateway
AD 91-2
Redevelopment Ritter Ranch Godde Hills
Joshua
Ranch Total
$ - $ - $ - $ - $ - $ 2,000
- - - 4,311 948 32,345
1,565 - - - - 1,565
798 23,059 239,457 269,687 2,282,543 7,175,450
(3) 70 714 136 7,013 10,707
$ 2,360 $ 23,129 $ 240,171 $ 274,134 $ 2,290,504 $ 7,222,067 $ 2,770 $ - $ 2,770 $ 2,801 $ 2,955 $ 22,785
74,071 - - - - 74,071
- - - - - 583,859
- - - - - 84,707
76,841 - 2,770 2,801 2,955 765,422
(74,481) 23,129 237,401 271,333 2,287,549 6,456,645
$ (74,481) $ 23,129 $ 237,401 $ 271,333 $ 2,287,549 $ 6,456,645 171
City of Palmdale
Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds
Year Ended June 30, 2023
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution
Plan Total
Additions:

Employer contributions to retiree medical trust $ - $ 116,300 $ 116,300 Investment and interest income 34,277 132,986 167,263
Net realized and unrealized gains (losses) 479,275 74,028 553,303 Total additions 513,552 323,314 836,866
Deductions:

Benefits paid to participants and expenses 518,568 207,654 726,222 Interfund Transfers (17,278) 17,278 -
Total deductions 501,290 224,932 726,222
Change in net position 12,262 98,382 110,644
Net Position Held in Trust at Beginning of Year 695,575 3,717,821 4,413,396 Net Position Held in Trust at End of Year $ 707,837 $ 3,816,203 $ 4,524,040 172
City of Palmdale
Statement of Fiduciary Change in Net Position
Assessment and Community Facilities District Custodial Funds Year Ended June 30, 2023
AD 88-1
Redevelopment
CFD 99-1
Redevelopment
AD 90-2
Redevelopment
AD 87-1
Redevelopment Anaverde
Trade and
Commerce
Additions
Other taxes $ - $ - $ - $ - $ 1,542,992 $ 1,033,315
Investment and interest income 5,426 - 2,956 2,451 5,054 31,892 Net realized and unrealized gains (losses) (3,383) - (1,682) (1,271) (1,911) (4,337) Total additions 2,043 - 1,274 1,180 1,546,135 1,060,870 Deductions:

Administrative expense - - - - 102,426 114,703
Interest expense - - - - 695,250 323,649
Principal payments on long-term debt - - - - 730,000 511,658 Total deductions - - - - 1,527,676 950,010
Change in Net Position 2,043 - 1,274 1,180 18,459 110,860 Net Position (Deficit) at Beginning of Year 65,842 - (125,574) 127,856 1,934,929 1,574,845 Net Position (Deficit) at End of Year $ 67,885 $ - $ (124,300) $ 129,036 $ 1,953,388 $ 1,685,705 173
City of Palmdale
Statement of Fiduciary Change in Net Position
Assessment and Community Facilities District Custodial Funds Year Ended June 30, 2023
Sierra
Gateway
AD 91-2
Redevelopment Ritter Ranch Godde Hills
Joshua
Ranch Total
$ - $ - $ - $ 140,091 $ 807,114 $ 3,523,512
138 381 4,079 6,144 37,770 96,291
(6) (197) (2,049) (407) (19,931) (35,174)
132 184 2,030 145,828 824,953 3,584,629
19,670 - 20,200 35,680 577,551 870,230
- - - 49,125 - 1,068,024
- - - 45,000 - 1,286,658
19,670 - 20,200 129,805 577,551 3,224,912
(19,538) 184 (18,170) 16,023 247,402 359,717
(54,943) 22,945 255,572 255,310 2,040,147 6,096,929
$ (74,481) $ 23,129 $ 237,401 $ 271,333 $ 2,287,549 $ 6,456,645 174
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Palmdale, California
Year Ended June 30, 202
Statistical Section
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City of Palmdale
Statistical Section
June 30, 2023
This part of the City's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health.

Contents Page
Financial Trends 176
These schedules contain information to help the reader understand how the City's financial performance and well-being have changed over time.

Revenue Capacity 186
These schedules contain information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.

Debt Capacity 191
These schedules present information to help the reader assess the affordability of the City's current level of outstanding debt and the City's ability to issue additional debt in the future.

Demographic and Economic Information 198
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.

Operating Information 201
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.

Source: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. 175
City of Palmdale
Net Position by Component
Last Ten Fiscal Year
(accrual basis of accounting)
2014 2015 2016 2017
Governmental Activities
Net investment in capital assets $ 655,895,266 $ 651,915,581 $ 662,351,171 $ 659,365,081 Restricted net position 179,662,667 160,152,582 144,651,291 149,318,498 Unrestricted 20,804,395 20,470,245 30,980,820 36,278,228 Total governmental activities net position $ 856,362,328 $ 832,538,408 $ 837,983,282 $ 844,961,807 Business-Type Activities
Unrestricted $ - $ - $ - $ -
Total business-type activities net position $ - $ - $ - $ - Primary Government
Net investment in capital assets $ 655,895,266 $ 651,915,581 $ 662,351,171 $ 659,365,081 Restricted net position 179,662,667 160,152,582 144,651,291 149,318,498 Unrestricted 20,804,395 20,470,245 30,980,820 36,278,228 Total primary government net position $ 856,362,328 $ 832,538,408 $ 837,983,282 $ 844,961,807 176
City of Palmdale
Net Position by Component (Continued)
Last Ten Fiscal Year
(accrual basis of accounting)
2018 2019 2020 2021 2022 2023
$ 643,077,802 $ 644,332,182 $ 649,681,476 $ 635,725,018 $ 618,136,264 $ 609,762,857 158,892,011 168,327,294 172,484,623 206,139,337 233,562,972 236,174,325 43,372,746 38,660,581 44,530,808 39,155,744 45,438,999 83,801,172 $ 845,342,559 $ 851,320,057 $ 866,696,907 $ 881,020,099 $ 897,138,235 $ 929,738,354 $ - $ - $ - $ - $ - $ (1,128,896)
$ - $ - $ - $ - $ - $ (1,128,896)
$ 643,077,802 $ 644,332,182 $ 649,681,476 $ 635,725,018 $ 618,136,264 $ 609,762,857 158,892,011 168,327,294 172,484,623 206,139,337 233,562,972 236,174,325 43,372,746 38,660,581 44,530,808 39,155,744 45,438,999 82,672,276 $ 845,342,559 $ 851,320,057 $ 866,696,907 $ 881,020,099 $ 897,138,235 $ 928,609,458 177
City of Palmdale
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Expenses
Governmental Activities:

General government $ 24,150,674 $ 17,167,502 $ 14,771,775 $ 15,162,734 Public safety 22,973,910 23,763,312 24,453,097 26,436,495 Transportation 47,723,268 51,743,421 53,165,326 51,989,170 Community development 5,418,368 5,852,056 7,900,847 8,715,698 Cultural and recreational 10,863,071 9,878,585 9,704,499 10,405,253 Health and welfare - - - -
Interest on long-term debt 5,152,837 4,953,848 6,116,645 3,948,940 Public service - - - -
Total governmental activities expenses 116,282,128 113,358,724 116,112,189 116,658,290 Business-Type Activities
Palmdale CCA - - - -
Total business-type activities expenses - - - -
Total primary government expenses 116,282,128 113,358,724 116,112,189 116,658,290 Program Revenues
Governmental Activities
Charges for services:

General Government 8,451,711 5,272,710 5,967,654 6,095,516 Public safety 2,462,495 2,411,614 3,478,453 3,188,196
Transportation 13,521,227 16,223,970 16,469,772 16,853,232 Community development 5,173,147 4,798,108 6,541,258 6,674,317 Cultural and recreational 4,820,809 5,157,093 5,226,101 5,320,091 Health and welfare 275,289 198,531 344,932 354,054
Public works - - - -
Operating grants and contributions 12,637,721 14,681,296 9,206,823 9,058,728 Capital grants and contributions 35,822,039 38,039,564 29,098,236 30,874,206 Total governmental activities program revenues 83,164,438 86,782,886 76,333,229 78,418,340 Business-Type Activities
Charges for services:

Power - - - -
Total business-type activities program revenues - - - - Total primary government program revenues 83,164,438 86,782,886 76,333,229 78,418,340 Net (expense)/revenue
Governmental activities (33,117,690) (26,575,838) (39,778,960) (38,239,950) Business-type activities - - - -
Total primary government net expense (33,117,690) (26,575,838) (39,778,960) (38,239,950) 178
City of Palmdale
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2018 2019 2020 2021 2022 2023
$ 16,416,215 $ 18,136,297 $ 19,602,733 $ 23,661,402 $ 26,570,018 $ 31,726,963 28,284,134 29,586,144 31,440,137 34,120,577 35,668,009 38,133,053 55,006,590 59,682,264 60,561,501 64,363,055 75,158,621 305,266 7,584,015 8,645,117 8,673,102 10,337,092 9,269,097 12,005,237 11,463,299 12,060,182 12,643,328 8,681,441 9,648,980 13,634,111 - - 1,287,612 1,136,316 316,031 588,116
3,327,586 3,237,967 2,955,972 2,966,821 2,182,745 2,555,060 - - - - - 75,322,520
122,081,839 131,347,971 137,164,385 145,266,704 158,813,501 174,270,326 - - - - - 29,459,055
- - - - - 29,459,055
122,081,839 131,347,971 137,164,385 145,266,704 158,813,501 203,729,381 6,716,003 6,933,948 10,430,987 8,697,930 7,060,041 7,868,872 2,687,364 2,667,432 3,658,425 3,352,082 5,889,031 5,273,458 17,545,979 17,712,240 18,427,062 23,981,954 25,124,723 - 6,775,750 7,486,493 7,588,544 8,177,023 7,993,491 8,053,093 5,255,553 5,262,707 3,643,056 5,885,950 8,258,640 8,052,680 311,587 322,559 289,499 220,105 216,738 184,106
- - - - - 25,471,077
8,540,307 13,858,198 9,552,177 3,828,357 2,740,434 19,313,133 23,778,358 38,211,672 40,280,273 34,148,793 32,939,685 33,403,301 71,610,901 92,455,249 93,870,023 88,292,194 90,222,783 107,619,720 - - - - - 29,406,756
- - - - - 29,406,756
71,610,901 92,455,249 93,870,023 88,292,194 90,222,783 137,026,476 (50,470,938) (38,892,722) (43,294,362) (56,974,510) (68,590,718) (66,650,606) - - - - - (52,299)
(50,470,938) (38,892,722) (43,294,362) (56,974,510) (68,590,718) (66,702,905) 179
City of Palmdale
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
General Revenues and other Changes in Net Position
Governmental activities:

Taxes:

Property taxes 5,269,406 6,098,318 6,154,152 7,026,181
Sales and use taxes 16,396,713 17,084,411 19,186,043 18,577,244 Motor vehicle in lieu 10,651,753 11,484,571 12,523,079 13,062,518 Franchise taxes 5,847,596 5,526,119 5,562,090 5,352,221 Transient occupancy taxes 2,824,182 3,089,802 3,278,724 3,716,154 Property Transfer Taxes - - - -
Business license taxes 515,815 551,202 569,381 589,805
Land sale proceeds - - - -
Unrestricted investment earnings/(loss) 391,725 260,322 537,396 (71,826) Other 274,312 288,740 412,936 592,876
Transfers - - - -
Extraordinary item-dissolution of RDA (note 1) 10,346,241 - - - Total governmental activities 52,517,743 44,383,485 48,223,801 48,845,173 Special Item - Write off of Permit Held for Sale - - - - Business-type activities:

Unrestricted investment earnings/(loss) - - - -
Transfers - - - -
Total business-type activities - - - -
Change in Net Position
Governmental activities (33,117,690) (26,575,838) (39,778,960) (38,239,950) Business-type activities - - - -
Total primary government $ (33,117,690) $ (26,575,838) $ (39,778,960) $ (38,239,950) Note 1: Effective February 1, 2012, all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity. All assets and liabilities of the former Redevelopment Agency of the City of Palmdale was transferred to a Private Purpose Trust Fund to be held until they are distributed to other units of the state and local government. All Tax Increment is reported under a fiduciary Fund statements (Private Purpose Trust Fund). The FY2011-12 extraordinary gain recognized on the Government Wide statements is the net assets and liabilities transferred to the Fiduciary Fund at February 1, 2012. For FY2012-13, the extraordinary loss recognized are assets returned to the Private Purpose Trust Fund as the result of California's Department of Finance review and determination of transfers made prior to the dissolution of the former RDA.

Note 2: The Motor Vehicle in Lieu Taxes include property tax in lieu of VLF revenues Source: The information is derived from the Annual Comprehensive Financial Reports for the relevant year. 180
City of Palmdale
Changes in Net Position (Continued)
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2018 2019 2020 2021 2022 2023
7,689,753 9,298,991 10,058,703 9,962,884 26,366,000 28,779,848 19,267,083 21,798,640 21,587,441 30,305,927 50,484,625 50,484,537 13,925,859 14,171,324 15,024,455 16,133,114 180,305 173,567 5,463,623 6,225,233 5,458,426 7,441,119 7,497,156 8,684,132 4,028,350 4,653,290 3,697,656 4,667,137 5,540,832 4,608,941 - - - - 952,103 551,908
628,303 628,479 666,997 468,666 677,197 624,183
133,981 - - - - -
519,275 2,365,811 1,504,089 401,101 (7,686,544) 1,417,412 594,975 569,791 673,444 1,267,638 697,180 2,666,630
- - - - - 1,077,918
- - - - - -
52,251,202 59,711,559 58,671,211 70,647,586 84,708,854 99,069,076 - (10,158,182) - - - -
- - - - - 1,321
- - - - - (1,077,918)
- - - - - (1,076,597)
(50,470,938) (59,209,086) (43,294,362) (56,974,510) (68,590,718) 32,418,470 - - - - - (1,128,896)
$ (50,470,938) $ (59,209,086) $ (43,294,362) $ (56,974,510) $ (68,590,718) $ 31,289,574 181
City of Palmdale
Fund Balance, Governmental Funds
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
The following fund balances are classified in compliance to GASB 54:
2014 2015 2016 2017 2018
General Fund
Nonspendable $ 10,491,577 $ 10,884,095 $ 11,433,344 $ 10,889,726 $ 11,072,269 Restricted 3,053,154 3,004,896 3,363,298 3,433,942 3,507,069 Assigned 5,717,857 11,946,745 7,816,109 10,808,898 11,838,025 Unassigned 21,637,632 17,200,108 29,139,751 31,648,004 35,914,833 Total general fund $ 40,900,220 $ 43,035,844 $ 51,752,502 $ 56,780,570 $ 62,332,196 All Other Governmental Funds
Restricted 163,742,301 169,737,885 165,219,475 164,464,462 179,943,144 Unassigned (15,388,578) (14,667,579) (13,624,754) (15,208,273) (13,373,212) Total all other governmental funds 148,353,723 155,070,306 151,594,721 149,256,189 166,569,932 Total governmental funds $ 189,253,943 $ 198,106,150 $ 203,347,223 $ 206,036,759 $ 228,902,128 The information is derived from the Annual Comprehensive Financial Reports for the relevant year.

FY2011 is the first year that the City implemented GASB issued Statement 54, Fund Balance Reporting and Governmental Fund Type Definitions. The City chose not to restate the prior year information. 182
City of Palmdale
Fund Balance, Governmental Funds (Continued)
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
The following fund balances are classified in compliance to GASB 54:
2019 2020 2021 2022 2023
$ 876,958 $ 470,243 $ 2,390,182 $ 2,554,221 $ 2,569,673 4,414,580 2,580,329 2,923,365 6,297,363 7,830,725
14,021,843 15,564,685 35,798,239 23,989,477 13,092,740
43,846,622 47,795,298 17,389,479 40,428,440 69,083,182
$ 63,160,003 $ 66,410,555 $ 58,501,265 $ 73,269,501 $ 92,576,320 184,867,493 194,970,111 215,685,053 240,397,464 261,436,934 (16,523,119) (11,305,691) (5,848,882) (3,713,302) (2,866,524) 168,344,374 183,664,420 209,836,171 236,684,162 258,570,410 $ 231,504,377 $ 250,074,975 $ 268,337,436 $ 309,953,663 $ 351,146,730 183
City of Palmdale
Changes in Fund Balances, Governmental Funds
Last Ten Fiscal Years
Modified Accrual Basis of Accounting
2014 2015 2016 2017
Revenues:

Taxes (see page 188) $ 46,089,020 $ 48,122,305 $ 50,600,450 $ 51,283,788 Subventions and grants 18,645,952 21,563,749 25,690,529 26,057,852 Fees and charges 22,906,797 14,528,075 18,823,349 18,711,910 Licenses and Permits 1,652,670 1,802,758 2,539,507 2,667,827 Special Assessments 14,402,577 17,269,746 17,227,611 17,579,851 Interfund interest 636,401 606,114 577,052 543,708
Interest 683,854 830,588 1,342,135 1,695,340
Successor agency contributions 3,389,127 5,758,733 17,265,417 41,258 Capital contributions 315,299 11,358,487 463,304 153,796 Net increase (decrease) in fair value of investments 480,776 21,262 320,522 (1,648,795) Other revenue 4,227,192 3,939,117 4,218,962 4,483,380
Interest revenue - - - -
Total revenues 113,429,665 125,800,934 139,068,838 121,569,915 Expenditures:

Current:

General Government 19,285,105 19,755,437 14,681,150 15,276,501 Public safety 22,926,361 23,904,831 24,785,404 26,793,853 Public services 17,238,982 21,215,460 22,095,709 20,952,691 Community development 4,874,350 5,119,951 7,242,971 7,229,495 Cultural and recreational 9,963,444 9,121,236 9,206,904 9,736,509 Health and welfare 2,824,602 2,178,496 3,031,167 3,650,042 Capital Outlay 10,777,668 25,664,366 28,470,675 26,733,173 Debt service:

Principal 4,453,442 30,144,672 5,433,042 3,391,747
Interfund interest 636,401 606,114 577,052 543,708
Interest 5,139,543 4,950,664 4,627,754 3,663,254
Cost of issuance - 207,500 361,287 383,662
Total expenditures 98,119,898 142,868,727 120,513,115 118,354,635 Excess (deficiency) of revenue over (under) expenditures 15,309,767 (17,067,793) 18,555,723 3,215,280 Other Financing Sources (Uses):

Capital lease proceeds - - 1,234,862 -
Gain (loss) on resale land - - - -
Issuance of notes - - - -
Issuance of bonds - 25,920,000 4,235,000 17,475,000
Payments to refunded bond escrow - - (18,784,512) (19,420,000) Debt issuance premiums (discounts) - - - 1,419,256
Transfers in 11,001,936 34,083,575 8,824,216 29,471,537 Transfers out (11,001,936) (34,083,575) (8,824,216) (29,471,537) Total other financing sources (uses) - 25,920,000 (13,314,650) (525,744) Special Item:

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

Net Change in Fund Balances $ 15,309,767 $ 8,852,207 $ 5,241,073 $ 2,689,536 Debt services as a percentage of non-capital expenditures %15.07 %31.36 %13.21 %9.87 Source: City of Palmdale, Finance Department and Audited Annual Financial Reports

1.Transfers In excludes $6,565,097 of Interservice Funds Capital Assets that were transferred in 2021 (Proprietary Funds) and are not Governmental funds.
184
City of Palmdale
Changes in Fund Balances, Governmental Funds (Continued) Last Ten Fiscal Years
Modified Accrual Basis of Accounting
2018 2019 2020 2021 2022 20231
$ 54,229,982 $ 59,912,769 $ 59,928,123 $ 73,442,350 $ 95,738,138 $ 98,305,989 28,470,216 31,759,025 41,727,112 28,048,936 29,955,623 43,421,415 18,692,915 14,995,901 22,247,921 23,850,691 26,552,574 25,184,391 2,180,693 1,998,982 3,528,336 3,385,143 5,747,192 5,066,521 18,204,324 18,569,358 18,397,067 19,505,242 19,263,188 21,355,867 516,103 481,194 882,858 440,665 26,251 197,519
2,260,381 3,487,106 3,528,323 1,203,208 2,316,885 5,696,495 35,953 35,925 - - - -
126,153 161,608 5,898,413 3,506,182 2,418,565 2,224,920 (941,708) 2,401,196 1,317,573 (483,057) (10,179,175) (4,534,354) 3,925,523 9,361,216 3,657,594 3,728,242 3,828,120 7,240,973 - - - - 2,611 1,840
127,700,535 143,164,280 161,113,320 156,627,602 175,669,972 204,161,576 15,629,948 16,266,972 20,039,498 17,797,687 20,406,076 31,377,928 28,107,228 29,083,581 30,684,148 33,615,289 35,754,740 33,072,154 20,980,917 22,432,301 23,487,783 28,455,439 32,762,556 49,106,675 6,566,458 7,324,760 7,192,095 9,388,083 7,913,876 12,636,912 10,086,436 10,783,255 11,246,819 7,369,676 9,231,767 11,041,091 1,872,018 1,774,890 1,209,687 1,088,504 312,924 473,993 25,935,646 37,329,350 38,890,472 24,579,551 20,405,381 18,366,685 3,425,667 3,587,279 5,744,341 4,764,954 5,188,550 5,048,427 516,103 481,194 882,858 3,052,447 2,393,414 2,238,143
3,348,492 3,416,038 3,245,817 706,665 26,251 184,419
157,280 - - 141,893 - -
116,626,193 132,479,620 142,623,518 130,960,188 134,395,535 163,546,427 11,074,342 10,684,660 18,489,802 25,667,414 41,274,437 40,615,149 14,161 - - - - -
377,481 91,753 80,796 - 341,784 -
- 1,252,500 - 14,103,744 - -
11,397,102 - - - - -
- - - (14,943,599) - -
- - - - - -
8,153,168 9,104,075 7,644,581 42,407,576 8,709,061 11,473,926 (8,153,168) (9,104,075) (7,644,581) (48,972,673) (8,709,061) (10,896,008) 11,788,744 1,344,253 80,796 (7,404,952) 341,784 577,918 - (10,158,182.00) - - - -
$ 22,863,086 $ 1,870,731 $ 18,570,598 $ 18,262,462 $ 41,616,221 $ 41,193,067 %12.35 %7.60 %8.52 %5.25 %6.71 %3.64
185
City of Palmdale
General Governmental Tax Revenue by Source
Last Ten Fiscal Years
Fiscal
Year
Property and
Tax Increment
Revenuea
Sales and
Use Taxes
Business
License
Tax
Franchise
Tax
Gasoline
Tax
Transient
Occupancy
Taxb
Real Property
Transfer
Tax Total
2013-14 $ 15,478,125 $ 16,396,713 $ 515,815 $ 5,847,596 $ 4,649,226 $ 2,824,182 $ 377,364 $ 46,089,021 2014-15 17,152,560 17,084,411 551,202 5,526,119 4,351,675 3,089,802 366,535 48,122,304 2015-16 18,118,214 19,186,043 569,381 5,562,090 3,392,713 3,278,724 493,284 50,600,449 2016-17 19,514,208 18,577,244 589,805 5,352,221 3,031,375 3,716,154 502,781 51,283,788 2017-18 20,983,338 19,267,083 628,303 5,463,623 3,310,498 4,028,350 548,787 54,229,982 2018-19 22,953,195 21,798,640 628,479 6,225,233 3,213,087 4,653,290 440,845 59,912,769 2019-20 24,442,179 21,587,441 666,997 5,458,426 3,559,379 3,697,656 516,045 59,928,123 2020-21 26,631,165 30,305,927 468,666 7,441,119 3,566,382 4,667,137 650,123 73,730,519 2021-22 27,318,103 50,484,625 677,197 7,497,156 3,668,344 5,540,832 952,103 96,138,360 2022-23 29,331,756 50,484,537 624,183 8,684,132 4,225,711 4,608,941 551,908 98,511,168 a Sales and Use Taxes for 2021 includes the City's local transactions and use tax (Measure AV) and this is a special district tax that became effective April 1, 2021.
b Transient Occupancy Tax has increased by 80.24 percent as the result of additional hotels opening since 2009-10.

Source: City of Palmdale, Finance Department
186
City of Palmdale
Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years
Secured Property
Fiscal
Year
Residential
Property
Commercial
Property
Industrial
Property
Dry Farm
Property
Governmental
Property
Institutional
Property
Irrigated
Property
Miscellaneous
Property
2013-14 $ 6,272,332,777 $ 1,297,491,324 $ 470,738,935 $ 3,070 $ 273,000 $ 218,014,208 $ 2,143,503 $ 3,254,005 2014-15 7,077,476,628 1,327,043,593 371,182,157 3,083 292,000 222,889,982 2,152,995 5,245,552 2015-16 7,635,291,990 1,365,232,525 511,346,775 3,144 452,000 225,436,801 2,386,169 3,365,234 2016-17 8,037,144,588 1,420,981,536 538,952,556 3,191 - 243,902,415 2,422,533 5,191,041 2017-18 8,533,219,339 1,469,739,955 591,126,895 3,254 - 255,229,741 2,470,953 5,416,084 2018-19 9,092,073,933 1,539,003,968 637,402,588 1,311,427 - 264,757,053 2,520,345 6,346,928 2019-20 9,604,501,555 1,615,682,922 461,649,492 1,337,654 - 280,936,547 2,973,968 9,002,895 2020-21 10,110,405,114 1,748,162,062 467,272,879 1,364,404 - 332,597,730 3,033,418 9,255,140 2021-22 10,576,572,497 1,776,996,314 499,665,315 1,378,537 - 286,951,575 3,064,824 13,722,590 2022-23 11,388,056,864 1,830,123,822 566,669,970 2,819,010 - 300,040,294 5,193,711 13,997,032 Secured Property
Fiscal
Year
Recreational
Property
Vacant Land
Property
Cross Reference
Property
Exempt
Property
Unknown
Property
Total
Secured
SBE Nonunitary
Property
Unsecured
Property
Total Taxable
Assessed Value
Total Direct
Tax
Rate
2013-14 $ 30,562,607 $ 549,530,339 $ 157,243,314 $ (78,516,112) 6,000 $ 8,923,076,970 $ 963,200 $ 354,680,993 $ 9,278,721,163 0.07637 2014-15 30,665,697 558,074,395 174,080,817 (78,416,749) 6,000 9,690,696,150 963,200 362,362,996 10,054,022,346 0.07933 2015-16 31,833,238 577,190,707 200,289,742 (75,198,398) 6,000 10,477,635,927 963,200 415,364,218 10,893,963,345 0.07867 2016-17 32,269,300 605,292,964 176,381,014 (75,989,372) 6,000 10,986,557,766 963,200 392,307,216 11,379,828,182 0.07878 2017-18 35,235,135 652,028,634 201,337,611 (68,143,060) 6,000 11,677,670,541 836,266 448,141,048 12,126,647,855 0.07858 2018-19 40,385,529 649,821,664 196,505,558 (67,773,322) 6,000 12,362,361,671 836,266 499,037,306 12,862,235,243 0.07875 2019-20 40,807,956 646,784,750 261,764,983 (76,302,878) 6,000 12,849,145,844 836,266 741,701,115 13,591,683,225 0.07893 2020-21 53,368,986 690,821,809 262,686,124 (75,151,870) - 13,603,815,796 836,266 1,014,356,469 14,619,008,531 0.07824 2021-22 51,999,974 696,688,023 272,762,641 (75,763,812) - 14,104,038,478 743,841 793,603,730 14,898,386,049 0.07858 2022-23 49,497,383 813,600,723 227,898,611 (75,770,290) 22 $ 15,122,127,152 743,841 956,020,410 $16,078,891,403 0.08046 Note 1: Exempt values are not included in total taxable assessed value Note 2: In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Data Source: L.A County Assessor 2013/14 - 2022/23 Combined Tax Rolls 187
City of Palmdale
Direct and Overlapping Property Tax Rates
Last Ten Fiscal Years
(Rate per $100 of Taxable Value)
2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Basic Levy1 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 %1.00000 Acton-Agua Dulce USD DS 2008 Series A %0.03271 %0.03386 %0.03538 %0.03886 %0.03652 %0.03875 %0.04022 %0.03906 %0.03903 %0.03790 Antelope Valley Community College %0.02740 %0.02480 %0.02556 %0.02560 %0.04869 %0.04847 %0.04722 %0.04247 %0.04424 %0.04060 Antelope Valley Union High %0.02602 %0.02585 %0.02428 %0.02474 %0.02357 %0.02317 %0.02187 %0.02163 %0.02360 %0.02289 Antelope Valley East Kern Water Agency %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 %0.07049 Eastside Union School District %0.08677 %0.08893 %0.08176 %0.08449 %0.08029 %0.07257 %0.07363 %0.06430 %0.06774 %0.04626 Lancaster School District %0.05503 %0.04837 %0.05449 %0.05511 %0.06398 %0.05620 %0.05864 %0.06540 %0.06567 %0.06259 Palmdale School District %0.04839 %0.04591 %0.04973 %0.03819 %0.07534 %0.07211 %0.07059 %0.07264 %0.07121 %0.07131 Palmdale Water District %0.32898 %0.34586 %0.29922 %0.27726 %0.26591 %0.22356 %0.21817 %0.19676 %0.26418 %0.23064 Westside Union School District %0.05615 %0.08166 %0.08107 %0.07929 %0.07904 %0.07895 %0.07507 %0.07656 %0.07546 %0.07421 Total Direct & OverlappingTax Rates2 %1.73194 %1.76573 %1.72198 %1.69403 %1.74383 %1.68427 %1.67590 %1.64931 %1.72162 %1.65689 City Share of 1% Levy per Prop 133 %0.06629 %0.10374 %0.10374 %0.10374 %0.10374 %0.10367 %0.10367 %0.10367 %0.10367 %0.10367 Total Direct Rate4 %0.43604 %0.07637 %0.07933 %0.07867 %0.07878 %0.07858 %0.07875 %0.07893 %0.07824 %0.08046 Notes:
1 In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values of the payment of any approved bonds. 2 Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
3 City's share of 1% levy is based on the City's share of the general fund tax rate area with the largest net taxable value with the City. ERAF general fund tax shifts may not be included in tax ratio figures. 4 Total direct rate is the weighted average of all individual direct rates and applied by the City of Palmdale.

Data Source: L.A. County Assessor 2014/13 - 2023/22 Tax Rate Table 188
City of Palmdale
Principal Property Tax Payers
Current Year and Nine Years Ago
2022-23 2013-14
Tax Payer
Taxable
Assessed
Value
Percentage
of Total City
Taxable
Assessed
Valuation
Taxable
Assessed
Value
Percentage
of Total City
Taxable
Assessed
Valuation
Lockheed Corporation $ 618,438,469 %3.8 $ 331,503,044 %3.5 Northrop Grumman Systems Corporation 304,786,477 %1.9 110,356,894 %1.2 Antelope Valley Shop LLC 264,468,175 %1.6 118,748,208 %1.3 Lancaster Hospital Corporation 262,782,636 %1.6 218,143,591 %2.3 Walmart/Sam's Club 85,663,826 %0.5 75,542,379 %0.8
Spectrum Pacific West LLC 70,123,795 %0.4 - %0.0
Hastings Ranch Shopping Center LP 65,374,782 %0.4 - %0.0 Allegra Palmdale LLC 59,700,000 %0.4 - %0.0
Golden Spectrum Property LLC 47,615,593 %0.3 - %0.0
2018 1 IH Borrower LP 45,229,661 %0.3 - %0.0
MGP X Properties LLC Lessor - %0.0 94,219,638 %1.0
Time Warner Cable - %0.0 45,288,074 %0.5
Universal Health Svs of Palmdale Inc. - %0.0 39,759,313 %0.4 Target Corporation - 0.0 39,378,819 0.4
LV Ritter Ranch LLC - %0.0 32,425,800 %0.3
Top Ten Total 1,824,183,414 %11.3 1,105,365,760 %11.8
Total City Taxable Assessed Value $ 16,154,662,024 %100.0 $ 9,357,237,275 %100.0 Source: HdL Coren & Cone, Los Angeles County Assessor 2022/23 and 2013/14 Combined Tax Roll 189
City of Palmdale
City Property Taxes Levies and Collections
Last Ten Fiscal Years
Fiscal
Year City Property Tax Subsequent Collections
Total
Collections
Levy (1)
Collections
(2)
Percentage
of Levy
Supplemental
(3)
Redemption(
(4)
Refunds
Adjustments
(5)
Percentage
of Levy
2013-14 4,866,006 4,295,755 88.28% 323,668 79,763 118,794 4,817,980 99.01% 2014-15 5,181,707 4,561,031 88.02% 159,671 54,300 338,739 5,113,741 98.69% 2015-16 5,564,458 4,851,602 87.19% 186,674 60,744 362,953 5,461,973 98.16% 2016-17 5,402,998 4,987,980 92.32% 140,425 61,470 155,603 5,345,478 98.94% 2017-18 5,828,578 5,228,633 89.71% 147,686 55,389 324,312 5,756,020 98.76% 2018-19 6,806,674 5,583,646 82.03% 181,836 55,887 912,182 6,733,551 98.93% 2019-20 7,618,313 5,801,915 76.16% 175,030 66,903 1,338,234 7,382,082 96.90% 2020-21 7,448,412 6,270,301 84.18% 122,110 112,061 879,714 7,384,186 99.14% 2021-22 7,499,947 6,530,266 87.07% 193,286 112,685 700,093 7,536,330 100.49% 2022-23 7,875,427 6,789,097 86.21% 166,732 119,240 738,453 7,813,522 99.21% (1) Billings represents the Secured, Unsecured, and Homeowners Property Tax billed amounts for each fiscal year (2) Collections represents the Secured, Unsecured, and Homeowners Property Tax collected amounts for each fiscal year (3) SB813 requires than a supplemental assessment be enrolled for the amount of the difference in value between regular assessment roll and the new fair market value after a change of ownership. The Supplemental figures were taken from LA County remittances and may include supplemental amounts from prior fiscal years. (4) Redemption collections represent tax-defaulted secured property taxes that were unpaid at the end of a fiscal year. The Redemption figures were taken from LA County remittances and may include redemption amounts from prior fiscal years. (5) Refunds represent overpayments of taxes due because of a decrease in value; whereas adjustments represent changes to the tax roll. The Refund and Adjustment figures were taken from LA County remittances and may include refunds and/or adjustments from prior fiscal years.
190
City of Palmdale
Ratios of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal
Year
Certificates
of
Participation
Tax
Allocation
Bondsa
Revenue
Bonds
Capital
Leases
Other
Notes
Payable
Total
Governmental
Activities
Percentage
of Personal
Income (1)
Per
Capita (1)
2014 $ 66,537,300 $ - $ 30,392,752 $ 962,260 $ 7,084,485 $ 104,976,797 %3.63 674 2015 65,097,544 - 28,337,814 697,150 6,474,923 100,607,431 %3.32 629 2016 62,879,049 - 12,440,000 1,636,893 6,117,000 83,072,942 %2.76 524 2017 41,160,000 - 30,736,782 1,310,146 5,862,000 79,068,928 %2.53 498 2018 39,815,000 - 28,901,224 1,091,639 17,614,522 87,422,385 %2.80 550 2019 38,315,000 - 26,982,753 964,360 18,271,625 84,533,738 %2.54 536 2020 36,655,000 - 25,054,801 832,294 15,984,014 78,526,109 %2.25 501 2021 33,649,908 - 22,635,000 1,183,278 15,035,845 72,504,031 %2.04 465 2022 31,542,451 - 21,088,805 1,019,884 13,918,357 67,569,497 %1.90 404 2023 29,438,552 - 18,950,834 966,140 12,573,358 61,928,884 %1.48 373 Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements. (1) These ratios are calculated using per capita personal income and population for the prior calendar year provided by HdL, Coren & Cone
Source: City of Palmdale, Finance Department
191
City of Palmdale
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal Year
Tax Allocation
Bondsa
Revenue*
Bonds Total
Percent of
Assessed
Value (1)
Per
Capita
2014 $ - $ 30,392,752 $ 30,392,752 %0.33 195
2015 - 28,337,814 28,337,814 %0.28 177
2016 - 8,205,000 8,205,000 %0.08 52
2017 - 25,180,000 b 25,180,000 %0.22 158
2018 - 23,685,000 23,685,000 %0.19 149
2019 - 22,090,000 22,090,000 %0.17 140
2020 - 20,465,000 20,465,000 %0.15 131
2021 - 18,800,000 18,800,000 %0.15 120
2022 - 17,025,000 17,025,000 %0.11 102
2023 - 15,105,000 15,105,000 %0.09 91
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

General bonded debt is debt payable with governmental fund resources recorded in Palmdale Financing Authority (of which the City has none).
(1) Assessed value has been used because the actual value of taxable property is not readily available in the State of California. a A decrease in Tax Allocation Bonds reported is the direct result of the dissolution of all California Redevelopment Agencies during 2011-12. The Debt previously reported under the City of Palmdale's Redevelopment Agency, a component unit of the City of Palmdale, is now being reported under a Private Purpose Trust Fund effective February 1, 2012. b A increase in total Revenue Bonds reported in 2017 as compared to 2016 is the result of refunding revenue bonds issued to pay off certificates of participation during 2016-17.
*During FY2012-13, $8,695,000 Lease Revenue Bonds were issued. 192
City of Palmdale
Direct and Overlapping Governmental Activities Debt
June 30, 2023
City Assessed Valuation $ 8,440,167,798
Redevelopment Agency Incremental Valuation 7,714,464,226 Total Assessed Valuation $ 16,154,632,024
OVERLAPPING DEBT:

Toal Debt
6/30/2023
Percentage
Applicable
to City
City's Share
of Debt
6/30/2023
Antelope Valley Joint Community College District $ 431,450,916 %36.510 $ 157,522,729 Antelope Valley Union High School District 31,279,873 %41.388 12,946,114 Acton-Agua Dulce Unified Schooll District 8,580,665 %0.006 515 Eastside Union School District 2,540,000 %15.050 382,270 Lancaster School District 66,107,091 %0.464 306,737
Palmdale School District 162,980,799 %94.735 154,399,860 Westside Union School District 39,918,813 %40.183 16,040,577 Palmdale School District Community Facilities District No. 90-1 51,058,773 %98.844 50,468,534 Westside Union School District Community Facilities Districts 8,610,000 %100.000 8,610,000 City of Palmdale Community Facilities Districts 45,496,334 %100.000 45,496,334 City of Palmdale Assessment District No. 2006-1 960,000 %100.000 960,000 City of Palmdale Street Lighting and Maint Assessment Districts 8,529,109 %100.000 8,529,109 Los Angeles County General Fund Obligations 2,601,551,282 %0.856 22,269,279 Los Angeles County Superintendent of Schools Certificates of Participation 3,403,487 %0.856 29,134 Antelope Valley Joint Community College Dist Certificates of Participation 9,920,000 %36.510 3,621,792 Acton-Agua Dulce Unified School District Certificates of Participation 1,650,000 %0.006 99 Antelope Valley Union High School District General Fund Oblications 6,000,000 %41.388 2,483,280 Lancaster School District Certificates of Participation 6,015,000 %0.464 27,910 Palmdale School District Certificates of Participation 11,046,670 %94.735 10,465,063 City of Palmdale General Fund Obligations 46,084,461 %100.000 46,084,461 Los Angeles County Sanitation District No. 14 Authority 106,266 %18.606 19,772 Los Angeles County Sanitation District No. 20 Authority 88,682 %98.101 86,998 Total Overlapping Debt $ 540,750,567
Successor Agency to Palmdale Redevelopment Agency $ 62,777,614 Total Direct and Overlapping Debt $ 603,528,181
Notes:

The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlaping district's assessed value that is within the boundaries of the city devided by the district's total taxable assessed value.

Combined Total Debt excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bounded capital lease obligations.

Data Source HDL Coren & Cone, L. A. County Assessor and Auditor Combined 2022/23 Tax Rolls. 193
City of Palmdale
Legal Debt Margin Information
Last Ten Fiscal Years
Fiscal Year
Assessed
Evaluation
Debt Limit
(1)
Total Net Debt
Applicable to the
Limit (2)
Total Debt
Applicable to the
Limit as a Percentage
of Debt Limit
2013-14 $ 9,357,237,275 $ 350,896,398 $ 115,840,632 %33.01 2014-15 10,380,860,342 389,282,263 112,074,317 %28.79
2015-16 10,969,161,743 441,343,565 121,994,744 %27.64
2016-17 11,455,817,554 429,593,158 121,593,787 %28.30
2017-18 12,194,790,915 457,304,659 114,426,984 %25.02
2018-19 12,930,008,625 484,875,323 105,383,212 %21.73
2019-20 13,667,986,103 512,549,479 98,452,808 %19.21
2020-21 14,694,160,401 551,031,015 91,438,375 %16.59
2021-22 14,974,149,861 561,530,620 84,274,517 %15.01
2022-23 16,154,662,024 605,799,826 76,912,668 %12.70
Source: Los Angeles County
Note (1): The legal debt limit is statutorily computed at 3.75% of assessed valuation.

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

Note (3): The aggregate principal amount of the City's general obligation debt for public improvements is statutorily limited to 15.0 percent of the City's total reported assessed valuation. 194
City of Palmdale
Former Community Redevelopment Agency - Project Area 1 & 1 A Pledged-Revenue Coverage Last Ten Fiscal Years
1993 Revenue Bonds
Debt Service (1)
2003 Revenue Bonds 19.2
Debt Service (3)
2009 Note Payable 6.0
Debt Service (4)
2010 Tax Allocation Note

27.5 Debt Service (5)
Fiscal
Year Principal Interest Principal Interest Principal Interest Principal Interest 2014 $ - $ - $ 845,000 $ 672,737 $ 105,000 $ 373,713 $ 1,265,627 $ 1,485,033 2015 - - 875,000 638,338 115,000 366,491 1,344,967 1,405,693 2016 - - 910,000 602,638 125,000 358,613 1,429,282 1,321,378 2017 - - - - - - 1,518,883 1,231,777
2018 - - - - - - 1,614,102 1,136,558
2019 - - - - - - 1,715,292 1,035,369
2020 - - - - - - 1,822,825 927,835
2021 - - - - - - 1,937,100 813,560
2022 - - - - - - 2,058,542 692,118
2023 - - - - - - 2,187,598 563,063
Debt Summary Pledge Revenue
Fiscal
Year Total Principal Total Interest
Total Debt
Service
Gross Tax
Increment (6)
Less: Operating
Expenses (7) Net Available Coverage
2014 $ 2,215,627 $ 2,531,483 $ 4,747,110 $ 8,696,225 $ 341,547 $ 8,354,678 1.76 2015 2,334,967 2,410,522 4,745,489 8,956,435 327,804 8,628,631 1.82 2016 2,464,282 2,282,629 4,746,911 9,245,959 352,357 8,893,602 1.87 2017 1,518,883 1,231,777 2,750,660 9,666,704 393,523 9,273,181 3.37 2018 1,614,102 1,136,558 2,750,660 10,236,117 402,461 9,833,656 3.58 2019 1,715,292 1,035,369 2,750,661 10,529,801 429,833 10,099,968 3.67 2020 1,822,825 927,835 2,750,660 11,393,921 452,757 10,941,164 3.98 2021 1,937,100 813,560 2,750,660 11,560,764 477,635 11,083,129 4.03 2022 2,058,542 692,118 2,750,660 10,762,947 485,552 10,277,395 3.74 2023 2,187,598 563,063 2,750,661 14,423,539 501,972 13,921,567 5.06 Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes
Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18)
Source: City of Palmdale, Finance Department
(1) Revenue Bonds were fully matured and paid off in FY 2011. (2) 2003 Bond Anticipation Note was fully defeased in June 2009 by the CRA Loan associated with the 2009 Revenue Bonds. (3) 2003 Revenue Bonds were fully defeased in April 2016 by the Successor Agency 2016 Series A Tax Allocation Refunding Bonds.
(4) 2009 Revenue Bonds were fully defeased in June 2016 by the Successor Agency 2016 Series B Tax Allocation Refunding Bonds.
(5) Sole source of payment on 2011 Tax Allocation Notes is Available Tax Increment, but is subordinate to any existing or future indebtedness.
(6) Gross Tax Increment consist of property taxes generated from Project Area No. 1&1A (7) Operating Expenses consist of the 20% set-aside property taxes generated from Project Area No. 1&1A up until 2011, pass through payments pursuant to agreements to allocate tax increment funds to various Local Agencies, and other charges related to administering Area 1&1A debt.
195
City of Palmdale
Former Community Redevelopment Agency - Project Area 2A Pledged-Revenue Coverage Last Ten Fiscal Years
1999 Sublien TAB 2.7
Debt Service (2)
2002 TAB 5.3
Debt Service
2004 TAB 6.09
Debt Service (3)
2004 TAB 18.5
Debt Service (3)
1998 TAB 30.6
Debt Services (2)
1994 Revenue Bonds Debt
Service (1)
1997 Revenue Bonds
Debt Service (1)
Fiscal Year Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2014 $ 105,000 $ 150,837 $ - $ - $ 155,000 $ 263,780 $ 300,000 $ 873,750 $ 675,000 $ 1,282,375 $ 205,000 $ - $ 805,000 $ 120,820 2015 110,000 144,925 - - 160,000 258,580 310,000 858,500 710,000 1,247,750 205,000 - 850,000 74,480 2016 115,000 70,950 - - 165,000 252,890 320,000 842,750 740,000 1,211,500 215,000 - 905,000 25,340 2017 - - 970,000 - - - - - - - - - - -
2018 - - - - - - - - - - - - - -
2019 - - - - - - - - - - - - - -
2020 - - - - - - - - - - - - - -
2021 - - - - - - - - - - - - - -
2022 - - - - - - - - - - - - - -
2023 - - - - - - - - - - - - - -
2016 TAB A&B 73.1
Debt Service Debt Summary Pledge Revenue
Fiscal Year Total Principal Total Interest Total Principal Total Interest Total Debt Service Sales Tax (4) Gross Tax
Increment (6)
Less: Operating
Expenses (7) Net Available Coverage
2014 $ - $ - $ 2,245,000 $ 2,691,562 $ 4,936,562 Note (6) $ 29,406,998 $ 17,777,381 Note (6) Note (6) 2015 - - 2,345,000 2,584,235 4,929,235 Note (6) 32,813,662 19,508,055 Note (6) Note (6) 2016 - - 2,460,000 2,403,430 4,863,430 Note (6) 34,915,819 20,449,662 Note (6) Note (6) 2017 1,235,000 2,611,743 2,205,000 2,611,743 4,816,743 Note (7) 40,469,941 22,224,293 18245648 4 2018 3,130,000 3,394,850 3,130,000 3,394,850 6,524,850 Note (7) 40,400,227 22,619,322 17,780,905 2.73 2019 3,250,000 3,282,900 3,250,000 3,282 3,253,282 Note (7) 44,929,524 24,908,918 20,020,606 3.06 2020 3,365,000 3,133,775 3,365,000 3,133,775 6,498,775 Note (7) 45,399,840 27,528,918 17,870,922 2.75 2021 3,540,000 2,961,150 3,540,000 2,961,150 6,501,150 Note (7) 55,069,687 29,999,947 25,069,740 3.86 2022 3,725,000 2,779,525 3,725,000 2,779,525 6,504,525 Note (7) 51,713,436 25,024,544 26,688,892 3.59 2023 3,915,000 2,588,525 3,915,000 2,588,525 6,503,525 Note (7) 59,111,800 30,448,362 28,663,438 4.41 Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes to the financial statements.

Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18)
Source: City of Palmdale, Finance Department
(1) The 1994 and 1997 Revenue Bonds were fully matured and paid off in FY 2016. (2) The 1998 and 1999 Tax Allocation Bonds were fully defeased in April 2016 by the Successor Agency 2016 Series A Tax Allocation Refunding Bonds.
(3) The 2004 $18.5M and 2004 $6.1 Tax Allocation Bonds were fully defeased in June 2016 by the Successor Agency 2016 Series B Tax Allocation Refunding Bonds.
(4) (Gross sales tax and tax increment consist of property taxes and sales tax generated from Project Area No. 2A. (5) Operating Expenses consist of the 20% set-aside property taxes generated from Project Area No. 2A up until 2011, pass through payments pursuant to agreements to allocate tax increment funds to various Local Agencies, and other charges related to administering Area 2A debt.
(6) Due to the dissolution of the Community Redevelopment Agency in 2012, the Sales Tax generated by Project Area was not available therefore the "Net Available" and "Coverage" percent is not available. (7) Due to the FY 2016 refunding of bond issues with a sales tax pledge, there is no longer any pledge of sales tax towards any Successor Agency debt.
196
City of Palmdale
Former Community Redevelopment Agency - Project Area 2A (20 Percent Set Aside) Pledged-Revenue Coverage Last Ten Fiscal Years
2003 TAB 5.9
Debt Service (1)
2003 TAB 7.2
Debt Service (1)
2005 TAB 14.115
Debt Service (1)
2005 TAB 2.8
Debt Service (1)
Fiscal Year Principal Interest Principal Interest Principal Interest Principal Interest 2014 $ 180,000 $ 192,523 $ 30,000 $ 341,168 $ 525,000 $ 452,104 $ 35,000 $ 113,599 2015 180,000 186,043 35,000 339,803 550,000 430,541 35,000 112,356 2016 190,000 179,103 35,000 338,333 570,000 407,479 40,000 110,976 2017 - - - - - - - -
2018 - - - - - - - -
2019 - - - - - - - -
2020 - - - - - - - -
2021 - - - - - - - -
2022 - - - - - - - -
2023 - - - - - - - -
Debt Summary Pledge Revenue
Fiscal Year Total Principal Total Interest
Total Debt
Service
20 Percent Set
Aside Tax
Increment (2) Net Available Coverage
2014 $ 770,000 $ 1,099,394 $ 1,869,394 $ 5,921,235 $ 5,921,235 3.17 2015 800,000 1,068,743 1,868,743 5,881,400 5,881,400 3.15 2016 835,000 1,035,891 1,870,891 6,562,732 6,562,732 3.51 2017 - - - 6,983,164 6,983,164 3.73
2018 - - - - - -
2019 - - - - - -
2020 - - - - - -
2021 - - - - - -
2022 - - - - - -
2023 - - - - - -
Note: Details regarding the City's debt and the Successor Agency to the former Community Redevelopment Agency's debt can be found in the notes to the financial statements
Note: As the result of the dissolution of the former Community Redevelopment Agency, the debt listed on this schedule has been assumed by the Successor Agency of the Former Community Redevelopment Agency. The debt has been approved by the State Department of Finance as an enforceable obligation and will be paid from future tax revenues received by the Private Purpose Trust Fund. (Note 18)
Source: City of Palmdale, Finance Department
(1) The 2003 Series C & D TAB's and the 2005 Series E & F TAB's were fully defeased in April 2016 by the Successor Agency 2016 Series B TAB's.
(2) The pledged revenues represent 20% property tax increments generated from Project Area 2A and set aside as required by State law for low and moderate income housing.
(3) Due to the dissolution of the Community Redevelopment Agency during 2012, the 20% set aside is no longer required. The 20% set aside calculated is based on what it should have been if legally required. 197
City of Palmdale
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal
Year
(1)
Population
(2)
Personal
Income
(thousands
of dollars)
(2)
Per
Capita
Personal
Income
(2)
Median
Age
(3)
School
Enrollment
(4)
Unemployment
Rate
(5)
Percent of Pop
25+
with HS
Degree
(5)
Percent of Pop
25+
with Bachelor's
Degree
2013 154,629 $ 2,890,789 $ 18,695 28.70 31,226 %10.8 %73.0 %14.7 2014 155,734 2,892,448 18,573 29.10 35,356 %11.0 %74.2 %15.3 2015 160,072 3,028,678 18,920 29.30 34,932 %9.0 %73.6 %15.5 2016 158,605 3,010,803 18,983 30.10 33,874 %7.1 %74.2 %14.8 2017 158,905 3,121,978 19,646 30.40 36,785 %6.2 %74.0 %15.0 2018 157,854 3,327,236 21,077 31.30 35,799 %6.4 %74.4 %14.7 2019 156,737 3,598,995 22,962 31.90 22,166 %14.9 %75.8 %16.5 2020 156,074 3,545,820 22,718 32.00 4,946 %15.3 %74.6 %15.5 2021 167,398 3,565,478 21,299 32.30 35,812 %12.4 %75.6 %15.7 2022 165,917 4,173,670 25,155 32.60 35,640 %7.1 %76.3 %16.1 Source:
(1) California State Department of Finance, Demographic Research Unit E-1: City/County Population Estimates (2) HdL Coren & Cone, U.S. Census Bureau, most recent American Community Survey. 2010, and later - Income, Age and Education Data - US Census Bureau, most recent American Community Survey. (3) Palmdale School District, California Department of Education - SARC Not Available for Palmdale School District and AVUHSD. Only Westside School District is available
(4) California Employment Development Department.
(5) U.S. Census Bureau
198
City of Palmdale
Principal Employers - Antelope Valley
Calendar Year 2023 and Calendar Year 2013
2023 2013
Employer
Number of
Employees
Percentage of
Total Valley
Employment Employer
Number of
Employees
Percentage of
Total Valley
Employment
Northrop Grumman 7,000 8.07% Edwards Air Force Base 10,808 17.45% Lockeed Martin 3,750 4.33% China Lake NWC 9,172 14.81%
Antelope Valley Union High Schood
Dist. 3,089 3.56% County of Los Angeles 3,953 6.38%
Palmdale School District 2,100 2.42% Lockheed Martin 3,000 4.84% Antelope Valley Mall 1,800 2.08% Palmdale School District 2,682 4.33% Palmdale Regional Medical Center 1,200 1.38% Antelope Valley Hospital Medical Center 2,619 4.23% Palmdale Walmart 800 0.92% Northrop-Grumman 2,573 4.16% Robertson's Ready Mix Concrete 500 0.58% A.V. High School District 2,037 3.29% Palmdale Auto Mall 410 0.47% AV Walmart 1,922 3.10%
Granite Construction 400 0.46% Tehachapi State Prison 1,915 3.09% Source: City of Palmdale Economic Development Department 199
City of Palmdale
Full-time-Equivalent City Government Employees by Function:Program Last Ten Fiscal Years
Function 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 City council - - - - - - - 0.50 1.00 1.00
City manager 7.00 5.00 6.00 8.00 8.00 12.00 25.00 46.50 56.00 56.00 City attorney 4.00 4.00 4.00 4.00 4.00 6.00 6.00 8.00 8.00 8.00 Administrative services 17.00 20.00 20.00 21.00 21.00 21.00 13.00 - - - Economic & community development* 33.00 39.00 25.00 27.00 29.00 29.00 30.00 31.00 34.00 34.00 Neighborhood services 24.00 21.00 20.00 21.00 24.00 23.00 23.00 24.00 31.00 38.00 Public works* 83.00 81.00 97.00 103.00 110.00 112.00 114.00 116.00 119.00 126.00 Recreation & culture 13.00 14.00 14.00 14.00 16.00 16.00 17.00 19.00 22.00 24.00 Total 181.00 184.00 186.00 198.00 212.00 219.00 228.00 245.00 271.00 287.00 - 2021 reorganization resulted in consolidation of Administrative Services full time employees into City Manager's Office. - 2016 Fluctuation in full time employees was caused by a reorganization.

Source: City of Palmdale, Finance Department
200
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Communications:

Video segments produced1 7 10 16 12 21 94 127 113 124 145 Commercials/Social media1 4 5 7 8 7 5 8 8 932 597
Photos/Graphics produced1 2 24 39 33 39 65 68 72 985 961 Publications produced1 3 3 3 3 3 15 15 15 104 3
Newsletters/Media releases1 51 102 148 109 188 224 265 309 251 213 Economic and Community
Development:

Film permits issued 15 19 36 35 29 30 19 28 39 29
Businesses licensed 6,240 8,873 9,585 10,099 9,929 9,456 9,372 6,560 8,692 8,207 Building permits issued 1,168 1,517 1,814 1,742 1,566 1,674 1,935 1,951 1,224 1,979 Engineer grading permits issued 23 17 22 26 18 16 41 27 48 30 Engineer Geotechnical review 18 10 20 12 12 17 20 16 45 28 Engineer Improvement plans 80 70 139 166 194 373 320 115 251 367 Engineer Inspections 2,189 3,200 2,219 965 1,101 1,543 1,311 1,009 1,575 1,502 Financial assistance to
businesses - - - - - - - 70 34 24
SBDC business counseling
hours 275 275 206 374 286 351 249 358 444 8,000
Business retention site visits 32 35 34 36 35 25 8 290 385 558 General Government:

Buildings maintained 48 57 64 65 57 60 60 60 75 75
Square footage of facilities 312,600 415,830 424,488 418,000 418,000 423,000 432,000 432,000 405,000 420,000 Neighborhood Services
Neighborhood watch
presentations 115 118 66 86 88 32 14 16 21 34
Business watch presentations 36 11 52 57 63 11 3 2 2 8
PAC presentations 62 11 25 8 11 8 4 5 3 11
Administration Citations
Processed 641 741 361 818 630 559 1,242 968 1,081 1,479 Parking Enforcement:

Vehicle Impounds 330 205 500 483 462 396 405 351 268 417 Citations Issued 5,585 5,195 3,560 5,430 7,233 6,014 6,633 3,065 3,073 3,890 Calls for Service 757 1,086 2,837 9,346 2,007 2,626 2,485 3,445 1,620 1,032 Number of law violations::

Part 1 crimes 4,093 4,750 4,200 5,946 4,082 3,757 2,895 3,232 3,327 3,450 Part 2 crimes 7,775 6,614 4,835 10,743 7,876 7,985 5,387 6,985 4,866 6,131 Crime reports taken 20,612 19,254 15,630 16,689 11,958 11,742 8,268 12,232 12,325 14,587 Arrests 5,267 6,206 5,976 9,061 6,583 6,652 6,554 5,355 4,606 3,648 Accident reports taken 1,572 1,967 2,081 2,226 1,435 1,850 1,720 2,320 1,855 1,684 Animal licenses issued 8,314 8,318 9,643 11,416 11,616 11,747 10,656 8,111 8,923 7,469 Code Enforcement cases closed 3,421 3,835 4,190 4,607 4,390 3,045 3,572 2,271 3,680 4,883 Mobile Home Parks paid
occupied spaces 787 787 787 787 787 787 787 791 784 784 Affordable Housing - Apartment
Units4 - - 291 291 291 291 299 299 296 295
201
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Health and Welfare:

Family members assisted with
food and/or shelter 10,281 7,184 7,516 6,573 9,143 3,080 5,563 4,346 5,846 12,111 SAVES meals provided 575,085 361,956 94,170 94,595 118,321 209,100 347,511 387,610 314,740 372,260 SAVES motel vouchers
provided (night) 25 29 59 160 101 61 42 298 490 2,067
Public Services:

Number of landscape districts
maintained 245 248 230 230 230 233 233 248 246 246
Landscaped area (acres)
maintained 253 253 376 377 377 377 377 381 482 482
Irrigation controllers maintained 542 542 532 413 413 534 534 534 518 518 Landscape median area
maintained (sq. ft.) 2,500,344 2,500,344 2,500,344 2,553,144 2,553,144 2,553,144 2,553,114 2,553,144 2,581,950 2,581,950 SR 14 Interchange area
maintained (sq. ft.) 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 125,382 Park-n-ride spaces maintained 2,009 2,009 2,009 2,009 2,009 2,006 2,006 2,006 2,006 2,006 Park-n-ride Acres maintained 22 22 22 22 22 22 22 22 22 22 Detention basins maintained 226 226 267 267 267 267 267 267 294 294 Detention basins (acres)
maintained 94 94 110 110 110 110 110 110 613 613
Service requests - landscape
maint. 365 1,109 1,236 1,016 1,016 1,297 1,297 1,310 3,791 3,692 Vandalism repair hours 20 20 23 13 13 42 42 42 2,772 3,797 Graffiti abatement hours 3,246 1,211 4,720 1,204 1,210 1,573 1,573 1,781 2,085 3,230 Lighting districts 150 164 164 164 164 170 170 170 5 5
Number of street lights in
districts 18,437 18,513 18,515 18,515 18,515 18,523 18,523 18,523 18,592 18,790 Commercial acreage in street
lighting districts 625 2,090 2,111 2,111 2,111 2,115 2,115 2,115 2,166 2,167 Commercial acreage in street
lighting districts 40,730 40,770 40,785 40,785 40,792 40,790 40,790 40,790 46,329 46,559 Striping and marking ln. ft. and
sq. ft. 2,500,000 2,500,000 2,500,000 1,713,453 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000 Trees planted 130 320 45 100 75 141 141 142 104 91
Trees pruned 947 410 455 455 1,678 959 959 755 2,843 2,688 Street signs maintained 9,100 9,100 9,150 14,500 14,500 14,500 14,500 14,560 14,560 14,560 Street centerline miles 504 504 504 508 508 508 508 508 508 508 Street pavement area (acres) 2,109 2,109 2,109 2,172 2,172 2,172 2,172 2,172 2,172 2,712 Bridges maintained 9 9 9 9 9 9 9 9 9 9
Box culverts maintained 7 7 7 7 7 7 7 7 7 7
Number of passengers served3 3,641,482 3,500,593 3,462,497 2,534,682 2,442,282 2,301,868 1,902,780 2,451,000 1,113,754 1,245,217 Number of commuter and fixed
routes3 18 18 18 18 19 21 22 22 20 20
Cultural and Recreational:

Library circulation 318,006 284,027 263,750 315,639 198,361 179,521 179,521 60,700 144,407 160,668 Library volumes owned - - 73,045 73,612 78,073 88,214 88,214 33,100 26,923 230,012 Library programs 233 190 271 339 428 528 528 180 185 239 Playhouse general attendance - - - 8,900 10,800 16,200 8,000 - 5,000 7,520 Larry Chimbole Center
attendance - 75,000 80,000 80,000 80,120 80,500 40,000 9,200 35,577 - Legacy Commons Attendance 36,000 37,000 40,000 55,875 55,900 59,556 49,825 5,000 39,500 63,209 202
City of Palmdale
Operating Indicators by Function/Program
Last Ten Fiscal Years
Function/Program 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Oasis Park Recreation Center
attendance - - - 47,000 47,000 47,200 15,000 1,500 61,522 34,600 Amphitheater attendance - - - 47,500 50,800 48,600 10,000 7,500 8,507 30,426 Recreational swimming
attendance - - - 2,450 2,500 2,400 3,081 2,218 1,200 3,080 Lesson swimming attendance - - - 2,680 2,587 2,450 1,665 1,415 2,646 1,885 Youth sports participants 1,700 1,661 1,784 1,664 1,586 1,718 1,169 818 1,229 1,401 Adult sports participants 2,500 2,446 2,530 2,574 2,560 1,712 1,192 60 1,200 1,050 General Program Registrants2 7,193 13,701 11,328 11,510 11,264 12,000 9,000 7,600 8,100 8,260 Aquatic Program Registrants2 8,934 8,378 2,833 2,910 2,999 2,800 3,200 2,300 2,900 3,127 Facility Rental Bookings2 2,259 4,819 2,600 4,452 925 698 400 90 6,419 2,489 Airpark Attendance2 11,874 16,918 17,100 16,336 17,000 20,210 3,000 600 10,000 13,500 Airpark Guided Tours2 258 51 60 22 30 34 10 2 1 -
Community Event Attendance2 64,750 43,000 44,000 44,000 44,000 50,600 10,000 200 9,000 12,000 Playhouse Performance
Attendance2 5,155 10,125 9,416 13,345 15,230 16,200 5,000 - 4,428 6,430 DryTown Admissions2 81,000 85,000 91,400 92,000 92,000 77,137 34,443 10,000 84,096 72,963 Tournament Attendance2 50,000 46,500 47,320 58,032 65,000 85,000 65,000 4,500 70,000 80,000 *Source: City of Palmdale, various City departments
Note
(1) New methodology used beginning FY 2021-22
(2) Began reporting in FY 2013-14
(3) Figures provided by Antelope Valley Transit Authority (4) Four multifamily apartment buildings purchased in September 2015 203
City of Palmdale
Capital Asset Statistics by Function/Program
Last Ten Fiscal Years
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 General Government:

Number of City owned building facilities 47 47 55 55 55 55 55 55 75 75 City Vehicles 4 4 4 4 4 4 4 4 4 4
Public Safety Vehicles 8 8 12 12 16 26 31 33 34 34
Public Services:

Streets and Bikeways (miles) 580 580 580 580 580 580 580 580 580 580 Landscaped area (acres) 260 260 260 260 260 260 260 260 482 482 Park-n-ride 22 22 22 22 22 22 22 22 22 22
Storm drainage systems (feet) 95,000 95,000 95,000 95,000 95,000 95,000 100,000 100,000 100,000 100,000 Retention and detention basins 11 11 11 11 11 11 11 11 300 300 Storm drainage pump stations 3 3 3 3 3 19 19 19 19 19
Detention basins (acres) 207 207 207 207 207 207 207 207 613 613 Traffic signals 168 168 184 188 195 195 199 200 252 226 Traffic signs 8,700 8,700 8,700 8,750 8,750 8,750 8,750 8,750 14,560 12,560 Transportation Center 1 1 1 1 1 1 1 1 1 1
Bridges 9 9 9 9 9 9 9 9 9 9
Street Lights1 4,150 4,200 4,200 4,200 18,523 18,523 18,523 18,523 18,523 18,790 Vehicles 75 75 91 91 104 102 101 101 101 106
Traffic Operation Center - - - - - - - - 1 1
Community Development:

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

Number of Parks 21 21 21 22 22 22 22 22 23 24
Developed park acreage 576 576 576 576 588 588 588 588 592 351 Number of swimming pools 3 3 3 3 3 4 4 4 4 4
Number of tennis courts 9 9 10 10 10 10 10 10 10 10
Number of Libraries 1 1 1 1 1 1 1 1 1 1
Number of Community Centers 3 3 3 3 3 3 3 3 3 3
Skate Parks 2 2 2 2 2 2 2 2 2 2
Soccer Fields 27 27 29 30 30 30 30 30 30 29
Basketball courts 8 8 9 9 9 9 9 9 9 9
Softball diamonds 20 20 13 13 13 15 15 15 15 16
Volleyball courts 6 6 7 7 7 7 7 7 7 7
Little league fields 11 11 11 11 11 11 11 11 11 11
Roller Hockey rinks 2 2 2 2 2 2 2 2 2 2
Aquatics Facility - Water Park 1 1 1 1 1 1 1 1 1 1
Community Theatre 1 1 1 1 1 1 1 1 1 1
Amphitheater 1 1 1 1 1 1 1 1 1 1
Vehicles 4 4 6 6 5 6 6 6 6 6
Health and Welfare:

Vehicles 2 2 2 2 2 2 3 3 3 3
Source: City of Palmdale, various City departments
(1) The City of Palmdale obtained jurisdiction of 14,315 Los Angeles County street lights in 2013; currently in the process of acquisition of street lights.
204

ANNUAL FINANCIAL REPORT

CITY OF PALMDALE, CALIFORNIA

HOUSING AUTHORITY
(A Component Unit of the City of Palmdale)
For the Fiscal Year Ended
June 30, 2023

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City of Palmdale Housing Authority
June 30, 2023

TABLE OF CONTENTS
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3 MANAGEMENT DISCUSSION AND ANALYSIS................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................6

BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................12 Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................13 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................14 Fund Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................18 Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................18 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................19 Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual:

General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 Special Revenue Fund-Housing Asset Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 Special Revenue Fund-Housing Facilities Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 REQUIRED SUPPLEMENTARY INFORMATION................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................48 Schedule of the Authority's Proportionate Share of the City's Net Pension Liability................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................48 Schedules of Contributions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................49 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER FINANCIAL

REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN

AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................49 This page intentionally left blank
3 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

Exercise professional judgment and maintain professional skepticism throughout the audit.

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

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

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

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

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, schedules of changes in the Authority’s proportionate share of the City’s net pension liability, and the schedule of contributions as listed in the table of contents be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with GAAS, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do 4 not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated 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
5 City of Palmdale Housing Authority
Management Discussion and Analysis
As management of the City of Palmdale Housing Authority (Authority), a component unit of the City of Palmdale, we offer readers of the Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for the fiscal year ended June 30, 2023.

Financial Highlights
 The assets and deferred outflows of resources of the Authority exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $75,103,169.
 The Authority’s total net position increased in the current year by $1,684,487. Details can be found on page 11.  As of the close of the current fiscal year, the Authority's governmental funds reported combined ending fund balances of $48,680,651, an increase of $1,485,315 in comparison with the prior year.

Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the Authority’s basic financial statements. The Authority’s basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to the financial statements.

Government-Wide Financial Statements. The government-wide financial statements are designed to provide readers with a broad overview of the Authority’s finances, in a manner similar to a private-sector business.

The statement of net position presents information on all of the Authority’s assets, deferred outflows of resources, liabilities and deferred inflows of resources, with the differences reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the Authority is improving or deteriorating.

The statement of activities presents information showing how the Authority’s net position changed during the most recent fiscal year.

All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Therefore, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods.

Both of the government-wide financial statements distinguish functions of the Authority that are principally supported by intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business- type activities). The Authority has no business-type activities. The governmental activities of the Authority include community development and interest on long-term debt.

The government-wide financial statements can be found on page 13 of this report.

Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The Authority, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. All five of the funds of the Authority are governmental funds.

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

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By d oing so, the readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances, provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The governmental fund financial statements can be found on pages 18 - 20. Budget and actual statements can be found on pages 24 - 26.

The Authority maintains three individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, the Housing Facilities Fund Special Revenue Fund and the Housing Asset Special Revenue Fund, all of which are considered to be major funds. The Authority does not have any non-major governmental funds.

The Housing Facilities Special Revenue Fund is used to account for revenues and expenditures related to the operation of three mobile home parks, four Multifamily apartments; Impressions, La Quinta, Park Vista and Summerwood, and one apartment building located at 513 East Avenue Q4. The funds are distributed under the terms of various agreements. The Housing Facilities Special Revenue Fund 6 City of Palmdale Housing Authority
Management Discussion and Analysis
has a deficit fund balance of $(2,462,215).

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

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

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

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

The Housing Asset Fund is used to account for the restricted housing assets of the former Community Redevelopment Agency Housing Development Fund. Revenues received from assets previously held by the former CRA Housing Development Fund are restricted to be used in accordance with the affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code section 34176.1, added by Senate Bill 341 (2013-2014 Regular Session). The Housing Asset Fund has a fund balance of $49,686,425.

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

Notes to the Financial Statements. The notes provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 29 - 45 of this report.
7 City of Palmdale Housing Authority
Management Discussion and Analysis
Government-wide Financial Analysis
As noted earlier, net position may serve over time as a useful indicator of a government's financial position. In the case of the Authority, assets exceeded liabilities by $75,103,169 as of June 30, 2023.

Housing Authority Net Position
Governmental
Activites
Governmental
Activites
2023 2022
Current and Other Assets $ 58,867,273 $ 57,109,091
Capital Assets 25,625,685 26,311,950
Total Assets 84,492,958 83,421,041
Deferred Outflows of Resources 369,821 126,691
Current and Other Liabilities 4,845,872 4,997,645
Long-Term Liabilities Outstanding 3,735,714 4,217,949
Net Pension Liabilities 1,172,453 603,083
Total Liabilities 9,754,039 9,818,677
Deferred Inflows of Resources 5,571 310,373
Net position
Net Investment in Capital Assets 22,333,492 22,920,723
Restricted
Community development 52,513,236 50,275,910
Unrestricted 256,441 222,049
Total net position $ 75,103,169 $ 73,418,682
The Authority’s net investment restricted in capital assets reflects a balance of $22,333,492. Net investment in capital assets is defined as land, buildings, machinery and equipment, infrastructure, and construction in progress, net of depreciation and less any related debt used to acquire these assets that is still outstanding.

The Authority’s restricted net position of $52,513,236 r epresent resources that are subject to the affordable housing provisions of California Redevelopment Law, by contract or grant agreement, health and safety code and debt service.

The Authority’s Long-term Liabilities reflect a balance of $3,735,714, consisting of $3,640,000 of Multifamily Housing Revenue Bonds (2015 Bonds) used to finance the acquisition of the Housing Facility Apartments on September 3, 2015. The remaining balance consists of unpaid compensated absences of $95,714.

The Authority’s Current and Other Liabilities reflect a balance of $4,845,872. Current and Other Liabilities consists of liabilities totaling $795,328 that are considered payable within a year, and consist of accounts payable, due to City, accrued interest and accrued salaries. The remaining balance consists of $4,050,544 of refundable deposits and unearned revenue. 8 City of Palmdale Housing Authority
Management Discussion and Analysis
Housing Authority's Changes in Net Position
Governmental
Activities
Governmental
Activities
2023 2022
Revenues:

Program Revenue:

Charges for Services $ 8,049,431 $ 7,930,166
Operating Grants and Contributions 1,624,790 582,754
General Revenue:

Unrestricted investment earnings/(loss) 271,789 (354,414) Other 1,474 1,537
Total Revenues 9,947,484 8,160,043
Expenses
Community development 8,084,046 7,108,573
Interest on long-term debt 178,951 182,108
Total Expenses 8,262,997 7,290,681
Change in Net Position 1,684,487 869,362
Net Position - Beginning of Year 73,418,682 72,549,320
Net Position - End of Year $ 75,103,169 $ 73,418,682
Governmental Activities. Governmental activities increased the Authority’s net position by $1,684,487. The increase is primarily the result of increased Community Development program activities during the year.  Charges for services increased b y $119,265, or 1.50 p ercent primarily due to asset, program and project management fees collected during the year, as well as an increase in rents collected as higher occupancy levels were achieved at the four Multifamily Housing Facility Apartments.
 Operating Grants and contributions increased by $1,042,036, or 178.81 percent.  Community Development expenses increased by $975,473 or 13.72 percent due to increases in compliance monitoring for Mobile Homes, and operating costs at the four Multifamily Housing Facility Apartments.

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

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

As of the end of the current fiscal year, the Authority’s governmental funds reported combined ending fund balances of $48,680,651, an increase of $1,485,315 in comparison with the prior year. The fund balances were classified as follows:
 $49,686,425 i s “Restricted” due to the existence of externally enforceable legal restrictions that are related primarily to special revenue funding sources.
 $(1,005,774) is “Unassigned” and represents negative residual resources.

The General Fund has a fund balance of $1,456,441, which was an increase of $1,234,396 from the prior fiscal year.

The Housing Asset Fund has a fund balance of $49,686,425 which was a decrease of $872,061 from the prior fiscal year. The decrease is attributable to an increase in operating expenditures.

The Housing Facilities Fund has a fund balance of $(2,462,215), which was an increase of $1,122,980 from the prior fiscal year. The increase is primarily due to annual repayment of interfund promissory note.

General Fund Budgetary Highlights
Differences between the original budget and the final amended budget resulted in a decrease of appropriations by $6,090 as the result 9 City of Palmdale Housing Authority
Management Discussion and Analysis
of anticipated increases in expenditures for contract and professional services throughout the budget. Differences between the final amended budget and actual resulted in a $42,503 decrease in appropriations due to expenditures for salaries and benefits coming in less than anticipated. Differences between the final amended budget and actual revenues received resulted in a $1,175,003 increase in appropriations due to ARPA grant funds awarded for development of affordable housing.

Capital Asset and Debt Administration
Capital Assets. The Authority’s investment in capital assets for its governmental activities as of June 30, 2023, amounts to $25,625,685 ( net of accumulated depreciation). This investment in capital assets includes land, buildings and structures, and infrastructure. A $686,265 decrease in the Authority’s investment in capital assets as compared to prior year is primarily the result of current year depreciation. There were additions of $130,071 and no disposals in the current year.

Housing Authority's Capital Assets
(Net of Depreciation)
Governmental
Activities
Governmental
Activities
2023 2022
Land $ 11,962,311 $ 11,962,311
Buildings & Structures 6,924,370 7,096,408
Improvements Other than Buildings 552,931 524,953
Infrastructure 6,186,073 6,728,278
Total $ 25,625,685 $ 26,311,950
Additional information on the Authority’s capital assets can be found on page 36, Note 7.

Long-Term Debt. At the end of the current fiscal year, the Authority had total bonded debt outstanding of $3,640,000. The 2015 Bonds are secured by pledges of the net revenue received from the operations of the Housing Facilities.

Housing Authority's Outstanding Debt
Revenue Bonds
Governmental
Activities
Governmental
Activities
2023 2022
2015 Multifamily Housing Revenue bonds $ 3,640,000 $ 3,740,000 The Authority’s total long-term liability was $3,640,000, which is the amount of Revenue Bonds. The total debt decreased primarily as the result of regularly scheduled debt service payments on the Multi-Family Housing Bond. The Authority did not apply for a rating on the bonds. No such rating should be assumed based upon any other Authority or City rating that may be obtained. See Note 13.

Request for Information
This financial report is designed to provide a general overview of the Authority's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the City of Palm dale Housing Authority, Office of the Director of Finance, 38300 Sierra Highway, Suite D, Palmdale, California, 93550.
10 This page intentionally left blank
Government-Wide Financial Statements
12 City of Palmdale Housing Authority

STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental
Activities
Assets
Cash $ 2,660,161
Investments 10,527,248
Accounts Receivable 388,647
Interest receivable 5,215,081
Due from other governmental units 4,909,777
Notes and liens 27,911,166
Deposits and prepaids 1,170
Land held for development 2,710,024
Restricted assets:

Cash and Investments 4,543,999
Capital assets:

Not being depreciated:

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

Buildings and structures 6,924,370
Improvements other than buildings 552,931
Infrastructure 6,186,073
Total assets 84,492,958
Deferred outflows of resources
Pension related amounts 369,821
Liabilities
Accounts payable 767,906
Accrued interest payable 14,913
Due to City 12,509
Deposits 170,544
Unearned revenue 3,880,000
Total current liabilities 4,845,872
Noncurrent liabilities:

Due within one year 151,898
Due in more than one year 3,583,816
Net pension liability 1,172,453
Total noncurrent liabilities 4,908,167
Total liabilities 9,754,039
Deferred inflows of resources
Pension related amounts 5,571
Net Position
Net investment in capital assets 22,333,492
Restricted
Community development 52,513,236
Unrestricted 256,441
Total net position $ 75,103,169
See Notes to Financial Statements
13 City of Palmdale Housing Authority

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
Program Revenues Total
Expenses
Charges for
Services
Operating
Grants and
Contributions
Net (Expense)
Revenues and
Changes in Net
Position
Governmental activities:

Community development $ 8,084,046 $ 8,049,431 $ 1,624,790 $ 1,590,175 Interest on long-term debt 178,951 - - (178,951)
Total governmental activities $ 8,262,997 $ 8,049,431 $ 1,624,790 $ 1,411,224 General Revenue:

Unrestricted investment earnings/(loss) $ 271,789
Other 1,474
Total general revenues 273,263
Change in Net Position 1,684,487
Net Position - Beginning of Year 73,418,682
Net Position - End of Year $ 75,103,169
See Notes to Financial Statements
14 This page intentionally left blank
Governmental Fund Financial Statements
16 The General Fund is the Housing Authority’s primary operating fund and has been classified as a major fund. It accounts for compliance, administrative, and monitoring expenditures collected for the Housing Authority.

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

Housing Asset Fund – Used to account for the restricted housing assets of the former Community Redevelopment Agency Housing Development Fund, which were transferred to the Successor Agency Fund and then transferred to the Housing Asset Fund upon acceptance of the Housing Successor role by the Housing Authority. Revenues received from assets previously held by the former CRA Housing Development Fund are restricted to be used in accordance with the affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code section 34176.1, added by Senate Bill 341.

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

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

The mobile home Parks funds are distributed under the terms of various agreements. Revenues received by the Housing Authority in its capacity as the owner of the mobile home parks are restricted to be used in accordance with California’s Housing Authorities Law. Revenues received by the Housing Authority in its capacity as housing successor to the former Community Redevelopment Agency are restricted to be used in accordance with the affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code section 34176.1, added by Senate Bill 341 (2013-2014 Regular Session).

The Housing Authority of the City of Palmdale acquired two apartment buildings with eight units from New Beginnings Outreach in 2018. The Housing Authority of the City of Palmdale owns and operates the apartments located at 507 and 513 East Avenue Q4. Net revenues derived from the operations of the Housing Facilities Ave. Q4 Fund will be restricted for repair and replacements. Any revenues net of the operations and reserves may be used for any lawful purpose (i.e. assigned) of the Housing Authority.
17 City of Palmdale Housing Authority
Balance Sheet
Governmental Funds
June 30, 2023
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund
Total
Governmental
Funds
Assets:

Cash $ - $ - $ 2,660,161 $ 2,660,161
Investments 242,182 8,866,012 1,419,054 10,527,248
Receivables:

Accounts and interest receivable 15,681 5,336,547 251,500 5,603,728 Advances due from other funds - 1,186,001 - 1,186,001
Deposits and prepaid - 1,170 - 1,170
Interfund promissory note - 6,353,333 - 6,353,333
Notes and Liens 1,200,000 26,711,166 - 27,911,166
Advances due from fiduciary funds - 4,909,777 - 4,909,777 Restricted Assets:

Investments - 3,019,115 - 3,019,115
Cash - - 1,524,884 1,524,884
Land held for development - 2,710,024 - 2,710,024
Total assets $ 1,457,863 $ 59,093,145 $ 5,855,599 $ 66,406,607 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts payable $ 422 $ 158,549 $ 608,936 $ 767,907
Deposits 1,000 - 169,544 170,544
Unearned revenue - 3,880,000 - 3,880,000
Advances due to other funds - - 1,186,001 1,186,001
Due to City - 12,509 - 12,509
Interfund promissory note - - 6,353,333 6,353,333
Total liabilities 1,422 4,051,058 8,317,814 12,370,294
Deferred Inflows of Resources
Unavailable revenue - 5,355,662 - 5,355,662
Fund Balances
Restricted - 49,686,425 - 49,686,425
Unassigned 1,456,441 - (2,462,215) (1,005,774)
Total fund balances (Deficit) 1,456,441 49,686,425 (2,462,215) 48,680,651 Total liabilities, deferred inflows of resources and fund balances $ 1,457,863 $ 59,093,145 $ 5,855,599 $ 66,406,607 See Notes to Financial Statements
18 City of Palmdale Housing Authority
Reconciliation of the Balance Sheet of the Governmental Funds to the Statement of Net Position
June 30, 2023
Total Fund Balances - Total Governmental Funds (page 15) $ 48,680,651 Amounts reported for governmental activities in the Statement of Net Position (page 10) are different because:

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

Governmental capital assets 37,982,093
Less accumulated amortization and depreciation (12,356,408) 25,625,685 Accounts receivable not available to pay for current-period expenditures are reported as deferred inflows of resources in the funds. 5,355,662
Deferred outflows related to pensions are not reported in the Governmental Fund Balance Sheet.

Deferred outflows related to pensions 369,821
Interest due on long-term debt does not require current financial resources and therefore is not reported as a liability on the Governmental Funds Balance Sheet.

Interest payable (14,913)
Long-Term Liabilities are not due and payable in the current period and therefore are not reported as a liability in the Governmental Funds Balance Sheet.

Compensated absences (95,713)
Net pension liability (1,172,453)
Bonds Payable (3,640,000) (4,908,166)
Deferred Inflows related to pensions and OPEB benefits are deferred inflows of resources and are not reported in the Governmental Funds Balance Sheet. (5,571) Net Position of Governmental Activities (page 10) $ 75,103,169 See Notes to Financial Statements
19 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2023
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund
Total
Governmental
Funds
Revenues:

Charges for current services $ 65,635 $ 171,699 $ - $ 237,334 Use of property - - 7,812,246 7,812,246
Interest 3,646 334,674 23,490 361,810
Net increase (decrease) in fair value of investments (2,078) (75,797) (12,146) (90,021) Grant revenue 1,200,000 1,474 - 1,201,474
Total revenues 1,267,203 432,050 7,823,590 9,522,843
Expenditures:

Current:

Community development 32,807 1,571,590 5,736,826 7,341,223 Capital Outlay - - 362,279 362,279
Debt service:

Principal - - 100,000 100,000
Interest - - 178,951 178,951
Total expenditures 32,807 1,571,590 6,378,056 7,982,453 Excess (deficiency) of revenues over (under)
expenditures 1,234,396 (1,139,540) 1,445,534 1,540,390
Other Financing Sources (Uses)
Transfers In - 322,554 - 322,554
Transfers Out - - (322,554) (322,554)
Transfers to City's General Fund - (55,075) - (55,075)
Total other financing sources (uses) - 267,479 (322,554) (55,075) Net Change in Fund Balances 1,234,396 (872,061) 1,122,980 1,485,315 Fund Balances (Deficit) - Beginning of Year 222,045 50,558,486 (3,585,195) 47,195,336 Fund Balances (Deficit) - End of Year $ 1,456,441 $ 49,686,425 $ (2,462,215) $ 48,680,651 See Notes to Financial Statements
20 City of Palmdale Housing Authority
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities and Changes in Net Position Year Ended June 30, 2023
Net Change in Fund Balances - Total Governmental Funds (page 17) $ 1,485,315 Amounts reported for governmental activities in the Statement of Activities and Changes in Net Position (page 11) are different because:

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

Capital Asset Additions - Current Year 130,072
Less Depreciation Expense (816,336) (686,264)
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 424,640
Long-term debt issuance provide current financial resources to Governmental Funds, but issuing debt increases long-term liabilities in the Government-Wide Statement of Net Position. Principal repayments of long-term debt and escrow agent payments are expenditures/uses in the Governmental Funds, but they reduce long-term liabilities in the Government-Wide Statement of Net Position. Also premiums are recognized in the current period in the Governmental Funds, whereas these amounts are amortized in the Government-Wide Statement of Activities. This is the amount by which repayments exceeded proceeds.

Bonds & Certificates of Participation payable 100,000
Some expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore are not reported as expenditures in the Governmental Funds.

Compensated absences (17,765)
Self insurance liability claims 400,000
Pension expense (21,439) 360,796
Net change in net position - governmental activities (page 11) $ 1,684,487 See Notes to Financial Statements
21 This page intentionally left blank
Budgetary Comparison Statements
23 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Fund
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 91,700 $ 91,700 $ 65,635 $ (26,065) Interest 500 500 3,646 3,146
Net increase (decrease) in fair value of investments - - (2,078) (2,078) Other Revenue - - 1,200,000 1,200,000
Total revenues 92,200 92,200 1,267,203 1,175,003
Expenditures:

Current:

Community development 81,400 75,310 32,807 42,503
Total expenditures 81,400 75,310 32,807 42,503
Excess (deficiency) of revenues over (under) expenditures 10,800 16,890 1,234,396 1,217,506 Net Changes in Fund Balance 10,800 16,890 1,234,396 1,217,506 Fund Balance (Deficit) - Beginning of Year 222,045 222,045 222,045 - Fund Balance (Deficit) - End of Year $ 232,845 $ 238,935 $ 1,456,441 $ 1,217,506 See Notes to Financial Statements
24 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Asset Fund -Special Revenue Fund
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for current services $ 180,300 $ 207,340 $ 171,699 $ (35,641) Interest 750,300 675,300 334,674 (340,626)
Net increase (decrease) in fair value of investments - - (75,797) (75,797) Other Revenue 251,350 251,480 1,474 (250,006)
Total revenues 1,181,950 1,134,120 432,050 (702,070)
Expenditures:

Current:

Community development 3,793,480 6,655,220 1,571,590 5,083,630 Total expenditures 3,793,480 6,655,220 1,571,590 5,083,630 Excess (deficiency) of revenues over (under) expenditures (2,611,530) (5,521,100) (1,139,540) 4,381,560 Other Financing Sources (Uses):

Transfers In 458,100 457,100 322,554 (134,546)
Transfers to City's General Fund (55,500) (55,500) (55,075) 425 Total other financing sources (uses) 402,600 401,600 267,479 (134,121) Net Changes in Fund Balance (2,208,930) (5,119,500) (872,061) 4,247,439 Fund Balance (Deficit) - Beginning of Year 50,558,486 50,558,486 50,558,486 - Fund Balance (Deficit) - End of Year $ 48,349,556 $ 45,438,986 $ 49,686,425 $ 4,247,439 See Notes to Financial Statements
25 City of Palmdale Housing Authority
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Housing Facilities - Special Revenue Fund
Year Ended June 30, 2023
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Use of property $ 7,835,970 $ 7,750,080 $ 7,812,246 $ 62,166 Interest 4,000 4,000 23,490 19,490
Net increase (decrease) in fair value of investments - - (12,146) (12,146) Total revenues 7,839,970 7,754,080 7,823,590 69,510
Expenditures:

Current:

Community development 6,052,960 5,746,420 5,736,826 9,594 Capital Outlay 319,370 335,000 362,279 (27,279)
Debt service:

Principal 99,300 87,800 100,000 (12,200)
Interest 184,100 189,600 178,951 10,649
Total expenditures 6,655,730 6,358,820 6,378,056 (19,236) Excess (deficiency) of Revenues: Over (Under) Expenditures 1,184,240 1,395,260 1,445,534 50,274
Other Financing Sources (Uses):

HA Facilities Fund to Housing Auth Housing Asset Fund (458,600) (424,900) (322,554) 102,346 Total other financing sources (uses) (458,600) (424,900) (322,554) 102,346 Net Changes in Fund Balance 725,640 970,360 1,122,980 152,620 Fund Balance (Deficit) - Beginning of Year (3,585,195) (3,585,195) (3,585,195) - Fund Balance (Deficit) - End of Year $ (2,859,555) $ (2,614,835) $ (2,462,215) $ 152,620 See Notes to Financial Statements
26 CITY OF PALMDALE, CALIFORNIA

HOUSING AUTHORITY
Notes to the Financial Statements
For the Fiscal Year Ended
June 30, 2023
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City of Palmdale Housing Authority

NOTES TO THE FINANCIAL STATEMENTS
JUNE 30, 2023
(1) Summary of Significant Accounting Policies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 A. Description of the Reporting Entity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 C. Budgets and Budgetary Accounting................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 D. Cash and Investments ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 E. Land Held for Resale................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 F. Capital Assets................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................31 G. Deferred Outflows/Inflows of Resources................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 H. Compensated Absences................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 I. Pensions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 J. Fund Equity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 K. Deficit Fund Equity................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 L. Use of Estimates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 M. Implemented Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 (2) Cash and Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 A. Investments Authorized by the California Government Code and the Authority's Investment Policy................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 B. Disclosures Relating to Interest Rate Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 C. Disclosures Relating to Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 D. Custodial Credit Risk................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 E. Disclosures relating to Fair Value of Investments................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 (3) Notes Receivable................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 (4) Fund Balance Classification................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 (5) Interfund Transfers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 (6) Interfund Due To/From and Advances Due To/From................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................37 A. Advances and Due To/From Other Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................37 B. Interfund Promissory Note Between the Housing Facilities Fund and the Housing Asset Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................37 C. Advances Due from Successor Agency at June 30, ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 (7) Capital Assets................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 (8) Deposits and Prepaids................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................39 (9) Due to City................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................39 (10) Risk Management and Litigation Liability................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................39 (11) Unearned Revenue/Unavailable Revenues................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................40 (12) Public Employee's Retirement System (PERS) Pension Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................40 A. General Information about the Pension Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................40 B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................41 (13) Long-Term Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................43 A. Revenue Bonds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................43 B. Changes in Long-Term Liabilities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................44 (14) Contingencies................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................44 (15) New Accounting Pronouncements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................44 29 City of Palmdale Housing Authority