Agenda packet, first session — Palmdale City Council, May 6, 2025 (part 2 of 4)

DISCUSSION
On March 13, 2025, the project was advertised for construction bids via the Planet Bids electronic platform. A total of 875 vendors were notified, and twenty-one (21) vendors registered as prime contractors downloaded the bid package. By the deadline on April 3, 2025, the City received three (3) bids for the project, which have been reviewed and are summarized below:

Bidder Location Amount

1. JT Construction Group, Inc. Sun Valley, CA $291,994.00

2. Deark E&C, Inc. Fullerton, CA $509,995.00

3. Golden Sun Firm Tarzana, CA $560,860.00
JT Construction Group, Inc. was found to be the lowest responsible and responsive bidder with an estimated construction cost of $291,994.

FISCAL IMPACT
$321,193; This project is funded using Measure AV funds.

STRATEGIC PLAN
Goal IV: Maintain a desirable community where everyone wants to live, work, and play.

B: Provide inclusive access to a variety of supportive services that build a resilient and healthy community.

Prepared by: Leonardo Torres, P.E.

Director of Public Works
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Salvador Mendez, City Manager Pro Tem
Approved as to form: Alexandra Halfman, Acting City Attorney

ATTACHMENTS
Agrmt No. A-9273 with JT Construction Group, Inc.

AGREEMENT NO. A-9273

CONSTRUCTION CONTRACT
BETWEEN THE CITY OF PALMDALE AND JT CONSTRUCTION GROUP, INC.

THIS CONTRACT (“Contract”) is made and entered into by and between City of Palmdale, a public entity ("City"), and JT CONSTRUCTION GROUP, INC., a California Corporation ("Contractor"). Contractor and City are collectively referred to herein as the “parties.” This Contract shall become effective on the date of the last signatory.
1 Scope of Work
Contractor shall complete the Project in accordance with this Contract. Contractor shall furnish all materials and perform all work required for the completion of the following Project:

Marie Kerr Park Best of the West Concession Stand Project, PN 887 The general items of work to be done hereunder consists of site preparation, landscaping, and installation of a concession stand building at the Marie Kerr Park Best of the West Softball Complex and ADA upgrades to the Marie Kerr Park Best of the West parking lot.
2 Standard Specifications
Standard Specifications for City projects are those contained in the 2021 Greenbook edition of the "Standard Specifications for Public Works Construction" (the "Greenbook"). Except as otherwise expressly provided herein, the Standard Specifications shall control the general provisions, construction materials, and construction methods for this Contract (except as amended by the Plans for the Project), the General Specifications for the Project, the Special Provisions for the Project, any technical specifications for the Project, and any other contract documents.
3 Compensation
City shall pay Contractor the total, all-inclusive, NOT-TO-EXCEED amount of Two Hundred Ninety-One Thousand Nine Hundred Ninety-Four Dollars ($291994.00) for the construction of the Project. This amount shall cover all expenses for labor, materials, and any and all other costs incurred by Contractor to satisfactorily construct the Project. Unless otherwise provided in the bid documents or agreed upon by the parties, Contractor shall submit detailed, monthly invoices for work actually performed.
4 Completion Date
The construction of the Project shall commence upon Contractor being given a written notice to proceed, and shall be completed within 45 working days. 5 Guaranty
1-21Concord - Document ID: generated after first signature Pursuant to the bid documents for this Project, the Contractor is required to provide a written guaranty of Contractor’s work. In furtherance thereof, Contractor shall execute the written form of Guaranty attached hereto and incorporated by reference herein. 6 Licenses
At all times during the term of this Contract, Contractor shall possess a valid and current Class B Contractor's License or Specialty Contractor License consisting of Class license to perform the required work (“Work”). Contractor’s DIR registration number is 1000602389. Contractor hereby certifies that it holds the required license(s).
7 Subcontracting
Subject to any self-performance requirements herein, Contractor may subcontract any portion of the work required by this Contract to other persons or firms, and Contractor submitted with its bid a list of those subcontractors who will perform work in an amount in excess of one-half of one percent (1%) of the Contractor’s total bid, in compliance with the Subletting and Subcontracting Fair Practices Act, California Public Contract Code § 4100, et seq. Only such listed subcontractors may perform on this Project.
8 Non-Assignability
Neither this Contract nor any rights, title, interest, duties or obligations under this Contract may be assigned, transferred, conveyed or otherwise disposed of by Contractor without the prior written consent of City.
9 Administration
This Contract will be administered by the Public Works Department of the City. The Director of Public Works or his or her designee shall be considered the Project Administrator and shall have the authority to act for the City under this Contract. 10 Indemnification
To the maximum extent permitted by law, Contractor shall indemnify, protect, defend and hold harmless the City, its Board of Director, the City's officers, employees, agents, volunteers, and representatives (“Indemnitees”) with respect to any and all claims, suits, actions, stop notices, liabilities and/or damages, including related expenses, attorney's fees and costs, based on, arising out of, or in any way related to the work undertaken by Contractor pursuant to this Contract, and in connection with the Project.
11 Liability Insurance
Without limiting Contractor's indemnification of City, as described in paragraph 10, and unless modified by City, Contractor shall obtain, provide and maintain, at its own expense, during the term of this Contract, a policy or policies of insurance, satisfactory to the City, from insurance carriers admitted to do business in the State of 2-21Concord - Document ID: generated after first signature California and rated in A.M. Best’s Insurance Guide with a rating of A:VII or better, which contain the coverage described below.

11.1.1 Commercial General Liability
 $2,000,000.00 limit on a per occurrence basis
 $5,000,000.00 general aggregate limit

11.1.2 Commercial Automobile Liability
 $2,000,000.00 combined single limit including owned, non-owned and hired automobile coverage

11.1.3 Workers’ Compensation and Employer’s Liability
 Workers’ Compensation -- coverage as required by the State of California  Employer’s Liability -- $1,000,000.00 each accident
$1,000,000.00 policy limit bodily injury
$1,000,000.00 each employee bodily injury by disease

11.1.4 Pollution/Environmental Liability*
 $2,000,000.00 limit on a per occurrence basis

11.2 Policies providing for bodily injury and property damage coverage shall contain the following:

A. An endorsement extending coverage to the City as an additional insured, as respects liability arising out of the performance of any work under the Contract.

The certificates shall state: “The City of Palmdale, Successor Agency to the Community Redevelopment Agency of the City of Palmdale, Palmdale Civic Authority, Housing Authority, Industrial Development Authority, Airport Authority, their officers, agents, employees and volunteers are named as additional insured”.

B. “Severability of Interest” Clause.

11.3 Promptly upon execution of this Contract, and prior to commencement of any work, CONTRACTOR shall deliver to CITY certificates of insurance and endorsements to all required policies demonstrating that CONTRACTOR has the required coverage and showing the required named insured. Within five (5) days of written request from CITY, CONTRACTOR shall deliver to CITY full and complete copies of all insurance policies required by this Contract.

11.4 Said Certificates of Insurance shall provide that thirty (30) days’ prior written notice of cancellation shall be given to the City in the event of cancellation and/or reduction in coverage of any nature.
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11.5 The required policies of insurance shall be endorsed to waive all rights of subrogation. Contractors waives all rights of subrogation.

11.6 Acceptable Proof of Insurance:

A. ACORD Certificate of Insurance listing all coverage, limits, deductibles and insured; and endorsements for all applicable coverage if agent has authority to issue it; or additional insured Form CG20100704 and CG20370704 or equivalent must be provided for general liability coverage. Additional insured form CA0001 must be provided for automobile liability coverage.

B. Binders of insurance for all coverage. Agents must confirm that policy endorsements have been ordered from the respective insurance companies.

Upon issuance, policy endorsements and a corresponding Certificate of Insurance listing all insurers and coverage must be submitted to the City Attorney.

C. *When pollution/environmental liability coverage is provided on a “claims made basis”, CONTRACTOR will continue to renew the insurance for a period of five (5) years after this Agreement expires or is terminated. Such insurance will have the same coverage and limits as the policy that was in effect during the term of this Agreement, and will cover CONTRACTOR, or its officers, employees, or agents during the time this Agreement was in effect.

11.7 The requirements as to the types and limits of insurance to be maintained by CONTRACTOR are not intended to and shall not in any manner limit or qualify CONTRACTOR’s liabilities and obligations under this Contract.

11.8 Any policy or policies of insurance that CONTRACTOR elects to carry as insurance against loss or damage to its equipment and tools or other personal property used in the performance of this Contract shall include a provision waiving the insurer’s right of subrogation against CITY.

11.9 Notwithstanding any other provision of this Contract, CITY may immediately terminate this Contract if, at any time CONTRACTOR fails to maintain the required insurance for any period of time or fails to comply with any of the insurance requirements listed above.

11.10 CONTRACTOR shall require any and all subcontractors working on its behalf to provide insurance coverages and limits that are based on the scope of work and nature of risk being performed by the subcontractor. Any and all subcontractors working on behalf of CONTRACTOR shall be subject to all other insurance requirements that are stated herein.

Any deviation in this requirement will be CONTRACTOR's sole risk. CONTRACTOR's insurance requirements in Section 11 will not be impacted and/or limited by such deviation.
4-21Concord - Document ID: generated after first signature 12 State Labor Code

12.1 This Contract calls for work to be performed constituting public works.

Contractor and all subcontractors shall pay the general prevailing rate of per diem wages as determined and as published by the State Director of the Department of Industrial Relations pursuant to Article 2 of Chapter 1 of Part 7, of Division 2 of the State Labor Code, including, but not limited to, Sections 1770, 1771, 1773, 1773.2 and 1774.

12.2 This is a public work and requires the payment of prevailing wages for the work or craft in which the worker is employed for any public work done under the contract by Contractor or by any subcontractor pursuant to Section 1771 of the Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this contract from the Director of the Department of Industrial Relations. These rates are on file with the City or may be obtained at http://www.dir.ca.gov/OPRL/DPreWageDetermination.htm.

Pursuant to the provisions of 1775 of the Labor Code, Contractor shall forfeit to the City, as a penalty, not more than $200.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Contract, by him or by any subcontractor under him, in violation of the provisions of this Agreement.

12.3 Contractors and subcontractors who are ineligible to bid for work on, or be awarded, a public works project pursuant to Labor Code Sections 1777.1 and 1777.7 are prohibited from bidding on, being awarded, or performing work as a subcontractor, on this Project pursuant to Public Contract Code Section 6109.

12.4 Contractor's attention is directed to the provisions in Sections 1774, 1775, 1776, 1777.5 and 1777.6 of the Labor Code. Contractor shall comply with the provisions in these Sections. The statutory provisions for penalties for failure to comply with the State's wage and hours laws will be enforced. Pursuant to Section 1775 of the Labor Code, the Contractor and any subcontractors, shall, as a penalty to the City forfeit the prescribed amounts per calendar day, or portion thereof, for each worker paid less than the prevailing wage rates.

12.5 Pursuant to Labor Code Section 1771.4, the Project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

12.6 Each Contractor and subcontractor shall furnish the records specified in Labor Code Section 1776 directly to the State Labor Commissioner at least monthly in the format prescribed by the State Labor Commissioner.
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12.7 Sections 1774 and 1775 require the Contractor and all subcontractors to pay not less than the prevailing wage rates to all workmen employed in the execution of the Contract and specify forfeitures and penalties for failure to do so. The minimum wages to be paid are those determined by the State Director of the Department of Industrial Relations. Section 1776 requires the Contractor and all subcontractors to keep accurate payroll records, specifies the contents thereof, their inspection and duplication procedures and certain notices required of the Contractor pertaining to their location.

12.8 Section 1777.5 of the Labor Code requires Contractor or subcontractor employing workers in any apprenticeable occupation to apply to the Joint Apprenticeship Committee nearest the site of the public works project, which administers the apprenticeship program in that trade for a certificate of approval. The certificate will also fix the ratio of apprentices to journeymen to be used in the performance of the Contract. The Contractor is required to make contributions to funds established for the administration of apprenticeship programs if he employs registered apprentices or journeymen in any apprenticeable trade and if other contractors on the public works site are making such contributions. Information relative to apprenticeship standards, contributions, wage schedules and other requirements may be obtained from the State Director of Industrial Relations or from the Division of Apprenticeship Standards. Section 1777.6 of the Labor Code provides that it shall be unlawful to refuse to accept otherwise qualified employees as registered apprentices solely on the grounds of race, religious creed, color, national origin, ancestry, sex, or age.

12.9 Eight hours labor constitutes a legal day's work, as set forth in Labor Code Section 1810. The statutory provisions for penalties for failure to comply with the State's wage and hour laws will be enforced as set forth in Labor Code Section 1813. 13 Antitrust Claims
In entering into this Agreement, Contractor offers and agrees to assign to the City all rights, title, and interest in and to all causes of action it may have under Section 4 of the Clayton Act (15 U.S.C. Sec. 15) or under the Cartwright Act (Chapter 2 (commencing with Section 16700) of Part 2 of Division 7 of the California Business and Professions Code) arising from purchases of goods, services, or materials pursuant to the Agreement. This assignment shall be made and become effective at the time the City tenders final payment to Contractor without further acknowledgment by the parties.
14 Trenching and Excavations
Pursuant to Public Contract Code Section 7104, if the Project involves trenching more than four (4) feet deep, Contractor shall promptly and before the following conditions are disturbed notify the City in writing of any:
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14.1 Material that Contractor believes may be material that is hazardous waste, as defined in California Health and Safety Code Section 25117, that is required to be removed to a Class I, Class II, or Class III disposal site in accordance with provisions of existing law; and/or

14.2 Subsurface or latent physical conditions at the site differing from those indicated; and/or

14.3 Unknown physical conditions at the site of any unusual nature, different materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in the Contract.

14.4 As required by Labor Code Section 6705 and in addition thereto, whenever work under the Contract that involves an estimated expenditure in excess of twenty- five thousand dollars ($25,000) for the excavation of any trench or trenches five (5) feet or more in depth, Contractor shall submit for acceptance by City in advance of excavation, a detailed plan showing the design of shoring, bracing, sloping, or other provisions to be made for worker protection from the hazard of caving ground during the excavation, of such trench or trenches. If such plan varies from the shoring system standards established by the Construction Safety Orders of the Division of Industrial Safety, the plan shall be prepared by a registered civil or structural engineer employed by Contractor, and all costs therefor shall be included in the price of the Contract. Nothing in this provision shall be deemed to allow the use of a shoring, sloping, or other protective system less effective than that required by the Construction Safety Orders. Nothing in this provision shall be construed to impose tort liability on the City or on any City officer, agent, consultant, representative, or employee. All plans, processing and shoring costs are Contractor’s responsibility and must be included in Contractor’s bid.
15 Location of Existing Elements
Pursuant to Government Code Sections 4216 to 4216.9, the methods used and costs involved to locate existing elements, points of connection and all construction methods are Contractor’s sole responsibility. Accuracy of information furnished, as to existing conditions, is not guaranteed. Contractor, at its sole expense, must make all investigations necessary to determine locations of existing elements, which may include, without limitation, contacting U.S.A. alert and other private underground locating firm(s), and/or utilizing potholes, specialized locating equipment and/or hand trenching.
16 Third Party Claims
Pursuant to Public Contract Code Section 9201, the City has full authority to compromise or otherwise settle any claim relating to this Contract at any time. The City shall timely notify Contractor of the receipt of any third-party claim relating to the 7-21Concord - Document ID: generated after first signature Contract. The City shall be entitled to recover its reasonable costs incurred in providing the notification required by Public Contract Code Section 9201(b). 17 Non-Collusion
Contractor hereby certifies that this bid is genuine and not a sham or collusive, or made in the interest or on behalf of any person or business not herein named.

Contractor further certifies that Contractor has not directly or indirectly induced or solicited any other bidder to furnish a sham bid, or any other person or business to refrain from bidding, and Contractor has not in any manner sought by collusion to secure itself an advantage over any other bidder. Contractor also affirms that it has signed and submitted with its bid to the City a Non-collusion Declaration as required by Public Contract Code Section 7106.
18 Conflicts of Interest
Contractor agrees not to accept any employment or representation during the term of this Contract or within twelve (12) months after completion of the work under this Contract which is or may likely make Contractor “financially interested,” as provided in Government Code Section 1090 and 87100, in any decisions made by City on any matter in connection with which Contractor has been retained pursuant to this Contract.
19 Audit
The City or its representative shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its billings to the City as a condition precedent to any payment to Contractor. Contractor will promptly furnish documents requested by the City. Additionally, pursuant to Government Code Section 8546.7, if this Contract involves the expenditure of public funds in excess of ten thousand dollars ($10,000), Contractor shall be subject to State Auditor examination and audit at the request of the City or as part of any audit of the City, for a period of three (3) years after final payment under this Contract. 20 Substitute Security
Pursuant to Public Contract Code Section 22300, the substitution of securities for any moneys withheld by the City to ensure performance under a contract is permitted, except where financing will be provided by the Farmers Home Administration of the United States Department of Agriculture pursuant to the Consolidated Farm and Rural Development Act (7 U.S.C. Sec. 1921 et seq.) or where federal regulations or policies, or both, do not allow the substitution of securities. At the request and expense of Contractor, securities equivalent to the amount withheld shall be deposited with the City, or with a state or federally chartered bank in the State of California as the escrow agent, that shall then pay those moneys to Contractor. Upon satisfactory completion of the Contract, the securities shall be returned to Contractor. 8-21Concord - Document ID: generated after first signature Alternatively, Contractor may request and the City shall make payment of retentions earned directly to the escrow agent at the expense of Contractor. At the expense of Contractor, Contractor may direct the investment of the payments into securities, and Contractor shall receive the interest earned on the investments upon the same terms provided for securities deposited by Contractor. Upon satisfactory completion of the Contract, Contractor shall receive from the escrow agent all securities, interest, and payments received by the escrow agent from the City, pursuant to the terms of this section.

Securities eligible for investment shall include those listed in California Government Code Section 16430, bank or savings and loan certificates of deposit, interest-bearing demand deposit accounts, standby letters of credit, or any other security to which Contractor and the City agree in writing. Contractor shall be the beneficial owner of any securities substituted for moneys withheld and shall receive any interest thereon.

If Contractor elects to receive interest on moneys withheld in retention by the City, it shall, at the request of any subcontractor performing more than five percent (5%) of Contractor’s total bid, make that option available to the subcontractor regarding any moneys withheld in retention by Contractor from the subcontractor. If Contractor elects to receive interest on any moneys withheld in retention by the City, then the subcontractor shall receive the identical rate of interest received by Contractor on any retention moneys withheld from the subcontractor by Contractor, less any actual pro rata costs associated with administering and calculating that interest. In the event that the interest rate is a fluctuating rate, the rate for the subcontractor shall be determined by calculating the interest rate paid during the time that retentions were withheld from the subcontractor. If Contractor elects to substitute securities in lieu of retention, then, by mutual consent of Contractor and its subcontractor, the subcontractor may substitute securities in exchange for the release of moneys held in retention by Contractor. No Contractor shall require any subcontractor to waive any provision of this paragraph.

The escrow agreement for security deposits in lieu of retention shall be substantially similar to the form provided in Public Contract Code Section 22300(f). 21 Claims Dispute Resolution
In the event of any dispute or controversy with the City over any matter whatsoever, the Contractor shall not cause any delay or cessation in or of Work, but shall proceed with the performance of the Work in dispute. The Contractor shall retain any and all rights provided that pertain to the resolution of disputes and protests between the parties. The Disputed Work will be categorized as an “unresolved dispute” and payment, if any, shall be as later determined by mutual agreement or a court of law.

The Contractor shall keep accurate, detailed records of all Disputed Work, claims and other disputed matters.
9-21Concord - Document ID: generated after first signature All claims arising out of or related to the Contract documents or this Project, and the consideration and payment of such claims, are subject to the Government Claims Act (Government Code Section 810 et seq.) with regard to filing claims. All such claims are also subject to Public Contract Code Section 9204 and Public Contract Code Section 20104 et seq. (Article 1.5), where applicable. This Contract hereby incorporates those provisions as though fully set forth herein. Thus, the Contractor or any Subcontractor must file a claim in accordance with the Government Claims Act as a prerequisite to filing a construction claim in compliance with Section 9204 and Article 1.5 (if applicable), and must then adhere to Section 9204 and Article 1.5 (as applicable), pursuant to the definition of “claim” as individually defined therein. 22 Non-discrimination and Equal Employment Opportunity

22.1 In performance of this Contract, CONTRACTOR shall not discriminate against any employee, subcontractor, or applicant for employment because of sex, color, race, religion, ancestry, national origin, disability, medical condition including the medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sexual orientation, age, gender, gender identity, gender expression, genetic information, or military and veteran status.

CONTRACTOR will take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their sex, color, race, religion, ancestry, national origin, disability, medical condition including the medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sexual orientation, age, gender, gender identity, gender expression, genetic information, or military and veteran status . Affirmative action relating to employment shall include, but not be limited to the following:
employment, upgrading, demotion or transfer; recruitment; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.

22.2 The provisions of subsection 16.1 above shall be included in all solicitations or advertisements placed by or on behalf of CONTRACTOR for personnel to perform any services under this Contract. CITY shall have access to all documents, data and records of CONTRACTOR and its subcontractors for purposes of determining compliance with the equal employment opportunity and non-discrimination provisions of this Section, and all applicable provisions of Executive Order No. 11246 which is incorporated herein by this reference. A copy of Executive Order No. 11246 is available for inspection at, and on file with, the Palmdale City Clerk’s Office. 23 Integration
This Contract supersedes any and all agreements, either oral or written, between the parties hereto with respect to the construction of the Project by Contractor for City and contains all of the covenants and agreements between the parties with respect to the construction of the Project. Each party to this Contract acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made with regard to the construction of the Project by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise regarding work not contained in this Contract shall 10-21Concord - Document ID: generated after first signature be valid or binding. Any modification or amendment of this Contract will be effective only if it is in writing and signed by the parties to this Contract. Any changes to the work required by this Contract will be by change order signed by the parties. 24 Governing Law
This Contract will be governed by and construed in accordance with the laws of the State of California without reference to change of venue laws. Any legal action in which enforcement of the terms and conditions of this Contract is requested, or in which it is alleged that a breach of this Contract has taken place, shall be filed and prosecuted in the County of Los Angeles, California.
25 Successors and Assigns
The terms and conditions of this Contract shall be binding on the successors and assigns of the parties to this Contract.
26 Exhibits
The exhibits and attachments referenced in this Contract are attached hereto and incorporated herein by this reference as though set forth in full in the Contract. 27 Authority to Sign
The person or persons executing this Contract on behalf of the Contractor warrant and represent that they have the authority to execute this Contract on behalf of the Contractor and have the authority to bind Contractor to the construction of the Project.
28 Time is of the Essence
Time is of the essence in every provision of this Agreement in which time to perform is a factor.

29 American Rescue Plan Funding
CONTRACTOR, understands, acknowledges, and agrees that the funding source for its work is from the American Rescue Plan, Coronavirus State and Local Fiscal Recovery Funds (collectively “ARPA”) and as such, CONTRACTOR is required to comply with the regulations associated with ARPA funds pursuant to 31 CFR Part

35. Those regulations and reporting requirements are set forth in Exhibit “A” attached hereto and incorporated herein by reference. By executing this Contract, CONTRACTOR agrees to comply with all such regulations and reporting requirements and shall familiarize itself with those requirements.

30 Debarment and Suspension Certification
Title 2, Code of Federal Regulations, Part §180.300
The bidder, under penalty of perjury, certifies that, except as noted in a separate document, he/she or any other person associated therewith in the capacity of owner, partner, director, officer, or manager:
11-21Concord - Document ID: generated after first signature •is not currently under suspension, debarment, voluntary exclusion, or determination of ineligibility by any Federal agency;
•has not been suspended, debarred, voluntarily excluded or determined ineligible by any Federal agency within the past 3 years; •does not have a proposed debarment pending; and
•has not been indicted, convicted, or had a civil judgment rendered against it by a court of competent jurisdiction in any matter involving fraud or official misconduct within the past 3 years.

In Witness Whereof, the parties hereto have caused this Contract to be executed and attested by their respective officers thereunto duly authorized.

CITY OF PALMDALE JT CONSTRUCTION GROUP, INC.

Salvador Mendez Date
City Manager Pro Tem

Emil Amyan Date
Project Manager

ADDRESS FOR NOTICE:

CITY OF PALMDALE
38250 Sierra Highway
Palmdale, CA 93550

ADDRESS FOR NOTICE:

JT CONSTRUCTION GROUP, INC.
9919 La Tuna Canyon Road
Sun Valley, CA 91352
APPROVE AS TO FORM:

William P. Curley, III
City Attorney

ATTEST:

Roxanne Faber
City Clerk

ATTEST: If Corporation

Secretary

[Signatures of contractor must be notarized. Obtain two corporate signatures if contractor is a corporation.]

12-21Concord - Document ID: generated after first signature EXHIBIT “A”

ARPA REQUIREMENTS

RECITAL:

On March 11, 2021, the American Rescue Plan Act (“ARP Act”) was signed into law.

The ARP Act was intended to provide increased aid to individuals, families, businesses, and governments affected by the COVID-19 pandemic. The ARP Act established and funded the Coronavirus State and Local Fiscal Recovery Funds (the “CSLFRF”), which included two hundred forty (240) billion dollars for state, territorial, local, and Tribal governments that are being used to fight the pandemic and accelerate local economic recovery.

MANDATORY CONTRACT PROVISIONS FOR ARP ACT EXPENDITURES:

Procurement processes for expenditures using American Rescue Plan Act (ARPA) funds generally follow state and local rules. In most cases, city procurement policies will satisfy the federal requirements. One notable difference is that federal procurement regulations mandate specific contract provisions in certain circumstances. There are no requirements for contracts or expenditures of less than $10,000. However, using ARPA funds for contracts in excess of $10,000 triggers the mandatory contract provisions in 2 CFR Part 200, Appendix II.

Most contract provisions are required only on those exceeding $100,000 or those for construction projects of any amount. However, mandatory contract provisions will apply if a city obligates ARPA funds to a contract that exceeds $100,000.

For ease of administration, below is an explanation of the mandatory contract provisions and model language necessary for compliance with federal law disclosures.
2 C.F.R. PART 200: APPENDIX II, CONTRACT PROVISIONS
•For contracts over $10,000, cities must include a provision that addresses termination for cause and convenience by the local government, including the process for termination and the basis for settlement.
•For contracts over $100,000, cities must include a provision that addresses administrative, contractual, or legal remedies if a contractor violates or breaches the contract, including sanctions and penalties for the breach. •In accepting the ARPA award, local governments agreed to include an EEO statement in any federally assisted construction contract defined in 41 CFR Part 60-1.3. A federally assisted construction contract is defined as follows:
oAny agreement or modification thereof between any applicant and a person for construction work which is paid for in whole or in part with funds obtained from the government or borrowed on the credit of the government pursuant to any federal program involving a grant, contract, loan, insurance, or guarantee, or undertaken pursuant to any federal program involving such grant, contract, loan, insurance, or guarantee, or any application or modification thereof approved by the government 13-21Concord - Document ID: generated after first signature for a grant, contract, loan, insurance, or guarantee under which the applicant itself participates in the construction work.

EQUAL EMPLOYMENT OPPORTUNITY:

During the performance of this contract, the contractor agrees as follows:
(1) The contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, sexual orientation, gender identity, or national origin. The contractor will take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, religion, sex, sexual orientation, gender identity, or national origin.

Such action shall include, but not be limited to the following:

1.Employment, upgrading, demotion, or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices to be provided setting forth the provisions of this nondiscrimination clause.

2.The contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive consideration for employment without regard to race, color, religion, sex, sexual orientation, gender identity, or national origin.

3.The contractor will not discharge or in any other manner discriminate against any employee or applicant for employment because such employee or applicant has inquired about, discussed, or disclosed the compensation of the employee or applicant or another employee or applicant. This provision shall not apply to instances in which an employee who has access to the compensation information of other employees or applicants as a part of such employee's essential job functions discloses the compensation of such other employees or applicants to individuals who do not otherwise have access to such information, unless such disclosure is in response to a formal complaint or charge, in furtherance of an investigation, proceeding, hearing, or action, including an investigation conducted by the employer, or is consistent with the contractor's legal duty to furnish information.

4.The contractor will send to each labor union or representative of workers with which he has a collective bargaining agreement or other contract or understanding a notice to be provided advising the said labor union or workers' representatives of the contractor's commitments under this section and shall post copies of the notice in conspicuous places available to employees and applicants for employment.

5.The contractor will comply with all provisions of Executive Order 11246 of September 24, 1965, and of the rules, regulations, and relevant orders of the Secretary of Labor.

6.The contractor will furnish all information and reports required by Executive Order 11246 of September 24, 1965, and by rules, regulations, and orders of the Secretary of Labor, or pursuant thereto, and will permit access to his books, records, and accounts by the administering agency and the Secretary 14-21Concord - Document ID: generated after first signature of Labor for purposes of investigation to ascertain compliance with such rules, regulations, and orders.

7.In the event of the contractor's noncompliance with the nondiscrimination clauses of this contract or with any of the said rules, regulations, or orders, this contract may be canceled, terminated, or suspended in whole or in part, and the contractor may be declared ineligible for further government contracts or federally assisted construction contracts in accordance with procedures authorized in Executive Order 11246 of September 24, 1965, and such other sanctions may be imposed and remedies invoked as provided in Executive Order 11246 of September 24, 1965, or by rule, regulation, or order of the Secretary of Labor, or as otherwise provided by law.

8.The contractor will include the portion of the sentence immediately preceding paragraph (1) and the provisions of paragraphs (1) through (8) in every subcontract or purchase order unless exempted by rules, regulations, or orders of the Secretary of Labor issued pursuant to section 204 of Executive Order 11246 of September 24, 1965, so that such provisions will be binding upon each subcontractor or vendor. The contractor will take such action with respect to any subcontract or purchase order as the administering agency may direct as a means of enforcing such provisions, including sanctions for noncompliance:

Provided, however, that in the event a contractor becomes involved in or is threatened with litigation with a subcontractor or vendor as a result of such direction by the administering agency, the contractor may request the United States to enter into such litigation to protect the interests of the United States.

Contracts that are in excess of $100,000 and involve the employment of mechanics or laborers must include provisions requiring compliance with the Contract Work Hours and Safety Standards Act as follows:
(1) Overtime requirements: No contractor or subcontractor contracting for any part of the contract work which may require or involve the employment of laborers or mechanics shall require or permit any such laborer or mechanic in any workweek in which he or she is employed on such work to work in excess of forty hours in such a workweek unless such laborer or mechanic receives compensation at a rate not less than one and one-half times the basic rate of pay for all hours worked in excess of forty hours in such a workweek.
(2) Violation: liability for unpaid wages; liquidated damages. In the event of any violation of the clause set forth in paragraph (1) of this section, the contractor and any subcontractor responsible therefor shall be liable for the unpaid wages. In addition, such contractor and subcontractor shall be liable to the United States (in the case of work done under contract for the District of Columbia or a territory, to such District or to such territory) for liquidated damages. Such liquidated damages shall be computed with respect to each individual laborer or mechanic, including watchmen and guards, employed in violation of the clause set forth in paragraph (1) of this section, in the sum of $10 for each calendar day on which such individual was required or permitted to work in excess of the standard workweek of forty hours without payment of the overtime wages required by the clause set forth in paragraph (1) of this section. 15-21Concord - Document ID: generated after first signature (3) Withholding for unpaid wages and liquidated damages. The City of Palmdale shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld, from any moneys payable on account of work performed by the contractor or subcontractor under any such contract or any other federal contract with the same prime contractor, or any other federally-assisted contract subject to the Contract Work Hours and Safety Standards Act, which is held by the same prime contractor, such sums as may be determined to be necessary to satisfy any liabilities of such contractor or subcontractor for unpaid wages and liquidated damages as provided in the clause set forth in paragraph (2) of this section.
(4) Subcontracts. The contractor or subcontractor shall insert in any subcontracts the clauses set forth in paragraph (1) through (4) of this section and also a clause requiring the subcontractors to include these clauses in any lower-tier subcontracts.

The prime contractor shall be responsible for compliance by any subcontractor or lower-tier subcontractor with the clauses set forth in paragraphs (1) through (4) of this section.

Contracts and subgrants in excess of $150,000 must contain a provision that requires the non-federal award to agree to comply with all applicable standards, orders, or regulations of the Clean Air Act and Federal Water Pollution Control Act.

CLEAN AIR ACT
(1) The contractor agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Clean Air Act, as amended, 42 U.S.C. § 7401 et seq.
(2) The contractor agrees to report each violation to the City of Palmdale and understands and agrees that the City of Palmdale will, in turn, report each violation as required to assure notification to the Treasury Department and the appropriate Environmental Protection Agency Regional Office.
(3) The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with American Rescue Plan Act funding.

FEDERAL WATER POLLUTION CONTROL ACT
(1) The contractor agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.
(2) The contractor agrees to report each violation to the City of Palmdale and understands and agrees that the City of Palmdale will, in turn, report each violation as required to assure notification to the Treasury Department and the appropriate Environmental Protection Agency Regional Office.
(3) The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with American Rescue Plan Act funds.
16-21Concord - Document ID: generated after first signature Federal Water Pollution Control Act
(1) The contractor agrees to comply with all applicable standards, orders, or regulations issued pursuant to the Federal Water Pollution Control Act, as amended, 33 U.S.C. 1251 et seq.
(2) The contractor agrees to report each violation to the City of Palmdale and understands and agrees that the City of Palmdale will, in turn, report each violation as required to assure notification to the Treasury Department and the appropriate Environmental Protection Agency regional office.
(3) The contractor agrees to include these requirements in each subcontract exceeding $100,000 financed in whole or in part with American Rescue Plan Act funds.

In order to contract with the City, all parties must:
(a) Be registered in SAM.gov (https://sam.gov/content/home); and (b) Maintain an active SAM registration with current information, including information on a recipient’s immediate and highest-level owner and subsidiaries; and
(c) Provide its unique entity identifier to the City before a contract is executed; and
(d) Not have an active exclusion record on SAM.gov which would indicate the entity has been debarred.

As of April of 2022, all entities doing business with the federal government must use a Unique Entity ID created in SAM.gov The federal government has stopped using the DUNS number to uniquely identify entities.

Byrd Anti-Lobbying Amendment, 31 U.S.C. § 1352: Contractors that apply for a bid or award exceeding $100,000 must file the required certification that it will not and has not used federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency. Cities should include the Byrd Anti-Lobbying contract clause is as follows:

Contractors who apply or bid for an award of $100,000 or more shall file the required certification. Each tier certifies to the tier above that it will not and has not used federal appropriated funds to pay any person or organization for influencing or attempting to influence an officer or employee of any agency, a member of Congress, officer or employee of Congress, or an employee of a member of Congress in connection with obtaining any federal contract, grant, or any other award covered by 31 U.S.C. § 1352. Each tier shall also disclose any lobbying with non-federal funds that takes place in connection with obtaining any federal award. Such disclosures are forwarded from tier to tier, up to the recipient.

BUY AMERICA PREFERENCE IN FEDERAL FINANCIAL ASSISTANCE
PROGRAMS FOR INFRASTRUCTURE – RESTORE ACT

On November 15, 2021, President Biden signed into law the Infrastructure Investment and Jobs Act (“IIJA”), Pub. L. No. 117-58, which includes the Build America, Buy America Act (“the Act”). Pub. L. No. 117-58, §§ 70901-52. The Act strengthens Made in America Laws and will bolster America’s industrial base, protect national security, 17-21Concord - Document ID: generated after first signature and support high-paying jobs. The Act requires that no later than May 14, 2022—180 days after the enactment of the IIJA—the head of each covered Federal agency shall ensure that “none of the funds made available for a Federal financial assistance program for infrastructure, including each deficient program, may be obligated for a project unless all of the iron, steel, manufactured products, and construction materials used in the project are produced in the United States.” RESTORE Act - Buy America Preference | U.S. Department of the Treasury.”

TITLE VI OF THE CIVIL RIGHTS ACT OF 1964
In addition to other provisions required by the Federal agency or non-Federal entity, all contracts made by the non-Federal entity under the Federal award must contain provisions covering the following, as applicable.

1. Recipient ensures its current and future compliance with Title VI of the Civil Rights Act of 1964, as amended, which prohibits exclusion from participation, denial of the benefits of, or subjection to discrimination under programs and activities receiving federal financial assistance, of any person in the United States on the ground of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury Title VI regulations at 31 CFR Part 22 and other pertinent executive orders such as Executive Order 13166, directives, circulars, policies, memoranda, and/or guidance documents.

2. Recipient acknowledges that Executive Order 13166, “Improving Access to Services for Persons with Limited English Proficiency,” seeks to improve access to federally assisted programs and activities for individuals who, because of national origin, have Limited English proficiency (LEP). Recipient understands that denying a person access to its programs, services, and activities because of LEP is a form of national origin discrimination prohibited under Title VI of the Civil Rights Act of 1964 and the Department of the Treasury’s implementing regulations. Accordingly, Recipient shall initiate reasonable steps, or comply with the Department of the Treasury’s directives, to ensure that LEP persons have meaningful access to its programs, services, and activities. Recipient understands and agrees that meaningful access may entail providing language assistance services, including oral interpretation and written translation where necessary, to ensure effective communication in the Recipient’s programs, services, and activities.

3. Recipient agrees to consider the need for language services for LEP persons when Recipient develops applicable budgets and conducts programs, services, and activities. As a resource, the Department of the Treasury has published its LEP guidance at 70 FR 6067. For more information on taking reasonable steps to provide meaningful access for LEP persons, please visit http://www.lep.gov.

4. Recipient acknowledges and agrees that compliance with the assurances constitutes a condition of continued receipt of federal financial assistance and is binding upon Recipient and Recipient’s successors, transferees, and assignees for the period in which such assistance is provided.

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5. Recipient acknowledges and agrees that it must require any sub-grantees, contractors, subcontractors, successors, transferees, and assignees to comply with assurances 1-4 above, and agrees to incorporate the following language in every contract or agreement subject to Title VI and its regulations between the Recipient and the Recipient’s sub-grantees, contractors, subcontractors, successors, transferees, and assignees:

The sub-grantee, contractor, subcontractor, successor, transferee, and assignee shall comply with Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal financial assistance from excluding from a program or activity, denying benefits of, or otherwise discriminating against a person on the basis of race, color, or national origin (42 U.S.C. § 2000d et seq.), as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, which are herein incorporated by reference and made a part of this contract (or agreement). Title VI also includes protection to persons with “Limited English Proficiency” in any program or activity receiving federal financial assistance, 42 U.S.C. § 2000d et seq., as implemented by the Department of the Treasury’s Title VI regulations, 31 CFR Part 22, and herein incorporated by reference and made a part of this contract or agreement.

6. Recipient understands and agrees that if any real property or structure is provided or improved with the aid of federal financial assistance by the Department of the Treasury, this assurance obligates the Recipient, or in the case of a subsequent transfer, the transferee, for the period during which the real property or structure is used for a purpose for which the federal financial assistance is extended or for another purpose involving the provision of similar services or benefits. If any personal property is provided, this assurance obligates the Recipient for the period during which it retains ownership or possession of the property.

7. Recipient shall cooperate in any enforcement or compliance review activities by the Department of the Treasury of the aforementioned obligations. Enforcement may include investigation, arbitration, mediation, litigation, and monitoring of any settlement agreements that may result from these actions. The Recipient shall comply with information requests, on-site compliance reviews and reporting requirements.

8. Recipient shall maintain a complaint log and inform the Department of the Treasury of any complaints of discrimination on the grounds of race, color, or national origin, and limited English proficiency covered by Title VI of the Civil Rights Act of 1964 and implementing regulations and provide, upon request, a list of all such reviews or proceedings based on the complaint, pending or completed, including outcome. Recipient also must inform the Department of the Treasury if Recipient has received no complaints under Title VI.

9. Recipient must provide documentation of an administrative agency's or court's findings of non-compliance of Title VI and efforts to address the non-compliance, including any voluntary compliance or other agreements between the Recipient and the administrative agency that made the finding. If the Recipient settles a case or matter alleging such discrimination, the Recipient must provide documentation of the 19-21Concord - Document ID: generated after first signature settlement. If Recipient has not been the subject of any court or administrative agency finding of discrimination, please so state.

10. If the Recipient makes sub-awards to other agencies or other entities, the Recipient is responsible for ensuring that sub-recipients also comply with Title VI and other applicable authorities covered in this document State agencies that make sub- awards must have in place standard grant assurances and review procedures to demonstrate that that they are effectively monitoring the civil rights compliance of subrecipients.

The United States of America has the right to seek judicial enforcement of the terms of this assurances document and nothing in this document alters or limits the federal enforcement measures that the United States may take in order to address violations of this document or applicable federal law.

Under penalty of perjury, the undersigned official(s) certifies that official(s) has read and understood the Recipient's obligations as herein described, that any information submitted in conjunction with this assurances document is accurate and complete, and that the Recipient is in compliance with the aforementioned nondiscrimination requirements.

ARPA Regulations, 31 CFR Part 35 (“Regulations”) are incorporated herein and made a part of this Contract.

CONTRACTOR agrees to be bound by the reporting requirements set out in the Regulations. This includes submitting quarterly reports by the 15th of the month following the end of each quarter to the Director of Finance. The reports must include, but is not limited to, the use of the funds, documentation/receipts of the funds spent, description of the project and status of completion of the project. The Director of Finance may require additional information of CONTRACTOR for compliance with ARPA Regulations.

CONTRACTOR, in the performance of this Contract and as a sub-recipient of ARPA funds, as well as all of its subcontractors, must comply with the following:

1. CONTRACTOR, and any and all of its subcontractors, must ensure that they do not deny benefits, services or otherwise discriminate on the basis of race, color, national origin (including limited English proficiency), disability, age, or sex (including sexual orientation and gender identity) in accordance with Title VI of the Civil Rights Act of 1964, Public Law 88-352, 42 U.S.C. 2000d-1 et seq., and the Department's implementing regulations, 31 CFR part 22; Section 504 of the Rehabilitation Act of 1973 (Section 504), Public Law 93-112, as amended by Public Law 93-516, 29 U.S.C. 794; Title IX of the Education Amendments of 1972 (Title IX), 20 U.S.C. 1681 et seq., and the Department's implementing regulations, 31 CFR part 28; Age Discrimination Act of 1975, Public Law 94-135, 42 U.S.C. 6101 et seq., and the Department implementing regulations at 31 CFR part 23. CONTRACTOR will be required to submit data showing compliance with the above.
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2. Universal Identifier and System for Award Management (SAM), 2 C.F.R. Part 25, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 25 is hereby incorporated by reference.

3. Reporting Subaward and Executive Compensation Information, 2 C.F.R. Part 170, pursuant to which the award term set forth in Appendix A to 2 C.F.R. Part 170 is hereby incorporated by reference.

4. OMB Guidelines to Agencies on Governmentwide Debarment and Suspension (Nonprocurement), 2 C.F.R. Part 180, including the requirement to include a term or condition in all lower-tier covered transactions. (2 C.F.R. Part 180, subpart B) and that the award is subject to 2 C.F.R. Part 180 and Treasury's implementing regulation at 31 C.F.R. Part 19.

5. The Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards found at 2 CFR Part 200 Appendix II.

6. Recipient Integrity and Performance Matters, pursuant to which the award term set forth in 2 C.F.R. Part 200, Appendix XII to Part 200 is hereby incorporated by reference.

7. Governmentwide Requirements for Drug-Free Workplace, 31 C.F.R. Part 20.

8. New Restrictions on Lobbying, 31 C.F.R. Part 21

9. Uniform Relocation Assistance and Real Property Acquisitions Act of 1970 (42 U.S.C. §§ 4601-4655) and implementing regulations.

10. Section 2 CFR 200.323 regarding Section 6002 of the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act (EPA guidelines at 40 CFR Part 247).

11. Section 200.322 of 2 CFR 200.322, Domestic preferences for procurements.

12. Generally applicable federal environmental laws and regulations.

---------------------------------------- INTERNAL USE ONLY ----------------------------------------

□Certificate(s) and Endorsement(s) attached
□Confirmed business name on contract with certificate(s) □Attached Worker's Compensation Certificate and Guaranty □Attached Agreement Checklist and met all requirements
□Attached 2 CFR 200 Checklist
□Attached Subrecipient Contractor Determination

21-21Concord - Document ID: generated after first signature City Council Staff Report
DATE: MAY 6, 2025
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS DEPARTMENT

CAPITAL IMPROVEMENT PROGRAM DIVISION
DISTRICT: ALL
SUBJECT: AWARD AGREEMENT WITH MANHOLE ADJUSTING, INC. , FOR CONSTRUCTION SERVICES FOR PN 911, FY 2025 -26 LOCAL

STREET RESURFACING PROJECT FOR A TOTAL NOT TO
EXCEED AMOUNT OF $5,677,916 FOR A TERM OF 90 WORKING

DAYS FROM THE DATE OF THE NOTICE TO PROCEED

RECOMMENDATION
Staff recommend that the City Council:

1. Approve Agreement No. A -9261 with Manhole Adjusting, Inc. , for construction services for PN 911, FY 2025-26 Local Street Resurfacing Project for a total not to exceed amount of $5,677,916, which includes a contract amount of $ 5,161,742, plus a 10% contingency amount of $516,174 for a term of 90 working days from the date of the Notice to Proceed; and,

2. Authorize the City Manager Pro Tem or his designee to execute the Agreement No. A -9261 with Manhole Adjusting, Inc. , including minimal and/or non - substantial changes.

BACKGROUND
Project No. 911 will provide slurry sealing, cape sealing, and mill and overlay paving on over 2.25 million square feet of local streets in various neighborhoods in the City, shown in the Project Map, Exhibit A . Project design was completed by City staff. S treets were selected based on current pavement condition indices, visual assessment of the existing surface condition, and effective distribution across all districts.

Slurry sealing isthe application of a recycled asphalt emulsion that provides a newdriving surface and rejuvenates the existing underlying pavement. Cape sealing is a sustainable pavement surface treatment that i s ideal for local streets in moderately distressed conditions. Installation of slurry seals includes notifications, temporary on-street parking Report to Mayor and City Council
Re: Award of PN 911, Agreement No. A-9261 with Manhole Adjusting, Inc.

May 6, 2025

Page 2 ends

restrictions, surface preparation (weed spraying and crack sealing), localized repairs, application of the recycled-material slurry seal, and restriping where necessary.

Installation of cape seals is the same; however, an asphalt rubber aggregate membrane (ARAM) chip seal is applied before the slurry seal.

One neighborhood in the project (designated as Area #04), near Avenue R and 20th Street East, will receive a mill, an asphalt-concrete leveling course, and a new conventional asphalt overlay. Pavement conditions in this area are poor to very poor, with PCIs generally within the 15 to 35 range. The existing surface condition with extensive cracking and surface failures requires milling and new asphalt to provide a new, effective, long- lasting driving surface.

Slurry sealing is a standard pavement preservation treatment that provides a new driving surface expected to last 5 to 7 years. The ARAM cape seal treatment is expected to extend the life of the existing pavement surface by an additional 10 to 12 years. With ongoing pavement preservation practices, new conventional asphalt pavement in the mill and overlay areas is expected to last up to 25 years.

DISCUSSION
On March 5, 2025, the project was advertised for construction bids through the Planet Bids electronic platform. Eleven (11) vendors registered as prime contractors. By the bid deadline on April 8, 2025, the City received three (3) electronic bids, which are summarized below:

Bidder Location Amount

1. Manhole Adjusting, Inc. Pico Rivera, CA $5,161,742

2. American Pavement Systems, Inc. Modesto, CA $5,705,615

3. C.A. Rasmussen, Inc. Valencia, CA $7,229,200
Manhole Adjusting, Inc., was found to be the lowest bidder, was responsive to all bid requirements, and has secured a 10% bid bond as required. In recent years, Manhole Adjusting Inc. has completed several projects for the City, including street resurfacing Projects No. 847, 806, 781, and 747. They also listed references for completed local and minor arterial resurfacing projects in the cities of Riverside, Pico Rivera, and Montebello between the spring/summer of 2022 through 2024.

Manhole Adjusting, Inc., provided a construction cost of $5,161,742. The contract will allow a 10% contingency of $516,174.

Report to Mayor and City Council
Re: Award of PN 911, Agreement No. A-9261 with Manhole Adjusting, Inc.

May 6, 2025

Page 3 ends

FISCAL IMPACT
$5,677,916; This project is funded using Gas Tax and Article 8. Sufficient funds are budgeted and available in FY 2024-25.

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

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

Prepared by: Leonardo Torres, P.E.

ATTACHMENTS
Agrmt No. A-9261 with Manhole Adjusting, Inc.

Exh. A Project Map
AGREEMENT NO. A- 9261

CONSTRUCTION CONTRACT
BETWEEN THE CITY OF PALMDALE AND MANHOLE ADJUSTING, INC.

THIS CONTRACT (“Contract”) is made and entered into by and between City of Palmdale, a public entity ("City"), and MANHOLE ADJUSTING, INC., a California Corporation ("Contractor"). Contractor and City are collectively referred to herein as the “parties.” This Contract shall become effective on the date of the last signatory. 1 Scope of Work
Contractor shall complete the Project in accordance with this Contract. Contractor shall furnish all materials and perform all work required for the completion of the following Project:

Local street resurfacing using slurry, ARAM cape seal, and mill and overlay methods. Scope includes but is not limited to: traffic control plan development and implementation, SWPPP \ BMPs, public notifications, permitting, geolocation of utilities at surface; application of ARAM cape seal on local streets per the 2024 SPPWC; slurry-sealing; cul-de-sac and intersection stop-point treatments with conventional AC overlay; micro-milling; milling; paving; localized repairs; v-ditch resurfacing; utility adjustment; and striping inventory and replacement, all in accordance with the project plans and specifications.
2 Standard Specifications
Standard Specifications for City projects are those contained in the 2024 Greenbook edition of the "Standard Specifications for Public Works Construction" (the "Greenbook"). Except as otherwise expressly provided herein, the Standard Specifications shall control the general provisions, construction materials, and construction methods for this Contract (except as amended by the Plans for the Project), the General Specifications for the Project, the Special Provisions for the Project, any technical specifications for the Project, and any other contract documents.
3 Compensation
City shall pay Contractor the total, all-inclusive, NOT-TO-EXCEED amount of Five Million One Hundred Sixty One Thousand Seven Hundred Forty Two Dollars ($5161742) for the construction of the Project. This amount shall cover all expenses for labor, materials, and any and all other costs incurred by Contractor to satisfactorily construct the Project. Unless otherwise provided in the bid documents or agreed upon by the parties, Contractor shall submit detailed, monthly invoices for work actually performed.

4 Completion Date
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The construction of the Project shall commence upon Contractor being given a written notice to proceed, and shall be completed within 90 working days of said notice.

5 Payment and Performance Bonds; Guaranty

Unless otherwise expressly provided in the bid documents, prior to commencing work, Contractor shall provide a payment bond and performance bond, each in an amount equal to 100% of the projected annual recurring services price for each year of the term of the contract. Contractor shall submit all bonds electronically through Surety 2000. Pursuant to the bid documents for this Project, the Contractor is required to provide a written guaranty of Contractor’s work. In furtherance thereof, Contractor shall execute the written form of Guaranty attached hereto and incorporated by reference herein.

6 Licenses

At all times during the term of this Contract, Contractor shall possess a valid and current Class A Contractor's License consisting of Class A licensee to perform the required work (“Work”). Contractor’s DIR registration number is 1000004104. Contractor hereby certifies that it holds the required license(s).

7 Subcontracting

Subject to any self-performance requirements herein, Contractor may subcontract any portion of the work required by this Contract to other persons or firms, and Contractor submitted with its bid a list of those subcontractors who will perform work in an amount in excess of one-half of one percent (1%) of the Contractor’s total bid, in compliance with the Subletting and Subcontracting Fair Practices Act, California Public Contract Code § 4100, et seq. Only such listed subcontractors may perform on this Project.

8 Non-Assignability

Neither this Contract nor any rights, title, interest, duties or obligations under this Contract may be assigned, transferred, conveyed or otherwise disposed of by Contractor without the prior written consent of City.

9 Administration

This Contract will be administered by the Public Works Department of the City. The Director of Public Works or his or her designee shall be considered the Project Administrator and shall have the authority to act for the City under this Contract. 2-14Concord - Document ID: generated after first signature

10 Indemnification

To the maximum extent permitted by law, Contractor shall indemnify, protect, defend and hold harmless the City, its Board of Director, the City's officers, employees, agents, volunteers, and representatives (“Indemnitees”) with respect to any and all claims, suits, actions, stop notices, liabilities and/or damages, including related expenses, attorney's fees and costs, based on, arising out of, or in any way related to the work undertaken by Contractor pursuant to this Contract, and in connection with the Project.

11 Liability Insurance

11.1 Without limiting Contractor's indemnification of City, as described in paragraph 10, and unless modified by City, Contractor shall obtain, provide and maintain, at its own expense, during the term of this Contract, a policy or policies of insurance, satisfactory to the City, from insurance carriers admitted to do business in the State of California and rated in A.M. Best’s Insurance Guide with a rating of A:VII or better, which contain the coverage described below.

11.1.1 Commercial General Liability
 $2,000,000.00 limit on a per occurrence basis
 $4,000,000.00 general aggregate limit

11.1.2 Commercial Automobile Liability
 $5,000,000.00 combined single limit including owned, non-owned and hired automobile coverage

11.1.3 Workers’ Compensation and Employer’s Liability
 Workers’ Compensation -- coverage as required by the State of California  Employer’s Liability
$1,000,000 each accident
$1,000,000.00 policy limit bodily injury
$1,000,000.00 each employee bodily injury by disease

11.1.4 Pollution/Environmental Liability*
 $2,000,000.00 limit on a per occurrence basis

1.1.4 Professional Liability (Errors & Omissions)*
 $2,000,000.00 limit on a per occurrence basis

11.2 Policies providing for bodily injury and property damage coverage shall contain the following:

A. An endorsement extending coverage to the City as an additional insured, as respects liability arising out of the performance of any work under the Contract.

Such insurance shall be primary insurance, as respects the interest of the City, 3-14Concord - Document ID: generated after first signature and any other insurance maintained by the City shall be considered excess coverage and not contributing insurance with the insurance required hereunder.

B. “Severability of Interest” Clause.

11.5 The required policies of insurance shall be endorsed to waive all rights of subrogation. Contractors waives all rights of subrogation.

11.6 Acceptable Proof of Insurance:

B. Binders of insurance for all coverage. Agents must confirm that policy endorsements have been ordered from the respective insurance companies.

Upon issuance, policy endorsements and a corresponding Certificate of Insurance listing all insurers and coverage must be submitted to the City Attorney.

C. *When pollution/environmental liability and/or professional liability (E&O) coverage is provided on a “claims made basis”, CONTRACTOR will continue to renew the insurance for a period of five (5) years after this Agreement expires or is terminated. Such insurance will have the same coverage and limits as the policy that was in effect during the term of this Agreement, and will cover CONTRACTOR, or its officers, employees, or agents during the time this Agreement was in effect.
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Any deviation in this requirement will be CONTRACTOR's sole risk. CONTRACTOR's insurance requirements in Section 11 will not be impacted and/or limited by such deviation.
12 State Labor Code

12.1 This Contract calls for work to be performed constituting public works.

Contractor shall post a copy of such wage rates at the job site and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor 5-14Concord - Document ID: generated after first signature Code. Pursuant to the provisions of 1775 of the Labor Code, Contractor shall forfeit to the City, as a penalty, not more than $200.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for any work done under this Contract, by him or by any subcontractor under him, in violation of the provisions of this Agreement.

12.5 Pursuant to Labor Code Section 1771.4, the Project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

12.8 Section 1777.5 of the Labor Code requires Contractor or subcontractor employing workers in any apprenticeable occupation to apply to the Joint Apprenticeship Committee nearest the site of the public works project, which administers the apprenticeship program in that trade for a certificate of approval. The certificate will also fix the ratio of apprentices to journeymen to be used in the performance of the Contract. The Contractor is required to make contributions to funds established for the administration of apprenticeship programs if he employs registered apprentices or journeymen in any apprenticeable trade and if other contractors on the public works site are making such contributions. Information 6-14Concord - Document ID: generated after first signature relative to apprenticeship standards, contributions, wage schedules and other requirements may be obtained from the State Director of Industrial Relations or from the Division of Apprenticeship Standards. Section 1777.6 of the Labor Code provides that it shall be unlawful to refuse to accept otherwise qualified employees as registered apprentices solely on the grounds of race, religious creed, color, national origin, ancestry, sex, or age.

14.2 Subsurface or latent physical conditions at the site differing from those indicated; and/or

15 Location of Existing Elements
Pursuant to Government Code Sections 4216 to 4216.9, the methods used and costs involved to locate existing elements, points of connection and all construction methods are Contractor’s sole responsibility. Accuracy of information furnished, as to existing conditions, is not guaranteed. Contractor, at its sole expense, must make all investigations necessary to determine locations of existing elements, which may include, without limitation, contacting U.S.A. alert and other private underground locating firm(s), and/or utilizing potholes, specialized locating equipment and/or hand trenching.
16 Third Party Claims
Pursuant to Public Contract Code Section 9201, the City has full authority to compromise or otherwise settle any claim relating to this Contract at any time. The City shall timely notify Contractor of the receipt of any third-party claim relating to the Contract. The City shall be entitled to recover its reasonable costs incurred in providing the notification required by Public Contract Code Section 9201(b). 17 Non-Collusion
Contractor hereby certifies that this bid is genuine and not a sham or collusive, or made in the interest or on behalf of any person or business not herein named. Contractor further certifies that Contractor has not directly or indirectly induced or solicited any other bidder to furnish a sham bid, or any other person or business to refrain from bidding, and Contractor has not in any manner sought by collusion to secure itself an advantage over any other bidder. Contractor also affirms that it has signed and submitted with its bid to the City a Non-collusion Declaration as required by Public Contract Code Section 7106.
18 Conflicts of Interest
Contractor agrees not to accept any employment or representation during the term of this Contract or within twelve (12) months after completion of the work under this 8-14Concord - Document ID: generated after first signature Contract which is or may likely make Contractor “financially interested,” as provided in Government Code Section 1090 and 87100, in any decisions made by City on any matter in connection with which Contractor has been retained pursuant to this Contract.
19 Audit
The City or its representative shall have the option of inspecting and/or auditing all records and other written materials used by Contractor in preparing its billings to the City as a condition precedent to any payment to Contractor. Contractor will promptly furnish documents requested by the City. Additionally, pursuant to Government Code Section 8546.7, if this Contract involves the expenditure of public funds in excess of ten thousand dollars ($10,000), Contractor shall be subject to State Auditor examination and audit at the request of the City or as part of any audit of the City, for a period of three (3) years after final payment under this Contract. 20 Substitute Security
Pursuant to Public Contract Code Section 22300, the substitution of securities for any moneys withheld by the City to ensure performance under a contract is permitted, except where financing will be provided by the Farmers Home Administration of the United States Department of Agriculture pursuant to the Consolidated Farm and Rural Development Act (7 U.S.C. Sec. 1921 et seq.) or where federal regulations or policies, or both, do not allow the substitution of securities. At the request and expense of Contractor, securities equivalent to the amount withheld shall be deposited with the City, or with a state or federally chartered bank in the State of California as the escrow agent, that shall then pay those moneys to Contractor. Upon satisfactory completion of the Contract, the securities shall be returned to Contractor.

Alternatively, Contractor may request and the City shall make payment of retentions earned directly to the escrow agent at the expense of Contractor. At the expense of Contractor, Contractor may direct the investment of the payments into securities, and Contractor shall receive the interest earned on the investments upon the same terms provided for securities deposited by Contractor. Upon satisfactory completion of the Contract, Contractor shall receive from the escrow agent all securities, interest, and payments received by the escrow agent from the City, pursuant to the terms of this section.

If Contractor elects to receive interest on moneys withheld in retention by the City, it 9-14Concord - Document ID: generated after first signature shall, at the request of any subcontractor performing more than five percent (5%) of Contractor’s total bid, make that option available to the subcontractor regarding any moneys withheld in retention by Contractor from the subcontractor. If Contractor elects to receive interest on any moneys withheld in retention by the City, then the subcontractor shall receive the identical rate of interest received by Contractor on any retention moneys withheld from the subcontractor by Contractor, less any actual pro rata costs associated with administering and calculating that interest. In the event that the interest rate is a fluctuating rate, the rate for the subcontractor shall be determined by calculating the interest rate paid during the time that retentions were withheld from the subcontractor. If Contractor elects to substitute securities in lieu of retention, then, by mutual consent of Contractor and its subcontractor, the subcontractor may substitute securities in exchange for the release of moneys held in retention by Contractor. No Contractor shall require any subcontractor to waive any provision of this paragraph.

All claims arising out of or related to the Contract documents or this Project, and the consideration and payment of such claims, are subject to the Government Claims Act (Government Code Section 810 et seq.) with regard to filing claims. All such claims are also subject to Public Contract Code Section 9204 and Public Contract Code Section 20104 et seq. (Article 1.5), where applicable. This Contract hereby incorporates those provisions as though fully set forth herein. Thus, the Contractor or any Subcontractor must file a claim in accordance with the Government Claims Act as a prerequisite to filing a construction claim in compliance with Section 9204 and Article 1.5 (if applicable), and must then adhere to Section 9204 and Article 1.5 (as applicable), pursuant to the definition of “claim” as individually defined therein. 22 Non-discrimination and Equal Employment Opportunity

22.1 In performance of this Contract, CONTRACTOR shall not discriminate against any employee, subcontractor, or applicant for employment because of sex, color, race, religion, ancestry, national origin, disability, medical condition including the 10-14Concord - Document ID: generated after first signature medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sexual orientation, age, gender, gender identity, gender expression, genetic information, or military and veteran status.

22.2 The provisions of subsection 16.1 above shall be included in all solicitations or advertisements placed by or on behalf of CONTRACTOR for personnel to perform any services under this Contract. CITY shall have access to all documents, data and records of CONTRACTOR and its subcontractors for purposes of determining compliance with the equal employment opportunity and non-discrimination provisions of this Section, and all applicable provisions of Executive Order No. 11246 which is incorporated herein by this reference. A copy of Executive Order No. 11246 is available for inspection at, and on file with, the Palmdale City Clerk’s Office. 23 Integration
This Contract supersedes any and all agreements, either oral or written, between the parties hereto with respect to the construction of the Project by Contractor for City and contains all of the covenants and agreements between the parties with respect to the construction of the Project. Each party to this Contract acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made with regard to the construction of the Project by any party, or anyone acting on behalf of any party, which are not embodied herein, and that no other agreement, statement, or promise regarding work not contained in this Contract shall be valid or binding. Any modification or amendment of this Contract will be effective only if it is in writing and signed by the parties to this Contract. Any changes to the work required by this Contract will be by change order signed by the parties. 24 Governing Law
This Contract will be governed by and construed in accordance with the laws of the State of California without reference to change of venue laws. Any legal action in which enforcement of the terms and conditions of this Contract is requested, or in which it is alleged that a breach of this Contract has taken place, shall be filed and prosecuted in the County of Los Angeles, California.
25 Successors and Assigns
11-14Concord - Document ID: generated after first signature The terms and conditions of this Contract shall be binding on the successors and assigns of the parties to this Contract.
26 Exhibits
The exhibits and attachments referenced in this Contract are attached hereto and incorporated herein by this reference as though set forth in full in the Contract. 27 Authority to Sign
The person or persons executing this Contract on behalf of the Contractor warrant and represent that they have the authority to execute this Contract on behalf of the Contractor and have the authority to bind Contractor to the construction of the Project.
12-14Concord - Document ID: generated after first signature 28 Time is of the Essence
Time is of the essence in every provision of this Agreement in which time to perform is a factor.

In Witness Whereof, the parties hereto have caused this Contract to be executed and attested by their respective officers thereunto duly authorized.

CITY OF PALMDALE MANHOLE ADJUSTING, INC.

Salvador Mendez, Date
City Manager Pro Tem

John Corcoran Date
President

ADDRESS FOR NOTICE:

CITY OF PALMDALE
38300 Sierra Highway
Palmdale, CA 93550

ADDRESS FOR NOTICE:

MANHOLE ADJUSTING, INC.
9500 Beverly Road
Pico Rivera, CA 90660
APPROVE AS TO FORM:

Alexandra Halfman
Acting City Attorney

ATTEST:

Roxanne Faber
City Clerk
ATTEST: If Corporation

Controller

[Signatures of contractor on bond(s) must be notarized. Obtain two corporate signatures if contractor is a corporation.]

---------------------------------------- INTERNAL USE ONLY ----------------------------------------

13-14Concord - Document ID: generated after first signature □Certificate(s) and Endorsement(s) attached
□Confirmed business name on contract with certificate(s) □Attached notarized bond(s), Worker's Compensation Certificate, and Guaranty □Attached Agreement Checklist and met all requirements

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2 43
PN 911 : FY 2025-2026 Local
Street Resurfacing - Award
Map Revision Date: 04/14/2025
**Represents local street surface treatment work
completed from 2018 to 2025.

Previously Completed Streets**
ARAM Sys 1 / Sys 2 Cape Seal
Type II RAP Slurry Seal
nm School
Centerline
Park
µ ´
0 3,500 7,000 10,500 14,0001,750
Feet
Data Source: Copyright 2025. All rights reserved. The City of Palmdale owns and licenses geographic data from a variety of sources. The information contained herein is the proprietary property of the following owners, supplied under license, and may not be reproduced except as licensed by those owners: City of Palmdale, Los Angeles County Assessor's Office, ESRI Date & Maps, USGS, & TeleAtlas (courtesy of SCAG). Aerial imagery may be outdated and not match the actual ground condition. nm
10TH ST WEST

DIVISION ST
20TH ST WEST
30TH ST WESTRANCHO VISTA BLVD
DISTRICT #2
DISTRICT #1
DISTRICT #3
DISTRICT #4

SIERRA HW
Y
10TH ST EAST
20TH ST EAST
40TH ST EAST
30TH ST EAST
50TH ST EAST
60TH ST EAST
47TH ST EAST \ CA SR-138
AVENUE P-8

AVENUE Q
PALMDALE BLVD \ CA SR-138

AVENUE S

PEARBLOSSOM HWY

ELIZABETH LAKE RD
AVENUE O-8

AVENUE N

AVENUE P
AVENUE O-8
*PN 911: Approx. 2.1 million square feet
of ARAM Cape Seal & Slurry Seal
and 400,000 SF of Mill and Overlay
on local streets as shown
Construction in Summer 2025
Note: not all project streets labeled
Area #6
Area #3
Area #4
Area #2
Area #1
15TH ST EAST
17TH ST EAST
15TH ST WEST

ATCH 1 - PN 911 PROJECT MAP
DISTRICT #5
35TH ST EAST

COUNTRY CLUB DR
5 AVENUE S
Area #5
PN 911 Streets (Cape Seal, Slurry Seal, Mill & Overlay)* FORT TEJON / SR-138
AVE T

HUBBARD ST
E AVE R-2

BOLTON AVE

TERRA VERDE DR
42ND ST EAST
43RD ST EAST
E AVE T-8
1 STEPHANIE AVE

FANTASY ST

AVENUE N

PALMDALE REGIONAL AIRPORT
LACO
LACO
LA
CO
LA
CO
LACO
LACO
LACO
45TH ST EAST
CA SR-14

PALMDALE BLVD
CA SR-14
CA SR-14
AVENUE R-8
AVENUE S-8
PARKW
OOD DR

GREENBRIER ST

THE GROVES
See project maps for further detail.

Area #2 (District #1):

System 1 ARAM Cape Seal &
Mill / Overlay at cul-de-sacs
and intersection stop points.

Area #1 (District #2):

Mix of System 1 ARAM Cape Seal,
System 2 ARAM Cape Seal,
Slurry Seal, and Mill / Overlay at
cul-de-sacs and intersection
stop points.

Area #3 (District #1):

Mix of System 1 ARAM Cape Seal,
System 2 ARAM Cape Seal,
Slurry Seal, and Mill / Overlay at
cul-de-sacs and intersection
stop points.

Area #4 (District #5):
7' mill at curb & gutter;
scratch surface; install
1/2" asphalt leveling course;
overlay with 1.5" conventional
asphalt-concrete pavement.

Area #5 (District #4):

Mix of System 1 ARAM Cape Seal,
System 2 ARAM Cape Seal,
Slurry Seal, and Mill / Overlay at
cul-de-sacs and intersection
stop points.

Area #6 (District #3):

System 2 ARAM Cape Seal &
Mill / Overlay at cul-de-sacs
and intersection stop points.

Resurfacing of existing
inverted asphalt-concrete
shoulders.

City Council Staff Report
DATE: MAY 6, 2025
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS DEPARTMENT

CAPITAL IMPROVEMENT PROGRAM DIVISION
DISTRICT: ALL
SUBJECT: ADOPT RESOLUTION NO. CC 2025-037, A RESOLUTION OF THE

CITY COUNCIL OF THE CITY OF PALMDALEADOPTING A LIST OF
PROJECTS FOR FY 2025-26 FUNDED BY S ENATE BILL 1: THE
ROAD REPAIR AND ACCOUNTABILITY ACT OF 2017

RECOMMENDATION
Staff recommends that the City Council:

1. Adopt Resolution No. CC 2025-037, a Resolution of the City Council of the City of Palmdale adopting a list of projects for F Y 2025-26 funded by Senate Bill 1: The Road Repair and Accountability Act of 2017; and,

2. Authorize the Mayor to execute Resolution No. CC 2025-037, approving a list of projects for F Y 2025-26 funded by S enate Bill 1: The Road Repair and Accountability Act of 2017.

BACKGROUND
In April 2017, the Governor signed Senate Bill 1 (SB 1) (Beall, Chapter 5, Statutes of 2017), known as the Road Repair and Accountability Act of 2017.To address basic road maintenance, rehabilitation, and critical safety needs on state highways and local streets and road systems, SB 1 increases per-gallon fuel excise taxes, increases diesel fuel sales taxes and vehicle registration fees, and provides for inflationary adjustments to tax rates in future years.

Beginning in November 2017, the State Controller (Controller) began depositing various portions of this new funding into the newly created Road Maintenance and Rehabilitation Account (RMRA). A percentage of this new RMRA funding will be apportioned by formula to eligible cities pursuant to the Streets and Highway Code (SHC) Section 2032(h) for basic road maintenance, rehabilitation, and critical safety projects on the local streets and road system.

Report to Mayor and City Council
Re: Adoption of Resolution No. CC 2025-037
May 6, 2025

Page 2 ends

SB 1 emphasizes the importance of accountability and transparency in the delivery of California’s transportation programs. Therefore, to be eligible for RMRA funding, the statutes require cities to provide basic RMRA project reporting to the California Transportation Commission (Commission).

DISCUSSION
Before receiving an apportionment of RMRA funds from the Controller in a fiscal year, a city must submit to the Commission a list of projects proposed to be funded with these funds. All projects proposed to receive funding must be included in a city or county budget that is adopted by the applicable city council at a regular public meeting [SHC 2032(a)(1)].

In accordance with the above requirement, for FY 2025-26, the allocated amount of $4,300,000 will be budgeted in the City’s Capital Improvement Project budget. Also, the project listed below will be added to any carryforward from previous years:

Project Title: Annual Citywide Pavement Maintenance Program.

Description: New capital improvement project for plan development for pavement rehabilitation slurry seal, cape seal and/or AC overlay; Location: Area 1 – Avenue R (25th Street East to 55th Street East) and Area 2 – Avenue R-8 (35th Street East to 45th Street East); Estimated schedule: Start Construction Spring 2026 and completed during Fall 2026; Estimated Useful Life: 10 – 20 years.

FISCAL IMPACT
$4,300,000; Since the inception of RMRA funds, the City has received $21,314,479. The funds are allocated FY 2025-26. These funds have been used for local streets and roads for basic road maintenance and road rehabilitation projects, safety projects, traffic control devices, and complete street components. Once the project is established and meets the criteria, a project number will be assigned along with the appropriate funding.

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

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

Report to Mayor and City Council
Re: Adoption of Resolution No. CC 2025-037
May 6, 2025

Page 3 ends

Prepared by: Leonardo Torres, P.E., Director of Public
Works
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Salvador Mendez, City Manager Pro Tem
Approved as to form: Alexandra Halfman, Acting City Attorney

ATTACHMENTS
Reso. No. CC 2025-037

CITY COUNCIL

CITY OF PALMDALE, CALIFORNIA
RESOLUTION NO. CC 2025-037

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALMDALE ADOPTING A LIST OF PROJECTS FOR FISCAL YEAR 2025-2026
FUNDED BY SENATE BILL 1: THE ROAD REPAIR AND
ACCOUNTABILITY ACT OF 2017
WHEREAS, Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017 (Chapter 5, Statutes of 2017) was passed by the Legislature and signed into law by the Governor in April 2017 to address the significant multi-modal transportation funding shortfalls statewide; and
WHEREAS, SB 1 includes accountability and transparency provisions that will ensure the residents of our City of Palmdale are aware of the projects proposed for funding in our community and which projects have been completed each fiscal year; and WHEREAS, the City of Palmdale must adopt by resolution a list of projects proposed to receive fiscal year funding from the Road Maintenance and Rehabilitation Account (RMRA), created by SB 1, which must include a description and the location of each proposed project, a proposed schedule for the project’s completion, and the estimated useful life of the improvement; and
WHEREAS, the City of Palmdale will receive an estimated $4.3 million in RMRA funding in Fiscal Year 2025-2026 from SB 1; and
WHEREAS, this is the ninth year in which the City of Palmdale is receiving SB 1 funding and will enable the City of Palmdale to continue essential road maintenance and rehabilitation projects, safety improvements, repairing and replacing aging bridges, and increasing access and mobility options for the traveling public that would not have otherwise been possible without SB 1; and
WHEREAS, the City of Palmdale has undergone a robust public process to ensure public input into our community’s transportation priorities/the project list through our Five-Year Capital Improvement Program and a yearly budget process; and WHEREAS, the City of Palmdale uses a Pavement Management System and community requests to develop the SB1 project list to ensure revenues are being used on the most high-priority and cost-effective projects that also meet the communities’ priorities for transportation investment; and
Resolution No. CC 2025-037

Page 2 of 3 ends

WHEREAS, the funding from SB 1 will help the City of Palmdale maintain and rehabilitate 172 street segments (approximately 4.5 million square feet of roadway), and Park and Ride facilities throughout the City of Palmdale this year in accordance with the City of Palmdale’s Pavement Resurfacing Program and similar projects into the future; and
WHEREAS, the 2023 California Statewide Local Streets and Roads Needs Assessment found that the City of Palmdale streets and roads are in an “at risk” condition, and this revenue will help us increase the overall quality of our road system and over the next decade will bring the streets and roads into a “good to excellent” condition; and
WHEREAS, the SB 1 project list and overall investment in our local streets and roads infrastructure with a focus on basic maintenance and safety, investing in complete streets infrastructure, and using cutting-edge technology, materials, and practices will have significant positive co-benefits statewide.

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

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

SECTION 1. The foregoing recitals are true and correct.

SECTION 2. The City’s 2025-2026 Capital Improvement Budget will incorporate the following list of projects planned to be funded with Road Maintenance and Rehabilitation Account revenues:

Project Title Project
Location/Description
Estimated
Completion
Estimated
Useful Life
Street
Rehabilitation
Program
Area 1 – Avenue R (25 th
Street East to 55 th Street
East)
Area 2 – Avenue R-8 (35th
Street East to 45 th Street
East)
Design-May 2025
Construction-
Spring 2026
through Fall 2026
20 years
Resolution No. CC 2025-037

Page 3 of 3 ends

SECTION 3. The following previously proposed and adopted projects may also utilize Fiscal Year 2025-26 Road Maintenance and Rehabilitation Account revenues in their delivery. With the relisting of these projects in the adopted fiscal year resolution, the City/County is reaffirming to the public and the State our intent to fund these projects with Road Maintenance and Rehabilitation Account revenues:

Project Title Project Location Estimated
Completion
Estimated
Useful Life
Avenue T Reconstruction
(includes design, environment
for a proposed full depth
reclamation (FDR) of roadway
Avenue T
(47th Street East to
82nd Street East)
Fall 2027 50 years
Local Streets Cape Seal
Resurfacing (System 1 or
2)
Area 1 – Avenue R-
11 to Avenue S (47th
St. E. to 55th St. E.)
Area 2 – Avenue S-
4 to Avenue S-8
(41st St. East to 45th
St. East)
Summer
2025
5-10 years
SECTION 4. The City Clerk shall certify the adoption of this resolution.

PASSED, APPROVED, and ADOPTED this 6th day of May 2025.

Approved as to form: Richard J. Loa, Mayor
Alexandra Halfman
Acting City Attorney
ATTEST:

Rochelle Scott, City Clerk
Resolution No. CC 2025-037

Page 3 of 3 ends

I, Rochelle Scott, City Clerk of Palmdale, California, do hereby certify that the foregoing resolution was duly passed, approved, and adopted by the City Council of the City of Palmdale at a regular meeting of said Council held on the 6th day of May 2025 by the following roll call vote:

AYES:

NOES: ___________________________________________________________ ABSTAIN: ______________________ ABSENT: ___________________________ Date:

Rochelle Scott, City Clerk
City Council Staff Report
DATE: MAY 6, 2025
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS DEPARTMENT

MAINTENANCE DIVISION
DISTRICT: 1, 2
SUBJECT: AWARD AND APPROVE AGREEMENT WITH LANDSCAPE
CONNECTION GROUP INC. , FOR TURF REMOVAL AND

REPLACEMENT PROJECTS AT MARIE KERR AND DESERT

SANDS PARKS FOR A TOTAL NOT TO EXCEED AMOUNT OF
$167,000 FOR A TERM OF SIX MONTHS FROM THE DATE OF

NOTICE TO PROCEED

RECOMMENDATION
Staff recommend that the City Council:

1. Approve Agreement No. A-9305 with Landscape Connection Group Inc. , for turf removal and replacement projects at Marie Kerr and Desert Sands Parks for a total not to exceed amount of $167,000 for a term of six months from the Date of Notice to Proceed; and,

2. Authorize the City Manager Pro Tem or his designee to execute Agreement No.

A-9305 with Landscape Connection Group Inc. , including minimal and/or non - substantial changes.

BACKGROUND
The City’s Park Maintenance Section maintains over 500 acres of developed parks , including 17 ball fields and 28 multi -use fields, used for year -round community programming.

Staff developed a five-year rest and renovation program to raise maintenance levels to match wear levels at these sites , incorporating recommendations outlined in the City’s Sports Turf Assessment and the Parks and Recreation Master Plan. The program strategically addresses turf renovation challenges, coordinates field closures with league schedules to minimize stakeholder disruptions , and provides adequate time for turf establishment.

Report to Mayor and City Council
Re: Approve Agreement No. A-9305 with Landscape Connection Group Inc.

May 6, 2025

Page 2 ends

As part of the program schedule, staff identified Marie Kerr Park softball field one (approximately 79,000 square feet) and Desert Sands Park soccer field (approximately 110,000 square feet) for turf removal and replacement. The turf renovation at Marie Kerr Park will complement the recently installed outfield fence on that field. The work at Desert Sands Park will address decades of deferred maintenance and repair soil structure and fertility issues impacted by years of special event use, including the Professional Rodeo Cowboy Association Rodeo.

DISCUSSION
On February 18, 2025, the City released Invitation for Bid (IFB) No. 25-001-3500 for Turf Removal and Replacement Services at the above-mentioned locations. Notification of the IFB release was sent electronically to registered vendors on PlanetBids, with 29 contractors downloading the IFB. The City also published the solicitation in the Antelope Valley Press. Five responsive bids were received on March 25, 2025, and are summarized below.

Bidder Location Project Bid
Landscape Connection Group Inc. Lancaster, CA $151,815
Southern California Landscape Rancho Cucamonga, CA $196,000 Elite Landscaping, Inc. Clovis, CA $216,610
Rich Meier’s Landscaping Lancaster, CA $219,474
Inland Empire Landscape San Bernardino, CA $273,777
Landscape Connection Group Inc. submitted the lowest responsible bid among the qualified proposals, with a total cost of 29% lower than the next bid. Landscape Connection Group successfully completed turf removal and replacement services for the City in 2024, at the Sam Yellen Park soccer field for the AV Alta youth academy project.

This turf removal and replacement project will incorporate the best management practices for sports turf renovations.

Based on the condition of the current fields, the cost-effectiveness of replacement, and the proposed improvements, staff recommend that the City Council approve the agreement with Landscape Connections Group, Inc.

FISCAL IMPACT
$167,000; Funds are budgeted and available in FY 2024-25 in Measure AV Parks Improvement Capital Project Professional Services account.

Report to Mayor and City Council
Re: Approve Agreement No. A-9305 with Landscape Connection Group Inc.

May 6, 2025

Page 3 ends

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

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

Prepared by: Leonardo Torres, P.E.,
Director of Public Works
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Salvador Mendez, City Manager Pro Tem
Approved as to form: Alexandra Halfman, Acting City Attorney

ATTACHMENTS
Agrmt No. A-9305 with Landscape Connection Group Inc.

AGREEMENT NO. A-9305

CONTRACT FOR SERVICES

BETWEEN THE CITY OF PALMDALE AND LANDSCAPE CONNECTION GROUP INC.

This CONTRACT for services (“Contract” herein) is made and entered into by and between the City of Palmdale, a public body corporate and politic, (hereinafter called “CITY”), and LANDSCAPE CONNECTION GROUP INC., a Corporation, (hereinafter called “CONTRACTOR”). This Contract shall become effective on the date of the last signatory.

RECITALS
WHEREAS, CONTRACTOR represents that CONTRACTOR has the expertise and is qualified to perform the services described in this Contract.

NOW THEREFORE, CITY and CONTRACTOR, in consideration of the mutual covenants hereinafter set forth, agree as follows:
1 CITY PROJECT MANAGER
To provide the services required by this Contract, CONTRACTOR shall act under the authority and approval of Public Works Director/designee, who shall oversee this Contract, the work performed by CONTRACTOR, assist CONTRACTOR with any necessary information, audit billings, and approve payments. The CONTRACTOR shall channel all contacts and requests through the City project manager. 2 DESCRIPTION OF WORK

2.1 CONTRACTOR shall provide the following services in a manner satisfactory to CITY:

Remove existing turf at the identified fields within the specified boundaries, utilizing a KORO Field Top Maker FTM 2000 or equivalent, set to a depth of 1”, laser level fields and install approximately 189,000 square feet of big roll sod. Big roll sod, soil conditioners, sand and disposal of spoils shall be provided by the CITY.

A. Marie Kerr Park - Softball Field #1: Approximately 79,000 square feet / 4 days B. Desert Sands Park - Soccer Field: Approximately 110,000 square feet / 7 days See Appendix A Site Maps for aerial site images and approximate square footage of turfgrass removal and replacement.

SCOPE OF WORK

1. CONTRACTOR shall coordinate on-site, pre-job meeting with City staff, provide project schedule with weekly updates and must obtain written authorization to proceed before mobilizing.
1-18Concord - Document ID: generated after first signature

2. CONTRACTOR shall determine amount of big roll sod required, including contingency for waste and inform City staff of required amount, target delivery quantities & dates.

3. City staff will purchase & supply big roll sod for the project, coordinating delivery according to the project schedule provided by CONTRACTOR.

4. CONTRACTOR shall stage equipment in areas designated by City staff.

5. City staff shall locate, flag and swing irrigation heads below the depth of turfgrass removal.

6. City staff shall locate & flag all valve & quick coupler boxes, to be protected in place.

7. CONTRACTOR shall prevent damage to public and private property, including all improvements leading to & adjacent to work areas.

8. CONTRACTOR shall survey, mark, and maintain infield radius at the interface of skinned surfaces and outfield turf. Methods for marking shall include survey feathers & marking paint.

9. CONTRACTOR shall have City staff observe and approve cut depth prior to proceeding with turfgrass removal.

10. CONTRACTOR shall provide all labor & equipment to remove approximately 189,000sq ft of existing turf in each field, within specified boundaries, utilizing a KORO Field Top Maker FTM 2000 or equivalent, set to a depth of 1” or depth of A.G.

Sod big roll sod.

11. CONTRACTOR shall provide all labor & equipment to deposit turf spoils in transfer sites adjacent to fields as designated by City staff.

12. City staff shall provide roll off containers and load approximately 583 cubic yards of turf spoils. No disposal required by CONTRACTOR.

13. City staff shall swing irrigation heads back in place, ensuring proper height, alignment, distribution uniformity & head-to-head coverage.

14. City staff shall aera-vate & broadcast soil conditioners prior to sod installation.

15. CONTRACTOR shall utilize the following steps:

Step A: Reverse Rotation Tilling
2-18Concord - Document ID: generated after first signature CONTRACTOR shall utilize a reverse rotation tiller such as a Blecavator BMV 210 to homogenously blend conditioned soil to a depth of 6”, wheel roll and compact soil profile after tilling process.

Step B: Laser Leveling
CONTRACTOR shall survey each field for existing elevations at start of project, determine final grading percentages based on survey, scarify soil profile, spread sand provided by city and laser grade soil profile to pre-determined grade percentages.

Laser leveling shall match slope to existing contours to allow for surface drainage away from infield surface to existing surface inlet drains or flow lines, according to initial field survey +/-1/4” at both sites. CONTRACTOR shall inform City staff of the amount of sand required, target delivery quantities & dates. Final grading shall be inspected and approved by City staff.

16. CONTRACTOR shall be on-site during sod delivery and coordinate the placement of big rolls with sod delivery person according to pre-determined layout per City staff.

17. CONTRACTOR shall install big roll sod immediately after delivery. Whole sod rolls shall be installed as directed by Parks Superintendent or appointed designee, according to irrigation station layout. CONTRACTOR shall deep soak freshly installed sod by hand using hoses & quick couplers.

18. CONTRACTOR shall stagger big roll sod joints ensuring all joints are tight by providing adequate labor to operate installer, groom soil as required, rake and pull sod into tight alignment, neatly trimming sod around interfacing improvements providing for minimal waste.

19. CONTRACTOR shall roll newly installed sod with a minimum 5700 lbs. 47” wide, smooth drum ride on roller to press out air pockets, leaving new sod smooth & level.

20. City staff shall coordinate irrigation programming to irrigate sod immediately after installation and will monitor and adjust irrigation programs as required through establishment.

21. Any private or public improvements damaged by CONTRACTOR while conducting scheduled work shall be replaced in kind at the CONTRACTOR’S expense within 5 working days from the date of damage, unless otherwise authorized by City staff.

22. CONTRACTOR shall be responsible for cleanup of all walkways, trails, parking lots and all other public or private property dirtied by CONTRACTOR’S operations before de-mobilization.

23. Tree Protection: When working in tree protection zones as identified Appendix C - 3-18Concord - Document ID: generated after first signature Tree Protection Zones, CONTRACTOR shall ensure tree protection provisions as required by the City are implemented and diligently adhered to throughout the duration of the work.

24. The City reserves the right to increase or decrease contract scope of services as determined to be in the City’s best interest.

25. Stop Work Clause: The Parks Superintendent or appointed designee reserves the right to issue an immediate Stop Work Order if the CONTRACTOR’S performance is deemed unsafe, damaging to any aspect of the project, or deviates from the approved Scope of Work. Upon issuance of a Stop Work Order, the CONTRACTOR shall immediately cease all activities until the issue is addressed to the satisfaction of the City. Failure to comply shall result in corrective action at the CONTRACTOR’S expense, contract termination, and/or other remedies as permitted under the contract and applicable local and California Public Contract Code. The CONTRACTOR shall not be entitled to any claims for delay, disruption, or additional compensation due to a Stop Work Order resulting from non-compliance with contract requirements.

26. Liquidated Damages: The City requires full completion of all the tasks outlined in the scope of work. It shall be agreed by the parties to the agreement that time is of the essence, and in the event of a delay in starting the work, or delivery of the equipment, goods, services & personnel required for project implementation to the City’s satisfaction, damage will be sustained by the City and that it is or will be impractical to determine the actual amount of the damage caused by reason of non- compliance with scope of work, or delays resulting from CONTRACTORS performance. It is therefore agreed that the CONTRACTOR will pay the City the sum of twenty-five hundred dollars ($2500) for each working day delay in completing the work as specified and in accordance to the schedule approved by the CITY.

These damages shall be deducted from any monies due, or which may thereafter become due, to the CONTRACTOR under the Agreement or may be recovered by the City through any lawful means. The CONTRACTOR will be granted an extension of time and will not be assessed liquidated damages for any portion of the delay in performance which would be excused pursuant to the force majeure provisions of the Agreement, provided that the successful CONTRACTOR shall notify the City’s representative in writing of the causes of delay within one (1) business day from the beginning of any such delay. The CONTRACTOR shall bear the burden of proof to establish that any delay is subject to the force majeure provisions of the Agreement.

27. Force Majeure: The time period(s) specified for the performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the CONTRACTOR, including, but not restricted to, acts of God or of the public enemy, unusually severe weather (to be determined by City staff), fires, earthquakes, floods, 4-18Concord - Document ID: generated after first signature epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts of any governmental agency, including the City, if the CONTRACTOR will within ten (10) days of the commencement of such delay notify the City in writing of the causes of the delay.

The City will ascertain the facts and the extent of the delay and extend the time for performing the services for the period of the enforced delay when and if the judgment of the superintendent, or designee, the delay is justified. The superintendent or his designee’s, decision shall be final and conclusive upon the parties to this Agreement.

In no event shall the CONTRACTOR be entitled to recover damages against the City for any delay in the performance of this Agreement, however, caused; the CONTRACTOR’s sole remedy being extension of the Agreement pursuant to this Section.

PAYMENT AND PERFORMANCE BONDS, GUARANTY
Unless otherwise expressly provided in the bid documents, prior to commencing work, CONTRACTOR shall provide a payment bond and performance bond, each in an amount equal to 100% of the Contract price. CONTRACTOR shall submit all bonds electronically through Surety 2000. Pursuant to the bid documents for this Project, the CONTRACTOR is required to provide a written guaranty of CONTRACTOR's work. In furtherance thereof, CONTRACTOR shall execute the written form of Guaranty attached hereto and incorporated by reference herein.

2.2 CONTRACTOR shall have no claim for compensation for any services or work, which has not been authorized by CITY’s Authorization to Proceed.

2.3 CONTRACTOR shall not accept any change of scope, or change in contract provisions, to this Contract unless issued in writing, as a contract change order or amendment and signed by CITY. Any extensions of time must be mutually agreed upon in writing and executed by both parties.

2.4 CONTRACTOR shall maintain in current status all Federal, State, and local licenses and permits required for the operation of the business conducted by the CONTRACTOR as applicable to this contract.

2.5 All work supplied under this Contract shall be fully guaranteed by CONTRACTOR for a minimum period of 180 days from the date of acceptance by CITY. Any defects of design, workmanship, or materials that would result in non- compliance with the Contract specifications shall be fully corrected by CONTRACTOR (including parts and labor) without cost to CITY. The written warranty shall be included with the delivered products to the using Department.

2.6 CITY shall provide to CONTRACTOR, without charge, all data, program information, including reports, records, maps, and other information, now in CITY’s possession, which may facilitate the timely performance of the work. 5-18Concord - Document ID: generated after first signature

2.7 At all times during the term Contract, CONTRACTOR shall possess and maintain all required Federal, State, and local licenses and permits. CONTRACTOR shall possess a valid and current C-27 Landscaping Contractor’s License with the Contractor's State License Board (CSLB) and City of Palmdale Business License to perform the required work.

CONTRACTOR's CSLB license number is 1018329. CONTRACTOR's DIR registration number is 1000533931. CONTRACTOR's Business License number is 11620845. CONTRACTOR hereby certifies that it holds the required license(s).

2.8 This Contract calls for work to be performed constituting public works. All labor is to be paid at prevailing wage rates. CONTRACTOR to determine proper wage classification. CONTRACTOR and all subcontractors must be registered with the State of California Department of Industrial Relations (DIR) as a public works contractor for the duration of the agreement and is responsible for any and all registration and/or renewal fees. CITY may request certified payroll records for any work performed under the term of the agreement. CONTRACTOR acknowledges and understands it must comply with the prevailing wage requirements as set for in Exhibit A.

2.9 CONTRACTOR shall comply with the requirements of Section 1776 of the Labor Code, of the State of California. Failure of the CONTRACTOR to comply with the Labor Code requirements to pay prevailing wages and to maintain certified payroll records may result in withholding from progress payments amounts for unpaid wages and penalties as authorized by the Labor Code. CONTRACTOR shall submit certified payroll records (CPRs) to the Labor Commissioner using DIR's electronic certified payroll reporting system if project exceeds $25,000 for new construction, alteration, installation, demolition, or repair or $15,000 for maintenance. If project is applicable, CITY shall verify CONTRACTOR's eCPRs are submitted before processing invoices for payment.

3 CONTRACTOR’S KEY PERSONNEL

3.1 Key Staff. CITY reserves the right to review and approve CONTRACTOR’S staff including all subcontractors to be assigned to any project by CONTRACTOR during the term of this Contract.

This Contract has been awarded to CONTRACTOR based partially on the key personnel proposed to perform the services required herein. CONTRACTOR shall not change nor substitute any of these key staff for work on this Contract without prior written approval by CITY.

CONTRACTOR’s Team and Key Personnel are as follows:
6-18Concord - Document ID: generated after first signature Landscape Connection Group Inc:

Michael Ayala, CEO
Team members to be determined
This Services Contract has been awarded to CONTRACTOR based on its representation that those personnel and subcontractors submitted as part of its bid and listed above will perform the portions of the work listed above.

CONTRACTOR shall not deviate nor substitute any of these team members without prior written approval by CITY.

3.2 Subcontractors. During the performance of the Agreement, CONTRACTOR may engage such additional SUBCONTRACTORS as may be required for the timely completion of this Agreement. In the event of subcontracting, the sole responsibility for fulfillment of all terms and conditions of this Agreement rests with CONTRACTOR.

CONTRACTOR shall not enter into any Subcontract under this Contract for the performance of this Contract without the advance written approval of CITY. The subcontract shall incorporate by reference the terms and conditions of this Contract.

3.3 Direct Responsibility. All services required under this Contract shall be performed by CONTRACTOR, or under CONTRACTOR’s direct supervision, and all personnel shall possess the qualifications, permits and licenses required by State and local law to perform such services.

3.3.1 CONTRACTOR shall be solely responsible for the satisfactory work performance of all personnel engaged in performing services required by this Contract, and compliance with all reasonable performance standards established by CITY.

3.3.2 CONTRACTOR shall be responsible for payment of all CONTRACTOR’s employees’ and subcontractor’s wages and benefits and shall comply with all requirements pertaining to the employer’s liability, workers’ compensation, unemployment insurance, and Social Security.

3.3.3 CONTRACTOR shall indemnify and hold harmless CITY, and its respective officers, agents and employees from and against all claims, demands, damages or costs arising from CONTRACTOR’s acts or omissions with respect to any liability, damages, claims, costs and expenses of any nature arising from alleged violations of personnel practices.
4 CONTRACT TERM

The term of this Contract is Six (6) Months, commencing on the effective date, with CITY reserving the option to extend the agreement for 0 additional terms of one year each.

7-18Concord - Document ID: generated after first signature 5 ACCEPTANCE AND DOCUMENTATION
Each task shall be reviewed and approved by the Contract Project Manager to determine acceptable completion.

5.1 Records. The CONTRACTOR shall retain and shall contractually require each SUBCONTRACTOR to retain all data and other “records” relating to the acquisition and performance of the Contract for a period of five years after the completion of the Contract.

5.2 Property of CITY. All materials, including reports, computer programs and other deliverables, supplied or created under this Contract are the sole property of CITY. CONTRACTOR is not entitled to a patent or copyright on those materials and may not transfer the patent or copyright to anyone else. CONTRACTOR shall not use or release these materials without the prior written consent of CITY.

5.3 Products. All equipment, materials, parts, and other components incorporated in the work or services performed pursuant to this Contract shall be new, or the latest model and of the most suitable grade for the purpose intended. All work shall be performed in a skilled and workmanlike manner. 6 PRICE
CITY shall pay to CONTRACTOR an amount not to exceed One Hundred Sixty- Seven Thousand dollars ($167000.00) for the completion of all the work and services described in Section 2, which sum shall include all costs or expenses incurred by CONTRACTOR, payable as follows:

As set forth in Exhibit C Fee Schedule attached hereto and made part herein by reference.

Project Cost.....$151,815
Contingency.......$15,185
Fixed Pricing
Pricing shall be firm fixed price for stated term and shall include all costs in accordance with all contract requirements, including but not limited to fully burdened labor, payroll and other taxes, fringes, licenses and permits, insurance, workforce productivity, coordination, transportation, field overhead, general, and administrative overhead, and profit.

6.1 An application for payment form must be submitted to CITY which shall include the following: a clear, detailed invoice reflecting work being billed for, a summary sheet showing percentage of work completed to date, amount/percent billed to date and current status of all tasks within a project; any/all backup documentation supporting the above items. Work schedule updates must also be included with the payment requests.
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6.2 CONTRACTOR shall maintain adequate records and shall permit inspection and audit by CITY of CONTRACTOR’s charges under this Contract. CONTRACTOR shall make such records available to CITY during normal business hours upon reasonable notice. Nothing herein shall convert such records into public records, and they will be available only to CITY and any specified public agencies. Such records shall be maintained by CONTRACTOR for one (1) year following completion of the work under this Contract unless a longer period of time is required by state or federal law, in which event CONTRACTOR shall retain its records for the time required by such laws.

6.3 Payment. A separate invoice shall be issued for each shipment of material or service performed, and no payment will be issued prior to receipt of material and/or completion of specified services and receipt of a correct invoice. 7 TAXES

7.1 CONTRACTOR shall pay all sales, consumer, use, and other similar taxes required to be paid by CONTRACTOR in accordance with state and local laws.

7.2 CONTRACTOR is an independent contractor and shall have no power or authority to incur any debt, obligation, or liability on behalf of CITY. No person employed by CONTRACTOR or acting on its behalf, in connection with this Contract shall be considered the Agent or employee of CITY.

7.3 CONTRACTOR shall be required to obtain a current City of Palmdale business license, as required by the Palmdale Municipal Code, before an Authorization to Proceed is issued.

7.4 When equipment, materials or supplies generally taxable to CONTRACTOR are eligible for a tax exemption due to the nature of the work, CONTRACTOR shall assist the City in applying for and obtaining such tax credits and exemptions, which shall be paid or credited to the City.
8 PATENT FEES AND ROYALTIES
CONTRACTOR shall pay all license fees and royalties and assume all costs incident to the use, in the performance of the work or the incorporation in the work of any invention, design, process, program, product or device which is the subject of patent rights or copyrights held by others. If a particular invention, design, process, program, product or device is specified in the contract documents for use in the performance of the work and if, to the actual knowledge of CITY, its use is subject to patent rights or copyrights calling for the payment of any license fee or royalty to others, the existence of such rights shall be disclosed by CITY in the contract documents.

CONTRACTOR shall indemnify and hold harmless CITY and anyone directly or indirectly employed by CITY from and against all claims, damages, losses and expenses (including attorneys' fees) arising out of any infringement of patent rights or 9-18Concord - Document ID: generated after first signature copyrights incident to the use in the performance of the work, or resulting from the incorporation in the work of any invention, design, process, program, product or device not specified in the contract documents, and shall defend all such claims in connection with any alleged infringement of such rights. 9 INDEMNIFICATION
To the fullest extent permitted by law, CONTRACTOR and any subcontractors working on its behalf agree to indemnify CITY, its officers, employees, agents and elected and appointed boards (hereinafter “Indemnified Parties”) for any loss, claim, demand, cause of action, cost, expense, damage, obligation or liability which arises out of or is in any way connected with the performance of any work under this agreement, including any acts or omissions, willful misconduct or negligent conduct, whether active or passive, on the part of CONTRACTOR, or its subcontractors, and regardless of any acts, omissions or negligence (whether active or passive) of any person or entity indemnified hereunder. At their own expense, CONTRACTOR and, as applicable, any subcontractors working on its behalf, shall defend any suit, claim or action against the Indemnified Parties founded upon such loss, claim, demand, cause of action, cost, expense, damage, obligation or liability. CONTRACTOR shall ensure that the contract of any subcontractor working under this agreement contain an indemnity agreement, requiring the subcontractor to indemnify and defend the Indemnified Parties pursuant the terms set forth above. CONTRACTOR shall indemnify the Indemnified Parties, and save it harmless from any and all loss, damage, costs, expenses and attorney's fees suffered or incurred on account of any breach of the aforesaid obligations and covenants, and any other provision or covenant of this agreement.
10 INSURANCE

10.1 CONTRACTOR, at its expense, shall maintain in effect at all times during the performance of work under this Contract not less than the following coverage and limits of insurance, which shall be maintained with insurers listed “A” or better in the Best’s Insurance Guide and authorized to do business in the State of California.

Proof of Insurance, as identified in Section 10.8, must be reviewed and accepted by the City Attorney.

10.1.1 Workers’ Compensation and Employer’s Liability
 Workers’ Compensation -- coverage as required by the State of California  Employer’s Liability
$1,000,000 each accident
$1,000,000.00 policy limit bodily injury
$1,000,000.00 each employee bodily injury by disease

10.1.2 Commercial General Liability
 $2,000,000.00 limit on a per occurrence basis
 $4,000,000.00 general aggregate limit

10-18Concord - Document ID: generated after first signature

10.1.3 Commercial Automobile Liability
 $2,000,000.00 combined single limit including owned, non-owned and hired automobile coverage

10.2 All of CONTRACTOR’s policies shall contain an endorsement providing that written notice shall be given to CITY at least thirty (30) calendar days prior to termination, cancellation, or reduction of coverage in the policy.

10.3 Policies providing for bodily injury and property damage coverage shall contain the following:

A. An endorsement extending coverage to the City as an additional insured, as respects liability arising out of the performance of any work under the Contract.

Such insurance shall be primary insurance, as respects the interest of the City, and any other insurance maintained by the City shall be considered excess coverage and not contributing insurance with the insurance required hereunder. The certificates shall state: “The City of Palmdale, Successor Agency to the Community Redevelopment Agency of the City of Palmdale, Palmdale Civic Authority, Housing Authority, Industrial Development Authority, Airport Authority, their officers, agents, employees and volunteers are named as additional insured”.

B. “Severability of Interest” Clause.

10.4 Promptly upon execution of this Contract, and prior to commencement of any work, CONTRACTOR shall deliver to CITY certificates of insurance and endorsements to all required policies demonstrating that CONTRACTOR has the required coverage and showing the required named insured. Within five (5) days of written request from CITY, CONTRACTOR shall deliver to CITY full and complete copies of all insurance policies required by this Contract.

10.5 The requirements as to the types and limits of insurance to be maintained by CONTRACTOR are not intended to and shall not in any manner limit or qualify CONTRACTOR’s liabilities and obligations under this Contract.

10.6 Any policy or policies of insurance that CONTRACTOR elects to carry as insurance against loss or damage to its equipment and tools or other personal property used in the performance of this Contract shall include a provision waiving the insurer’s right of subrogation against CITY.

10.7 All insurance coverage must be maintained throughout the duration of this Contract.

10.8 Acceptable Proof of Insurance:

10.8.1 ACORD Certificate of Insurance listing all coverage, limits, deductibles and insured; and endorsements for all applicable coverage if agent has authority to issue it; or additional insured Form CG20100704 and CG20370704 or equivalent must be 11-18Concord - Document ID: generated after first signature provided for general liability coverage. Additional insured form CA0001 must be provided for automobile liability coverage.

10.8.2 Binders of insurance for all coverage. Agents must confirm that policy endorsements have been ordered from the respective insurance companies. Upon issuance, policy endorsements and a corresponding Certificate of Insurance listing all insurers and coverage must be submitted to the City Attorney.

10.9 Notwithstanding any other provision of this Contract, CITY may immediately terminate this Contract if, at any time CONTRACTOR fails to maintain the required insurance for any period of time or fails to comply with any of the insurance requirements listed above.

10.10 CONTRACTOR shall require any and all subcontractors working on its behalf to provide insurance coverages and limits that are based on the scope of work and nature of risk being performed by the subcontractor. Any and all subcontractors working on behalf of CONTRACTOR shall be subject to all other insurance requirements that are stated herein.

Any deviation in this requirement will be CONTRACTOR's sole risk. CONTRACTOR's insurance requirements in Section 10 will not be impacted and/or limited by such deviation.

11 TERMINATION WITHOUT CAUSE
City reserves the right to terminate this Contract or any part thereof for its sole convenience with fifteen (15) days written notice. In the event of such termination, CONTRACTOR shall immediately stop all work hereunder, and shall immediately cause any of its suppliers and subcontractors to cease such work. CONTRACTOR shall also surrender to CITY all finished or unfinished documents, processes, programs and other supplies and materials, which shall be City’s property. As compensation in full for services performed to the date of such termination, the CONTRACTOR shall receive an amount equal to the value of the work completed as of the termination date in accordance with the fee schedule or as negotiated between the parties. In no event shall the amount payable upon termination exceed the total maximum compensation provided for in this Contract.
12 TERMINATION FOR CAUSE
If CITY determines that CONTRACTOR has failed to supply an adequate working force, or to provide services of proper quality, or has failed in any other respect to satisfactorily perform the services specified in this Contract, CITY shall give written notice to CONTRACTOR specifying all defaults to be remedied within thirty (30) days.

Such notice shall set forth the basis for CITY’s dissatisfaction and suggest corrective measures. If, after thirty days, CONTRACTOR has failed to implement appropriate corrective measures, CITY may elect to terminate this Contract in whole or in part. 12-18Concord - Document ID: generated after first signature

12.1 In the event CITY terminates this Contract, in whole or in part, for cause, CITY may procure, upon such terms and in such manner, as it may deem appropriate, services similar to those terminated.

12.2 CONTRACTOR shall provide all finished or unfinished documents, data, studies, software, drawings, programs, processes, maps, photographs, reports, etc., prepared by CONTRACTOR within fifteen (15) working days after notice of termination. Upon such termination, CONTRACTOR shall be paid an amount equal to the value of the services provided and work performed as of the date of termination, taking into consideration the costs associated with hiring another CONTRACTOR to complete the services. In ascertaining the value of the work performed up to the date of termination, consideration shall be given to both completed work and work in progress, to complete and incomplete documents when such are delivered to CITY, and to authorized reimbursement expenses. The above is in addition to any other remedies available by law or equity to CITY.

12.3 If, after notice of termination of the Contract under the provisions of this Section 12, it is determined, for any reason, that CONTRACTOR was not in default, or that the default was excusable, then the rights and obligations of the parties shall be the same as if the notice of termination had been issued pursuant to Section 11. 13 DISPUTE RESOLUTION
All claims, disputes, and other matters in question between CITY and CONTRACTOR arising out of or relating to this Contract or the breach thereof shall, to the extent reasonably feasible, be resolved through good faith negotiations between the parties. 14 OWNERSHIP OF PRODUCT
All product, data, documents, programs and software including, but not limited to, research, field notes, investigations, analysis, studies, processes, software, instructions for use and other manuals, whether complete or incomplete, which are prepared or produced in the performance of this Contract are to be, and remain the property of CITY and shall be delivered to or left with CITY upon the completion or termination of this Agreement. CONTRACTOR shall furnish CITY, upon its request, originals and reproducible and electronic copies of product, data reports, studies and of all other documents listed above. Electronic copies shall be provided in an unprotected format which allows CITY to copy, reproduce and makes changes as CITY deems necessary.
15 DELEGATION AND ASSIGNMENT

15.1 CONTRACTOR shall not delegate or assign its duties or rights hereunder, either in whole or in part, without the prior written consent of CITY; provided, however, that claims for money due or to become due to CONTRACTOR from CITY under this Contract may be assigned to a bank, trust company or other financial institution without such approval.
13-18Concord - Document ID: generated after first signature

15.2 Any assignment, delegation or subcontract shall be made in the name of CONTRACTOR and shall not bind or purport to bind CITY and shall not release CONTRACTOR from any obligations under this Contract including, but not limited to, the duty to properly supervise and coordinate the work of employees, assignees, delegates and subcontractors. No such assignment, delegation or subcontract shall result in any increase in the amount of total compensation payable to CONTRACTOR under this Contract.
16 NON-DISCRIMINATION AND EQUAL EMPLOYMENT OPPORTUNITY

16.1 In performance of this Contract, CONTRACTOR shall not discriminate against any employee, subcontractor, or applicant for employment because of sex, color, race, religion, ancestry, national origin, disability, medical condition including the medical condition of Acquired Immune Deficiency Syndrome (AIDS) or any condition related thereto, marital status, sexual orientation, age, gender, gender identity, gender expression, genetic information, or military and veteran status.

16.2 The provisions of subsection 16.1 above shall be included in all solicitations or advertisements placed by or on behalf of CONTRACTOR for personnel to perform any services under this Contract. CITY shall have access to all documents, data and records of CONTRACTOR and its subcontractors for purposes of determining compliance with the equal employment opportunity and non-discrimination provisions of this Section, and all applicable provisions of Executive Order No. 11246 which is incorporated herein by this reference. A copy of Executive Order No. 11246 is available for inspection at, and on file with, the Palmdale City Clerk’s Office. 17 FINANCIAL INTEREST CERTIFICATION

17.1 CONTRACTOR warrants that no person has been employed or retained to solicit or secure this Contract upon an agreement or understanding for a commission, percentage, brokerage or contingent fee; and that no officer or employee of the CITY has any interest, financially or otherwise, in CONTRACTOR’s firm.

17.2 For breach or violation of this warranty, CITY shall have the right to annul this Contract without liability or at its discretion to deduct from the Contract Price or 14-18Concord - Document ID: generated after first signature consideration, the full amount of such commission, percentage, brokerage or contingent fee.
18 CONFLICT OF INTEREST

18.1 CONTRACTOR stipulates that its officers and employees do not now have a conflict of interest and it further agrees for itself, its officers and its employees that it will not contract for or accept employment for the performance of any work or services with any individual business, corporation or government unit that would create a conflict of interest in the performance of its obligations pursuant to this Contract or which would cause CONTRACTOR to be “financial interested” (as provided in California Government Code Section 1090 et seq. or 87100 et seq.) in any contract or decision made by CITY on any matter.

18.2 CONTRACTOR shall not employ any City official or employee to perform any work required pursuant to this Contract.

18.3 To the extent required by the City Manager or his designee, CONTRACTOR shall complete and file with the City Clerk a Form 700 Statement of Economic Interests disclosing any reportable property interests, income, gifts, investments, or business positions.
19 COMPLIANCE WITH LAW

19.1 CONTRACTOR shall comply with all state and federal laws, including but not limited to, the requirement to hire only those persons authorized by federal law to work in the United States. If CONTRACTOR uses any subcontractors to complete this Contract, this same requirement shall be included in all subcontracts and strictly enforced by CONTRACTOR.

19.2 The law of the state of California shall govern this Contract. The venue of any legal action, either formal or informal, shall be the County of Los Angeles.

19.3 If applicable, CONTRACTOR acknowledges and understands it must comply with the prevailing wage requirements as set forth in Exhibit “A” attached hereto and incorporated herein by reference, as well as the execution of a Worker’s Compensation Certificate attached hereto as Exhibit “B” and incorporated herein by reference.

20 NOTICES
Any notice required under this Contract shall be in writing, addressed to the appropriate party at its address on the signature page and given personally or by registered or certified mail postage prepaid, or by a commercial courier service. All notices shall be effective upon the date of receipt.
21 ENTIRE AGREEMENT AND AMENDMENTS
15-18Concord - Document ID: generated after first signature

21.1 This Contract is the complete Agreement between the parties and supersedes all prior proposals, agreements, and understandings between the parties and may not be modified or terminated orally.

21.2 No attempted waiver of any of the provisions hereof, nor any modification in the nature, extent or duration of the work to be performed by CONTRACTOR hereunder, shall be binding unless in writing and signed by the party against whom the same is sought to be enforced.

21.3 The failure of any party to enforce against another party any provision of this Contract shall not constitute a waiver of that party’s right to enforce such a provision at a later time, and shall not serve to vary the terms of this Contract. 16-18Concord - Document ID: generated after first signature 22 ATTORNEY’S FEES

If any action at law or in equity is brought to enforce or interpret any provisions of this Contract, the prevailing party in such action shall be entitled to reasonable attorney’s fees, costs and necessary disbursements, in addition to such other relief as may be sought and awarded.

In Witness Whereof, the parties hereto have caused this Contract to be executed and attested by their respective officers thereunto duly authorized.

CITY OF PALMDALE: LANDSCAPE CONNECTION GROUP
INC.:

Salvador Mendez
City Manager Pro Tem

Michael Ayala
President/CEO

ADDRESS FOR NOTICE:

CITY OF PALMDALE
39110 3rd Street East, Suite C
Palmdale, CA 93550

ADDRESS FOR NOTICE:

LANDSCAPE CONNECTION GROUP
INC.
1111 W Avenue L12, Suite A
Lancaster, CA 93534
APPROVE AS TO FORM:

Alexanda Halfman
Acting City Attorney

ATTEST:

Roxanne Faber
City Clerk

---------------------------------------- INTERNAL USE ONLY ----------------------------------------

17-18Concord - Document ID: generated after first signature □Certificate(s) and Endorsement(s) attached
□Confirmed business name on contract with certificate(s) □Attached Agreement Checklist and met all requirements
18-18Concord - Document ID: generated after first signature

EXHIBIT A
Prevailing Wage Requirements

1. This Contract calls for work to be performed constituting public works. Contractor and all subcontractors shall pay the general prevailing rate of per diem wages as determined and as published by the State Director of the Department of Industrial Relations pursuant to Article 2 of Chapter 1 of Part 7, of Division 2 of the State Labor Code, including, but not limited to, Sections 1770, 1771, 1773, 1773.2 and 1774.

2. This is a public work and requires the payment of prevailing wages for the work or craft in which the worker is employed for any public work done under the contract by Contractor or by any subcontractor pursuant to Section 1771 of the Labor Code. Pursuant to the provisions of Section 1773 of the Labor Code of the State of California, the City has obtained the general prevailing rate of per diem wages and the general rate for holiday and overtime work in this locality for each craft, classification, or type of workman needed to execute this contract from the Director of the Department of Industrial Relations. These rates are on file with the City or may be obtained at
http://www.dir.ca.gov/OPRL/DPreWageDetermination.htm.

Contractor shall post a copy of such wage rates at the job site and shall pay the adopted prevailing wage rates as a minimum. Contractor shall comply with the provisions of Sections 1775, 1776, 1777.5, 1777.6, and 1813 of the Labor Code. Pursuant to the provisions of 1775 of the Labor Code, Contractor shall forfeit to the City, as a penalty, not more than $200.00 for each calendar day, or portion thereof, for each laborer, worker, or mechanic employed, paid less than the stipulated prevailing rates for an y work done under this Contract, by him or by any subcontractor under him, in violation of the provisions of this Agreement.

3. Contractors and subcontractors who are ineligible to bid for work on, or be awarded, a public works project pursuant to Labor Code Sections 1777.1 and 1777.7 are prohibited from bidding on, being awarded, or performing work as a subcontractor, on this Proj ect pursuant to Public Contract Code Section 6109.

4. Contractor's attention is directed to the provisions in Sections 1774, 1775, 1776, 1777.5 and 1777.6 of the Labor Code. Contractor shall comply with the provisions in these Sections. The statutory provisions for penalties for failure to comply with the State's wage and hours laws will be enforced. Pursuant to Section 1775 of the Labor Code, the Contractor and any subcontractors, shall, as a penalty to the City forfeit the prescribed amounts per calendar day, or portion thereof, for each worker paid less than the prevailing wage rates.

5. Pursuant to Labor Code Section 1771.4, the Project is subject to compliance monitoring and enforcement by the California Department of Industrial Relations.

6. Each Contractor and subcontractor shall furnish the records specified in Labor Code Section 1776 directly to the State Labor Commissioner at least monthly in the format prescribed by the State Labor Commissioner.

7. Sections 1774 and 1775 require the Contractor and all subcontractors to pay not less than the prevailing wage rates to all workmen employed in the execution of the Contract and specify forfeitures and penalties for failure to do so. The minimum wages to be paid are those determined by the State Director of the Department of Industrial Relations. Section 1776 requires the Contractor and all subcontractors to keep accurate payroll records, specifies the contents thereof, their inspection and duplication procedures and certain notices required of the Contractor pertaining to their location.

8. Section 1777.5 of the Labor Code requires Contractor or subcontractor employing workers in any apprenticeable occupation to apply to the Joint Apprenticeship Committee nearest the site of the public works project, which administers the apprenticeship program in that trade for a certificate of approval. The certificate will also fix the ratio of apprentices to journeymen to be used in the performance of the Contract. The Contractor is required to make contributions to funds established for the adm inistration of apprenticeship programs if he employs registered apprentices or journeymen in any apprenticeable trade and if other contractors on the public works site are making such contributions.

Information relative to apprenticeship standards, contributions, wage schedules and other requirements may be obtained from the State Director of Industrial Relations or from the Division of Apprenticeship Standards. Section 1777.6 of the Labor Code provides that it shall be unlawful to refuse to accept otherwis e qualified employees as registered apprentices solely on the grounds of race, religious creed, color, national origin, ancestry, sex, or age.

9. Eight hours labor constitutes a legal day's work, as set forth in Labor Code Section 1810. The statutory provisions for penalties for failure to comply with the State's wage and hour laws will be enforced as set forth in Labor Code Section 1813.

EXHIBIT B
WORKERS’ COMPENSATION INSURANCE CERTIFICATE
Pursuant to Section 1861 of the State Labor Code, and all amendments thereto, each contractor to whom a public works contract has been awarded shall sign the following certificate and shall submit same to the City of Palmdale prior to performing any work on the contract:
“I am aware of the provisions of Section 3700 of the Labor Code which requires every employer to be insured against liability for Worker’s Compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of work of this contract.”
___
_________________________
Contractor
By _______________________
Print Name
__________________________
Signature
__________________________
Title
__________________________
Date
S
ection 3700 of the State Labor Code reads as follows:
“Every employer except the State shall secure the payment of compensation in one or more of the following ways:
(a) By being insured against liability to pay compensation in one or more insurers duly authorized to write compensation insurance in this state.
(b) By securing from the Director of Industrial Relations a certificate of consent to self-insure, which may be given upon furnishing proof satisfactory to the Director of Industrial Relations of ability to self-insure and to pay any compensation that may become due to his employee.” Item Description Unit of Measure Price
A. MARIE KERR PARK SOFTBALL FIELD #1 - approximate project completion = 4 days 1 Marie Kerr Park Mobilization Lump Sum $ 2,500.00 2 Marie Kerr Park: Turf removal with KORO Field Top Maker FTM 2000 or equivalent Sq. Ft. $ 19,750.00 3 Marie Kerr Park: Big roll sod installation Sq. Ft. $ 13,035.00 4a Marie Kerr Park: Reverse rotation tilling to 6” depth Sq. Ft. $ 8,900.00 4b Marie Kerr Park: Laser leveling Sq. Ft. $ 10,000.00 Subtotal: $ 54,185.00
B. DESERT SANDS PARK SOCCER FIELD - approximate project completion = 7 days 5 Desert Sands Park Mobilization Lump Sum $ 2,500.00 6 Desert Sands Park: Turf removal with KORO Field Top Maker FTM 2000 or equivalent Sq. Ft. $ 27,500.00 7 Desert Sands Park: Big roll sod installation Sq. Ft. $ 18,150.00 8a Desert Sands Park: Reverse rotation tilling to 6” depth Sq. Ft. $ 11,000.00 8b Desert Sands Park: Laser leveling Sq. Ft. $ 15,000.00 Subtotal: $ 74,150.00
C. MISCELLANEOUS/ADDITIONAL FEES
9 Sod Cutter for smaller Areas Lump Sum $ 12,480.00 10 Site Clean-up - Marie Kerr Park Sq. Ft. $ 2,500.00 11 Site Clean-up - Desert Sands Park Sq. Ft. $ 2,500.00 12 Bond Lump Sum $ 6,000.00
13 Sand not included in price
Subtotal: $ 23,480.00
Project Total: $ 151,815.00
D. LABOR RATES
14 Supervisor Hourly Rate $ 150.00
15 Journeyman Hourly Rate $ 130.00
16 Apprentice Journeyman Hourly Rate $ 110.00

EXHIBIT C

FEE SCHEDULE

GUARANTY
In accordance with the terms of the Contract between City of Palmdale, (“City ”) and the undersigned, under which contract the undersigned shall complete work as described in the Contract documents, the following guarantee of said work is hereby made.

Should any of the items installed pursuant to said Contract, prove defective or should the item as a whole prove defective, due to faulty workmanship, material fur nished or methods of installation, or should the said item or any part thereof fail to operate properly, as planned, due to any of the above causes, all within one (1) year after date on which the work is accepted by the City, the under signed agrees that the repairs shall be made and such materials as are necessary shall be furnished and installed within thirty (30) days after the receipt of demand from the City. In the event repairs are not made within thirty (30) days, the City shall have the unqualified option to make any needed repairs or replacements itself or by any other Contractor. The undersigned agrees to reimburse the City, upon demand, of its expenses incurred in restoring said items to the condition contemplated in said contract, inc luding the cost of any equipment or materials replaced, or upon demand by the City, to replace any such equipment and repair said items completely without cost to the City so that they will operate successfully as originally contemplated.

Emergency repairs must necessarily be made by the City; therefore, when defective material or workmanship results in emergency repairs, the undersigned agrees to reimburse the City, upon demand, expenses incurred.

Said items will be deemed defective within the meaning of this Guaranty in the event that they fail to operate as originally intended thereof and in accordance with the plans and specifications included in said contract. The Faithful Performance Bond for this project shall remain in full force and effect for the entire guarantee period as required in the specifications and contract documents.
___________________________________________
Signature Date

APPENDIX A

SITE MAPS

Marie Kerr Park – Softball Field #1 Approximately 79,000 square feet 39700 30th Street West, Palmdale, CA 93551

Google Maps Link: Softball Field 1

Desert Sands Park – Soccer Field Approximately 110,000 square feet 39117 3rd Street East, Palmdale, CA 93550

Google Maps Link: Soccer Field

City Council Staff Report
DATE: MAY 6, 2025
TO: HONORABLE MAYOR AND CITY COUNCIL
FROM: PUBLIC WORKS DEPARTMENT

ENGINEERING DIVISION
DISTRICT: ALL
SUBJECT: ACCEPT NOTICE OF COMPLETION (NOC) FOR PN 869 - ARTERIAL

ROAD RESURFACING PROJECT ON PALMDALE BOULEVARD
BETWEEN 70th STREET EAST AND 90th STREET EAST

RECOMMENDATION
Staff recommend that the City Council:

1. Accept the NOC for completed Arterial Road Resurfacing Project on Palmdale Boulevard between 70th Street East and 90th Street East; and,

2. Authorize the City Manager Pro Tem or his designee to file the NOC and release the security for the completed public street improvements.

BACKGROUND
The Arterial Road and Resurfacing project is located on Palmdale Boulevard between 70th Street East and 90th Street East. The project’s improvements included pavement rehabilitation and full-depth reclamation along Palmdale Boulevard, 10th Street West, and Rayburn Road/Avenue R, and pavement reconstruction along Avenue N and 40th Street, 10th Street West, Rayburn Road/Avenue R, and 35th Street East. Work consisted of cold milling existing asphalt concrete, asphalt overlay, removal of existing asphalt, construction of new asphalt concrete, installation of agg regate base, unclassified excavation, full depth pulverization of existing asphalt and subgrade, grading of pulverized materials, mixing and grading cement treated base, mobilization, traffic control, clearing and grubbing, signing and striping, installing traffic signal loops, adjusting utility covers to grade, potholing and preparation of NPDES (National Pollutant Discharge Elimination System).

Report to Mayor and City Council
Re: NOC Completed Arterial Road Rehabilitation
May 6, 2025

Page 2 ends

DISCUSSION
The NOC is presented by Section 16.110.060 of Palmdale’s Municipal Code. This action will accept the roadway improvements as complete and initiate the City’s release of applicable securities posted for this project by the City’s subdivision regulations.

FISCAL IMPACT
$0; There is no fiscal impact associated with this action. Project costs totaled 18,000,000, and was funded using Road Maintenance and Rehabilitation Account (RMRA SB1), Gas Tax, Prop C Local Return, and Transportation Development Act (TDA) Article 8 funds.

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

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

Prepared by: Leonardo Torres, P.E.

ATTACHMENTS
NOC
Project Photos
RECORDING REQUESTED BY:

City of Palmdale
Public Works Department
WHEN RECORDED MAIL TO:

City of Palmdale
Office of the City Clerk
38300 Sierra Highway, Suite C
Palmdale, CA 93550

PURSUANT TO CIVIL CODE SECTION
C.C. 3093
___________________________________________________________________________________

NOTICE OF COMPLETION
NOTICE IS HEREBY GIVEN:

1. The City of Palmdale, a municipal corporation, is the owner in fee, of certain public improvement known as Arterial Road Rehabilitation Project, City Project Number PN 847A & 869.

2. The City’s address is 38300 Sierra Highway, Palmdale, California 93550.

3. The general location of said public improvement is Citywide; Avenue N, 40th Street East, 6 th Street East, 10th Street West, Palmdale Boulevard, Rayburn Road/Avenue R, and 35th Street East, Palmdale, California 93350.

4. On April 3, 2024, a construction contract for said public improvement was awarded to Sully- Miller Contracting Co.,135 S. State College Boulevard, Suite 400, Brea, CA 92821.

5. Work under said contract was completed on April 10, 2025, to the satisfaction of the City of Palmdale, and the City hereby accepts the project as complete.

Dated: May 6, 2025
Salvador Mendez, City Manager Pro Tem
City of Palmdale
____________________________________________________________________________________________

VERIFICATION
I, the undersigned, say: I am the Director of Public Works, the declarant of the foregoing notice of completion; I have read the said notice of completion and know the contents thereof; the same is true of my own knowledge. I declare under penalty of perjury that the foregoing is true and correct.

Executed on May 6, 2025, in the City of Palmdale, California.

Lee Torres, Director of Public Works

NOTICE OF COMPLETION

ARTERIAL ROAD RESURFACING
CITYWIDE: 13.35 LANE MILES RESURFACED WITH THE PROGRAM

COMPLETED PUBLIC IMPROVEMENTS
AVE R, AVE N, 6TH ST E, 30TH ST E, 40TH ST E, 10TH ST W, PALMDALE BLVD

COMPLETED PUBLIC IMPROVEMENTS

1 MINUTES

CITY COUNCIL

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
APRIL 12, 2025

www.cityofpalmdale.org

1) CALL MEETING TO ORDER

Mayor Loa called the meeting to order at 10:07 am.

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

2) ROLL CALL MAYOR LOA, MAYOR PRO TEM BETTENCOURT,
COUNCILMEMBERS BISHOP, OHLSEN, ALARCÓN

PRESENT: Richard J. Loa, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

ABSENT: Laura Bettencourt.

3) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

Mayor Loa announced that a moment of silence would be held in memory of Rhonda Camacho and Johnny Zamrzla. Kathy Mac Laren -Gomez led the Pledge of Allegiance.

4) PUBLIC COMMENTS

The following individuals provided public input: Matt Luker discussed the agenda format and transparency. Mayor Loa explained the purpose of the meeting; Jason Zink discussed the agenda format, streets, super commuter opportunity zone, and government transparency.

Motion: Suspend the rules for public comments and offer the opportunity for the public to speak after the presentation.

Moved by Andrea Alarcón, seconded by Eric Ohlsen.

Vote: Motion carried (4-0)
Yes: Richard J. Loa, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

Absent: Laura Bettencourt.

5) PRESENTATION

5.1) City Council Strategic Planning Workshop.

Patrick Ibarra, Consultant at The Mejorando Group, discussed the agenda for the day. The council and the consultant discussed the session's ground rules and desired outcomes.

2 Councilmembers provided their feedback regarding the benefits of good government, which included quality of life, street improvements, delivery of essential services, improving mental health in the community, improving public safety, preventing illegal dumping, creating safe neighborhoods and schools, providing employment opportunities, promoting home ownership, advocating for citizens, fostering direct relationships with constituents, and cleaning up graffiti.

Councilmembers discussed their desired legacies:

Councilmember Alarcón would like to open doors of opportunity to district residents and provide resources for the community.

Councilmember Bishop stated he would like to see Palmdale become one of the best communities in Southern California, increase development, and give residents a good quality of life.

Councilmember Ohlsen wants to do the work for the people, redefine relationships, and improve transportation and the quality of life for residents.

Mayor Loa would like to improve the quality of life for residents and showcase and make Palmdale better.

Mr. Ibarra shared strategies for creating a more collaborative, effective Council.

The following individuals provided public input: Matt Luker, Transplants Brewery Company, spoke about the City's collaboration with businesses; Jason Zink discussed the super commuter zone, economic district, and Palmenthol Park; and Kathy Mac Laren -Gomez spoke about supporting everyone and working together as a team.

Lunch was held from 11:46 am to 12:30 pm.

There was discussion regarding the roles and expectations of the Elected Officials, the City Manager, the Department Directors, the city staff, and the community members.

The City Management Team provided updates on the following:

City Manager Pro Tem Mendez - Chimbole Center, Civic Center Conceptual Plan, Palmdale Blvd Relinquishment, Rancho Vista Grade Separation, Retail Cannabis, Housing & Industrial Update, 56-acre land development, and Sponsorships.

Deputy City Manager Gallagher - South Antelope Valley Emergency Services (SAVES), Emergency Operation Center (EOC), Rebranding, and Street Sweeping.

Deputy City Manager Lopez - McAdam Park, and Mental Health & Wellbeing.

Mr. Ibarra noted several items of Council interest from staff updates, which included Development, Council meeting protocols, Economic Development, 3 Street Sweeping, prioritizing Capital Improvement Projects, Sponsorships, and Mental Health.

Councilmembers provided a list for the City Management Team that included Rebranding, Development, Palmdale Blvd . Negotiations, Wellbeing Lab, Measure PD Sales Tax, Sheriff’s Department Contract, Public Safety Plan, Animal Control Contract, Waste Management Contract, EPIC, Equestrian Center, Union Training Facility, Civic Center, Transportation Center, Recreation Center at Oasis Park, Domestic Violence Shelter, Cemetery that includes veterans, Veteran Wall, and Pickle Ball Courts.

The following individual provided public comments: Kathy Mac Laren-Gomez spoke in support of the Council retreat.

6) ADJOURNMENT

Mayor Loa adjourned the meeting at 3:01 pm.

PASSED, APPROVED, and ADOPTED this 6th day of May 2025.

Richard J. Loa, Mayor

ATTEST:

Rochelle Scott, City Clerk
1 MINUTES

CITY COUNCIL

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
APRIL 15, 2025

www.cityofpalmdale.org

1) CALL MEETING TO ORDER

Mayor Loa called the meeting to order at 5:00 pm.

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

2) ROLL CALL MAYOR LOA, MAYOR PRO TEM BETTENCOURT,
COUNCILMEMBERS BISHOP, OHLSEN, ALARCÓN

PRESENT: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

ABSENT: None.

3) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

Mayor Loa announced a moment of silence for Rhonda Camacho and Johnny Zamrzla. Councilmember Ohlsen led the Pledge of Allegiance.

City Manager Pro Tem Mendez withdrew items 5.2 and 12.2 from the agenda, they were not considered.

4) PUBLIC COMMENTS

CONSENT CALENDAR, APPOINTMENT(S), NEW BUSINESS, AND CLOSED SESSION:

Motion: A motion was made and passed to restore the public comment sections to three minutes for the Consent Calendar, Appointments and New Business together, and the Closed Session separate.

Moved by Eric Ohlsen, seconded by Andrea Alarcón.

Vote: Motion carried (5-0)
Yes: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

Jason Zink spoke on the down -payment assistance program and assessment districts.

Council pulled items 5.8 and 5.9 for discussion.

2 5) CONSENT CALENDAR

5.1) Waive full reading of the Resolution(s) and/or Ordinance(s) to be considered and voted on at this meeting. (This allows for reading the title only in lieu of reciting the entire text).

5.2) Approve Down-Payment Assistance Program.

This item was not heard; it was withdrawn from the agenda

5.3) Adopt Resolution No. CC 2025 -025, a Resolution of the City Council of the City of Palmdale directing the preparation of the annual Engineer’s Report for the continuation of the annual levy of assessments and designating the Engineer of Work for fiscal year 2025 -26 for the City of Palmdale Drainage Benefit Assessment Districts No. 1 and No. 2006-02.

5.4) Adopt Resolution No. CC 2025 -026, a Resolution of the City Council of the City of Palmdale directing the preparation of the annual Engineer’s Reports for the continuation of the annual levy of assessments and designating the Engineer of Work for fiscal year 2025 -26 for the City of Palmdale Landscape Maintenance Assessment Districts and Annexations, Park Maintenance and Recreation Improvement District, and Streetlight Maintenance Assessment Districts and Annexations.

5.5) Adopt Resolution No. CC 2025 -034, a Resolution of the City Council of the City of Palmdale adopting the Joint Resolution of the Board of Supervisors of the County of Los Angeles acting on behalf of the Los Angeles County General Fund, Los Angeles County Consolidated Fire Protection District, the Board of Directors of the County Sanitation District No. 14 of Los Angeles County and the governing bodies of the Antelope Valley Cemetery District, Antelope Valley Mosquito and Vector Control District, Antelope Valley Resource Conservation District, City of Palmdale, and the Palmdale Water District - Zone E approving and accepting the negotiated exchange of property tax revenues resulting from annexation to County Sanitation District No. 14 Entitled Annexation No. 464.

5.6) Approve Third Amendment to the Agreement with SOV Security for PN 872, Citywide Security Upgrades, increasing the agreement by $255,750 for the total not to exceed amount of $1,525,616 with an extension of 180 calendar days for a total of 596 calendar days.

5.7) Approve Third Amendment to the Agreement with Schneider Electric for professional services for PN 880, ESCO Energy Project, increasing the agreement by $84,450 for the total not to exceed amount of $15,336,605 with an extension of three months for a total term of 22 months.

5.8) Approve requisition with National Auto Fleet for the purchase of two new Roadline GPMT Graffiti Trucks for a total not to exceed amount of $334,500; and approve requisition with Inland Kenworth (US), Inc. for the purchase of a 3 new T880 Super 10 Dump Truck for a total not to exceed amount of $285,000; and approve requisition with Municipal Maintenance Equipment for the purchase of a new Petersen Lightning Loader for a total not to exceed amount of $295,000; and approve requisition with PB Loader Corporation for the purchase of a new B-5 Asphalt Truck for a total not to exceed amount of $360,000.

Deputy Director of Public Works Livingston presented the staff report and spoke about the features of the vehicles purchased.

Council spoke in support of this item and thanked the leadership.

Mayor Pro Tem Bettencourt provided information to the public for reporting graffiti.

Motion: Approve requisitions 250913, 250915, 250917, 250930.

Moved by Andrea Alarcón, seconded by Austin Bishop.

Vote: Motion carried (5-0)
Yes: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

5.9) Notice of Completion (NOC) - Accept public landscape improvements for Palmdale Terrace Apartments located at 2650 East Avenue Q-12.

Director of Public Works Torres presented the staff report. Council spoke in support of this item.

Motion: Accept Notice of Completion (NOC) - Accept public landscape improvements for Palmdale Terrace Apartments located at 2650 East Avenue Q-12.

Moved by Andrea Alarcón, seconded by Eric Ohlsen.

Vote: Motion carried (5-0)
Yes: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

5.10) Notice of Completion (NOC) - Accept public street improvements for Legacy Lane Industrial Building located at 40347 Legacy Lane.

5.11) Approve the minutes from the previous meeting.

Motion: Approve all items listed under the Consent Calendar except item 5.2, which was withdrawn from the agenda, and items 5.8 and 5.9, which were pulled for discussion.

Moved by Austin Bishop, seconded by Laura Bettencourt.

Vote: Motion carried (5-0)
Yes: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

4 6) APPOINTMENTS

6.1) Appoint one (1) member to serve on the Antelope Valley Mosquito and Vector Control District Board.

Public Comments: None.

Mr. Gee and Mr. Acevedo introduced themselves and spoke regarding their experience.

There was Council discussion regarding the applicants.

Motion: Appoint Mr. Acevedo as a member to serve on the Antelope Valley Mosquito and Vector Control District Board.

Moved by Eric Ohlsen, seconded by Austin Bishop.

Vote: Motion carried (5-0)
Yes: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

7) NEW BUSINESS

7.1) Adopt Resolution No. CC 2025-033, a Resolution of the City Council of the City of Palmdale approving the Five Year Public Art Work Plan for projects in the City of Palmdale in accordance with Chapter 15.01 of the Palmdale Municipal Code.

Public Art P rogram Manager Davis and Chair Sarno gave a PowerPoint presentation to the Council and discussed the Public Art Work Plan.

The following individuals provided public input: William Hawley, Lori Antoinette, Chris Minsal, Jason Zink, and Marsha Furman. Also, three letters were received supporting the Public Art Work Plan.

Councilmember Alarcón discussed coordinating a shuttle tour of art with the senior centers and thanked the Commis sion for bringing Native American art to McAdam Park.

Chair Sarno discussed a future tour and encouraged the public to attend the Public Art Commission meetings.

Mayor Pro Tem Bettencourt spoke about the arts (i.e. murals, performance), requested a recreation center at Domenic Massari, suggested that the Scouts push for a local arts badge, and bringing more Native American art to the community.

Councilmember Ohlsen spoke in support of the Public Art Program and commended staff.

Councilmember Bishop spoke about the success of the Public Art Program. 5 Motion: Adopt Resolution No. CC 2025 -033, a Resolution of the City Council of the City of Palmdale approving the Five Year Public Art Work Plan.

Moved by Andrea Alarcón, seconded by Austin Bishop.

Vote: Motion carried (5-0)
Yes: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

8) CITY MANAGER’S REPORT

City Manager Pro Tem Mendez announced the following upcoming events: Art Reception at the Palmdale Playhouse on April 18, You Are Loved event on April 19, Senior Resource Fair at Legacy Commons on April 23, Pet Wellness Clinic in Poncitlan Square on April 27; Books & Barks at the Library on April 29, and the Many Voices One Vision Prevention Summit on April 30 and May 1.

9) SHERIFF’S REPORT

Captain Cartmill gave an update on response times for routine calls, service calls, Public Safety partnership, Part 1 crimes, arrests, graffiti -related arrests, traffic enforcement, collision prevention, and traffic tickets. He also announced that the Sheriff's Department and the City will host an Interfaith Prayer Breakfast on May 9.

Mayor Loa asked for an update on graffiti -related arrests, and Captain Cartmill said he would follow up with the information. The conversation about graffiti continued afterward.

10) NON-AGENDA PUBLIC COMMENTS:

The following individuals provided public comments: Eugene Hernandez thanked Council for increasing the speaking time for public comments, and restoring the Chimbole Center; Jason Zink suggested th at the Public Art Commission create a calendar of the wall murals, survey the citizens regarding the use of the income from the implemented sales tax, replacing missing or faded street signs, paving streets, and submitting a letter to representatives regarding creation of a super commuter opportunity and a state economic zones, add hand rails and air conditioner units to the city budget for veterans and seniors; and Marsha Furman spoke about the vehicles that were purchased and the lack of sidewalks in the older areas.

11) COUNCIL REPORTS, ANNOUNCEMENTS AND REQUESTS FOR FUTURE

AGENDA ITEMS

Councilmember Bishop talked about the five vehicles the city bought and how they will help improve the quality of life for residents.

Councilmember Ohlsen spoke about teamwork among staff, public participation, volunteerism, and making the three-minute time limit for public comments permanent.

6 Mayor Pro Tem Bettencourt asked for an update on the Chimbole Center, and City Manager Pro Tem Mendez provided a short response. Mayor Pro Tem Bettencourt also raised concerns about missing sidewalks and suggested using the GIS map to show which neighborhoods lack them. In response, City Manager Pro Tem Mendez mentioned plans for a future sidewalk master plan.

Councilmember Alarcón discussed the veterans' emergency needs fund that was established and requested that City Manager Pro Tem Mendez explore the program to see if extra funds should be allocated through the budget process. She also mentioned the resignation of the 5th District Planning Commissioner and asked for a review of the Planning Commission meeting time. Additionally, she shared updates on several events: Charlie and the Chocolate Factory at the Playhouse, Palmdale High School Prom Night, an Earth Day event by SALVA on April 16, Children's Day on April 19 hosted by LA Care and partners, and the Get the Scoop event at Albe's Ice Cream on May 10.

Mayor Loa talked about the new vehicles the city bought to help remove graffiti and repair potholes, with the goal of making the city look better and improving residents' quality of life.

12) PRESENTATION BY CITY ATTORNEY

12.1) Conference with Legal Counsel – Existing Litigation Marlene Jannet Hernandez Daniel, J. Stoneham, et al. vs. Marlene Jannet Hernandez, et al.

This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

12.2) Conference with Legal Counsel – Existing Litigation Maithi Ricci v. City of Palmdale, et al.

This closed session is being held pursuant to the authority of California Government Code Section 54956.9(d)(1).

This item was not heard; it was withdrawn from the agenda

12.3) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED

LITIGATION
Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Section 54956.9: (1 potential case – facts and circumstances unknown to potential plaintiffs)

13) ANNOUNCEMENT BY CITY ATTORNEY

Closed Session was held from 6:36 pm - 8:31 pm.

Acting City Attorney Halfman announced the following:

12.1 - Reportable action received to offer a settlement for $5.5M.

12.3 - There were no reportable actions.
7 14) ADJOURNMENT

Mayor Loa adjourned the meeting at 8:32 pm to May 6, 2025, at 5:00 p.m. in the City Hall Council Chamber located at 38300 Sierra Highway, Suite B, Palmdale, California.

PASSED, APPROVED, and ADOPTED this 6th day of May, 2025.

Richard J. Loa, Mayor

ATTEST:

Rochelle Scott, City Clerk
1 MINUTES

CITY COUNCIL

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
APRIL 15, 2025

www.cityofpalmdale.org

1) CALL MEETING TO ORDER

Mayor Loa called the meeting to order at 5:00 pm.

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

2) ROLL CALL MAYOR LOA, MAYOR PRO TEM BETTENCOURT,
COUNCILMEMBERS BISHOP, OHLSEN, ALARCÓN

PRESENT: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

ABSENT: None.

3) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

Mayor Loa announced a moment of silence for Rhonda Camacho and Johnny Zamrzla. Councilmember Ohlsen led the pledge of allegiance.

4) PUBLIC COMMENTS

Public Comments: Jason Zink provided his observation of the City Attorney.

5) PRESENTATION BY CITY ATTORNEY

5.1) This closed session is being held pursuant to the authority of California Government Code Section 54957
Public Employee Performance Evaluation
Title: City Attorney

6) ANNOUNCEMENT BY CITY ATTORNEY

Acting City Attorney Halfman announced the following:

5.1 - There was no reportable action.

2 7) ADJOURNMENT

Mayor Loa adjourned the meeting at 8:36 pm.

PASSED, APPROVED, and ADOPTED this 6th day of May 2025.

Richard J. Loa, Mayor

ATTEST:

Rochelle Scott, City Clerk
1 MINUTES

CITY COUNCIL

CITY HALL COUNCIL CHAMBER
38300 SIERRA HIGHWAY, SUITE B

PALMDALE, CALIFORNIA
APRIL 29, 2025

www.cityofpalmdale.org

1) CALL MEETING TO ORDER

Mayor Loa called the meeting to order at 5:30 pm.

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

2) ROLL CALL MAYOR LOA, MAYOR PRO TEM BETTENCOURT,
COUNCILMEMBERS BISHOP, OHLSEN, ALARCÓN

PRESENT: Richard J. Loa, Laura Bettencourt, Austin Bishop, Eric Ohlsen, Andrea Alarcón.

ABSENT: None.

3) PLEDGE OF ALLEGIANCE AND MOMENT OF SILENCE

Councilmember Bishop led the Pledge of Allegiance.

4) PUBLIC COMMENTS CLOSED SESSION

Eugene Hernandez spoke on various topics , including May Day, the Chimbole Center, and potholes.

5) PRESENTATION BY CITY ATTORNEY

5.1) CONFERENCE WITH LEGAL COUNSEL—ANTICIPATED LITIGATION Significant exposure to litigation pursuant to paragraph (2) or (3) of subdivision (d) of Section 54956.9: (1 potential case – facts and circumstances unknown to potential plaintiffs)

6) ANNOUNCEMENT BY CITY ATTORNEY

Acting City Attorney Halfman announced there was no reportable action.

Councilmember Alarcón spoke in support of the LA County 48-hour service strike.

2 7) ADJOURNMENT

Mayor Loa adjourned the meeting at 7:15 pm.

PASSED, APPROVED, and ADOPTED this 6th day of May 2025.

Richard J. Loa, Mayor

ATTEST:

Rochelle Scott, City Clerk

Joint Staff Report
DATE: MAY 6, 2025
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, 2024, FOR THE CITY

OF PALMDALE, THE HOUSING AUTHORITY OF THE CITY OF

PALMDALE, THE PALMDALE FINANCING AUTHORITY, AND THE

PALMDALE COMMUNITY FOUNDATION

RECOMMENDATION
Staff recommend that the City Council:

1. Receive and file the independent auditor’s unmodified (clean) report for the City’s Annual Comprehensive Financial Report for the Year Ended June 30, 2024, for the City of Palmdale, the Housing Authority of the City of Palmdale, 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 4. 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 that management will remain diligent and continue to recommend caution during this time of uncertainty. The following is an explanation of some key indicators shown in the ACFR.

The City contracted with Eide Bailly, LLP , to perform the annual audit of the City’s financial transactions for the Year End ed June 30, 202 4. The independ ent 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, 2024.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2024 May 6, 2025

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The ACFR is used to communicate the City’s financial condition and activity transparently and in an organized manner. 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://cityofpalmdaleca.gov/293/Financial-Reports.

The quality of the City’s work and the ACFR is measured by the independent auditors' clean audit report, which is defined as one without audit-related findings.

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-vi) – 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).
o City-Wide Statements (pages 20-22) – overview of financial information. o Fund Financial Statements (pages 24-27) – a detailed look at funds, showing Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance.

Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2024 May 6, 2025

Page 3 ends

o Budget to Actual Comparisons (pages 28-33) – for the General Fund and other select major funds.
o Proprietary Fund Financial Statement (pages 34-36) – shows finances for Internal Service Funds.
o Fiduciary Fund Financial Statement (pages 37-39) – shows finances for Custodial Funds, Retiree Health Premium Trust Funds and Private- purpose Trust Funds.
o Notes to the Financial Statements (pages 40-98) – a narrative explanation accompanying the Basic Financial Statements.

Required Supplementary Information Sections
 Pension Information (pages 99-100) – information on changes in Net Pension Liability and related ratios and schedule of contributions.  Other Post Employment Defined Benefit information (OPEB) (pages 101-102) – information on changes in Net OPEB Liability and related ratios and schedule of investment returns.
 Descriptions of Non-Major Governmental Funds (pages 104-106)  Combining Financial Statements (pages 107-122) - A detailed schedule of the non-major individual funds for funds that were presented cumulatively in the Financial Section.
 Budget to Actual Comparisons (pages 123-164) – 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.

Statistical Section - current and historical information up to 10 years (pages 175 –204)
 Financial Trends
 Revenue Capacity Information
 Debt Capacity Information
Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2024 May 6, 2025

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 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, 2024. The total net position (assets less liabilities) was $976.2 million. Net position is broken into three categories: capital, restricted, and unrestricted.
 Net Investment in Capital Assets ($609.9 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 ($264.3 million)
These assets are subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. Approximately 18.3 percent of this amount is restricted to affordable housing, and 68.9 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 ($102.0 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 $91,396,188 in the General Fund.
 Liabilities and Deferred Inflows of Resources ($237.7 million) o The short-term liabilities totaling $66.8 million are considered current and payable within a year and consist of unpaid expenditures, accrued salaries, unearned revenue, and accrued due within the year. Non-current liabilities totaling $170.6 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 $ .4 million.
o The long-term liabilities consist of $81.2 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 $11.5 million, Capital Leases Payable for Equipment Leases, Section 108 HUD Loan, HOME Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2024 May 6, 2025

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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, Note 13 (pages 66-76). The second largest component of long-term liabilities consists of the Net Pension Liabilities, totaling $63.8 million, for future unpaid retirement benefits due to employees. A detailed explanation of the net pension liability is included in the Notes section. (Note 16 pages 82 through 84).
o Schedules of Changes in Net Pension Liability and Related Ratios and Schedule of Contributions can be found on pages 99 and 100 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 101 and 102 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, 2024, the City had $416.1 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 $102.9 million as of June 30, 2024. The balance consists of several categories, as follows:
o $1.8 million no-spendable, resources not in a spendable form such as permit held for development, prepaids, and long-term receivables. o $9.7 million restricted resources subject to externally enforceable legal restrictions such as donations and grants.
o $11.0 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, healthcare claims liabilities, and unpaid accrued employee compensated absence balances.
o $80.4 million in unassigned resources that can be used for ongoing obligations of the City.

The City’s 2024-25 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 Report to Mayor and City Council
Re: Annual Comprehensive Financial Reports for Year Ended June 30, 2024 May 6, 2025

Page 6 ends

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 the recommended actions for this report.

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

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

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

Prepared by: Janelle Samson, Director of Operations
Certified as to availability of Funds: Janelle Samson, Director of Operations Approved by: Salvador Mendez, City Manager Pro-Tem
Approved as to form: Alexandra Halfman, Acting City Attorney

ATTACHMENTS
Rpt. City of Palmdale ACFR for the Year Ended June 30, 2024

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City of Palmdale
Table of Contents
For the Year Ended June 30, 2024

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

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 Budget and Actual - Transportation Article 8 Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 Proprietary Fund Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 Statement of Revenues, Expenses and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................35 Statement of Cash Flows - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 Fiduciary Fund Financial Statements
Statement of Fiduciary Net Position - Fiduciary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 Statement of Changes in Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................39 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................40 Required Supplementary Information
Schedule of Changes in Net Pension Liability and Related Ratios-Public Employees Retirement System-Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................99 City of Palmdale
Table of Contents
For the Year Ended June 30, 2024
Schedule of Contributions-Public Employees Retirement System-Miscellaneous Plan................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................100 Schedule of Changes in Net OPEB Liability and Related Ratios................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................101 Schedule of Investment Returns for OPEB................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................102 Supplementary Information
Combining Balance Sheet - Nonmajor Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................107 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................108 Combining Balance Sheet - Nonmajor Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................109 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................116 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Air Quality Improvement Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................123 Community Development Block Grant - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................124 Citywide Maintenance and Services (CFD 2022-1) - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................125 Drainage - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................126 Drainage Benefit Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................127 Enhanced Infrastructure Financing District................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................128 Federal Funds - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................129 Federal Home Program - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................130 Federal Jobs Programs - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................131 Federal Home ARP Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................132 Fire Facilities Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................133 Gas Tax - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................134 Housing Authority - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................135 Landscape Maintenance - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................136 Local Transport Article 3 - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................137 Measure A LA County Parks................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................138 Measure R - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................139 Measure R Local Return................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................140 Measure M - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................141 Measure M Local Return................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................142 Miscellaneous Grants/Developer Contributions - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................143 Park Assessments - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................144 Park Development - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................145 Proposition A - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................146 Proposition C - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................147 Prop C Local Return................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................148 Public Facilities Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................149 Public Safety - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................150 Road Maintenance & Rehabilitation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................151 South Antelope Valley Emergency Services (SAVES) - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................152 Sewer Maintenance Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................153 Sewer Upgrade - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................154 City of Palmdale
Table of Contents
For the Year Ended June 30, 2024
State Grants Fund - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................155 Street Lighting Assessment District - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................156 Traffic Impact - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................157 Communications PEG - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................158 Solid Waste - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................159 Palmdale Community Foundation - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................160 Water Park - Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................161 Public Art - Special Revenue 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 City of Palmdale
Table of Contents
For the Year Ended June 30, 2024
Former Community Redevelopment Agency - Project Area 2A Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................196 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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May 1, 2025

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

It is with great pride and deep respect that we present the Annual Comprehensive Financial Report (ACFR) for the City of Palmdale for the fiscal year ended June 30, 2024. This report, prepared in accordance with generally accepted accounting principles (GAAP) and audited by the independent accounting firm Eide Bailly LLP under generally accepted auditing standards (GAAS), stands as a testament to the City’s steadfast commitment to fiscal stewardship, transparency, and public trust.

This document reflects more than just financial results — it represents the City's enduring dedication to prudent management, resilience, and our collective vision for a stronger future. The responsibility for the accuracy, completeness, and fairness of the information contained herein rests with City management. To support this responsibility, we have established and maintained a robust system of internal controls designed to protect public assets and ensure the reliability of financial reporting. While recognizing that no system can offer absolute assurance, we believe the City's internal controls provide reasonable assurance against material misstatement.

The City's financial statements have been independently audited by Eide Bailly LLP. Their thorough examination of our accounting practices, estimates, and disclosures resulted in an unmodified (clean) audit opinion, affirming that the financial statements present fairly the financial position of the City of Palmdale in accordance with GAAP. The independent auditor’s report is included in the Financial Section of this document.

Following the auditor’s report, the Management’s Discussion and Analysis (MD&A) offers readers an accessible and comprehensive overview of the City’s financial condition. It highlights key trends, major initiatives, and the financial strategies that continue to position Palmdale for sustainable growth, economic vitality, and a thriving future.

PALMDALE: A CITY OF OPPORTUNITY AND GROWTH

Incorporated on August 24, 1962, and a Charter City since November 2009, Palmdale stands as a vibrant and resilient community in northern Los i

Angeles County, approximately 60 miles north of downtown Los Angeles.

Nestled in the scenic high desert at an elevation of 2,600 feet, Palmdale enjoys an average temperature of 72°F, offering residents and visitors an exceptional quality of life in a dynamic natural setting. As of January 1, 2024, the California Department of Finance estimated Palmdale’s population at 165,917, making it the sixth-largest city in Los Angeles County and one of the fastest-growing.

As of the 2020 U.S. Census, Palmdale, California, encompasses a total area of 106.06 square miles, comprising entirely land. It’s important to note that while the city's incorporated area is 106.06 square miles, the broader planning area—which includes the city's sphere of influence and adjacent unincorporated regions—covers approximately 201.6 square miles.

As of the latest available data, the median household income in Palmdale is $81,151, based on the 2023 American Community Survey 1-Year Estimates (dof.ca.gov). This figure represents a 3.5% increase from the previous year's median income of $78,414. The average household income in Palmdale is higher, at $99,706, reflecting the influence of higher-earning households on the average. For context, the median household income in California is approximately $90,330, and the national median is around $74,606. This positions Palmdale's median income below the state average but above the national average.

Operating under a Council-Manager form of government, Palmdale’s leadership model reflects a deep commitment to democratic representation and professional management. The City is divided into five geographic districts, each represented by a City Councilmember elected to serve a four- year term. The Mayor and Mayor Pro Tem are selected annually by the Council to guide collective governance, while the City Manager oversees day-to-day operations and policy implementation.

Palmdale is dedicated to delivering a full range of high-quality municipal services designed to enhance the well-being of its residents and to foster a thriving, sustainable community. These services include:

· Public Safety
· Parks and Recreation
· Public Works & Utilities
· Economic Development
· Engineering
· Planning & Zoning
· Environmental Programs
· Building Services
· Human Resources
· Finance

· Information Technology
· Library Services
· Affordable Housing

CHARTING THE PATH FORWARD: BUDGETING WITH PURPOSE

The City's annual budget serves as the cornerstone of financial planning, resource allocation, and policy execution. Departments submit detailed budget requests to the City Manager by 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.

Following public hearings and deliberations, the City Council adopts the budget by June 30, ensuring that resources are strategically deployed to meet community needs and support long-term goals.

This Annual Comprehensive Financial Report (ACFR) reflects not only the activities of the primary government but also those of related component units that contribute to Palmdale’s continued growth and service to its residents, including:

· Palmdale Financing Authority
· Housing Authority of the City of Palmdale
· Palmdale Community Foundation
· Industrial Development Authority of the City of Palmdale

These entities are included based on the criteria established by the Governmental Accounting Standards Board (GASB), ensuring transparency, accountability, and a comprehensive view of the City's financial landscape.

As Palmdale continues to grow, innovate, and lead, it remains committed to prudent financial stewardship, community-centered services, and a bold vision for the future.

A DYNAMIC ECONOMY, A RESILIENT FUTURE

Palmdale’s economy is gaining strength, supported by robust business attraction efforts and strategic planning. Highlights for 2024 include:

· Advanced Film Industry Development: Created the 10-year Film Palmdale Strategic Plan, partnered with Ghetto Film School for a weeklong film lab, and enhanced the Film Palmdale website to support production.
· Supported Key Industry Growth: Launched the Aerospace Incentive Program to attract and expand aerospace and
manufacturing businesses.
· Strengthened Small Business Resilience: Implemented marketing and grant support programs, including the Small Business Assistance iii

Program and $10,000 Small Business Grants.
· Empowered Community Organizations: Hosted the Nonprofit Grant Bootcamp to help local nonprofits build grant-writing capacity. · Expanded Regional Partnerships & Workforce Support:

Collaborated with AV EDGE on economic development initiatives and co-hosted job fairs with the America’s Job Center of California.

As Palmdale looks to the future, the City remains focused on fostering a vibrant, resilient economy by attracting new industries, supporting local businesses, and expanding workforce development opportunities. Through these efforts, Palmdale will continue to strengthen its role as a regional hub for innovation, investment, and community prosperity.

INVESTING TODAY, SECURING TOMORROW

The City remains steadfast in its commitment to long-term financial resilience, maintaining a strong General Fund reserve that is strategically designated to:

· Ensure operational stability by providing contingencies for unforeseen challenges.
· Support capital replacement and infrastructure renewal to preserve and enhance critical assets.
· Advance technology improvements that drive innovation, efficiency, and service delivery.
· Promote economic sustainability by fostering growth and resilience in changing market conditions.
· Prepare for emergencies and future liabilities through disciplined financial planning and risk mitigation.

Through thoughtful stewardship and forward-looking strategies, Palmdale continues to build a strong foundation for lasting prosperity and community success. The City’s multi-year financial forecasting, conservative fiscal practices, and active risk management support ongoing fiscal health and service reliability.

The Capital Improvement Program (CIP) supports long-term infrastructure investments. In FY 2023–24, key CIP initiatives included:

· Rancho Vista Boulevard Grade Separation Project:

Design phase is underway, with project scope including a new grade- separated bridge, roadway realignment, and pedestrian safety improvements. Grant funding is actively being pursued to support construction.
· 5-Year Pavement Management Plan: A comprehensive, data-driven plan is in development to assess and update pavement current iv

conditions, prioritize future rehabilitation project efforts, and optimize long-term capital investments. Plan completion is anticipated by Summer 2025, with implementation to follow in Spring 2026. · ADA Transition Plan: Accessibility assessments of the public rights- of-way are ongoing, including inventory and condition evaluations of sidewalks, curb ramps, and intersections. Final plan delivery is anticipated in Fall 2025, with phased implementation to commence in Spring 2026.
· Avenue N Widening and Street Improvement Project: The design is approximately 90% complete and includes roadway widening, pavement reconstruction, new roundabouts, drainage improvements, and multimodal infrastructure. Final approvals from Caltrans, right-of- way acquisition, and construction funding are required to proceed to the building phase.
· Avenue R Regional Drainage Basin Improvement Project:

Currently in the planning phase. The project scope includes new constructing new drainage basins, new inlet/outlet structures, and enhancing erosion control systems. The final design is scheduled to begin in Summer 2025 and be completed by Fall 2026, contingent on construction funding availability.

City of Palmdale Parks and Recreation Master Plan: The City of Palmdale is reimagining the future of community recreation through the active implementation of its Parks and Recreation Master Plan. Guided by a commitment to innovation, inclusivity, and sustainability, the Plan envisions a vibrant network of parks, trails, and recreational spaces that inspire connection, promote well-being, and enhance the City's quality of life. This transformative initiative is a cornerstone of the Palmdale 2045 General Plan, a bold vision for a thriving, resilient, and forward-looking community.

· DryTown Capital Upgrades: $2 million mat slide racer and main water tower renovation, along with several other park
improvement projects to be completed by summer 2025.
· Sam Yellen Park: $11 million approved to complete Phase II construction and upgrade landscaping and lighting in Phase I; completion expected summer 2025.
· Marie Kerr Pool: $1 million approved to expand the pool deck; construction scheduled for summer 2025.
· Best of the West Softball Complex: Nearly $1 million approved for a new concession stand; project to be completed summer 2025.

A ROADMAP FOR PROGRESS AND POSSIBILITY

The City’s Strategic Plan, originally adopted in 2022 and updated annually, v

serves as a dynamic roadmap for Palmdale’s future — ensuring that priorities are thoughtfully guided by community values and that resources are strategically aligned to achieve meaningful outcomes. Grounded in a shared vision for a vibrant and resilient city, the Strategic Plan focuses on four core pillars:

· Maintain effective public safety and protection for life, property and the environment.
· Ensure long-term fiscal health of the City and maintain funding for services.
· Invest in infrastructure to improve community livability. · Maintain a desirable community where everyone wants to live, work and play.

Each department aligns its Business Plan with these strategic priorities, establishing a strong foundation for accountability, innovation, and results- driven management. Through this disciplined, visionary approach, Palmdale is charting a path toward sustainable success and enduring community prosperity.

RECOGNIZING ACHIEVEMENT AND DEDICATION

The City of Palmdale was once again honored with the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association (GFOA) for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023 — marking the City’s 33rd consecutive year receiving this prestigious national recognition.

This achievement reflects the unwavering dedication, expertise, and professionalism of the Operations Department – Finance Division, whose commitment to excellence made this report possible. Special recognition is extended to the City's accounting and budget teams for their meticulous attention to detail and collaborative spirit.

The City also expresses profound appreciation to the Mayor, City Council, and City Manager for their visionary leadership and steadfast commitment to transparency, sound financial stewardship, and the highest standards of public service. Their collective efforts continue to shape a stronger, more resilient Palmdale for today and for future generations.

Respectfully submitted,

Janelle Samson
Director of Operations / City Treasurer
vi
9/24/2024
Janelle Samson
Director of Operations
City of Palmdale, California
Dear Janelle:

Congratulations!
We are pleased to notify you that your annual comprehensive financial report for the fiscal year ended June 30, 2023 has met the requirements to be awarded GFOA's Certificate of Achievement for Excellence in Financial Reporting. The GFOA established the Certificate of Achievement for Excellence in Financial Reporting Program (Certificate Program) in 1945 to encourage and assist state and local governments to go beyond the minimum requirements of generally accepted accounting principles to prepare annual comprehensive financial reports that evidence the spirit of transparency and full disclosure and then to recognize individual governments that succeed in achieving that goal. The Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting. Congratulations, again, for having satisfied the high standards of the program.

Your electronic award packet contains the following:
 A "Summary of Grading" form and a confidential list of comments and suggestions for possible improvements. We strongly encourage you to implement the recommended improvements in your next report. Certificate of Achievement Program policy requires that written responses to these comments and suggestions for improvement be included with your 2024 fiscal year end submission. If a comment is unclear or there appears to be a discrepancy, please contact the Technical Services Center at (312) 977-9700 and ask to speak with a Certificate of Achievement Program in-house reviewer.
 Certificate of Achievement. A Certificate of Achievement is valid for a period of one year. A current holder of a Certificate of Achievement may reproduce the Certificate in its immediately subsequent annual comprehensive financial report. Please refer to the instructions for reproducing your Certificate in your next report.
 Award of Financial Reporting Achievement. When GFOA awards a government the Certificate of Achievement for Excellence in Financial Reporting, we also present an Award of Financial Reporting Achievement (AFRA) to the department identified in the application as primarily responsible for achievement of the Certificate.
 Sample press release. Attaining this award is a significant accomplishment. Attached is a sample news release that you may use to give appropriate publicity to this notable achievement. vii
In addition, award recipients will receive via mail either a plaque (if first-time recipients or if the government has received the Certificate ten times since it received its last plaque) or a brass medallion to affix to the plaque (if the government currently has a plaque with space to affix the medallion). Plaques and medallions will be mailed separately.

As an award-winning government, we would like to invite one or more appropriate members of the team that put together your annual comprehensive financial report to apply to join the Special Review Committee. As members of the Special Review Committee, peer reviewers get exposure to a variety of reports from around the country; gain insight into how to improve their own reports; achieve professional recognition; and provide valuable input that helps other local governments improve their reports. Please see our website for eligibility requirements and information on completing an application.

Thank you for participating in and supporting the Certificate of Achievement Program. If we may be of any further assistance, please contact the Technical Services Center at (312) 977-9700.

Sincerely,
Michele Mark Levine
Director, Technical Services
viii

ix
City Officials
Year Ended June 30, 2024
City Council
Austin Bishop Mayor
Richard J. Loa Mayor Pro Tem
Andrea Alarcón Councilmember
Laura Bettencourt Councilmember
Eric Ohlsen Councilmember
Administration and Department Heads
City Manager Ronda Perez
Assistant City Manager Salvador Mendez
City Attorney William P. Curley
Deputy City Manager Sara Gallagher
Deputy City Manager Nardy Lopez
Director of Economic & Community Development Luis Garibay Director of Operations Janelle Samson
Director of Parks & Recreation Keri Smith
Director of Housing Sophia Reyes
Director of Public Works Lynn Glidden
x
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xi
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:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x 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.
x 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.
x 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.
x 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 May 1, 2025, 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
May 1, 2025
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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, 2024. 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 Inflow s of Resources at the close of Fiscal Year Ending June 30, 2024, resulting in a Total Net Position of Governmental Activities of $969,266,046. The City’s Change in Net Position of Government Activities increased in Fiscal Year 2023-24 by $39,527,692 or 4.3 percent. Further details on reported Fiscal Year Net Position are discussed on page

21.  Included in the Statement of Net Position (Governmental Activities), Total Assets increased t o $1,180,509,215; Deferred Outflows of Resources reported a balance of $19,404,878 for an increase of $644,152 or 3.4 percent; Total Liabilities increased by 22.9 percent to $230,296,645; and Deferred Inflows of Resources decreased by 29.9 percent to $351,402.
 Within Total Net Position, the Net Investment in Capital Assets was reported as $609,871,573, Restricted Net Position was reported as $264,319,596, and Unrestricted Net Position reported as $95,074,877. Unrestricted Net Position increased b y 13.5 p ercent and may be used to meet the government's ongoing obligations to citizens and creditors.
 As of the close of Fiscal Year 2023-24, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $415,889,480, an increase of $64,742,750 in comparison with the Prior Year. Of the Total Ending Fund Balance of $415,889,480, the General Fund Balance was $102,985,690 or an increase of $10,409,370 from the prior fiscal year. Of the $102,985,690 G eneral Fund Balance, Nonspendable Fund Balance was $1,825,542, Restricted Fund Balance was $9,763,960, Assigned Fund Balance was $11,004,526 a nd Unassigned Fund Balance was $80,391,662. Details are discussed on page 24.
 The City of Palmdale's Total Governmental Long-Term Liabilities increased by $36,314,997 or 27.1 percent, during the Fiscal Year Ended June 30, 2024. The increase is primarily due to increases in the City's net pension liability.

During Fiscal Year 2023-24, Additions and Retirements offsetting the increase in liabilities included:
 Compensated Absences Additions of $2,523,319 and Retirements of $2,553,532  Self-Insurance Liability Claims Additions of $941,403 and Retirements of $932,002  Lease Payable Additions of $0 and Retirements of $102,914  Bonds Payable Additions of $40,987,856 and Retirements of $8,215,246  Note Payable Additions of $0 and Retirements of $1,122,872 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 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 d oing so, the readers may better understand the long-term impact of the government's near-term financing decisions. The Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures, and Changes in Fund Balances, provide a reconciliation to facilitate this comparison between Governmental Funds and Governmental Activities. The Governmental Fund Statements can be found on pages 24-27.

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), Measure AV Fund, and Local Transportation Article 8 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 107-164.

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 28-33.

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 34-36.

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 38-39 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 40-98 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 $976,192,257 as of June 30, 2024.

The City of Palmdale’s Net Investment in Capital Assets reflects a balance of $609,871,573. Investment in capital assets is defined as land, buildings, machinery and equipment, infrastructure, construction in progress, and right to use assets net of accumulated depreciation, and less any related debt or deferred outflows of resources used to acquire these assets that is still outstanding. T he 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 (16) of the Notes to the Financial Statements.

Separate sections are included and report:
 Total Assets totaling $1,194,523,144 as a sum of Current and Other Assets of $527,383,069 and Capital Assets of $667,140,075.
 Deferred Outflows of Resources totaling $19,404,878 a s a sum of Pension Related Amounts for a future period totaling $19,307,580 and Other Postemployment Benefits Related Amounts totaling $97,298. This section represents a consumption of net assets that applies to a future period.  Total Liabilities totaling $237,384,363 as a sum of Long-Term Liabilities Outstanding (including net pension liability and net OPEB liability) of $177,674,403 and Other Liabilities of $59,709,960.  Total Deferred Inflows of Resources totaling $351,402 a s Other Postemployment Benefit Related Amounts of $179,542 and pension related amounts of $143,581, and lease amounts of $28,279. 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 $976,192,257 r epresents a sum of the Net Investment in Capital Assets $609,871,573; Restricted Net Position of $264,319,596; and Unrestricted Net Position of $102,001,088. 8 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Net Position
Governmental
Activities
2024
Governmental
Activities
2023
Business-type
Activities
2024
Business-type
Activities
2023
Primary
Government
2024
Primary
Government
2023
Assets
Current and Other Assets $ 513,369,140 $ 427,971,448 $ 14,013,929 $ 6,568,323 $ 527,383,069 $ 434,539,771 Capital Assets 667,140,075 670,900,473 - 667,140,075 670,900,473 Total Assets 1,180,509,215 1,098,871,921 14,013,929 6,568,323 1,194,523,144 1,105,440,244 Deferred Outflows of Resources
Pension Related Amounts 19,307,580 18,483,338 - - 19,307,580 18,483,338 Other Postemployment Benefits Related
Amounts 97,298 277,388 - - 97,298 277,388
Total Deferred Outflows of Resources 19,404,878 18,760,726 - - 19,404,878 18,760,726 Liabilities
Long-term Liabilities Outstanding 170,586,685 134,271,688 7,087,718 7,697,219 177,674,403 141,968,907 Other Liabilities 59,709,960 53,121,401 - - 59,709,960 53,121,401 Total Liabilities 230,296,645 187,393,089 7,087,718 7,697,219 237,384,363 195,090,308 Deferred Inflows of Resources
Pension Related Amounts 143,581 277,671 - - 143,581 277,671 Other Postemployment Benefits Related
Amounts 179,542 164,314 - - 179,542 164,314
Deferred Inflows from Leases 28,279 59,219 - - 28,279 59,219 Total Deferred Inflows of Resources 351,402 501,204 - - 351,402 501,204 Net Position
Net Investment in Capital Assets 609,871,573 609,762,857 - - 609,871,573 609,762,857 Restricted 264,319,596 236,174,325 - - 264,319,596 236,174,325 Unrestricted 95,074,877 83,801,172 6,926,211 (1,128,896) 102,001,088 82,672,276 Total Net Position $ 969,266,046 $ 929,738,354 $ 6,926,211 $ (1,128,896) $ 976,192,257 $ 928,609,458 The City of Palmdale's Restricted Net Position of $264,319,596 represents resources that are subject to external restrictions on how they may be used. The Unrestricted Net Position of $102,001,088 m ay be used to meet the government's ongoing obligations to citizens and creditors. The Net Investment in Capital Assets is $609,871,573 which includes capital assets net of accumulated depreciation and reduced by the outstanding debt used to acquire those assets. 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. The flunctuation in Business-type activites is due to Energy for Palmdale's Independent Choice (EPIC).

Fiscal Year 2023-24 was Epic's first full year after implementation. EPIC is Palmdale’s local energy provider operating under California’s Community Choice Aggregation (CCA) program. It enables the city to purchase cleaner electricity on behalf of residents and businesses while Southern California Edison (SCE) continues to handle power delivery, infrastructure maintenance, and billing. EPIC offers cleaner energy options, competitive rates and community investment. Revenues are reinvested into local programs such as EV charging infrastrutucture, solar incentives, and worforce development. 9 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Changes in Net Position
Governmental
Activities
2024
Governmental
Activities
2023
Business-type
Activities
2024
Business-type
Activities
2023
Primary
Government
2024
Primary
Government
2023
Revenues:

Program Revenues:

Charges for Services $ 62,374,710 $ 54,903,286 $ 67,424,984 $ 29,406,756 $ 129,799,694 $ 84,310,042 Operating Grants and
Contributions 16,291,059 19,313,133 - - 16,291,059 19,313,133 Capital Grants and
Contributions 38,302,819 33,403,301 - - 38,302,819 33,403,301 Total Program Revenues 116,968,588 107,619,720 67,424,984 29,406,756 184,393,572 137,026,476 General Revenue:

Property Taxes 31,159,311 28,779,848 - - 31,159,311 28,779,848 Sales and Use Taxes 50,073,637 50,484,537 - - 50,073,637 50,484,537 Other Taxes 15,883,788 14,642,731 - - 15,883,788 14,642,731 Unrestricted Investment
Earnings/(Loss) 17,264,540 1,417,412 - 1,321 17,264,540 1,418,733 Other 9,086,732 2,666,630 - - 9,086,732 2,666,630
Total General Revenues 123,468,008 97,991,158 - 1,321 123,468,008 97,992,479 Total Revenues 240,436,596 205,610,878 67,424,984 29,408,077 307,861,580 235,018,955 Expenses:

General Government 41,711,266 31,726,963 - - 41,711,266 31,726,963 Public Safety 41,218,066 38,133,053 - - 41,218,066 38,133,053 Public Service 84,937,841 75,322,520 - - 84,937,841 75,322,520 Community Development 12,192,625 12,005,237 - - 12,192,625 12,005,237 Culture and Recreation 15,987,459 13,634,111 - - 15,987,459 13,634,111 Health and Welfare 550,969 588,116 - - 550,969 588,116
Transportation - 305,266 - - - 305,266
Interest on Long-term Debt 4,310,678 2,555,060 - - 4,310,678 2,555,060 Palmdale CCA - - 59,369,877 29,459,055 59,369,877 29,459,055 Total Expenses 200,908,904 174,270,326 59,369,877 29,459,055 260,278,781 203,729,381 Transfers - 1,077,918 - (1,077,918) - -
Change in Net Position 39,527,692 32,418,470 8,055,107 (1,128,896) 47,582,799 31,289,574 Net Position, Beginning of Year 929,738,354 897,138,235 (1,128,896) - 928,609,458 897,138,235 Change in Accounting Principle
GASB 96 - 181,649 - - - 181,649
Net Position, Beginning of Year
as restated 929,738,354 897,319,884 (1,128,896) - 928,609,458 897,319,884 Net Position, End of Year $ 969,266,046 $ 929,738,354 $ 6,926,211 $ (1,128,896) $ 976,192,257 $ 928,609,458 10 City of Palmdale
Management's Discussion and Analysis
Governmental Activities. G overnmental activities increased t he City of Palmdale’s net position by $39,527,692 o r 4.25 percent, during the Fiscal Year 2023-24. Key elements of the Governmental activities Net Position increase are as follows:
 Charges for Services increased by $7,471,424 or 13.6 percent primarily due to inflationary pressure.  Operating Grants and Contributions decreased by $3,022,074 or 15.7 percent from the prior fiscal year primarily due to the allocation of American Rescue Plan Act Funds.
 Capital Grants and Contribution proceeds increased b y $4,899,518 o r 14.7 p ercent primarily due capital grants awarded during the year for park improvements and other capital projects.  The City reported increases in Property Taxes of $2,379,463 or 8.3 percent. The improvement can be attributed to an increase in property values within the City and continued restoration of prior Proposition 8 Property Tax reductions.  Other Taxes increased by $1,241,057 or 8.5 percent primarily due to increases in franchise tax, transient occupancy tax, motor vehicle license fees and decreases in business license tax and property transfer tax.  The City’s Unrestricted Investment Earnings increased by $15,847,128 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 $6,420,102 or 240.8 percent due to the sale of City owned property that occurred during the year.
 General Government expenses increased b y $9,984,303, or 31.5 p ercent primarily due to a liability insurance settlement claim paid during the Fiscal Year.
 Public Safety expenses increased $3,085,013 o r 8.1 p ercent. This is largely due to the budgeted increase in the County Sheriff’s contract for services.
 Public Service expenses increased $9,615,321 or 12.8 percent. This is primarily due to City services increasing for programs such as illegal dumping and graffiti abatement.  Community Development expenses increased $187,388 or 1.6 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 $2,353,348 or 17.3 percent primarily due to park and water park repairs and refurbishments.
 Health and Welfare expenses decreased $37,147 or 6.32 percent due to project studies and demolition expenses.  Interest on Long-Term Debt increased by $1,755,618 or 68.7 percent due to the newly issued lease revenue bonds series 2023A and 2023B and cost of issuance.
11 City of Palmdale
Management's Discussion and Analysis
Program Expenses and Program Revenues-Governmental Activities The Statement of Activities reflects total expenses of $200,908,904. Total Revenues in the Statement of Activities for the Year Ended June 30, 2024 were $240,436,596. Of this amount, $116,968,588 of the resources came from Program Revenues, and $123,468,008 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
Business-Type Activities. T otal net position for business-type activities for Palmdale Community Choice Aggregate (Palmdale-CCA) totaled $6,926,211 for the Fiscal Year 2023-24. Key elements of this year’s activity in relation to the prior year are as follows:
 Charges for services were $67,424,984 for the Fiscal Year 2023-24 as the program began its operations starting on October 1, 2022.
 Overall expenses were $59,369,877 as operational expenses officially began in the Fiscal Year 2023-24.

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 2023-24, the City of Palmdale's Governmental Funds reported Combined Ending Fund Balances of $415,889,480, an increase of $64,742,750 over the prior year. The General Fund is the chief operating fund of the City of Palmdale. At the end of Fiscal Year 2023-24, the Total Fund Balance of the General Fund was $102,985,690. Of the Total Fund Balance:
 Nonspendable Fund Balance totaled $1,825,542. “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 $1,173,952; Deposits and Prepaids totaling $651,590.  Restricted Fund Balance totaling $335,220,857. “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 9,763,960.
 Assigned Fund Balance totaling $11,004,526. “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 $303,175 a nd Health Insurance obligations totaling $8,476,981.
 Unassigned Fund Balance t otaling $67,838,555. “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 2023-24 the Unassigned Fund Balance in the General Fund is 78.1 percent of Total Fund Balance for the General Fund and 90.2 percent of Total General Fund Expenditures.

The Housing Authority - Housing Asset Fund has a Fund Balance of $48,391,728 a nd is restricted for low a nd moderate- income housing purposes. This Fund is used to record the assets formally held by the Community Redevelopment Agency Low and Moderate Income Housing Fund. The assets that were approved by the State Department of Finance to be retained by the Low and Moderate Housing Fund were transferred to the Housing Authority-Housing Asset Fund as the City has control of those assets, which may be used in accordance affordable housing provisions of California’s Community Redevelopment Law, as amended by Health and Safety Code 34176.1. The housing asset fund balance decreased by $1,294,697 in the Fiscal Year 2023-24, primarily due to cost and expenditures exceeding program revenue. Program revenues were $799,298, primarily due to gains on investments, and expenditures were $2,333,678 in Fiscal Year 2023-24. 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 2023-24 was at a deficit of $2,462,215. The deficit was reduced by $1,918,226 a s the result of a decline in operating expenditures and capital outlay. 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, 2024, the ARPA fund had total revenues of $11,445,576 and total expenditures of $9,416,435 resulting in an increase in the fund balance of $2,029,141. The fund balance at the beginning of the year was $323,465. The beginning fund balance with this net increase results in a fund balance at fiscal year end of $2,352,606.

Measure AV Fund - For the fiscal year ended June 30, 2024, Measure AV had total revenues of $23,387,916, leases issued of $419,161 and total expenditures of $26,756,688 resulting in a decrease in the fund balance of $2,949,611. The fund balance at the beginning of the year was $24,565,678. The beginning fund balance with this net decrease results in a fund balance at fiscal 16 City of Palmdale
Management's Discussion and Analysis
year end of $21,616,067.

Local Transportation Article 8 - For the fiscal year ended June 30, 2024, Local Transportation Article 8 had no revenues, a transfer out of $23,812 and total expenditures of $7,860,847 resulting in a decrease in the fund balance of $7,884,659. The fund balance at the beginning of the year was $2,720,834. The beginning fund balance with this net decrease results in a fund balance at fiscal year end of ($5,163,825).

General Fund Budgetary Highlights
Differences between original budget and final budget resulted in an increase of appropriations for General Fund expenditures of $5,186,720 a s a result of an adjustment in budget needs in operating expenses primarily in General Government, as well as carry forward of budgets for multi-year Capital Projects. Differences between final amended budget and actual resulted in a $7,716,596 decrease in appropriations and can be briefly summarized as follows:
 $647,617 decrease in General Governmental expenditures as a result of vacancies in various departments.  $2,392,518 decrease in Public Safety expenditures as a result of a multi-year I.T. project implementation.  $3,056,626 decrease in Public Services expenditures primarily due to supply shortages of fleet equipment.  $253,286 decrease in Community Development program expenditures.  $1,421,862 decrease in Parks and Recreation program expenditures (see paragraph below).  $51,903 increase in capital outlay expenditures.
 $3,410 increase in Debt Service Principal and Interest These decreases are due to not only expenditures coming in less than anticipated but also the result of activities that were budgeted but not completed during Fiscal Year 2023-24 ( 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.

Capital Assets and Debt Administration
Capital Assets. The City of Palmdale's investment in capital assets for Governmental Activities as of June 30, 2024, amounts to $667,140,075 ( 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 $3,760,399 in Fiscal Year 2023-24 as compared to prior year 2022-23.

City of Palmdale's Capital Assets (Net of Depreciation) Governmental
Activities 2024
Governmental
Activities 2023
Land and Improvements $ 122,859,592 $ 122,859,592
Intangible Assets 153,090 153,090
Construction in Progress 63,516,507 30,834,212
Buildings and Structures 51,025,604 53,206,455
Improvements Other than Buildings 865,093 1,018,329
Infrastructure 418,238,388 452,568,964
17 City of Palmdale
Management's Discussion and Analysis
City of Palmdale's Capital Assets (Net of Depreciation) Governmental
Activities 2024
Governmental
Activities 2023
Machinery and Equipment 7,937,446 7,407,096
Right to Use Assets 2,544,355 2,852,736
$ 667,140,075 $ 670,900,474
Major capital asset events during the current fiscal year included the following:
 Additions of Improvements other than Building totaling $117,899  Additions of Construction In Progress totaling $38,085,297.  Additions of Machinery and Equipment totaling $1,980,549.  Additions of Infrastructure Improvement totaling $1,942,735.  Additions of Total Accumulated Depreciation totaling $39,384,949.  Deletions of Depreciated and Non-Depreciated Assets totaling $7,142,882.

Additional information on the City of Palmdale's capital assets can be found on page 64, Note 11.

Long-Term Debt. At the end of the current fiscal year, the City of Palmdale had total bonded debt outstanding of $81,161,996.

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 Financing Authority (PFA). The rentals will be used by the 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 2024
Governmental
Activities 2023
Lease Revenue Bonds $ 50,190,000 $ 15,105,000
Mortgage Revenue Bonds 3,540,000 3,640,000
Certificates of Participation 27,250,006 29,438,552
Bond Premiums 181,990 205,834
Loans & Direct Borrowings 11,450,485 12,573,357
Financing Arrangements 3,078,523 3,566,927
Total $ 95,691,004 $ 64,529,670
The City of Palmdale’s Total Long-Term Liabilities total was $95,691,004 o f which $81,161,996 w as Revenue Bonds, Mortgage Revenue Bonds, Certificates of Participation and Bond Premiums as noted on the schedule above. The increase in lease revenue bonds is due to the newly issued series 2023A and 2023B bonds.

The remainder of the debt was comprised of Financial Arrangements Payable for Equipment Leases totaling $3,078,523; Notes Payable for Street Light Acquisition totaling $7,767,112; Section 108 HUD Loan totaling $701,000; HOME Loan totaling $2,850,000; SCE Parks LED Retrofit OBF A-5962 totaling $78,441; SCE LED Retrofit OBF A-5807 totaling $4,042, and SCE 18 City of Palmdale
Management's Discussion and Analysis
LED Retrofit OBF A-7251 totaling $49,890.

Additional information on the City of Palmdale's long-term debt can be found on pages 66-76 Note 13.

Economic Factors and Next Year's Budget
The City took into consideration the following factors in preparing the budget for the 2024-25 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 2023-24 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 w ill continue to impact the City for a number of years. As of July 1, 2018, Los Angeles County consolidated the oversight boards and committees of each agency that contains the Successor Agency to the former Redevelopment Agency to administer the obligations of the former Redevelopment Agency until they are fully satisfied. This board consists of five districts segregated out based on the area maps within Los Angeles County. The City of Palmdale falls under the Fifth District the City and Successor Agency have been responding to the reporting requirement with Los Angeles Consolidated Oversight Board. Additional information can be found in Note 18.

Requests for Information
This financial report is designed to provide a general overview of the City of Palmdale's finances for all those with an interest in the government's finances. Questions concerning any of the information provided in this report, requests for any of the separately issued component unit financial statements or additional financial information should be addressed to the City of Palmdale, 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, 2024
Primary Government
Governmental
Activities
Business-Type
Activities Total
Assets
Cash $ 18,037,970 $ 7,147,445 $ 25,185,415
Investments 338,002,139 - 338,002,139
Accounts Receivable 30,401,693 17,875,541 48,277,234
Interest Receivable 10,663,376 - 10,663,376
Property Tax Receivable 688,961 - 688,961
Due from Other Governmental Units 11,773,684 - 11,773,684 Notes and Liens 35,887,109 - 35,887,109
Deposits and Prepaids 761,590 - 761,590
Internal Balances 11,009,057 (11,009,057) -
Land Held for Development 3,249,136 - 3,249,136
Short-term Lease Receivable 29,337 - 29,337
Restricted Assets:

Cash and Investments 52,865,088 - 52,865,088
Capital Assets and Right to Use Assets:

Not Being Depreciated:

Land 122,859,592 - 122,859,592
Water Credit CFD 16-1 153,090 - 153,090
Construction in Progress 63,516,507 - 63,516,507
Being Depreciated/Amortized, Net of Accumulated Depreciation/Amoritzation:

Buildings and Structures 51,025,604 - 51,025,604
Machinery, Equipment, and Other Improvements 7,937,446 - 7,937,446 Improvements Other than Buildings 865,093 - 865,093
Infrastructure 418,238,388 - 418,238,388
Machinery and Equipment - Right to Use 312,042 - 312,042 SBITA Assets 2,232,313 - 2,232,313
Total Assets 1,180,509,215 14,013,929 1,194,523,144
Deferred Outflows of Resources
Pension Related Amounts 19,307,580 - 19,307,580
Other Postemployment Benefits Related Amounts 97,298 - 97,298 Total Deferred Outflows of Resources 19,404,878 - 19,404,878 See Notes to Financial Statements
20 City of Palmdale
Statement of Net Position
June 30, 2024
Primary Government
Governmental
Activities
Business-Type
Activities Total
Liabilities
Accounts Payable 18,772,340 5,636,386 24,408,726
Accrued Salaries and Employee Benefits 3,033,794 - 3,033,794 Due to Other Governmental Units 18,479 - 18,479
Deposits 9,903,202 1,451,332 11,354,534
Accrued Interest Payable 2,205,051 - 2,205,051
Unearned Revenue 25,777,094 - 25,777,094
Noncurrent Liabilities:

Due within One Year 14,879,798 - 14,879,798
Due in More than One Year 91,719,893 - 91,719,893
Net Pension Liability 63,827,542 - 63,827,542
Net OPEB Liability 159,452 - 159,452
Total Liabilities 230,296,645 7,087,718 237,384,363
Deferred Inflows of Resources
Pension Related Amounts 143,581 - 143,581
Other Postemployment Benefits Related Amounts 179,542 - 179,542 Deferred Inflows from Leases 28,279 - 28,279
Total Deferred inflows of resources 351,402 - 351,402
Net Position
Net Investment in Capital Assets 609,871,573 - 609,871,573 Restricted
Capital Projects 7,256,292 - 7,256,292
Public Safety 17,216,917 - 17,216,917
Public Services 163,518,704 - 163,518,704
Community Development 63,325,807 - 63,325,807
Debt Service 77,780 - 77,780
Culture and Recreation 12,924,096 - 12,924,096
Unrestricted 95,074,877 6,926,211 102,001,088
Total Net Position $ 969,266,046 $ 6,926,211 $ 976,192,257 See Notes to Financial Statements
21 City of Palmdale
Statement of Activities
For the Year Ended June 30, 2024
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 $ 41,711,266 $ 7,563,083 $ 9,484,443 $ - $ (24,663,740) $ - $ (24,663,740) Public Safety 41,218,066 6,555,792 521,701 - (34,140,573) - (34,140,573) Community Development 12,192,625 8,361,154 4,421,009 - 589,538 - 589,538 Cultural and Recreational 15,987,459 7,507,733 94,853 - (8,384,873) - (8,384,873) Health and Welfare 550,969 191,420 - - (359,549) - (359,549) Public Service 84,937,841 32,195,528 1,769,053 38,302,819 (12,670,441) - (12,670,441) Interest on Long-term Debt 4,310,678 - - - (4,310,678) - (4,310,678) Total Governmental Activities 200,908,904 62,374,710 16,291,059 38,302,819 (83,940,316) - (83,940,316) Business-type Activities:

Palmdale CCA 59,369,877 67,424,984 - - - 8,055,107 8,055,107 Total Business-type Activities 59,369,877 67,424,984 - - - 8,055,107 8,055,107 Total Primary Government $ 260,278,781 $ 129,799,694 $ 16,291,059 $ 38,302,819 $ (83,940,316) $ 8,055,107 $ (75,885,209) General revenues and transfers:

Taxes:

Property Taxes $ 31,159,311 $ - $ 31,159,311
Sales and Use Taxes 50,073,637 - 50,073,637
Unrestricted Motor Vehicle in Lieu 209,159 - 209,159
Franchise Taxes 9,581,190 - 9,581,190
Transient Occupancy Taxes 5,096,411 - 5,096,411
Property Transfer Taxes 478,671 - 478,671
Business License Taxes 518,357 - 518,357
Unrestricted Investment Earnings/(Loss) 17,264,540 - 17,264,540 Other 9,086,732 - 9,086,732
Total General Revenues and Transfers 123,468,008 - 123,468,008 Change in Net Position 39,527,692 8,055,107 47,582,799
Net Position - Beginning of Year 929,738,354 (1,128,896) 928,609,458 Net Position - End of Year $ 969,266,046 $ 6,926,211 $ 976,192,257 See Notes to Financial Statements
22 City of Palmdale
Governmental Fund Financial Statements
For the Year Ended June 30, 2024
The General Fund – i s the City’s primary operating fund and has been classified as a major fund. It accounts for all financial resources of the general government that are not already required legally or by sound financial management to be accounted for in another fund.

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

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

Housing Authority (HA) Facilities Fund - This fund is used to account for revenues and expenditures restricted to the operations of three mobile home parks. four apartments and one apartment consisting of two buildings with 4 units each. This fund is a combination of the previous funds 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 - T his 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.

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

See Notes to Financial Statements
23 City of Palmdale
Balance Sheet - Governmental Funds
June 30, 2024
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund Measure AV
Local
Transportation
Article 8
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Assets:

Cash $ 13,227,157 $ - $ 3,161,190 $ - $ - $ - $ 271,962 $ 16,660,309 Investments 64,156,249 9,109,219 1,452,850 15,632,729 21,959,254 1,664,609 224,146,259 338,121,169 Receivables:

Accounts and Interest
Receivable 6,906,140 6,185,366 172,316 266,189 3,984,554 10,395,000 13,134,611 41,044,176 Property Tax Receivable 405,002 - - - - - 283,959 688,961 Due from Other Funds 33,297,267 - - - - - 62 33,297,329 Due from Custodial Funds 329,984 - - - - - - 329,984
Advances Due from Fiduciary
Funds 1,173,952 4,659,777 - - - - 583,859 6,417,588
Due from Other Governmental
Units 5,013,603 - - - - - - 5,013,603
Notes and Liens - 25,354,495 - 48,677 - - 10,483,937 35,887,109 Interfund Promissory Note - 5,278,333 - - - - - 5,278,333 Advances Due from Other Funds 5,000,000 1,186,001 - - - - 3,800,000 9,986,001 Deposits and Prepaid 651,590 - - - - - 110,000 761,590
Short-term Lease Receivable 29,337 - - - - - - 29,337
Restricted Assets:

Investments 9,763,960 3,019,115 - - - - 38,467,678 51,250,753 Cash - - 1,614,335 - - - - 1,614,335
Land Held for Development - 3,249,136 - - - - - 3,249,136 Total Assets $ 139,954,241 $ 58,041,442 $ 6,400,691 $ 15,947,595 $ 25,943,808 $ 12,059,609 $ 291,282,327 $ 549,629,713 Liabilities, Deferred Inflows of
Resources and Fund Balances
Liabilities:

Accounts Payable 10,488,781 48,127 317,206 489,876 4,327,741 369,554 5,597,054 21,638,339 Due to Fiduciary Funds 4,405 - - - - - 1,565 5,970
Due to Other Funds - 12,509 - - - 6,458,880 13,781,360 20,252,749 Self Insurance Liability 6,682,269 - - - - - - 6,682,269 Advances Due to Other Funds - - 1,186,001 - - - 8,800,000 9,986,001 Interfund Promissory Note - - 5,278,333 - - - - 5,278,333 Deposits 5,958,986 - 163,140 - - - 3,781,076 9,903,202
Unearned Revenue 8,667,342 3,880,000 - 13,105,113 - - 124,639 25,777,094 Notes Payable 150,674 - - - - - 3,305 153,979
Total Liabilities 31,952,457 3,940,636 6,944,680 13,594,989 4,327,741 6,828,434 32,088,999 99,677,936 Deferred Inflows of Resources
Unavailable Revenue 4,987,815 5,709,078 - - - 10,395,000 12,942,125 34,034,018 Deferred Inflows Related to
Lease Receivables 28,279 - - - - - - 28,279
Total Deferred Inflows of
Resources 5,016,094 5,709,078 - - - 10,395,000 12,942,125 34,062,297 Fund Balances
Nonspendable 1,825,542 - - - - - - 1,825,542
Restricted 9,763,960 48,391,728 - 2,352,606 21,616,067 - 253,096,496 335,220,857 Assigned 11,004,526 - - - - - - 11,004,526
Unassigned 80,391,662 - (543,989) - - (5,163,825) (6,845,293) 67,838,555 Total Fund Balances
(Deficits) 102,985,690 48,391,728 (543,989) 2,352,606 21,616,067 (5,163,825) 246,251,203 415,889,480 Total Liabilities, Deferred
Inflows of Resources and
Fund Balances $ 139,954,241 $ 58,041,442 $ 6,400,691 $ 15,947,595 $ 25,943,808 $ 12,059,609 $ 291,282,327 $ 549,629,713 See Notes to Financial Statements
24 City of Palmdale
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2024
Fund Balances - Total Governmental Funds $ 415,889,480
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 1,455,247,163
Less Accumulated Amortization and Depreciation (796,949,975) 658,297,188 Accounts receivable not available to pay for current-period expenditures are unavailable in the funds. 34,034,018
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 (2,173,138)
Deferred outflows related to pensions and OPEB benefits are not reported in the Governmental Fund Balance Sheet.

Deferred Outflows Related to Pensions 19,307,580
Deferred Outflows Related to OPEB Benefits 97,298
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 (3,923,242)
Claims Payable (303,175)
Lease Liability (272,911)
Net Pension Liability (63,827,542)
Net OPEB liabilities (159,452)
Financing Leases Payable (716,337)
SCE LED Notes Payable 21,606
Notes Payable (11,318,112)
Bonds & Certificates of Participation Payable (80,982,045) Plus Issuance Premiums (179,951) (161,661,161)
Deferred inflows related to pensions and OPEB benefits are not reported in the Governmental Funds Balance Sheet.

Deferred Inflows Related to Pensions (143,581)
Deferred Inflows Related to OPEB Benefits (179,542)
Internal service fund net position less business-type allocation 5,797,904 Net Position of Governmental Activities $ 969,266,046
See Notes to Financial Statements
25 City of Palmdale
Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds Year Ended June 30, 2024
Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund Measure AV
Local
Transportation
Article 8
Nonmajor
Governmental
Funds
Total
Governmental
Funds
Revenues:

Property Taxes $ 31,244,698 $ - $ - $ - $ - $ - $ - $ 31,244,698 Sales Taxes 27,486,027 - - - 22,587,610 - - 50,073,637
Other Taxes 15,031,221 - - - - - 5,433,884 20,465,105
Subventions and Grants - - - 9,416,435 - - 24,514,011 33,930,446 Park Development Fees - - - - - - 677,938 677,938
Licenses and Permits 6,204,945 - - - - - 94,444 6,299,389 Motor Vehicle License Fees 209,159 - - - - - - 209,159
Fines and Forfeitures 1,345,887 - - - - - 281,659 1,627,546 Special Assessments - - - - - - 22,641,328 22,641,328
Use of Property 1,040,183 - 8,102,810 - - - - 9,142,993 Charges for Current Services 6,837,890 192,392 - - - - 2,786,186 9,816,468 Drainage Fees - - - - - - 5,085,662 5,085,662
Traffic Impact Fees - - - - - - 2,025,899 2,025,899
Facilities Impact Fees - - - - - - 2,028,686 2,028,686
Interfund Interest 119,600 - - - - - 83,962 203,562
Interest 3,313,250 484,919 31,791 1,809,220 496,487 - 5,288,195 11,423,862 Net Increase (Decrease) in Fair Value
of Investments 1,800,459 121,987 19,414 206,721 303,819 - 3,026,205 5,478,605 Developer Contributions - - - - - - 40,941 40,941
State Contributions - - - - - - 3,219,305 3,219,305
Other Agency Contributions - - - - - - 34,852 34,852
Federal Grants 25,000 - - - - - - 25,000
County Contributions - - - - - - 158,083 158,083
Other Revenue 4,803,860 - - 13,200 - - 431,879 5,248,939 Lease Interest 1,082 - - - - - - 1,082
Total Revenues 99,463,261 799,298 8,154,015 11,445,576 23,387,916 - 77,853,119 221,103,185 Expenditures:

Current:

General Government 31,634,743 - - - 318,249 137,716 1,663,852 33,754,560 Public Safety 29,574,122 - - - 9,227,425 - 679,803 39,481,350 Public Services 13,251,684 - - 3,975,204 408,974 7,382,122 16,301,609 41,319,593 Community Development 1,004,334 2,333,678 5,263,269 - 274,343 - 2,158,474 11,034,098 Cultural and Recreational 9,328,598 - - - 1,200,964 - 2,136,884 12,666,446 Health and Welfare - - - - - - 287,609 287,609
Capital Outlay 1,981,113 - 405,164 5,441,231 15,180,483 341,009 21,431,711 44,780,711 Debt Service:

Principal 1,675,826 - 100,000 - 146,250 - 3,869,543 5,791,619 Interest 643,414 - 175,326 - - - 2,305,037 3,123,777
Interfund Interest - - - - - - 203,562 203,562
Cost of Issuance - - - - - - 1,048,943 1,048,943
Total Expenditures 89,093,834 2,333,678 5,943,759 9,416,435 26,756,688 7,860,847 52,087,027 193,492,268 Excess (Deficiency) of Revenues
Over (Under) Expenditures 10,369,427 (1,534,380) 2,210,256 2,029,141 (3,368,772) (7,860,847) 25,766,092 27,610,917 Other Financing Sources (Uses)
Transfers In 4,823,544 292,030 - - - - 8,803,567 13,919,141 Transfers Out (4,783,601) (52,347) (292,030) - - (23,812) (9,267,352) (14,419,141) Premium on Issuance of Long-term
Debt - - - - - - 59,130 59,130
Leases Issued - - - - 419,161 - - 419,161
Issuance of Long-term Debt - - - - - - 37,160,000 37,160,000 Refunding Debt - - - - - - 3,770,000 3,770,000
Payment to Refunding Bond Escrow
Agent - - - - - - (3,776,459) (3,776,459)
Total Other Financing Sources
(Uses) 39,943 239,683 (292,030) - 419,161 (23,812) 36,748,886 37,131,831 Net Change in Fund Balances 10,409,370 (1,294,697) 1,918,226 2,029,141 (2,949,611) (7,884,659) 62,514,978 64,742,748 Fund Balances (Deficit) - Beginning of
Year, as Previously Reported 92,576,320 49,686,425 (2,462,215) 323,465 24,565,678 - 186,457,059 351,146,732 Restatement of fund balance to establish
new fund - - - - - 2,720,834 (2,720,834) -
Fund Balances, Beginning of Year as
Restated 92,576,320 49,686,425 (2,462,215) 323,465 24,565,678 2,720,834 183,736,225 351,146,732 Fund Balances (Deficit) - End of Year $ 102,985,690 $ 48,391,728 $ (543,989) $ 2,352,606 $ 21,616,067 $ (5,163,825) $ 246,251,203 $ 415,889,480 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, 2024
Net Change in Fund Balances - Total Governmental Funds $ 64,742,748 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 35,026,106 Less Depreciation Expense (38,213,265)
Lease Amortization Expense (138,623)
Gain(Loss) on Sale of Capital Assets (490,551) (3,816,333) 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. 12,897,811 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.

Bond Proceeds (37,160,000)
Principal Repayments:

Financing Arrangements 188,523
Lease Payments 178,553
Notes Payable 1,060,997
Bonds & Certificates of Participation Payable 4,287,433 5,715,506 Internal Service Fund Change in Net Position with Business-type Allocation (2,527,551) 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 30,212
Self Insurance Liability Claims Payable 4,032,597
Pension Expense (4,255,886)
OPEB Expense (155,573)
Accrued Interest on Debt (17,076)
Amortization of Bond Premiums 34,778
Payment to Refunding Escrow Agent 6,459 (324,489)
Change in Net Position of Governmental Activities $ 39,527,692 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, 2024
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Property Taxes $ 26,889,450 $ 31,175,190 $ 31,244,698 $ 69,508 Sales Taxes 28,265,620 27,770,810 27,486,027 (284,783)
Other Taxes 12,826,710 14,638,670 15,031,221 392,551
Licenses and Permits 3,418,270 6,646,090 6,204,945 (441,145) Motor Vehicle License Fees 180,000 209,160 209,159 (1)
Fines and Forfeitures 549,800 555,290 1,345,887 790,597 Use of Property 1,032,270 1,035,570 1,040,183 4,613
Charges for Current Services 7,650,710 7,749,480 6,837,890 (911,590) Interfund Interest 119,600 119,600 119,600 -
Interest 800,000 800,000 3,313,250 2,513,250
Net Increase (Decrease) in Fair Value of Investments - - 1,800,459 1,800,459 Federal Grants - - 25,000 25,000
Other Revenue 10,718,320 4,282,030 4,803,860 521,830
Interest Revenue - - 1,082 1,082
Total Revenues 92,450,750 94,981,890 99,463,261 4,481,371 Expenditures:

Current:

General Government 26,945,580 32,282,360 31,634,743 647,617 Public Safety 31,780,780 31,966,640 29,574,122 2,392,518 Public Services 16,572,950 16,308,310 13,251,684 3,056,626 Community Development 1,573,700 1,257,620 1,004,334 253,286 Cultural and Recreational 11,075,100 10,750,460 9,328,598 1,421,862 Capital Outlay 1,405,680 1,929,210 1,981,113 (51,903)
Debt service:

Principal 1,627,860 1,671,340 1,675,826 (4,486)
Interest 642,060 644,490 643,414 1,076
Total Expenditures 91,623,710 96,810,430 89,093,834 7,716,596 Excess (Deficiency) of Revenues Over (Under) Expenditures 827,040 (1,828,540) 10,369,427 12,197,967 Other Financing Sources (Uses):

Transfers In 4,891,800 4,966,150 4,823,544 (142,606)
Transfers Out (4,715,660) (5,514,640) (4,783,601) 731,039 Capital Contributions (1,250,000) (1,250,000) - 1,250,000 Total Other Financing Sources (Uses) (1,073,860) (1,798,490) 39,943 1,838,433 Net Change in Fund Balance (246,820) (3,627,030) 10,409,370 14,036,400 Fund Balance - Beginning of Year 92,576,320 92,576,320 92,576,320 - Fund Balance (Deficit) - End of Year $ 92,329,500 $ 88,949,290 $ 102,985,690 $ 14,036,400 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, 2024
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Charges for Current Services $ 184,930 $ 194,130 $ 192,392 $ (1,738) Interest 675,300 100,000 484,919 384,919
Net Increase (Decrease) in Fair Value of Investments - - 121,987 121,987 Other Revenue 250,000 250,000 - (250,000)
Total Revenues 1,110,230 544,130 799,298 255,168
Expenditures:

Current:

Community Development 5,036,740 4,215,690 2,333,678 1,882,012 Total Expenditures 5,036,740 4,215,690 2,333,678 1,882,012 Excess (Deficiency) of Revenues Over (Under) Expenditures (3,926,510) (3,671,560) (1,534,380) 2,137,180 Other Financing Sources (Uses):

Transfers In 1,355,140 1,358,510 292,030 (1,066,480)
Transfers Out (55,500) (55,500) (52,347) 3,153
Total Other Financing Sources (Uses) 1,299,640 1,303,010 239,683 (1,063,327) Net Change in Fund Balance (2,626,870) (2,368,550) (1,294,697) 1,073,853 Fund Balance (Deficit) - Beginning of Year 49,686,425 49,686,425 49,686,425 - Fund Balance (Deficit) - End of Year $ 47,059,555 $ 47,317,875 $ 48,391,728 $ 1,073,853 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, 2024
Budgeted Amounts
Variance with
Final Budget -
Original Final
Actual
Amounts
Positive
(Negative)
Revenues:

Use of Property $ 7,412,960 $ 8,235,700 $ 8,102,810 $ (132,890) Interest 8,700 8,700 31,791 23,091
Net Increase (Decrease) in Fair Value of Investments - - 19,414 19,414 Total Revenues 7,421,660 8,244,400 8,154,015 (90,385)
Expenditures:

Current:

Community Development 5,943,670 5,817,520 5,263,269 554,251 Capital Outlay 421,000 336,000 405,164 (69,164)
Debt Service:

Principal 99,300 100,000 100,000 -
Interest 183,600 176,200 175,326 874
Total Expenditures 6,647,570 6,429,720 5,943,759 485,961 Excess (Deficiency) of Revenues Over (Under) Expenditures 774,090 1,814,680 2,210,256 395,576 Other Financing Sources (Uses):

Transfers Out (1,360,640) (1,358,510) (292,030) 1,066,480 Total Other Financing Sources (Uses) (1,360,640) (1,358,510) (292,030) 1,066,480 Net Change in Fund Balance (586,550) 456,170 1,918,226 1,462,056 Fund Balance (Deficit) - Beginning of Year (2,462,215) (2,462,215) (2,462,215) - Fund Balance (Deficit) - End of Year $ (3,048,765) $ (2,006,045) $ (543,989) $ 1,462,056 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, 2024
Budgeted Amounts
Variance with
Final Budget -
Original Final Actual
Positive
(Negative)
Revenues
Subventions and Grants $ 12,721,540 $ 15,779,110 $ 9,416,435 $ (6,362,675) Interest 300,000 465,000 1,809,220 1,344,220
Net Increase (Decrease) in Fair Value of Investments - - 206,721 206,721 Other Revenue - 13,200 13,200 -
Total Revenues 13,021,540 16,257,310 11,445,576 (4,811,734) Expenditures
Current
Public Services 7,890,600 8,421,560 3,975,204 4,446,356 Capital Outlay 4,830,000 7,442,550 5,441,231 2,001,319
Total Expenditures 12,720,600 15,864,110 9,416,435 6,447,675 Excess (Deficiency) of Revenues Over Expenditures 300,940 393,200 2,029,141 6,082,297 Net Change in Fund Balance 300,940 393,200 2,029,141 6,082,297 Fund Balance (Deficit) - Beginning of Year 323,465 323,465 323,465 - Fund Balance (Deficit) - End of Year $ 624,405 $ 716,665 $ 2,352,606 $ 6,082,297 See Notes to Financial Statements
31 City of Palmdale
Statement of Revenues and Expenditures and Changes In Fund Balance - Budget and Actual Measure AV Special Revenue Fund
Year Ended June 30, 2024
Budgeted Amounts
Variance with
Final Budget
Original Final Actual
Positive
(Negative)
Revenues
Sales Taxes $ 22,923,000 $ 22,580,000 $ 22,587,610 $ 7,610 Interest - - 496,487 496,487
Net Increase (Decrease) in Fair Value of Investments - - 303,819 303,819 Total Revenues 22,923,000 22,580,000 23,387,916 807,916 Expenditures
Current
General Government 688,140 625,500 318,249 307,251
Public Safety 9,963,320 9,459,330 9,227,425 231,905
Public Services 639,650 461,720 408,974 52,746
Community Development 2,540,000 520,000 274,343 245,657 Cultural and Recreational 1,411,890 1,373,740 1,200,964 172,776 Capital Outlay 18,279,660 21,519,540 15,180,483 6,339,057 Debt Service:

Principal - - 146,250 (146,250)
Total Expenditures 33,522,660 33,959,830 26,756,688 7,203,142 Excess (Deficiency) of Revenues Over Expenditures (10,599,660) (11,379,830) (3,368,772) 9,021,393 Other Financing Sources (Uses)
Proceeds from Financing Related to Leases - - 419,161 419,161 Total other financing sources (uses) - - 419,161 419,161 Net Change in Fund Balance (10,599,660) (11,379,830) (2,949,611) 9,440,554 Fund Balance (Deficit) - Beginning of Year 24,565,678 24,565,678 24,565,678 - Fund Balance (Deficit) - End of Year $ 13,966,018 $ 13,185,848 $ 21,616,067 $ 9,440,554 See Notes to Financial Statements
32 City of Palmdale
Statement of Revenues and Expenditures and Changes In Fund Balance - Budget and Actual Local Transportation Article 8 Special Revenue Fund
Year Ended June 30, 2024
Budgeted Amounts
Variance with
Final Budget
Original Final Actual
Positive
(Negative)
Revenues
Interest $ 10,000 $ 10,000 $ - $ (10,000)
Subventions and Grants 11,536,140 11,536,140 - (11,536,140) Total revenues 11,546,140 11,546,140 - (11,546,140)
Expenditures
Current
General Government 290,540 155,000 137,716 17,284
Public Services 3,640,360 9,537,700 7,382,122 2,155,578 Capital Outlay 1,646,380 4,322,200 341,009 3,981,191
Total expenditures 5,577,280 14,014,900 7,860,847 6,154,053 Excess (Deficiency) of Revenues Over Expenditures 5,968,860 (2,468,760) (7,860,847) (3,219,225) Other Financing Sources (Uses)
Transfers Out (116,200) (116,200) (23,812) 92,388
Total other financing sources (uses) (116,200) (116,200) (23,812) 92,388 Net Change in Fund Balance 5,852,660 (2,584,960) (7,884,659) (3,126,837) Fund Balance (Deficit) - Beginning of Year 2,720,834 2,720,834 2,720,834 - Fund Balance (Deficit) - End of Year $ 8,573,494 $ 135,874 $ (5,163,825) $ (3,126,837) 33 This page intentionally left blank
City of Palmdale
Statement of Net Position
Proprietary Funds
June 30, 2024
Palmdale CCA
Internal Service
Funds
Assets
Current Assets
Cash $ 7,147,445 $ -
Investments - 1,258,631
Receivables 17,875,541 20,893
Total Current Assets 25,022,986 1,279,524
Capital Assets
Depreciable/Amortizable Capital Assets:

Vehicles - 12,793,836
Equipment - 6,259,544
SBITA Assets - 3,568,992
Less Accumulated Depreciation/Amortization - (13,779,485) Capital Assets, Net - 8,842,887
Total Assets $ 25,022,986 $ 10,122,411
Liabilities
Current Liabilities
Accounts Payable $ 5,636,386 $ 167,795
Interest Payable - 31,913
Deposits 1,451,332 -
Subscription Liability - 452,388
Due to Other Funds 10,951,344 2,093,236
Total Current Liabilities 18,039,062 2,745,332
Noncurrent Liabilities
Subscription Liability - 1,636,888
Total Liabilities 18,039,062 4,382,220
Net Position
Net Investment in Capital Assets - 6,753,611
Unrestricted 6,983,924 (1,013,420)
Total Net Position $ 6,983,924 $ 5,740,191
Adjustment reflects consolidation of internal service fund activities related to enterprise funds $ (57,713) Total Net Position of Business-type Activities $ 6,926,211 See Notes to Financial Statements
34 City of Palmdale
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
Year Ended June 30, 2024
Palmdale CCA
Internal Service
Funds
Operating Revenues:

Charges for Current Services $ 67,363,604 $ 2,818,956
Other Revenue 61,380 57,931
Total Operating Revenues 67,424,984 2,876,887
Operating Expenses:

Salaries, Wages and Benefits 190,437 1,781,771
Material and Supplies 5,913 965,791
Utilities 57,602,330 98,892
Administrative 10,289 14,813
Depreciation/Amortization - 1,870,544
Repairs and Maintenance - 1,302,930
Other Expenditures 104,504 2,766
Professional Services 1,387,798 -
Total Operating Expenses 59,301,271 6,037,507
Operating Income (Loss) 8,123,713 (3,160,620)
Nonoperating Revenues (Expenses)
Interest Income - 98,337
Net Realized and Unrealized Gains (Losses) - 60,176
Interest Expense - (94,050)
Total Nonoperating Revenues (Expenses) - 64,463
Transfers In - 500,000
Transfers Out - -
Change in Net Position 8,123,713 (2,596,157)
Net Position - Beginning of Year (1,139,789) 8,336,348
Net Position - End of Year $ 6,983,924 $ 5,740,191
Adjustment reflects the consolidation of internal service fund activity related to enterprise funds $ (68,606) Change in Net Position of Business-type Activities $ 8,055,107 See Notes to Financial Statements
35 City of Palmdale
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2024
Palmdale CCA
Internal Service
Funds
Cash from Operating Activities:

Cash Received from Customers $ 65,696,639 $ -
Cash Received from Interfund Services Provided - 2,849,646 Cash Paid to Employees for Services (190,437) (1,781,771) Cash Paid to Suppliers for Goods and Services (59,639,579) (2,376,042) Cash (Paid)/Received for Other Services - 57,931
Net Cash Provided (Used) by Operating Activities 5,866,623 (1,250,236) Cash from Non Capital Financing Activities:

Transfers from Other Funds - 500,000
Transfers to Other Funds - 374,144
Net Cash Provided (Used) by Noncapital Financing Activities - 874,144 Cash from Capital and Related Financing Activities:

Acquisition and Construction of Capital Assets - (1,397,372) SBITA Arrangements - (753,074)
Net Cash Provided (Used) by Capital and Related Financing Activities - (2,150,446) Cash from Investing Activities:

Gain/(Loss) on Investments - 60,176
Interest Income - 77,444
Change in Investments - 1,888,918
Net Cash Provided (Used) by Investing Activities - 2,026,538 Net Increase/(Decrease) in Cash 5,866,623 (500,000)
Beginning Cash 1,280,822 500,000
Ending Cash $ 7,147,445 $ -
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities
Operating Income/Loss from Operating Activities $ 8,123,713 $ (3,160,620) Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities:

Depreciation and Amortization Expense - 1,870,544
Changes in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable (7,429,301) 30,690 (Increase) Decrease in Due from Others 5,762,337 -
(Increase) Decrease in Prepaid Expenses 19,375 -
(Decrease) Increase in Accounts Payable (709,531) 9,150 (Decrease) Increase in Wages Payable (61,380) -
(Decrease) Increase in Customer Deposits 161,410 -
Net Cash Provided (Used) by Operating Activities: 5,866,623 (1,250,236) Schedule of Non-Cash Investing, Capital and Financing Activities Subscription Liability for the Acquisition of Rights to Use Subscription Asset $ - $ 109,941 See Notes to Financial Statements
36 City of Palmdale
Fiduciary Fund Financial Statements
For the Year Ended June 30, 2024
The City’s Fiduciary Funds are Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds. Custodial Funds, Retiree Health Premium Trust Funds, and Private-purpose Trust Funds are used to account for assets held by the City in a fiduciary capacity for other governmental units, private organizations, individuals and/or other funds.

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

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

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

See Notes to Financial Statements
37 City of Palmdale
Statement of Fiduciary Net Position - Fiduciary Funds
June 30, 2024
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Assets:

Cash $ - $ 12,017,466 $ 14,171
Cash - OPEB Trust Money Market Funds 133 - -
Mutual Funds 4,738,111 - -
Receivables
Property Tax Receivable - - 22,979
Interest Receivable - 75,152 -
Due from Other Governmental Units - 4,405 1,565
Land Held for Development - 146,788 -
Restricted Assets
Cash and Investments - 548,360 7,781,852
Interest Receivable - - 15,845
Capital Assets:

Not Being Depreciated:

Land - 372,073 -
Being Depreciated, Net of Accumulated Depreciation:

Buildings and Structures - 167,198 -
Total Assets $ 4,738,244 $ 13,331,442 $ 7,836,412
Deferred Outflows of Resources
Deferred Loss on Refunding - 1,623,586 -
Liabilities:

Accounts Payable - 257,006 27,859
Advances Due to General Fund - 1,173,952 329,984
Advances Due to City of Palmdale - 4,659,777 583,859
Deposits - - 84,707
Interest Payable - 912,656 -
Long-term Liabilities:

Due within One Year - 8,436,524 -
Due in More than One Year - 54,288,879 -
Total Liabilities - 69,728,794 1,026,409
Net Position
Restricted:

OPEB Benefits 4,738,244 - -
Redevelopment Dissolution - (54,773,766) -
Held on Behalf of Others - - 6,810,003
Total Net Position (Deficit) $ 4,738,244 $ (54,773,766) $ 6,810,003 See Notes to Financial Statements
38 City of Palmdale
Statement of Changes in Fiduciary Net Position
Year Ended June 30, 2024
OPEB Trust
Funds
Successor
Agency Private
Purpose Trust
Funds Custodial
Additions:

Employer Contributions to Retiree Medical Trust $ 109,000 $ - $ - Property Taxes - 70,360,649 -
Other Taxes - - 3,578,304
Investment and Interest Income 200,002 325,579 107,767
Net Realized and Unrealized Gains (Losses) 195,878 167,034 52,589 Total Additions 504,880 70,853,262 3,738,660
Deductions:

Benefits Paid to Participants and Expenses 290,676 - -
Administrative Expense - - 1,046,444
Community Development - 1,547,455 -
Intergovernmental - Tax Sharing - 61,084,264 -
Depreciation/Amortization - 8,763 -
Interest Expense - 1,828,085 987,764
Principal Payments on Long-term Debt - - 1,351,094
Total Deductions 290,676 64,468,567 3,385,302
Changes in Net Position 214,204 6,384,695 353,358
Net Position (Deficit) at Beginning of Year 4,524,040 (61,158,461) 6,456,645 Net Position (Deficit) at End of Year $ 4,738,244 $ (54,773,766) $ 6,810,003 See Notes to Financial Statements
39 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
June 30, 2024
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 Financing Authority (Authority), 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 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, 38250 Sierra Highway, Suite D, Palmdale, California 93550.

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

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

The Industrial Development Authority was organized under Section 91500 et seq. of the California Government Code on 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 40 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
A. Description of the Reporting Entity
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, 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.

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 41 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus Government-Wide Financial Statements
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 Fund, American Rescue Plan Act Fund, and Local Transportation Article 8 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 104 - 106.

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

Enterprise f unds are separate accounting and financial reporting mechanisms for which revenues and expenditures are 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. O perating 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 a dministrative 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. 42 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
B. Financial Statement Presentation, Basis of Accounting, and Measurement Focus 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. Fiduciary fund financial statements are reported using the economic resources measure focus and the full 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 w hich expenditures may not legally exceed appropriations) is the category level. The category level includes personnel, training and meetings, operating expenditures, contingency, debt service, and capital outlay. Supplemental appropriations during the year must be approved by the City Council if they are over $100,000 or between funds, except for shifts in appropriations relating to personnel changes that may be done administratively by the City Manager. The City Manager can approve budget transfers up to $100,000 within a fund. Supplemental appropriations were made during the year and are reflected in the budgeted numbers contained in the accompanying financial statements.

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

A budgetary report-comparing budget to actual at the category level has been issued for the General Fund, Special Revenue Funds, and Debt Service Funds. General Fund and major special revenue funds are audited. Budgetary reports are not prepared for the Capital Projects Funds. This budgetary report is available from the City’s Finance Department, 38300 Sierra Highway, Suite D, Palmdale, California 93550, 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 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, 2024. 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, 2024. 43 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
Cash and Investments
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.

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
44 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
J. Capital Assets
Asset 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 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 45 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
N. Other Postemployment Benefits (OPEB)
related to OPEB, and OPEB expense, information about the fiduciary net position of the City of Palmdale Retiree Benefits Plan (“OPEB Plan”) and additions to/deductions from OPEB Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. For this purpose, the OPEB Plan recognizes benefits w hen due and payable in accordance with the benefit terms. Investments are reported at fair value, except for m oney market investments, which are reported at amortized cost.

Gains and losses related to changes in total OPEB 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 w ould be either 1) externally imposed by creditors (such as through debt covenants), grantors, contributors, or law s or regulations of other governments or 2) imposed by law through constitutional provisions or enabling legislation.

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

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

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

When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned, or unassigned) fund balances are available, the City’s policy is to first apply restricted fund balance. When expenditures are incurred for 46 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
P. Fund Balance
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, 2024 in the amount indicated:

Major Special Revenue Funds:

Housing Authority Facilities Fund $ (543,989)
Non-Major Special Revenue Funds:

Federal Funds $ (5,557,914)
Federal Jobs Program (13,067)
Federal Home ARP Fund (2,140)
Measure A LA County Parks (6,350)
Measure R (499,098)
Measure M (141,310)
SAVES (8,511)
State Grants Fund (616,903)
Management anticipates that these deficits will be resolved in future years as outstanding reimbursable grants are received and as additional operating revenues become available. It is anticipated occupancy levels at the Mobile Home Parks and Apartments will continue to remain high and consistent and continue to reduce the deficit in the Housing Authority Facilities Fund.

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

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

Total
General
Government
Public
Safety
Public
Services
Health and
Welfare
Governmental Funds:

Community Development Block Grant $ 15,232 $ - $ 5,320 $ 1,172 $ 8,740 Citywide Maintenance and Service Fund 6,413 6,413 - - - Federal Funds - Special Revenue Fund 15,008 - - 15,008 - Fire Facilities Impact - Special Revenue
Fund 8,721 8,721 - - -
Gas Tax - Special Revenue Fund 18,740 - - 18,740 -
Measure R - Special Revenue Fund 37,302 - - 37,302 -
Measure R - Local Returns 77,026 - - 77,026 -
Measure M - Special Revenue Fund 19,622 - - 19,622 -
Measure M Local return 18,173 - - 18,173 -
Misc. Grant/Developer Contributions 1,252,466 1,236,497 - 15,969 - Park Development - Special Revenue Fund 99,366 - - 99,366 - Proposition C - Special Revenue Fund 19,730 - - 19,730 - Prop C Local Return 93,930 - - 93,930 -
47 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
R. Expenditures Exceeding Appropriations
Total
General
Government
Public
Safety
Public
Services
Health and
Welfare
Road Maintenance and Rehab - Special
Revenue Fund 34,512 - - 34,512 -
Sewer Upgrade - Special Revenue Fund 137 - - 137 -
Traffic Impact - Special Revenue Fund 16,805 - - 16,805 - States Grants Fund - Special Revenue Fund 19,571 - - 19,571 - CFD/Assessment Districts-Capital Projects
Fund 1,686 936 - 750 -
Total Excess of Expenditures Over
Appropriations $ 1,754,440 $ 1,252,567 $ 5,320 $ 487,813 $ 8,740 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 w hich the taxes are levied. Taxes are levied on both real and personal property, as it exists on that date. Secured property taxes are levied against real property and are due and payable in two equal installments. The first installment is due on November 1 and becomes delinquent if not paid by December 10. The second installment is due on February 1 and becomes delinquent if not paid by April 10. Unsecured personal property taxes are due on July 1 each year. These taxes become delinquent if not paid by August 31st.

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

U. 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 48 City of Palmdale
Notes to the Financial Statements
June 30, 2024
1 - Summary of Significant Accounting Policies
U. Leases
incremental borrowing rate to calculate the present value of expected lease payments.

V. 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, 2024 are classified in the accompanying financial statements as follows:

Statement of Net Position:

Cash $ 25,185,415
Investments 338,002,139
Restricted Cash and Investments 52,865,088
Total 416,052,642
Statement of Fiduciary Net Position:

Cash 12,031,637
Cash - OPEB Trust Money Market Funds 133
Investments - OPEB Trust Mutual Funds 4,738,111
Restricted Cash and Investments 8,330,212
Total 25,100,093
Total Cash and Investments $ 441,152,735
Cash and investments as of June 30, 2024 consist of the following:

Cash on Hand $ 23,567
Deposits with Financial Institutions 22,065,721
Investments:

Pooled $ 349,184,331
Held by trustees 55,376,912
Held by trustees - PARS section 115
Money Market Funds 396,417
Mutual Funds 9,367,543
Held by OPEB Trust Money Market Fund 133
Held by OPEB Trust Mutual Fund 4,738,111
49 City of Palmdale
Notes to the Financial Statements
June 30, 2024
2 -Cash and Investments
Total 419,063,447
Total Cash and Investments $ 441,152,735
A. Investments Authorized by the California Government Code and the City of Palmdale’s Investment Policy The table below identifies the investment types that are authorized for the City of Palmdale, for the OPEB Trust Fund, and the Pension Stabilization Trust Fund by the California Government Code (or the City of Palmdale’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City of Palmdale’s investment policy, where more restrictive) that addresses interest rate risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements w ith the City of Palmdale or cash deposits held in restricted accounts, rather than the general provisions of the California Government Code or the City of Palmdale’s investment policy.

Authorized
Investment Type
Maximum
Maturity
Maximum
Percentage
of Portfolio*
Maximum
Investment
in One Issuer**
U.S. Treasury Obligation 5 years None None
U.S. Federal Agency Securities 5 Years None None
Banker's Acceptance 180 days 40% 2%
Municipal Obligations 5 years 10% 15%
Medium Term Corporate Notes 5 years 15% None
Negotiable Certificates of Deposit 5 years 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, 2024, a demand deposit of $3,897,015 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 50 City of Palmdale
Notes to the Financial Statements
June 30, 2024
2 -Cash and Investments
C. Disclosures Relating to Interest Rate Risk
investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

Information about the sensitivity of the fair values of the City of Palmdale’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City of Palmdale’s Investments by Maturity.

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

Treasury Notes $ 58,100,402 $ 22,569,751 $ 23,566,400 $ 11,964,251 Federal Agency Securities 109,112,207 40,507,299 27,917,258 40,687,650 Negotiable Certificates of Deposit 3,407,880 - 1,467,513 1,940,367 Local Agency Investment Fund 122,182,027 122,182,027 - - CAMP Investment Fund 47,472,526 47,472,526 - -
Corporate Notes 8,247,942 - 5,360,577 2,887,365
UBS Money Market Funds 661,347 661,347 - -
Held by Trustees
Money Market Mutual Funds 47,256,462 47,256,462 - -
PARS Section 115
Money Market Funds 396,417 396,417 - -
Mutual Funds 9,367,543 9,367,543 - -
OPEB Trust Money Market Funds 133 133 - -
OPEB Trust Mutual Funds 4,738,111 4,738,111 - -
Local Agency Investment Fund 8,120,450 8,120,450 - -
Total Investments by Maturity $ 419,063,447 $ 303,272,066 $ 58,311,748 $ 57,479,633 D. Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below i s the minimum rating required by (where applicable) the California Government Code, the City of Palmdale’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type:
51 City of Palmdale
Notes to the Financial Statements
June 30, 2024
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 $ 58,100,402 N/A $ - $ 58,100,402 $ -
Federal Agency Securities 109,112,207 N/A - 109,112,207 - Negotiable Certificates of Deposit 3,407,880 N/A 3,407,880 - - Local Agency Investment Pool 122,182,027 N/A 122,182,027 - - CAMP Investment Fund 47,472,526 N/A 47,472,526 - -
Corporate Notes 8,247,942 A - 8,247,942 -
UBS Money Market Funds 661,347 N/A 661,347 - -
Held by Trustees:

Money Market Funds 47,256,462 A - - 47,256,462
PARS Section 115
Money Market Funds 396,417 N/A 396,417 - -
Mutual Funds 9,367,543 N/A 9,367,543 - -
OPEB Trust Money Market Funds 133 N/A 133 - -
OPEB Trust Mutual Funds 4,738,111 N/A 4,738,111 - -
Local Agency Investment Fund 8,120,450 N/A 8,120,450 - - $ 419,063,447 $ 196,346,434 $ 175,460,551 $ 47,256,462
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 $ 45,737,095 Federal Farm Credit Bank Federal Agency Securities 41,228,393 F. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or w ill not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City of Palmdale’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits.

As of June 30, 2024, a total of $14,813,806 o f City of Palmdale’s deposits with financial institutions in excess of federal depository insurance limits was held in collateralized accounts, but not in the name of the City. In addition, as of June 30, 2024, 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
June 30, 2024
2 -Cash and Investments
F. Custodial Credit Risk
Investment Type Reported Amount
Negotiable Certificates of Deposit $ 3,407,880
Treasury Notes 58,100,402
Federal Agency Securities 109,112,207
Corporate Notes 8,247,942
G. Investment in State Investment Pool
The City of Palmdale is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City of Palmdale’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City of Palmdale’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on the amortized cost basis. LAIF is not rated and not registered with the Securities and Exchange Commission (SEC).

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

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
June 30, 2024
2 -Cash and Investments
I. Disclosures Relating to Fair Value of Investments
As of June 30, 2024, the City has the following recurring fair value measurements:

Fair Value Measurements on A Recurring Basis Using
Balance
June 30, 2024
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 $ 58,100,402 $ - $ 58,100,402 $ -
Federal Agency Securities 109,112,207 - 109,112,207 -
Negotiable Certificates of Deposit 3,407,880 - 3,407,880 - Corporate Notes 8,247,942 - 8,247,942 -
PARS Section 115 - Mutual Funds 9,367,543 9,367,543 - - OPEB Trust Mutual Funds 4,738,111 4,738,111 - -
Total Investments by fair value level 192,974,085 $ 14,105,654 $ 178,868,431 $ - Investments Measured Using Uncategorized Inputs:

Local Agency Investment Fund 130,302,477
CAMP Investment Fund 47,472,526
UBS Money Market Funds 661,347
Money Market Mutual Funds 47,256,462
PARS Section 115 - Money Market Funds 396,417
OPEB Trust - Money Market Mutual Funds 133
Total Investments - Uncategorized Inputs 226,089,362
Total Investments $ 419,063,447
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.

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 $683,234, the ending balance as of June 30, 2024 is $9,763,960.
54 City of Palmdale
Notes to the Financial Statements
June 30, 2024
3 -Interfund Transfers
Interfund transfers for the year ended June 30, 2024 were as follows:

Transfer To Transfer From Amount
General Fund Non-Major Governmental Funds $ 4,771,197
General Fund Housing Asset Fund 52,347
Non-Major Governmental Funds General Fund 4,283,599
Non-Major Governmental Funds Non-Major Governmental Funds 4,496,156 Non-Major Governmental Funds Local Transportation Article 8 Fund 23,812 Housing Asset Fund Housing Authority Fund 292,030
Internal Service Funds General Fund 500,000
Total interfund transfers $ 14,419,141
Transfers resulted from the following transactions:

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

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

3. Using unrestricted revenues collected in the general fund to finance various programs accounted for in other funds in accordance with budgetary authorizations.
4 -Interfund Assets/Liabilities
A. Due From/To Other Funds as of June 30, 2024 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 $ 13,781,298
Housing Asset Fund 12,509
Palmdale CCA Fund 10,951,344
Local Transportation Article 8 Fund 6,458,880 -
Internal service Funds 2,093,236
Non-Major Governmental Funds Non-Major Governmental Funds 62 Total due to/due from other funds $ 33,297,329
B. Advances Due From/To Fiduciary Funds as of June 30, 2024 The amounts payable to the General Fund and due from Fiduciary Funds relate to administrative fees that are scheduled to be collected in the subsequent year and total $329,984.

C. Advances Due From/To Drainage Funds as of June 30, 2024 Beginning in fiscal year ending June 30, 1993, advances were made from the Amargosa, Portal Ridge, and Pearland Drainage funds to cover shortfalls in funding in the Anaverde Drainage Funds. Government Code Section 66006 stipulates that developer impact fees shall be kept in a separate fund and earn interest until expended for the purpose for which the fee was originally collected. In accordance with this Government Code Section, interest has been accrued on a monthly basis with a rate equal to 55 City of Palmdale
Notes to the Financial Statements
June 30, 2024
4 -Interfund Assets/Liabilities
C. Advances Due From/To Drainage Funds as of June 30, 2024 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 $ 3,494,008
Anaverde Drainage (3,210,058)
Littlerock Drainage 44,076
Portal Ridge Drainage 105,602
Pearland Drainage 15,086,338
Big Rock Drainage (2,010)
$ 15,517,956
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 $ 1,173,952
Housing Asset Fund Private Purpose Trust Funds 4,659,777 Total Major Funds 5,833,729
Non-Major Governmental Funds Custodial Funds 583,859
$ 6,417,588
56 City of Palmdale
Notes to the Financial Statements
June 30, 2024
4 -Interfund Assets/Liabilities
E. Interfund Promissory Note Receivable and Payable as of June 30, 2024 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 2023-2024, the Housing Authority Facilities fund paid $1,075,000 p rincipal and $277,989 i nterest for a total of $1,352,989 t o the Housing Authority Housing Asset Fund. The balance of the Promissory Note as of June 30, 2024 is $5,278,333.

F. Advances Due to/Due From Other Funds as of June 30, 2024 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 Fund 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 over a period of 27 years. Payments w ill 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
June 30, 2024
5 -Notes Receivable and Liens
The City has the following Note Receivables outstanding at the end of June 30, 2024:

Major Funds
Housing Authority Fund:

Housing Asset Fund $ 25,354,495
ARPA Fund 48,677
Total Major Governmental Funds 25,403,172
Non-Major Governmental Funds
Federal Home Program 7,670,389
CDBG/NSP Program 2,013,548
Housing Authority Fund 800,000
Total Non-Major Governmental Funds 10,483,937
Total $ 35,887,109
A. Federal Home Program Loans
The City provides loans to developers for development and rehabilitation of affordable housing. All loan payments w ill be used to pay for future program expenditures. The balances of the loans were $7,670,389 as of June 30, 2024.

B. 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 $2,013,548 as of June 30, 2024.

C. 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 $25,354,495 as of June 30, 2024. 6 -Lease Receivables
As of year-end June 30, 2024, 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, 2024 the outstanding leases receivable total $29,337. 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, 2024 is $28,279. The City will be systematically recognizing revenue over the terms of the lease, and in the current fiscal year, the City recognized $44,140 in lease principal and $1,082 in interest.
58 City of Palmdale
Notes to the Financial Statements
June 30, 2024
7 -Fund Balance Classification
The Fund Balances at June 30, 2024 were classified as follows:

Special Revenue Funds
General Fund
HA Housing
Asset Fund
Housing
Authority
Facilities Fund ARPA Fund Measure AV
Local
Transportation
Article 8
Other
Governmental
Funds
Nonspendable:

Advances $ 1,173,952 $ - $ - $ - $ - $ - $ -
Deposits and Prepaids 651,590 - - - - - -
Total Nonspendable 1,825,542 - - - - - -
Restricted:

General Government - - - - 21,616,067 - -
Pension Stabilization Program 9,763,960 - - - - - -
Debt Service - - - - - - 35,168,016
Public Safety Programs - - - - - - 13,075,572
Public Services Programs - - - - - - 182,130,232
Low and Moderate Income Housing - 48,391,728 - - - - 11,752,352 Recreation and Culture Programs - - - - - - 9,951,256
Health and Welfare Programs - - - 2,352,606 - - 600,820 Street Projects and Maintenance - - - - - - 418,248
Total Restricted 9,763,960 48,391,728 - 2,352,606 21,616,067 - 253,096,496 Assigned:

Compensated Absences 2,224,370 - - - - - -
Self Insurance Claims 303,175 - - - - - -
Health Insurance 8,476,981 - - - - - -
Total Assigned 11,004,526 - - - - - -
Unassigned Fund Balance 80,391,662 - (543,989) - - (5,163,825) (6,845,293) Total Fund Balance (Deficit) $ 102,985,690 $ 48,391,728 $ (543,989) $ 2,352,606 $ 21,616,067 $ (5,163,825) $ 246,251,203 Total
Governmental
Funds
Nonspendable:

Advances $ 1,173,952
Deposits and Prepaids 651,590
Total Nonspendable 1,825,542
Restricted:

General Government 21,616,067
Pension Stabilization Program 9,763,960
Debt Service 35,168,016
Public Safety Programs 13,075,572
Public Services Programs 182,130,232
Low and Moderate Income Housing 60,144,080
Recreation and Culture Programs 9,951,256
Health and Welfare Programs 2,953,426
Street Projects and Maintenance 418,248
Total Restricted 335,220,857
Assigned:

Compensated Absences 2,224,370
Self Insurance Claims 303,175
Health Insurance 8,476,981
Total Assigned 11,004,526
Unassigned Fund Balance 67,838,555
Total Fund Balance (Deficit) $ 415,889,480
59 City of Palmdale
Notes to the Financial Statements
June 30, 2024
8 -Joint Ventures
A. Antelope Valley Transit Authority
The City of Palmdale is a member of the Antelope Valley Transit Authority (Authority), a joint powers authority of the County of Los Angeles and the cities of Palmdale and Lancaster. The Authority was formed to provide public transit service to Palmdale and Lancaster. The governing board consists of one person from each member agency. Each member has one vote.

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

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

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

Separate financial statements of the Authority are available from the City of Palmdale Finance Department at 38250 Sierra Highway, 2nd floor, Palmdale, California 93550.
60 City of Palmdale
Notes to the Financial Statements
June 30, 2024
9 -Risk Management
The City is self-insured and exposed to various risk of loss related to general liability and health, dental, and vision needs of employees. Under the City’s risk management program, the City retains the risk for general liability claims for the first $500,000 per occurrence and carries excess general liability and automobile insurance with total policy limits of $35,000,000.

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

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

During fiscal year 2023-2024, $941,403 was incurred in liability administrative costs. On June 30, 2024, general liability claims totaled $6,205,175. The portion estimated to be due within one year is $5,902,000 a nd is calculated based on a three-year average of settlements paid during the fiscal year. These accruals, based on the results of an actuarial study and the Risk Management department, represent estimates of amounts to be paid for reported claims and incurred but unreported claims.

During fiscal year 2023-2024, $1,545,123 was paid in health claims and $477,833 was paid in health administrative costs. On June 30, 2024, $690,708 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, 2024.

During fiscal year 2023-2024, $218,677 w as paid in dental and vision claims and $22,441 w as paid in dental and vision administrative costs. On June 30, 2024, $89,561 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, 2024, 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. 61 City of Palmdale
Notes to the Financial Statements
June 30, 2024
9 -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, 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 of June 30, 2023 6,014,772 865,071 96,200 6,976,043 Claims Incurred 941,403 1,370,760 212,038 2,524,201
Claims Paid (751,000) (1,545,123) (218,677) (2,514,800) Balance as of June 30, 2024 $ 6,205,175 $ 690,708 $ 89,561 $ 6,985,444 10 - Unearned Revenue and Unavailable Revenue
Unearned Revenue - G overnmental Funds and governmental activities report unearned revenues on the balance sheet in connection with resources that have been received, but not yet earned. Accordingly, this type of unearned revenue is also reported on the Statement of Net Position. At the end of the current fiscal year, the components of unearned revenue were as follows:

General Fund
Fees Received for Recreational Program Not Yet Held $ 167,342 Franchise Tax Received in Advance 8,500,000
Total General Fund Unearned Revenue 8,667,342
American Rescue Plan Act Fund
U.S. Treasury Funds Received for Coronavirus Aid 13,105,113 Housing Asset Fund:

Contract Revenues Received in Advance 3,880,000
Misc Grants/Developer Contributions 124,639
Total Unearned Revenues for Governmental Funds $ 25,777,094 62 City of Palmdale
Notes to the Financial Statements
June 30, 2024
10 - 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 2023-24, the components of Unavailable Revenue resulting from grant revenue not received with 60-day accrual period were detailed as follows:

Major Funds
General Fund $ 4,987,815
HA Housing Asset Fund 5,709,078
Local Transportation Article 8 10,395,000
Non-Major Special Revenue Funds
Community Development Block Grant 26,267
Federal Funds 5,181,832
Federal Home Program 3,086,226
Measure R 1,754,978
Misc. Grants/ Developer Contributions 1,610,104
Proposition C 983,640
Measure M 299,078
Total Unavailable Revenue for Governmental Funds $ 34,034,018 63 City of Palmdale
Notes to the Financial Statements
June 30, 2024
11 - Capital Assets and Right to Use Assets
Capital Assets of the City for year ended June 30, 2024, consisted of the following:

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

Land and Improvements $ 122,859,592 $ - $ - $ 122,859,592 CFD 16-1 Water Credits 153,090 - - 153,090
Construction in Progress 30,834,212 38,085,297 (5,403,002) 63,516,507 Total Capital Assets, Not being Depreciated 153,846,894 38,085,297 (5,403,002) 186,529,189 Capital Assets, Being Depreciated:

Buildings and Structures 82,931,457 - (1,045,958) 81,885,499 Improvements Other than Buildings 2,736,982 117,899 - 2,854,881 Machinery and Equipment 21,701,891 1,980,549 (393,922) 23,288,518 Infrastructure 1,177,598,606 1,942,735 (300,000) 1,179,241,341 Total Capital Assets, Being Depreciated 1,284,968,936 4,041,183 (1,739,880) 1,287,270,239 Less: Accumulated Depreciation for:

Buildings and Structures 29,725,002 1,690,300 (555,407) 30,859,895 Improvements Other than Buildings 1,718,653 271,135 - 1,989,788 Machinery and Equipment 14,294,795 1,450,203 (393,926) 15,351,072 Infrastructure 725,029,642 35,973,311 - 761,002,953
Total Accumulated Depreciation 770,768,092 39,384,949 (949,333) 809,203,708 Total Capital Assets, Being Depreciated, Net 514,200,844 (35,343,766) (790,547) 478,066,531 Right to Use Assets:

SBITA Assets 3,459,051 109,941 - 3,568,992
Machinery and Equipment - Right to Use $ 81,954 $ 419,161 $ - $ 501,115 Total Right to Use 3,541,005 529,102 - 4,070,107
Accumulated Amortization
SBITA Assets 637,819 698,860 - 1,336,679
Machinery and Equipment $ 50,450 $ 138,623 $ - $ 189,073 Total Accumulated Amortization 688,269 837,483 - 1,525,752 Total Right to Use Assets, Net $ 2,852,736 $ (308,381) $ - $ 2,544,355 Total Governmental Activities Capital Assets,
Net $ 670,900,474 $ 2,433,150 $ (6,193,549) $ 667,140,075 Note: Amortization expense on SBITA Assets and machinery and equipment of $698,860 and $138,623 is charged to Internal Service Funds and the governmental public safety function, respectively. 64 City of Palmdale
Notes to the Financial Statements
June 30, 2024
11 - Capital Assets and Right to Use Assets
For the year ended June 30, 2024, depreciation on capital assets was charged to the governmental functions as follows:

Governmental Function
Depreciation
Expense
General Government $ 690,098
Cultural and Recreational 2,415,537
Community Development 829,652
Public Safety 29,664
Public Services 34,248,314
Internal Service Funds 1,171,684
Total Depreciation Expense $ 39,384,949
12 - 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, 2024, amounted to $109,619 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
2025 $ 105,269 $ 4,352 109,621
2026 107,677 1,943 109,620
2027 27,393 103 27,496
Total Value of Minimum Lease Payments $ 240,339 $ 6,398 $ 246,737 65 City of Palmdale
Notes to the Financial Statements
June 30, 2024
12 - 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, 2024, amounted to $105,246 and are sourced by the General Fund. In the Event of Default, Capital One Public Funding may repossess the equipment but may not accelerate the entire balance outstanding due and payable.

For Year Ending Principal Interest Total
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
2029 101,745 3,500 105,245
Total Value of Minimum Lease Payments $ 475,997 $ 50,230 $ 526,227 13 - 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, 2024, is $701,000.

Year Ending Principal Interest Total
2025 $ 333,000 $ 14,518 $ 347,518
2026 368,000 5,038 373,038
Totals $ 701,000 $ 19,556 $ 720,556
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, 2024, no residual receipts from the project have been received from developer. Interest on the note is equal to 3 percent.

If any installment under the Promissory Note is not paid when due or any default occurs in the agreements contained in the Note or the Loan Documents, the entire principal amount outstanding and any accrued interest thereon shall become due and payable 66 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
A. Notes Payable
immediately. The outstanding balance as of June 30, 2024, is $2,850,000 with $1,508,938 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.
67 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - 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
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 $ 7,767,112 $ 898,242 $ 8,665,354
2017 On Bill Financing (OBF) – T he City of Palmdale and Southern California Edison (“SCE”) entered into the Energy Management Solution Incentive Application (“EMS Agreement”) with the California Public Utilities Commission (“CPUC”) in May 2014. After submission of the application, the City has completed installation of energy efficient equipment (“Equipment”) at the sites as set forth in the EMS Agreement. In Decision 12-11-015, the CPUC authorized SCE to provide zero-percent financing for the installation of Equipment, which is to be repaid over a specified period through the City’s electric utility bill through a process called On-Bill Financing (“OBF”).

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

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

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

The outstanding balance as of June 30, 2024 is $78,441.

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, 2024 is $49,890. 68 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
A. Notes Payable
Year Ending Principal A Interest Total Year Ending Principal B Interest Total 2025 $ 23,016 $ - $ 23,016 2025 $ 20,404 $ - $ 20,404
2026 23,016 - 23,016 2026 20,404 - 20,404
2027 23,016 - 23,016 2027 9,082 - 9,082
2028 9,393 - 9,393 2028 - - -
Total $ 78,441 $ - $ 78,441 Total 49,890 - $ 49,890
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, 2024 are as follows:

A. Street Lighting Retrofitting On-Bill Financing Agreement OBF A-5807 for $100,761 with an outstanding balance of $4,042 as of June 30, 2024
Year Ending Principal Interest Total
2025 $ 4,042 $ - $ 4,042
B. Revenue Bonds
2012 Lease Revenue Bond Payable (Defeased and Paid in Full) - On December 19, 2012, the Authority issued $8,695,000 of Lease Refunding Revenue Bonds (the 2012 Bonds). Interest was payable semi-annually on March 1 and September 1 at rates ranging from 2.00% to 4.00% per annum. Principal payments were scheduled annually each September 1, from 2015 through 2029.

The proceeds from the 2012 Bonds were used to refinance an existing lease obligation, refund related certificates of participation, fund a bond reserve, and cover issuance costs. Under the lease agreement, the City made semi-annual base rental payments to the Authority, which were used to service the debt. Legal title to the facilities was held by the Authority for the benefit of bondholders during the lease term, with title transferring to the City upon full repayment.

In fiscal year 2023-24, the 2012 Bonds were refunded and defeased, and the outstanding balance was paid in full. As a result, the City has no further obligation under the 2012 Bonds, and the lease agreement associated with this debt has been terminated. 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 69 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
B. Revenue Bonds
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
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 125,000 153,615 278,615
2030-2034 700,000 684,085 1,384,085
2035-2039 875,000 506,840 1,381,840
2040-2044 1,130,000 254,100 1,384,100
2045 265,000 13,913 278,913
Totals $ 3,540,000 $ 2,273,869 $ 5,813,869
70 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - 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
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 965,000 194,163 1,159,163
2030-2034 5,110,000 368,444 5,478,444
Totals $ 9,260,000 $ 1,771,884 $ 11,031,884
71 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
B. Revenue Bonds
2023 Lease Revenue Bonds Series 2023A and 2023B ($40,930,000) -The City of Palmdale issued Lease Revenue Bonds, Series 2023A and 2023B, on November 30, 2023, through the Palmdale Finance Authority to finance and refinance the acquisition of real property for economic development initiatives. The Series 2023A Bonds were issued in the amount of $26,370,000 and carry an interest rate ranging from 4.125% to 5% and will mature on June 1, 2053. Scheduled principal payments will be made annually, based on the debt service schedule, beginning with $575,000 due on June 1, 2025.

The Series 2023B Bonds totaled $14,560,000 and carry an interest rate ranging from 5.6% to 6.65% and w ill mature on June 1, 2053. Scheduled principal payments will be made annually, based on the debt service schedule, beginning with $670,000 due on June 1, 2025.

These bonds were specifically structured to support the city's strategic efforts in acquiring land and properties that will foster business growth, attract investment, and enhance long-term economic sustainability. The bonds are backed by a pledge of general fund and Measure AV fund revenues to ensure timely repayment. By leveraging these funds, Palmdale aims to drive development opportunities and strengthen its local economy.

Lease Revenue Bonds Payable 2023A ($26,370,000) -
Year Ending Principal Interest Total
2025 $ 575,000 $ 1,208,763 $ 1,783,763
2026 605,000 1,180,013 1,785,013
2027 635,000 1,149,763 1,784,763
2028 665,000 1,118,013 1,783,013
2029 560,000 1,084,763 1,644,763
2030-2034 1,305,000 5,165,813 6,470,813
2035-2039 4,150,000 4,562,563 8,712,563
2040-2044 5,215,000 3,503,400 8,718,400
2045-2049 6,425,000 2,278,281 8,703,281
2050-2053 6,235,000 717,075 6,952,075
$ 26,370,000 $ 21,968,447 $ 48,338,447
Lease Revenue Bonds Series 2023B ($14,560,000) -
Year Ending Principal Interest Total
2025 $ 670,000 $ 913,353 $ 1,583,353
2026 705,000 875,833 1,580,833
2027 70,000 836,705 906,705
2028 50,000 832,820 882,820
2029 140,000 830,020 970,020
2030-2034 3,580,000 3,642,730 7,222,730
2035-2039 1,505,000 2,888,413 4,393,413
2040-2044 2,045,000 2,343,270 4,388,270
2045-2049 2,805,000 1,577,713 4,382,713
2050-2053 2,990,000 512,383 3,502,383
$ 14,560,000 $ 15,253,240 $ 29,813,240
C. Certificates of Participation
2021 Certificates of Participation Payable ($13,584,908) - O n May 27, 2021, the City issued the Refunding of the 2007 Certificates with a private placement loan with Western Alliance Bank, in the amount of $13,584,908 with annual interest rate 72 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
C. Certificates of Participation
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. As of June 30, 2021, a total of $13,584,908 w as 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
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 887,738 320,742 1,208,480
2030-2035 6,110,898 1,141,694 7,252,592
2036 1,162,726 45,695 1,208,421
Totals $ 11,390,006 $ 3,114,386 $ 14,504,392
73 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
C. Certificates of Participation
2014 Lease Payable ($25,920,000) – O n October 16, 2014, the Palmdale Financing Authority assigned the future lease revenues from the Lease Agreement dated as of October 1, 2014, by and between the City of Palmdale and the Authority, to TPB Investments, Inc., a wholly owned subsidiary of Western Alliance Bank, an Arizona corporation, in exchange for $25,920,000 as a private placement loan. These funds were used to redeem $25,445,000 of outstanding 2002 Certificates of Participation, pay $262,893 of interest on the outstanding 2002 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
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 1,755,000 319,269 2,074,269
2030-2033 7,705,000 586,551 8,291,551
Totals $ 15,860,000 $ 2,800,788 $ 18,660,788
74 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
D. Change in Long-Term Liabilities
Activity for the year ended June 30, 2024 were as follows:

Governmental Activities June 30,2023 Additions Retirements June 30,2024 Due Within
One Year
Compensated Absences Payable:

Compensated Absences Payable: $ 3,953,455 $ 2,523,319 $ 2,553,532 $ 3,923,242 $ 1,868,262 Total Compensated Absences Payable 3,953,455 2,523,319 2,553,532 3,923,242 1,868,262 Liability Claims (General Fund)
Health, Dental and Vision Claims 961,271 - 181,002 780,269 780,269 Liability Claims 6,014,772 941,403 751,000 6,205,175 5,902,000 Total Liability Claims 6,976,043 941,403 932,002 6,985,444 6,682,269 Bonds payable:
2012 Lease Revenue Bond 4,380,000 - 4,380,000 - -
2015 Mortgage Revenue Bonds 3,640,000 - 100,000 3,540,000 105,000 2017 Lease Revenue Bonds 10,725,000 - 1,465,000 9,260,000 705,000 2023A Lease Revenue Bonds - 26,370,000 - 26,370,000 670,000 2023B Lease Revenue Bonds - 14,560,000 - 14,560,000 575,000 2014 Certificates of Participation 17,315,000 - 1,455,000 15,860,000 1,510,000 2021 Certificates of Participation 12,123,552 - 733,546 11,390,006 762,314 Plus: Deferred Issuance Premiums 205,834 57,856 81,700 181,990 60,933 Total Bonds Payable 48,389,386 40,987,856 8,215,246 81,161,996 4,388,247 Direct Borrowings and Direct Placements:

Notes Payable:

Section 108 HUD Loan 1,000,000 - 299,000 701,000 333,000 Home Loan 2,850,000 - - 2,850,000 -
Street Light Purchase Loan 8,529,109 - 761,997 7,767,112 780,894 SCE Parks LED Retrofit OBF A-5962 101,456 - 23,015 78,441 23,016 SCE LED Retrofit OBF A-5806 3,001 - 3,001 - -
SCE LED Retrofit OBF A-5807 19,497 - 15,455 4,042 4,042 SCE LED Retro OBF A-7251 70,294 - 20,404 49,890 20,404
Total Notes Payable 12,573,357 - 1,122,872 11,450,485 1,161,356 Financial Arrangements:

Lease Liability 32,303 419,161 178,553 272,911 133,136
Financed Purchase-Copier 343,253 - 102,914 240,339 105,268 Financed Purchase-Energy Efficient Equipment 561,913 - 85,916 475,997 88,871 SBITA Liability 2,629,459 109,940 650,123 2,089,276 452,389 Total Payable 3,566,928 529,101 1,017,506 3,078,523 779,664 Total Governmental Activities Long-term Liabilities $ 75,459,169 $ 44,981,679 $ 13,841,158 $ 106,599,690 $ 14,879,798 The City is subject to a legal debt limit statutorily computed at 3.75 percent of assessed valuation. As of June 30, 2024, the City’s total debt limit was $648,762,283, and the total outstanding debt applicable to the limit was $82,367,204, 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 liability
During fiscal year 2024, the City entered into one lease agreement as a lessee for the right to use an asset under a noncancelable lease with an initial term of three years, terminating in October 2026. The lease requires an annual payment of $150,000. The agreement includes an option to extend the lease for an additional two years, through October 2029. Based on an assessment of the lease terms and operational needs, the City expects to exercise the extension option with reasonable certainty, resulting in a total lease term of five years.

As of June 30, 2024, the City recognized a right-to-use lease asset of $419,161 and a corresponding lease liability of $272,911 related to this agreement. For the fiscal year, the City recorded $107,119 i n amortization expense and $12,029 o f interest 75 City of Palmdale
Notes to the Financial Statements
June 30, 2024
13 - Long-Term Debt
E. Lease liability
expense. The lease liability was calculated using a discount rate of 7.08%, which reflects the City’s estimated incremental borrowing rate.

Additionally, during the fiscal year, the City fully amortized a separate right-to-use lease asset. At year end, the related lease liability was $0.

The remaining obligations associated with the current lease are as follows:

Year Ending Principal Interest Total
2025 $ 133,136 $ 16,864 $ 150,000
2026 139,775 10,224 149,999
Totals $ 272,911 $ 27,088 $ 299,999
F. Subscription Based Information Technology Arrangements During fiscal year 2024, 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, 2024, the City recognized a SBITA asset of $3,568,992 a nd a SBITA liability of $452,388 r elated to these agreements. During the fiscal year, the City recorded $698,860 in amortization expense and $94,050 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
2025 $ 452,389 $ 84,535 $ 536,924
2026 418,776 66,908 485,684
2027 445,356 49,692 495,048
2028 463,594 31,454 495,048
2029 309,161 12,307 321,468
Totals $ 2,089,276 $ 244,896 $ 2,334,172
14 - 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. 76 City of Palmdale
Notes to the Financial Statements
June 30, 2024
14 - Special Assessment District and Community Facilities District Bonds A. Bonds Outstanding
Community Facilities District No. 91-1 (Sierra Gateway) Special Tax Bonds – I n December 1991, the City issued $7,970,000 of special tax Bonds. Proceeds were used for the development of public improvements for the Sierra Gateway Center, a master-planned, mixed-use business park, which is proposed to ultimately include 2.5 million square feet of industrial, office, and retail buildings. The Bond issue provided for the acquisition of land, acquisition and construction of storm drainage retention facilities, landscaping, and street, water, and utility improvements. As of June 30, 2024, a total of $7,425,000 in Bonds was outstanding.

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, 2024, a total of $18,895,000 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, 2024, a total of $12,775,000 i n 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.
77 City of Palmdale
Notes to the Financial Statements
June 30, 2024
14 - 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.

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, 2024, a total of $8,755,240 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.

Assessment District No. 2006-1 (Godde Hills Estates Sewer Im provements) Limited Obligation Improvement Bonds – In November 2006, the City issued $2,220,000 of Special Assessment Bonds for the construction of sewer improvements in the community known as Godde Hills Estates. As of June 30, 2024, a total of $910,000 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.

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

The special taxes are authorized to be levied on the Property for the purpose of (i) paying the annual purchase price of the Assigned Water Rights and other related and allocable charges to be paid by AVEK, (ii) paying the expenses of the City in administrating the CFD, (iii) paying the expenses of AVEK relative to its obligations under this agreement and otherwise with respect to the Assigned Water Rights, including but not limited to wheeling costs, and any costs associated with water banking by AVEK, (iv) paying an energy charge to AVEK based on California Department of Water Resources charges to transport water from the Tupman Turnout to AVEK’s water treatment plant, (v) paying energy charges incurred by the City related to banked water, and (vi) establishing and replenishing a reserve fund to be maintained by the City and to be drawn upon if the special taxes revenues collected by the City for the CFD in any fiscal year are not sufficient to pay the Annual Water Rights Charges, the AVEK Administrative Expenses and the AVEK Energy Charges due and payable in any fiscal year. 78 City of Palmdale
Notes to the Financial Statements
June 30, 2024
14 - Special Assessment District and Community Facilities District Bonds A. Bonds Outstanding
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 2024 and is effective through July 12, 2025. As of June 30, 2024, a total of $379,491 in Letter of Credit was outstanding.

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

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

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

The Los Angeles County TTC officials were interested in a proposed timeline and the City’s plan for the Property. The Plan is to market and sell the property and distribute proceeds to bondholders in complete satisfaction of amount owed under the Bonds, have the Property developed and paying taxes again. They also went out and visited the Property after the meeting. As of the date of the financial statements, the bonds and delinquent Ad Valorem Taxes levied against the Property remain outstanding.
79 City of Palmdale
Notes to the Financial Statements
June 30, 2024
14 - Special Assessment District and Community Facilities District Bonds B. Default in Payment of Debt Service on Bonds Outstanding Year Ending Interest Paid Year Ending Interest Paid
1998-1999 $ 148,474 2009-2010 $ 147,131
1999-2000 148,283 2010-2011 149,729
2000-2001 123,693 2011-2012 154,943
2001-2002 141,376 2012-2013 158,128
2002-2003 130,703 2013-2014 160,207
2003-2004 129,454 2014-2015 161,823
2004-2005 126,712 2015-2016 164,925
2005-2006 140,404 2016-2017 137,100
2006-2007 144,418 2017-2018 128,454
2007-2008 142,787 2018-2019 -
2019-2020 -
2020-2021 -
2021-2022 -
2022-2023 -
2023-2024 -
-
$ 2,738,744
15 - 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, 2024, 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, 2024, there was $24,119,000 of Multifamily Mortage Revenue Bonds outstanding.

The bonds described above do not constitute indebtedness of the Housing Authority or the City, and there exists no legal or moral obligation on the part of the Housing Authority or the City to make payments on such bonds from any source other than the revenue and assets pledged thereto. The program is completely administered by the trustees. Accordingly, these programs and the mortgage revenue bonds issued there under have been excluded from the accompanying financial statements. 16 - 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 80 City of Palmdale
Notes to the Financial Statements
June 30, 2024
16 - Public Employees’ Retirement System (PERS) Pension Plan A. General Information about the Pension Plan
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, 2024, 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, 2024, 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
81 City of Palmdale
Notes to the Financial Statements
June 30, 2024
16 - 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, 2024 were $6,725,151.

B. Net Pension Liability
The City’s net pension liability for the Plan was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022, rolled forward to June 30, 2023.

Actuarial Assumptions
The total pension liability in the June 30, 2022 actuarial valuation was determined using the following actuarial assumptions.

Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.9 percent
Inflation Rate 2.30 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, the same as 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 rate of return, 6.90%, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return w as then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:
82 City of Palmdale
Notes to the Financial Statements
June 30, 2024
16 - Public Employees’ Retirement System (PERS) Pension Plan B. Net Pension Liability
Discount Rate
Asset Class1
Assumed Asset
Allocation Real Return1,2
Global Equity - Cap-weighted %30.00 %4.54
Global Equity - Non-Cap-weighted %12.00 %3.84
Private Equity %13.00 %7.28
Treasury %5.00 %0.27
Mortgage-backed Securities %5.00 %0.50
Investment Grade Corporates %10.00 %1.56
High Yield %5.00 %2.27
Emerging Market Debt %5.00 %2.48
Private Debt %5.00 %3.57
Real Assets %15.00 %3.21
Leverage %(5.00) %(0.59)
(1) An Expected Inflation Rate of 2.30% was used for this period. (2) Figures are based on the 2021 Asset Liability Management study.

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 $ 210,033,553 $ 151,420,231 $ 58,613,322 Changes in the Year:

Service Cost 3,403,055 - 3,403,055
Interest on the Total Pension Liability 14,554,515 - 14,554,515 Changes in Benefit Terms 195,618 - 195,618
Differences between Expected and Actual Experience 4,318,495 - 4,318,495 Net Plan to Plan Resource Movement - - -
Contribution - Employer - 6,467,047 (6,467,047)
Contribution - Employee - 1,556,978 (1,556,978)
Net Investment Income - 9,344,784 (9,344,784)
Benefit Payments, including Refunds of Employee Contributions (10,628,343) (10,628,343) - Administrative Expenses (1) (111,347) 111,346
Net Changes 11,843,339 6,629,119 5,214,220
Balance at June 30, 2023 $ 221,876,892 $ 158,049,350 $ 63,827,542 83 City of Palmdale
Notes to the Financial Statements
June 30, 2024
16 - 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 $ 92,393,141 $ 63,827,542 $ 40,123,184 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, 2024, the City recognized pension expense of $4,255,888. At June 30, 2024, 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 $ 6,725,151 $ - Change of Assumptions 2,442,085 -
Difference between Expected and Actual Experience 3,009,860 (143,581) Net Difference between Projected and Actual Earnings on Plan Investments 7,130,484 - Total $ 19,307,580 $ (143,581)
The amount of $6,725,151 r eported as deferred outflows of resources related to contributions made subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2025.

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,
2025 $ 4,483,361
2026 2,387,059
2027 5,369,998
2028 198,431
Total Pension Expense $ 12,438,849
84 City of Palmdale
Notes to the Financial Statements
June 30, 2024
17 - Public Agency Retirement Systems
For all of its part-time employees not covered by PERS, a defined contribution pension plan is made available through the Public Agency Retirement System (PARS) pursuant to the requirements of 3121(B)(7)(F) of the Internal Revenue Code. This was created in accordance with Internal Revenue Code Sections 401(a) and 501 and adm inistered by Phase II Systems. Benefit terms, including contribution requirements for PARS are established by Internal Revenue Code 3121(b)(7)(F). Employees are required to contribute 7.5 percent of their salary to the pension plan, up to applicable Internal Revenue Code limits. The City does not contribute to Employees PARS account. Employees are immediately vested in their contributions and earnings on those contributions. For the year ended June 30, 2024, employee contribution amounts were $344,289.

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, 2024, employee and employer contribution amounts were $6,356. 18 - 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, 2024, 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 85
City of Palmdale
Notes to the Financial Statements
June 30, 2024
18 - 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, 2024, 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, 2024, the annual money-weighted rate of return on investments, net of investment expense was

15.26 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, 2024, and the total OPEB liability (Asset) used to calculate the net OPEB liability (Asset) was determined by an actuarial valuation as of June 30, 2024.

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

The best-estimates of expected future asset class returns were published in the 2016 Survey of Capital Market Assumptions produced by Horizon Actuarial Services. These expected returns, along with expected asset class standard deviations and correlation coefficients, are based on Horizon’s annual survey of investment advisory firms. The expected inflation assumption was developed based on an analysis of historical experience blended with forward-looking expectations available in market data.
86 City of Palmdale
Notes to the Financial Statements
June 30, 2024
18 - 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 w as 4.32 percent. The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to m ake all projected future benefit payments of current plan members through 2036 and the long-term expected rate of return on OPEB plan investments was applied to those periods. A projected “crossover” date occurs in 2037 and unfunded benefit payments for the years thereafter were discounted using the expected 3.90% 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, 2024, using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Valuation Date June 30, 2024
Measurement Date June 30, 2024
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 4.32 percent
Investment Rate of Return 6.25 percent
General Inflation Rate 2.50 percent
Healthcare Cost Trend Rate 6.30 percent for FY2024, gradually decreasing over several decades to an ultimate rate of 3.9 percent in
FY2076 and later years.
87 City of Palmdale
Notes to the Financial Statements
June 30, 2024
18 - 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, 2023 $ 907,034 $ 707,837 $ 199,197 Changes in the Year:

Service Cost 17,601 - 17,601
Interest 41,212 - 41,212
Differences between Expected and Actual Experience (69,240) - (69,240) Changes in Assumptions 10,331 - 10,331
Net Investment Income - 103,693 (103,693)
Benefit Payments, including Refunds of Employee Contributions (29,771) (29,771) - Administrative Expenses - (64,044) 64,044
Net Changes (29,867) 9,878 (39,745)
Balance at June 30, 2024 $ 877,167 $ 717,715 $ 159,452
Administrative Expenses for Fiscal Year Ended 2024, include $64,044 in excess draw from the Trust, which is expected to cover expenses through 2025. The Plan's fiduciary net position represnts 82% 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 (3.32% percent) or one percentage point higher ( 5.32% percent) than the current discount rate:

Decrease 1%
Discount Rate of

3.32%
Current
Discount Rate of

4.32%
Increase 1%
Discount Rate of

5.32%
Net OPEB Liability (Asset) $ 211,260 $ 159,452 $ 111,848 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) $ 123,192 $ 159,452 $ 199,217 88 City of Palmdale
Notes to the Financial Statements
June 30, 2024
18 - 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, 2024, the City recognized OPEB expense of $155,573. At June 30, 2024, 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 $ 79,084 $ 94,574 Change of Assumptions 18,214 55,297
Net Difference between Projected and Actual Investments Earnings - 29,671 Total $ 97,298 $ 179,542
Other amounts reported as deferred outflows of resources r elated to OPEB will be recognized as future OPEB expense as follows:

Measurement Period
Year Ended June 30,
2025 $ (20,989)
2026 (12,925)
2027 (35,505)
2028 (12,825)
2029 -
Total $ (82,244)
C. Defined Contribution OPEB Plan
Plan membership
At June 30, 2024, 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 w ith investment earnings and annual City contributions.

Beginning account balances were determined based on years of service, annual benefit times the life annuity factory at expected retirement age. Annual contributions for the beginning account balances and the annual contribution is made when the 89 City of Palmdale
Notes to the Financial Statements
June 30, 2024
18 - Post-Employment Benefits Other Than Pensions
C. Defined Contribution OPEB Plan
Benefits provided
employee is fully vested as described above.

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, 2024, the City contributed $109,000 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, 2024:

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

Cash and Cash Equivalents $ 133 $ - $ 133
Investments:

Mutual Funds 756,708 3,981,403 4,738,111
Total Assets 756,841 3,981,403 4,738,244
Total Net Position Restricted
for OPEB Benefits $ 756,841 $ 3,981,403 $ 4,738,244
OPEB Trust
Defined
Benefit Plan
OPEB Trust
Defined
Contribution Plan Total
Additions:

Employer Contributions to Retiree Medical Trust $ - $ 109,000 $ 109,000 Investment and Interest Income 23,043 176,959 200,002
Net Realized and Unrealized Gains (Losses) 80,650 115,228 195,878 Total Additions 103,693 401,187 504,880
Deductions:

Benefits Paid to Participants and expenses 54,690 235,986 290,676 Total Deductions 54,690 235,986 290,676
Change in Net Position 49,003 165,201 214,204
Net Position as of July 1, 2023 707,837 3,816,203 4,524,040 Net Position as of June 30, 2024 $ 756,840 $ 3,981,404 $ 4,738,244 90 City of Palmdale
Notes to the Financial Statements
June 30, 2024
19 - 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, 2024.

C. Capital Assets
Capital Assets of the Successor Agency Trust Fund as of June 30, 2024 consisted of the following:

Beginning
Balance Additions Deletions
Ending
Balance
Capital Assets not Being Depreciated:

Land and Improvements $ 372,073 $ - $ - $ 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 262,191 - (8,763) 270,954
Total Accumulated Depreciation 262,191 - (8,763) 270,954 Total Capital Assets, Being Depreciated, Net 175,961 - 8,763 167,198 Total Capital Assets, Net $ 548,034 $ - $ (8,763) $ 539,271 91 City of Palmdale
Notes to the Financial Statements
June 30, 2024
19 - Successor Agency Trust for Former City of Palmdale Redevelopment Agency C. Capital Assets
For the Year Ended June 30, 2024, 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 $ 4,659,777 $ -
Successor Agency Trust Fund:

Dissolved - CRA Project Area No. 1 and No. 2A - 4,659,777 Total $ 4,659,777 $ 4,659,777
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 2023-24, the Housing Authority received $250,000 f rom the Successor Agency during the Recognized Obligation Payment Schedule (ROPS) Period of July-June 2024 or ROPS 23-24A and B. The next payment is expected to be received during the ROPS Period of July-December 2024 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, 2024 of $1,173,952 for approved obligations paid by the City on behalf of the Agency.
92 City of Palmdale
Notes to the Financial Statements
June 30, 2024
19 - 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 $2,750,660. The outstanding balance of the notes as of June 30, 2024 is $5,442,844.

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
2025 $ 2,461,926 $ 288,734 $ 2,750,660
2026 2,980,918 139,563 3,120,481
Totals $ 5,442,844 $ 428,297 $ 5,871,141

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

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

The proceeds of the 2002 Bonds were used to finance redevelopment activities in or of benefit to Project Area No. 2A. The former Community Redevelopment Agency has pledged incremental property tax generated in Project Area No. 2A to pay principal and interest with respect to the 2002 Bonds as they become due. The current year payment of principal w as $975,000.

No interest was paid for the current year. Property taxes received after negotiated, statutory, and residual distributions totaled $3,885,000 for the year. At year-end, pledged future revenues totaled $3,885,000 of which $3,313,599 was the amount of the remaining principal and $571,401 interest on the Bonds. 93 City of Palmdale
Notes to the Financial Statements
June 30, 2024
19 - 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
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 717,978 252,022 970,000
2030-2033 2,978,260 1,671,740 4,650,000
Totals $ 7,009,837 $ 2,495,163 $ 9,505,000
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 $2,942,250. Property taxes received after negotiated, statutory, and residual distributions totaled $33,903,147 for the year. At year-end, pledged future revenues totaled $22,630,750 of which $18,050,000 was the amount of the remaining principal and $4,580,750 interest on the Bonds.

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

Year Ending Principal Interest Total
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 1,355,000 473,875 1,828,875
2030-2034 7,215,000 1,304,375 8,519,375
2035 1,585,000 39,625 1,624,625
Totals $ 18,050,000 $ 4,580,750 $ 22,630,750
94 City of Palmdale
Notes to the Financial Statements
June 30, 2024
19 - 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 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 $3,531,275. Property taxes received after negotiated, statutory, and residual distributions totaled $36,152,870 for the year. At year-end, pledged future revenues totaled $36,266,300 of which $28,840,000 was the amount of the remaining principal and $7,426,300 interest on the Bonds.

Year Ending Principal Interest Total
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 2,280,000 770,650 3,050,650
2030-2034 13,060,000 2,031,800 15,091,800
2035 2,375,000 59,375 2,434,375
Totals $ 28,840,000 $ 7,426,300 $ 36,266,300

3. Change in Long Term Liabilities
The following debt activity for the year ended June 30, 2024 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, 2023 Additions Retirements
Balance at June
30, 2024
Due Within One
Year
Bonds Payable:
2002 Tax Allocation Bonds $ 7,962,900 $ - $ 953,063 $ 7,009,837 $ 897,640 2016 Tax Allocation Bonds Series A 20,040,000 - 1,990,000 18,050,000 2,095,000 2016 Tax Allocation Bonds Series B 30,935,000 - 2,095,000 28,840,000 2,205,000 Plus: Deferred Issuance Premiums 4,287,520 - 904,799 3,382,721 776,958 Total Bonds Payable 63,225,420 - 5,942,862 57,282,558 5,974,598 Notes from Direct Borrowing and
Direct Placements:

Fairway Business Park 7,764,122 - 2,321,278 5,442,844 2,461,926 $ 70,989,542 $ - $ 8,264,140 $ 62,725,402 $ 8,436,524
95 City of Palmdale
Notes to the Financial Statements
June 30, 2024
20 - Commitments and Contingencies
A. Contracts and Purchase Orders
The City has several contracts in place, one of which is with the County of Los Angeles for various services, primarily law enforcement, until June 30, 2024. This contract represents the City’s most significant financial commitment and is maintained under the ‘Contract City Law Enforcement Service Level Authorization.’ Through this agreement, the County charges a set amount of service fees based on the number of deputies, support personnel, and their projected hours of service. 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 an average increase. Additionally, the City is required to pay for its portion of liability costs to ensure that funds are available in the event of litigation. 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 written notice not less than 60 days prior.

The following were the contract costs for the fiscal year ending June 30, 2024:

Law Enforcement $ 30,600,727
Other $ 55,230,726
Total Cost $ 85,831,453
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 $63,478,805 a t June 30, 2024, with the following breakdown between major funds and non-major funds.

Major Funds:

General Fund $ 2,767,126
Housing Asset Fund 277,855
Measure AV Fund 5,820,109
ARPA Fund 722,418
Total Major Funds 9,587,508
Internal Service Funds
Information Technology 82,610
Fleet Maintenance 154,710
Total Internal Service Funds 237,320
Non-Major Special Revenue Funds 53,653,977
Total Contract and Purchase Orders
Outstanding for Governmental Funds $ 63,478,805
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.
96 City of Palmdale
Notes to the Financial Statements
June 30, 2024
20 - Commitments and Contingencies
C. Claims and Judgments
Certain legal actions have been initiated against the City in the ordinary course of business. These matters are subject to coverage under the City’s risk management liability program and include, but are not limited to, lawsuits and claims alleging personal injury and property damage. In addition, the City is currently a named defendant in multiple employment-related legal actions. While it is anticipated that some of these matters may be resolved through settlement in the near term, the potential liability associated with such settlements cannot be reasonably estimated at this time.

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.
21 - Restatement
During fiscal year 2024, there was a change within the financial reporting entity which resulted in the Transportation Article 8 Fund being reported as a major fund instead of as a nonmajor fund. As a result, fund balance of the Transportation Article 8 Fund of $2,720,834 which was previously reported in the nonmajor funds is now reported as a major fund with a beginning fund balance of $2,720,834. This resulted in adjustments to and restatements of beginning fund balance to nonmajor funds as follows:

July 1, 2023,
As Previously
Reported
Change to or
Within the
Financial
Reporting
Entity
July 1, 2023,
As Restated
Governmental Funds
Nonmajor Funds $ 186,457,059 $ (2,720,834) $ 183,736,225 New Major Fund Not Applicable $ 2,720,834 $ 2,720,834
22 - Adoption of New Standard
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, 2024 are as follows:

GASB Statement No. 99 - Omnibus 2022. The primary objectives of this Statement are to enhance comparability in accounting 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 Statements and (2) accounting and financial reporting for guarantees. The City has determined no significant impact, if any, this pronouncement had on the financial statements. The requirements of this statement related to leases, PPPs and SBITAs are effective for the City's fiscal year ending June 30, 2023 and the requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for the City's fiscal year ending June 30, 2024. The City has determined that this statement does not apply.

GASB 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 97 City of Palmdale
Notes to the Financial Statements
June 30, 2024
22 - Adoption of New Standard
corrections made in fiscal years beginning after June 15, 2023, and all reporting periods thereafter. The City has determined that this statement does not apply.
23 - New Accounting Pronouncements
The following pronouncements were issued prior to June 30, 2024 and have effective dates that may impact future financial statement presentation. The effects of the statements are currently under review.

GASB Statement No. 101 – Compensated Absences. The primary objective of the Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences by aligning the recognition and measurement guidance under a unified model and amending certain previously required disclosures. The requirements of this statement are effective to the City's fiscal year ending June 30, 2025. The City has not determined the effects, if any, on the financial statements.

GASB Statement No. 102 – Certain Risk Disclosures. The primary objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to certain concentrations or constraints. A concentration is defined as a lack of diversity related to an aspect of a significant inflow of resources or outflow of resources. A constraint is a limitation imposed on a government by an external party or by formal action of the government's highest level of decision- making authority. The requirements of this statement are effective for the City's fiscal year ending June 30, 2025. The City has not determined the effects, if any, on the financial statements.

GASB Statement No. 103 – Financial Reporting Model Improvements. The primary objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also addresses certain application issues. The requirements of this statement are effective for the City's fiscal year ending June 15, 2025. The City has not determined the effects, if any, on the financial statements.

GASB Statement No. 104 – Disclosure of Certain Capital Assets. The primary objective is that State and local governments are required to provide detailed information about capital assets in notes to financial statements. Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, requires certain information regarding capital assets to be presented by major class. The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets. The requirements of this Statement are effective for fiscal years beginning after June 15, 2025, and all reporting periods thereafter. The City has not determined the effects, if any, on the financial statements. 24 - Subsequent Events
The City has settled one employment-related case for an amount of $6,000,000, which was paid in April 2025. Insurance proceeds are anticipated to be received in Fiscal Year 2025 in the amount of $5,500,000 in relation to this settlement. 98 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, 2024
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
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 $ 3,403,055 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 14,554,515 Differences between Expected and Actual
Experience - (2,606,465) - 9,269,931 (1,358,574) - 1,368,882 - (382,880) 4,318,495 Changes in Assumptions - (3,032,525) (948,090) (3,510,853) 2,354,023 2,310,424 1,368,882 (46,529) 6,512,225 195,618 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) (10,628,343) 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 11,843,340 Total Pension Liability - Beginning 136,494,809 143,393,075 144,490,407 150,311,831 163,148,217 171,085,845 180,642,998 189,495,804 196,678,686 210,033,552 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 $ 221,876,892 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 6,467,047 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 1,556,978 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) 9,344,784 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) (10,628,343) Administrative Expense - (127,281) (66,805) (161,055) (188,366) (91,249) (188,455) (137,825) (103,739) (111,347) 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) 6,629,119 Plan Fiduciary Net Position - Beginning 93,359,880 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 137,971,710 166,531,508 151,420,231 Plan Fiduciary Net Position - Ending (b) 108,484,075 109,615,669 109,084,138 120,881,252 127,867,280 133,679,230 137,971,710 166,531,508 151,420,231 158,049,350 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 $ 63,827,542 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 %71.23 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 $ 21,124,060 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 %302.16 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 June 30 , 2023 *Fiscal year 2015 is the first year of implementation.
99 City of Palmdale
Schedule of Contributions - Public Employees Retirement System - Miscellaneous Plan Year Ended June 30, 2024
Last Ten Years*
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
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 $ 6,725,151 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 6,725,151 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 25,195,252 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 %26.69 Valuation Date:
2015 2016 2017 2018 2019 2020 2021 2022 2023
Methods and Assumptions Used to Determine Contribution Rates:

Actuarial Cost Method
Entry age Entry age Entry age Entry age Entry age Entry age Entry age Entry age Entry age Amortization Method Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Level percentage
of payroll, closed
Remaining Amortization Period
30 years 30 years 30 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
%2.50 %2.50 %2.50 %2.50 %2.50 %2.50 %2.50 %2.50 %2.50
Salary Increase Varies on entry
age and servce,
including
inflation of

2.75%
Varies on entry
age and servce,
including
inflation of

2.75%
Investment Rate of Return 7.0% net of
pension plan
investment
expense,
including
inflation

7.0% 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. 100
City of Palmdale
Schedule of Changes in Net OPEB Liability and Related Ratios Other Postemployment Benefits (OPEB)
Year Ended June 30, 2024
Last Ten Years*
2017 2018 2019 2020 2021 2022 2023 2024
Total OPEB Liability
Service Costs $ 9,380 $ 9,801 $ 10,241 $ 19,286 $ 26,370 $ 18,642 $ 15,469 $ 17,601 Interest 42,190 41,817 41,771 49,286 31,829 27,510 34,266 41,212 Differences Between Expected and Actual Experience 162,410 117,475 272,638 - 439,617 (128,567) 53,031 (69,240) Changes in Assumptions - - (45,786) 103,650 (7,331) (106,880) (34,685) 10,331 Benefit Payments, Including Refunds of Member Contributions (244,316) (195,980) (144,496) (139,429) (346,268) (8,617) 20,852 (29,771) Net Change in Total OPEB Liability (30,336) (26,887) 134,368 32,793 144,217 (197,912) 88,933 (29,867) Total OPEB Liability - Beginning 761,858 731,522 704,635 839,003 871,796 1,016,013 818,101 907,034 Total OPEB Liability - Ending (a) $ 731,522 $ 704,635 $ 839,003 $ 871,796 $ 1,016,013 $ 818,101 $ 907,034 $ 877,167 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) 87,761 103,693 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) (64,044) Benefit Payments, Including Refunds of Employee Contributions (244,316) (195,980) (144,496) (139,429) (346,268) (8,617) 20,852 (29,771) Net Change in Plan Fiduciary Net Position $ (124,271) $ (115,790) $ (127,849) $ (110,026) $ (116,745) $ (227,415) $ 12,262 $ 9,878 Plan Fiduciary Net Position - Beginning 1,517,671 1,393,400 1,277,610 1,149,761 1,039,735 922,990 695,575 707,837 Plan Fiduciary Net Position - Ending $ 1,393,400 $ 1,277,610 $ 1,149,761 $ 1,039,735 $ 922,990 $ 695,575 $ 707,837 $ 717,715 Net OPEB Liability Ending $ (661,878) $ (572,975) $ (310,758) $ (167,939) $ 93,023 $ 122,526 $ 199,197 $ 159,452 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 %81.82 Covered-employee Payroll1 840,010 874,002 914,074 941,496 897,776 766,192 497,546 657,745 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 %24.24 Measurement Date June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 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 101
City of Palmdale
Schedule of Investment Returns for OPEB
Other Postemployment Benefits (OPEB)
Year Ended June 30, 2024
Last Ten Years*
2017 2018 2019 2020 2021 2022 2023 2024
Annual Money-weighted Rate of Return -
Net of Investment Expense %11.23 %10.31 %5.55 %5.73 %26.04 %(20.25) %13.34 %15.26 Notes to Schedule
* Fiscal year 2017 was the first year of implementation. 102
Supplementary Information
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City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2024
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 – T his fund accounts for revenues collected under the City’s Drainage Fee, which are used for the development of drainage improvements.

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

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

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

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

Measure A LA County Parks Fund – T his fund accounts for special parcel tax revenues and expenditures related to the development, improvement, and maintenance of parks, open space, and recreational facilities in Los Angeles County. 104
City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2024
Measure R Fund – This fund accounts for State Funds provided to the City for street-related purposes only.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Traffic Impact Fund – This fund accounts for revenues collected under the City’s Traffic Impact Fee, which are used for traffic 105
City of Palmdale
Non-Major Governmental Funds Descriptions
For the Year Ended June 30, 2024
related projects, such as traffic signals and street improvements.

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

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

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

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

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

Community Facilities District (CFD) – This fund accounts for the revenues and expenditures of community facilities districts and assessment districts, which are funded entirely from district bond proceeds. 106
City of Palmdale
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
Debt Service
Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Assets:

Cash $ 271,962 $ - $ - $ 271,962
Investments 224,142,465 - 3,794 224,146,259
Receivables:

Accounts and Interest Receivable 13,134,593 - 18 13,134,611 Property Tax Receivable 283,959 - - 283,959
Due from Other Funds 62 - - 62
Advances Due from Fiduciary Funds - - 583,859 583,859
Notes and Liens 10,483,937 - - 10,483,937
Advances Due from Other Funds 3,800,000 - - 3,800,000
Prepaid Items and Other Assets - 110,000 - 110,000
Restricted Assets
Investments - 35,090,236 2,977,442 38,067,678
Land Held for Development 400,000 - - 400,000
Total Assets $ 252,516,978 $ 35,200,236 $ 3,565,113 $ 291,282,327 Liabilities, Deferred Inflows of Resources and Fund Balances Liabilities:

Accounts Payable $ 5,595,866 $ - $ 1,188 $ 5,597,054
Due to Fiduciary Funds - - 1,565 1,565
Due to Other Funds 13,243,167 32,220 505,973 13,781,360 Advances Due to Other Funds 8,800,000 - - 8,800,000
Deposits 3,781,076 - - 3,781,076
Unearned Revenue 124,639 - - 124,639
Notes Payable 3,305 - - 3,305
Total Liabilities 31,548,053 32,220 508,726 32,088,999
Deferred Inflows of Resources:

Unavailable Revenue 12,942,125 - - 12,942,125
Fund Balances:

Restricted 214,872,093 35,168,016 3,056,387 253,096,496 Unassigned (6,845,293) - - (6,845,293)
Total Fund Balances 208,026,800 35,168,016 3,056,387 246,251,203 Total Liabilities, Deferred Inflows of Resources and Fund Balances $ 252,516,978 $ 35,200,236 $ 3,565,113 $ 291,282,327 107
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
Year Ended June 30, 2024
Debt Service
Funds
Capital Projects
Fund
Non-Major
Special Revenue
Funds
Palmdale
Financing
Authority
CFD/Assessment
Districts
Total Nonmajor
Governmental
Funds
Revenues:

Other Taxes $ 5,433,884 $ - $ - $ 5,433,884
Subventions and Grants 24,514,011 - - 24,514,011
Park Development Fees 677,938 - - 677,938
Licenses and Permits 94,444 - - 94,444
Fines and Forfeitures 281,659 - - 281,659
Special Assessments 22,641,329 - - 22,641,329
Charges for Current Services 2,786,186 - - 2,786,186
Drainage Fees 5,085,662 - - 5,085,662
Traffic Impact Fees 2,025,899 - - 2,025,899
Facilities Impact Fees 2,028,686 - - 2,028,686
Interfund Interest 83,962 - - 83,962
Interest 5,028,700 124,192 135,302 5,288,194
Net Increase (Decrease) in Fair Value of Investments 3,026,152 - 53 3,026,205 Developer Contributions 40,941 - - 40,941
State Contributions 3,219,305 - - 3,219,305
Other Agency Contributions 34,852 - - 34,852
County Contributions 158,083 - - 158,083
Other Revenue 431,879 - - 431,879
Total Revenues 77,593,572 124,192 135,355 77,853,119
Expenditures:

Current:

General Government 1,662,924 - 936 1,663,860
Public Safety 679,803 - - 679,803
Public Services 16,300,853 - 750 16,301,603
Community Development 2,158,474 - - 2,158,474
Cultural and Recreational 2,136,884 - - 2,136,884
Health and Welfare 287,607 - - 287,607
Capital Outlay 21,431,711 - - 21,431,711
Debt Service:

Principal 1,060,997 2,808,546 - 3,869,543
Interest 224,948 2,080,089 - 2,305,037
Interfund Interest 203,562 - - 203,562
Cost of Issuance - 1,048,943 - 1,048,943
Total Expenditures 46,147,763 5,937,578 1,686 52,087,027 Excess (Deficiency) of Revenues Over Expenditures 31,445,809 (5,813,386) 133,669 25,766,092 Other Financing Sources (Uses):

Issuance of Long-term Debt - 37,160,000 - 37,160,000
Transfers In 5,034,960 3,768,607 - 8,803,567
Transfers Out (9,267,352) - - (9,267,352)
Premium on Issuance of Long-term Debt - 59,130 - 59,130 Refunding Debt - 3,770,000 - 3,770,000
Payment to Refunding Bond Escrow Agent - (3,776,459) - (3,776,459) Total Other Financing Sources (Uses) (4,232,392) 40,981,278 - 36,748,886 Net Change in Fund Balances 27,213,417 35,167,892 133,669 62,514,978 Fund Balances (Deficit) - Beginning of Year, as Previously Reported 183,534,217 124 2,922,718 186,457,059 Restatement of Fund Balance to Establish New Fund (2,720,834) - - (2,720,834) Fund Balances (Deficit) - Beginning of Year, Restated 180,813,383 124 2,922,718 183,736,225 Fund Balances (Deficit) - End of Year $ 208,026,800 $ 35,168,016 $ 3,056,387 $ 246,251,203 108
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024
Air Quality
Improvement
Fund
Community
Development
Block Grant
Citywide
Maintenance and
Services Drainage Funds
Drainage Benefit
Assmnt Dist
Assets:

Cash $ - $ - $ - $ - $ -
Investments 330,325 2,062,152 156,812 11,683,401 1,546,249 Receivables:

Accounts Receivable 26,531 35,791 729 54,571 7,192
Property Tax Receivable - - - - 907
Due from Other Funds - 62 - - -
Notes and Liens - 2,013,548 - - -
Advances Due from Other Funds - - - 3,800,000 -
Restricted Assets:

Investments - - - - -
Total Assets $ 356,856 $ 4,111,553 $ 157,541 $ 15,537,972 $ 1,554,348 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts Payable $ 3,275 $ 118,906 $ - $ 1,540 $ 2,596
Due to Other Funds - - 17,500 18,476 -
Advances Due to Other Funds - - - - -
Notes Payable - - - - -
Deposits - 1,755,523 - - -
Unearned Revenue - - - - -
Total Liabilities 3,275 1,874,429 17,500 20,016 2,596
Deferred Inflows of Resources:

Unavailable Revenue - 26,267 - - -
Total Deferred Inflows of Resources - 26,267 - - -
Fund Balances:

Restricted 353,581 2,210,857 140,041 15,517,956 1,551,752 Unassigned - - - - -
Total Fund Balances 353,581 2,210,857 140,041 15,517,956 1,551,752 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 356,856 $ 4,111,553 $ 157,541 $ 15,537,972 $ 1,554,348 109
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024
Enhanced
Infrastructure
Financing
District Federal Funds
Federal Home
Program
Federal Jobs
Programs
Federal Home
ARP Fund
Fire Facilities
Impact Gas Tax
$ - $ - $ - $ - $ - $ - $ -
708,877 260 539,416 - - 10,361,629 12,961,267
3,290 5,172,562 2,930,635 59,006 - 48,411 466,171
3,838 - - - - - -
- - - - - - -
- - 7,670,389 - - - -
- - - - - - -
- - - - - - -
$ 716,005 $ 5,172,822 $ 11,140,440 $ 59,006 $ - $ 10,410,040 $ 13,427,438 $ - $ 679,582 $ 13,813 $ 7,433 $ - $ - $ 201,738
- 4,868,375 50 64,640 2,140 - -
- - - - - - -
- - - - - - -
- 947 - - - - -
- - - - - - -
- 5,548,904 13,863 72,073 2,140 - 201,738
- 5,181,832 3,086,226 - - - -
- 5,181,832 3,086,226 - - - -
716,005 - 8,040,351 - - 10,410,040 13,225,700
- (5,557,914) - (13,067) (2,140) - -
716,005 (5,557,914) 8,040,351 (13,067) (2,140) 10,410,040 13,225,700 $ 716,005 $ 5,172,822 $ 11,140,440 $ 59,006 $ - $ 10,410,040 $ 13,427,438 110
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024
Housing
Authority
Landscape
Maintenance
Local
Transportation
Article 3
Measure A LA
County Parks Measure R
Assets:

Cash $ - $ - $ - $ - $ -
Investments 254,166 15,902,767 2,575 - 7,904,099
Receivables:

Accounts Receivable 49,039 78,116 13 - 1,620,509
Property Tax Receivable - 67,094 - - -
Due from Other Funds - - - - -
Notes and Liens 800,000 - - - -
Advances Due from Other Funds - - - - -
Restricted Assets:

Investments 400,000 - - - -
Total Assets $ 1,503,205 $ 16,047,977 $ 2,588 $ - $ 9,524,608 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts Payable $ 1,061 $ 712,732 $ - $ - $ 261,862
Due to Other Funds - - - 6,350 8,003,561
Advances Due to Other Funds - - - - -
Notes Payable - - - - 3,305
Deposits 1,000 - - - -
Unearned Revenue - - - - -
Total Liabilities 2,061 712,732 - 6,350 8,268,728
Deferred Inflows of Resources:

Unavailable Revenue - - - - 1,754,978
Total Deferred Inflows of Resources - - - - 1,754,978
Fund Balances:

Restricted 1,501,144 15,335,245 2,588 - -
Unassigned - - - (6,350) (499,098)
Total Fund Balances 1,501,144 15,335,245 2,588 (6,350) (499,098) Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 1,503,205 $ 16,047,977 $ 2,588 $ - $ 9,524,608 111
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024
Measure R Local
Return Measure M
Measure M
Local Return
Misc Grants/
Developer
Contributions
Park
Assessments
Park
Development
$ - $ - $ - $ - $ - $ -
13,079,778 123,620 11,574,021 2,910,477 3,049,092 9,702,169 81,089 323,633 54,343 468,764 16,652 45,750
- - - - 36,268 -
- - - - - -
- - - - - -
- - - - - -
- - - - - -
$ 13,160,867 $ 447,253 $ 11,628,364 $ 3,379,241 $ 3,102,012 $ 9,747,919 $ 26,951 $ 70,279 $ 441,683 $ 29,637 $ 199,297 $ 1,601,678 - 219,206 - - - -
- - - - - 5,000,000
- - - - - -
- - - - - -
- - - 124,639 - -
26,951 289,485 441,683 154,276 199,297 6,601,678
- 299,078 - 1,610,104 - -
- 299,078 - 1,610,104 - -
13,133,916 - 11,186,681 1,614,861 2,902,715 3,146,241
- (141,310) - - - -
13,133,916 (141,310) 11,186,681 1,614,861 2,902,715 3,146,241 $ 13,160,867 $ 447,253 $ 11,628,364 $ 3,379,241 $ 3,102,012 $ 9,747,919 112
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024
Proposition A Proposition C
Prop C Local
Return
Public Facilities
Fund Public Safety
Assets:

Cash $ - $ - $ - $ - $ -
Investments 11,576,610 865,013 16,599,728 2,124,977 1,901,757 Receivables:

Accounts Receivable 53,692 985,645 79,967 9,856 10,075
Property Tax Receivable - - - - -
Due from Other Funds - - - - -
Notes and Liens - - - - -
Advances Due from Other Funds - - - - -
Restricted Assets:

Investments - - - - -
Total Assets $ 11,630,302 $ 1,850,658 $ 16,679,695 $ 2,134,833 $ 1,911,832 Liabilities, Deferred Inflows of Resources and
Fund Balances
Liabilities:

Accounts Payable $ 246,309 $ 72,462 $ 14,412 $ 1,150 $ - Due to Other Funds - - - - -
Advances Due to Other Funds - - - - -
Notes Payable - - - - -
Deposits - - - - -
Unearned Revenue - - - - -
Total Liabilities 246,309 72,462 14,412 1,150 -
Deferred Inflows of Resources:

Unavailable Revenue - 983,640 - - -
Total Deferred Inflows of Resources - 983,640 - - -
Fund Balances:

Restricted 11,383,993 794,556 16,665,283 2,133,683 1,911,832 Unassigned - - - - -
Total Fund Balances 11,383,993 794,556 16,665,283 2,133,683 1,911,832 Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ 11,630,302 $ 1,850,658 $ 16,679,695 $ 2,134,833 $ 1,911,832 113
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024
Road
Maintenance and
Rehab SAVES
Sewer
Maintenance
Assmnt Dist Sewer Upgrade
States Grants
Fund
Street
Lighting
Assmnt Dist
Traffic
Impact
Communications
PEG
$ - $ - $ - $ - $ - $ - $ - $ -
11,170,673 - 38,441,787 487,587 1,524,925 22,807,147 2,590,902 782,136 51,809 - 181,308 2,262 8,971 108,609 16,043 50,892
- - 52,132 - - 123,720 - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
- - - - - - - -
$ 11,222,482 $ - $ 38,675,227 $ 489,849 $ 1,533,896 $23,039,476 $ 2,606,945 $ 833,028 $ 162,379 $ - $ 84,391 $ 255 $ 171,060 $ 199,121 $ - $ - - 8,511 - - - - - -
- - 3,800,000 - - - - -
- - - - - - - -
- - 43,502 - 1,979,739 - - -
- - - - - - - -
162,379 8,511 3,927,893 255 2,150,799 199,121 - -
- - - - - - - -
- - - - - - - -
11,060,103 - 34,747,334 489,594 - 22,840,355 2,606,945 833,028 - (8,511) - - (616,903) - - -
11,060,103 (8,511) 34,747,334 489,594 (616,903) 22,840,355 2,606,945 833,028 $ 11,222,482 $ - $ 38,675,227 $ 489,849 $ 1,533,896 $23,039,476 $ 2,606,945 $ 833,028 114
City of Palmdale
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2024
Solid Waste
Palmdale
Community
Foundation Water Park Public Art
Total Special
Revenue Funds
Assets:

Cash $ - $ 271,962 $ - $ - $ 271,962
Investments 1,387,847 - 5,162,008 1,866,216 224,142,465 Receivables:

Accounts Receivable 6,437 10,000 7,575 8,655 13,134,593 Property Tax Receivable - - - - 283,959
Due from Other Funds - - - - 62
Notes and Liens - - - - 10,483,937
Advances Due from Other Funds - - - - 3,800,000
Restricted Assets:

Investments - - - - 400,000
Total Assets $ 1,394,284 $ 281,962 $ 5,169,583 $ 1,874,871 $ 252,516,978 Liabilities, Deferred Inflows of Resources and Fund
Balances
Liabilities:

Accounts Payable $ 30,825 $ - $ 237,939 $ 1,500 $ 5,595,866 Due to Other Funds - 34,358 - - 13,243,167
Advances Due to Other Funds - - - - 8,800,000
Notes Payable - - - - 3,305
Deposits - 365 - - 3,781,076
Unearned Revenue - - - - 124,639
Total Liabilities 30,825 34,723 237,939 1,500 31,548,053 Deferred Inflows of Resources:

Unavailable Revenue - - - - 12,942,125
Total Deferred Inflows of Resources - - - - 12,942,125
Fund Balances:

Restricted 1,363,459 247,239 4,931,644 1,873,371 214,872,093 Unassigned - - - - (6,845,293)
Total Fund Balances 1,363,459 247,239 4,931,644 1,873,371 208,026,800 Total Liabilities, Deferred Inflows of Resources and
Fund Balances $ 1,394,284 $ 281,962 $ 5,169,583 $ 1,874,871 $ 252,516,978 115
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2024
Air Quality
Improvement
Fund
Community
Development
Block Grant
Citywide
Maintenance and
Services Drainage Funds
Drainage Benefit
Assmnt Dist
Revenues:

Other Taxes $ - $ - $ - $ - $ -
Subventions and Grants 32,586 1,153,468 - - -
Park Development Fees - - - - -
Licenses and Permits - - - - -
Fines and Forfeitures - - - - -
Special Assessments - - 157,436 - 145,870
Charges for Current Services - - - - -
Drainage Fees - - - 5,085,662 -
Traffic Impact Fees - - - - -
Facilities Impact Fees - - - - -
Interfund Interest - - - 83,962 -
Interest 7,211 79,144 3,423 256,841 33,775
Net Increase (Decrease) in Fair Value of
Investments 4,412 27,547 2,095 157,174 20,655
Developer Contributions - - - - -
State Contributions - - - - -
Other Agency Contributions - - - - -
County Contributions - - - - -
Other Revenue - - - - -
Total Revenues 44,209 1,260,159 162,954 5,583,639 200,300 Expenditures:

Current:

General Government - - 22,913 - -
Public Safety - 5,320 - - -
Public Services - 1,172 - - 26,515
Community Development - 531,535 - - -
Cultural and Recreational - - - - -
Health and Welfare - 218,340 - - -
Capital Outlay 3,275 108,495 - 201,090 -
Debt Service:

Principal - 299,000 - - -
Interest - 22,874 - - -
Interfund Interest - - - 83,962 -
Total Expenditures 3,275 1,186,736 22,913 285,052 26,515 Excess (Deficiency) of Revenues Over
Expenditures 40,934 73,423 140,041 5,298,587 173,785
Other Financing Sources (Uses):

Transfers In - - - - -
Transfers Out - - - (82,100) -
Total Other Financing Sources (Uses) - - - (82,100) -
Net Change in Fund Balances 40,934 73,423 140,041 5,216,487 173,785 Fund Balances (Deficit) - Beginning of Year 312,647 2,137,434 - 10,301,469 1,377,967 Restatement of Fund Balance to Establish New
Fund - - - - -
Fund Balances (Deficit) - Beginning of Year,
Restated 312,647 2,137,434 - 10,301,469 1,377,967
Fund Balances (Deficit) - End of Year $ 353,581 $ 2,210,857 $ 140,041 $ 15,517,956 $ 1,551,752 116
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2024
Enhanced
Infrastructure
Financing
District Federal Funds
Federal Home
Program
Federal Jobs
Programs
Federal Home
ARP Fund
Fire Facilities
Impact Gas Tax
$ - $ - $ - $ - $ - $ - $ 4,556,678
- 2,541,253 266,975 - - - -
- - - - - - -
- - - - - - -
- - - - - - -
393,285 - - - - - -
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - 1,474,428 -
- - - - - - -
15,487 - 55,742 - - 226,540 257,897
9,477 - 7,206 - - 138,413 175,395
- - - - - - -
- - - - - - -
- - - - - - -
- - - - - - 117,111
- - - 62,506 - - -
418,249 2,541,253 329,923 62,506 - 1,839,381 5,107,081
- - - - - 73,721 77,330
- - - - - - -
- 15,008 - 57,561 - - 18,739
- - 188,066 - 785 - -
- - - - - - -
- - - - - - -
- 7,556,317 - - - - 428,315
- - - - - - -
- - - - - - -
- - - - - - -
- 7,571,325 188,066 57,561 785 73,721 524,384
418,249 (5,030,072) 141,857 4,945 (785) 1,765,660 4,582,697 - - - - - - -
- (141,545) - - - - (160,874)
- (141,545) - - - - (160,874)
418,249 (5,171,617) 141,857 4,945 (785) 1,765,660 4,421,823 297,756 (386,297) 7,898,494 (18,012) (1,355) 8,644,380 8,803,877 - - - - - - -
297,756 (386,297) 7,898,494 (18,012) (1,355) 8,644,380 8,803,877 $ 716,005 $ (5,557,914) $ 8,040,351 $ (13,067) $ (2,140) $ 10,410,040 $ 13,225,700 117
City of Palmdale
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Special Revenue Funds
June 30, 2024
Housing
Authority
Landscape
Maintenance
Local
Transportation
Article 3
Local
Transportation
Article 8
Measure A LA
County Parks
Revenues:

Other Taxes $ - $ - $ - $ - $ -
Subventions and Grants - - 21,005 - -
Park Development Fees - - - - -
Licenses and Permits - - - - -
Fines and Forfeitures - 11,200 - - -
Special Assessments - 7,283,569 - - -
Charges for Current Services 64,318 - - - -
Drainage Fees - - - - -
Traffic Impact Fees - - - - -
Facilities Impact Fees - - - - -
Interfund Interest - - - - -
Interest 14,280 349,308 56 - -
Net Increase (Decrease) in Fair Value of
Investments 8,739 210,724 35 - -
Developer Contributions - 17,863 - - -
State Contributions - - - - -
Other Agency Contributions - - - - -
County Contributions - - - - -
Other Revenue - - - - -
Total Revenues 87,337 7,872,664 21,096 - -
Expenditures:

Palmdale City CouncilMay 6, 2025

Palmdale City Council
May 6, 2025