CITY OF PALM DESERT

MANAGEMENT'S DISCUSSION AND ANALYSIS

Our discussion and analysis of the City of Palm Desert's financial performance for the fiscal year ended June 30, 2025, provides: a comparison of current year to prior year ending results based on the government-wide financial statements; an analysis of the City's overall financial position and results of operations to assist users in evaluating the City's financial position; a discussion of significant changes that occurred in the funds; and significant budget variances. In addition, it describes the activities during the year for capital assets and long-term debt. We end our discussion and analysis with a description of known facts, decisions, and conditions that are expected to have a significant effect on the financial position or results of operations. Please read it in conjunction with the transmittal letter and the City's financial statements.

FINANCIAL HIGHLIGHTS

• The City's total assets and deferred outflows exceeded its liabilities and deferred inflows by $835.62 million (net position).
• The City's governmental activities net position increased by $12.40 million, and the net position of the business-type activities decreased by $1.77 million.
• During the year, the City's revenues were $154.53 million and expenses were $142.13 million in its governmental activities, compared to fiscal year 2024, where revenues were $155.47 million and expenses were $167.64 million.
• In the City's business-type activities, expenses were $16.17 million, $1.84 million more than the $14.33 million in prior year expenses. Revenues generated from golf course green fees, merchandise sales, rental income and other revenues increased by $433.19 thousand compared to prior year, and Parkview Office Complex revenues for business-type activities revenues increased $105.06 thousand from prior year.
• The City's governmental activities program revenues and general revenues decreased by $0.94 million, while program expenses decreased by $25.51 million.
• The City kept its General Fund expenditures within spending limits by $9.69 million. The revenues and transfers available for expenditures exceeded budget by $7.60 million.

USING THIS ANNUAL REPORT

This annual report consists of a series of financial statements. The Statement of Net Position and Statement of Activities (on pages 39, 40, 41 and 42) provide information about the activities of the City as a whole and present a long-term view of the City's finances. The fund financial statements start on page 43. For governmental activities, these fund statements tell how these services were financed in the short term as well as what remains for future spending. The fund financial statements also report the City's operation in more detail than the government-wide statements by providing information about the City's most significant funds and other funds. The remaining fiduciary fund statement provides financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government.