Finance, Economic Development and Jobs Committee
January 27, 2025

FINANCE, ECONOMIC DEVELOPMENT AND JOBS
AGENDA

REGULAR MEETING

January 27, 2025, 12:00 p.m.

City Hall North Conference Room A
1600 Truxtun Avenue
Members
Larry Koman
Eric Arias
Andrae Gonzales

1. ROLL CALL

2. PUBLIC STATEMENTS
a. Agenda Item Public Statements
b. Non-Agenda Item Public Statements

3. ADOPTION OF MINUTES
a. Adoption of the September 23, 2024, regular meeting minutes.

Staff recommends adoption of minutes.

4. STAFF REPORT

5. NEW BUSINESS
a. 2023 Audit Reports
Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2023.

1. Agreed Upon Conditions Report for the fiscal year ended June 30, 2023.2.

Auditor Communication with Those Charged with Governance (SAS 114 Letter) for fiscal year ended June 30, 2023.

3. Independent Auditors Report – Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan for the year ended June 30, 2023.

4. Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield for the fiscal year ended June 30, 2023.

5. Independent Auditors Report – Mechanics Bank Arena, Theater, Convention Center, Dignity Health Amphitheatre & Valley Children’s Ice Center for the

6. fiscal year ended June 30, 2023.

Agreed Upon Procedures Report (Public Safety and Vital Services) for the fiscal year ended June 30, 2023.

7. Single Audit Report for the fiscal year ended June 30, 20238.

Staff recommends acceptance of the fiscal year 2023 audit reports b. Economic Area Program Overview and Downtown Competitive Program Overview of the existing Economic Opportunity Area (EOA) Program and selection of applications for the Downtown Competitive Program.

Staff recommends the Board provide direction regarding the Economic Opportunity Area Program and Competitive EOA selection
*1. PowerPoint presentation by ECD
*2. EOA Incentive Program Activity Report
Submitted by ECD

6. COMMITTEE COMMENTS

7. ADJOURNMENT

1 BUDGET, FINANCE AND ECONOMIC DEVELOPMENT

MINUTES

REGULAR MEETING

September 23, 2024, 12:00 p.m.

City Hall North Conference Room A
1600 Truxtun Avenue

Members Present: Andrae Gonzales, Eric Arias

Members Absent: Ken Weir

City Staff Present: Gary Hallen, Assistant City Manager Julie Drimakis, City Clerk
Darrin Budak, Assistant Recreation and Parks Director
Josh Rudnick, Deputy City Attorney
_____________________________________________________________________

1. ROLL CALL

2. PUBLIC STATEMENTS
a. Agenda Item Public Statements
None.
b. Non-Agenda Item Public Statements
None.

3. STAFF REPORT
None.

4. ADOPTION OF MINUTES
a. Adoption of the June 24, 2024 regular meeting minutes.

Staff recommends adoption of minutes.

Motion by Councilmember Arias to adopt the minutes.

Motion approved with Councilmember Weir absent.

5. NEW BUSINESS
a. Proposed Increase of Park Development and Improvement Fee

2 All Wards
Staff recommends the Budget, Finance and Economic Development Committee refer the proposed increase in the Park Development and Improvement Fee to full Council for approval.

Interim Recreation and Parks Director Budak made staff comments and provided a PowerPoint presentation.

Michael Turnipseed made public comments regarding the need for public restrooms in the parks.

Motion by Councilmember Gonzales to move to Council after staff has had a sit down face to face meeting with key stakeholders.

Motion was approved with Councilmember Weir absent.

1. PowerPoint presentation
b. East Hills Mall Development Update
Assistant City Manager Hallen made staff comments and provided a PowerPoint presentation.

Councilmember Gonzales referred to staff to look into what needs to be done for the City to assume responsibility for the streets, Mall View Road.

Staff recommends to receive and file report.

Councilmember Gonzales moved to receive and file the report.

Motion was approved with Councilmember Weir absent.

1. PowerPoint presentation

6. COMMITTEE COMMENTS

7. ADJOURNMENT
Meeting was adjourned at 12:40 p.m.

_________________________

JULIE DRIMAKIS, CITY CLERK

ADMINISTRATIVE REPORT

MEETING DATE: January 27, 2025 AGENDA CATEGORY: New Business TO: Finance, Economic Development and Jobs Committee
FROM: Randy McKeegan, Finance Director
DATE: January 23, 2025
SUBJECT: Fiscal Year 2023 Audit Reports:

1. Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2023.

2. Agreed Upon Conditions Report for the fiscal year ended June 30, 2023.

3. Auditor Communication with Those Charged with Governance (SAS 114 Letter) for fiscal year ended June 30, 2023.

4. Independent Auditors Report – Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan for the year ended June 30, 2023.

5. Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield for the fiscal year ended June 30, 2023.

6. Independent Auditors Report – Mechanics Bank Arena, Theater, Convention Center, Dignity Health Amphitheatre & Valley Children’s Ice Center for the fiscal year ended June 30, 2023.

7. Agreed Upon Procedures Report (Public Safety and Vital Services) for the fiscal year ended June 30, 2023.

8. Single Audit Report for the fiscal year ended June 30, 2023

RECOMMENDATION:

Staff recommends acceptance of the fiscal year 2023 audit reports

BACKGROUND:

1. The City’s Annual Comprehensive Financial Report (ACFR), commonly referred to as the Annual Audit Report, for the fiscal year ended June 30, 2023 will be provided to the City Council as part of the packet prior to this meeting. A copy of the report will also be on file in the City Clerk’s office for public review. The ACFR represents the City’s financial statements as of June 30, 2023, which are audited by the accounting firm of Brown Armstrong Accountancy Corporation. The current year audit opinion issued by the outside auditors was “unqualified,” which indicates that the City complied, in all material respects, with accounting principles generally accepted in the United States of America.

2. The Agreed Upon Conditions Report is designed to increase efficiency, internal controls and/or financial reporting and includes any reportable conditions noted during the Audit. A summary of reported conditions are included in the report. The report also addresses conditions identified in the prior year which have all been resolved to the auditors’ satisfaction.

3. The SAS 114 Letter provides information about our auditors’ responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the planned scope and timing of the audit.

4. Contract requirements contained in City of Bakersfield Agreement 76-153 as amended by Agreements 76-153(5), 76-153(4), 77-44, 85-197 and 92-106 apply to operations of the

Bakersfield Subregional Wastewater Management Plan. The City’s compliance with contract

requirements is audited on an annual basis. The current compliance report, issued by the outside auditors, is attached for your review and indicates that there were no audit findings.

5. Attached is a letter from the City’s independent auditors Brown Armstrong Accountancy Corporation indicating they have completed their annual review of the Appropriations Limit Worksheet prepared by the City in accordance with Section 1.5 of Article XIIIB of the California Constitution (GANN Limit). This annual review is performed by the auditors as part of their contract to provide auditing services to the City of Bakersfield. The agreed upon review procedures are substantially less in scope than an audit and therefore no audit opinion is expressed regarding the calculation.

6. Attached is the independent audit report for the Mechanics Bank Arena, Theater, Convention Center, Dignity Health Amphitheatre & Valley Children’s Ice Center, for the fiscal year ended June 30, 2023. This audit report presents the financial statements for this operational unit as of June 30, 2023. The management company (AEG) is required to submit an independent audit report of their operations to the City after the end of each fiscal year. This audit report was prepared by the accounting firm of Barbich, Hooper, King, Dill & Hoffman.

7. The Agreed Upon Procedures Report for the Public Safety and Vital Services measure is designed to increase efficiency, internal controls and/or financial reporting and includes any reportable conditions noted during the Audit. This report is a requirement per the guidelines stated in Resolution No. 089-18 regarding the Public Safety and Vital Services measure. A summary of reported conditions is included in the report.

8. Attached is the Single Audit Report for the fiscal year ended June 30, 2023. This audit report tests the City’s compliance for each major program and on internal control over compliance and report on the schedule of expenditures of federal awards required by the uniform guidance. The current audit report, issued by outside auditors, finds that the City has complied, in all material respects, with the compliance requirements that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2023.

FISCAL IMPACT:

The act of accepting th ese reports and referred to the committee will have not Fiscal Impact to the City General Fund.

COUNCIL GOAL:

Innovative and Efficient City Government

ATTACHMENTS:

1. ACFR 2023 – Financial statements Final

2. AUC Report Final

3. SAS 114 Letter Final

4. Wastewater AUP Report Final

5. GANN Report 2023 Final

6. Mechanics Bank Arena Financials 6 30 23 – Final

7. AUP Report Final

8. Final 2023 Single Audit Report

CITY OF BAKERSFIELD

CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2023
Prepared by the Department of Finance
Randy McKeegan, Finance Director

On the Cover
Via Arte Festival
The Marketplace
Photo by Gilbert Vega

CITY OF BAKERSFIELD
Annual Comprehensive Financial Report
Year Ended June 30, 2023
Table of Contents

INTRODUCTORY SECTION PAGE
Table of Contents................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................i Letter of Transmittal................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................iv GFOA Certificate of Achievement................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ix Organizational Chart................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................x Elected and Administrative Officers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................xi

FINANCIAL SECTION
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1 Management Discussion and Analysis................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5 Basic Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 Governmental Funds:

Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 Reconciliation of the Governmental Funds Statement
of Revenues, Expenditures and Changes in Fund Balances
to the Government-Wide Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 Proprietary Funds:

Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36 Statement of Revenues, Expenses and Changes in Fund Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38 Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................40 Fiduciary Funds:

Statement of Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................46 Statement of Changes in Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................47 Notes to the Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................49 Required Supplementary Information:

Budgetary Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................108 Budgetary Comparison Schedule for the General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................109 Budgetary Comparison Schedule for the Transient Occupancy Taxes Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................110 Budgetary Comparison Schedule for the Community Development Block Grant Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................110 Budgetary Comparison Schedule for the Gas Tax & Road Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................111 Budgetary Comparison Schedule for the Redevelopment Successor Agency - Housing Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................111 Defined Pension Plan - Schedules of Changes in Net Pension Liability and Related Ratios & Schedules of Plan Contributions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................113 Other Post-Employment Benefits (OPEB) Plan - Schedule of Changes in City's Net OPEB Liability and Related Ratios and Schedule of OPEB Contributions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................119 iPage 10 of 302

CITY OF BAKERSFIELD
Annual Comprehensive Financial Report
Year Ended June 30, 2023
Table of Contents
PAGE
Supplementary Information:

Balance Sheet - General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................125 Schedule of Revenues by Function - General Fund - Budget & Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................126 Schedule of Expenditures by Division - General Fund - Budget & Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................127 Combining Statement of Revenues, Expenditures and Changes in Fund Balances Public Safety and Vital Services Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................128 Special Revenue Funds:

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget & Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................130 Debt Service Fund:

Schedule of Revenues, Expenditures and Changes in Fund Balance -Budget & Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................136 Capital Projects Funds:

Combining Schedule of Revenues, Expenditures and Changes in Fund Balances -Budget & Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................138 Non-Major Governmental Funds
Combining Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................140 Combining Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................142 Internal Service Funds:

Combining Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................145 Combining Statement of Activities and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................146 Combining Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................147 Fiduciary Funds:

Combining Statement of Fiduciary Net Position - Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................149 Combining Statement of Fiduciary Net Position
-Private Purpose Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................150 Combining Statement of Fiduciary Net Position
-Pension & Other Employee Benefit Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................151 Combining Statement of Changes in Fiduciary Net Position - Custodial Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................152 Combining Statement of Changes in Fiduciary Net Position -Private Purpose Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................153 Combining Statement of Changes in Fiduciary Net Position -Pension & Other Employee Benefit Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................154 Long-term Debt Recorded in Private Purpose Trust Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................155 ii

CITY OF BAKERSFIELD
Annual Comprehensive Financial Report
Year Ended June 30, 2023
Table of Contents
PAGE

STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................158 Changes in Net Position - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................160 Fund Balances of Governmental Funds - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................164 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................166 Governmental Activities Tax Revenues By Source - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................168 Principal Property Taxpayers - Current Year and Nine Years Ago................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................169 Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................170 Property Tax Rates/Direct and Overlapping Governments - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................172 Property Taxes Levies and Collections - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................174 Direct and Overlapping Sales Tax Rates - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................175 Taxable Sales By Category Market Groups - Last Ten Calendar Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................176 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................178 Ratio of Outstanding Debt by Type - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................180 Direct and Overlapping Debt as of June 30, 2023................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................182 Computation of Legal Debt Margin................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................183 Pledged - Revenue Coverage - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................184 Demographic and Economic Statistics - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................185 Principal Employers - Current Year and Nine Years Ago................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................186 Full-time Equivalent City Government Employees by Function - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................187 Property Value, Construction and Bank Deposits - Last Ten Calendar Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................189 Operating Indicators by Function - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................191 Capital Asset Statistics by Function - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................193 Schedule of Insurance in Force................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................195 iii

December 26, 2024
Honorable Mayor, City Council, City Manager and Citizens of Bakersfield:

The City of Bakersfield's (the “City”) Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2023 is now available for review and analysis. This document is required by City’s Municipal Code, which states that a complete financial statement and report be prepared at the end of each fiscal year (Section 2.08.020F). T he City’s Finance Department prepared the report and assumes responsibility for both the accuracy of the data, its completeness and the fairness of the presentation which includes all disclosures. Because the cost of fiscal internal controls should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute assurance that the financial statements are free of any material misstatements. To the best my knowledge and belief, the enclosed data is accurate in all material aspects and is reported in a manner that presents fairly the financial position and results of operations of the City.

The accompanying financial statements of the City have been prepared in conformity with U.S. generally accepted accounting principles (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB).

Brown Armstrong Accountancy Corporation, a firm of licensed certified public accountants, performed the annual independent audit. The goal of the audit was to provide reasonable assurance that the basic financial statements of the City are free of material misstatement. The independent auditor concluded, based upon the audit, that the City’s financial statements for the fiscal year ended June 30, 2023 are fairly stated in conformity with GAAP.

The independent audit of the financial statements of the City is part of a broader financial review that is supplemented by the federally mandated “Single Audit.” This separate review is designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair representation of the financial statements, but also on the audited government’s internal controls and compliance with legal requirements, with special emphasis on internal controls and legal requirements involving the administration of federal awards.

These reports are available in the City’s separately issued Single Audit Report and may be obtained from the City’s website.

GAAP requires that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management’s Discussion and A nalysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of Bakersfield’s MD&A c an be found immediately following the report of the independent auditors, beginning on page 5 of the financial section.
iv

GENERAL BACKGROUND
The City is located approximately one hundred miles north of Los Angeles in the southern San Joaquin Valley. The City is the County seat for the County of Kern and maintains an incorporated area of 151 square miles with an estimated population of 411,109 as of January 1, 2024. Bakersfield operates under the Council-Manager form of government. Policymaking and legislative authority are vested in the City Council, which consists of a Mayor and a seven-member Council. The City Council is responsible for passing the ordinances and operating resolutions, passing the annual budget, appointing commissions and committees, and hiring the City Manager, and City Attorney, as well as many other related duties.

The City of Bakersfield is a Charter City founded in 1898 that offers a full range of services including:
• Fire and Police Protection
• Streets and Infrastructure Maintenance
• Planning and Building Services
• Economic and Community Development Services
• Parks and Recreation Services
• River & Agricultural Water and Domestic Water Services • Municipal Airpark - General Aviation
• Refuse Collection
• Wastewater Treatment
This report includes the financial activities of the City and the Bakersfield Successor Agency. A more detailed discussion of the reporting entity is provided in the notes to the financial statements.

MAJOR INITIATIVES
The City of Bakersfield recognized the severe impact of homelessness on the community and undertook several programs and projects designed to address the issues it creates. The landmark homeless project undertaken by the City is the Brundage Lane Navigation Center which opened early in October 2020 and is now providing bridge housing for over 300 unhoused individuals in the area. Last year the facility served more than 884 individuals and found permanent housing for 116 people. Since it opened, more than 1,300 unduplicated clients have stayed there and over 365 of those individuals have moved to permanent housing. In addition to this endeavor, the City has established rapid response teams in both the Development Services and Recreations and Parks departments to clean up homeless encampments and address other negative impacts caused by that population. The number of employees assigned to these important teams has increased each year since being established in 2019. The City also continues to fund private clean-up services in the Downtown and Old Town Kern areas of the City.

The City also continues to move forward with initiatives to improve financial infrastructure and long-term planning. In the current year, the City began the implementation phase to replace the current Enterprise Resource Planning (ERP) software. The existing legacy system was implemented in the mid-1990’s and has passed its useful life. Modern ERP systems would build more efficient operations across all City departments. The City Council has approved the funding for this project which is expected to be complete in the next 12 to 18 months.
v

FACTORS AFFECTING FINANCIAL CONDITION
Local Economy and Local Budget Issues – F unds f rom the American Rescue Plan Act (ARPA) were awarded to the City in 2021 continue to provide benefits to the community. These funds have allowed local governments like Bakersfield to assist the community negatively impacted by the pandemic, fund economic redevelopment, and supplement City operations. The period of availability for ARPA d ollars continues into fiscal year 2024-25 so that stimulus has the potential to backfill some revenues for the City over the next three years.

Property tax revenues grew by 12% in fiscal year 2022-23 and are estimated to increase by an additional 7% in fiscal year 2023-24. These tax revenues face some uncertainty as higher interest rates over the last few years could lead to slower growth in the local housing market. In addition, the State and Federal government’s desire to reduce the economy’s reliance on fossil fuels can negatively impact the local job and housing markets. In 2018, the citizens of Bakersfield approved a new 1% transaction and use tax called the Public Safety and Vital Services ( PSVS) and this newer tax revenue stream has had tremendous positive impacts to the community by adding as estimated $100 million in revenue each year. The PSVS funds are budgeted and accounted for separately within a sub-fund of the General Fund and have a special oversight committee made up of nine City residents. It should be noted that the PSVS revenue stream is primarily earmarked for the fulfilling specific priorities highlighted when the measure was passed but the City Council can use portions of that sales tax revenue to address economic instability. Like the PSVS tax, the standard Bradley-Burns 1% sales tax has been a steady revenue source for the City and like the PSVS funds, with double digit growth over the last two years. That growth is expected to level off in the upcoming years though and both sales tax sources are expected to be basically flat, with little growth when compared to prior years.

The City Council adopted Resolution 91-19 on June 28, 2019 to create a more substantial reserve to help mitigate potential financial downturns as well as create potential avenues to address an increasing concern regarding the growing unfunded pension liabilities. This resolution created a five-year plan that would increase the General Fund reserve equal to two months of operational costs, increase the facility replacement reserve, and begin to fund a Section 115 Pension Rate Stabilization Fund. The positive sales tax revenue receipts from the last three years allowed the City to meet that planned two-month operational reserve, establishing the rainy-day reserve balance at the end of the 2022-23 fiscal year that currently sits at over $52 million. The Council continued to fund the City’s Other Post-Employment Benefits (OPEB) plan for retiree medical benefits, maintaining the City of Bakersfield’s position as one of the few entities in California that are making serious progress toward fully funding this long-term obligation.

Retirement costs will continue to escalate for all employee groups and over the next several years are expected to increase by a total of over $30 million by fiscal year 2027-28. Actual CalPERS earnings over the past five years have been 8.6%, 6.7%, 4.7% and 21.3% (-6.1%) respectively. The 21.3% earnings experienced in 2020-21 (14% over the discount rate) prompted CalPERS to reduce the discount rate to

6.8%. This action was required by the State system’s policy that is meant to smooth out the positive effects of the plan’s performance over the subsequent years, without which participants would see significant swings in contribution rates. CalPERS estimates the impact of the changes will still create some positive impacts on City pension costs. The loss experienced the very next year will actually generate more of a negative impact on pension costs than the prior year gain positively impacted costs, Analysis shows that the combined effect is an over $52 million net funding loss.

Accounting System and Internal Controls - The City's accounting system is organized and operated on a fund basis with each fund treated as a distinct self-balancing accounting entity. Various funds utilized by the City of Bakersfield are fully described in Note 1 of Notes to the Financial Statements. T he City's accounting records for general governmental operations are maintained on a modified accrual basis of accounting, whereby revenues are recognized when measurable and available and expenditures are recognized when materials and services are received. Accounting records for the enterprise and internal service funds are recorded on an accrual basis of accounting, whereby revenues are recognized when vi

earned and expenses are recognized when incurred.

In developing and evaluating the City's accounting system, consideration is given to the adequacy of internal accounting controls. Internal accounting controls are designed to provide reasonable, but not absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or disposition and (2) the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that: (a) the cost of a control should not exceed the benefits likely to be derived and (b) the evaluation of costs and benefits requires estimates and judgments by management.

All internal control evaluations occur within the framework described previously. The City's Finance department believes that these internal accounting controls adequately safeguard assets and provide reasonable assurance of proper recording of financial transactions. However, the City recognizes that even sound internal controls have inherent limitations. Internal controls must be reviewed to ensure that the City’s operating policies and procedures are being adhered to and that the controls are adequate to assure accurate and reliable financial reporting and to safeguard the City’s assets.

Budgetary Controls - T he objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Project length financial plans are adopted for the capital projects funds. The level of budgetary control is established at the fund level. The City also maintains an encumbrance accounting system as one technique of accomplishing budgetary control. Unencumbered amounts lapse at year-end. However, encumbrances and certain capital projects are re-appropriated as part of the following year's budget.

Cash Management - The City maintains a cash and investment pool that is available for use by all funds, except the Fire Pension Trust Fund. Each fund type's portion of this pool is displayed on the combined balance sheet as cash and short-term investments. The deposits and investments of the Fire Pension Trust Fund are held separately from other City funds.

The City Council has adopted an investment policy in accordance with California Government Code Sections 53607 and 53646, with a goal to minimize credit and market risks while maintaining a competitive yield on its portfolio. The City is also governed by State statutes authorizing the City to invest in bonds or other evidences of indebtedness of the U.S. Government or any of its agencies and instrumentalities, repurchase agreements and bankers’ acceptances. The pension trust investments are administered separately under Municipal Code Section 2.92, which is within state guidelines.

OTHER INFORMATION
Independent Audit - T he City Charter requires an annual audit by independent certified public accountants. The accounting firm of Brown Armstrong Accountancy Corporation was selected by the City Council in 2023 to perform the audit for a two-year service contract.

Awards - T he Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Bakersfield for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022, marking 42nd consecutive year Bakersfield has received the GFOA c ertificate. T he Certificate of Achievement is a national award recognizing conformance with the highest standards for preparation of state and local government financial reports.

A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to conform to Certificate of Achievement Program requirements and will be submitting it to GFOA to determine its eligibility for another certificate.

Additionally, the City received the Distinguished Budget Presentation Award for the fiscal year beginning vii

July 1, 2023 from the GFOA. The Distinguished Budget Presentation Award judges a government's budget document for compliance with the guidelines established by the National Advisory Council on State and Local Budgeting and best practices of the GFOA.

Acknowledgments - The preparation of this report could not have been accomplished without the tireless work performed by the entire staff of the Finance Department. I would like to express my appreciation to the members of this Department who assisted and contributed to its preparation. I would also like to thank the Mayor, City Council, and the City Manager for their continued support in planning and conducting the financial operations of the City in a professional and effective manner.

Respectfully,
Randy McKeegan
Finance Director
viii

ix

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CITY OF BAKERSFIELD
June 30, 2023
City Council
Karen K. Goh .....................................................................................................................Mayor Eric Arias ........................................................................................................Member/Ward 1 Andrae Gonzales ..............................................................................................Vice Mayor/Ward 2 Ken Weir ............................................................................................................Member/Ward 3 Bob Smith ........................................................................................................... Member/Ward 4 Bruce Freeman ...................................................................................................Member/Ward 5 Patty Gray ..........................................................................................................Member/Ward 6 Manpreet Kaur ......................................................................................................Member/Ward 7 Administrative Personnel
Christian Clegg........................................................................................................City Manager Virginia Gennaro ....................................................................................................City Attorney Phil Burns.................................................................................... Development Services Director Jennifer Beyers..................................................Economic & Community Development Director Randy McKeegan .............................................................................................Finance Director John Frando.................................................................................................................Fire Chief Christi Tenter ....................................................................................Human Resources Director Greg Terry ..............................................................................................................Police Chief Zachary Meyer......................................................................................... Public Works Director Rick Anthony ..................................................................................Recreation & Parks Director Greg Pronovost.............................................................................Technology Services Director Kristina Budak ....................................................................................Water Resources Manager xi

1 INDEPENDENT AUDITOR’S REPORT

To the Honorable Mayor and
Members of the City Council
City of Bakersfield
Bakersfield, California

Report on the Audit of the Financial Statements

Opinions

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund i nformation of the City of Bakersfield, California (the City), as of and for the year ended June 30, 20 23, and the related notes to the financial statements, which collectively comprise the City’s basic financ ial statements as listed in the table of contents.

In our opinion, the financial statements referred to above pres ent fairly, in all material respects, the respective financial position of the governmental activities, t he business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flow s thereof for the year then ended in
accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards ge nerally accepted in the United States of America and the standards applicable to financial audits contai ned in Government Auditing Standards , issued by the Comptroller General of the United States.

Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Aud it of the Financial Statements section of our report. We are required to be independent of the City and to me et our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presenta tion of the financial statements in accordance with accounting prin ciples generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control rel evant to the preparation and fair presentation of financial statem ents that are free from materia l 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 dou bt 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. Page 21 of 302

2 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 acc ordance with auditing standards generally accepted in the United States of America 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 cont rol. Misstatements are considered material if there is a substantial likelihood that, individually or in t he aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with auditing standards ge nerally accepted in the United States of America and Government Auditing Standards, we:

• Exercise professional judgment and maintain professional skept icism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures respons ive to those risks. Such procedures include examining, on a test basis, evidence regardi ng the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the au dit in order to design audit procedures that are appropriate in the circumstances, but not f or the purpose of expressing an opinion on the effectiveness of the City’s internal control. Ac cordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and t he reasonableness of significant accounting estimates made by management, as well as evaluate th e overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or eve nts, considered in the aggregate, that raise substantial doubt about the City’s ability to contin ue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governan ce regarding, among other matters, the planned scope and timing of the audit, significant audit fi ndings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information

Accounting principles generally accepted in the United States o f America require that the management’s discussion and analysis and budgetary comparison information on pages 5-21 and 108-112, respectively, the Defined Pension Plan – Schedules of Changes in the Net Pens ion Liability and Related Ratios and the Schedule of Plan Contributions on pages 113-118, and the Ot her Postemployment Benefits (OPEB) Plan Schedule of Changes in the City’s Net OPEB Liability and R elated Ratios as well as its Schedule of OPEB Contributions on pages 119-1 20 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 auditing stan dards generally accepted in the United States of America, which consisted of inquiries of management about the methods of prepa ring 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 f inancial 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.

3 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 accompanyin g combining and individual nonmajor fund financial statements and the schedule of long-term debt re c o r d e d i n p r i v a t e p u r p o s e t r u s t a r e 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 de rived from and relates directly to the underlying accounting and other records used to prepare the bas ic financial statements. The information has been subjected to the auditing procedures applied in the au dit of the basic financial statements and certain additional procedures, including comparing and reconcil ing such information directly to the underlying accounting and other records used to prepare the bas ic financial statements or to the basic financial statements themselves, and other additional procedure s in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and the schedule of long-term debt re corded in private purpose trust 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 Comprehensive Financial Report. The other information comprises the introductory sectio n and 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 ex press 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 exist s between the other information and the basic financial statements, or t he other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected ma terial misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 26, 2024, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contra cts, and grant agreements and other matters. The purpose of that report is solely to describe the s cope of our testing of internal control over financial reporting and compliance and the results of that test ing, and not to provide an opinion on the effectiveness of the City’s internal control over financial rep orting 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.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
December 26, 2024

4

CITY OF BAKERSFIELD
Management's Discussion and Analysis
This discussion and analysis of the City of Bakersfield’s (City) financial performance provides an overview of the City’s financial activities for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with the accompanying letter of transmittal, the basic financial statements, and the accompanying notes to those financial statements.

FINANCIAL HIGHLIGHTS
 The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $2.3 billion (net position).  The City’s total net position increased by $84.3 million over the prior fiscal year. This increase is broken down with changes to the following components of net position; a $178 thousand decrease in restricted net position, a $56.8 million increase i n unrestricted net position, and a $27.9 million decrease in capital assets investment. Prior year information presented in this section does not take into account potential restatements made to the prior fiscal year balances for prior period adjustments (though there were no material restatements to report).  As of the close of the current fiscal year, the City's Governmental Funds reported combined ending fund balances of $380.8 million, an increase o f $35.4 million in comparison with the prior year. Amounts available for spending include restricted, committed, assigned and unassigned fund balances. Of this amount, $25.5 million is restricted by law or externally imposed requirements, $197.1 million is committed for specific purposes, $132.2 million assigned and $25.0 is unassigned and available for appropriations.  Total available fund balance for the General Fund increased $23.9 million to $152.3 million, which equates to 48.5% of total General Fund expenditures for the year.
 The City's long-term debt showed a decrease of $11.1 million during the current fiscal year.

Note: Further analysis of the changes and balances highlighted can be found in detail provided in this section. 5

CITY OF BAKERSFIELD
Management's Discussion and Analysis

OVERVIEW OF THE FINANCIAL STATEMENTS
The City'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. T his report also contains other supplementary information in addition to the basic financial statements themselves.

GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business. T he statements present the financial picture of the City from the economic resources measurement focus using the accrual basis of accounting. They present governmental activities and business-type activities separately. Additionally, certain eliminations have occurred as prescribed by the Governmental Accounting Standards Board (GASB) statements in regards to interfund activity, payables and receivables.

The Statement of Net Position and the Statement of Activities provide information about the City as a whole and its activities through the fiscal year. These statements include all assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid.

These two statements report the City's net position and changes in it. Net position is the difference between assets, deferred outflows of resources, liabilities, and deferred inflows of resources providing a measurement of the City's financial health. Over time, increases or decreases in the City's net position can be an indicator of whether its overall financial health is improving or deteriorating. Other factors to consider are changes in the City's property tax base and sales tax base. The government-wide financial statements do not include the fiduciary funds, which comprise the private purpose trust funds, pension trust funds, and custodial funds. Resources in the fiduciary funds are generally not available to support the City’s own programs.

In the Statement of Net Position and the Statement of Activities, the City's activities are separated as follows:

Governmental activities - T he majority of the City's basic services are reported in this category, including the General Government, Police, Fire, Public Works, Recreation & Parks and Development Services. These activities are generally financed by property and sales taxes, user fees, interest income, franchise fees, and state and federal shared revenues and grants.

Business-Type activities - The City charges a fee to customers to cover all or most of the cost of certain services it provides.

The City's Water, Wastewater, and Refuse Collection systems. In addition, the operations of the City's Municipal Airport and Offstreet Parking activities are reported in this category.

FUND FINANCIAL STATEMENTS
A fund is a specific grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities and objectives. Like other state and local government, the fund financial statements provide detailed information about the most significant funds, not the City as a whole. Some funds are required to be established by State law and by bond covenants. Management establishes many other funds to help control and manage financial resources for particular purposes, or to show that the City is meeting legal responsibilities when using certain taxes, grants, and other revenue.

These financial statements include statements for each of three categories of activities – governmental, proprietary and fiduciary. T he governmental activities are prepared using the current financial resources measurement focus and modified accrual basis of accounting. The proprietary activities are prepared using the economic resources measurement focus and the accrual basis of accounting. T he fiduciary activities are custodial funds that also use the economic resources measurement focus but only report a balance sheet. Reconciliation of the Governmental Fund Financial Statements to the Government-Wide 6

CITY OF BAKERSFIELD
Management's Discussion and Analysis
Financial Statements are provided to explain the differences created by the integrated approach.

Governmental Funds - M ost of the City's basic services are reported in governmental funds, which focus on the flow of resources into and out of those funds with the balances remaining at year-end available for appropriation. These funds are reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be converted to cash. The Governmental Fund financial statements focus on near-term inflow and outflow 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 financial requirements. The differences of results in the Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation schedule following the Governmental Fund financial statement in order to facilitate comparison.

Proprietary Funds - Proprietary Funds are used to report services the City charges to all of its customers, which may include units within the City. Proprietary Funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. The City's Enterprise Funds report the same functions as the business-type activities reported in the Government-Wide financial statements, but provide more detail and additional information, such as cash flows.

The City uses Internal Service Funds (the second component of Proprietary Funds) to report activities that provide supplies and services for the City's other programs and activities. This includes the City's Self-Insurance and Equipment Management Funds.

These services primarily benefit governmental rather that business-type functions so a majority of the related operation costs are included with the governmental activities in the Government-Wide financial statements.

Fiduciary Funds - T he City is the trustee, or fiduciary, for certain funds held on behalf of various third parties. The City's fiduciary activities are reported in separate Statements of Fiduciary Net Position much like the proprietary funds. These resources are not available to support the City's programs or operations activities and are thereby excluded from the City's other financial statements. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes.

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 can be found starting on page 49 of this report.

OTHER INFORMATION
In addition to the basic financial statements and accompanying notes, this report also presents certain “Required Supplementary Information” concerning the City's progress in funding its obligation to provide pension benefits and other post-employment benefits (OPEB) to its employees and budgetary comparison schedules for the General Fund and Special Revenue Major Funds.

This information can be found starting on page 108 of this report. 7

CITY OF BAKERSFIELD
Management's Discussion and Analysis

GOVERNMENT-WIDE FINANCIAL ANALYSIS
As previously noted, net position may serve over time as a useful indicator of a government’s financial position. In the current year, the City's assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $2.2 billion at the close of the reporting period, which is a $84.3 million increase in comparison with the prior year (after restatements).

The largest portion of the City’s net position relates to its net investment in capital assets of $2.2 billion (e.g., land, buildings, machinery, infrastructure and equipment), less any related debt used to acquire those assets that is still outstanding. T hese capital assets are used to provide services to citizens; as such, the assets are not available for future expenditures. The City’s investment in capital assets is reported net of related debt, though it should be noted that the resources needed to repay this debt must be provided from other sources as the capital assets themselves cannot be used to service this debt.

A small portion of the City’s net position, $41.6 million (1.8% of the total), represents resources that are subject to external restrictions on their use.

As in the prior year, the City is able to report positive balances in both categories of net position, whether for the City as a whole or for its separate Governmental and Business-type activities.

The following table presents the components of the government-wide Statement of Net Position at the end of the fiscal year for both 2022 a nd 2023. The governmental and business-type activities columns reflect amounts that have been restated in this financial report. Any prior period adjustments that changed net position are explained in the notes though none occurred in the current report.

City of Bakersfield - Net Position
(in thousands)
Governmental Activities Business-Type Activities Total
2022 2023 2022 2023 2022 2023
Assets
Current and other assets $ 518,311 $ 594,651 $ 191,309 $ 203,738 $ 709,620 $ 798,389 Capital assets (net) 1,388,208 1,398,966 882,926 875,654 2,271,134 2,274,620 Total assets 1,906,519 1,993,617 1,074,235 1,079,392 2,980,754 3,073,009 Deferred Outflows of Resources 74,610 173,550 13,356 21,506 87,966 195,056 Liabilities
Long-term liabilities
outstanding 382,487 598,658 158,372 166,982 540,859 765,640 Other liabilities 115,480 133,695 29,149 30,667 144,629 164,362 Total liabilities 497,967 732,353 187,521 197,649 685,488 930,002 Deferred Inflows of Resources 131,434 14,873 18,737 5,648 150,171 20,521 Net Position
Net investment in capital assets 1,369,954 1,395,503 754,164 756,450 2,124,118 2,151,953 Restricted 21,536 21,358 20,200 20,200 41,736 41,558
Unrestricted (39,763) 3,081 106,969 120,952 67,206 124,033 Total Net Position $ 1,351,727 $ 1,419,942 $ 881,333 $ 897,602 $ 2,233,060 $ 2,317,544 Governmental Activities – Total assets for governmental activities increased by $87.1 million, with current and other assets in governmental activities increasing by $76.3 million and a capital assets increase of $10.8 million. Total liabilities increased by $234.4 m illion, with other liabilities increasing b y $18.2 m illion and long-term liabilities increasing b y $216.2 m illion.

Changes to the balance sheet accounts, specifically in capital assets and long-term liabilities are explained further in the applicable Note Disclosures of that accompanying this document. These changes are not related to any significant events that are considered notable or outside the normal operations of a municipal government. 8

CITY OF BAKERSFIELD
Management's Discussion and Analysis
Of the $68.2 million increase in governmental activities total net position, unrestricted net position increased by $42.8 million, net investment in capital assets increased by $25.5 million and restricted net position decreased by $0.2 million. Net investment in capital assets increased due to continued development throughout the City increasing the value of overall infrastructure. The increase in unrestricted net position stems from continued decreases in the other post-employment benefit liability along with a decrease in pension liabilities this year as a result of improved investment performance of the City's pension plan.. There were also increases in revenues, in relation to much smaller levels of increases in expenses across most departments, resulted in an increase in net position. The operational changes are due to improved economic conditions and slowdowns in inflationary pressures.

Business-Type Activities – T otal assets for business-type activities increased b y $5.2 million, with current and other assets increasing by $12.4 million and a $7.3 million decrease in capital assets. Total liabilities increased by $10.1 million, with other liabilities increasing by $1.5 million and long-term liabilities also increasing by $8.6 million. Total net position for business- type activities increased b y $16.3 m illion. O f that amount, net investment in capital assets increased b y $2.3 m illion.

Restricted net position remained constant and unrestricted net position increased by $14.0 million. The overall increase in net position is the result of operations, specifically in Wastewater activities, and completed improvement projects in the Wastewater and, Refuse funds. As with governmental activities, there was a decrease in the net other post-employment benefit liability and the pension related liabilities that also played a part in the increased net position.

Change in Net Position of the City
The following table presents the government-wide changes in net position for both 2022 and 2023. The City’s total revenues of $692.8 million were more than expenses of $605.8 million for an increase in net position before transfers & other items of $87.0 million. The governmental and business-type activities columns reflect amounts that have been restated in this financial report.

City of Bakersfield - Changes in Net Position
(in thousands)
Governmental Activities Business-Type Activities Total
2022 2023 2022 2023 2022 2023
Revenues:

Program revenues:

Charges for services $ 67,803 $ 67,239 $ 137,668 $ 154,422 $ 205,471 $ 221,661 Operating grants and
contributions 43,350 46,450 9,583 6,578 52,933 53,028
Capital grants and
contributions 90,120 60,047 11,758 8,694 101,878 68,741 Total program revenues 201,273 173,736 159,009 169,694 360,282 343,430 General revenues:

Taxes:

Property taxes 96,169 103,660 - - 96,169 103,660
Sales taxes 201,047 199,751 - - 201,047 199,751
Other taxes 2,053 1,497 - - 2,053 1,497
Intergovernmental:

Intergovt, unrestricted 459 419 - - 459 419
Grants and contributions not
restricted to specific programs 28,518 30,202 - - 28,518 30,202 Investment earnings (5,253) 7,049 (1,925) 3,998 (7,178) 11,047 Miscellaneous 3,627 2,705 - - 3,627 2,705
Gain on sale of property 9 2 (9) 51 - 53
Total Revenues 527,902 519,021 157,075 173,743 684,977 692,764 9

CITY OF BAKERSFIELD
Management's Discussion and Analysis
City of Bakersfield - Changes in Net Position
(in thousands)
Governmental Activities Business-Type Activities Total
2022 2023 2022 2023 2022 2023
Expenses:

Governmental:

General government 42,512 36,776 - - 42,512 36,776
Public safety - Police 129,729 157,182 - - 129,729 157,182 Public safety - Fire 45,765 58,352 - - 45,765 58,352
Public works 150,281 109,900 - - 150,281 109,900
Recreation and parks 26,119 39,782 - - 26,119 39,782
Development services 6,956 14,367 - - 6,956 14,367
Economic/Community dev. 50,041 31,828 - - 50,041 31,828 Interest on long-term debt 18 (3) - - 18 (3)
Subtotal - Governmental 451,421 448,184 - - 451,421 448,184 Business-Type:

Wastewater treatment - - 41,499 44,261 41,499 44,261
Refuse collection - - 58,507 65,669 58,507 65,669
Agricultural water - - 7,096 7,322 7,096 7,322
Domestic water - - 38,098 39,548 38,098 39,548
General aviation - - 430 488 430 488
Offstreet parking - - 342 330 342 330
Subtotal - Business-Type - - 145,972 157,618 145,972 157,618 Total expenses 451,421 448,184 145,972 157,618 597,393 605,802 Change in net position before
transfers & other items 76,481 70,837 11,103 16,125 87,584 86,962 Transfers (3,720) (2,771) (2,924) 144 (6,644) (2,627)
Changes in net position 72,761 68,066 8,179 16,269 80,940 84,335 Net Position - Beginning of
Year 1,309,462 1,351,728 879,676 881,333 2,189,138 2,233,061 Net Position - End of Year $ 1,382,223 $ 1,419,794 $ 887,855 $ 897,602 $ 2,270,078 $ 2,317,396 Governmental Activities – O perations of the City's governmental activities for the fiscal year resulted in a $68.1 m illion increase. The following chart displays the difference between the program revenue and expenses by activity to illustrate the amount each respective activity is supported by operational related revenues versus general tax revenue, w hich. The majority of the governmental activities of the City do not receive sufficient program revenues to cover their costs. The activities that have the largest portion of their activities covered by tax revenue are Public Safety and Public Works whose service delivery costs exceeded program revenues by $198.4 million and $42.0 million, respectively . 10

CITY OF BAKERSFIELD
Management's Discussion and Analysis
Total expenses in Governmental Activities had a net decrease of $3.2 million from the previous fiscal year for an overall 0.7% decrease. That decrease is primarily due to less project activity funded by grants that were initiated in the Economic & Community Development (ECD) and Public Works departments in the prior year. With reductions of $18.2 million and $40.4 million respectively, less funds were utilized for ECD program contributions, specifically rental assistance, and in Public Works with reductions related to overall decreases in street and road improvement projects that did not have as significant levels of activity than in the prior year. There were increases in other areas though, where Public Safety costs increased by $40.0 million and Recreation & Parks by $13.7. These rising costs are connected to the significant cost-of-living increases approved for personnel along with the ongoing increases in California Public Employees' Retirement System (CalPERS) rates in the current year.
11

CITY OF BAKERSFIELD
Management's Discussion and Analysis
Taxes are the largest revenue source for governmental activities, which is the case for most municipal governments, amounting to $304.9 million or 58.5% of total revenues. The second largest source of revenue is charges for services which amounts to $67.2 million or 13.0% of total revenues. That revenue is dependent on usage by the City residents and are increased annually based on the operational cost increases incurred by departments. Capital grants and contributions is also a significant revenue source for the City’s governmental activities, amounting to $60.0 million or 11.5% of total revenues. Grant revenue can be dependent on programs operations and reimbursable activities.

Governmental Activities Revenues decreased $8.9 million which is a 1.7% decrease compared to the previous fiscal year to a total of $519.0 million. That is not considered a significant change but is an indication of a potential slowdown in the general revenue growth local government have seen since even before the pandemic. The City will need to prepare budgets conservatively with that in mind and will have to continue to watch revenue trends.

General Revenues - While there was a slight decrease in general revenue, Property Tax revenues increased by 7.8%, or $7.5 million as this tax increases consistently based on overall increases in assessed values of property within the City limits. While that tax revenue source is fairly stable over the last number of years, the flattening of Sales Tax revenue is a change from recent years and consumer spending has slowed in the area.

Program Revenues - Capital Grants and Contributions decreased b y $30.1 m illion due to fewer special projects funded in Public Works compared to the prior year. The most significant reduction is related to the Thomas Roads Improvement Program (TRIP) projects which included decreases in activity related to construction and property acquisition when compared to the previous year. Operating Grants and Contributions increased $3.1 million as more funds related to ARPA revenue were utilized for affordable housing, public works projects in disadvantaged neighborhoods, and economic redevelopment all as a way to address the negative impacts of the COVID-19 pandemic.
12

CITY OF BAKERSFIELD
Management's Discussion and Analysis
Business-Type Activities – T he City operates six Enterprise Funds that offer wastewater services, refuse collection, river & agricultural water, domestic water to City residents, downtown parking and a municipal airport.

Business-type activities increased the City’s net position by $16.3 million during the current year. The chart above compares total program revenues and expenses. As the graphic shows, program revenues exceeded program expenses in Wastewater Treatment by $3.3 million and Refuse Collection by $11.5 million. While the Airpark and Offstreet Parking program revenues exceeded program expenses by a combined $216 thousand. These increases were offset slightly by program expenses exceeding program revenues in Domestic Water by $5.3 million and River & Agricultural Water by $2.7 million. Total business-type expenses increased by $11.6 million (8.0%) over the prior year. That increase is not unexpected as inflationary pressures in the economy have resulted in increases of both materials, supplies and equipment, but has also increased labor costs and the related cost of employee benefits
The following chart illustrates the distribution of business-type revenues by category. The City’s business-type activities rely heavily on charges for services to fund their operations, making up 88.9% of total revenues. Capital grants and contributions is the second largest revenue source at 5.0% of total revenues. 13

CITY OF BAKERSFIELD
Management's Discussion and Analysis
Business-Type activities program revenues increased by $10.7 million, 6.7%, over the prior year. The increase relates back to the increases in operational costs noted previously which requires comparable increases to rates charged to customers. There was an increase in Wastewater charges of $2.4 million and in Refuse Collection service revenue of $10.4 million due to rate increases and increased use.

FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.

A fund is created and segregated for the purpose of carrying out specific activities or attaining specific objectives in accordance with special regulations, restrictions, or limitations. Activity not required to be reported in a separate fund is included in the General Fund.

Governmental Funds - The focus of the City’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's financing requirements. In particular, unassigned fund balance may serve as a useful measure of the City’s available resources as it represents the portion of fund balance which is not limited to use for a particular purpose by an external party, City management or City Council.

As of the end of the current fiscal year, the City’s Governmental Funds reported combined ending fund balances of $380.8 million, an increase of $35.4 million in comparison with the prior year. The components of total fund balance are as follows (for more information see Note 14 – Fund Balances):
 Nonspendable fund balance, $0.9 m illion, are amounts that are not spendable in form, may be legally or contractually required to be maintained intact, or are made up of prepaid expenses and deposits.  Restricted fund balance, $25.5 million, consists of amounts with constraints put on their use by external creditors, grantors, contributions, laws, regulations or enabling legislation. Examples of restrictions on funds are those for (1) 14

CITY OF BAKERSFIELD
Management's Discussion and Analysis
$13.6 million for the purpose of the fund (i.e., Gas Tax and Road projects), (2) $ 2.8 million from the Redevelopment Successor Agency Housing Fund for projects and (3) $3.1 million for traffic safety projects.  Committed fund balance, $197.1 million, are amounts for specific purposes determined by the Bakersfield City Council, such as funds collected from fees paid to mitigate the traffic impacts to the regional circulation system of $61.4 million, funds set aside for future city facilities and infrastructure project $11.0 million, funds set aside by City Council in the General Fund for cash basis/emergency reserves of $51.1 million and $39.4 million for appropriations for next year’s budget.
 Assigned fund balance, $132.2 million, for funds set aside by management for specific purposes. Amounts include $95.9 million set aside for capital projects and $ 7.3 million for the fund purposes related to transient occupancy fees, and $39.4 million for PSVS fund balance. Those available funds are set aside for future projects that will meet the intended uses of those funds in accordance with the sales tax ballot measure.  Unassigned fund balance, $25.0 million represents the residual classification for the City’s General Fund.

General Fund: The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the General Fund’s total fund balance increased by 18.6%, or $23.9 million from $128.4 million to $152.3 million. The following detail of changes from the prior year explains this change in fund balance for the year:
 Total operating revenues have increased, as discussed previously, specifically related to property tax and ARPA/COVID relief revenue. The use of Federal recovery dollars in the General Fund was directed to one-time programs and projects so when those dollars lapse in 2024, there should not be a negative impact. Other general revenues will continue to be monitored to understand the effect ongoing slowdowns in growth will have on operational needs.
 Total expenditures increased b y $25.5 million (a 8.9% increase). This was mainly due to increases in the Public Safety costs in both Police and Fire expenditures related primarily to cost-of-living increases, pension costs as will as filling some vacancies ($13.1 million and $3.5 million, respectively). Overall personnel expenditures also increased throughout all General Fund departments due to hiring related to PSVS programs those same pay raises and increases in pension costs.

Other governmental funds: As compared with the prior year, the total fund balances of the remaining governmental funds increased by 5.3%, or $11.5 million, to $228.5 million with the following significant changes:
 The Transient Occupancy Tax (TOT) Fund increased b y $0.8 m illion from $6.5 m illion to $7.3 m illion. The amounts in this fund cover both the collection and disbursement or TOT revenue for capital project and the operational activity of both the City's Convention Center/Arena Operations and Visit Bakersfield. The increase in fund balance is solely connected to increased profitability for those convention and concert activities as ticket and concession revenue have improved from prior years.
 The Capital Outlay Fund balance increased by $5.8 million from $123.4 million to $129.2 million. Of this amount, $27.5 million is committed for contractual obligations and $5.0 million is committed for facility replacement. The remaining amount of $95.9 m illion is assigned and available for use at management’s discretion. The resulting increase shows that expenditures were in line with projected revenues (which included significant transfers from the PSVS fund for ongoing CIP projects).
 The Park Improvement Fund decreased by $1.2 million. Of this fund balance amount, the full amount of $7.9 million is committed for contractual obligations. The decrease in fund balance is the allocation of the accumulation of funds connected to prior year for planned expansion and improvement of area parks.  The Transportation Development Fund increased by $6.3 m illion this year. The fund balance in the fund is the accumulation of development fees collected each year to be used for expansion of the City's streets and road infrastructure. There were not as many of those types of projects initiated in the current year so fund balance has been set aside for future infrastructure expansion and improvements. 15

CITY OF BAKERSFIELD
Management's Discussion and Analysis
Proprietary Funds - The City’s Proprietary Funds are shown in their entirety in the government-wide financial statements. All funds are being reported as major funds, so there is no need to report additional detail elsewhere in the document.

The Wastewater Treatment Fund has total net position of $564.6 million at the end of the current year, an increase of $4.7 million over the prior year. Total net position includes $493.8 million net investment in capital assets and $20.2 million of restricted assets which are not available to cover current expenses. The remaining net position of $50.6 million is unrestricted and available to cover current operating and capital needs (including plant and equipment replacement) of the fund. The majority of the increase resulted from more development completed to infrastructure in the current year which was reflected in a $5.9 million addition in Capital Contributions. That change was offset by an operational loss brought about by inflationary drivers increasing operational costs and wages. There was also a reduction in connection fee revenue that played a factor in the overall operational results. These connection fees are driven primarily by residential development within the City which has seen a reduction from previous years.

The Refuse Collection Fund has total net position of $13.6 million at the end of the current year, an increase of $8.1 million from the prior year. The increase is due to more revenue collected from residential services/rates than is necessary to cover the operating costs of the division brought about by a rate increase that was approved to cover the growing cost of collection services, particularly with regards to recycling. This increase was in part related to changes in operational design brought on by losses in the prior year. This included increases in cost sharing for facilities that serve the County residences and higher collections for commercial customers.

The River and Agricultural Water Fund has total net position of $30.5 million at the end of the current year, an increase of $ 2.7 million over the prior year. Total net position includes $20.1 million net investment in capital assets, which is not available to cover current expenses. The remaining net position of $10.4 million is unrestricted and available to cover current operating and capital needs of the fund. There have been significant operational gains when compared to the prior year due to more rainfall providing more water to be available to sell to customers. Offsetting those higher water sales, there were still inflationary driven increases to expenses but overall operational results were improved and increased net position.

The Domestic Water Fund has total net position of $ 269.6 million at the end of the current year, a decrease of $1.7 million over the prior year. Total net position includes $ 221.3 million net investment in capital assets, which is not available to cover current expenses. The remaining net position of $48.2 million is unrestricted and available to cover current operating and capital needs of the fund. The domestic water operations continue to operate outside of expected revenue so a review of rates charged to residents and businesses is needed to insure that revenues get back on track with expected continued escalations in costs. That increase is also related to the rise in operational costs that have affected departments throughout the City.

The General Aviation Fund has total net position of $11.6 m illion at the end of the current year, an increase o f $160,421 compared to the prior year. Total net position includes $10.7 million net investment in capital assets, which is not available to cover current expenses. The remaining net position is unrestricted and available to cover current operating and capital needs of the fund.

The Offstreet Parking Fund has total net position of $ 0.6 million at the end of the current year, a decrease of $74,553 compared to the prior year. T otal net position includes $0.6 m illion net investment in capital assets, which is not available to cover current expenses. The remaining net position is unrestricted and available to cover current operating and capital needs of the fund.
16

CITY OF BAKERSFIELD
Management's Discussion and Analysis

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets - The City’s investment in capital assets for its governmental and business-type activities as of June 30 of the current fiscal year amounts to $2.3 billion (net of accumulated depreciation). This investment in capital assets includes land, buildings and systems, improvements, machinery and equipment, park facilities, roads, highways, bridges and construction in progress. T he total increase in the City’s investment in capital assets for the current fiscal year was $16.2 million. Of this amount, a $23.5 million increase relates to Governmental Activities and a $7.3 million decrease that relates to Business-Type Activities. Depreciation expense of $(105.4) million reduced capital assets by this amount.

These financial statements include infrastructure assets constructed or acquired through fiscal year 2022-23.

Major capital asset events during the current fiscal year included the following:
 A variety of street construction projects and rehabilitation of major arterial streets. C onstruction in progress for governmental activities as of the end of the current fiscal year is $210.8 million. This figure includes over $30.1 million towards major street construction, traffic signals, and resurfacing projects throughout the City.

City of Bakersfield - Capital Assets
(in thousands)
Governmental Activities Business-Type Activities Total
2022 2023 2022 2023 2022 2023
Land and water storage rights $ 450,331 $ 450,650 $ 24,036 $ 24,439 $ 474,367 $ 475,089 Depreciable buildings, property,
equipment and infrastructure, net 764,285 736,443 810,467 805,373 1,574,752 1,541,816 Construction in progress 159,812 210,823 16,947 14,366 176,759 225,189 Non-amortizable intangible assets - - 31,477 31,477 31,477 31,477 Total Capital Assets $ 1,374,428 $ 1,397,916 $ 882,927 $ 875,655 $ 2,257,355 $ 2,273,571 17

CITY OF BAKERSFIELD
Management's Discussion and Analysis
City of Bakersfield - Outstanding Debt
Balance Incurred Satisfied Balance
June 30, 2022 or Issued or Matured June 30, 2023
Governmental Activities
Notes Payable $ 3,547,669 $ - $ (1,199,444) $ 2,348,225 Total governmental activities $ 3,547,669 $ - $ (1,199,444) $ 2,348,225 Business-Type Activities
Revenue Bonds Payable $ 120,697,778 $ - $ (9,601,778) $ 111,096,000 Notes Payable 2,719,697 - (284,507) 2,435,190
Total business-type activities $ 123,417,475 $ - $ (9,886,285) $ 113,531,190 Total Debt $ 126,965,144 $ - $ (11,085,729) $ 115,879,415 * Certificates of Participation in governmental activities are debt of the former Redevelopment Agency that is now reported as City debt.
 Long-Term Debt - At the end of the current fiscal year, the City had a total debt outstanding of $ 115.9 million. The City’s total debt decreased by a net amount of $11.1 million during the current fiscal year. This amount is the result of normal debt maturities.

Certificates of Participation issued by the City via the former Redevelopment Agency in 2006 carry a Reserve Fund Surety from Ambac Assurance Company (Ambac). Moody’s Investor’s Service (Moody’s) rating on Ambac is currently “Baa1”. T he current underlying rating on the Certificates of Participation has not been revised (currently “A1”). T his rating on the Certificates of Participation reflects only the view of Moody’s, and any desired explanation of the significance of such rating should be obtained from Moody’s. There is no assurance that such rating will continue for any given period of time or that such rating will not be revised or withdrawn by Moody’s if, in the judgment of Moody’s, circumstances so warrant.

The 2015 Wastewater Revenue Bonds – Series A, i ssued by the City in 2015, which redeemed a majority of the 2007 Wastewater Revenue Bonds – Series A, has an “Aa2” rating from Moody’s and an "AA" rating from Standard & Poors. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised or withdrawn by the rating agencies if, in their judgment, circumstances so warrant.

More detailed information regarding capital asset and long-term debt activity can be found in the related notes to the financial statements. See Note 5 for capital assets and Note 12 for long-term debt. 18

CITY OF BAKERSFIELD
Management's Discussion and Analysis

GENERAL FUND BUDGETARY HIGHLIGHTS
Differences between the original budget and the final amended budget reflect an increase in resources of $32.4 million and an increase in appropriations of $42.7 million. Significant budgetary amendments (changes) are summarized as follows:
 $7.4 million increase in various resources and appropriations due to revenues associated with open purchase orders at the end of the previous fiscal year. Also, $13.9 million increase in various resources due to revenues associated with prior year appropriations not spent and carried forward to this fiscal year.  $7.7 million increase in appropriations for PSVS tax revenue that was determined to be available for operational programs and capital projects approved by the City Council at mid-year. T hese included programs to address homelessness, public safety and park improvements.

The final amended revenue estimate budget figures in the General Fund were lower than actual revenue by $7.0 million and appropriations were higher than actual expenditures by $59.4 m illion. Significant differences between budget and actual amounts are as follows:
 $3.4 million positive variance in tax revenue. This is the result of an increase in property tax revenue and sales and use tax revenue. Property tax revenue was initially estimated to increase while Sales tax revenue did not come in as expected due to adjustments made at the State level for overpayments from prior years. That shortfall reduced the overall budget variance but revenues were still above estimates. Projections for tax revenue were conservative in nature because of uncertainty throughout the year on the level and sustainability of economic recovery in the area.  $6.2 million less than budgeted in intergovernmental revenue which is due primarily to this source of funds being based on reimbursement of expenditures incurred. Some of the project activity for these awards had not moved forward resulting in less revenue being recognized.
 The budget for charges for services was $7.7 million less than actual in the current year due to additional amounts allocated from ARPA activity for City staffing costs in public safety. Those dollars were not initially budget as other recovery programs were expected to utilize those dollars. When it was determined that the City could use more of these dollars to recover operational costs, management charged those costs directly to the grant award.  There was a $24.1 m illion variance of appropriations over actual expenditures in Economic & Community Development. The savings is due to major economic development service projects for businesses and members of the underserved community that were budgeted but not started.  The majority of the other variances of appropriations over actual expenditures across the General Fund departments was from savings brought about primarily in salary and benefits from unfilled positions or positions filled later in the year.
19

CITY OF BAKERSFIELD
Management's Discussion and Analysis

ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The key assumptions in the General Fund revenue forecast for fiscal year 2023-24 were:

1. Property tax revenue is projected to grow at 3.5% which is the same level as last year’s estimate as projected by Kern County.

2. Sales and use tax revenue is projected to show an increase of 2% in t he upcoming fiscal year which was a conservative estimate in light of the continued growth seen in this revenue source. The City will monitor the quarterly reports prepared by the State in conjunction with outside analysis of trends to understand if that revenue increase will be realized.

3. California Public Employees’ Retirement System (CalPERS) experienced investment returns above the plan's established discount rate which has actually created a slight reduction in the Normal rates going into the next fiscal year. The unfunded portion of the retirement contribution still saw an increase so overall contributions went up for Miscellaneous, Police, and Fire, approximately 1.1%, 1.1%, and 2.3% respectively. While the plan performance for the applicable year reduced the expected cost escalation, larger increases are projected for future fiscal years as plan performance has not been as positive in recent investment periods.

New items specifically addressed in the 2023-24 budget include the following:

Police Department – T he Police Department’s operating budget has increased from fiscal year 2022-23 by 11.3%, totaling $17.1 million. T his increase is primarily attributable to increased costs related to the PSVS plan to increase the number of officers and support staff in the department. There were also significant cost-of-living adjustments and a rise in retirement rates that also result in higher operating budgets.

Fire Department – The Fire Department's operating budget had and increase of just under 12.4% from fiscal year 2022-23 totaling $7.0 million. The increase is primarily due to cost-of-living adjustments and a rise in retirement rates.

Public Works - The Public Works Department operating budget increased by $10.5 million, or 6.3%, from fiscal year 2022-23.

The increase was also due to cost-of-living adjustments and a rise in retirement rates causing increases in salaries & benefit costs.

Development Services – T he Development Services Department’s operating budget increased from fiscal year 2022-23 b y

7.2%, an increase of $2 million This increase is due to cost-of-living adjustments and a rise in retirement rates.

Economic & Community Development – T he Economic & Community Development Department’s operating budget has decreased from fiscal year 2022-23 by 7.2%, totaling $1.2 million. This decrease is due lower funding available for community focused programs to address economic development though it was offset with other increases in salaries & benefit costs.

Recreation and Parks – The Recreation and Parks Department’s operating budget has increased from fiscal year 2022-23 by 7%, totaling $2.2 million. The increase was due primarily to the rise in CalPERS rates as well as an increases in salaries & benefit costs.

CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview of the City's finances and to show the City's accountability for the money it receives. Questions concerning any of the information provided in this report or requests for additional financial information can be sent via e-mail to:
[email protected]. Formal written requests should be addressed to: City of Bakersfield, Attn: Finance Department, 1600 Truxtun Avenue, Bakersfield, CA 93301.
20

Government-Wide Financial Statements
21

CITY OF BAKERSFIELD
Statement of Net Position
June 30, 2023
Assets
Governmental
Activities
Business-Type
Activities Total
Current assets:

Cash and investments $ 491,517,638 $ 177,024,543 $ 668,542,181 Accounts receivable, net 26,751,343 9,315,403 36,066,746 Interest receivable 3,884,326 1,539,794 5,424,120
Advances to other funds - current - 288,775 288,775
Due from other governmental agencies 50,917,949 2,138,073 53,056,022 Internal balances (7,080,396) 7,080,396 -
Prepayments and inventories 2,341,835 - 2,341,835
Total current assets 568,332,695 197,386,984 765,719,679 Noncurrent assets:

Capital assets:

Land 450,649,754 24,438,536 475,088,290
Depreciable capital assets, net 736,443,372 805,372,878 1,541,816,250 Construction in progress 210,823,278 14,365,834 225,189,112 Intangible assets - 31,476,906 31,476,906
Lease assets, net of amortization 860,306 - 860,306
Subscription assets, net of amortization 189,493 - 189,493 Land held for resale 1,198,743 - 1,198,743
Advances to other funds - 2,146,415 2,146,415
Lease receivable 400,647 4,179,772 4,580,419
Notes/loans receivable 24,718,739 25,087 24,743,826
Total noncurrent assets 1,425,284,332 882,005,428 2,307,289,760 Total assets 1,993,617,027 1,079,392,412 3,073,009,439
Deferred Outflows of Resources:

Deferred pensions (See Note 17) 163,028,303 13,203,869 176,232,172 Deferred OPEB (See Note 18) 10,521,959 1,497,215 12,019,174 Debt issuance - 6,805,256 6,805,256
Total deferred outflows of resources 173,550,262 21,506,340 195,056,602 Liabilities:

Current liabilities:

Accounts payable and accrued liabilities 36,939,012 12,168,811 49,107,823 Customers' deposits - 6,535,857 6,535,857
Advances from grantors and third parties 79,547,103 121,875 79,668,978 Long-term debt 701,646 10,056,778 10,758,424
Advances from other funds - current - 288,775 288,775
Lease & subscription liability 616,753 747,648 1,364,401 Kern River Levee District - 335,450 335,450
Claims and judgments payable 13,284,000 - 13,284,000
Compensated absences payable 2,606,264 411,964 3,018,228 Total current liabilities 133,694,778 30,667,158 164,361,936 Noncurrent liabilities:

Long-term debt 1,646,578 101,039,222 102,685,800
Advances from other funds - 2,146,415 2,146,415
Lease & subscription liability 484,377 14,166,035 14,650,412 Claims and judgments payable 64,945,000 - 64,945,000
Net other post-employment benefits liability 20,032,309 2,850,486 22,882,795 Compensated absences payable 19,057,196 2,068,676 21,125,872 Net pension liability 492,492,814 44,711,201 537,204,015 Total noncurrent liabilities 598,658,274 166,982,035 765,640,309 Total liabilities 732,353,052 197,649,193 930,002,245
Deferred Inflows of Resources:

Deferred pensions (See Note 17) 5,277,867 337,917 5,615,784 Deferred OPEB (See Note 18) 9,214,558 1,311,181 10,525,739 Deferred Leases (See Note 10) 380,188 3,998,628 4,378,816 Total deferred inflows of resources 14,872,613 5,647,726 20,520,339 Net Position:

Net investment in capital assets 1,395,502,719 756,449,727 2,151,952,446 Restricted: Capital improvements 21,357,879 20,200,000 41,557,879 Unrestricted 3,081,026 120,952,107 124,033,133
Total net position $ 1,419,941,624 $ 897,601,834 $ 2,317,543,458 The accompanying notes are an integral part of these financial statements. 22

23

CITY OF BAKERSFIELD
Statement of Activities
For the Fiscal Year Ended June 30, 2023
Program Revenues
Functions/Programs Expenses
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions Total
Primary Government:

Governmental activities:

General government $ 36,776,455 $ 10,265,564 $ 32,416,997 $ - $ 42,682,561 Public safety - Police 157,182,433 3,769,689 2,823,090 - 6,592,779 Public safety - Fire 58,352,144 9,825,370 699,458 - 10,524,828 Public works 109,899,852 15,584,199 5,870,065 46,491,688 67,945,952 Recreation & parks 39,781,689 20,303,609 206,550 1,790,211 22,300,370 Development services 14,366,698 7,490,244 - 180,088 7,670,332 Economic /Community development 31,828,294 - 4,434,128 11,584,598 16,018,726 Interest on long-term debt (3,224) - - - -
Total governmental activities 448,184,341 67,238,675 46,450,288 60,046,585 173,735,548 Business-type activities:

Wastewater treatment 44,261,402 36,560,842 5,092,663 5,894,701 47,548,206 Refuse collection 65,668,875 76,907,921 284,981 - 77,192,902 River and agricultural water 7,322,078 9,931,949 - 53,744 9,985,693 Domestic water 39,547,695 30,282,579 1,190,106 2,745,925 34,218,610 General aviation 488,137 592,720 10,000 - 602,720
Offstreet parking 329,928 146,342 - - 146,342
Total business-type activities 157,618,115 154,422,353 6,577,750 8,694,370 169,694,473 Total primary government $ 605,802,456 $ 221,661,028 $ 53,028,038 $ 68,740,955 $ 343,430,021 General Revenues:

Taxes:

Property taxes
Sales and use tax
Other taxes
Intergovernmental, unrestricted
Unrestricted grants and contributions
Investment earnings
Miscellaneous
Gain on sale of property
Transfers
Total general revenues and transfers
Change in net position
Change in accounting principle GASB 96
SBITA beginning balance
Net position - beginning of year, as restated
Net position - end of year
The accompanying notes are an integral part of these financial statements. 24

Net (Expenses) Revenues and
Changes in Net Position
Governmental
Activities
Business-Type
Activities Total
$ 5,906,106 $ - $ 5,906,106
(150,589,654) - (150,589,654)
(47,827,316) - (47,827,316)
(41,953,900) - (41,953,900)
(17,481,319) - (17,481,319)
(6,696,366) - (6,696,366)
(15,809,568) - (15,809,568)
3,224 - 3,224
(274,448,793) - (274,448,793)
- 3,286,804 3,286,804
- 11,524,027 11,524,027
- 2,663,615 2,663,615
- (5,329,085) (5,329,085)
- 114,583 114,583
- (183,586) (183,586)
- 12,076,358 12,076,358
$ (274,448,793) $ 12,076,358 $ (262,372,435)
$ 103,659,840 $ - $ 103,659,840
199,751,271 - 199,751,271
1,496,831 - 1,496,831
419,097 - 419,097
30,203,358 - 30,203,358
7,049,209 3,997,545 11,046,754
2,705,121 - 2,705,121
2,164 50,565 52,729
(2,771,093) 144,280 (2,626,813)
342,515,798 4,192,390 346,708,188
68,067,005 16,268,748 84,335,753
146,939 - 146,939
1,351,874,619 881,333,086 2,233,207,705
$ 1,419,941,624 $ 897,601,834 $2,317,543,458
25

26

Governmental Fund Financial Statements
27

CITY OF BAKERSFIELD
Balance Sheet
Governmental Funds
June 30, 2023
General
Fund
Transient
Occupancy
Taxes
Community
Development
Block Grant
Gas Tax
& Road Fund
Assets:

Cash and investments $ 131,594,085 $ 3,385,413 $ - $ 6,065,186 Accounts receivable, net 3,696,620 3,874,684 14,684,420 - Interest receivable 1,087,051 70,546 - 100,750
Due from other governmental agencies 37,881,480 - 1,804,961 10,275,021 Due from other funds 1,534,200 - - -
Notes/loans receivable - - 2,606,112 -
Lease receivable 400,647 - - -
Prepaid items 60,731 - - -
Total assets $ 176,254,814 $ 7,330,643 $ 19,095,493 $ 16,440,957 Liabilities, Deferred Inflows of Resources
and Fund Balances:

Liabilities:

Accounts payable $ 12,042,911 $ 39,008 $ 358,645 $ 2,834,165 Due to other governmental agencies 6,637,032 - - -
Due to other funds - - 1,534,200 -
Advances from grantors and third parties 2,555,118 - - - Total liabilities 21,235,061 39,008 1,892,845 2,834,165 Deferred Inflows of Resources:

Lease related items 380,188 - - -
Deferred revenue 2,341,397 - 17,289,407 -
Total Deferred Inflows of Resources 2,721,585 - 17,289,407 - Fund Balances:

Nonspendable 99,455 - - -
Restricted - - - 13,606,792
Committed 98,091,483 - - -
Assigned 29,000,457 7,291,635 - -
Unassigned 25,106,773 - (86,759) -
Total fund balances 152,298,168 7,291,635 (86,759) 13,606,792 Total liabilities, deferred inflows of
resources, and fund balances $ 176,254,814 $ 7,330,643 $ 19,095,493 $ 16,440,957 The accompanying notes are an integral part of these financial statements. 28

Covid Relief
Capital
Outlay
Park
Improvement
Transportation
Development
Redevelopment
Successor
Agency -
Housing
Other
Governmental
Funds
Total
Governmental
Funds
$ 60,570,593 $ 131,798,814 $ 12,965,351 $ 59,939,897 $ 2,781,648 $ 3,188,333 $ 412,289,320 - 111,070 - - 215 4,381,600 26,748,609
617,767 793,495 116,612 481,419 23,804 35,445 3,326,889 675,841 275,953 - - - 50 50,913,306
- - - - - - 1,534,200
- - - - 22,112,627 - 24,718,739
- - - - - - 400,647
- 779,865 - - - - 840,596
$ 61,864,201 $ 133,759,197 $ 13,081,963 $ 60,421,316 $ 24,918,294 $ 7,605,428 $ 520,772,306 $ 1,025,678 $ 4,529,036 $ 5,172,095 $ 1,756,276 $ - $ 185,220 $ 27,943,034 - - - - - - 6,637,032
- - - - - - 1,534,200
54,862,092 - - - 22,112,627 17,266 79,547,103
55,887,770 4,529,036 5,172,095 1,756,276 22,112,627 202,486 115,661,369 - - - - - - 380,188
- 46,606 - - - 4,269,938 23,947,348
- 46,606 - - - 4,269,938 24,327,536
- 779,865 - - - - 879,320
5,976,431 - - - 2,805,667 3,133,004 25,521,894
- 32,479,596 7,909,868 58,665,040 - - 197,145,987
- 95,924,094 - - - - 132,216,186
- - - - - - 25,020,014
5,976,431 129,183,555 7,909,868 58,665,040 2,805,667 3,133,004 380,783,401 $ 61,864,201 $ 133,759,197 $ 13,081,963 $ 60,421,316 $ 24,918,294 $ 7,605,428 $ 520,772,306 29

CITY OF BAKERSFIELD
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2023
Total Fund Balances - Total Governmental Funds $ 380,783,401 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. Capital assets allocated from Internal Service Funds are included in the Internal Service Funds adjustment below.

Capital assets 2,747,703,055
Ending accumulated depreciation (1,409,906,066) 1,337,796,989 Right to use lease asset (net of amortization). 860,306 Subscription Assets (net of amortization). 104,854
Land held for resale is not a current financial resource and is not reported in the Governmental Funds. 1,198,743
Deferred outflows of resources related to pensions are not a current financial resource and are not reported in the Governmental Funds. 159,533,185
Deferred outflows of resources related to other post-employment benefits are not a current financial resource and are not reported in the Governmental Funds. 10,102,324 Deferred inflows of resources related to pensions are not a current financial resource and are not reported in the Governmental Funds. (5,081,356)
Deferred inflows of resources related to other post-employment benefits are not a current financial resource and are not reported in the Governmental Funds. (8,847,065) Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the Governmental Funds Balance Sheet. (2,030) Unavailable revenue and other resources not available to liquidate liabilities of the current period are not recognized in the Governmental Funds. 23,947,348
Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The assets and liabilities of the Internal Service Funds are included in governmental activities in the Government-Wide Statement of Net Position. 43,908,511
Long-term liabilities are not due and payable in the current period and therefore they are not reported in the Governmental Funds Balance Sheet. Noncurrent liabilities allocated from Internal Service Funds are included in the Internal Service Funds adjustment above.

Notes/Contracts/Loans payable (2,348,224)
Compensated absences payable (20,981,250)
Lease payable (925,767)
Subscription payable (96,231)
Unfunded post-employment benefits (19,233,384)
Unfunded pension benefits (480,778,730) (524,363,586)
Net Position of Governmental Activities $ 1,419,941,624 The accompanying notes are an integral part of these financial statements. 30

31

CITY OF BAKERSFIELD
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Fiscal Year Ended June 30, 2023
General
Fund
Transient
Occupancy
Taxes
Community
Development
Block Grant
Gas Tax
& Road Fund
Revenues:

Taxes $ 316,256,425 $ 11,135,080 $ - $ -
Licenses and permits 3,360,089 - - -
Intergovernmental 8,622,630 - 12,746,295 50,928,207
Charges for services 34,875,728 11,237,857 - -
Fines, forfeitures and assessments 1,148,647 - - 35,624 Interest income (loss) 1,320,846 467,575 11,469 244,353 Loan payments - - 54,797 -
Contributions and donations 210,042 - - -
Other income 2,152,247 - 55,127 61,613
Total revenues 367,946,654 22,840,512 12,867,688 51,269,797 Expenditures:

Current:

General government 20,269,972 11,628,038 - -
Public safety - Police 147,605,005 - - -
Public safety - Fire 54,998,122 - - -
Public works 32,370,676 - - 4,010,812
Recreation and parks 30,077,625 - - -
Development services 13,747,976 - - -
Economic/Community development 6,800,463 - 9,449,709 -
Non-departmental 8,239,123 - - -
Capital outlay - - 2,799,478 47,400,099
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures 314,108,962 11,628,038 12,249,187 51,410,911 Excess (deficiency) of revenues
over (under) expenditures 53,837,692 11,212,474 618,501 (141,114) Other financing sources (uses):

Transfers in 11,264,480 - - -
Transfers out (41,245,304) (10,432,276) (384,339) (9,300) Total other financing sources (uses) (29,980,824) (10,432,276) (384,339) (9,300) Net change in fund balances 23,856,868 780,198 234,162 (150,414) Fund balances - beginning, restated 128,441,300 6,511,437 (320,921) 13,757,206 Fund balances - ending $ 152,298,168 $ 7,291,635 $ (86,759) $ 13,606,792 The accompanying notes are an integral part of these financial statements. 32

Covid Relief
Capital
Outlay
Park
Improvement
Transportation
Development
Redevelopment
Successor
Agency -
Housing
Other
Governmental
Funds
Total
Governmental
Funds
$ - $ 7,426,975 $ - $ - $ - $ - $ 334,818,480
- - - - - 379,723 3,739,812
31,239,767 180,088 - - - 1,742,824 105,459,811
- 49,135 - 48,973 - 1,664,914 47,876,607
- 194,620 1,790,211 12,993,031 - 1,331,870 17,494,003
1,674,584 1,178,653 176,123 663,603 51,769 121,394 5,910,369 - - - - - - 54,797
- - - - - - 210,042
- 16,725 - 4,429 142,111 - 2,432,252
32,914,351 9,046,196 1,966,334 13,710,036 193,880 5,240,725 517,996,173 454,721 - - 122,998 - - 32,475,729
- - - - - 1,719,247 149,324,252
- - - - - 1,760,386 56,758,508
- - - 459,153 - 556,357 37,396,998
- - - - - 17,725 30,095,350
- - - - - - 13,747,976
11,723,460 - - - - 243,357 28,216,989
5,178,295 41,497 - - - - 13,458,915
3,057,874 47,356,326 3,212,310 7,787,489 - 144,126 111,757,702 - - - - - 1,199,445 1,199,445
- - - - - 6,339 6,339
20,414,350 47,397,823 3,212,310 8,369,640 - 5,646,982 474,438,203 12,500,001 (38,351,627) (1,245,976) 5,340,396 193,880 (406,257) 43,557,970 - 44,175,462 - 1,000,000 - 1,205,784 57,645,726
(12,500,000) - - - - (1,272,000) (65,843,219)
(12,500,000) 44,175,462 - 1,000,000 - (66,216) (8,197,493) 1 5,823,835 (1,245,976) 6,340,396 193,880 (472,473) 35,360,477 5,976,430 123,359,720 9,155,844 52,324,644 2,611,787 3,605,477 345,422,924 $ 5,976,431 $ 129,183,555 $ 7,909,868 $ 58,665,040 $ 2,805,667 $ 3,133,004 $ 380,783,401 33

CITY OF BAKERSFIELD
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities For the Fiscal Year Ended June 30, 2023
Net Change in Fund Balances - Total Governmental Funds $ 35,360,477 Amounts reported for Governmental Activities in the Statement of Activities are different because:

Governmental Funds report capital outlay as expenditures. However, in the Government-Wide Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense.

Capital Outlay eliminated $ 15,359,286
Depreciation and amortization expense is deducted from fund balance (net of Internal Service Fund depreciation of $10,782,965 which has already been allocated to serviced funds). (66,520,131) Contributions of infrastructure and improvements by developers are capitalized in the Statement of Activities, but are not recorded in the Governmental Fund Financial Statements because no cash changed hands. 70,877,308 19,716,463
Certain expenses are reported in the Government-Wide Statement of Activities, but they do not require the use of current financial resources. Therefore, these expenses are not reported as expenditures in Governmental Funds.

Net compensated absences expense (1,531,822)
Interest expense on long-term debt 9,565
Net pension expense (8,787,511)
Net other post-employment benefit expense 14,021,078 3,711,310 Bond and loan proceeds provide current financial resources to Governmental Funds, but issuing debt increases long-term liabilities in the Government-Wide Statement of Net Position. Repayment of bond principal is an expenditure in Governmental Funds, but the repayment reduces long-term liabilities in the Government-Wide Statement of Net Position. 1,199,445
Unearned revenue and other resources not available to liquidate liabilities of the current period are not recognized in the Governmental Funds. Revenue in the Statement of Activities is not limited by availability, so certain revenues need to be reduced by the amounts that were unavailable at the end of the year. This adjustment records a net decrease in revenues - unavailable revenues at the beginning of the year exceed ending unavailable revenues by this amount. (451,069) Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The net revenue of the Internal Service Funds is reported with Governmental Activities. 10,993,837
Less: amount of Internal Service Funds net income allocated to Business Type Acctivites (2,463,458) Change in Net Position of Governmental Activities $ 68,067,005 The accompanying notes are an integral part of these financial statements. 34

Proprietary Fund Financial Statements
These funds account for operations (a) that are financed and operated in a m anner similar to private business enterprises where the intent of the governing body is that the costs (including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that periodic determination of net income is appropriate for accountability purposes.

Wastewater Treatment Fund i s used to account for the provision of sewer service to the residents of the City and some residents of Kern County. This fund also accounts for the activities related to the debt issuance which provided for the Wastewater Treatment Facilities.

Refuse Collection Fund is used to account for the collection and disposal of refuse within the City. All activities necessary to provide such services are accounted for in this fund.

River & Agricultural Water Fund is used to account for the provision of water service restricted primarily for agricultural purposes to users within the City and some users within Kern County (some Kern River water is exchanged for State Aqueduct water for domestic water purposes). All activities necessary to provide such services are accounted for in this fund.

Domestic Water Fund is used to account for the provision of water service to some residents of the City and Kern County. All activities necessary to provide such service are accounted for in this fund.

General Aviation Fund i s used to account for the acquisition and operation of the Bakersfield Airpark. The majority of acquisition and improvement financing for the airport facility was provided by a grant from the Federal Aviation Administration.

Offstreet Parking Fund i s used to account for the operations of the parking garage at 18th and Eye Streets and various offstreet surface parking lots within the City. The parking garage was financed by the former Redevelopment Agency and the related debt was retired in August 1994. Subsequently, the title was transferred to the City.

Internal Service Funds are used to provide goods and services by one department or agency to other departments or agencies of the City on a cost reimbursement basis.
35

CITY OF BAKERSFIELD
Statement of Net Position
Proprietary Funds
June 30, 2023
Wastewater
Treatment
Refuse
Collection
River &
Agricultural
Water
Current assets:

Cash and investments $ 86,132,654 $ 25,954,591 $ 13,247,341 Accounts receivable, net 1,969,894 1,993,633 1,613,605
Interest receivable 737,852 189,654 107,808
Advances to other funds - current 288,775 - -
Due from other governmental agencies - 2,138,073 -
Prepayments and inventories - - -
Total current assets 89,129,175 30,275,951 14,968,754
Noncurrent assets:

Capital assets:

Land 10,689,406 2,958,335 2,175,944
Depreciable buildings, property,
equipment and infrastructure, net 576,721,904 6,579,586 9,698,322 Construction in progress 10,717,325 389,859 158,241
Intangible assets - - 8,032,678
Lease receivable 3,056,185 - -
Subscription Asset - net of amortization - - -
Advances to other funds 2,146,415 - -
Other long-term receivable - - 25,087
Total noncurrent assets 603,331,235 9,927,780 20,090,272 Total assets 692,460,410 40,203,731 35,059,026
Deferred outflows of resources:

Deferred pensions 3,981,429 7,294,351 1,075,486
Deferred other post-employment benefits 442,948 898,848 116,564 Debt issuance 6,805,256 - -
Total deferred outflows of resources 11,229,633 8,193,199 1,192,050 Current liabilities:

Accounts payable and accrued liabilities 4,916,833 3,674,143 1,125,441 Claims payable - - -
Workers' compensation claims - - -
Compensated absences payable 177,304 211,984 1
Advances from other funds - current - 288,775 -
Long-term debt - due within one year 10,056,778 - -
Lease liability - due within one year - - -
Subscription liability - due within one year - - -
Advances from grantors and third parties - 121,875 -
Total current liabilities 15,150,915 4,296,777 1,125,442 Noncurrent liabilities:

Long-term debt - due in more than one year 101,039,222 - - Lease liability - due in more than one year - - -
Kern River Levee District/Buena Vista - - 335,450
Subscription liability - due in more than one year - - - Customers' deposits 4,311,708 384,701 -
Workers' compensation claims - - -
Compensated absences payable 700,276 1,034,674 202,705
Advances from other funds - 2,146,415 -
Net pension liability 13,801,849 24,260,226 3,751,931
Net other post-employment benefits liability 843,310 1,711,278 221,924 Total noncurrent liabilities 120,696,365 29,537,294 4,512,010 Total liabilities 135,847,280 33,834,071 5,637,452
Deferred inflows of resources:

Deferred pensions (69,628) 218,377 17,647
Deferred other post-employment benefits 387,910 787,162 102,082 Deferred Inflow Leases 2,908,396 - -
Total deferred inflows of resources 3,226,678 1,005,539 119,729 Net position:

Net investment in capital assets 493,837,891 9,927,780 20,065,185 Restricted for:

Capital improvements 20,200,000 - -
Unrestricted 50,578,195 3,629,540 10,428,710
Total net position (deficit) $ 564,616,086 $ 13,557,320 $ 30,493,895 Adjustments to reflect the consolidation of internal service fund activities related to proprietary funds
Net position of business-type activities
The accompanying notes are an integral part of these financial statements. 36

Domestic
Water
General
Aviation
Offstreet
Parking Totals
Governmental Activities
Internal Service Funds
$ 50,552,871 $ 1,066,627 $ 70,459 $ 177,024,543 $ 79,228,318 3,725,050 11,546 1,675 9,315,403 2,734
467,692 36,559 229 1,539,794 557,437
- - - 288,775 -
- - - 2,138,073 4,643
- - - - 1,501,239
54,745,613 1,114,732 72,363 190,306,588 81,294,371
740,597 7,464,254 410,000 24,438,536 -
209,863,235 2,324,252 185,579 805,372,878 60,119,415
2,207,442 892,967 - 14,365,834 -
23,444,228 - - 31,476,906 -
- 1,123,587 - 4,179,772 -
- - - - 84,638
- - - 2,146,415 -
- - - 25,087 -
236,255,502 11,805,060 595,579 882,005,428 60,204,053
291,001,115 12,919,792 667,942 1,072,312,016 141,498,424 771,017 81,586 - 13,203,869 3,495,118
38,855 - - 1,497,215 419,635
- - - 6,805,256 -
809,872 81,586 - 21,506,340 3,914,753
2,338,551 92,606 21,237 12,168,811 2,356,916
- - - - 3,648,000
- - - - 9,636,000
15,386 7,289 - 411,964 221,301
- - - 288,775 -
- - - 10,056,778 -
747,648 - - 747,648 -
- - - - 25,586
- - - 121,875 -
3,101,585 99,895 21,237 23,795,851 15,887,803
- - - 101,039,222 9,192,000
14,166,035 - - 14,166,035 -
- - - 335,450 -
- - - - 53,545
1,839,448 - - 6,535,857 -
- - - - 55,753,000
128,744 2,277 - 2,068,676 460,909
- - - 2,146,415 -
2,727,307 169,888 - 44,711,201 11,714,084
73,974 - - 2,850,486 798,925
18,935,508 172,165 - 173,853,342 77,972,463
22,037,093 272,060 21,237 197,649,193 93,860,266
163,287 8,234 - 337,917 196,511
34,027 - - 1,311,181 -
- 1,090,232 - 3,998,628 367,493
197,314 1,098,466 - 5,647,726 564,004
221,341,819 10,681,473 595,579 756,449,727 60,119,415
- - - 20,200,000 -
48,234,761 949,379 51,126 113,871,711 (9,130,508)
$ 269,576,580 $ 11,630,852 $ 646,705 890,521,438 $ 50,988,907 7,080,396
$ 897,601,834
37

CITY OF BAKERSFIELD
Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds
For the Fiscal Year Ended June 30, 2023
Wastewater
Treatment
Refuse
Collection
River &
Agricultural
Water
Operating revenues:

Intergovernmental $ - $ 284,981 $ -
Charges for services 36,172,143 67,922,380 7,012,818
Cost recoveries 19,028 8,786,501 728,824
Rental income 365,777 - 30,811
Other sales or services 13,570 164,018 2,159,496
Miscellaneous (9,675) 35,022 -
Total operating revenues 36,560,843 77,192,902 9,931,949 Operating expenses:

General and administrative 19,884,976 66,154,607 6,555,307 Transmission and distribution 429,090 1,265,853 259,437 Workers' compensation payments - - -
Claims paid - - -
Depreciation and amortization 20,029,888 286,746 563,141 Compensated absences - 99,209 18,291
Total operating expenses 40,343,954 67,806,415 7,396,176 Operating income (loss) (3,783,111) 9,386,487 2,535,773 Nonoperating revenues (expenses):

Interest income (loss) 2,065,985 552,810 206,630
Connection fees 5,092,662 - -
Interest expense (4,062,172) (38,662) -
Gain on sale of capital assets - 37,704 -
Total nonoperating revenues (expenses) 3,096,475 551,852 206,630 Income (loss) before transfers
and capital contributions (686,636) 9,938,339 2,742,403 Capital contributions 5,894,701 - -
Transfers in - - -
Transfers out (515,500) (1,875,080) (49,600)
Change in net position 4,692,565 8,063,259 2,692,803
Total Net Position (Deficit) -
Beginning of Year, as Restated 559,923,521 5,494,061 27,801,092 Total Net Position-End of Year $ 564,616,086 $ 13,557,320 $ 30,493,895 Adjustment to reflect the consolidation of internal
service activity related to proprietary funds
Change in net position of business-type activities
The accompanying notes are an integral part of these financial statements. 38

Domestic
Water
General
Aviation
Offstreet
Parking Totals
Governmental
Activities
Internal Service
Funds
$ - $ 240,603 $ - $ 525,584 $ -
27,863,431 332,691 146,342 139,449,805 65,432,595
67,692 16,523 - 9,618,568 4,253,876
- - - 396,588 -
2,300,255 - - 4,637,339 -
51,201 12,903 - 89,451 44,950
30,282,579 602,720 146,342 154,717,335 69,731,421
29,683,178 345,810 237,733 122,861,611 48,459,305
2,085,779 16,510 - 4,056,669 -
- - - - 4,873,257
- - - - 2,700,305
7,160,085 124,031 90,630 28,254,521 10,782,965
- - - 117,500 18,633
38,929,042 486,351 328,363 155,290,301 66,834,465
(8,646,463) 116,369 (182,021) (572,966) 2,896,956
1,117,358 54,294 466 3,997,543 1,138,840
1,190,106 - - 6,282,768 -
(636,692) - - (4,737,526) -
12,861 - - 50,565 338,495
1,683,633 54,294 466 5,593,350 1,477,335
(6,962,830) 170,663 (181,555) 5,020,384 4,374,291
2,745,925 - - 8,640,626 1,193,146
2,500,000 - 120,000 2,620,000 5,426,400
(12,300) (10,242) (12,998) (2,475,720) -
(1,729,205) 160,421 (74,553) 13,805,290 10,993,837
271,305,785 11,470,431 721,258 39,995,070
$ 269,576,580 $ 11,630,852 $ 646,705 $ 50,988,907
2,463,458
$ 16,268,748
39

CITY OF BAKERSFIELD
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023
Wastewater
Treatment
Refuse
Collection
River &
Agriculture
Water Fund
Domestic
Water
Cash from operating activities:

Cash received from:

Customers $ 41,702,023 $ 69,826,021 $ 8,994,197 $ 32,046,753 Prior year reimbursements and cost recoveries 19,028 8,786,501 728,824 67,692 Cash paid to:

Suppliers (16,562,248) (56,175,732) (4,892,354) (33,359,670) Employees (7,872,216) (13,946,555) (2,165,445) (1,317,136) Net cash provided (used) by operating activities 17,286,587 8,490,235 2,665,222 (2,562,361) Cash from noncapital financing activities:

Cash transfered from other funds (2) - - 2,500,000
Cash transfers to other funds (515,500) (1,875,080) (49,600) (12,300) Interfund loan receivable 284,507 (284,507) - -
Connection fees 5,092,662 - - 1,190,106
Net cash provided (used) bynoncapital financing
activities 4,861,667 (2,159,587) (49,600) 3,677,806
Cash from capital and related financing activities:

Principal payments
Issuance of debt 756,140 - - -
Notes/Loans/Bonds (9,601,778) - - -
Lease payments - - - (712,201)
Interest paid (4,062,172) (38,662) - (636,692)
Acquisition and construction of capital assets (8,657,133) (1,942,651) (470,684) (1,099,325) SBITA payments - - - -
Proceeds from lease activities (88,866) - - -
Proceeds from sale of capital assets - 37,704 - 12,861
Net cash provided (used) by capital and related
financing activities (21,653,809) (1,943,609) (470,684) (2,435,357) Cash from investing activities:

Interest received 1,887,578 669,500 215,848 923,352
Net increase (decrease) in the fair value of investments (352,404) (270,132) (90,081) (156,296) Net cash provided by investing activities 1,535,174 399,368 125,767 767,056 Net increase (decrease) in cash and investments 2,029,619 4,786,407 2,270,705 (552,856) Cash and investments - Beginning of year 84,103,035 21,168,184 10,976,636 51,105,727 Cash and investments - End of Year 86,132,654 25,954,591 13,247,341 50,552,871 The accompanying notes are an integral part of these financial statements. 40

General
Aviation Fund
Offstreet
Parking Fund Totals
Governmental
Activities
Internal
Service Funds
$ 591,339 $ 149,407 $153,309,740 $ 65,624,131
16,523 - 9,618,568 4,253,876
(146,601) (251,709) (111,388,314) (46,644,482)
(167,144) - (25,468,496) (3,957,285)
294,117 (102,302) 26,071,498 19,276,240
3 120,000 2,620,001 5,426,401
(10,242) (12,999) (2,475,721) 1,193,146
- - - -
- - 6,282,768 -
(10,239) 107,001 6,427,048 6,619,547
- - 756,140 -
- - (9,601,778) -
- - (712,201) -
- - (4,737,526) -
(171,890) - (12,341,683) (14,372,797)
- - - (5,507)
(31,889) - (120,755) -
- - 50,565 338,495
(203,779) - (26,707,238) (14,039,809)
57,074 287 3,753,639 1,072,902
(6,479) - (875,392) (374,485)
50,595 287 2,878,247 698,417
130,694 4,986 8,669,555 12,554,395
935,933 65,473 168,354,988 66,673,923
1,066,627 70,459 177,024,543 79,228,318
The accompanying notes are an integral part of these financial statements. 41

CITY OF BAKERSFIELD
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2023
Wastewater
Treatment
Refuse
Collection
River &
Agriculture
Water Fund
Domestic
Water
Reconciliation of Operating income (Loss) to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) (3,783,111) 9,386,487 2,535,773 (8,646,463) Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation expense 20,029,888 286,746 563,141 7,160,085 (Increase) decrease in accounts receivable (120,033) (507,167) (688,801) 417,865 (Increase) decrease in inventories - - - -
(Increase) decrease in prepaid items - - - -
Increase (decrease) in accounts payable 631,780 333,309 538,497 (1,631,158) Increase (decrease) in unearned revenue - (1,764) - -
Increase (decrease) in customers' deposits 1,049,005 (14,101) 9,188 146,640 Other accrued liabilities - - - -
Increase (decrease) in compensated absences 75,660 116,213 6,512 (41,711) Increase (decrease) in net pension liability 5,909,438 10,218,695 1,471,167 952,573 Increase (decrease) in deferred outflows/inflows of
resources for pensions (5,855,826) (10,058,840) (1,471,413) (876,831) Increase (decrease) in net other post-employment benefits liability 242,008 512,034 10,293 26,945
Increase (decrease) in deferred outflows/inflows of
resources for OPEB (892,222) (1,781,377) (309,135) (70,306) Net cash provided (used) by operating activities: 17,286,587 8,490,235 2,665,222 (2,562,361) Noncash investing capital and financing activities:

Contributions of infrastructure and improvements $ 5,894,701 $ - $ - $ 2,745,925 42

General
Aviation Fund
Offstreet
Parking Fund Totals
Governmental
Activities
Internal
Service Funds
116,369 (182,021) (572,966) 2,896,956
124,031 90,630 28,254,521 10,782,965
5,142 3,065 (889,929) 153,406
- - - (19,465)
- - - (878)
60,711 (13,976) (80,837) (994,628)
- - (1,764) -
- - 1,190,732 -
- - - 6,908,000
(16,696) - 139,978 18,633
119,269 - 18,671,142 4,546,148
(114,709) - (18,377,619) (4,499,991)
- - 791,280 271,526
- - (3,053,040) (786,432)
294,117 (102,302) 26,071,498 19,276,240
$ - $ - $ 8,640,626 $ -
43

44

Fiduciary Fund Financial Statements
Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individual private organizations, other governmental units and/or other funds. Detailed combining statements for Fiduciary Funds are located in the Supplementary Information section. Below are descriptions of the generic fund types within this category and specific funds within each fund type.

Private Purpose Trust Funds
Redevelopment Successor Agency - T he Bakersfield Redevelopment Agency ceased activities in February 2012. All non- housing related assets, liabilities and activities have been transferred to the City and are accounted for in a trust fund.

Planning Habitat Trust Fund - This fund is used to account for monies collected from developers to be used to purchase suitable land to provide habitat for endangered species. After the land is purchased, it is transferred to the State Fish and Game Department for maintenance.

Bakersfield Affordable Housing Trust Fund - This fund will assist in the creation and preservation of affordable housing in the City of Bakersfield for the benefit of very low, low and moderate-income households as well as address the housing needs of the homeless population.

Pension and Other Employee Benefit Trust Funds
Fire Relief and Pension Trust Fund - This fund is used to account for the accumulation of resources to be used for retirement annuity payments at appropriate amounts and times in the future for Fire Department personnel who retired prior to June 2, 1972.

Other Post-Employment Benefits (OPEB) Irrevocable Trust Fund - This fund is used to account for the City's post-retirement medical benefit plan. The City provides medical insurance coverage through contributions to eligible retirees' insurance premiums.

Custodial Funds
Special Deposits Fund - This fund is used to account for the collection by the City as agent for organizations operated under the auspices of the Recreation Division, security deposits for utility franchises, temporary deposits for construction permits, deposits for affordable housing programs and bid deposits. This fund is also used for the collection of police seized property, local Law Enforcement Block Grants, and other revenues held in trust pending disposition of contingencies.

Improvement Districts Fund - T his fund is used to account for the collection of liens for improvements benefiting private properties and payments to the holders of bonds issued pursuant to the Improvement Act of 1913 and the Improvement Bond Act of 1915. The City is in no way liable for the payment of bonded indebtedness, but the City serves as agent to collect the principal and interest installments from the owners of the benefited properties. A trustee administers the periodic payment to the bondholders. In addition, Community Service Districts created for the West Ming and Old River Ranch developments are accounted for in this section. These funds are collected to be used to pay for public safety costs in the applicable communities. 45

CITY OF BAKERSFIELD
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
Private Purpose
Trust Funds
Pension and Other
Employee Benefit
Trust Funds
Custodial
Funds
Assets:

Cash $ 29,304,142 $ 3,324,678 $ 35,702,326
Accounts receivable - - 587
Interest receivable 225,438 2,912 56,589
Investments
Domestic equities - 26,260,260 -
Fixed income - 60,887,663 -
Total investments - 87,147,923 -
Land held for resale 60,895 - -
Total assets 29,590,475 90,475,513 35,759,502
Liabilities:

Payables:

Advances from grantors and third parties 2,725,323 - -
Deposits - - 32,846,739
Accrued bond interest - - 195,172
Bonds 1,730,000 - 2,717,591
Notes 8,268,911 - -
Total liabilities 12,724,234 - 35,759,502
Net Position:

Restricted for:

Individuals, organizations and other governments 16,866,241 - - Other post-employment benefits - 90,475,513 -
Total Net Position $ 16,866,241 $ 90,475,513 $ -
The accompanying notes are an integral part of these financial statements. 46

CITY OF BAKERSFIELD
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2023
Private Purpose
Trust Funds
Pension and Other
Employee Benefit
Trust Funds Custodial Funds
Additions
Contributions to pooled investments $ - $ 1,334,756 $ - Developer fees 296,988 - -
Successor agency property tax deposits 1,415,610 - -
Assessment District Contributions - - 3,630,839
Special Deposit Contribution - - 129,475,656
Other Contributions - - 671,265
Other income / (loss) 141 - 286,508
Interest income (loss) 734,918 3,529,496 167,764
Total additions 2,447,657 4,864,252 134,232,032
Deductions:

Benefits - 2,010,170 -
Administrative expenses - 231,657 -
Purchase of uninhabited land 847,660 - -
Obligation retirement 481,914 - 3,028,472
Bond - Interest - - 454,830
Other Distributions - - 130,748,730
Total deductions 1,329,574 2,241,827 134,232,032
Transfers in 2,626,813 - -
Change in net position 3,744,896 2,622,425 -
Net position - beginning of year 13,121,345 87,853,088 - Net position - end of year $ 16,866,241 $ 90,475,513 $ - The accompanying notes are an integral part of these financial statements. 47

48

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the City of Bakersfield (the “City”) have been prepared in conformity with generally accepted accounting principles in the United States of America (GAAP) as prescribed by the Governmental Accounting Standards Board (GASB). The follow ing summary of the City’s significant accounting policies is presented to assist the reader in interpreting the basic financial statements and other data in this report. These policies should be viewed as an integral part of the accompanying basic financial statements.

A. Description of Reporting Entity
The City of Bakersfield, California, is a California Charter City, incorporated on January 11, 1898, and serves as the county seat of the County of Kern, California (the “County”). The City is a full-service city and operates under a Council - Manager form of government, providing the following services as authorized by its Charter: General government; public safety; public works; and development and conservation.

As required by GAAP, these basic financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data from these units are combined with data of the primary government.

B. Basis of Presentation
Government-Wide Financial Statements
The Government-Wide financial statements (the statement of net position and the statement of activities) report information of all of the non-fiduciary activities of the primary government and its component units. For the most part, eliminations have been made to minimize the double counting on internal activities. I nternal activities for services provided and used that are not eliminated include water, solid waste and sewer services provided to various other functions of the government. These statements distinguish between the governmental and business-type activities o f the City. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees charged to external parties.

The statement of activities presents a comparison between direct expenses and program revenues for each segment of the business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Some functions include expenses that are, in essence, indirect expenses of other functions resulting from charges among funds or programs for centralized services. Program revenues include: 1) charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues.

Net position is restricted when constraints placed on it are either externally imposed or are imposed by constitutional provisions or enabling legislation. Internally imposed designations of resources are not presented as restricted net position. When both restricted and unrestricted resources are available for use, generally it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.
49

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Basis of Presentation (continued)
Fund Financial Statements
The fund financial statements provide information about the City’s funds, including fiduciary funds and the blended component units. Separate statements for each fund category - governmental, proprietary and fiduciary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are separately aggregated and reported as non-major funds.

Proprietary fund operating r evenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. E xchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary activities. Operating expenses for enterprise funds and internal service funds include cost of sales and services, administrative expenses, and depreciation of capital assets. A s used in this section, the term depreciation can include amortization of intangible assets. All expenses not meeting this definition are reported as nonoperating expenses.

The City reports the following major governmental funds:

General Fund - The General Fund is the principal operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. F or the City, the General Fund includes basic governmental activities, such as general government, public safety, public works, and community services.

Transient Occupancy Taxes Fund - T he Transient Occupancy Taxes Fund is used to account for transient occupancy tax revenues (hotel tax) and expenditures funded by this revenue source. The Mechanics Bank Arena and Convention Center and the Bakersfield Ice Sports Center operating revenues and expenditures are recorded in this fund. T his fund is also used to account for the operations of the Visit Bakersfield division of the City.

Community Development Block Grant Fund – The Community Development Block Grant Fund is used to account for resources provided by the Federal Housing and Community Development Act of 1974 for the elimination of slums and blight, housing conservation and improvements of community services.

Gas Tax & Road Fund - The Gas Tax & Road Fund is used to account for the City’s share, based upon population, of state gasoline taxes. State law requires these gasoline taxes to be used to maintain streets or for major street construction. This fund also accounts for other State and Federal grant revenues related to street maintenance or construction, including the Federal earmark Thomas Roads funds.

Capital Outlay Fund - The Capital Outlay Fund is used to account for the cost of capital projects financed by local revenues and various grant/loan proceeds for capital expenditures. This fund also accounts for the special Utility Franchise/Surcharge Fund created by the City Council to account for the specified local road project costs funded by the selected electricity and gas franchise surcharge fees. In addition, funds contributed by the County to be used to cover a portion of the costs of the local match needed for the Thomas Roads projects are accounted for in this fund.

Park Improvement Fund - The Park Improvement Fund is used to account for funds collected for residential park development (Ordinance No. 3646). F ees are collected based on the development’s share of the cost to develop, improve, construct, or enhance a neighborhood park (Ordinance No. 3327).

Transportation Development Fund - T he Transportation Development Fund is used to account for funds collected from fees paid to mitigate the traffic impacts to the regional circulation system caused by a development project. The fees are paid w hen a building permit for the development project is obtained, and are based upon the amount of traffic the development will generate. The fee schedule was adopted with Ordinance No. 3513 and will be periodically evaluated by the City Council and revised to reflect updated costs and growth projections. 50

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Basis of Presentation (continued)
Redevelopment Successor Agency - Housing Fund - T he Redevelopment Successor Agency - Housing Fund was created on February 1, 2012, pursuant to the provisions of the Redevelopment Restructuring Act. The City has chosen to assume the housing functions and take over the housing assets of the former Redevelopment Agency.

The City reports the following major proprietary (enterprise) funds:

Wastewater Treatment Fund - T he Wastewater Treatment Fund is used to account for the provision of sewer service to the residents of the City and some residents of the County. This fund also accounts for the activities related to the debt issuance, which provided for the Wastewater Treatment Facilities.

Refuse Collection Fund - The Refuse Collection Fund is used to account for the collection and disposal of refuse within the City. All activities necessary to provide such services are accounted for in this fund.

River & Agricultural Water Fund - The River & Agricultural Water Fund is used to account for the provision of water service restricted primarily for agricultural purposes to users within the City and some users within the County (some Kern River water is exchanged for State Aqueduct water for domestic water purposes). A ll activities necessary to provide such services are accounted for in this fund.

Domestic Water Fund - The Domestic Water Fund is used to account for the provision of water service to residents of the City and County connected to the City's system. All activities necessary to provide such services are accounted for in this fund.

General Aviation Fund - T he General Aviation Fund is used to account for the acquisition and operation of the Bakersfield Municipal Airpark located on Union Avenue. The majority of acquisition and improvement financing for the airport facility was provided by a grant from the Federal Aviation Administration.

Offstreet Parking Fund - The Offstreet Parking Fund is used to account for the operations of the parking garage at 18th and Eye Streets and various offstreet surface parking lots within the City. The parking garage was financed by the former Redevelopment Agency and the related debt was retired in August 1994, and subsequently, the title was transferred to the City.

Internal Service Funds - T he Internal Service Funds are used to account for the cost of goods or services provided by one department or agency to other departments or agencies of the governmental unit on a reimbursement basis. The City accounts for its self-insurance and equipment management activities as internal service funds.

The City reports the following additional fund types:

Private Purpose Trust Funds - The Planning Habitat Trust Fund is used to account for monies collected from developers to be used to purchase suitable land to provide habitat for endangered species. After the land is purchased, it is transferred to the State Fish and Game Department for maintenance. The Bakersfield Affordable Housing Trust Fund will assist in the creation and preservation of affordable housing in the City for the benefit of very low, low and moderate-income households, as well as address the housing need of the homeless population. The City also records the assets, liabilities, and activities of the Redevelopment Successor Agency in a separate trust fund.

Pension and Other Employee Benefit Trust Funds - The Fire Relief and Pension Trust Fund is used to account for the annuity payments at appropriate amounts and times in the future for Fire Department personnel who retired prior to June 26, 1972. The Other Post-Employment Benefits (OPEB) Irrevocable Trust Fund is used to account for the City’s postretirement medical benefit plan in which the City provides medical insurance coverage through contributions to eligible retirees’ insurance premiums.

Custodial Funds - The Custodial Funds account for assets held by the City as an agent for various local governments or other entities. The Special Deposits Fund is used to account for the collection by the City as agent for organizations operated under the auspices of the Recreation Division, security deposits for utility franchises, temporary deposits for construction permits and 51

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) B. Basis of Presentation (continued)
bid deposits. This fund is also used for the collection of police seized property, local Law Enforcement Block Grants and other revenues held in trust pending disposition of contingencies. T he Improvement Districts Fund i s used to account for the collection of liens for improvements benefiting private properties and payments to the holders of bonds issued pursuant to the Improvement Bond Act of 1913 and the Improvement Bond Act of 1915. The City is in no way liable for the payment of bonded indebtedness, but the City serves as agent to collect the principal and interest installments from the owners of the benefited properties. A t rustee provides the periodic payment to the bondholders. This fund also accounts for the special assessments and taxes collected within the boundaries of Community Service Districts within the City.

C. Measurement Focus and Basis of Accounting
The government-wide, proprietary, private purpose trust, and pension and other employee benefit trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. R evenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include property and sales taxes, grants, entitlements, and donations. On an accrual basis of accounting, revenue from property taxes is recognized in the fiscal year for which the taxes are levied. R evenues from sales tax are recognized when the underlying transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligible requirements have been satisfied. The custodial funds utilize the accrual basis of accounting to report assets and liabilities but technically have no measurement focus.

Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this method, revenues are recognized when measurable and available. Property and sales taxes, interest, certain State and Federal grants and charges for services are accrued w hen their receipt occurs within sixty days after the end of the accounting period so as to be both measurable and available. E xpenditures are generally recorded when a liability is incurred, as under the accrual basis of accounting. H owever, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. General capital assets acquisitions are reported as expenditures in governmental funds. P roceeds of general long-term debt and leases are reported as other financing sources.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. O perating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary funds' principal ongoing operations. Revenues and expenses not meeting this definition are reported as nonoperating.

D. Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items Cash and Investments
Cash balances of each of the City's funds, except for certain Fiduciary Funds, are pooled and invested by the City. Income earned from pooled investments is allocated to each of the funds based on average pooled cash balances during the year.

Deficit cash balances are classified as due to other funds and funded by the General Fund or related operating fund.

The City applies GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External Investment Pools. This statement adheres to GASB reporting guidelines which generally requires that investments be reported at their fair value and that all changes in fair value be reflected as income of the period in which they occur.

Statutes authorize the City to invest in obligations of the United States Treasury, agencies and instrumentalities, commercial paper, bankers' acceptances, repurchase agreements, money market funds, and the State Treasurer's investment pool. The City's Pension Trust Fund is also authorized to invest in corporate bonds rated A or better by a national rating system generally recognized and used by banks and investment brokers in the United States. 52

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued) Investments are comprised of obligations of the United States Treasury, agencies and instrumentalities, cash, time certificates of deposit, mutual funds, bankers' acceptances, money market accounts, deposits in the State of California Local Agency Investment Fund (LAIF), and California Asset Management Program (CAMP). Investments are stated at fair value.

Interfund Transactions
Interfund transactions are reflected as either loans, services provided, reimbursements or transfers. L oans are reported as receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are reported in the government-wide financial statement as “internal balances.” Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not available financial resources.

Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses.

Reimbursements are 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 or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

Receivables
All trade and property tax receivables are shown net of an allowance for uncollectible accounts. Trade accounts receivable in excess of 180 days comprise the trade accounts receivable allowance for uncollectible accounts.

Inventory and Prepaid Items
Inventory is valued at average cost applied on a first-in, first-out (FIFO) basis. The reserve for prepaid expenses relates to certain payments to vendors for costs applicable to future accounting periods. The cost of both inventories and prepaid items are recorded as expenditures/expenses when consumed rather than when purchased.

Capital Assets
Capital outlays are recorded as expenditures of the General, Special Revenue, and Capital Projects Funds and as assets in the government-wide financial statements to the extent the City’s capitalization thresholds are met.

Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), and intangible water rights are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the government as assets with an estimated useful life in excess of one year and an initial individual cost of more than $50,000 for infrastructure and $5,000 for all other capital assets.

Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets are recorded at acquisition value at the date of donation in the majority of instances. When assets are donated in relation to a service concession arrangement, they are reported at acquisition cost.

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. Betterments and major improvements which significantly increase values, change capacities or extend useful lives are capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is included in the results of operations. 53

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued) Major outlays for capital assets and improvements are capitalized as projects are constructed. I nterest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed.

Property, plant, and equipment of the primary government, as well as the component units, are depreciated using the straight- line method over the following estimated useful lives:

Infrastructure 10 to 70 years
Buildings, structures and improvements 5 to 40 years
Transmission and distribution equipment 5 to 50 years
Rolling equipment 2 to 30 years
Office equipment 3 to 10 years
Long-Term Obligations
In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type Statement of Net Position. Debt principal payments of both governmental and business-type activities are reported as decreases in the balance of the liability on the Statement of Net Position. B ond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method.

In the fund financial statements, however, debt principal payments of governmental funds are recognized as expenditures when paid. Governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. T he face amount of debt issued is reported as other financing sources. P remiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. I ssuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Deferred Outflows and Inflows of Resources
The City records deferred outflows and inflows of resources in the government-wide, governmental, and proprietary fund type financial statements.

The Statements of Net Position and Balance Sheets will sometimes report a separate section for deferred outflow s of resources, defined as representing a consumption of net assets that applies to future periods, or deferred inflows of resources, defined as representing an acquisition of net assets that applies to future periods. The City has items that qualify for reporting in these categories and are detailed in a separate note disclosure. 54

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued) Net Position/Fund Balance
The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized as net investment in capital assets, restricted and unrestricted.  Net Investment in Capital Assets - This category groups all capital assets, including infrastructure, into one component of net position. A ccumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.  Restricted Net Position - This category presents external restrictions imposed by creditors, grantors, contributors, laws, or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.  Unrestricted Net Position - T his category represents net position of the City, not restricted for any project or other purpose.

As of June 30, 2023, net position is as follows:

Governmental
Activities
Business-Type
Activities Total
Net investment in capital assets $ 1,395,502,719 $ 756,449,727 $ 2,151,952,446 Restricted 21,357,879 20,200,000 41,557,879
Unrestricted 3,081,026 120,952,107 124,033,133
Total net position $ 1,419,941,624 $ 897,601,834 $ 2,317,543,458 Fund balances of the governmental funds are report using a hierarchy based primarily on the extent to which a government is bound to observe constraints imposed upon the use of the resources reported. Fund balances for governmental funds are segregated as follows:
 Nonspendable Fund Balance – includes net resources that cannot be spent because of their form or because of legal or contractual limitations, and therefore must remain intact.  Restricted Fund Balance – i ncludes net resources that have externally enforceable limitations on their use. T hese limitations can be established by creditors, grantors, or by laws and regulations.  Committed Fund Balance – includes amounts with self-imposed limitations and are set in place prior to the end of the fiscal year. Commitments are set forth by the formal action of the City’s highest level of decision-making authority, the City Council (via resolutions or ordinances), and the limitations require that same level of authority to be removed.  Assigned Fund Balance – i ncludes amounts for which the intended use results in limitations but do not meet the requirements for either the “Restricted” or “Committed” classifications. I ntended use can be established by the City Council, a governing committee or board, or by a City official designated as having that authority as provided by the Fund Balance Policy.
 Unassigned Fund Balance – is the residual balance of the General Fund not included in the other classifications. 55

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued) The City Council establishes, modifies or rescinds fund balance commitments though approval of contracts for services and supplies that require City Council authorization through resolution. Fund balance assignments are made by agreements entered into by department heads, and their designees, for specific purposes. The City Council also establishes fund balance assignments through the adoption of the budget and subsequent budget amendments. Assignments are generally temporary and as such, additional action is not usually needed for assignments to be removed. The City Council approved, through resolution, a Fund Balance policy that established these rules for fund balance commitments and assignments in the General Fund. It was not deemed necessary to include a policy to achieve and maintain a specific level of unrestricted fund balance in the General Fund.

Fund Balance Flow Assumptions
The City will sometimes fund outlays for a specific purpose from restricted and unrestricted resources (committed, assigned, and unassigned fund balance). A flow assumption must be made about the order of how these resources will be applied to properly calculate the amounts reported as restricted, committed, assigned, and unassigned. It is the City’s policy to consider restricted fund balance to be used completely before any components of unrestricted fund balance. When the components of unrestricted fund balance are used for the same purpose, the amount classified as committed is used first, followed by assigned, and unassigned is applied last.

Property Taxes
In 1978, a state constitutional amendment (Proposition 13) provided that the property tax rate is lim ited to 1% of market value.

This property tax rate limitation may only be increased through voter approval. The County is the sole agency responsible for levying and collecting the property taxes and distributing them to taxing jurisdictions. T axes are allocated and distributed based upon each taxing jurisdiction's assessed valuations and upon any voter-approved debt override on the tax rate.

The property tax calendar for the City is as follows:

Valuation date January 1
Lien date March 1
Levy dates July 1 through June 30
Due dates November 1; February 1
Collection dates December 10; April 10
56

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) D. Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued) Pension Plan
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City's California Public Employee's Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans' 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.

Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City's OPEB Plan (OPEB Plan) and additions to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, are reported at cost.

Cash Flow Statements
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, deposits, short-term investments and cash and investments with fiscal agents. Cash equivalents are defined as short-term, highly liquid investments that are both readily convertible to known amounts of cash, and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Generally, only investments with original maturities of three months or less meet this definition.

Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

E. Stewardship, Compliance, and Accountability
Budgets and Budgetary Accounting
The procedures established by the City Council in adopting the budgetary data reflected in the financial statements are as follows:

1. Prior to June 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the means of financing them.

2. Public hearings are conducted to obtain taxpayer comments.

3. The City Council legally enacts the budget by resolution before July 1.

The City Manager is authorized to transfer budgeted amounts between departments within any fund and approve reductions of budgeted amounts. Since expenditures may not exceed budgeted appropriations at the fund level, any revisions that alter the total appropriations of any fund are to be approved by the City Council. Projects budgeted w ithin the current fiscal year but not yet completed can be re-appropriated the following fiscal year with City Manager approval. A ll other unencumbered appropriations lapse at year-end. Encumbered amounts are re-appropriated in the ensuing fiscal year budget.

Budgets are adopted for all governmental fund types and are prepared on a basis consistent w ith GAAP. Budgeted amounts are 57

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) E. Stewardship, Compliance, and Accountability (continued) as originally adopted, or as amended by the City Council. D uring the fiscal year ended June 30, 2023, the City Council approved $122,004,609 of increases to the originally adopted budget, excluding carryovers of prior year encumbered balances and selected capital appropriations.

Deficit Net Position
The Self-Insurance Internal Service Fund reported a deficit in net position of $59,825,840 at the close of the fiscal year. The continued deficit is the result of a significant increase in the workers' compensation and general liability calculated in the City’s most recent actuarial study. Workers' compensation charges can fluctuate significantly from year to year and staff will continue to adjust departmental rates accordingly to maintain sufficient funding levels.

The Community Development Block Grant Fund reported a deficit in net position of $ 86,759 at the close of the fiscal year. The deficit is caused development activity funded by this activity that will have supplemental resources added to to the fund in the subsequent year.

Reclassification and Eliminations
Interfund balances must generally be eliminated in the government-wide financial statements, except for net residual amounts due between governmental activities. A mounts involving fiduciary funds should be reported as external transactions. Any allocations must reduce the expenses of the function from which the expenses are being allocated, so that expenses are reported only once, in the function in which they are allocated.

F. New Accounting Pronouncements
During the fiscal year ending June 30, 2023, the City implemented the following standards:

In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The objectives of this statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with commitments extended by issuers, arrangements associated with conduit debt obligations, and related to note disclosures. Upon implementation, there was no material effect on the City's accounting or financial reporting.

In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The objective of this statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). Upon implementation, there was no material effect on the City's accounting or financial reporting.

In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. The objective of this statement is to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users. The City has elected not to early implement GASB Statement No. 96 and has not determined its effects on the City's financial statements. The resulting implementation of this standard did have a material affect on the City's financial accounting and reporting. Those effects are included in the face of the financial reports and in a separate note disclosure (Note 11).

In April 2022, GASB issued Statement No. 99, Omnibus 2022. The objectives of this statement are to enhance comparability in accounting and financial reporting to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. Certain provisions of this statement became effective upon issuance. With the implementation of the statement there was no material effect on the City's accounting or financial reporting.

The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB Statements, which have been updated to reflect revised effective dates as applicable. The City has elected not 58

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) F. New Accounting Pronouncements (continued)
to early implement these Statements and has not determined their effects on the City's financial statements:

In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections . The 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 reporting periods beginning after June 15, 2023 (Fiscal Year 2023-24).

In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition measurement guidance for compensated absences.

The requirements of this Statement are effective for reporting periods beginning after December 15, 2023 (Fiscal Year 2024- 25).

In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The 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. The requirements of this Statement are effective for reporting periods beginning after June 15, 2024 (Fiscal Year 2024-25).

In April 2024 GASB issued Statement No. 103, Financial Reporting Model Improvements. The 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 reporting periods beginning after June 15, 2025 (Fiscal Year 2025-26).

NOTE 2 - CASH AND INVESTMENTS
Cash and investments as of June 30, 2023, are classified in the accompanying financial statements as follows:

Statement of net position:

Cash and investments $ 668,542,181
Fiduciary funds:

Cash and investments 155,479,069
$ 824,021,250
Cash and investments as of June 30, 2023, consist of the following:

Cash on hand $ 1,702,910
Deposits with financial institutions 13,863,645
Investments 826,294,995
GASB Stmt. No. 31 Fair Value Adjustment (17,840,300)
$ 824,021,250
59

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 2 - CASH AND INVESTMENTS (continued)
Investment Authorized by the California Government Code and the City’s Investment Policy The table below i dentifies the investment types that are authorized for the City by the California Government Code, or the City’s investment policy, where more restrictive. The table also identifies the more restrictive provision of the California Government Code or the City’s investment policy that address interest rate risk, credit risk, and concentration of credit risk.

This table does not address investment of any debt proceeds held by bond trustees that are governed by the provisions of the City’s debt agreements, rather than the general provisions of either the California Government Code or the City’s investment policy.

Maximum
Percentage Maximum
Authorized Investment Types of Portfolio Maturity
U.S. Treasury Bills, Notes and Bonds 0 to 100% 5 Years
U.S. Government Agency Obligations 20% per agency 5 Years Bankers' Acceptances 40% 180 Days
Commercial Paper 25% 270 Days
Repurchase Agreements 30% 90 Days
Local Agency Investment Fund 40% N/A
Time Certificates of Deposit 40% 5 Years
Public Agency Demand Accounts 30% N/A
Mutual Funds 20% N/A
Investments Authorized by Debt Agreements
The City and its component units have $371,711 in investments held by bond trustees pledged to the payment or security of certain debt issues. These investments are held in direct obligations of, or obligations that are fully guaranteed as to principal and interest by, the United States Government or an agency thereof. The California Government Code provides that monies held by a bond trustee pledged to the payment or security of debt issues, in absence of specific statutory provisions governing the issuance of the debt, may be invested in accordance with the ordinances, resolutions, or indentures specifying the types of investments the respective bond issue’s trustee may make. The obligations described above are authorized per the investment agreements with the bond trustees and include, but are not limited to, Federal Land Bank Bonds, Federal Home Loan Bank notes and bonds, Export-Import Bank notes and guaranteed participation certificates, obligations of or fully guaranteed by the Government National Mortgage Association, Federal National Mortgage Association notes, debentures and guaranteed certificates of participation, obligations of the International Bank of Reconstruction and Development and Federal Home Loan Mortgage Corporation notes.

Interest Rate Risk
Interest rate risk is the risk that changes in the 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. As part of the City’s investment policy, one of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturing evenly over time as necessary to provide the cash flow and liquidity needed for operations.
60

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 2 - CASH AND INVESTMENTS (continued)
Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity:

Remaining Maturity (In Months)
Investment Type
Fair
Value Cost
12 Months
Or Less
13 - 24
Months
25-60
Months
More Than
60 Months
U.S. Government Agency Obligations:

Federal Farm Credit Bank $ 96,228,990 $102,381,667 $ 9,997,500 $ 40,981,390 $ 51,402,777 $ - Federal Home Loan Bank 95,746,373 102,477,680 8,990,250 35,746,180 57,741,250 - Federal Home Loan Mortgage Corp. 91,942,733 95,025,523 13,000,000 40,000,000 42,025,523 - Federal National Mortgage Assn. 67,979,656 69,853,182 26,370,000 29,307,107 14,176,075 - U.S. Treasury Bills, Notes, and Bonds 458,669 458,669 458,669 - - - Local Agency Investment Fund 145,330,815 145,330,815 145,330,815 - - - CAMP 219,167,178 219,167,178 219,167,178 - - -
Mutual Funds (1) 91,228,570 91,228,570 91,228,570 - - - Investment Contracts 371,711 371,711 - - - 371,711
Total $808,454,695 $826,294,995 $514,542,982 $146,034,677 $165,345,625 $ 371,711 (1) See Note 17 for Other Post-Employment Benefits.

Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations Except as inherent by their nature as disclosed above, the City’s investments (including those held by a bond trustee) are not highly sensitive to interest rate fluctuations.

Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the investment.

This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year end for each investment type. On August 5, 2011, the rating agency of Standard & Poors (S&P) assigned a negative outlook to the credit rating of the United States government. On August 8, 2011, S&P then downgraded that credit rating to AA+ from AAA
61

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 2 - CASH AND INVESTMENTS (continued)
Remaining as of the Year-End
Investment Type
Minimum
Legal
Rating AAA AA+
Not
Rated
U.S. Government Agency Obligations:

Federal Farm Credit Bank $102,381,667 $ - $102,381,667 $ - Federal Home Loan Bank 102,477,680 - 102,477,680 -
Federal Home Loan Mortgage Corp. 95,025,523 - 95,025,523 - Federal National Mortgage Assn. 69,853,182 - 69,853,182 - U.S. Treasury Bills, Notes, and Bonds 458,669 - 458,669 - Local Agency Investment Fund 145,330,815 - - 145,330,815 CAMP 219,167,178 - - 219,167,178
Mutual Funds (1) 91,228,570 91,228,570 - -
Investment Contracts 371,711 - - 371,711
Total $826,294,995 $ 91,228,570 $370,196,721 $364,869,704 (1) See Note 17 for Other Post-Employment Benefits
Concentration of Credit Risk
The City’s investment policy does not limit the amount that can be invested in any one issuer beyond the limitations stipulated by the California Government Code. Investments in any one issuer (other than United States Treasury securities, mutual funds and external investment pools) that represent 5% or more of the City’s total investments are as follows.

Issuer Investment Type Reported Amount Percentage
Federal Farm Credit Bank Federal Agency Securities $ 102,381,667 12% Federal Home Loan Bank Federal Agency Securities $ 102,477,680 12% Custodial Credit Risk
Custodial credit risk for deposits is the risk that the City will not be able to recover its deposits or will not be able to recover collateral securities in the possession of an outside party if a depository institution fails. T he custodial credit risk for investments is the risk that the City will not be able to recover the value of its investment or collateral securities held by another party if the counterparty (e.g., broker-dealer) to a transaction fails. T he California Government Code and City’s investment policy do not contain legal or policy requirements that w ould limit exposure to custodial credit risk for deposits or investments, other than the following provision applicable to 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 fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. C alifornia law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

As of June 30, 2023, all of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in fully collateralized accounts, as permitted by the California Government Code. As of June 30, 2023, all of the City’s investments were held by the City itself or by a broker-dealer (counterparty) other than the broker-dealer used by the City to purchase the securities in the City’s name.
62

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 2 - CASH AND INVESTMENTS (continued)
Investment in State Investment Pools
Investments are stated at fair value. Fair value is established quarterly based on quoted market prices received from the securities custodian. Fair value of investments held fluctuates with interest rates. The fair value of participants’ position in the pool is the same as the value of the pool shares. The value of participants’ equity withdrawn is based on the book value of the participants’ percentage participation at the date of such withdrawal.

The California State Treasurer’s Office operates the Local Agency Investment Fund (LAIF). The LAIF is available for investment of funds administered by California local governments and special districts and is not registered with the Securities and Exchange Commission (SEC) as an investment company. The enabling legislation for the LAIF is Section 16429.1 et seq. of the California Government Code. California Asset Management Program (CAMP) is a California Joint Powers Authority established in 1989 to provide California public agencies w ith professional investment services. The CAMP Pool is a permitted investment for all local agencies under California Government Code Section 53601(p).

The LAIF and CAMP operate and report to participants on an amortized cost basis. For both the LAIF and CAMP, the income, gains, and losses, net of administration fees, are allocated based upon the participant’s average daily balance. Deposits in the LAIF and CAMP are not insured or otherwise guaranteed by the State of California, and participants share proportionally in any realized gains or losses on investments. The fair value of the LAIF and CAMP investment pools are approximately equal to the value of the pool shares.

Fair Value Measurement
The City categorizes its fair value measurements within the fair value hierarchy established by GAAP. The hierarchy used to measure the fair value of the asset is based on the following:

Level 1 - unadjusted price quotations in active markets/exchanges for identical assets or liabilities, that each fund has the ability to access.

Level 2 - other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, loss severities, credit risks and default rates) or other market-corroborated inputs).

Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are not available (including each fund's own assumptions used in determining the fair value of investments).

The City has a reported fair value of investments of $808,454,695, of which $240,816,319 are valued using Level 1 inputs.

These include all of the U.S Government Agency Obligations and Time Certificates of Deposit. The remaining investments are valued using Level 2 inputs.
63

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 3 - COMPOSITION OF ACCOUNTS RECEIVABLE AND PAYABLE BALANCES Accounts receivable at June 30, 2023 o f the City's major individual funds and non-major and internal service funds in the aggregate, including the applicable allowance for uncollectible accounts, are as follows:

Accounts Receivable -
Governmental Funds:

General
Fund
Transient
Occupancy
Taxes
Fund
Community
Development
Block Grant
Fund
Capital
Outlay
Fund
Redevelopment
Successor
Agency -
Housing Fund
Non-Major
Governmental
Funds
Internal
Service
Funds
Total
Governmental
Activities
Taxes $ - $3,874,684 $ - $ - $ - $ - $ - $ 3,874,684
Accounts 3,696,620 - 14,684,420 111,070 215 4,381,600 176,040 23,049,965 Gross Receivables 3,696,620 3,874,684 14,684,420 111,070 215 4,381,600 176,040 26,924,649 Less: Allowance
for Uncollectible - - - - - - (173,306) (173,306)
Total Accounts Receivable -
Net $ 3,696,620 $3,874,684 $ 14,684,420 $ 111,070 $ 215 $ 4,381,600 $ 2,734 $ 26,751,343 Accounts Receivable -
Proprietary Funds:

Wastewater
Treatment
Fund
Refuse
Collection
Fund
Agricultural
Water
Fund
Domestic
Water
Fund
General
Aviation
Fund
Offstreet
Parking
Fund
Total
Business-Type
Activities
Accounts $ 1,969,894 $ 1,993,633 $ 1,613,605 $ 3,725,050 $ 11,546 $ 1,675 $ 9,315,403 Gross Receivables 1,969,894 1,993,633 1,613,605 3,725,050 11,546 1,675 9,315,403 Less: Allowances for
Uncollectible - - - - - - -
Total Accounts Receivable - Net $ 1,969,894 $ 1,993,633 $ 1,613,605 $ 3,725,050 $ 11,546 $ 1,675 $ 9,315,403 64

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 3 - COMPOSITION OF ACCOUNTS RECEIVABLE AND PAYABLE BALANCES (continued) Accounts payable and accrued liabilities at June 30, 2023, are composed of the following:

Accounts Payable and
Accrued Liabilities General
Transient
Occupancy
Taxes
Community
Development
Block Grant
Gas Tax
& Road Covid Relief
Capital
Outlay
Park
Improvement
Governmental Activities: Fund Fund Fund Fund Fund Fund Fund Accounts payable $ 12,042,911 $ 39,008 $ 358,645 $ 2,834,165 $ 1,025,678 $ 4,529,036 $ 5,172,095 Due to other governments 6,637,032 - - - - - -
Total Accounts Payable
and Accrued Liabilities $ 18,679,943 $ 39,008 $ 358,645 $ 2,834,165 $ 1,025,678 $ 4,529,036 $ 5,172,095 Accounts Payable and
Accrued Liabilities
Transportation
Development
Non-Major
Governmental Govt-Wide
Internal
Service
Total
Governmental
Governmental Activities: Fund Funds Funds Funds Activities Accounts payable $ 1,756,276 $ 185,220 $ 2,029 $ 2,356,916 $ 30,301,979 Due to other governments - - - - 6,637,032
Total Accounts Payable
and Accrued Liabilities $ 1,756,276 $ 185,220 $ 2,029 $ 2,356,916 $ 36,939,011 Accounts Payable and
Accrued Liabilities -
Wastewater
Treatment
Refuse
Collection
River and
Agricultural
Water
Domestic
Water
General
Aviation
Offstreet
Parking
Total
Business-Type
Business-Type Activities: Fund Fund Fund Fund Fund Fund Activities Accounts payable $ 3,480,729 $ 3,674,143 $ 1,125,441 $ 2,338,551 $ 92,606 $ 21,237 $ 10,732,707 Accrued interest 1,436,104 - - - - - 1,436,104
Total Accounts Payable
and Accrued Liabilities $ 4,916,833 $ 3,674,143 $ 1,125,441 $ 2,338,551 $ 92,606 $ 21,237 $ 12,168,811 NOTE 4 - DUE FROM OTHER GOVERNMENTS
Amounts due from other governments at June 30, 2023 are comprised of the following:

Federal
Government
State of
California
County/City
Agencies
Total
Governmental
Activities
Business-Type
Activities
Total
Reporting
Entity
Senate Bill (SB) 90 Claims $ - $ 2,209,231 $ - $ 2,209,231 $ - $ 2,209,231 Sales Tax - 35,672,252 - 35,672,252 - 35,672,252
Public Employee Retirement System - 4,643 - 4,643 - 4,643 American Rescue Plan Act 675,840 - - 675,840 - 675,840
Caltrans - 7,813,482 - 7,813,482 298,582 8,112,064
SB 1 - Road Maintenance & Rehabilitation - 2,461,538 - 2,461,538 - 2,461,538 Proposition 68 - 192,403 - 192,403 - 192,403
Economic/Community Development 1,804,960 - - 1,804,960 - 1,804,960 Department of Natural Resources - 83,550 - 83,550 - 83,550 Kern County Waste Management - - - - 1,839,491 1,839,491 Kern County Public Works - - 50 50 - 50
Totals $ 2,480,800 $ 48,437,099 $ 50 $ 50,917,949 $ 2,138,073 $ 53,056,022 65

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 5 - CAPITAL ASSETS
Capital asset activities for the year ended June 30, 2023, were as follows:

Balance Balance
June 30, 2022 Adjustments Additions Retirements June 30, 2023 Governmental Activities
Capital assets, not being depreciated
Land $ 450,330,562 $ - $ 319,192 $ - $ 450,649,754
Construction in progress 159,812,152 - 58,845,534 7,834,408 210,823,278 Total capital assets, not being depreciated 610,142,714 - 59,164,726 7,834,408 661,473,032 Capital assets, being depreciated
Buildings, structures and improvements 164,706,781 - 1,260,772 - 165,967,553 Infrastructure 1,872,266,526 - 31,420,778 - 1,903,687,304 Rolling equipment 115,528,060 2,852,118 10,803,666 2,498,088 126,685,756 Furniture and other equipment 21,794,896 (112,530) 3,317,969 57,251 24,943,084 Total capital assets, being depreciated 2,174,296,263 2,739,588 46,803,185 2,555,339 2,221,283,697 Less accumulated depreciation for
Buildings, structures and improvements (92,768,459) - (4,529,311) - (97,297,770) Infrastructure (1,240,025,008) - (61,355,784) - (1,301,380,792) Rolling equipment (62,515,324) (108,419) (10,008,743) (2,365,612) (70,266,874) Furniture and other equipment (14,702,288) 34,453 (1,281,442) (54,388) (15,894,889) Total accumulated depreciation/amortization (1,410,011,079) (73,966) (77,175,280) (2,420,000) (1,484,840,325) Total capital assets, being depreciated, net 764,285,184 2,665,622 (30,372,095) 135,339 736,443,372 Leases, net of amortization (Note 10) 1,379,712 - (519,406) - 860,306 SBITA, net of amortization (Note 11) 128,675 - 60,818 - 189,493 Governmental activities capital assets, net $ 1,375,936,285 $ 2,665,622 $ 28,334,043 $ 7,969,747 $ 1,398,966,203 Business-Type Activities
Capital assets, not being depreciated/amortized
Land $ 24,036,133 $ - $ 402,403 $ - $ 24,438,536
Water rights 31,476,906 - - - 31,476,906
Construction in progress 16,946,746 - 5,683,707 8,264,619 14,365,834 Total capital assets, not being depreciated 72,459,785 - 6,086,110 8,264,619 70,281,276 Capital assets, being depreciated
Buildings, structures and improvements 335,986,383 - 4,935,607 - 340,921,990 Infrastructure 925,758,236 - 16,161,330 - 941,919,566
Equipment 92,116,092 - 2,063,879 - 94,179,971
Total capital assets being depreciated 1,353,860,711 - 23,160,816 - 1,377,021,527 Less accumulated depreciation for
Buildings, structures and improvements (154,282,295) - (8,090,425) - (162,372,720) Infrastructure (335,323,832) - (15,680,586) - (351,004,418) Equipment (53,788,001) - (4,483,510) - (58,271,511)
Total accumulated depreciation (543,394,128) - (28,254,521) - (571,648,649) Total capital assets, being depreciated, net 810,466,583 - (5,093,705) - 805,372,878 Business-type activities capital assets, net $ 882,926,368 $ - $ 992,405 $ 8,264,619 $ 875,654,154 66

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 5 - CAPITAL ASSETS (continued)
Depreciation and amortization expense was charged in the following functions in the Statement of Activities:

Governmental functions: Depreciation
General government $ 1,775,688
Public safety - Police 689,933
Public safety - Fire 928,921
Public works 69,427,838
Recreation and parks 3,593,356
Development services 759,544
Total $ 77,175,280
Business-type functions:

Wastewater treatment $ 20,029,890
Refuse collection 286,747
River & agricultural water 563,140
Domestic water 7,160,084
General aviation 124,031
Offstreet parking 90,629
Total $ 28,254,521
NOTE 6 - LAND HELD FOR RESALE
The City, as the Redevelopment Successor Agency, has been transferred real property to be held for a limited period that will be used for future development. The inventory for land held for resale is presented at the lower of cost or net realizable value though it is initially recorded at historical costs. Subsequently, the land could be adjusted to net realizable value if and w hen the City enters into agreements for development or sale of the property for less than its historical cost, w hen a property is impaired or when property value decreases due to market conditions.

Balance at Balance at
Redevelopment Successor Agency - Housing June 30, 2022 Additions Deletions June 30, 2023 Land Held for Resale $ 1,198,744 $ - $ - $ 1,198,744
$ 1,198,744 $ - $ - $ 1,198,744
67

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 7 - OTHER LONG-TERM RECEIVABLES
Other long-term receivables consist of the following:

Governmental Activities
Deferred loans receivable associated with the low and moderate income housing project. These loans bear 0-3% interest and are not due until ten years after the loan agreement date (also see deferred revenue at Note 9). $ 2,606,112
Mercy Housing, Madison Place Apartments, 55 year loan term, with 1/55 to be forgiven each year of compliance to agreement. 241,651
Amcal Santa Fe Apartments, 55 year loan term, repayment begins from residual receipts following the date that the housing project is put in service. 134,691 Down payment assistance loans. 1,492,935
19th Street Senior Plaza, LLC, a 55 year loan term upon recordation of Certificate of Completion. 1,688,375
Park 20th Apartments, a 55 year loan term beginning upon recordation of the Certificate of Completion with an interest rate of 3.0%. 2,720,055
Chelsea Investment Corp. - Mill Creek Village. 19th Street Senior Housing and Parking Structure. A 55 year loan term beginning upon recordation of the Certificate of Completion with an interest rate of 3.0%. 9,023,333
Chelsea Investment Corp. - Mill Creek Village. 19th Street Senior Housing and Parking Structure. A 55 year loan term beginning upon recordation of the Certificate of Completion with an interest rate of 2.0%. 1,962,792
CalHOME Downpayment Assistance for a grant from the State which provided downpayment and closing cost assistance to seventeen (17) families within the Metropolitan Bakersfield area. The assistance was provided to those families whose incomes were at or below 120% of area median income. The loans of up to $40,000 are forgiven at 1/15th per year. 221,440
Golden Empire Housing, Park Place Apartments, 55 year loan term beginning July 12, 1999, ending on July 12, 2054, with the interest payment being deferred for first ten years, until year 2010, with an interest rate of 1.5%. 807,355 Capital Vision Equities, City Center Senior Housing, 35 year loan term beginning on March 28, 2001, ending March 28, 2036, with an interest rate of 5.85%. 990,000 Canyon Hills Assembly of God, Senior Housing Project 30 year loan term beginning July 30, 2001 ending July 30, 2031, with an interest rate of 0%. 310,000 Mill Creek Courtyard CIC - SEPA - Senior Housing Project. A 55 year loan term beginning from the date of execution by the developer. 2,520,000 Face value of loans $ 24,718,739
68

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 7 - OTHER LONG-TERM RECEIVABLES (continued)
Current portion $ -
Long-term portion 24,718,739
Business-Type Activities
Notes receivable in the River & Agricultural Water Fund are for the amounts due from various customers/vendors.

These loans are non-interest bearing. $ 25,087
Total business-type noncurrent receivables $ 25,087
NOTE 8 - INTERFUND TRANSACTIONS
Interfund transactions are comprised of loans, services provided, reimbursements, or transfers. Loans are reported as amounts “due to/due from” other funds or as “advances,” as appropriate, and are subject to elimination upon consolidation. Services provided, deemed to be at market or near market rates, 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 activities and business-type activities are netted as part of the consolidation required to produce the government-wide financial statements.

Interfund receivable and payable balances at June 30, 2023 were:

Fund
Due from
Other Funds
Due to
Other Funds
Governmental Funds:

Major Funds:

General Fund $ 1,534,200 $ -
Community Development Block Grant Fund - 1,534,200
$ 1,534,200 $ 1,534,200
These balances are a result of expenditures incurred prior to the receipt of the related special revenue source.

Fund
Advances from
Other Funds
Advances to
Other Funds
Business Type Funds
Wastewater Fund $ - $ 2,435,190
Refuse Fund 2,435,190 -
$ 2,435,190 $ 2,435,190
This balance is a result in an advance from the Wastewater Fund to the Refuse Fund in order to purchase a recycling center and has nine years remaining on the repayment schedule.
69

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 8 - INTERFUND TRANSACTIONS (continued)
Interfund transfers at June 30, 2023 consisted of the following:

Transfers In Transfers Out
Governmental Funds:

Major Funds:

General Fund $ 11,264,480 $ 41,245,304
Gas Tax & Road Fund - 9,300
Covid Relief Fund - 12,500,000
Transient Occupancy Taxes Fund - 10,432,276
Community Development Block Grant Fund - 384,339
Capital Outlay Fund 44,175,462 -
Transportation Development Fund 1,000,000 -
Non-Major Funds:

State Safety Fund - 1,272,000
General Obligation Debt Fund 1,205,784 -
Subtotal 57,645,726 65,843,219
Private Purpose Trust Funds:

Affordable Housing Fund 2,626,813 -
Proprietary Funds:

Major Funds:

Wastewater Treatment Fund - 515,500
Refuse Collection Fund - 1,875,080
River & Agricultural Water Fund - 49,600
Domestic Water Fund 2,500,000 12,300
General Aviation Fund - 10,242
Offstreet Parking Fund 120,000 12,998
Internal Service Funds:

Equipment Management Fund 5,426,400 -
$ 68,318,939 $ 68,318,939
Additional details regarding transfers in and out of various funds are provided below:
 The $1,250,000 transfer in to the General Fund is from the State Safety Fund that subsidized the cost of the traffic division of the police department for parking fine violations.
 The $12,500,000 transfer from the COVID Relief Fund related to the allowable use of funds for lost revenue brought on by the pandemic of $10,000,000 and a capital project for water conservation to the Domestic Water Fund of $2,500,000.  The $41,245,304 transfer from the General Fund includes a transfer to the Capital Outlay Fund of $34,784,462 for various capital improvement projects, $793,529 to the General Obligation Debt Fund for the repayment of loans from PG&E for energy efficient retro fit projects, $120,000 to the Offstreet Parking Fund for security, $2,626,813 to the Affordable Housing Fund to aid in the housing crisis, as well as $2,920,500 to the Equipment Fund for operating activity.  The $10,432,276 t ransfers from the Transient Occupancy Taxes Fund include $10,391,000 transferred to the Capital Outlay Fund to fund a number of capital projects, $4,676 to the General Obligation Debt Fund for the repayment of a loan from PG&E for an energy efficiency retrofit at Mechanics Bank Arena, and $36,600 to the Equipment Fund for additional funding to replace equipment.
70

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 8 - INTERFUND TRANSACTIONS (continued)
 The $384,339 t ransfer from the Community Development Block Grant (CDBG) Fund to the General Obligation Debt Fund is for the repayment of a Section 108 loan.
 The $1,000,000 transfer from the General Fund (PSVS) to the Transportation Development Fund was to cover a portion of the cost of a building purchased as part of the acquisitions necessary for a new highway project that was repurposed as a City operational facility for the Recreation & Parks and Fire Departments.  There were additional transfers to the Equipment Management Fund to purchase additional equipment for operations which include: the State Safety Fund ($22,000), the Gas & Tax & Road Fund ($9,300), the Sewer Fund ($515,000), the Refuse Fund ($1,875,080), the River & Agricultural Water Fund ($49,600), and the Domestic Water Fund ($12,300).

NOTE 9 - ADVANCES FROM GRANTORS AND THIRD PARTIES
The government-wide Statement of Net Position as well as governmental and enterprise funds defer revenue recognition in connection with resources that have been received as of year-end but not yet earned because under both the accrual and modified accrual basis of accounting revenue may be recognized only when earned. Assets recognized in connection with a transaction before the earnings process is complete are offset by a corresponding liability for advances from grantors and third parties.

The following table summarizes Advances from Grantors and third parties for the City at June 30, 2023:

Balance at
June 30, 2023
Governmental Activities:

General Fund
Dog License $ 61,786
Business License 2,493,332
General Fund Total 2,555,118
COVID Relief 54,862,092
Redevelopment Successor Agency - Housing 22,112,627
Non-Major Funds:

State TDA - Grants Advanced 17,266
Total Governmental Activities $ 79,547,103
Business-Type Activities:

Refuse Collection $ 121,875
Total Business-Type Activities $ 121,875
71

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 10 - LEASES
A lease is defined as a contractual agreement that conveys control of the right to use another entity’s nonfinancial asset, for a minimum contractual period of greater than one year, in an exchange-like transaction.

A. Leases of Tangible Items
In fiscal year 2022, the City adopted Statement No. 87, Leases, i ssued by the Governmental Accounting Standards Board (GASB). This statement establishes a single model for lease accounting based on the principle that leases are financing of the right to use an underlying asset. In accordance with the statement, parties to a lease agreement, the lessee and lessor, are required to recognize a lease liability and an intangible right-to-use lease asset, and a lease receivable and deferred inflow of resources, respectively.

City as Lessor
The City is a lessor of land and building nonfinancial assets. The City recognizes a lease receivable and a deferred inflow of resources in the government-wide and governmental fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources in initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date.

The following are key estimates and judgments how the City determines the discount rate on the expected lease receipts to present value, lease term, and lease receipts:
 The City uses its estimated incremental borrowing rate as the discount rate for leases.  The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

As lessor, the City recognized twelve lease agreements subject to GASB Statement No. 87, Leases, at the beginning of the fiscal year. The lease terms range from 48 to 994 months for the right to use land, land improvements, buildings, and infrastructure. Most of these leases include periodic adjustments to the lease amounts at determined intervals. The fixed lease payment ranges from $1 to $195,696 per year, with the incremental borrowing rate of 1.5%. For the year ended June 30, 2023 the City received an immaterial amount of variable and other payments from these lease arrangements.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
72

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 10 - LEASES (continued)
Changes in lease receivable for the year ended June 30, 2023 are as follows:

Restated
Balance at
June 30, 2022 Additions
Principal
Retirement
Balance at
June 30, 2023
Governmental Activities
Lease Receivable $ 449,397 $ - $ 48,750 $ 400,647
Defered inflow of resources $ 434,694 $ - $ 54,506 $ 380,188 Balance at
June 30, 2022 Additions
Principal
Retirement
Balance at
June 30, 2023
Business-Type Activities
Lease Receivable $ 4,624,235 $ - $ 444,463 $ 4,179,772
Deffered inflow of resources $ 4,563,846 $ - $ 565,218 $ 3,998,628 City as a Lessee
The City is a lessee of nonfinancial assets such as land, buildings, and equipment. The City recognizes a lease liability and intangible right-to-use lease assets in the government-wide financial statements. The City recognizes lease liabilities with an initial, individual value of $5,000 or more.

At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight-line basis over its useful life, which is the shorter of the leased asset’s useful life or the lease term.

The following are key estimates and judgments on how the City determines its discount rate on the expected lease payments to present value, lease term, and lease payments:
 The City uses its estimated incremental borrowing rate as the discount rate for leases.  The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payment and purchase option price that the City is reasonably certain to exercise.

As lessee, the City recognized six lease agreements subject to GASB Statement No. 87, Leases, at the beginning of the fiscal year. During the fiscal year, the City entered into one lease agreement. The lease terms range from 36-204 months for the right to use buildings and equipment. Most of these leases include periodic adjustments to the lease amounts at determined intervals.

The fixed lease payment ranges from $680 to $695,722 per year with the incremental borrowing rate ranging from 3% to 5%.

For the year ended June 30, 2023, the City paid an immaterial amount of variable and other payments from these lease arrangements.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability. 73

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 10 - LEASES (continued)
Changes in lease asset and lease liability for the year ended June 30, 2023 are as follows:

Balance at
June 30, 2022 Additions
Principal
Retirement
Balance at
June 30, 2023
Governmental Activities:

Lease assets
Right-to-use land $ 67,010 $ - $ - $ 67,010
Right-to-use-buildings 1,509,949 - - 1,509,949
Right-to-use equipment 34,947 - - 34,947
Total lease assets 1,611,906 - - 1,611,906
Accumulated amortization (232,194) (519,406) - (751,600) Total lease assets, net $ 1,379,712 $ (519,406) $ - $ 860,306 Lease liability $ 1,404,785 $ - $ (479,018) $ 925,767
During the year ended June 30, 2023, the City recognized lease expenses and interest expenses as follows:

Business-Type
Activities
Governmental
Activities
Amortization of lease assets $ - $ 519,406
Total lease expenses - 519,406
Lease interest expenses 636,692 36,013
Total lease interest expenses $ 636,692 $ 36,013
As of June 30, 2023, the City had a minimum principal and interest payment requirement for its lease activities with a remaining term in excess of one year, as follows:

Governmental Activities
Year ending Lease Interest Total
2024 $ 543,889 $ 20,783 $ 564,672
2025 340,692 4,819 345,511
2026 16,111 1,069 17,180
2027 9,958 590 10,548
2028 3,521 460 3,981
2029-2033 9,070 930 10,000
2034-2038 2,526 194 2,720
Totals $ 925,767 $ 28,845 $ 954,612
74

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 10 - LEASES (continued)
B. Leases of Intangible Items
GASB Statement No. 87 for leases specifically excludes inclusion of intangible assets. As such, there is a separate tracking of those leases for items identified under GASB Statement No. 51, Accounting and Financial Reporting for Intangible Assets .

The City entered into a long-term lease agreement in September 2005 for the acquisition of water rights with the Kern County Water Agency (KCWA). The agreement entitles the City to receive 6,500 acre feet of water per year in exchange for an annual payment tied to KCWA's water revenue certificates of participation from 2006 and 2008, which were used for the expansion of the water treatment facility. On March 1, 2016, KCWA issued a refunding bond that refunded the previous debt that the City's lease payments were based upon. The City's lease payments coincide with the amortization schedule for the related KCWA dept wit the value of the water rights at $14,913,683. The total lease obligations for the term of the agreement are as follows:

Business-Type Activities
Year ending Lease Interest Total
2024 $ 747,648 $ 602,990 $ 1,350,638
2025 782,515 566,907 1,349,422
2026 819,559 529,057 1,348,616
2027 860,240 488,979 1,349,219
2028 902,834 446,723 1,349,557
2029-2033 5,166,709 1,580,053 6,746,762
2034-2038 5,634,178 615,369 6,249,547
Totals $ 14,913,683 $ 4,830,078 $ 19,743,761
75

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 11 - SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (SBITA) A Subscription-Based Information Technology Arrangement (SBITA) is defined as a contract tha conveys control of the right to use another party's information technology softwares, alone or in combination with tangible captial assets (underlying IT assets), as specified by the contract for a period greater than one year in an exchange or exchange-like transaction.

The City recognizes a SBITA liability and intangible asset in the government wide financial statement with an initial individual value of $10,000 or more.

At the commencement of a SBITA, the City initially measures the liability at the present value of payments expected to be made during the SBITA term. The related liability is reduced by the principal portion of SBITA payments. The related asset is initially measured at the amount of the SBITA liability, adjusted for the payments before the commencement of the SBITA, plus applicable direct costs. The SBITA asset is amortized on a straight-line basis over its useful life.

Key estimates related to the City's SBITA include, 1) the discount rate used to calculate the present value of SBITA payments, 2) the SBITA term, and 3) the SBITA payments. The discount rate used by City is its incremental borrowing of of 3.5%. The SBITA term includes noncancellable period and periods covered by an option to extend if it is reasonably certain that the City of SBITA vendor will exercise the option.

The City monitors changes in circumstance that would require a remeasurement of its SBITA assets and liabilities and will do so if certain changes occur that are expected to significantly affect these amounts. SBITA assets are reported with other capital assets and SBITA liabilities are reported with long-term debt on the statements of net position. All SBITA were recognized as having an inception date of July 1, 2022 or after. On June 30, 2023 the City has two qualifying SBITA under GASB 96. None include an option to extend beyond the periods reported.

The following is a summary of leased asset activity for the year ended June 30, 2023:

Governmental activities:

Beginning
Balance Additions Retirements Total
Subscription assets $ 128,675 $ 146,931 $ - $ 275,606
Accumulated amortization - (86,113) - (86,113)
Total subscription assets, net 128,675 60,818 - 189,493 Subscription liability $ 103,969 $ 146,931 $ 75,538 $ 175,363 SBITA principal and interest payments to maturity are as follows:

Governmental Activities
Year ending Principal Interest Total
2024 $ 72,864 $ 5,836 $ 78,700
2025 75,325 3,375 78,700
2026 27,174 827 28,001
Totals $ 175,363 $ 10,038 $ 185,401
76

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 12 - LONG-TERM DEBT
Long-term debt transactions for the fiscal year ending June 30, 2023 are summarized below:

Business-Type Activities
Governmental
Activities
General
Obligations
Revenue
Obligations Total
Total
Government
Payable at June 30, 2022:

Bonds $ - $ - $ 120,697,778 $ 120,697,778 $ 120,697,778 Certificates of Participation - - - - -
Notes 3,547,669 2,719,697 - 2,719,697 6,267,366
Contracts/Loans - 326,262 - 326,262 326,262
Claims and Judgments Payable 71,321,000 - - - 71,321,000 Compensated Absences 20,113,006 2,340,663 - 2,340,663 22,453,669 Subtotal 94,981,675 5,386,622 120,697,778 126,084,400 221,066,075 New debt incurred:

Bonds - - - - -
Contracts/Loans - 9,187 - 9,187 9,187
Claims and Judgments Payable 6,908,000 - - - 6,908,000
Compensated Absences 13,804,774 1,543,194 - 1,543,194 15,347,968 Subtotal 20,712,774 1,552,381 - 1,552,381 22,265,155
Principal reductions:

Bonds - - 9,601,778 9,601,778 9,601,778
Certificates of Participation - - - - -
Notes 1,199,444 284,507 - 284,507 1,483,951
Compensated Absences 12,254,320 1,403,216 - 1,403,216 13,657,536 Subtotal 13,453,764 1,687,723 9,601,778 11,289,501 24,743,265 Payable at June 30, 2023:

Bonds - - 111,096,000 111,096,000 111,096,000
Notes 2,348,224 2,435,190 - 2,435,190 4,783,414
Contracts/Loans - 335,448 - 335,448 335,448
Claims and Judgments Payable 78,229,000 - - - 78,229,000 Compensated Absences 21,663,460 2,480,641 - 2,480,641 24,144,101 Total Payables $102,240,684 $ 5,251,279 $ 111,096,000 $ 116,347,279 $ 218,587,963 77

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 12 - LONG-TERM DEBT (continued)
Business-Type Activities
Governmental
Activities
General
Obligations
Revenue
Obligations Total
Total
Government
Due Within One Year:

Bonds $ - $ - $ 10,056,777 $ 10,056,777 $ 10,056,777
Certificates of Participation - - - - -
Notes 701,646 288,775 - 288,775 990,421
Total Long-Term Debt 701,646 288,775 10,056,777 10,345,552 11,047,198 Contracts/Loans - 335,449 - 335,449 335,449
Claims and Judgments Payable 13,284,000 - - - 13,284,000 Compensated Absences 2,606,264 411,964 - 411,964 3,018,228 Total Due Within One Year $ 16,591,910 $ 1,036,188 $ 10,056,777 $ 11,092,965 $ 27,684,875 Due in More Than One Year:

Bonds $ - $ - $ 101,039,222 $101,039,222 $101,039,222
Notes 1,646,578 2,146,415 - 2,146,415 3,792,993
Total Long-Term Debt 1,646,578 2,146,415 101,039,222 103,185,637 104,832,215 Claims and Judgments Payable 64,945,000 - - - 64,945,000 Compensated Absences 19,057,197 2,068,677 - 2,068,677 21,125,874 Total Due in More Than One Year $ 85,648,775 $ 4,215,092 $ 101,039,222 $105,254,314 $190,903,089 The liability for pension-related debt, OPEB debt, and compensated absences for governmental activities is primarily liquidated by the General Fund with smaller portions charged to other funds in an amount proportional to the personnel costs incurred.

The pension related debt and compensated absences for business-type activities will be paid by the respective proprietary funds.

Long-term debt payable at June 30, 2023, was comprised of the following individual issues:

Bonds
General obligation bonds serviced by business-type activities:
$10,525,000 Wastewater Revenue Bonds 2020 Series A bonds - The proceeds from the sale of the Series 2020A Bonds, along with certain available moneys of the Enterprise, were to be used to redeem and decrease a portion of the outstanding 2015A Refunded Bonds. The original series from 2007 was refunded with these 2015 bonds, a portion of which remains outstanding. The financing was used to fund the costs of certain capital improvements at the City's wastewater and sewer collection, treatment and disposal system (specifically Treatment Plant #3) (This issue is serviced by the Wastewater Treatment Fund). $ 10,525,000 $145,500,000 Wastewater Revenue Bonds 2015 Series A - The 2007 Series A bonds were refunded in 2015 with a partial call of the outstanding principal amount of $156,750,000 as well as payment of the issuance costs. The proceeds of the original Series 2007A refunded bonds were used to finance a portion of certain capital improvements at the City's wastewater and sewage collection treatment and disposal system; interest rate of 5.00%. (This issue is serviced by the Wastewater Treatment Fund.) $ 86,110,000 Unamortized Bond Premium on Wastewater Revenue Bonds 14,461,000 Total Bonds $111,096,000
78

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 12 - LONG-TERM DEBT (continued)
Notes/Loans:

General obligation note serviced by Community Development Block Grant Fund (via the Municipal Debt Service Fund with Community Development Block Grant Entitlement): $800,000 HUD Section 108 Loan 2003 - due in annual principal installments of $24,000 to $61,000 commencing August 1, 2005 through August 2023; interest ranging from 1.61% to 4.76%. 61,000
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund ):
$75,960 PG&E loan used for an energy efficient lighting upgrade at the City's Municipal Airport. The payment will be made in 89 monthly payments of $853.49 This loan contains no interest charges. 61,452
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund); $743,215 PG&E loan used for an energy efficient lighting upgrades to various City of Bakersfield Parks. The payment will be made in 100 monthly payments of $7,362.33. This loan contains no interest charges. 654,866
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund):
$1,420,717 PG&E loan used for an energy efficient lighting upgrade throughout the City. The payments will be made in 80 monthly payments of $17,759. This loan contain no interest charges.
532,769
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund):
$1,979,307 PG&E loan used for an energy efficient lighting upgrade throughout the City. The payments will be made in 80 monthly payments of $24,138. This loan contain no interest charges.
796,551
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund); $126,730 PG&E loan used for an energy efficient lighting upgrade for the Parking Garage.

The payment will be made in 117 monthly payments of $1,083. This loan contains no interest charges.
97,485
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund); $32,285 PG&E loan used for an energy efficient lighting upgrade for the City Hall North.

The payment will be made in 110 monthly payments of $294. This loan contains no interest charges.
24,948
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund); $140,477 PG&E loan used for an energy efficient lighting upgrade for the Amphitheater.

The payment will be made in 107 monthly payments of $1,313. This loan contains no interest charges.
106,346
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund); $28,073 PG&E loan used for an energy efficient lighting upgrade for Grissom Park. The payment will be made in 48 monthly payments of $585. This loan contains no interest charges.
12,867
79

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 12 - LONG-TERM DEBT (continued)
Advances from other funds serviced by Business-Type Activities:
$3,000,000 interfund loan from the Wastewater Fund to the Refuse Fund. This loan was made to purchase a recycling center and will be repaid over 10 years. 2,435,190 Total general obligation notes/loans payable $ 4,783,474 Compensated Absences:

Governmental Activities $ 21,663,460
Business-Type Activities 2,480,641
Total Compensated Absences $ 24,144,101
A summary of the City's debt service requirements outstanding at June 30, 2023, is as follows:

Total
Government
Principal:

Governmental Activities $ 102,240,684
Business-Type Activities:

General Obligations 5,251,279
Revenue Obligations 111,096,000
Subtotal - Principal 218,587,963
Less: Claims and Judgments Payable included
above that bear no interest and have
no schedule of repayment terms 78,229,000
Less: Kern River Levee District Payable
included above that bears no interest and
has no schedule of repayment terms 335,449
Less: Unamortized premium for Wastewater
revenue bond 14,461,000
Less: Compensated Absences included above that bear
no interest and have no schedule of repayment terms 24,144,102 Total Principal with Scheduled
Repayment Terms 101,418,409
Interest on Obligations 24,255,695
Total Debt Service Requirements $ 125,674,104
80

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 12 - LONG-TERM DEBT (continued)
The annual requirement to amortize the principal and interest on long-term debt at June 30, 2023 is as follows:

Government-Type Activities
Year ending Principal Interest
Bonds Notes/Loans Total Bonds Notes/Loans Total
2024 $ - $ 701,646 $ 701,646 $ - $ 854 $ 854
2025 - 639,477 639,477 - - -
2026 - 454,659 454,659 - - -
2027 - 130,865 130,865 - - -
2028 - 129,135 129,135 - - -
2029-2033 - 292,442 292,442 - - -
Totals $ - $ 2,348,224 $ 2,348,224 $ - $ 854 $ 854
Business-Type Activities
Year ending Principal Interest
Bonds Notes/Loans Total Bonds Notes/Loans Total
2024 $ 8,450,000 $ 288,775 $ 8,738,775 $ 4,620,500 $ 34,362 $ 4,654,862 2025 8,920,000 293,106 9,213,106 4,186,250 29,998 4,216,248 2026 9,365,000 297,503 9,662,503 3,729,125 25,568 3,754,693 2027 9,885,000 301,965 10,186,965 3,247,875 21,072 3,268,947 2028 10,405,000 306,495 10,711,495 2,740,625 16,509 2,757,134 2029-2033 49,610,000 947,346 50,557,346 5,581,500 21,457 5,602,957 Totals $ 96,635,000 $ 2,435,190 $ 99,070,190 $ 24,105,875 $ 148,966 $ 24,254,841 Total Reporting Entity
Year Ending Principal Interest
Bonds Notes/Loans Total Bonds Notes/Loans Total
2024 $ 8,450,000 $ 990,421 $ 9,440,421 $ 4,620,500 $ 35,216 $ 4,655,716 2025 8,920,000 932,583 9,852,583 4,186,250 29,998 4,216,248 2026 9,365,000 752,162 10,117,162 3,729,125 25,568 3,754,693 2027 9,885,000 432,830 10,317,830 3,247,875 21,072 3,268,947 2028 10,405,000 435,630 10,840,630 2,740,625 16,509 2,757,134 2029-2033 49,610,000 1,239,788 50,849,788 5,581,500 21,457 5,602,957 Totals $ 96,635,000 $ 4,783,414 $101,418,414 $ 24,105,875 $ 149,820 $ 24,255,695 81

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 13 - PLEDGED REVENUES
The City has pledged net revenues generated by the Wastewater Enterprise Fund to repay a total of $ 96.6 million in wastewater revenue bonds series 2015A issued to finance a portion of the expansion and improvement of the City's w astewater and sewage collection and disposal system.

Each fiscal year, net revenues means all revenues of the enterprise fund received during the fiscal year less operation and maintenance costs for that fiscal year. T he pledge of net revenues does not constitute a lien upon any property of the City.

Proceeds of the bonds provided financing for expansion and upgrade of Wastewater Treatment Plant #3, and improvements to Wastewater Treatment Plant #2. T he bonds are payable through 2034 for 2015A bonds. T he covenants of the ordinances authorizing the bonds include, among other things, an obligation of the City to fix, prescribe, revise, and collect rates, fees, and charges for the services and facilities of the system and revise the same whenever necessary, which will provide gross revenues in each fiscal year sufficient to pay the cost of operation and maintenance of the system; one hundred twenty five percent (125%) of the bond service requirement becoming due in such fiscal year on the outstanding bonds; plus one hundred percent (100%) of all reserve and other payments required to be made pursuant to the ordinances authorizing the bonds.

NOTE 14 - DEFERRED INFLOWS OF RESOURCES
Pursuant to GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and GASB Statement No. 65, Items Previously Reported as Assets and Liabilities, the City recognized deferred inflows of resources in the governmental fund financial statements. These items are an acquisition of net fund balance by the City that is applicable to a future reporting period. Previous financial reporting standards do not include guidance for reporting those financial statement elements, which are distinct from assets and liabilities. Under the modified accrual basis of accounting, it is not enough that revenue has been earned if it is to be recognized in the current period. Revenue must also be susceptible to accrual (i.e., measurable and available to finance expenditures of the current period). Governmental funds report deferred revenues in connection with receivables for revenues not susceptible to accrual, as deferred inflows of resources.

Deferred inflows of resources balances (non-lease related) for the year ended June 30, 2023 were as follows:

Balance at
General Fund
Code Enforcement Receivable $ 100,334
Federal Agencies (CARES) 31,832
County Agencies (Fire Fund) 2,209,231
General Fund Total 2,341,397
Transient Occupancy Fund 17,289,407
Capital Outlay Fund 1
Non-Major Funds
Neighborhood Stabilization 1
Total Governmental Funds $ 19,630,806
82

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 15 - FUND BALANCES
Fund balances for all major and non-major governmental funds as of June 30, 2023 are as follows (see Note 1 for description of the categories used):

General
Fund
Transient
Occupancy
Taxes Fund
Community
Development
Block Grant
Fund
Gas Tax
& Road
Fund
Covid Relief
Fund
Capital
Outlay
Fund
Nonspendable
Prepaids/Deposits $ 99,455 $ - $ - $ - $ - $ 779,865
Subtotal 99,455 - - - - 779,865
Restricted
Development Services grants - - - - - -
Development Services projects - - - - - -
Police services grants - - - - - -
Fire services grants - - - - - -
Covid relief - - - - 5,976,431 -
Public Works grants - - - 13,606,792 - -
Subtotal - - - 13,606,792 5,976,431 -
Committed
Legal & Professional services 272,879 - - - - 8,943,000 City facility construction & refurbishment projects - - - - - 11,032,606 Police service contracts 809,708 - - - - 316,786
Fire service contracts - - - - - 175,898
Public Works
improvement contracts - - - - - 2,707,491
Park improvement contracts - - - - - 918,280
Development Services contracts 267,759 - - - - 439,358
Cash basis reserve 51,137,226 - - - - -
Facility replacement reserve - - - - - 5,028,428
Economic/Community Development projects 6,224,526 - - - - 2,917,749 Appropriation for next
year's budget 39,379,385 - - - - -
Subtotal 98,091,483 - - - - 32,479,596
Assigned
Legal & Professional services 81,451 - - - - -
Police operations 296,597 - - - - -
Fire operations 130,907 - - - - -
Public Works - General
Services department 33,031 - - - - -
Highway and road projects - - - - - 16,640,500
Rolling equipment - - - - - 79,283,594
Tourism and promotional contracts 172,564 7,291,635 - - - - Park development projects 141,320 - - - - -
Economic/Community development projects 158,159 - - - - - Other miscellaneous agreements 119,899 - - - - -
Petty Cash accounts 29,170 - - - - -
Compensated absences 2,288,886 - - - - -
Public Safety and Vital Services 25,548,473 - - - - -
Subtotal 29,000,457 7,291,635 - - - 95,924,094
Unassigned 25,106,773 - (86,759) - - -
Total $ 152,298,168 $ 7,291,635 $ (86,759)$ 13,606,792 $ 5,976,431 $ 129,183,555 83

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 15 - FUND BALANCES (continued)
Park
Improvement
Fund
Transportation
Development
Fund
Redevelopment
Successor
Agency -
Housing
Fund
Non-Major
Governmental
Funds Total
Nonspendable
Prepaids/Deposits $ - $ - $ - $ - $ 879,320
Subtotal - - - - 879,320
Restricted
Development Services grants - - - 68,008 68,008
Development Services projects - - 2,805,667 - 2,805,667 Police services grants - - - 674,690 674,690
Fire services grants - - - 2,390,306 2,390,306
Covid relief - - - - 5,976,431
Public Works grants - - - - 13,606,792
Subtotal - - 2,805,667 3,133,004 25,521,894
Committed
Legal & Professional services - - - - 9,215,879
City facility construction & refurbishment projects - - - - 11,032,606 Police service contracts - - - - 1,126,494
Fire service contracts - - - - 175,898
Public Works
improvement contracts - 58,665,040 - - 61,372,531
Park improvement contracts 7,909,868 - - - 8,828,148
Development Services contracts - - - - 707,117
Cash basis reserve - - - - 51,137,226
Facility replacement reserve - - - - 5,028,428
Economic/Community Development projects - - - - 9,142,275 Appropriation for next
year's budget - - - - 39,379,385
Subtotal 7,909,868 58,665,040 - - 197,145,987
Assigned
Legal & Professional services - - - - 81,451
Police operations - - - - 296,597
Fire operations - - - - 130,907
Public Works - General
Services department - - - - 33,031
Highway and road projects - - - - 16,640,500
Rolling equipment - - - - 79,283,594
Tourism and promotional contracts - - - - 7,464,199
Park development projects - - - - 141,320
Economic/Community development projects - - - - 158,159 Other miscellaneous agreements - - - - 119,899
Petty Cash accounts - - - - 29,170
Compensated absences - - - - 2,288,886
Public Safety and Vital Services - - - - 25,548,473
Subtotal - - - - 132,216,186
Unassigned - - - - 25,020,014
Total $ 7,909,868 $ 58,665,040 $ 2,805,667 $ 3,133,004 $ 380,783,401 NOTE 16 - REIMBURSABLE DEVELOPER COSTS
Reimbursable developer costs of $1,702,002 at June 30, 2023 are included in customer deposits in the Domestic Water Fund which represent amounts due to developers for construction of water mainline extensions and certain other water facilities. For mainline extensions transferred to the City after June 30, 1982, the developers are to be reimbursed based on revenues generated from the water sales associated with these mainline extensions. The City is required to reimburse 2.5% of the cost of the extension on a yearly basis with the total amount to be reimbursed within 40 years. 84

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 17 - EMPLOYEE RETIREMENT BENEFITS
General
The City of Bakersfield provides pension benefits to eligible full-time employees in three separate plans: the Miscellaneous Plan, the Safety Fire Plan, and the Safety Police Plan, all of which are included in the Public Agency portion of the California Public Employees’ Retirement System (CalPERS).

Miscellaneous Plan
Plan Description
The City’s Miscellaneous Plan is a defined benefit pension plan that provides retirement and disability benefits, annual cost-of- living adjustments (COLA), and death benefits to plan members and beneficiaries. T he Miscellaneous Plan is an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. A menu of benefit provisions, as well as other requirements, is established by State statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance. C alPERS issues a separate annual comprehensive financial report. Copies of the CalPERS' annual financial report may be obtained from their Executive Office - 400 P Street – Sacramento, CA 95814.

Benefits Provided
The benefits provided through the CalPERS Miscellaneous Plan include retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The City has three tiers through CalPERS under the Miscellaneous employee plan. Tier I is applicable to all employees hired before August 20, 2008 with a formula of 3% at age

60. Earliest retirement age is 50 with final compensation based on 12 months at the highest rate of pay received. Tier II is applicable to employees hired after August 20, 2008 and before January 1, 2013 with a formula of 2.7% at age 55. Earliest retirement age is 50 with final compensation based on 36 months at the highest rate of pay received. Tier III is applicable to employees hired after January 1, 2013 with a formula of 2% at age 62, which is a result of the Public Employees' Pension Reform Act of 2013 (PEPRA). PEPRA also lowered the final compensation and contribution requirements. Earliest retirement age is 52 with final compensation, subject to the PEPRA limit which is based on 36 months at the highest rate of pay received addjusted annually based on changes to the CPI for all urban consumers.

Contributions and Employees Covered
Active plan members in the CalPERS Miscellaneous Plan may be required to contribute a particular percent of their annual pay depending on the applicable plan they fall under. Tier I and Tier II employees will pay 8% of their salary while those employees under PEPRA (Tier III) will pay 6.25% of their salary. In addition, employees in Tier I and Tier II have 7.5% of their contribution picked-up by the City after five years of service.

Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. 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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. It is the responsibility of the employer to make necessary accounting adjustments to reflect the impact due to any Employer Paid Member Contributions or situations where members are paying a portion of the employer contribution.

As of June 30, 2022 (the measurement date), there are 1,140 active employees and 1,053 inactive employees or beneficiaries receiving benefits. For the fiscal year ended June 30, 2023, the employee contribution rate was 7.460 percent of annual pay, and the employer’s minimum contribution rate was 35.040 percent of annual payroll. Employer contribution rates may change if plan contracts are amended.
85

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 17 - EMPLOYEE RETIREMENT BENEFITS (continued)
Actuarial Methods and Assumptions
For the measurement period ended June 30, 2022 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2021 total pension liability. The June 30, 2021 and the June 30, 2022 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal
Asset Valuation Method
Fair Value of Assets. For details, see
June 30, 2019 Funding Valuation
Report.

Inflation Rate 2.50%
Salary Increases Varies by Entry Age and Service
Payroll Growth 2.75%
Investment Rate of Return 7.00% [a]
Mortality [b]
[a] Net of Pension Plan Investment and Administrative Expenses; includes inflation. [b] Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvements using Society of Actuaries 90% of scale MP-2016. For more details on this table, please refer to the December 2017 experience study report.

All other actuarial assumptions used in the June 30, 2021 valuation were based on the results of an actuarial experience study dated 2017 which was derived from data collected for the period from 1997 to 2015, including updates to salary increases, mortality and retirement rates. The 2017 Experience Study report can be obtained at CalPERS’ website under Forms and Publications.

Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets.

Therefore, the current 6.90 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary.

The long-term expected discount rate of 6.90 percent is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB Statement No. 68 section.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for 86

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 17 - EMPLOYEE RETIREMENT BENEFITS (continued)
assumed administrative expenses.

The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the CalPERS' Board effective on July 1, 2016.

Asset Class (1)
Assumed Asset
Allocation
Real Return
(1),(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 of 2.30% used for this period. [2] Figures are based on the 2021 Asset Liability Management study.

Changes in Net Pension Liability
The change in the Net Pension Liability recognized over the measurement period is as follows:

Increase (Decrease)

MISCELLANEOUS PLAN
Total Pension
Liability
[1]
Plan Fiduciary
Net Position
[2]
Net Pension
Liability
[3]=[1] - [2]
Balance at June 30, 2021 [a] $ 635,453,907 $ 525,769,434 $ 109,684,473 Changes Recognized for the
Measurement Period:
- Service Cost 11,936,949 - 11,936,949
- Interest on the Total
Pension Liability 44,607,191 - 44,607,191
- Changes of Benefit Terms - - -
- Changes of Assumptions 22,963,465 - 22,963,465
- Differences between Expected
and Actual Experience (1,146,174) - (1,146,174)
- Plan to Plan Movement - - -
- Contributions - Employer - 20,877,107 (20,877,107)
- Contributions - Employees - 4,920,321 (4,920,321)
- Net Investment Income - (39,818,161) 39,818,161
- Benefit Payments Including
Refund of Employee Contributions (33,517,292) (33,517,292) - - Administrative Expenses - (327,523) 327,523
- Other Misc Income/(Expense) [b] - - -
Net Changes during 2021-22 44,844,139 (47,865,548) 92,709,687 Balance at June 30, 2022 [a] $ 680,298,046 $ 477,903,886 $ 202,394,160 [a] The plan fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary, self- insurance and OPEB expense. This may be different from the plan assets reported in the funding actuarial valuation report. 87

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 17 - EMPLOYEE RETIREMENT BENEFITS (continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate

MISCELLANEOUS PLAN
Discount Rate - 1%
(5.90%)
Current Discount
Rate (6.90 %)
Discount Rate +
1%
(7.90%)
Plan Net Pension
Liability $ 293,941,953 $ 202,394,160 $ 126,823,852
Recognition of Gains and Losses
Under GASB Statement No. 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.

The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is a five year straight-line amortization. All other amounts are amortized using straight-line amortization 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 Expected Average Remaining Service Lifetime (EARSL) for the plan for the June 30, 2022 measurement date is 3.9 years, which is obtained by dividing the total service years of 12,619 (the sum of remaining lifetimes of active employees) by 3,211 (the total number of participants: active, inactive, and retired). Note that inactive employees and retirees have remaining service lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event other than receiving a cash refund.

Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of the start of the measurement period (July 1, 2021), the net pension liability/(asset) is $109,684,473. For the measurement period ending June 30, 2022 (the measurement date), the City incurred a pension expense/(income) of $25,353,339 for the plan.

Note that no adjustments have been made for contributions subsequent to the measurement date. Adequate treatment of any contributions made after the measurement date is the responsibility of the employer.

As of June 30, 2023, the City had deferred outflows of resources related to pensions of $25,466,772 for contributions made subsequent to the measurement date (which will be recognized as a reduction of the net pension liability as of June 30, 2024), $17,075,397 f or changes of assumptions, and $1,591,230 f or the differences between expected and actual experience, and $24,021,114 f or the net difference between projected and actual earning on pension plan investments. Deferred inflows of resources related to pensions of $(1,129,828), $0 f or changes in assumptions and $(1,129,828) f or differences between expected and actual experiences, and $0 f or the net difference between projected and actual earnings on pension plan investments.
88

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 17 - EMPLOYEE RETIREMENT BENEFITS (continued)
Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in future pension revenue and expense amortized annually as follows:

Measurement Periods
Ended June 30:

Deferred Outflows/(Inflows)
of Resources
2023 $10,161,704
2024 $9,585,876
2025 $6,655,341
2026 $15,154,992
2027 $0
Remaining $0
Safety Fire Plan
Plan Description
The City’s Safety Fire Plan is a defined benefit pension plan that provides retirement and disability benefits, annual cost-of- living adjustments, and death benefits to plan members and beneficiaries. The Safety Fire Plan is an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. A menu of benefit provisions, as well as other requirements, is established by State statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance. CalPERS issues a separate annual comprehensive financial report. C opies of the CalPERS' annual financial report may be obtained from their Executive Office - 400 P Street – Sacramento, CA 95814.

Benefits Provided
The benefits provided through the CalPERS Safety Fire Plan include retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. The City has three tiers through CalPERS under the Safety Fire employee plan. Tier I is applicable to all employees hired before January 1, 2011 with a formula of 3% at age 50. Earliest retirement age is 50 with final compensation based on 12 months at the highest rate of pay received. Tier II is applicable to employees hired after January 1, 2011 and before January 1, 2013 with a formula of 2.0% at age 50. Earliest retirem ent age is 50 with final compensation based on 36 months at the highest rate of pay received. Tier III is applicable to employees hired after January 1, 2013 with a formula of 2% at age 57, which is a result of PEPRA. PEPRA also lowered the final compensation and contribution requirements. Earliest retirement age is 50 with final compensation, subject to the PEPRA limit which is based on 36 months at the highest rate of pay received addjusted annually based on changes to the CPI for all urban consumers.

Contributions and Employees Covered
Active plan members in the CalPERS Safety Fire Plan may be required to contribute a particular percent of their annual pay depending on the applicable plan they fall under. Tier I and Tier II employees will pay 9% of their salary while those employees under PEPRA (Tier III) will pay 11.75% o f their salary. I n addition, employees in Tier I have 8% of their contribution picked-up by the City after five years of service.

Section 20814(c) of the California PERL requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. 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 employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. It is the responsibility of the employer to make necessary accounting adjustments to 89

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 17 - EMPLOYEE RETIREMENT BENEFITS (continued)
reflect the impact due to any Employer Paid Member Contributions or situations where members are paying a portion of the employer contribution.

As of June 30, 2022 ( the measurement date), there are 175 a ctive employees and 224 i nactive employees or beneficiaries receiving benefits. For the fiscal year ended June 30, 2023, the employee contribution rate was 9.70 percent of annual pay, and the employer’s minimum contribution rate was 55.62 percent of annual payroll. Employer contribution rates may change if plan contracts are amended.

Actuarial Methods and Assumptions
For the measurement period ended June 30, 2022 (the measurement date), the total pension liability was determined by rolling forward the June 30, 2021 total pension liability. The June 30, 2021 and the June 30, 2022 total pension liabilities were based on the following actuarial methods and assumptions:

Actuarial Cost Method Entry Age Normal
Asset Valuation Method
Fair Value of Assets. For details, see
June 30, 2019 Funding Valuation
Report.

Salary Increases 2.50%
Salary Increases Varies by Entry Age and Service
Payroll Growth 2.75%
Investment Rate of Return 7.00% [a]
[a] Net of Pension Plan Investment and Administrative Expenses; includes inflation. [b]Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvements using Society of Actuaries 90% of scale MP-2016. For more details on this table, please refer to the December 2017 experience study report.

All other actuarial assumptions used in the June 30, 2022 valuation were based on the results of an actuarial experience study dated 2017 which was derived from data collected for the period from 1997 to 2015, including updates to salary increases, mortality and retirement rates. The 2017 Experience Study report can be obtained at CalPERS’ website under Forms and Publications.

Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that w ould most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90 percent discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long-term expected discount rate of 6.90 percent is applied to all plans in the Public Employees Retirement Fund. The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB Statement No. 68 section.

The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return 90

CITY OF BAKERSFIELD
Notes to the Financial Statements
NOTE 17 - EMPLOYEE RETIREMENT BENEFITS (continued)
that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the CalPERS Board effective on July 1, 2016.

Asset Class
Assumed Asset
Allocation
Real Return
Years 1-10 [a]
Real Return
Years 11+ [b]
Global Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0% (0.92%)
[a] An expected inflation of 2.00% used for this period. [b] An expected inflation of 2.92% used for this period.

Changes in Net Pension Liability
The change in the Net Pension Liability recognized over the measurement period is as follows:

Increase (Decrease)

SAFETY FIRE PLAN
Total Pension
Liability
[1]
Plan Fiduciary
Net Position
[2]
Net Pension
Liability
[3]=[1] - [2]
Balance at June 30, 2021 [a] $ 322,060,271 $ 265,852,952 $ 56,207,319 Changes Recognized for the
Measurement Period:
- Service Cost 5,613,674 - 5,613,674
- Interest on the Total
Pension Liability 22,311,323 - 22,311,323
- Changes of Benefit Terms - - -
- Changes of Assumptions 10,750,631 - 10,750,631
- Differences between Expected
and Actual Experience (3,773,126) - (3,773,126)
- Plan to Plan Resource Movement - - -
- Contributions - Employer - 10,226,742 (10,226,742)
- Contributions - Employees - 2,026,395 (2,026,395)
- Net Investment Income - (20,199,779) 20,199,779
- Benefit Payments Including
Refund of Employee Contributions (16,984,220) (16,984,220) - - Administrative Expenses - (165,611) 165,611
- Other Misc Income/(Expense) [b] - - -
Net Changes during 2021-22 17,918,282 (25,096,473) 43,014,755 Balance at June 30, 2022 [a] $ 339,978,553 $ 240,756,479 $ 99,222,074 [a] The plan fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary, self-insurance and OPEB expense. This may be different from the plan assets reported in the funding actuarial valuation report. [b] During fiscal year 2017-18, as a result of Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Financial Reporting for Postemployment Benefits Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to post-employment benefits for participation in the State of California's agent OPEB plan.
91