BARSTOW FIRE PROTECTION DISTRICT
FOR THE YEAR ENDED JUNE 30, 2024
BASIC FINANCIAL STATEMENTS AND
INDEPENDENT AUDITORS’ REPORT
BARSTOW FIRE PROTECTION DISTRICT
Basic Financial Statements and Independent Auditors’ Report For the Year Ended June 30, 2024
BARSTOW FIRE PROTECTION DISTRICT
Basic Financial Statements and Independent Auditors’ Report For the Year Ended June 30, 2024
Table of Contents
Page
Number
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT ................................................................................................................ 1 BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements:
Statement of Net Position ......................................................................................................................... 6 Statement of Activities .............................................................................................................................. 7 Fund Financial Statements:
Balance Sheet - Governmental Funds ..................................................................................................... 9 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ........................................................................ 10 Statement of Revenues, Expenditures and Changes in Fund Balances .......................................................................................................................................... 11 Reconciliation of the Government Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ...................................................................................................................... 12 Notes to Basic Financial Statements ............................................................................................................ 14
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Basis of Accounting ..................................................................................................................... 33 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund ..................................................................................................... 34 Schedule of Proportionate Share of the Net Pension Liability ...................................................................... 35 Schedule of Plan Contributions – Pension .................................................................................................... 37 Schedule of Changes in the Net OPEB Liability and Related Ratios ........................................................... 39 Schedule of Contributions – OPEB ............................................................................................................... 41 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.................................................................. 43 LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Board Of Directors
Barstow Fire Protection District
City of Barstow, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, and the general fund of the Barstow Fire Protection District (the “District”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, and the general fund of the District, as of June 30, 2024, and the respective changes in financial position, and, where applicable, cash flows 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 generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet 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.
Emphasis of Matter Regarding Going Concern
The accompanying financial statements have been prepared assuming that the District will continue as a going concern. As discussed in Note 11 to the financial statements, the District has suffered recurring losses from operations and has a deficit fund balance of $2,511,336 in the General Fund and a deficit net position of $10,941,807 on the government-wide financial statements that raise substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 11. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
To the Board Of Directors
Barstow Fire Protection District
City of Barstow, California
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’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.
Auditors’ 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 auditors’ report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison schedules for the General Fund, and the required pension and other postemployment benefits schedules, as listed on the table of contents, 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 standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
To the Board Of Directors
Barstow Fire Protection District
City of Barstow, California
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinions on the basic financial statements are not affected by this missing information.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 31, 2025, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering District’s internal control over financial reporting and compliance.
Irvine, California
March 31, 2025
BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
BARSTOW FIRE PROTECTION DISTRICT
Statement of Net Position
Governmental
Activities
Assets:
Cash and investments $ 1,579,151
Receivables:
Accounts 58,755
Leases 239,060
Capital assets not being depreciated/amortized 45,129
Capital assets, net of depreciation/amortization 485,082 Total Assets 2,407,177
Deferred Outflows of Resources:
Pension-related 5,730,723
OPEB-related 410,993
Total Deferred Outflows of Resources 6,141,716
Liabilities:
Accounts payable 183,624
Accrued liabilities 155,830
Due to other governments 3,817,392
Compensated absences, due within one year 97,460
Noncurrent liabilities:
Compensated absences, due in more than one year 146,190 Net pension liability 7,278,342
Net OPEB liability 1,347,906
Total Liabilities 13,026,744
Deferred Inflows of Resources:
Pension-related 1,721,027
OPEB-related 3,981,262
Leases-related 231,456
Total Deferred Inflows of Resources 5,933,745
Net Position:
Net investment in capital assets 530,211
Unrestricted (10,941,807)
Total Net Position $ (10,411,596)
June 30, 2024
See Notes to Financial Statements.
BARSTOW FIRE PROTECTION DISTRICT
Statement of Activities
For the Year Ended June 30, 2024
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs
Primary Government:
Governmental Activities:
Public safety 10,045,270 $ 3,606,664 $ 1,628 $ - $ (6,436,978) $ Total Governmental Activities 10,045,286 3,606,664 1,628 - (6,436,994) Total Primary Government 10,045,286 $ 3,606,664 $ 1,628 $ - $ (6,436,994) General Revenues:
Taxes:
Property taxes, levied for general purpose 6,344,672
Use of money and property 18,593
Total General Revenues 6,363,265
Change in Net Position (73,729)
Net Position at Beginning of Year (10,337,867)
Net Position at End of Year (10,411,596) $
Program Revenues
See Notes to Financial Statements.
FUND FINANCIAL STATEMENTS
BARSTOW FIRE PROTECTION DISTRICT
Balance Sheet
Governmental Funds
June 30, 2024
General
Assets:
Cash and investments $ 1,579,151
Receivables:
Accounts 58,755
Leases 239,060
Total Assets $ 1,876,966
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable $ 183,624
Accrued liabilities 155,830
Due to City of Barstow 3,817,392
Total Liabilities 4,156,846
Deferred Inflows of Resources:
Leases 231,456
Total Deferred Inflows of Resources 231,456
Fund Balances:
Unassigned (2,511,336)
Total Fund Balances (2,511,336)
Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $ 1,876,966
See Notes to Financial Statements.
BARSTOW FIRE PROTECTION DISTRICT
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2024
Fund balances of governmental funds $ (2,511,336)
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 530,211
Leases payable and compensated absences
that have not been included in the governmental fund activity:
Compensated Absences (243,650)
In the Government-Wide Financial Statements, certain differences between actuarial amounts and actual results for pension are deferred and amortized over a period of time, however these differences do not impact the Governmental Funds Balance Sheet:
Deferred outflows of resources - pension 5,730,723
Deferred outflows of resources - OPEB 410,993
Deferred inflows of resources - pension (1,721,027)
Deferred inflows of resources - OPEB (3,981,262) 439,427 Long-term liabilities are not due and payable in the current period and therefore they are not reported in the funds:
Net OPEB liability (1,347,906)
Net pension liability (7,278,342) (8,626,248)
Net Position of Governmental Activities $ (10,411,596)
See Notes to Financial Statements.
BARSTOW FIRE PROTECTION DISTRICT
Statement of Revenues,
Expenditures and Changes in Fund Balances
Governmental Funds
Year Ended June 30, 2024
General
Revenues:
Taxes $ 6,344,672
Licenses and permits 2,418
Intergovernmental 1,628
Contributions from City of Barstow 3,603,158
Use of money and property 18,593
Miscellaneous 1,088
Total Revenues 9,971,557
Expenditures:
Current - public safety
Salaries and benefits 6,490,678
Services and supplies 2,113,264
Capital outlay 203,625
Debt service:
Lease principal 7,267
Lease interest 16
Total Expenditures 8,814,850
Net Change in Fund Balances 1,156,707
Fund Balances
Beginning of year (3,668,043)
End of Year $ (2,511,336)
See Notes to Financial Statements.
BARSTOW FIRE PROTECTION DISTRICT
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Year Ended June 30, 2024
Net change in fund balances - total governmental funds 1,156,707 $ Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. The activity is reconciled as follows:
Depreciation/amortization (54,473) (54,473)
Repayment of bond principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the statement of net position.
Proceeds from debt issuances are reported as a revenue in the governmental funds, but the issuance increases long-term liabilities in the statement of net position.
Lease principal 7,267
Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 18,490
Employer contributions for pension were recorded as expenditures in the governmental funds. However,in the Government-Wide Financial Statements, these contributions are deferred. (1,041,142)
Employer contributions for OPEB were recorded as expenditures in the governmental funds. However,in the Government-Wide Financial Statements, these contributions are deferred. (160,578)
Change in Net Position of Governmental Activities (73,729) $ See Notes to Financial Statements.
NOTES TO BASIC FINANCIAL STATEMENTS
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
I SIGNIFICANT ACCOUNT POLICIES
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the Barstow Fire Protection District (District) have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard – setting body for establishing governmental accounting and financial reporting principles. The more significant of the District’s accounting policies are described below:
A. Description of Reporting Entity
Barstow Fire Protection District (the District) was organized on May 24, 1926. On November 17, 2010, Resolution No. 23-10 was passed by the City of Barstow Council establishing the District as a component unit of the City.
Previously the District was an independent district. Barstow Fire Protection District continues to be operated according to the applicable state fire protection district laws and the property taxes collected within the District will be used exclusively for the administration and operational costs of the District. The City Council acts as the District's governing board and exerts significant influence over its operations.
The District is an integral part of the City of Barstow (City) and the Accompanying Basic Financial Statements are included as a component unit of the basic financial statements prepared by the City.
B. Basis of Accounting/Measurement Focus
The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Government - Wide Financial Statements - The District’s government-wide financial statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental activities for the District.
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the District’s assets and liabilities, including capital assets and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
Governmental Fund Financial Statements - Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The District has one major fund.
The following is the District’s major fund:
General Fund - This fund is the District’s primary operating fund. It accounts for all financial resources of the District.
All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Revenues are recorded when received in cash, except revenues subject to accrual (generally received within 90 days after year-end). The primary revenue sources, which have been treated as susceptible to accrual by the District, are property taxes, intergovernmental revenues, and other taxes and investment income. Expenditures are recorded in the accounting period in which the related fund liability is incurred except for claims, judgments, compensated absence, interest on long-term debt which is recognized when paid.
Unavailable revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Unavailable revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the unavailable revenue is removed from the combined balance sheet and revenue is recognized.
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.
C. Cash and Cash Equivalents
The District considers cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition to be cash and cash equivalents.
D. Investments
The District has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 31 “Accounting and Financial Reporting for Certain Investments and External Pools”, which require governmental entities to report certain investments at fair value in the balance sheet and recognize the corresponding change in the fair value of investments in the year in which the change occurred. In accordance with GASB Statement No. 31, the District has adjusted certain investments to fair value (when material).
Investments, if any, are reported in the financial statements at fair value, unless fair value reasonably approximates cost, in which case cost is used.
E. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates.
F. Accounts Receivable and Allowance for Bad Debts
During the course of normal operations, the District carries various receivable balances for taxes and interest.
Receivables are shown net of an allowance for doubtful accounts. As of June 30, 2024, no allowance was required to be recorded.
G. Capital Assets
The District’s buildings, machinery, equipment, infrastructure, and lease assets with useful lives of more than two years are stated at historical cost or estimated historical cost and reported in the government-wide financial statements. Donated assets are stated at fair value on the date donated. The District updated its Capital Asset Policy on June 16, 2014, per Board approval. The District capitalizes its assets as follows:
Buildings and Building Improvement Costs of $50,000 or more Furniture Costs of $20,000 or more
Equipment Costs of $20,000 or more
Infrastructure Costs of $100,000 or more
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The costs of normal maintenance and repairs that do not add to the asset value or materially extend useful lives are not capitalized. Capital assets are depreciated using the straight-line method. When capital assets are disposed, the cost and applicable accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in operations.
Amortization of assets acquired under capital leases is based on the shorter of the lease term or the estimated useful life of the asset and is included in depreciation and amortization. Water rights, which are intangible assets, are not amortized. Estimated useful lives, in years, for depreciable assets are as follows:
Buildings 50 years
Infrastructure and improvements other than buildings 10-100 years Machinery and equipment 3-15 years
Lease assets Shorter of the leased
asset’s useful life or
the lease term
H. Liability for Compensated Absences
The District is required to recognize a liability for compensated absences when future payments for such absences have been earned by employees based on pay and salary rated in effect at the balance sheet date. For the District, this consists of accumulated sick leave, vacation and compensation time.
I. Property Taxes
The County of San Bernardino collects property taxes for the District. Tax liens attach annually as of 12:01 A.M. on the first day in March preceding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1, the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10 respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31.
J. Fund Balances
In the fund financial statements, fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the District is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balances for governmental funds are made up of the following:
Nonspendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, and long-term loans receivable.
Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. The District does not have any restricted fund balances.
Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a formal action of the District’s highest level of decision-making authority, the Board of Directors by passage of an ordinance or resolution. Commitments may be changed or lifted only by the District taking the same formal action that imposed the constraint originally. The District does not have any committed fund balances.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Assigned Fund Balance – comprises amounts intended to be used by the District for specific purposes that are neither restricted nor committed. The District has not designated any level of authority for assigning fund balance; therefore, the Board of Directors can assign fund balance. The District does not have any assigned fund balances.
Unassigned Fund Balance – is the residual classification for the general fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. In other governmental funds, if expenditures exceed amounts restricted, committed, or assigned, the negative amount is reflected as negative unassigned fund balance.
In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned.
K. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then.
In addition to liabilities, the statement of net position or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
L. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s San Bernardino County Employees’ Retirement Association (SBCERA) plan (Plan) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by SBCERA. 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.
M. Net Positions
In the government-wide financial statements, net position is classified in the following categories:
Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted Net Position – This amount is the remaining net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” NOTE 2: CASH AND INVESTMENTS
The City’s treasurer maintains a cash and investment pool used by all funds of the City and by certain component units of the City, including the District. The District does not own specifically identifiable securities of the City’s pool.
The District’s portion of this pool is reported on the financial statements as “cash and investments.” Investment policies and associated risk factors applicable to the District’s funds are those of the City of Barstow and are included in the City’s Annual Comprehensive Financial Report.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
At June 30, 2024, the portion of the District’s cash and investments pooled with the City is $1,579,151.
The following disclosures are based upon the City of Barstow’s investment policy which the District is subject to.
A. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits, or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits.
The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2024, none of the District’s deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts. As of June 30, 2024, no District investments were held by the same broker-dealer (counterparty) that was used by the District to buy the securities.
B. Investments authorized by the California Government Code and the City of Barstow adopted investment policy
The table below identifies the investment types that are authorized for the District (City of Barstow) by the California Government Code and by the City’s adopted investment policy. The table also identifies certain provisions of the California Government Code or the City’s adopted investment policy, where more restrictive, that address interest rate risk, credit risk, and concentration of credit risk.
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment in
One Issuer
U.S. Treasury Bills, Notes, or Bonds 5 years None None
U.S. Agencies 5 years None None
Time Certificates of Deposit 5 years None 50%
Negotiable Certificates of Deposit N/A 30% 50%
Bankers' Acceptance 180 days 40% 30%
Prime Commercial Paper 270 days 25% None
Repurchase Agreements 1 year None None
Reverse Repurchase Agreements 92 days 20% None
Mutual Funds investing in eligible securities N/A 20% 10% Medium Term Notes 5 years 30% None
County Pooled Funds N/A None None
Local Agency Investment Fund (LAIF) N/A 100% $75 million* *Limit set by LAIF Governing Board, not Government Code
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
C. Disclosures Related to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments, and by timing cash flows from maturities so that a portion of the portfolio is maturing, or coming close to maturity, evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Barstow Fire Protection District’s cash is pooled with the City of Barstow’s cash to maximize investments.
Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided in the City of Barstow’s Comprehensive Annual Financial Report for fiscal year ended June 30, 2024.
D. Disclosure Related to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
The District’s investment in the City’s investment pool is not rated by a nationally recognized rating organization.
NOTE 3: ACCOUNTS RECEIVABLE
Receivables at June 30, 2024 consisted of property taxes and other local sources. All receivables are considered collectible in full.
General Fund
Accounts Receivable 58,755 $
NOTE 4: LEASES
Leases are financings of the right to use an underlying asset. A lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources.
Leases Receivable and Deferred Inflows of Resources
The District leases land to various companies. As of June 30, 2024, the value of the lease receivable was $239,060.
The value of the deferred inflow of resources as of June 30, 2024, was $231,456.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 4: LEASES (CONTINUED)
The principal and interest payments that are expected to maturity are as follows:
NOTE 5: CAPITAL ASSETS
NOTE 6: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities at June 30, 2024, consisted of the following:
General Fund
Salaries and Benefits 155,830 $
Accounts Payable 183,624
Total 339,454 $
Fiscal Year Principal Interest Total
2025 3,138 $ 6,516 $ 9,654 $
2026 3,225 6,429 9,654
2027 3,314 6,340 9,654
2028 3,406 6,248 9,654
2029 3,494 6,160 9,654
2030-2034 18,507 29,766 48,272
2035-2039 21,222 27,050 48,272
2040-2044 24,336 23,936 48,272
2045-2049 27,907 20,366 48,272
2050-2054 32,001 16,271 48,272
2055-2059 36,697 11,576 48,272
2060-2064 42,081 6,192 48,272
2065-2066 19,731 834 20,565
Totals 239,060 $ 167,684 $ 406,744 $
Balance Balance
July 1, 2023 Adjustments Additions Deletions June 30, 2024 Capital assets, not being depreciated/amortized
Land 45,129 $ - $ - $ - $ 45,129 $
Total capital assets, not being depreciated/amortized 45,129 - - - 45,129 Capital assets, being depreciated/amortized
Buildings 2,093,869 - - (6,357) 2,087,512
Machinery, equipment, and vehicles 1,333,860 - - - 1,333,860 Lease assets 42,850 - - (42,850) -
Total capital assets, being depreciated/amortized 3,470,579 - - (49,207) 3,421,372 Less accumulated depreciation/amortization
Buildings (1,915,636) 100,120 (19,010) - (1,834,526)
Machinery, equipment, and vehicles (1,043,970) (36,000) (28,151) 6,357 (1,101,764) Lease assets (35,538) - (7,312) 42,850 -
Total accumulated depreciation/amortization (2,995,144) 64,120 (54,473) 49,207 (2,936,290) Total capital assets, being depreciated/amortized, net 475,435 64,120 (54,473) - 485,082 Total governmental activities capital assets 520,564 $ 64,120 $ (54,473) $ - $ 530,211 $
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 7: LONG-TERM LIABILITIES
Long-term liabilities consisted of the following:
Balance
June 30, 2023 Additions Deletions
Balance
June 30, 2024
Due Within
One Year
Due in More
Than One Year
Compensated absences 262,140 $ 363,916 $ (382,406) $ 243,650 $ 97,460 $ 146,190 $ Total long-term liabilities 262,140 $ 363,916 $ (382,406) $ 243,650 $ 97,460 $ 146,190 $ Compensated Absences
The District’s policy relating to compensated absences is described in Note 1. Compensated absences are liquidated by the District’s General Fund. The total amount outstanding at June 30, 2024, was $243,650.
NOTE 8: RETIREMENT PLAN
The District became a component of the City from November 17, 2010, and effective on that date all of the employees of the District became employees of the City. The District employees were covered under the pension plan of the San Bernardino County Employees’ Retirement Association (SBCERA). Subsequent to the merger, the members of Barstow Professional Firefighters Association are enrolled in the City’s retirement program through the SBCERA.
Plan Description
The SBCERA is a cost-sharing multiple- employer defined benefit pension plan (the Plan) operating under the California County Employees' Retirement Act of 1937 (1937 Act). It provides retirement, death and disability benefits to members. Although legally established as a single employer plan, the City of Big Bear Lake, Department of Water and Power-City of Big Bear Lake, Crestline Sanitation District, California State Association of Counties, South Coast Air Quality Management District (SCAQMD), San Bernardino Associated Governments (SANBAG), Local Agency Formation Commission (LAFCO), San Bernardino County Law Library, Barstow Fire Protection District, Hesperia Recreation and Parks District, SBCERA, City of Chino Hills, Mojave Desert Air Quality Management District (MDAQMD), California Electronic Recording Transaction Network Authority (CERTNA), along with the County, and are collectively referred to as the “Participating Members.” The plan is governed by the SBCERA Board of Retirement under the 1937 Act. Employees become eligible for membership on their first day of regular employment and become fully vested after 5 years. SBCERA issues a stand-alone financial report, which may be obtained by contacting the Board of Retirement, 348 W Hospitality Lane - 3rd Floor, San Bernardino, California 92415-0014.
Benefits Provided
SBCERA provides service retirement, disability, death and survivor benefits to eligible employees. Generally, any employee of the County of San Bernardino or participating employers who is appointed to a regular position whose service is greater than fifty percent of the full standard of hours required by a participating SBCERA employer (e.g. 20 hours per week or more) must become a member of SBCERA effective on the first day of employment. There are separate retirement benefits for General and Safety member employees. Safety membership is extended to those involved in active law enforcement and fire suppression. All other members are classified as General Members.
There are currently two tiers applicable to both General and Safety members. Members with membership dates before January 1, 2013 are included in General Tier 1 or Safety Tier 1. Any new member who becomes a member on or after January 1, 2013 is designated as General Tier 2 or Safety Tier 2 and is subject to the provisions of California Public Employees’ Pension Reform Act of 2013 (CalPEPRA), California Government Code 7522 et seq. and Assembly Bill (AB) 197.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: RETIREMENT PLAN (CONTINUED)
General members prior to January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 50 and have acquired 10 or more years of retirement service credit. A member with 30 years of service is eligible to retire regardless of age. General members who are first hired on or after January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 52 and have acquired five or more years of retirement service credit.
Safety members prior to January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 50 and have acquired 10 or more years of retirement service credit. A member with 20 years of service is eligible to retire regardless of age. Safety members who are first hired on or after January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 50 and have acquired five or more years of retirement service credit.
The retirement benefit the member will receive is based upon age at retirement, final average compensation, years of retirement service credit and retirement plan and tier.
General Tier 1 benefit is calculated pursuant to the provisions of California Government Code of Section 31676.15. The monthly allowance is equal to 2% of final compensation times years of accrued retirement service credit times age factor from Section 31676.15. General Tier 2 benefit is calculated pursuant to the provisions found in California Government Code Section 7522.20(a). The monthly allowance is equal to the final compensation multiplied by years of accrued retirement credit multiplied by the age factor from Section 7522.20(a).
Safety Tier 1 benefit is calculated pursuant to the provisions of California Government Code Section 31664.1.
The monthly allowance is equal to 3% of final compensation times years of accrued retirement service credit times age factor from Section 31664.1. Safety Tier 2 benefit is calculated pursuant to the provisions found in California Government Code Section 7522.25(d). The monthly allowance is equal to the final compensation multiplied by years of accrued retirement credit multiplied by the age factor from Section 7522.25(d).
For Tier 1 members, the maximum monthly retirement allowance is 100% of final compensation. There is no final compensation limit on the maximum retirement benefit for Tier 2 members. However, the maximum amount of compensation earnable that can be taken into account for 2017 for Tier 1 members with membership dates on or after July 1, 1996 is $265,000. The maximum amount of pensionable compensation for Tier 2 members that can be taken into account for 2017 is equal to $140,424. These limits are adjusted on an annual basis. Members are exempt from paying member contributions and employers are exempt from paying employer contributions on compensation in excess of the annual cap.
Final average compensation consists of the highest 12 consecutive months for Tier 1 members and the highest 36 consecutive months for Tier 2 members.
The member may elect an unmodified retirement allowance or choose an optional retirement allowance. The unmodified retirement allowance provides the highest monthly benefit and a 60% continuance to an eligible surviving spouse or domestic partner. An eligible surviving spouse or domestic partner is one married to or registered with the member one year prior to the effective retirement date or at least two years prior to the date of death and has attained age 55 on or prior to the date of death. There are four optional retirement allowances the member may choose. Each of the optional retirement allowances requires a reduction in the unmodified retirement allowance in order to allow the member the ability to provide certain benefits to a surviving spouse, domestic partner, or named beneficiary having an insurable interest in the life of the member.
SBCERA provides an annual cost-of-living benefit to all retirees. The cost-of-living adjustment, based upon the Consumer Price Index for All Urban Consumers for the Los Angeles-Riverside-Orange County Area, is capped at
2.0%.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: RETIREMENT PLAN (CONTINUED)
The County of San Bernardino and participating employers contribute to the retirement plan based upon actuarially determined contribution rates adopted by the Board of Retirement.
Employer contribution rates are adopted annually based upon recommendations received from SBCERA’s actuary after the completion of the annual actuarial valuation.
All members are required to make contributions to SBCERA regardless of the retirement plan or tier in which they are included.
Fire safety members contribute the required employee share of their pension. The percentage of pay varies between 12.30%-17.74%.
The District pays a capped percentage of the employer’s pension cost per the Barstow Professional Fire Fighters Association Memorandum of Understanding. Employer pension costs have two tiers. The employer’s costs are capped at 46% with the employee paying the difference.
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law 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. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by SBCERA. 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 District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
The District’s contributions to the Plan for the measurement period ended June 30, 2023, were $1,508,934.
In fiscal year 2017-2018, the District transferred from the “Other Safety” cost group within SBCERA to the “County Safety” cost group to achieve future savings in the cost of the District’s contributions to SBCERA. Such transfer must be made in a manner that does not shift the present unfunded liability burden associated with the District, or a portion thereof, to the County. The Parties have agreed that the amount that must be contributed to SBCERA to effectuate the inclusion of the District into the present County Safety cost group, and avoid negatively impacting the County as a result thereof, is $8,485,000 calculated as of June 30, 2018. The Parties have further agreed that this amount may be amortized over twenty years at SBCERA's assumed rate of return for investments, which is 7.5%, resulting in twenty annual payments of $832,312 beginning on or before July 1, 2017, and continuing on or before each successive July 1 thereafter, through and including July 1, 2036.
The payments are considered supplemental contributions in addition to the regular employer contribution rates annually set by the SBSERA Board of Retirement and approved by the County Board of Supervisors.
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2024, the District reported a net pension liability for its proportionate share of the net pension liability of the Plan of $7,278,342.
The District’s net pension liability for the Plan is measured as the proportionate share of the total net pension liability of Plan. The net pension liability of the Plan is measured as of June 30, 2023, and the total pension liability for the Plans used to calculate the net pension liability was determined by actuarial valuations as of June 30, 2022. The District’s proportionate of the net pension liability was based on the District’s share of all actual contributions, actuarially determined.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: RETIREMENT PLAN (CONTINUED)
The District’s proportionate share of the net pension liability for the Plan as of the measurement dates June 30, 2022 and 2023, were as follows:
Proportion - June 30, 2022 0.338%
Proportion - June 30, 2023 0.777%
Change - Increase (Decrease) 0.439%
For the year ended June 30, 2024, the District recognized pension expense/revenue of ($7,521,996). At June 30, 2024, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
$1,321,109 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date 1,321,109 $ - $
Changes of assumptions 282,372 302,396
Differences between expected and
actual experience 598,735 122,450
Net excess of actual over projected
earnings 263,382 -
Changes in proportion and differences
between employer's contributions
and proportionate share of contributions 3,265,125 1,296,181 Total 5,730,723 $ 1,721,027 $
Deferred
Outflows/(Inflows)
Fiscal year ended June 30, of Resources
2025 883,966 $
2026 342,222
2027 1,452,185
2028 25,721
2029 (15,507)
Total 2,688,587 $
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: RETIREMENT PLAN (CONTINUED)
Actuarial Assumptions – The total pension liabilities in the June 30, 2023 actuarial valuations were determined using the following actuarial assumptions:
June 30, 2022
June 30, 2023
Entry - Age Actuarial Cost Method
7.25%
2.75%
General: 4.55% to 12.75% and Safety: 4.75% to 12.25%
Contingent upon CPI increases with a 2% maximum
7.25%
Mortality rates are based on the Pub-2010
Amount-Weighted Above-Median Mortality Table project
generationally with the two-dimensional MP-2019 project scale. For healthy General members, the General Healthy Retiree rates increased by 10% were used. For healthy
Safety members, the Safety Healthy Retiree rates were
used. For disabled General members, the
Non-Safety Disabled Retiree rates were used. For disabled Safety members, the Safety Disabled Retiree rates were
used. For beneficiaries, the General Contingent Survivor rates increased by 10% were used.
2 Varying by service, including inflation 2.75%
Mortality
Measurement Date
Valuation Date
Cost of Living Adjustments
Investment Rate of Return 1
1 Net of pension plan investment expenses, including inflation.
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Projected Salary Increase 2
Inflation
Discount Rate – The discount rates used to measure the Total Pension Liability was 7.25% as of June 30, 2023. The projection of cash flows used to determine the discount rate assumed employer and member contributions will be made at rates equal to the actuarially determined contribution rates. For this purpose, only employee and employer contributions that are intended to fund benefits for current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on pension plan investments of 7.25% was applied to all periods of projected benefit payments to determine the Total Pension Liability as of June 30, 2023.
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 inflation) are developed for each major asset class. These returns are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage, adding expected inflation and subtracting expected investment expenses and a risk margin.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 8: RETIREMENT PLAN (CONTINUED)
The June 30, 2022 target allocations (approved by the Board) and projected arithmetic real rates of return for each major asset class, after deducting inflation but before deducting investment expenses, used in the derivation of the long-term expected investment rate of return assumption is summarized in the table below.
Total Allocation
Long-Term
Expected Real Rate
of Return (Arithmetic)
11.00% 5.42%
2.00% 6.21%
9.00% 6.50%
6.00% 8.80%
2.00% 1.13%
13.00% 3.40%
1.00% -0.04%
8.00% 3.44%
3.50% 4.57%
3.50% 6.53%
2.00% -0.03%
11.00% 5.89%
7.00% 3.69%
5.00% 10.64%
16.00% 10.70%
100.00%
al Credit
Return
ts
uity
quivalents
Asset Class
U.S. Equity
U.S. Equity
International Equity
Market Equity
Fixed Income
/ Credit Strategies
al Core Fixed Income
Market Debt
te
ed real estate
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the District’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued SBCERA financial reports.
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
(6.25%) (7.25%) (8.25%)
Proportionate share of net pension liability/(asset) 12,854,316 $ 7,278,342 $ 3,764,506 $
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 9: POSTEMPLOYMENT HEALTH CARE BENEFITS
Plan Description
The Barstow Fire Protection District became part of the City of Barstow in November 2010 as a special revenue fund. The Barstow Fire Professional Fire Fighters Association maintains health coverage through CalPERS, the same coverage offered to City employees. The City provides retiree medical benefits to eligible retirees and their spouses in accordance with their labor agreements. The health insurance plan is a single employer defined benefit plan.
Employee Covered
Contributions
The contribution requirements of plan members and the District are established and may be amended by the Board of Directors. The District must agree to make a defined monthly payment towards the cost of each retiree’s coverage. The required contribution is based on projected prefunding financing requirements. For the measurement period 2021-2022, the District contributed $45,608, which were in the form of benefit payments during the period. The City did not make additional contributions to the CERBT trust (CERBT).
CERBT is a tax qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to prefund OPEB as described in GASB Statement 45. The CERBT issues a publicly available financial report that included financial statements and required supplementary information for the City, not individualizing, but in aggregate with the other CERBT participants. That report may be obtained by contacting CalPERS.
Net OPEB Liability
The District’s net OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to the calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2021, based on the following actuarial methods and assumptions.
June 30, 2023
June 30, 2023
Entry - Age Normal Cost Method
4.12%
2.50%
Contributes full ADC
Varies by Entry Age and Service
3.00%
5.10%
MacLeod Watts Scale 2022 applied generationally
7.40%, trending down to 4.14%
Valuation Date
Investment Rate of Return
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Projected Salary Increases
Healthcare Trend
Contribution Policy
Mortality
Measurement Date
Inactive members currently receiving benefits 8
Inactive members entitled to but not yet receiving benefits 0 Active members 25
Total 33
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 9: POSTEMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) The long-term expected rate of return on OPEB plan investments was determined using a building- block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the table below.
Target Allocation*
Expected Real
Return Year 1-5
Expected Real
Return Years 6+
49.00% 4.40% 4.50%
23.00% -1.00% 2.20%
20.00% 3.00% 3.90%
5.00% -1.80% 1.30%
3.00% 0.80% 1.20%
2.40%
N/A
6.30%
2.20%
Asset Class
Global Equity
Fixed Income
Global Real Estate (REITs)
Treasury Inflation Protected Securities
Assumed Long-Term Investment Expenses
Expected Long-Term Net Rate of Return, Rounded
Discount Rate
*Real rates of return come from a geometric representation of returns that assume a general inflation rate of 2.5%.
Commodities
Assumed Long-Term Rate of Inflation
Discount Rate
The discount rate used to measure the total OPEB liability was 4.12 percent. The discount rate used reflects the results of a crossover test. In years where the trust is expected to have sufficient assets to pay the current year’s retiree benefits, the assumed trust rate of return is applied; once the trust is no longer expected to be able to pay plan benefits, a municipal bond rate is applied for the remainder of the projects. The S&P General Obligation Municipal Bond 20 Year High Grade Index was used for the purpose of the municipal bond rate.
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 9: POSTEMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) Changes in the net OPEB Liability
The changes in the net OPEB liability for the OPEB Plan are as follows:
The following presents the net OPEB liability of the District if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the District if it were calculated using a healthcare trend rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2023:
Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 3,612,838 $ 324,558 $ 3,288,280 $ Changes recognized for the
measurement period:
Service cost 525,547 - 525,547
Interest on total OPEB liability 168,356 - 168,356
Changes of assumptions (2,569,363) - (2,569,363)
Differences between expected and
actual experience 20,115 - 20,115
Contributions-employer - 64,217 (64,217)
Net investment income - 20,854 (20,854)
Benefit payments, including refunds of
employee contributions (38,524) (38,524) -
Implicit subsidy credit (25,693) (25,693) -
Administrative expense - (162) 162
Other miscellaneous (income)/expense - 120 (120)
Net changes during 2022-23 (1,919,562) 20,812 (1,940,374) Balance at June 30, 2023 1,693,276 $ 345,370 $ 1,347,906 $ Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
(3.12%) (4.12%) (5.12%)
Plan's net OPEB liability/(asset) 1,550,978 $ 1,347,906 $ 1,179,679 $ Current
1 Percent Heathcare 1 Percent
Decrease Trend Rate Increase
Plan's net OPEB liability/(asset) 1,286,728 $ 1,347,906 $ 1,414,963 $
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 9: POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) Recognition of Deferred Outflow and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The recognition period differs depending on the source of the gain or loss:
OPEB Expense and Deferred Outflows/(Inflows) of Resources Related to OPEB For the measurement period ended June 30, 2023, the District recognized OPEB expense of $565,956. For the fiscal year ended June 30, 2024, the District reported deferred outflows of resources related to OPEB from the following sources:
The $90,199 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2025. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date 90,199 $ - $
Changes of assumptions 222,281 3,472,920
Differences between expected and
actual experience 77,201 508,342
Net difference between projected
and actual earnings on OPEB
plan investments 21,312 -
Total 410,993 $ 3,981,262 $
Deferred
Outflows/(Inflows)
Fiscal year ended June 30, of Resources
2025 (433,547) $
2026 (435,545)
2027 (423,515)
2028 (435,671)
2029 (442,751)
Thereafter (1,489,439)
Total (3,660,468) $
Net differences between projected and actual
earnings on OPEB plan investments
All Other Amounts
5 years straight-line
Expected average remaining service lifetime
(EARSL) (9.1 years at June 30, 2022)
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 10: RISK MANAGEMENT
The government is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, and natural disasters for which the government carried commercial insurance.
The District was a defendant in personal injury lawsuits of a nature common to many similar jurisdictions. The District’s management believes that any potential claims against the District, not covered by insurance, resulting from such litigation will not materially affect the financial statements of the District.
NOTE 11: NEGATIVE FUND BALANCE AND EXCESS EXPENDITURES OVER APPROPRIATIONS The Barstow Fire Protection District (BFPD) had a deficit fund balance of $2,511,336 and a deficit net position on the government-wide statements of $10,411,596 as of June 30, 2024.
In fiscal year 2024, the negative fund balance was actually reduced due to a positive net change of $1,156,707.
The Fire District has had on-going losses carried over from previous fiscal years. The Board and Administration will continue to monitor the Barstow Fire Protection District financial situation. Management will keep the Board informed of developing highlights, and concerns regarding the District.
Revenues
Actual property tax revenues came in at $6,344,672 as opposed to a budget estimate of $6,294,950, or $49,722 higher. Contribution from the City’s Measure Q and Debt Service fund to the District amounted to $3,603,158.
Expenditures
Salary and benefit projections were under budgeted expenditures by $58,747 with total salary and benefit expenditures of $6,490,678. Services and supplies expenditures were under budget by $161,724, mainly due to the deferral of equipment purchases.
REQUIRED SUPPLEMENTARY INFORMATION
BARSTOW FIRE PROTECTION DISTRICT
Notes to Required Supplementary Information
For the Year Ended June 30, 2024
NOTE 1: BUDGETARY INFORMATION
A. Budgets and Budgetary Accounting
The District follows these procedures in establishing the budgets.
1. The annual budget is adopted by the City of Barstow City Council acting as the District’s Board of Directors after the holding of a hearing and provides for the general operation of the District. The operating budget includes proposed expenditures and the means of financing them.
2. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year.
The City manager is authorized to transfer budgeted amounts between departments. Actual expenditures may not exceed budgeted appropriations at the fund level.
3. Formal budgetary integration is employed as a management control devise during the year. Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures. Capital projects appropriations are an automatic supplemental appropriation for next year. All others lapse unless they are encumbered at year end or re-appropriated through the formal budget process.
4. Annual budgets are adopted for the General Fund on a basis substantially consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items.
B. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of moneys are recorded in order to reserve that portion of the applicable appropriation is employed as an extension of formal budgetary integration. Encumbrances outstanding at year-end are reported as restricted or committed fund balance since they do not constitute expenditures or liabilities and are added to the subsequent year’s adopted appropriations.
BARSTOW FIRE PROTECTION DISTRICT
Budgetrary Comparison Schedule
Barstow Fire Protection District General Fund
For the Year Ended June 30, 2024
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Resources (Inflows):
Taxes $ 6,294,950 5,075,000 $ 6,344,672 $ 49,722 $
Licenses and permits 500 2,355 2,418 63
Intergovernmental 100 1,620 1,628 8
Use of money and property 9,000 19,100 18,593 (507)
Miscellaneous - 590 1,088 498
Contributions from City of Barstow 3,118,728 3,680,072 3,603,158 (76,914) Amounts Available for Appropriations 8,203,328 9,998,687 9,971,557 (27,130) Charges to Appropriation (Outflow):
Public safety
Salaries and benefits 12,886,008 6,549,425 6,490,678 58,747 Services and supplies 4,518,540 2,274,988 2,113,264 161,724 Capital outlay 426,000 213,000 203,625 9,375
Debt service:
Lease principal - - 7,267 (7,267)
Lease interest - - 16 (16)
Total Charges to Appropriations 17,830,548 9,037,413 8,814,850 222,563 Net Change in Fund Balance (9,627,220) $ 961,274 $ 1,156,707 195,433 $ FUND BALANCE:
Beginning of year (3,668,043)
End of year $ (2,511,336)
BARSTOW FIRE PROTECTION DISTRICT
San Bernardino County Employees' Retirement Association (SBCERA) Schedule of Proportionate Share of the Net Pension Liability As of June 30, For the Last Ten Fiscal Years (1)
2024 2023 2022 2021
Measurement Date 6/30/2023 6/30/2022 6/30/2021 6/30/2020 Proportion of the Net Pension Liability 0.307% 0.338% 0.640% 0.421% Proportionate Share of the Net Pension Liability 7,278,342 $ 7,854,204 $ 8,433,660 $ 16,891,227 $ Covered Payroll 2,605,075 $ 2,550,102 $ 2,430,284 $ 2,045,831 $ Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 279.39% 308.00% 347.02% 825.64% Plan Fiduciary Net Position 26,805,659 $ 29,379,425 $ 45,633,022 $ 33,270,269 $ Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 49.58% 54.34% 84.40% 66.33%
Notes to Schedule:
Changes of Assumptions: None
Benefit Changes: None
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown.
2020 2019 2018 2017 2016
6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015
0.457% 0.498% 0.378% 0.518% 0.638%
$ 12,626,176 12,382,040 $ 9,958,070 $ 12,781,554 $ 12,395,608 $ $ 1,816,148 1,890,826 $ 1,776,774 $ 2,518,304 $ 2,036,785 $ 654.85% 695.22% 560.46% 507.55% 608.59%
$ 34,034,011 33,532,575 $ 24,486,977 $ 18,856,232 $ 20,207,792 $
73.03% 72.94% 71.09% 76.86% 80.98%
BARSTOW FIRE PROTECTION DISTRICT
San Bernardino County Employees' Retirement Association (SBCERA) Schedule of Plan Contributions
As of June 30, For the Last Ten Fiscal Years (1)
2024 2023 2022 2021
Actuarially Determined Contribution $ 1,321,109 1,363,210 $ 2,141,231 $ $ 2,029,361 Contribution in Relation to the Actuarially Determined
Contribution (1,363,210) (1,321,109) (2,141,231) (2,009,357) Contribution Deficiency (Excess) $- - $- $ $ 20,004
Covered-Employee Payroll 2,759,103 2,605,075 2,550,102 2,430,284 Contributions as a Percentage of Covered-Employee
Payroll 49.41% 50.71% 83.97% 82.68%
Note to Schedule:
Valuation Date: June 30, 2023
Methods and assumptions used to determine contribution rates:
Actuarial Cost Method Entry age normal cost method
Amortization method Level percent of payroll
Remaining amortization period 20 years
Assets valuation method
Inflation 2.75% per year
Salary Increases
Investment rate of return 7.25%
Retirement age 53 years
Mortality Pub-2010 Amount-Weighted Above-Median Mortality Table Market value of assets less unrecognized returns from each of the last five years.
4.75% to 12.25%
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown.
2020 2019 2018 2017 2016
$ 1,760,542 $ 1,704,307 1,625,725 $ 1,258,947 $ $ 1,407,336 (1,760,542) (1,625,725) (1,704,307) (1,258,947) (1,407,336) $ - $ - - $ - $ $ -
2,045,831 1,890,826 1,816,148 1,776,774 2,518,304
86.06% 85.98% 93.84% 70.86% 55.88%
BARSTOW FIRE PROTECTION DISTRICT
Schedule of Changes in the Net OPEB Liability and Related Ratios As of June 30, for the Last Ten Fiscal Years(1)
2024 2023 2022
Measurement Date 6/30/2023 6/30/2022 6/30/2021
Changes in Total OPEB Liability
Service cost $ 633,234 525,547 $ 573,551 $
Interest on the total OPEB liability 168,356 109,198 127,973 Plan experience 20,115 - (705,883)
Changes in assumptions (2,569,363) (1,437,109) 208,292
Changes in benefit terms - - -
Benefit payments (38,524) (45,608) (33,966)
Implicit subsidy credit (25,693) - -
Net change in total OPEB liability (1,919,562) (740,285) 169,967 Total OPEB liability - beginning 3,612,838 4,353,123 4,183,156 Total OPEB liability - ending (a) 1,693,276 3,612,838 4,353,123 Plan Fiduciary Net Position
Contribution - employer 64,217 45,608 33,966
Net investment income 20,854 (50,191) 80,880
Benefit payments (38,524) (45,608) (33,966)
Implicit subsidy credit (25,693) - -
Administrative expense (162) (95) (111)
Other miscellaneous income/(expense) 120 - -
Net change in plan fiduciary net position 20,812 (50,286) 80,769 Plan fiduciary net position - beginning 324,558 374,844 294,075 Plan fiduciary net position - ending (b) 345,370 324,558 374,844 Net OPEB Liability/(Assets) - ending (a) - (b) 1,347,906 $ 3,288,280 $ 3,978,279 $ Plan fiduciary net position as a percentage of the total OPEB liability 20.40% 8.98% 8.61% Covered-employee payroll $ 4,005,521 4,272,131 $ 3,624,974 $ Net OPEB liability as a percentage of covered-employee payroll 31.55% 82.09% 109.75% Notes to Schedule:
Changes of Assumptions: The discount rate decreased from 4.10% to 4.12% in measurement period 2022-23. (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 2021 2020 2019 2018
6/30/2020 6/30/2019 6/30/2018 6/30/2017
$ 90,956 544,393 $ 86,320 $ 90,934 $
111,849 29,157 26,317 21,440
- 124,887 - -
72,167 52,128 13,302 (50,934)
- 2,355,457 - -
(19,568) (14,200) (12,072) (12,099)
-- - -
708,841 2,638,385 113,867 49,341
3,474,315 835,930 722,063 672,722
4,183,156 3,474,315 835,930 722,063
19,568 14,200 12,072 12,099
10,045 16,415 19,778 23,752
(19,568) (14,200) (12,072) (12,099)
-- - -
(139) 57 (461) (121)
-- - -
9,906 16,472 19,317 23,631
284,169 267,697 248,380 224,749
294,075 284,169 267,697 248,380
$ 3,190,146 3,889,081 $ 568,233 $ 473,683 $
7.03% 8.18% 32.02% 34.40%
$ 2,758,300 2,045,831 $ 2,611,101 $ 2,537,528 $
190.10% 115.66% 21.76% 18.67%
BARSTOW FIRE PROTECTION DISTRICT
Schedule of Contributions - OPEB
As of June 30, For the Last Ten Fiscal Years(1)
2024 2023 2022
$ 408,795 208,181 $ 376,137 $
90,199 64,217 45,608
$ 344,578 117,982 $ 330,529 $
$ 4,272,131 4,400,295 $ 4,005,521 $
2.05% 1.50% 1.14%
Notes to Schedule:
Methods and assumptions used to determine contributions:
Valuation Date 6/30/2023
Actuarial Cost Method
Amortization Valuation Method/Period
Asset Valuation Method Market value
Inflation 2.50%
Payroll Growth
Investment Rate of Return 5.10%
Healthcare cost-trend rates
Retirement Age
Mortality MacLeod Watts Scale 2022 applied generationally Actuarially Determined Contribution
Contribution in Relation to the Actuarially Determined Contributions Contribution Deficiency (Excess)
Covered-employee payroll
Contributions as a percentage of covered-employee payroll Entry Age Normal
Level percent of pay
7.40% in 2024, fluctuating to 4.14% by 2076
45 to 65 years
*Actuarial methods and assumptions used to set the actuarially determined contribution for Fiscal Year 2024 were from the June 30, 2023 actuarial valuation.
3.00% per annum, in aggregate
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 2021 2020 2019 2018
$ 335,358 366,074 $ 64,738 $ 62,732 $
33,966 19,568 14,200 12,072
$ 315,790 332,108 $ 50,538 $ 50,660 $
$ 2,045,831 3,624,974 $ 2,758,300 $ 2,611,101 $
0.94% 0.96% 0.51% 0.46%
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Barstow Fire Protection District
City of Irvine, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and the general fund information of the Barstow Fire Protection District, a component unit of the City of Barstow, as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated March 31, 2025.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
LSLCPAS.COM
To the Board of Directors
Barstow Fire Protection District
City of Barstow, California
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
March 31, 2025