APN: 081-110-007
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EXHIBIT "B"
[SAMPLE FORM]
ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (hereinafter "this Agreement") is entered into this ___ day of ____ , 20_, by and between _______________ ______ _ (hereinafter called "Owner") and, (hereinafter "Assignee").
RECITALS
A. On _ ____ , 20_, the City of Los Banos and Owner entered into that certain agreement entitled "Pre-Annexation Development Agreement," approved by Ordinance (hereinafter "Agreement"), relative to the development known as the ____________ _ (hereinafter "Subject Property").
B. Owner entered into a purchase and sale agreement whereby a portion of the Subject Property will be sold to Assignee, which portion of the Subject Property is identified and described in Exhibit "A", attached hereto and incorporated herein by this reference (hereinafter the "Assigned Parcel(s)").
C. Owner desires to assign all of its interests, rights and obligations under the Agreement with respect to the Assigned Parcel(s).
D. Assignee desires to assume all Owner's rights and obligations under the Agreement with respect to the Assigned Parcel(s).
NOW, THEREFORE, Owner and Assignee hereby agree as follows:
1. Owner hereby assigns, effective as of Owner's conveyance of the Assigned Parcel(s) to Assignee, all of the rights, interest, burdens and obligations of Owner under the Agreement with respect to the Assigned Parcel(s). Owner retains all the rights, interest, burdens and obligations under the Agreement with respect to all other property within the Subject Property owned thereby.
2. Assignee hereby assumes all of the burdens and obligations of Owner under the Agreement, and agrees to observe and fully perform all of the duties and obligations of Owner under the Agreement, and to be subject to all the terms and conditions thereof, with respect to the Assigned Parcel(s), it being the express intention of both Owner and Assignee that, upon the execution of this Agreement and conveyance of the Assigned Parcel(s) to Assignee, Assignee shall be come substituted for Owner as the "Developer" under the Agreement with respect to the Assigned Parcel(s).
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3. All of the covenants, terms, and conditions set forth herein shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, successors and assigns.
IN WITNESS HEREOF, the parties hereto have executed this Agreement as of the day and year first above written.
ASSIGNOR/ OWNER
By: _______ _
By: _______ _
ASSIGNEE
By: _______ _
By:. _______ _
SIGNATURES MUST BE NOTARIZED
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EXHIBIT "C"
DEVELOPER OBLIGATIONS/SPECIAL CONDITIONS AND REQUIREMENTS
1. Specific Plan. This Agreement requires that a Specific Plan be approved by the City for the entire 28.5 acre Project Site prior to any application for further entitlements or development. The Specific Plan shall be adopted by ordinance or resolution of the city council, in compliance with state law (Section 65453 of the California Government Code). The City shall maintain full authority and discretion to determine how the Specific Plan will be prepared.
Developer shall be responsible for the cost of the preparation and processing of the Specific Plan A The specific purposes of the Specific Plan shall be to: ensure orderly planning for the development of the entire Project Site consistent with the General Plan; maintain an environmental equilibrium consistent with existing vegetation, soils, geology, topography, and drainage patterns; avoid premature or inappropriate development that would result in incompatible uses or create public service demands exceeding the capacity of existing or planned facilities; encourage sensitive site planning and design; ensure the provision of utilities, roadways and other public facilities.
B. Land use regulations for the Project Site shall be those of the underlying zoning district unless modified by the approved Specific Plan, provided that all land use regulations shall be consistent with the General Plan Land Use designation for land within the Specific Plan area.
C. Development regulations for the Project Site shall be those of the underlying zoning district unless modified by the approved Specific Plan.
D. The Specific Plan shall include a land use and circulation system concept for the entire Project Site that is consistent with the goals and policies of the General Plan, compatible with the environment, and capable of being served by existing and planned public facilities and utilities.
E. The Specific Plan shall consider shared access, reciprocal parking, shared open space and amenity areas, the relationship of buildings to each other on adjacent parcels, and other design features to optimize use of the entire planning area as a functional unit.
F. The Specific Plan shall address conceptual building locations, heights and footprints; overall circulation, ingress and egress; parking layout; conceptual grading and drainage; and areas for common use.
G. A statement of intent regarding building design and/or conceptual elevations shall be provided to indicate architectural style, product types, form and materials. 167
H. The following plans and materials must be incorporated into the Specific Plan submittal. The Community and Economic Development Director or his or her designee may require the submission of additional items considered necessary:
1. A map showing proposed Specific Plan boundaries and the relationship of the area to uses and structures within a 300-foot radius of the plan area boundaries;
2. A map of the Specific Plan area showing sufficient topographical data to indicate clearly the character of the terrain, and the type, location, and condition of mature trees and other natural vegetation;
3. A site plan indicating the existing and proposed uses, gross floor area, lot coverage, height, parking and density, and a circulation plan;
4. Architectural plans indicating exterior elevations, floor plans, colors, material of buildings and structures;
5. A landscape plan indicating existing vegetation and proposed planting areas, types and sizes of plant materials, and design of walkways, trails, bicycle paths, paved areas, benches, water features, and lighting;
6. Preliminary development schedule indicating sequence and timing of development; and
7. Design guidelines for the physical development of the property, including illustrations of proposed architectural, urban design, and landscape concepts to guide future individual building developers and maintain the integrity of the Specific Plan concept.
8. Proposed Conditions, Covenants, and Restrictions, subject to review and approval by the City Attorney.
I. The application for the approval of the Specific Plan shall be processed the same as a zone change pursuant to Title 9 Chapter 3 Article 23 of the Los Banos Municipal Code. In order to approve the Specific Plan the Planning Commission and the City Council shall find that the proposed Specific Plan:
1. Conforms to the General Plan;
2. Generally complies with the land use and development regulations of the underlying Zoning District and does not significantly alter the regulations;
3. Can be adequately, reasonably and conveniently served by public services, utilities and public facilities; and
4. Based on the fiscal impact analysis, the Specific Plan area will be financially selfsustaining, so that it imposes no additional financial burden on the residents, property owners or taxpayers in other areas of the City, by providing for the payment of all costs for the public facilities and services necessary to serve the Specific Plan area.
J. Procedures for an amendment to the adopted Specific Plan shall be initiated in the same manner as same as a zone change pursuant to Title 9 Chapter 3 Article 23 of the Los Banos Municipal Code. Substantial amendments to the adopted Specific Plan may trigger the requirement for a revised fiscal impact analysis.
K. The approved Specific Plan may specify adherence to a development staging or phasing program.
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L. Land use permits and Site plans for a project within the approved Specific Plan area shall only be accepted for review if they are consistent with the approved Specific Plan, and with all other applicable requirements of this Agreement and the Los Banos Municipal Code. The Community and Economic Development Director shall give written notice to the applicant whether the proposed development substantially complies with the approved Specific Plan. In the event the proposed development is determined not to be in substantial compliance, the notice shall specify the reason(s) for the determination and suggest action(s) that would bring the proposal into substantial compliance.
M. The approved Specific Plan does not itself authorize construction, but provides standards against which application for subsequent development including site plans and permits for development of property covered by the approved Specific Plan are to be reviewed.
N. Development standards, site and architectural design standards identified in the approved Specific Plan shall control for all subsequent site development as long as the approved Specific plan remains in effect. If alternative standards or procedures are not specifically identified in the approved Specific Plan, the applicable city standard at the time of land use permit or subdivision submittal shall control. In the event site development or design standards approved as part of the Specific Plan differ from otherwise applicable city standards, the approved Specific Plan standards shall control. If alternative standards are not identified in the approved Specific Plan, the applicable city standard shall control.
2. Financially Self Sustaining Development. Prior to any application for further entitlements or development a fiscal impact analysis shall be conducted at the Developer's expense for the proposed/approved Specific Plan identifying the financial requirements for the Project and setting forth a Finance and Implementation Plan to provide for the payment of all costs for the public facilities and services necessary to serve such development to be approved by the City Council upon recommendation by the Planning Commission.
3. Participation in a Community Facilities District. Prior to approval of any final or parcel map, or issuance of a building permit the Developer shall form or annex the Subject Property to a community facilities district created for the purposes of funding public safety, as authorized by Government Code section 53313(a) and (b). The form, terms and conditions and the tax rate for the formation of the Mello-Roos district, or in the alternative the annexation of the Subject Property to an existing district, shall be as approved by the City Council, as determined in its sole and exclusive discretion. District formation or annexation shall be at the sole cost of the Developer.
4. Participation in a Lighting and Landscaping District. Prior to approval of any final or parcel map, or issuance of a building permit the Developer shall form or annex the Subject Property to a Lighting and Landscaping District created for purposes of maintaining public landscape areas, signage and public lighting including a share of traffic signal maintenance costs as authorized pursuant to the Landscape and Lighting Act of 1972, Parts of Division 15 of the California Streets and Highways Code, and Article XIIID of the California Constitution. The form, terms and conditions and the tax rate for the formation of the Lighting and Landscaping 169
district, or in the alternative the annexation of the Subject Property to an existing district, shall be as approved by the City Council, as determined in its sole and exclusive discretion. District formation or annexation shall be at the sole cost of the Developer. 170
EXHIBIT ''D"
[SAMPLE FORM]
NOTICE OF TERMINATION
TIDS NOTICE OF TERMINATION (hereinafter "this Notice") is given this day of _____ , 20_, by the City of Los Banos (hereinafter called "City") for the benefit of ________________ _, (hereinafter "Owner").
1. On _____ , 20_, the City of Los Banos and ______ _ entered into that certain agreement entitled "Pre Annexation Development Agreement," approved by Ordinance ______ (hereinafter "Agreement"), relative to the development known as the _______ (hereinafter "Subject Property").
2. Owner has fully performed all its duties with respect to that portion of the Subject Property, which portion of the Subject Property is identified and described in Exhibit "A," attached hereto and incorporated herein by this reference (hereinafter the "Released Property").
3. Pursuant to Section of the Pre Annexation Development Agreement, the Pre Annexation Development Agreement is no longer in effect with respect to the Released Property.
CITY OF LOS BANOS
By:
City Manager or Designee
SIGNATURES MUST BE NOTARIZED
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PROPERTY OWNER'S CONSENT
[ APN 081-110-007]
I/We, the undersigned am/are the owner(s) of record of APN 081-110-007 that property described in Exhibit A to this Pre Annexation Agreement by and between the City of Los Banos and AMG & Associates LLC, relative to the project known as the AMG Industrial Business Park Annexation. I/We hereby consent to all the terms and conditions of said agreement and agree that my/our property as described herein shall be bound by all of the terms and conditions of said agreement.
AMG & Associates LLC
Dated: c;;;-r _,_gi_an_, ____ _
Managing Member
SIGNATURES MUST BE NOTARIZED
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ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
State of California )
)
)
On \)ec.,U<'\x'x ~o, 20B before me, 3 0-c__o'o ~ti~Ol.\.~ ·, , a Notary Public, personally appeared ~ \e, i--.,s G\e\Jon1\Qf\ , who proved to me on the basis of satisfactory evidence to be the person(~ whose nam~are subscribed t~e within instrument and acknowledged to me that ~/shetthey- executed the same in (hi~/t:hefr authorized capacity, and that b~thei.J;..-signature(.s}on the instrument the person~ or the entity upon behalf of which the person(M acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature ~£~·
p
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LOsBanos
At the Crossroads of Ce1lffor11ia
Agenda Staff Report
TO:
FROM:
DATE:
Mayor Faria and City Council Members
William Via, Public Works Operations Manager
January 19, 2022
TYPE OF REPORT: Agenda
SUBJECT: Organic Waste Disposal Reduction Ordinance
Recommendation:
Staff recommends that the City Council waive the second reading and adopt the Ordinance adding Chapter 3.2 to Title 6 of the Los Banos Municipal Code relating to organic waste disposal reduction.
Background:
In 2016, then Governor Brown signed into law Senate Bill (SB) 1383 (Lara, Chapter 395, Statutes of 2016), establishing methane emissions reduction targets in a statewide effort to reduce emissions of short-lived climate pollutants (SLCP) in various sectors of California's economy.
The California Department of Resources Recycling and Recovery (CalRecycle) then conducted two years of informal hearings with local governments and stakeholders to assist in developing formal regulations. On November 3, 2020 the Office of Administrative Law approved the regulations that took effect on January 1, 2022.
The current contract with Mid Valley Disposal (MVD) includes bundled Solid Waste collection services, so that every customer subscribes to the three can system; gray for garbage, blue for recyclables, and green for organic waste. This strategy has assisted the 1 175
ITEM 10
City in meeting some of the requirements of SB 1383, namely that all covered generators must subscribe to organic waste collection services.
On May 5, 2021, staff presented, through Mid Valley Disposal, an overview of SB 1383 and the City's progress to meeting the new requirements to Council. This ordinance is the next step in the process of becoming compliant with the requirements of the new law.
On January 5, 2022, the Los Banos City Council waived the first reading and introduced Ordinance No. 1194 by title.
Discussion:
SB 1383 is the State's most ambitious waste reduction law in the last 30 years and enacts the following targets to reduce organic waste in landfills:
• Achieve a 50% reduction in the level of the statewide disposal of organic waste from the 2014 level by 2020 and a 75% reduction by 2025 • Recover at least 20% of currently disposed surplus food by 2025 In addition to setting specific emissions reduction goals, SB 1383 mandates cities and counties to:
• Provide organic waste collection services to all residents and businesses • Develop and adopt an enforcement mechanism or ordinance by January 2022 • Establish an edible food recovery program
• Update the City's procurement policy to purchase recycled content paper and recycled organic waste products (e.g., compost and mulch) at a volume of 0.08 tons/resident
• Provide outreach and education for generators, haulers, facilities, edible food recovery organizations, and municipal departments
• Plan and secure access for recycling and edible food recovery capacity • Monitor compliance and conduct enforcement
• Maintain accurate compliance records
To meet the SB 1383 regulations, jurisdictions throughout the State are required to adopt an ordinance or other similarly enforceable mechanism by March 1, 2022. The ordinance will mandate that organic waste generators, haulers, and other entities subject to the requirements of SB 1383 regulations and subject to the jurisdiction's authority, comply with SB 1383 regulatory requirements. It will also help reduce food insecurity by requiring Commercial Edible Food Generators to arrange to have the maximum amount of their edible food, that would otherwise be disposed, be recovered for human consumption.
Staff is currently working with the MVD in identifying edible food generators and establishing recovery methods to meet the edible food recovery aspects of SB 1383.
Currently, all commercial customers generating two-cubic yards or more of commercial solid waste per week, and multi-family dwellings of five units or more are required to 2 176
recycle their organic waste under mandatory commercial organics recycling requirements of AB 1826. Multi-family dwellings were not required to arrange for the food waste portion of mandatory commercial organics recycling. They must now do so under SB 1383, and the legislation adds on to AB 1826 by associating SLCP reductions with organic waste disposal, and granting CalRecycle the regulatory authority required to achieve the organic waste disposal reduction targets. Our current contract with MVD includes a bundled service, mentioned above, and also includes the diversion of all organic waste from the landfill and to MVD's certified organic composting facility. This diversion of organic waste will go far in helping the City meet our diversion goals and will generate beneficial organic compost for use in agriculture and landscaping.
PROPOSED ORDINANCE:
The proposed Ordinance establishes the SB 1383 regulatory requirements the City needs to enforce on other entities, including requirements for generators to participate in organic waste collection programs; multi-family and business owners and property managers to support organic waste disposal reduction; commercial edible food generators to recover edible food through contracts or written agreements with food recovery organizations and services.
ENVIRONMENTAL DETERMINATION:
The proposed Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2), 15060(c)(3) and 15061 (b)(3). The activity is not subject to CEQA because it will not result in a direct or reasonably foreseeable indirect physical change in the environment; the activity is not a project as defined in Section 15378, and the activity is covered by the general rule that CEQA applies only to projects, which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the envi nment, the activity is not subject to CEQA. '
Attachments:
Proposed Ordinance
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Ordinance No. 1194
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF LOS BANOS ADDING CHAPTER 3.2 (ORGANIC WASTE DISPOSAL REDUCTION)
TO TITLE 6 (SANITATION AND HEALTH) OF THE LOS BANOS
MUNICIPAL CODE
WHEREAS, State recycling law, Assembly Bill 939 of 1989, the California Integrated Waste Management Act of 1989 (California Public Resources Code Section 40000, et seq., as amended, supplemented, superseded, and replaced from time to time), requires cities and counties to reduce, reuse, and recycle (including composting) Solid Waste generated in their Jurisdictions to the maximum extent feasible before any incineration or landfill disposal of waste, to conserve water, energy, and other natural resources, and to protect the environment.
WHEREAS, State recycling law, Assembly Bill 341 of 2011 (approved by the Governor of the State of California on October 5, 2011, which amended Sections 41730, 41731, 41734, 41735, 41736, 41800, 42926, 44004, and 50001 of, and added Sections 40004, 41734.5, and 41780.01 and Chapter 12.8 (commencing with Section 42649) to Part 3 of Division 30 of, and added and repealed Section 41780.02 of, the Public Resources Code, as amended, supplemented, superseded and replaced from time to time), places requirements on businesses and Multi-Family property owners that generate a specified threshold amount of Solid Waste to arrange for recycling services and requires Jurisdictions to implement a Mandatory Commercial Recycling program.
WHEREAS, State organics recycling law, Assembly Bill 1826 of 2014 (approved by the Governor of the State of California on September 28, 2014, which added Chapter
12.9 (commencing with Section 42649.8) to Part 3 of Division 30 of the Public Resources Code, relating to Solid Waste, as amended, supplemented, superseded, and replaced from time to time), requires businesses and Multi-Family property owners that generate a specified threshold amount of Solid Waste, Recycling, and Organic Waste per week to arrange for recycling services for that waste, requires Jurisdictions to implement a recycling program to divert Organic Waste from businesses subject to the law, and requires Jurisdictions to to implement a Mandatory Commercial Organics Recycling program.
WHEREAS, SB 1383, the Short-lived Climate Pollutant Reduction Act of 2016, requires CalRecycle to develop regulations to reduce organics in landfills as a source of methane. The regulations place requirements on multiple entities including Jurisdictions, residential households, Commercial Businesses and business owners, Commercial Edible Food Generators, haulers, Self-Haulers, Food Recovery Organizations, and Food Recovery Services to support achievement of Statewide Organic Waste disposal reduction targets.
WHEREAS, SB 1383, the Short-lived Climate Pollutant Reduction Act of 2016, requires Jurisdictions to adopt and enforce an ordinance or enforceable mechanism to 179
implement relevant provisions of SB 1383 Regulations. This ordinance will also help reduce food insecurity by requiring Commercial Edible Food Generators to arrange to have the maximum amount of their Edible Food, that would otherwise be disposed, to be recovered for human consumption.
WHEREAS, AB 827, requires businesses that provide customers access to the business to provide customers with a recycling bin or container that is visible, easily accessible, adjacent to each bin or container for trash, except in restrooms, and clearly marked with educational signage. Full service restaurants are exempt.
WHEREAS, Requirements in this ordinance are consistent with other adopted goals and policies of the City of Los Banos including: Title 6-3.1.03 Curbside Recycling Program or diversion goals associated with AB 939
WHEREAS, the subject Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2), 15060(c)(3) and 15061 (b)(3). The activity is not subject to CEQA because it will not result in a direct or reasonably foreseeable indirect physical change in the environment; the activity is not a project as defined in Section 15378, and the activity is covered by the general rule that CEQA applies only to projects, which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment, the activity is not subject to CEQA.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF LOS BANOS DOES ORDAIN AS FOLLOWS:
Section 1: Title 6 (Sanitation and Health) of the Los Banos Municipal Code is hereby amended to add Chapter 3.2 (Organic Waste Disposal Reduction) to read as follows:
TITLE 6 SANITATION AND HEAL TH
CHAPTER 3.2 ORGANIC WASTE DISPOSAL REDUCTION
Sec. 6-3.2.01 Definitions
For the purposes of this chapter, unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:
(a) "Blue Container" means a container where either: (1) the lid of the container is blue in color or (2) the body of the container is blue in color and the lid is either blue, gray, or black in color and shall be used for the purpose of storage and collection of Source Separated Recyclable Materials
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(b) "Commercial Business" or "Commercial" means a firm, partnership, proprietorship, joint-stock company, corporation, or association, whether for-profit or nonprofit, strip mall, industrial facility, or a multifamily residential dwelling. (c) "Commercial Edible Food Generator" means a commercial edible food generator that is one of the following:
(1) Tier One.
(A) Supermarket.
(B) Grocery store with a total facility size equal to or greater than 10,000 square feet.
(C) Food service provider.
(D) Food distributor.
(E) Wholesale food vendor.
(2) Tier Two.
(A) Restaurant with 250 or more seats, or a total facility size equal to or greater than 5,000 square feet.
(B) Hotel with an on-site food facility and 200 or more rooms. (C) Health facility with an on-site food facility and 100 or more beds. (D) Large venue is a large event that charges an admission price or is operated by a local Agency.
(E) Large event is a permanent venue facility that annually seats or serves an average of more than 2,000 individuals within the grounds of the facility per day of operation of the venue facility.
(F) A state agency with a cafeteria with 250 or more seats or a total cafeteria facility size equal to or greater than 5,000 square feet. (G) A local education agency with an on-site food facility. (d) "Compliance Review" means a review of records by the City of Los Banos, or designee, to determine compliance with this ordinance. 181
(e) "Compost" means the product resulting from the controlled biological decomposition of organic Solid Wastes that are Source Separated from the municipal Solid Waste stream, or which are separated at a centralized facility. (f) "Container Contamination" or "Contaminated Container'' means a container, regardless of color, that contains Prohibited Container Contaminants. (g) "C&D" means construction and demolition debris.
(h) "Designee" means an entity that a City contracts with or otherwise arranges to carry out any of the City's responsibilities of this ordinance. A Designee may be a government entity, a hauler, a private entity, or a combination of those entities. (i) "Edible Food" means food intended for human consumption. For the purposes of this ordinance Edible Food is not Solid Waste if it is recovered and not discarded. Nothing in this ordinance requires or authorizes the Recovery of Edible Food that does not meet the food safety requirements of the California Retail Food Code. (j) "Enforcement Action" means an action of the City to address noncompliance with this ordinance including, but not limited to, issuing administrative citations, fines, penalties, or using other remedies.
(k) "Enforcement Official" means the city manager, or his/her authorized Designee(s) who is/are partially or wholly responsible for enforcing the ordinance. (I) "Food Distributor'' means a company that distributes food to entities including, but not limited to, Supermarkets and Grocery Stores. (m) "Food Facility" means an operation that stores, prepares, packages, serves, vends, or otherwise provides food for human consumption at the retail level (Refer to Section 113789 of the Health and Safety Code for a complete definition). (n) "Food Recovery" means actions to collect and distribute food for human consumption that otherwise would be disposed.
( o) "Food Recovery Organization" means an entity that engages in the collection or receipt of Edible Food from Commercial Edible Food Generators and distributes that Edible Food to the public for Food Recovery either directly or through other entities including, but not limited to:
(1) A food bank as defined in Section 113783 of the Health and Safety Code; (2) A nonprofit charitable organization as defined in Section 113841 of the Health and Safety code; and,
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(3) A nonprofit charitable temporary food facility as defined in Section 113842 of the Health and Safety Code.
(p) "Food Recovery Service" means a person or entity that collects and transports Edible Food from a Commercial Edible Food Generator to a Food Recovery Organization or other entities for Food Recovery.
( q) "Food Scraps" means all food such as, but not limited to, fruits, vegetables, meat, poultry, seafood, shellfish, rice, beans, pasta, bread, cheese, and eggshells. Food Scraps excludes fats, oils, and grease when such materials are Source Separated from other Food Scraps.
(r) "Food Service Provider" means an entity primarily engaged in providing food services to institutional, governmental, Commercial, or industrial locations of others based on contractual arrangements with these types of organizations. (s) "Food-Soiled Paper" is compostable paper material that has come in contact with food or liquid, such as, but not limited to, compostable paper plates, paper coffee cups, napkins, pizza boxes, and milk cartons.
(t) "Food Waste" means Food Scraps, and Food-Soiled Paper. (u) "Gray Container means container used only for the purpose of storage and collection of garbage.
(v) Green Container'' means a container used only for the purpose of storage and collection of Source Separated Organic Waste including food waste. (w) "Grocery Store" means a store primarily engaged in the retail sale of canned food; dry goods; fresh fruits and vegetables; fresh meats, fish, and poultry; and any area that is not separately owned within the store where the food is prepared and served, including a bakery, deli, and meat and seafood departments. (x) "Hauler Route" means the designated itinerary or sequence of stops for each segment of the City's collection service area.
(y) "Inspection" means a site visit where a City or City designee reviews records, containers, and an entity's collection, handling, recycling, or landfill disposal of Organic Waste or Edible Food handling to determine if the entity is complying with requirements set forth in this ordinance).
(z) "Multi-Family Residential Dwelling" means residential premises with five (5) or more dwelling units.
(aa) "Non-Compostable Paper" includes but is not limited to paper that is coated in a plastic material that will not breakdown in the composting process. 183
(bb) "Non-Organic Recyclables" means non-putrescible and non-hazardous recyclable wastes including but not limited to bottles, cans, metals, plastics and glass. (cc) "Notice of Violation (NOV)" means a notice that a violation has occurred that includes a compliance date to avoid an action to seek penalties. (dd) "Organic Waste" means Solid Wastes containing material originated from living organisms and their metabolic waste products, including but not limited to food, green material, landscape and pruning waste, lumber, wood, Paper Products, Printing and Writing Paper, and manure
(ee) "Organic Waste Generator" means a person or entity that is responsible for the initial creation of Organic Waste.
(ff) "Prohibited Container Contaminants" means discarded materials that are not acceptable Recyclable Materials to be placed in the blue container; discarded materials that are not acceptable Source Separated Organic waste to be placed the green container; and discarded materials that are not acceptable to be placed in the Gray Container and Excluded Waste placed in any container.
(gg) "Recovered Organic Waste Products" means products made from California, landfill-diverted recovered Organic Waste processed in a permitted or otherwise authorized facility.
(hh) "Recovery" means any activity or process of diverting organic waste from the landfill, processed at an approved "Recycling Center", Composting Facility, In-Vessel Digestion Operation or Facility, Biomass Conversion Operation or Facility, or used as soil amendment for erosion control, revegetation, slope stabilization, or landscaping. (ii) "Recycled-Content Paper" means Paper Products and Printing and Writing Paper that consists of at least 30 percent, by fiber weight, postconsumer fiber.
Uj) "Route Review" means a visual Inspection of containers along a Hauler Route for the purpose of determining Container Contamination and may include mechanical Inspection methods such as the use of cameras. (kk) "SB 1383" means Senate Bill 1383 of 2016 approved by the Governor on September 19, 2016, which added Sections 39730.5, 39730.6, 39730.7, and 39730.8 to the Health and Safety Code, and added Chapter 13.1 (commencing with Section 42652) to Part 3 of Division 30 of the Public Resources Code, establishing methane emissions reduction targets in a Statewide effort to reduce emissions of short-lived climate pollutants as amended, supplemented, superseded, and replaced from time to time. (II) "SB 1383 Regulations" or "SB 1383" Regulatory means or refers to, for the purposes of this ordinance, the Short-Lived Climate Pollutants: Organic Waste Reduction 184
regulations developed by CalRecycle and adopted in 2020 that created 14 CCR, Division 7, Chapter 12 and amended portions of regulations of 14 CCR and 27 CCR. (mm) "Self-Hauler" means a person, who hauls Solid Waste, Organic Waste or Recyclable Material he or she has generated to another person. Self-hauler also includes a person who back-hauls waste. Back-haul means generating and transporting Organic Waste to a destination owned and operated by the generator using the generator's own employees and equipment.
(nn) "Single-Family" means of, from, or pertaining to any residential premises with fewer than five (5) units.
(oo) "Solid Waste" has the same meaning as defined in State Public Resources Code Section 40191, which defines Solid Waste as all putrescible and non-putrescible solid, semisolid, and liquid wastes, including garbage, trash, refuse, paper, rubbish, ashes, industrial wastes, demolition and construction wastes, abandoned vehicles and parts thereof, discarded home and industrial appliances, dewatered, treated, or chemically fixed sewage sludge which is not hazardous waste, manure, vegetable or animal solid and semi-solid wastes, and other discarded solid and semisolid wastes, with the exception that Solid Waste does not include any of the following wastes:
(1)
40141 .
Hazardous waste, as defined in the State Public Resources Code Section (2) Radioactive waste regulated pursuant to the State Radiation Control Law (Chapter 8 (commencing with Section 114960) of Part 9 of Division 104 of the State Health and Safety Code).
(3) Medical waste regulated pursuant to the State Medical Waste Management Act (Part 14 ( commencing with Section 117600) of Division 104 of the State Health and Safety Code). Untreated medical waste shall not be disposed of in a Solid Waste landfill, as defined in State Public Resources Code Section 40195.1. Medical waste that has been treated and deemed to be Solid Waste shall be regulated pursuant to Division 30 of the State Public Resources Code.
(pp) "Source Separated" means materials, including commingled recyclable materials and organic waste, that have been separated or kept separate from the Solid Waste stream, at the point of generation, for the purpose of additional sorting or processing those materials for recycling or reuse in order to return them to the economic mainstream in the form of raw material for new, reused, or reconstituted products, which meet the quality standards necessary to be used in the marketplace. For the purposes of the ordinance, Source Separated shall include separation of materials by the generator, property owner, property owner's employee, property manager, or property manager's employee into different containers for the purpose of collection such that Source Separated materials are separated from Gray Container Waste or other Solid Waste for the purposes of collection and processing.
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(qq) "Source Separated Blue Container Organic Waste" means Source Separated Organic Wastes that can be placed in a Blue Container that is limited to the collection of those Organic Wastes and Non-Organic Recyclables. (rr) "Source Separated Green Container Organic Waste" means Source Separated Organic Waste that can be placed in a Green Container that is specifically intended for the separate collection of Organic Waste by the generator, excluding Source Separated Blue Container Organic Waste, carpets, Non-Compostable Paper, and textiles.
(ss) "Source Separated Recyclable Materials" means Source Separated NonOrganic Recyclables and Source Separated Green Container Organic Waste. (tt) "State" means the State of California.
(uu) "Supermarket" means a full-line, self-service retail store with gross annual sales of two million dollars ($2,000,000), or more, and which sells a line of dry grocery, canned goods, or nonfood items and some perishable items. (vv) "Tier One Commercial Edible Food Generator" means a Commercial Edible Food Generator that is one of the following:
(1) Supermarket.
(2) Grocery Store with a total facility size equal to or greater than 10,000 square feet.
(3) Food Service Provider.
(4) Food Distributor.
(5) Wholesale Food Vendor.
(ww) "Tier Two Commercial Edible Food Generator'' means a Commercial Edible Food Generator that is one of the following:
(1) Restaurant with 250 or more seats, or a total facility size equal to or greater than 5,000 square feet.
(2) Hotel with an on-site Food Facility and 200 or more rooms. (3) Health facility with an on-site Food Facility and 100 or more beds. ( 4) Large Venue.
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(5) Large Event.
(6) A State agency with a cafeteria with 250 or more seats or total cafeteria facility size equal to or greater than 5,000 square feet. (7) A Local Education Agency facility with an on-site Food Facility.
Sec. 6-3.2.02 Organic Waste Generators
(a) Single Family dwellings shall subscribe to City's three-container organic waste collection services for all organic waste generated by placing garbage in the gray container, recyclables in the blue container, and organic materials such as green waste and food waste in the green container.
(b) Multi-Family Residential dwellings shall subscribe to City franchise hauler's three-bin container organic waste collection services for all organic waste generated by placing garbage in the gray container, recyclables in the blue container, and organic materials such as green waste and food waste in the green container. (1) Provide adequate number, size, and location of collection containers with sufficient labels or colors consistent with City's blue, green, and gray collection services containers for employees, contractors, and tenants.
(2) Provide education information before or within fourteen (14) days of occupation of the premises to new tenants that describes requirements to keep Source Separated Green Container Organic Waste and Source Separated Recyclable Materials separate from Gray Container Waste (when applicable) and the location of containers and the rules governing their use at each property.
(c) Commercial Businesses shall subscribe to City's three- bin container organic waste collection services for all organic waste generated by placing garbage in the gray container, recyclables in the blue container, and organic materials such as green waste and food waste in the green container.
(1) Provide adequate number, size, and location of collection containers with sufficient labels or colors consistent with City's blue, green, and gray collection services containers for employees, contractors, and tenants.
(2) Pursuant to AB 827, Commercial Businesses that generate organic waste and recyclable materials shall provide green containers for the collection of organic waste and blue containers for recyclable materials in all indoor and outdoor areas where disposal containers are provided for customers, for materials generated by the business. (3) Provide education information before or within fourteen (14) days of occupation of the premises to new tenants that describes requirements to keep Source Separated Green Container Organic Waste and Source Separated Recyclable Materials 187
separate from Gray and the location of containers and the rules governing their use at each property.
Sec. 6-3.2.03 Waivers
The City may waive a Commercial Business' or property owner's obligation (including Multi-Family Residential Dwellings) to comply with some or all of the recyclable materials and/or Organic Waste requirements of this Chapter. (a) De Minimis Waivers.
Commercial Businesses requesting a de Minimis waiver shall:
(1) Submit an application specifying the services that they are requesting a waiver from and provide either of the following documentation. (A) The Commercial Business' total Solid Waste collection service is two cubic yards or more per week and Organic Waste subject to collection in a Blue Container or Green Container comprises less than 20 gallons per week per applicable container of the business' total waste; or,
(B) The Commercial Business' total Solid Waste collection service is less than two cubic yards per week and Organic Waste subject to collection in a Blue Container or Green Container comprises less than 10 gallons per week per applicable container of the business' total waste.
(2) Notify City if circumstances change such that Commercial Business's Organic Waste exceeds threshold required for waiver, in which case waiver will be rescinded.
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(3) Provide written verification of eligibility for de Minimis waiver every 5 years if City has approved de Minimis waiver.
(b) Physical Space Waiver.
(1) Submit an application form specifying the type(s) of collection services for which they are requesting a compliance waiver.
(2) Provide documentation that the premises lack adequate space for Blue Containers and/or Green Containers including documentation from its hauler, licensed architect, or licensed engineer.
(3) Provide written verification to City that it is still eligible for physical space waiver every five years if City has approved application for a physical space waiver. City will confer with staff, a hauler, licensed architect, or licensed engineer of the premises 188
lack of adequate space for the collection containers required for compliance with the Organic Waste collection requirements.
(c) Review and Approval of Waivers shall be conducted by the Public Works Director, or designee.
Sec. 6-3.2.04 Commercial Edible Food Generators
(a) Tier One Commercial Edible Food Generators must comply with the requirements of this Section commencing March 1, 2022, and Tier Two Commercial Edible Food Generators must comply commencing January 1, 2024. (b) Large Venue or Large Event operators not providing food services, but allowing for food to be provided by others, shall require Food Facilities operating at the Large Venue or Large Event to comply with the requirements of this Section, commencing January 1, 2024.
(c) Commercial Edible Food Generators shall comply with the following requirements:
(1) Arrange to recover the maximum amount of Edible Food that would otherwise be disposed.
(2) Contract with or enter into a written agreement with Food Recovery Organizations or Food Recovery Services for:
(A) the collection of Edible Food for Food Recovery; or (B) acceptance of the Edible Food that the Commercial Edible Food Generator self-hauls to the Food Recovery Organization for Food Recovery. (3) Shall not intentionally spoil Edible Food that is capable of being recovered by a Food Recovery Organization or a Food Recovery Service. ( 4) Allow City's designated entity to access the premises and review records. (5) Keep records that include the following information:
(A) A list of each Food Recovery Service or organization that collects or receives its Edible Food pursuant to a contract or written agreement. (B) A copy of all contracts or written agreements with Food Recovery Service or organization.
(C) A record of the following information for each of those Food Recovery Services or Food Recovery Organizations:
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(i) The name, address and contact information of the Food Recovery Service or Food Recovery Organization.
(ii) The types of food that will be collected by or self-hauled to the Food Recovery Service or Food Recovery Organization.
(iii) The established frequency that food will be collected or self-hauled. (iv) The quantity of food, measured in pounds recovered per month, collected or self-hauled to a Food Recovery Service or Food Recovery Organization for Food Recovery.
(6) No later than September 1, 2022, submit an annual Food Recovery report to the City for the period of January 1, 2022 through June 30, 2022 that includes the list of Food Recovery Organizations and Services contracted to receive recovered edible food and the amount of edible food in pounds collected for each Food Recovery Organizations and Services. Submit annual Food Recovery report to the City July 1, 2023 and on or before July 1 each year thereafter for the period covering the entire previous calendar year.
( d) Nothing in this ordinance shall be construed to limit or conflict with the protections provided by the California Good Samaritan Food Donation Act of 2017, the Federal Good Samaritan Act, or share table and school food donation guidance pursuant to Senate Bill 557 of 2017 (approved by the Governor of the State of California on September 25, 2017, which added Article 13 [commencing with Section 49580] to Chapter 9 of Part 27 of Division 4 of Title 2 of the Education Code, and to amend Section 114079 of the Health and Safety Code, relating to food safety, as amended, supplemented, superseded and replaced from time to time).
Sec. 6-3.2.05 Food Recovery organizations and Services
(a) Food Recovery Services collecting or receiving Edible Food directly from Commercial Edible Food Generators, via a contract or written agreement shall maintain the following records otherwise:
(1) The name, address, and contact information for each Commercial Edible Food Generator from which the service collects edible food. (2) The quantity in pounds of edible food collected from each Commercial Edible Food Generator per month.
(3) The quantity in pounds of edible food transported to each Food Recovery Organization per month.
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(4) The name, address, and contact information for each Food Recovery Organization that the Food Recovery Service transports edible food to for Food Recovery. (b) Food Recovery Organizations collecting or receiving edible food directly from Commercial Edible Food Generators, via a contract or written agreement shall maintain the following records:
(1) The name, address, and contact information for each Commercial Edible Food Generator from which the organization receives edible food. (2) The quantity in pounds of edible food received from each Commercial Edible Food Generator per month.
(3) The name, address, and contact information for each Food Recovery Service that the organization receives edible food from for food recovery. (c) Nothing in this ordinance shall be construed to limit or conflict with the protections provided by the California Good Samaritan Food Donation Act of 2017, the Federal Good Samaritan Act, or share table and school food donation guidance pursuant to Senate Bill 557 of 2017 (approved by the Governor of the State of California on September 25, 2017, which added Article 13 [commencing with Section 49580] to Chapter 9 of Part 27 of Division 4 of Title 2 of the Education Code, and to amend Section 114079 of the Health and Safety Code, relating to food safety, as amended, supplemented, superseded and replaced from time to time). (d) Food Recovery Organizations and Food Recovery Services that have their primary address physically located in the City and contract with or have written agreements with one or more Commercial Edible Food Generators shall report to the City it is located in the following:
(1) The list of Commercial Edible Food Generators.
(2) The total pounds of edible food recovered in the previous calendar year from the Tier One and Tier Two Commercial Edible Food Generators. (3) The above report is due to the City by:
(A) September 1, 2022, for the period of January 1, 2022 through June 30, 2022.
(B) July 1, 2023 and on or before July 1 each year thereafter for the period covering the entire previous calendar year.
(e) Provide information and consultation to the City, upon request, regarding existing, or proposed new or expanded, Food Recovery capacity that could be accessed by the City and its Commercial Edible Food Generators. A Food Recovery Service or 191
Food Recovery Organization contacted by the City shall respond to such request for information within 60 days, unless a shorter timeframe is otherwise specified by the City.
Sec. 6-3.2.06 Haulers and Facility Operators
(a) Exclusive Franchise Hauler providing residential, commercial, or industrial Organic Waste collection services to generators within the City's boundaries shall meet the following requirements and standards as a condition of approval of a contract or agreement with the City to collect Organic Waste:
(1) Through written notice to the City annually on or before February 15 of each year, identify the facilities to which Organic Waste including facilities for Source Separated Recyclable Materials, Source Separated Green Container Organic Waste, and Mixed Waste.
(2) Transport Source Separated Recyclable Materials, Source Separated Green Container Organic Waste, and Mixed Waste to a facility, operation, activity, or property that recovers Organic Waste.
(3) Exclusive Franchise Hauler authorized to collect Organic Waste shall comply with education, equipment, signage, container labeling, container color, contamination monitoring, reporting, and other requirements contained within its franchise agreement, permit, license, or other agreement entered into with the City.
Sec. 6-3.2.07 Self-Hauler Requirements
(a) Self-Haulers shall source separate all recyclable materials and Organic Waste (materials that City otherwise requires generators to separate for collection in the City's organics and recycling collection program) generated on-site from Solid Waste in a manner consistent with the three-container system (gray container for trash, blue container for recyclables, and green container for organic waste including food waste), or shall haul Organic Waste to a High Diversion Organic Waste Processing Facility specified by the City.
(b) Self-Haulers shall haul their Source Separated Recyclable Materials to a facility that recovers those materials; and haul their Source Separated Green Container Organic Waste to a Solid Waste facility, operation, activity, or property that processes or recovers Source Separated Organic Waste. Alternatively, Self-Haulers may haul Organic Waste to a High Diversion Organic Waste Processing Facility specified by the City. (c) Self-Haulers that are Commercial Businesses (including Multi-Family Residential Dwellings) shall keep a record of the amount of Organic Waste delivered to each Solid Waste facility, operation, activity, or property that processes or recovers Organic Waste; this record shall be provided to the City, or Designee, upon request. The records shall include the following information:
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(1) Delivery receipts and weight tickets from the entity accepting the waste. (2) The amount of material in cubic yards or tons transported by the generator to each entity.
(3) If the material is transported to an entity that does not have scales on-site or employs scales incapable of weighing the Self-Hauler's vehicle in a manner that allows it to determine the weight of materials received, the Self-Hauler is not required to record the weight of material but shall keep a record of the entities that received the Organic Waste.
· Sec. 6-3.2.08 Inspections and Investigations by City
(a) City representatives and/or its designated entity, including Designees are authorized to conduct Inspections and investigations, at random or otherwise, of any collection container, collection vehicle loads, or transfer, processing, or disposal facility for materials collected from generators, or Source Separated materials to confirm compliance with this ordinance by Organic Waste Generators, Commercial Businesses (including Multi-Family Residential Dwellings), property owners, Commercial Edible Food Generators, haulers, Self-Haulers, Food Recovery Services, and Food Recovery Organizations, subject to applicable laws.
(b) Regulated entity shall provide or arrange for access during all Inspections (with the exception of residential property interiors) and shall cooperate with the City's employee or its designated entity/Designee during such Inspections and investigations.
Such Inspections and investigations may include confirmation of proper placement of materials in containers, Edible Food Recovery activities, records, or any other requirement of this ordinance described herein. Failure to provide or arrange for:
( 1) access to an entity's premises; or
(2) access to records for any Inspection or investigation is a violation of this ordinance and may result in penalties described.
(c) Any records obtained by a City during its Inspections, and other reviews shall be subject to the requirements and applicable disclosure exemptions of the Public Records Act as set forth in Government Code Section 6250 et seq. ( d) City representatives, its designated entity, and/or Designee are authorized to conduct any Inspections, Remote Monitoring, or other investigations as reasonably necessary to further the goals of this ordinance, subject to applicable laws. (e) City shall receive written complaints from persons regarding an entity that may be potentially non-compliant with SB 1383 Regulations, including receipt of anonymous complaints.
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Sec. 6-3.2.09 Enforcement
(a) Violation of any provIsIon of this Chapter shall constitute grounds for issuance of a Notice of Violation and assessment of a fine by a City of Los Banos Enforcement Official or representative. Enforcement Actions under this Chapter are issuance of an administrative citation and assessment of a fine. The City of Los Banos' procedures on imposition of administrative fines (Title 4, Chapter 11) are hereby incorporated in their entirety, as modified from time to time, and shall govern the imposition, enforcement, collection, and review of administrative citations issued to enforce this Chapter and any rule or regulation adopted pursuant to this chapter, except as otherwise indicated in this Chapter.
(b) Other remedies allowed by law may be used, including civil action or prosecution as misdemeanor or infraction. The City may pursue civil actions in the California courts to seek recovery of unpaid administrative citations. The City may choose to delay court action until such time as a sufficiently large number of violations, or cumulative size of violations exist such that court action is a reasonable use of City staff and resources.
(c) Responsible Entity for Enforcement
(1) Enforcement pursuant to this ordinance may be undertaken by the City Enforcement Official, which may be the city manager or his/her designated entity, legal counsel, or combination thereof.
(2) Enforcement may also be undertaken by a Regional or County Agency Enforcement Official, designated by the City, in consultation with the City Enforcement Official.
(A) The City Enforcement Official(s) (and Regional or County Agency Enforcement Official, if used) will interpret this Chapter; determine the applicability of waivers, if violation(s) have occurred; implement Enforcement Actions; and, determine if compliance standards are met.
(8) The City Enforcement Official(s) (and Regional or County Agency Enforcement Official, if used) may issue Notices of Violation(s). (d) Process for Enforcement
(1) The City Enforcement Officials or Regional or County Enforcement Officials and/or their Designee will monitor compliance with this Chapter randomly and through Compliance Reviews, Route Reviews, investigation of complaints, and an Inspection program (that may include Remote Monitoring). Sec. 6-3.2.08 establishes the City's right to conduct Inspections and investigations.
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(2) The City may issue an official notification to notify regulated entities of its obligations under the ordinance.
(3) For incidences of Prohibited Container Contaminants found in containers, the City will issue a Notice of Violation to any generator found to have Prohibited Container Contaminants in a container. Such notice will be provided via a cart tag or other communication immediately upon identification of the Prohibited Container Contaminants or within five (5) days after determining that a violation has occurred. If the City observes Prohibited Container Contaminants in a generator's containers on more than three (3) consecutive occasion(s), the City may assess an administrative citation and fine, pursuant to 6-3.2.09(e). Such fine shall be in addition to any contamination processing fee or penalty assessed by a hauler if authorized by its agreement or contract with the City. ( 4) With the exception of violations of generator contamination of container contents addressed under Sub Section (d)(3), the City shall issue a Notice of Violation requiring compliance within 60 days of issuance of the notice. (5) Absent compliance by the respondent within the deadline set forth in the Notice of Violation, The City shall commence an action to impose penalties, via an administrative citation and fine, pursuant to 6-3.2.09(e). Notices shall be sent to the owner at the address of the dwelling or Commercial property or to the party responsible for paying for the collection services, depending upon available information. ( e) Penalty Amounts for Types of Violations
The penalty levels are as follows:
(1)
violation.
(2)
violation.
For a first violation, the amount of the base penalty shall be $50 per For a second violation, the amount of the base penalty shall be $100 per (3) For a third or subsequent violation, the amount of the base penalty shall be $250 per violation.
(f) Compliance Deadline Extension Considerations
The City may extend the compliance deadlines set forth in a Notice of Violation issued in accordance with this Section if it finds that there are extenuating circumstances beyond the control of the respondent that make compliance within the deadlines impracticable, including the following:
(1) Acts of God such as earthquakes, wildfires, flooding, and other emergencies or natural disasters.
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(2) Delays in obtaining discretionary permits or other government agency approvals; or,
(3) Deficiencies in Organic Waste recycling infrastructure or Edible Food Recovery capacity and the Jurisdiction is under a corrective action plan with CalRecycle pursuant to 14 CCR Section 18996.2 due to those deficiencies. (g) Administrative Hearing
Persons receiving an administrative citation containing a penalty for an uncorrected violation may request an administrative hearing to contest the citation. A hearing will be held only if it is requested within the time prescribed and consistent with procedures in Title 4 Chapter 11 of the Los Banos Municipal Code. (h) Education Period for Non-Compliance
Beginning March 1,2022 and through December 31, 2023, the City will conduct Inspections to determine compliance, and if City determines that Organic Waste Generator, Self-Hauler, hauler, Tier One Commercial Edible Food Generator, Food Recovery Organization, Food Recovery Service, or other entity is not in compliance, it shall provide educational materials to the entity describing its obligations under this ordinance and a notice that compliance is required by March 1, 2022, and that violations may be subject to administrative penalties starting on January 1, 2024. (i) Civil Penalties for Non-Compliance
Beginning January 1, 2024, if the City determines that an Organic Waste Generator, Self-Hauler, hauler, Tier One or Tier Two Commercial Edible Food Generator, Food Recovery Organization, Food Recovery Service, or other entity is not in compliance with this ordinance, it shall document the noncompliance or violation, issue a Notice of Violation, and take Enforcement Action pursuant to this Chapter, as needed.
Sec. 6-3.2.10 Effective Date
This Chapter shall be effective commencing on March 1, 2022.
Section 2. To the extent that the terms and provisions of this Ordinance may be inconsistent or in conflict with the terms or conditions of any prior City ordinance, motion, resolution, rule or regulation governing the same subject, the terms of this Ordinance shall prevail with respect to the subject matter thereof and such inconsistent or conflicting provisions of prior ordinances, motions, resolutions, rules or regulations are hereby repealed.
Section 3. If any section, subsection, subdivision, paragraph, sentence, clause or phrase added by this Ordinance, or any part thereof, is for any reason held to be unconstitutional or invalid or ineffective by any court of competent jurisdiction, such 196
decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more subsections, subdivisions, paragraphs, sentences, clauses or phrases are declared unconstitutional, invalid or ineffective.
Section 4. The subject Ordinance is not subject to the California Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2), 15060(c)(3) and 15061(b)(3). The activity is not subject to CEQA because it will not result in a direct or reasonably foreseeable indirect physical change in the environment; the activity is not a project as defined in Section 15378, and the activity is covered by the general rule that CEQA applies only to projects, which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity may have a significant effect on the environment, the activity is not subject to CEQA.
Section 5. This Ordinance shall go into effect and be in full force and operation on March 1, 2022. The City Clerk shall certify to the adoption of this Ordinance and cause the same to be posted and published once within fifteen days after passage and adoption as may be required by law; or, in the alternative the City Clerk may cause to be published a summary of this Ordinance and a certified copy of the text of this Ordinance shall be posted in the Office of the City Clerk five days prior to the date of adoption of this Ordinance; and, within fifteen days after adoption, the City Clerk shall cause to be published, the aforementioned summary and shall post a certified copy of this Ordinance, together with the vote for and against the same, in the Office of the City Clerk.
Introduced by Council Member and seconded by Council Member _____ on the __ day of _ ____ , 2022.
Passed on the __ day of _____ , 2022 by the following vote:
AYES: CouncilMembeIB
NOES:
ABSENT:
APPROVED:
Manuel Thomas Faria, Ill, Mayor
ATTEST:
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Lucille L. Mallonee, City Clerk
198
TO:
FROM:
DATE:
SUBJECT:
LOsBanos
·\t tit ( 1ossroac, (I/ alif01 nta
Agenda Staff Report
Mayor Faria & City Council Members
Sonya William~ ance Director
January 19, 2022
2020-2021 Fiscal Year Annual Comprehensive Finance Report TYPE OF REPORT: Non-Consent Agenda
Recommendation:
Staff recommends that Council adopt a Resolution accepting the 2020-2021 Annual Comprehensive Financial Report (ACFR), and the Government Auditing Standards Report prepared by Price Paige & Company, our independent auditors.
Background:
The ACFR communicates the City's financial condition and activity for the fiscal year ending June 30, 2021. Overall, the City's operations show stability and steady growth, reflecting its prudent and sound management practices.
The attached ACFR has received an unmodified, or clean, opinion from our independent auditors, Price Paige & Company. An unmodified report communicates that the ACFR, and audited information within, fairly present the City's financial position for the fiscal year ending June 30, 2021. An attached submittal letter states that the City's independent auditors encountered no difficulties, found no corrected or uncorrected misstatements, and had no disagreements with management during the audit. An additional report on the City's internal control over financial reporting and compliance notes no instances of non-compliance.
The City has received a clean audit report for the past several years and has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers' Association (GFOA) for seven consecutive years; the City once again chose to submit the ACFR to the Government Finance Officers Association (GFOA). The GFOA established the Certificate of Achievement for Excellence in Financial Reporting Program to encourage and assist state and local governments to go beyond the minimum requirements of generally accepted accounting principles to prepare annual comprehensive financial reports that evidence the spirit 199
ITEM 11
of transparency and full disclosure and then to recognize individual governments that succeed in achieving that goal.
Reports submitted to the ACFR program are reviewed by selected members of the GFOA professional staff and the GFOA Special Review Committee (SRC), which comprises individuals with expertise in public-sector financial reporting and includes financial statement preparers, independent auditors, academics, and other finance professionals. A ward results are still pending.
Overview:
The ACFR communicates the City's financial condition and activity m a transparent and organized manner and in compliance with accounting and financial reporting .standards established by the Governmental Accounting Standards Board (GASB). The report presents historical and comparative information that can be useful to City staff, elected officials, and external users such as debt rating agencies, businesses, other public agencies, and the City's residents. The most recent ACFR and several prior year reports are available on the City's website at: www.losbanos.org.
The City's ACFR includes the following major sections and information:
Introductory Section:
• Letter of Transmittal - prepared by management and used to communicate information on areas that may have an impact on the City's finances now and in the future. This includes economic factors as well as budget and management factors.
Financial Section (the main body of the ACFR for current year information) •
•
•
Independent Auditors' Report- the City's report card on the content of the ACFR Management Discussion and Analysis (MD&A) - provides an analytical overview of the City's financial status and results for the year
Basic Financial Statements - reports finances at a point in time ( assets - liabilities) and throughout the year (revenues - expenditures), and cash flows o Government-Wide Statements - overview of financial information including all of the City's operations by financial activity
o Fund Financial Statements - a detailed look at funds, reporting the Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance o Notes to the Financial Statement (Notes) - a narrative explanation that accompanies the Basic Financial Statements
Required Supplementary Information Section
• OPEB Information - four years of Other Post-Employment Benefits funding information • Pension Information - schedule of changes in the pension liability and related ratios; schedule of contribution by plan
• Budget to Actual Comparisons - for all governmental funds with a legally adopted budget
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Combing and Individual Financial Statements and Schedules Section • A breakout of individual funds - for funds that were presented in a cumulative manner in the Financial Section
Statistical Section
• Financial Trends
• Revenue Capacity Information
• Debt Capacity Information
• Demographic and Economic Information
• Operating Information
Discussion:
Overall, the City's ACFR shows that City finances are stable. The following is an explanation of some key indicators reported in the ACFR.
General Fund Balance
The most notable measure of a City's financial health is the General Fund balance. As presented in the Basic Financial Statements, the fund balance for the City's General Fund ended the year with $28,638,436. This balance is comprised of a number of categories as follows:
• $10.4 million committed and assigned funds set aside for specific purposes based on budget priorities, including continuing and future capital projects • $18.2 million in unassigned funds as follows:
o $6.5 million reserve (30% minimum reserve level)
o $1.8 million earmarked for Measure H
o $9.9 million other unassigned fund balance
The established fund balance plays a key role in the City's budget forecasting and will allow staff to mitigate the economic uncertainty of increased pension cost. In addition, the City will be able to pursue funding essential capital projects.
The General Fund balance increased by $6.9 million over the prior year, primarily due to expenditure variations and an increase in property tax, sales tax, and the addition of Measure H revenues.
Citywide Net Position
The Statement of Net Position, similar to a balance sheet, reports total assets and liabilities of the City as of June 30, 2021. The total net position of the City for all activities was $234 million.
Net position is broken out into three categories; capital, restricted and unrestricted.
Net Capital Position ($127 million)
Capital assets may include land, buildings, equipment, improvements, infrastructure and construction in progress.
Restricted Net Position ($73 million)
These assets are subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. Approximately 39% of this amount is restricted for development projects, 3 201
36% is restricted for various capital projects, 10% is restricted for public safety, 7% is restricted for highways and streets, and the remaining amounts are restricted for parks and recreation, economic development and other constraints.
Unrestricted Net Position ($34 million)
This represents the balance of net position that is neither part of capital assets nor restricted.
Healthy capital and operating reserves in the business-type activities support rate stabilization and recovery strategies for the City's many activities.
Pension Liabilities
For greater transparency, beginning in FY 2014-15, new GASB pronouncements for pension accounting require that entities report unfunded liability in the financial statements rather than in the footnotes. These GASB pronouncements do not affect either the amount of contributions a government makes to pension plans or the total net pension liability, which is still actuarially determined. Total net pension liability, or unfunded liability, is based on projected future benefit payments attributed to the current and past employees' service, less the assets accumulated to pay those liabilities. As shown on pages 16 of the ACFR, the City has a combined net pension liability of $24,997,926. The City's various pension plans are approximately 74% funded.
The City's annual payments include a portion to fund current benefits as well as an amount to pay down the unfunded liability. Annual actuarial valuations provide the City with the amount of the contribution that must be paid annually into the plan to ensure that the current unfunded liability is paid off over the subsequent 30 years. A detailed explanation of the employee's benefits programs including detailed pension information by plan is included in the Notes section (see Note 10, pages 53 through 57) and the Required Supplementary Information (pages 71 and 72).
Cash and Investments
The ACFR also includes detailed information on the City's cash and investments. As of June 30, 2021, the City had $142.6 million in total cash and investments, all of which are in the form of investments authorized by the California Government Code and are reported quarterly by the City's Treasurer. More information on cash and investments can be found in Note 3, pages 40 through 44 of the ACFR.
The Independent Auditor's Report states that the audit did not identify any deficiencies considered to be material misstatements. There are no findings to report.
ACFR Presentation
The City's auditors Price Paige & Company will be presenting the ACFR at the council meeting and will be present to answer any questions. The City selects its independent auditors through a competitive procurement process. Price Paige & Company is in its eighth year auditing the City.
The ACFR for the Fiscal Year Ending June 30, 2021 is available for review in the Finance Department located at City Hall and on the City's website, www.losbanos.org. 4 202
Fiscal Impact:
There is no immediate financial impact or budget action necessary as a result of the recommended action.
Attachments:
Resolution
Annual Comprehensive Financial Statements (ACFR)
Audit Committee Letter
Government Auditing Standards Report
5 203
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RESOLUTION NO. --
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LOS
BANOS ACCEPTING THE 2020/2021 FISCAL YEAR AUDIT
REPORTS CONSISTING OF THE ANNUAL COMPREHENSIVE
FINANCIAL REPORT, AND THE GOVERNMENT AUDITING
STANDARDS REPORT.
WHEREAS, the City of Los Banos is required to undergo an annual fiscal audit performed by an independent auditor; and
WHEREAS, the auditing firm of Price Paige & Company has completed the 2020/2021 Fiscal Year audit and all related reports and presented their findings to the Los Banos City Council;
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Los Banos hereby accept the 2020/2021 Fiscal Year Audit Reports consisting of the Annual Comprehensive Financial Report (ACFR), and the Government Auditing Standards Report.
The foregoing resolution was introduced at a regular meeting of the City Council of the City of Los Banos held on the 19th day of January 2022, by Council Member _____ who moved for its adoption, which motion was duly seconded by Council Member _ _____ , and the Resolution was adopted by the following vote:
AYES:
NOES:
ABSENT:
APPROVED:
Manuel Tom Faria Ill, Mayor
ATTEST:
Lucille L. Mallonee, City Clerk
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206
City of Los Banos
520 J Street
Annual Co01prehensive
Financial Report
For Fiscal year Ending
June 30, 2021
Los Banos, CA 93635 Califonna
207
CITY OF LOS BANOS
CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE FISCAL YEAR ENDED
JUNE 30, 2021
Prepared by
FINANCE DEPARTMENT
208
CITY OF LOS BANOS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
INTRODUCTORY SECTION
Letter of Transmittal ............... .. ................. .
PAGE
·········· .. ················i
GFOA Certificate of Achievement for Excellence in Financial Reporting ... ..... ....... .. ...... ............ .. ......... .. ... vi Organization Chart ................... ..... .............. ... ......... ............ .. ....... .................................... ........... ............... vii Directory of City Officials ........................................ .. ...................... .. ..... ... ............. ................................... viii
FINANCIAL SECTION
Independent Auditor's Report ....................... ................ ........ ................................ .. ................................... 1 Management's Discussion and Analysis ........ .............. ........ ... ............ .......................... .... ...... ... .. .... .... .. ... ... 3 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position ..... ............. ................... ................................ ............... ............................ 16 Statement of Activities ............... .. .... .......... .............................. .. ............ .. .............. ........................... 18 Fund Financial Statements:
Balance Sheet - Governmental Funds ............... . . .. .............. 20 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position......... . ........................................ ....... .. ....... .......... 21 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ................................................... ... .. ..... ....................... .............. ........ ............ 22 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds to the Government-Wide Statement of Activities ... .......................................... . .................................................................. .23 Statement of Net Position - Proprietary Funds ........... ....................... ........ ...................................... 26 Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds ........ .......... 28 Statement of Cash Flows - Proprietary Funds .................. ...... ....................... ........................ ......... 29 Statement of Fiduciary Net Position - Fiduciary Fund ... .... ............................. ............... .................. 32 Statement of Changes in Fiduciary Net Position - Fiduciary Fund ..... ............................................ 33 Notes to the Basic Financial Statements ................................. .... ........ ... .. ................... ......................... 34 209
CITY OF LOS BANOS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
(Continued)
Required Supplementary Information
Statement of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:
PAGE
General Fund ......... .............. ... .. ...... ...... ... ... .. .. ........ .......................... ......... .. ..... ... ... .. ........ ........... 64 Impact Fees Special Revenue Fund .... .. ........ .. .............................. .. ... .. .. ... ....... .... .. ... .. ... .. ...... .... 66 CDBG and Home Grants Special Revenue Fund ............................... ....................... .... .. .. .. .. ..... 67 Streets and Roads Special Revenue Fund ............................. ... .......... .. .. ......... ............ ........ ... ... 68 Public Safety Special Revenue Fund .. .. .. ........ ... ........... ....... ............ .... ....... .. .. ........... ............ ..... 69 Notes to the Required Supplementary Information ..... ......... ................................................ ... .. .. 70 Proportionate Share of Net Pension Liability .. .. .. .. ... .......... .... ..... .................. .. ............................ .... .. .... 71 Schedule of Pension Contributions ....... ..... ......... ............. ............................ ....... .. .............. .................. 72 Schedule of Changes in the Net OPEB Liability and Related Ratios ........ ....... .. .. .. ...... .. ..................... 73 Schedule of OPES Contributions ......... .. ... ........... .. ...... ............................... ...... .. ........ ..................... ..... 7 4 Combining and Individual Fund Financial Statements and Schedules Combining Balance Sheet - Nonmajor Governmental Funds ........ .. ...... ........ .. ... .. .. .. .. ............ .. .. .... ... . 78 Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds .. .................................. ... ......... ... ........ .. .......... 79 Schedule of Revenues, Expenditures and Changes in Fund
Balance - Budget to Actual - Assessment District Fund ...... .. ..... .. .. ........ .. .......... .. .. ........ ................ 80 Schedule of Revenues, Expenditures and Changes in Fund
Balance- Budget to Actual - HCD Grant Fund .. .. ...... .. ... ...... ... .. .......... ....... ....... ...... .................. .... 81 Combining Statement of Net Position - Internal Service Funds .................. .. .. ... ..... ...... .. ......... ........ ... 84 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds .. ... ............................. ............... ....... ..................... ... ............. 85 Combining Statement of Cash Flows - Internal Service Funds ................................... ....... .. ............. 86 210
STATISTICAL SECTION
CITY OF LOS BANOS
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
(Continued)
PAGE
Net Position by Components - Last Ten Fiscal Years . .. .............. ........... ............... ... ........... .................... 90 Changes in Net Position - Last Ten Fiscal Years ................................................................................. ... 91 Fund Balances, Governmental Funds - Last Ten Fiscal Years ...................................................... .. ........ 93 Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years ..... ............ ............................ 94 Assessed Actual Value of Taxable Property - Last Ten Fiscal Years ........ .. ........................ .. .............. ..... 96 Tax Revenue by Source, General Fund - Last Ten Fiscal Years ................ ................... ... ... .. .................. 97 Direct and Overlapping Property Tax Rates - Last Nine Fiscal Years .. ........ .. ............. ........................ ..... 98 Principal Property Taxpayers - Current Year and Ten Years Ago ..... ............ ................ .. ................... .. .... 99 Property Tax Levies and Collections - Last Ten Fiscal Years .................... .. .......................... ...... ........ 100 Ratios of Outstanding Debt by Type- Last Ten Fiscal Years ................. .... .............. ............................. 101 Ratios of General Fund Debt Outstanding - Last Ten Fiscal Years ............. ....................... ... .. ............. 102 Direct and Overlapping Governmental Activities Debt ......... ..................... ......................... ................ .... 103 Legal Debt Margin Information - Last Ten Fiscal Years .. .. ..... .. ...................................... .. .. ......... ... ........ 104 Pledged-Revenue Coverage- Last Ten Fiscal Years ...... .. .... ....... ............................................. ........... . 105 Demographic and Economic Statistics - Last Ten Fiscal Years .. .. ..... ....... .............. .. ........ ............. ....... 106 Principal Employers - Current Year and Nine Years Ago ... ........ ...... ... ....................... .. .......... ... ........ .. . 107 Full-Time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years ....... 108 Operating Information, Operating Indicators by Function/Program - Last Ten Fiscal Years ................ 109 Operating Information, Capital Assets Statistics by Function/Program - Last Ten Fiscal Years ........ .. 110 211
INTRODUCTORY SECTION
212
LOsBanos
December 17, 2021
Honorable Mayor,
Members of the City Council, and
Citizens of the City of Los Banos
City Hall
520 J Street
Los Banos, CA 93635
Phone: (209) 827-7000
Fax: (209) 827-7010
www.losbanos.org
SUBJECT: Annual Comprehensive Financial Report - June 30, 2021 We are pleased to submit the Annual Comprehensive Financial Report (ACFR) of the City of Los Banos (City) for the fiscal year ended June 30, 2021. This report is published in accordance with local ordinance and state law requirements that financial statements be presented in conformity with Generally Accepted Accounting Principles (GAAP) and audited in accordance with Generally Accepted Auditing Standards by a firm of licensed certified public accountants.
This report consists of management's representations concerning the finances of the City.
Management assumes full responsibility for the completeness and reliability of all information presented in this report. In order to provide a reasonable basis for making these representations, management of the City has established an internal control framework designed both to ensure the assets of the government are protected from loss, theft or misuse, and to ensure adequate accounting data is compiled to allow for the preparation of the financial statements in conformity with GAAP. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. As a recipient of federal, state, and local financial assistance, the City is also responsible for ensuring that an adequate internal control structure is in place to ensure and document compliance with applicable laws and regulations related to the appropriate programs. This internal control structure is subject to periodic evaluation by management.
Price Paige & Company, a firm of licensed certified public accountants approved by the City Council, has audited the City's financial statements. The goal of the independent audit is to provide reasonable assurance that the financial statements of the City for the fiscal year ended June 30, 2021, were free of material misstatement. The independent audit involved examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.
Price Paige & Company concluded based upon the audit, that there is reasonable basis for rendering an unmodified ("clean") opinion that the City's financial statements for the fiscal year · ended June 30, 2021, were fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the finandal section of this report.
In addition, the City may be required to undergo an annual single audit in compliance with provisions of the Title 2 U.S. Code of Federal Regulations. The report of the Single Audit is published separately from this ACFR. This fiscal year a Single Audit was not required as the City expended less than the threshold amount of federal awards which is outlined in the requirements. 213
Generally accepted accounting principles require that management provide a narrative introduction, overview, and analysis to accompany the basic financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The City's MD&A can be found in the financial section of this document, immediately following the . report of the independent auditor.
Proflle of the City Los Banos
The City, incorporated in 1907 as a General Law City has a population of 42,869, and is the second largest city in Merced County. The City is located near the geographical center of California in the San Joaquin Valley approximately 70 miles northwest of Fresno, 80 miles east of the Pacific Ocean and 120 miles south of Sacramento. The Crossroads of California describes Los Banos because State Highway 33, 165 and 152 pass through the City and Interstate 5 is six miles to the west. Los Banos is famous for its agricultural products, including melons, almonds, walnuts, apricots, cotton, tomatoes, and dairy products.
The City delivets a full range of municipal services which include Police, Fire, Co111Iil.Uhity and Economic Development, Recreation, Park Maintenance, and Public Utilities under the CouncilManager form of government. The City Council meets the first and third Wednesdays of every month. Policy making and legislative authority are vested in the City Council, which consists of a Mayor and four Council Members. The Mayor is directly elected by the people and serves a two year term. Four Council Members, a City Clerk, and a City Treasurer are elected and serve four year terms. The City Manager isappointed by the City Council and is responsible for implementing .policies and overseeing the day-to-day operations of the City. the City Council is required to adopt a budget no later than the close of the prior fiscal year. Toe budget is prepared by fund (e.g. General Fund) and department (e.g. Police). After adoption, departmental adjustments may be done with the approval from the City Manager provided that there is no change to the fund balance. Budget amendments to increase appropriations may be taken to the City Council for their approval throughout the year.
Local Economy
Important to any community is the current economic condition and outlook for the Nation, the State, and the City. As the City begins to recover from the COVID-19 pandemic, economic forecasts for the City and Merced County show signs of improvement. The financial fallout of the pandemic has been significant but the economy is beginning to recover as retail stores, fitness centers, and restaurants start to operate at full capacity once more. Sales and transient occupancy taxes have seen an improvement within our city as citizens start to shop and travel now that all shelter in place restrictions have been lifted. Even with the pandemic restrictions lifted the financial outlook post COVID still remains a bit uncertain. Economic recovery signs are promising but it is still too soon to tell if City finances will return to their pre-pandemic state. Toe State and Nation as a whole is experiencing high fuel prices and inflation which could lead to less consumer spending and limited travel in the future.
Unemployment rates are slowly on the mend; the City experienced a decrease in unemployment rates at 13.5%, down from last year's 20%. Merced County's unemployment rate of 10.8% is a decrease from last year's rate of 15.6%. California's unemployment rate is 8.0% also down from last year's number of 14.9%. These numbers reflect the current pandemic and the opening back up of business. As employment is an integral component to our economy, City staff continues to ii
214
work with two recruitment finns to help attract potential businesses to the community. The City contracted with Buxton Company to solicit national retailers and major businesses and with Chabin Concepts to assist with industrial recruiting. As more busint;:sses move to the City with the help of these partnerships, the City will benefit immensely with job creation, increased sales tax revenue, and a larger property tax base.
The City issued over 453 new residential pennits and finalized a total of 457 permits in Fiscal Year 2020-2021. These numbers continue to be a reflection of the shortage in available homes in the Central Valley and the demand for affordable housing from the -Bay Area. In Fiscal Year 2020- 2021 there were six finaled commercial building permits; which include Crocker's Lockers Self Storage, Rocha Office Building, Arco AM/PM Fuel Station and Car Wash, Los Banos Memory Care Facility, Big Lots and Grocery Outlet. The following projects are new isssuances to date for Fiscal Year 2021-2022 and will also bring additional benefit to the City: IHOP, Legacy Construction Commercial Strip and Mini Storage, Merced School Employees Federal Credit Union and Always Rescue Plumbling.
Long Term Financial Planning
The City maintains an annual budget and . it serves as the foundation for the City's financial planning and control. The objective of these controls is to ensure compliance with legal provisions embodied in the annual-appropriated budget adopted by the City Council. The level of budgetary control (i.e. the level where the expenditures cannot legally exceed the appropriated amount) is maintained' at the departmental level for the General Fund and at the fund level for all other funds.
Department heads may transfer resources within a department as they see fit with the approval of the City Manager. The City Council may amend funds by an affirmative vote at any regular or special City Council Meeting.
The City Council has approved to maintain a 30% General Fund reserve to safeguard the City and improve its ability to respond to emergency needs. The current year budget provides a 79% operating reserve in the General Fund. This policy provides reassurance and protection against uncertain fluctuations in the local economy.
Retirement rates have increased as a result of CalPERS' changes in the amortization period for the unfunded accrued liability and the phasing down of the decrease in the discount rate implemented in previous years. CalPERS experienced 21.3% favorable investment returns which triggered a reduction of the discount rate to 6.8%. This lower discount rate will increase unfunded liability and employer normal costs moving forward. These current changes will first impact contribution rates in FY 2023-2024. The City continues to develop a plan to help mitigate the anticipated impact of future increases in employer rates and has assigned $2,000,000 in funds to assist with these rate impacts. The City is currently looking at plans to utilize these funds either by investing in a Section 115 Trust, paying down the unfunded accrued liability, or use the funds to help pay future employer contributions.
Major Achievements and Future Objectives
The City's continued exploration of new revenues sources as well as expense management has proven positive in its efforts as the City strives to keep up with personnel, infrastructure and equipment needs. There is an outlined five-year Capital Improvement Plan in the current budget to recognize capital needs throughout the City. Some of those objectives include:
Administration Department
• City Hall Renovation
iii
215
• Financial Software
• Point to Point Internet
• VMWare Host Replacement
Community and Economic Development
• Digitl;ll Sign Replacement
• Downtown Gateway Signage
• Downtown Infrastructure
Police Department
• New Mobile Display Computers (MDC)
• License Plate Reader
• Fleet Replacement
• New Police Department Building
• VMWare Host Replacement
Fire Department
• Fire Station #2 Addition
• Station Security
• Turnouts
• CPR Compression Machines
• Live Fire Training Room
• Personal Protective Gear/Equipment Replacement
• New Mobile Display Computers (MDC)
Public Works Department
• Ariel Boom Truck
• Playground Replacements - Catholic Park, Davis Park, Little Page Park • Stump Grinder
• Concrete Grinder
• Cartegraph Software
• Street Overlays
• 2022 Street Rehabilitations
• Center A venue Improvements
• Community Center Fence/ Camera / Parking Lot
• Signal Synchronization Project
• Ag Sports Complex Improvements
• Splash Park Improvements
• Fairground Area Water Line
• Well 16
• Central City Sub-Basin
• Nantes Storm Basin
• Pine Storm Line
• Sewer Lift Station Rehab - Cresthills
• Sewer Line Repair Junction of SR165/152
• Potable Water
• Hot Mix Pavement of Access Road to WWTP
• Backhoe
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• Street Sweeper
• Fleet Replacement
Information Technology Department
• Phone System Replacement
• Network/Server and Computer Replacement
Cash Management
The City finance staff focuses on safety, liquidity and yield of investments. The highest priority of cash management and .investments is to ensure adequate funds are available to meet the City's obligations and all investments are in safe instruments. Yield, while important, is considered in third priority after safety and liquidity. The City invests in the Local Agency Investment Fund (LAIF) operated by the state for the benefit of local governments. The City also has investments in Wells Fargo Institutional Securities. Bond proceeds, debt service monies, debt service reserves, etc. are invested according to the bond covenants of each issue. Finance staff continues to work on updating the City's investment policy in order to improve the rate of returns on the City's investments, while still maintaining the safety and liquidity needs of the City.
Awards and Acknowledgments
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement of Excellence in Financial Reporting to the City of Los Banos for its ACFR for the fiscal year ended June 30, 2020. This is the seventh year that the City has achieved this prestigious award. In order to receive the Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. This report must satisfy both GAAP and appJicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe that our current ACFR continues to meet the Certificate of Achievement Program's requirements and we are submitting it to the GFOA to determine its eligibility for another certificate; We would like to recognize the Mayor and City Council for their guidance and support in the City's pursuit of excellence in financial reporting. The preparation of the Annual Comprehensive Financial Report was made possible by the dedicated service of the entire Finance Department staff. We are profoundly proud of the ACFR and our department is committed to producing financial statements that are accountable and informative to the public. Credit must also be given to all members of the departments who assisted and contributed to the preparation of this report.
The City continues to strive to maintain fiscal sustainability, efficiency in services, and a safe and healthy community for our citizens to live and thrive.
Respectfully submitted,
5u\A_E::~
Sonya Williams
Finance Director
V
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Gm-emment Finance Officers :\:ssociation
Certificate of
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for Excellence
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Pre<:,euted to
(, alifornia
For it, Annual Compreheu~iye
fimmcia1 Report
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June 30. 2020
~ p. ~
vi
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Mayor
Mayor Pro Tern
Council Member
Council Member
Council Member
City Clerk
City Treasurer
City Manager
City Attorney
Human Resources Director
Fire Chief
Police Chief
City of Los Banos
Directory of City Officials
June 30, 2021
Elected Officials
Appointed Officials
Public Works Director/Engineer
Finance Director
Community & Economic Development Director
viii
Manuel Thomas Faria Ill
Deborah Lewis
Brett Jones
Kenneth Lambert
Refugio Llamas
Lucy Mallonee
Kimberly Tomas
Josh Pinheiro
William Vaughn
Lucy Mallonee
Mason Hurley
Gary Brizzee
Vacant
Sonya Williams
Stacy Souza Elms
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FINANCIAL SECTION
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PRICE PAIGE & COMPANY
Accountancy Corporation
The Place to Be
INDEPENDENT AUDITOR'S REPORT
To the Honorable Mayor and
Members of the City Council
City of Los Banos, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Los Banos, California (the City), as of and for the year ended June 30, 2021 , and the related notes to the financial statements, which collectively comprise the City's basic financial statements as listed in the table of contents.
Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes 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.
Auditor's Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. 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. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Los Banos, California, as of June 30, 2021 , 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.
570 N. Magnolia Avenue, Suite 100
Clovis, CA 9361 I
www.ppcpas.com
tel 559.299.9540
fax 559.299.2344
227
Emphasis of Matter
As described in Note 14 to the financial statements, in 2021 , the City adopted new accounting guidance, GASS No. 84, Fiduciary Activities. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3-13, budgetary comparison schedules on pages 64-69, the proportionate share of net pension liability on page 71, the schedule of pension contributions on page 72, the schedule of changes in OPES liability and related ratios on page 73, and the schedule of OPES contributions on page 74, be presented to supplement the basic financial statements. Such 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. 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.
Other 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 introductory section, combining and individual nonmajor fund financial statements, and statistical section, are presented for purposes of additional analysis and are not a required part of the basic financial statements.
The combining and individual nonmajor fund financial statements and the related budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements and related budgetary comparison schedules are fairly stated in all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2021 , on our consideration of the City's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City's internal control over financial reporting and compliance.
{ rit" P~i 1 C~~()
Clovis, California
December 20, 2021
2 228
CITY OF LOS BANOS
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2021
As management of the City of Los Banos (City), we offer readers of the City's financial statements this narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2021 . We encourage readers to consider the information presented here in conjunction with the additional information that we have furnished in our letter of transmittal, which can be found on pages i-v of this report.
Financial Highlights
The City's assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $234,334,030 (net position). The unrestricted net position of $34,012,807 may be used to meet the government's ongoing obligations to citizens and creditors.
The City's total net position increased by $25,621,029, with $15,629,575 attributable to governmental activities and $9,991,454 attributable to business-type activities. The City's total assets increased by $27,928,111 due to various equipment purchases and infrastructure improvements throughout the year. Liabilities increased by $3,033,439. An increase in accounts payable, compensated absences, and pension and OPEB liabilities contributed to this increase.
The deferred outflows of resources increased by $50,291 and was mainly due to Other Post-Employment Benefits (OPEB) related activity within the governmental type activities funds. The deferred inflows of resources decreased by $676,066. The decrease can be largely attributed to OPEB activities in the governmental type funds as well.
As of the close of the current fiscal year, the City's governmental funds reported a combined ending fund balance of $76,323,649. This is an increase of $15,801 ,684 in comparison with the prior fiscal year.
Approximately 23.9% or $18,269,391 is available for spending at the government's discretion and is referred to as the unassigned fund balance.
At the end of the current fiscal year, total fund balance for the general fund was $28,638,436. Of this amount, $5,911 ,193 was assigned for various capital projects and Measure H expenditures, $4,457,852 was committed for public safety capital outlay, the City's general plan update, and the new police station project. $18,269,391 was unassigned for discretionary use. The unassigned fund balance is 105% of the total general fund expenditures.
Overview of the Financial Statements
This Management's Discussion And analysis is intended to serve as an introduction to the City's basic financial statements. The City's basic financial statements consist of three components: 1) government-wide financial statements 2) fund financial statements, and 3) notes to the basic financial statements. This report also includes supplementary information intended to furnish additional detail to support 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.
The statement of net position presents financial information on all the City's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
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Both of the government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues, referred to as governmental activities from other functions that are intended to recover all or a significant portion of their costs through user fees and charges, known as businesstype activities. The governmental activities of the City include general government, public safety, highways and streets, parks and recreation, and economic development. The business-type activities of the City include water, wastewater, airport, and solid waste operations.
The government-wide financial statements include not only the City itself which is known as the primary government, but all legally separate entities or component units for which the government is financially accountable. Currently, there are no component units of the City.
The government-wide financial statements can be found on pages 16-18 of this report.
Fund Financial Statements. A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental funds, proprietary funds, and fiduciary funds.
Governmental Funds. Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year.
Such information may be useful in assessing a government's near-term financing requirements.
Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
The City maintains sixty-nine (69) individual governmental funds . Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the general fund, impact fee special revenue funds, CDBG & Home grant special revenue funds, streets and roads special revenue funds, public safety special revenue funds, and capital grants special revenue fund which are considered to be major funds. Data from the nineteen (19) non-major governmental funds are combined into a single aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.
The City adopts an annual appropriated budget for its general fund. A budgetary comparison statement has been provided for the general fund to demonstrate compliance with this budget.
The basic governmental fund financial statements can be found on pages 20-23 of this report.
Proprietary Funds. The City maintains two different types of proprietary funds . Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements.
The City uses enterprises funds to account for its water, wastewater, airport, and solid waste operations.
Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for the management of its retiree health benefits, its information technology, and for its fleet of vehicles. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements.
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Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The proprietary fund financial statements provide separate information about the activities the government operates like businesses, such as the water, wastewater, and solid waste systems as well as the municipal airport, all of which are considered to be major funds of the City. Conversely, all internal service funds are combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the internal service funds are provided in the form of combining statements in the combining and individual fund statements and schedules section of this report.
The basic proprietary fund financial statements can be found on pages 26-29 of this report.
Fiduciary Funds. Fiduciary funds are used to account for resources held for the benefit of parties outside of the government. Fiduciary funds are not reported in the government-wide financial statements because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds .
At this time, the City maintains the Neighborhood Stabilization Program (NSP) Impound Fund as a fiduciary fund. This custodial fund reports resources held by the City in a custodial capacity for individuals, private organizations, and other governments.
The fiduciary fund financial statements can be found on page 32-33 of this report.
Notes to the Financial Statements. The notes provide additional information that is necessary to acquire a full understanding of the data provided in the government-wide and fund financial statements. The notes to the financial statements can be found on pages 34-62 of this report.
Othe_r Information. In addition to the basic financial statements and accompanying notes, this report also presents required supplementary information concerning the City's progress in funding its obligation to provide pension and other post-employment benefits (OPES) to its employees. Required supplementary information can be found on pages 64-74 of this report.
The combining statements referred to earlier in connection with non-major governmental funds and internal service funds are presented immediately following the required supplementary information on pensions and OPES. Combining and individual fund statements and schedules can be found on pages 78-86 of this report.
Government-wide Overall Financial Analysis
Net Position: A condensed presentation of the City's net position shown below totals $234,334,030 as of June 30, 2021 .
(in thousands of dollars)
Governmental Activities Business-~ee Activities Total Activities 2020 2021 2020 2021 2020 2021
Current and other assets $ 65,083 $ 80,560 $ 60,278 $ 72,021 $ 125,361 $ 152,581 Capital assets 70,994 72,183 55,420 54,940 126,414 127,123 Total Assets 136,077 152,743 115,698 126,961 251,775 279,704 Deferred outflows of resources 7,283 7,424 2,174 2,084 9,457 9,508 Long-term liabilities outstanding 30,876 32,261 14,654 14,844- 45 ,530 47,105 Other liabilities 2,029 2,266 1,483 2,706 3,512 4,972
Total liabiltties 32,905 34,527 16,137 17,550 49,042 52,077 Deferred inflows of resources 2,544 2,099 932 701 3,476 2,800 Net position:
Net investment in capital assets 70,986 72,183 55,420 54,940 126,406 127,123 Restricted 41,606 50,091 18,400 23,108 60,006 73,199
Unrestricted (4,681 ) 1,267 26,983 32,746 22,302 34,013 Total net position $ 107,911 $ 123,541 $ 100,803 $ 110,794 $ 208,714 $ 234,335 5 231
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By far, the largest portion of the City's net position (54.2%) reflects its investment in capital assets (e.g. , land, buildings, machinery, equipment, vehicles, and infrastructure), less any related outstanding debt that was used to acquire those assets. The City uses these capital assets to provide a variety of services to its citizens.
Accordingly, these assets are not available for future spending . Although the City's investment in capital assets is reported net of related debt, it should be noted that the resources used to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities.
An additional portion of the City's net position (31.2%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $34,012,807 is unrestricted and may be used to meet the government's ongoing needs and obligations to its citizens and creditors.
At the end of the current fiscal year, the City is able to report positive balances in all of the reported categories of net position, both for the government as a whole, as well as for its separate governmental and business-type activities. The prior fiscal year showed positive balances in all but one of the reported categories.
Changes in Net Position: Below is a current year recap of the changes in net position. The full Statement of Activities can be seen on Page 18.
Program revenues
General revenues
Governmental expenses
Business-type expenses
Net increase (decrease)
2020
$ 49,577,728
20,004,183
(33,167,681)
(17,637,105)
$ 18,777,125
2021
$ 50,165,391
25,471,304
(31 ,671,209)
(18,344,457)
$ 25,621 ,029
Program revenues reflect charges for services, operating and capital grants or contributions for other sources.
General revenues consist of a variety of taxes, unrestricted investment earnings, and gain on sale of capital assets. These revenues reflect a $5,467,121 overall increase from the 2020 fiscal year. This increase was primarily due to increases in property and sales tax.
The City's overall net position increased $25,621,359 (12%) from the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business-type activities.
Key elements of this increase are as follows:
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(in thousands of dollars)
Governmental Activities Business-!}:ee Activities Total Activities 2020 2021 2020 2021 2020 2021
Program revenues:
Charges for services $ 8,896 $ 10,355 $ 22,833 $ 26,264 $ 31,729 $ 36,619 Operating grants 6,015 4,052 25 130 6,040 4,182
Capital grants 10,976 8,218 834 1,146 11 ,810 9,364
General revenues:
Property taxes 7,306 9,382 4 4 7,310 9,386
Sales taxes 7,751 12,762 7,751 12,762
Other taxes 1,085 1,203 1,085 1,203
Use of money and property 1,877 902 1,139 189 3,016 1,091 Motor vehicle in-lieu 33 31 33 31
Gain on sale of capital assets 37 85 5 85 42
Miscellaneous 215 358 509 598 724 956
Total revenues 44,154 47,300 25,429 28,336 69,583 75,636 Expenses:
General government 1,615 1,681 1,615 1,681
Public safety 18,937 18,001 18,937 18,001
Highways and streets 6,457 6,232 6,457 6,232
Parks and recreation 5,132 4,813 5,132 4,813
Economic development 1,019 942 1,019 942
Interest on long-term debt 7 7 1
Water 4,810 5,132 4,810 5,132
Sewer 4,897 4,879 4,897 4,879
Airport 337 306 337 306
Solid waste 7,594 8,028 7,594 8,028
Total expenses 33,167 31 ,670 17,638 18,345 50,805 50,015 Increase (decrease) in
net position before transfers 10,987 15,630 7,791 9,991 18,778 25,621 Transfers (3) 3
Increase (decrease) in
net position 10,984 15,630 7,794 9,991 18,778 25,621
Net position - beginning 96,927 107,911 93,009 100,803 189,936 208,714 Net position - ending $ 107,911 $ 123,541 $ 100,803 $ 110,794 $ 208,714 $ 234,335 Governmental Activities. During the current fiscal year, net position for governmental activities increased $15,629,575 or 14.5% from the prior fiscal year for an ending balance of $123,540,628. The City is experiencing growth in property tax due to development and home sales and an increase in sales tax due to consumer spending. The increase in the overall net position of governmental activities is the result of this tax revenue growth. The full Statement of Net Position can be found on Pages 16-17.
Business-type Activities. For the City's business-type activities, the results for the current fiscal year were positive in that overall net position increased to reach an ending balance of $110,793,402. The total increase in net position for business-type activities (water, wastewater, and solid waste and airport funds) was $9,991,454 or 9.9% from the prior fiscal year. The growth, in large part, is attributable to an increase in charges for services the water, wastewater and solid waste activities. As a result, charges for services increased $3,432,017 from the previous year's amounts. The City adopted rate increases effective July 1, 2019, for five years.
Net Cost of Services: The table below presents the total cost of each of the City's governmental activities as well as each of the activities' net cost (total cost less fees generated by the activities and intergovernmental aid).
The net cost shows the financial burden that was placed on the City's taxpayers by each of these functions.
The total governmental activities costs of $31 ,671,209 were offset by charges for services of $10,355,202, operating grants/contributions of $4,052,293, and capital grants/contributions of $8,218,079, bringing the net expense to cost of services to $9,045,635. Streets received a total of $6,029,369 and Public Safety received $1,679,019 from capital grants/contributions reflecting the restricted subventions for infrastructure and other capital improvements. Public Safety represents the highest proportion of total net costs at $12,808,622. 7 233
(in thousands of dollars)
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MANAGEMENT'S DISCUSSION AND ANALYSIS
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Total Cost of Service Net Cost of Service
2020 2021 2020 2021
General government $ 1,615 $ 1,681 $ (677) $ (39)
Public. safety 18,937 18,002 (6,515) (12,809)
Highways and streets 6,457 6,232 1,585 3,011
Parks and recreation 5,132 4,813 (820) 1,443
Economic development 1,019 942 (848) (651)
Interest of long-term debt 7 {6~ {1 )
Total $ 33,167 $ 31 ,670 $ {7,281) $ {9,046)
Financial Analysis of Governmental Funds
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. These funds have been classified as governmental or proprietary.
Governmental Funds
The focus of the City's governmental funds is 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 serves as a useful measure of a government's net resources available for spending at the end of the fiscal year.
To provide an overview of the City's funds, following is a table showing the increases and (decreases) to total assets, liabilities, revenues, and expenditures of the City fund types from fiscal year 2020 to 2021 . The total revenues and expenditures do not include any "other financing sources (uses)." Increase (Decrease) from Prior Year
Assets Liabilities Revenues Exeenditures
General fund $ 6 ,696,763 $ (255,730) $3,250,883 $ (343,554) Special revenue funds 8,490,033 40,945 4,200,552 (1 ,064,782) Capital projects fund 4,955 5,091,760 (7,887)
Other funds 108,873 (39,026) 42,890 (217,866)
As of June 30, 2021 , the City's governmental funds reported combined ending fund balances of $76,323,649 or an increase of $15,801,684 from the prior fiscal year. Approximately 62.5% of this total amount ($47,685,213) is not available for new spending because it is restricted to impact fee related projects and capital grant projects.
Of the remaining balance, $136,112 is assigned for economic development, $2,483,488 for general capital projects, $421 for public safety capital projects, $2,000,000 for future PERS employer contributions, and $1,291 ,172 for Measure H activity. $18,269,391 or 23.9% as unassigned and available for spending in the future at the government's discretion. However, approximately $5.2 million of the General Fund's unassigned fund balance is needed to comply with the City's minimum fund balance policy.
General Fund
The assets in the General Fund realized an increase of 29% whereas liabilities decreased by 15%. The total fund balance for General Funded ended the year at $28,638,436 with $18,269,391 as unassigned and available for discretionary use. This was an overall fund balance increase of 32% from the previous fiscal year. The significant reasons for the increase to the total general fund balance was due to growth in property and sales tax revenues and permit activity due to increased development within the City. Further analysis of the General Fund budget is discussed below under the "General Fund Budgetary Highlights". 8 234
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Major Governmental Funds. There are six major governmental funds: <Seneral Fund, Impact Fees Special Revenue Fund, CDBG and HOME Grants Special Revenue Fund, Streets and Roads Special Revenue Fund, Public Safety Special Revenue Fund, and Capital Grants Special Revenue Fund. Changes in the General Fund are highlighted in the Financial Analysis section above. The following are changes in the other major funds:
Impact Fee Fund. These funds account for fees collected from developers for new development and used for future impact of capital needs within the City. At June 30, 2021, the impact fee funds had a total fund balance of $28.6 million. The entire amount of the fund balance has been committed for capital projects. During the current year, funds were expended towards City Hall rehabilitation for ADA compliance, engine and equipment purchases for Fire, construction of a Dog Park, upgrade lighting at Colorado Skate Park, and expenditures related to the new Police facility. Most of the remaining fund equity position will be used on expanding public safety facilities in order to mitigate the safety impact from new development.
CDBG and HOME Grants. These funds account for grant funding received from the State of California to assist low to moderate income homeowners. The total fund balance at June 30, 2021 , was $434,102 and was generated from repayment of loans. These funds are restricted and are required to be sent back to the State or used back into the program. The City will util ize all program income available.
Streets and Roads. These funds include Regional Surface Transportation Program (RSTP), Transportation Expenditure Plan (TEP), Gas Tax, and Local Transportation Fund (L TF). These funds are used to maintain, repair, and improve the City's 123 miles of streets, 5 miles of alleys, 227 miles of curbs and gutters, and 216 miles of sidewalks. The fund balance at June 30, 2021 was $5.4 million for these funds.
Public Safety Special Revenue. These funds are generated from a half cent sales tax for public safety known as Measure P. In November 2014 Measure K was passed which extended Measure A for an additional 7 years.
The majority of Measure P funds are used for personnel. The total fund balance at June 30, 2021 was $7.5 million. These funds also account for revenues received for public safety grants, impact fees, and community facility districts.
Capital Grants. These funds are used for major capital projects. They include the Traffic Mitigation fund which are fees collected from developers to help mitigate the development impact on the City. The Emergency Operations Fund is also in this grouping. The City received $5,000,000 from the state in fiscal year 2019-2020 to build an emergency operations center in the future. The total fund balance at June 30, 2021 was $5.2 million.
Non-Major Governmental Funds. These funds include Assessment Districts which are used to maintain the sidewalks, landscaping, parks, street signs, streetlights, trees, fences, and storm drains within designated districts throughout the City; and Housing Community Development grant used to help cities prepare and implement plans and process improvements that streamline housing approvals and accelerate housing production. The total fund balance at June 30, 2021 was $343,213.
There are no restrictions, commitments, or other limitations that would significantly affect the availability of fund resources for the future.
General Fund Budgetary Highlights
Original budget compared to final budget. At mid-year, the City Council approved budget adjustments for the general fund. The most significant adjustment to expenditures at mid-year was an increase to specialized equipment of $100,000 to purchase 10 Self Contained Breathing Apparatus for Fire. 9 235
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Final budget compared to actual results. Total revenues exceeded budget expectations by $3,099,705 or 15%. The most significant differences between estimated revenues and actual revenues were property taxes and sales t_ax. Revenue for property taxes was anticipated at $7,163,445 but the actual amount received was $7,987,042 for a $823,597 amount over budget. Estimated revenues for sales tax was $7,376,335 and the actual amount received was $9,282,344 exceeding the budget by $1,906,009. These positive variances exceeded the budget by 19% or $2,729,606. This was due to increased property values and home sales for property taxes and increased consumer spending within in the City.
Expenditure variances were positive coming in 14.4% under the amended budget. The most significant savings were found in public safety, parks and recreation, and capital outlay. Public safety realized a variance of $1,845,242 parks and recreation $512,193, and capital outlay $232,800. There was a total variance of $2,921 ,508 between the amended budget and actual expenditures.
In fiscal year 2018-2019, the citizens of Los Banos passed a ½ percent sales tax measure known as the Los Banos Essential City Services Measure (Measure H). The sales tax proceeds from this measure are used to support vital services of the City, such as Public Safety and Recreation, and to maintain fiscal sustainability. A Citizens' Oversight Committee was established to review, make recommendations, and annually report on the revenue and expenditures of these funds. Since the establishment of Measure H, the City has been able to hire additional Public Safety and Recreation personnel as well as purchase equipment for Police and Fire and offer more recreational activities. The City budgeted $2.5 million in Measure H sales tax revenue and received $3.5 million exceeding budget expectations by $1 million. Measure H expenditures were budgeted at $2,113,235 and ended the year at $1,658,986. This was an expenditure savings of $454,249 for the fiscal year.
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, 2021, amounts to $127,122,611 (net of accumulated depreciation). This investment in capital assets includes land, buildings, machinery, equipment, vehicles, park facilities, roads, highways, bridges, wells, and the wastewater treatment plant. There was a total increase in capital assets for the current fiscal year in the amount of $716,784.
For governmental activities, capital assets increased $1,196,774 and business-type activities decreased by. $479,990 in fiscal year 2020-2021 .
A recap of the City's capital assets, net of accumulated depreciation, is shown next:
(in thousands of dollars)
Governmental Activities Business-~~ Activities Total
Descrietion 2020 2021 2020 2021 2020 2021
Land $ 8,608 $ 8,608 $ 8,068 $ 8,068 $ 16,676 $ 16,676
Buildings and improvements 18,487 18,522 10,055 10,063 28,542 28,585 Equipment 17,471 18,492 10,650 11 ,461 28,121 29,953
Infrastructure 139,225 143,445 69,828 71 ,183 209,053 214,628 Construction in progress 783 2,731 188 246 971 2,977
Less: accumulated depreciation (113,581) (119,615) (43,369) (46,081) (156,950) (165,696) Total capital assets $ 70,993 $ 72,183 $ 55,420 $ 54,940 $ 126,413 $ 127,123 The City's depreciation expense for the year totals $8,999,900. This includes $6,263,603 in depreciation expense for governmental activities and $2,736,297 for the business-type funds. There is more detailed information about the City's capital assets in Note 6 to the financial statements on page 47-48 of this report.
Major capital asset events during the current fiscal year include the projects stated as follows:
• Contained Breathing Apparatus paid by Fire in the amount of $104,009. • Playground Equipment at City Park paid by Recreation in the amount of $87,254. 10 236
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• Purchase of Fire Engine with equipment paid by Fire in the amount of $649,439. • Street Overlays paid by Streets in the amount of $376,246. • 2021 Freightliner Flatbed Dump Truck paid by Water fund in the amount of $116,235. • 2021 Ford F-250 Medium Duty Utility Truck paid by Wastewater fund in the amount of $50,521 . • WWTP Access Road Pavement Project paid by the Wastewater fund in the amount of $134,582. • 2021 Caterpillar 420 Backhoe Loader paid by Solid Waste fund in the amount of $154,933. • John Deere 6105E Tractor Mower paid by Solid Waste fund in the amount of $156,222. • Network Infrastructure Refresh Project paid by Information Technology in the amount of $71,674.
Long-term Debt: A recap of the City's long-term debt is shown below. Changes in the total outstanding longterm debt include a decrease of $65,059 or 7% for the current fiscal year. The decrease in capital leases was due to the City paying off its vehicle lease as required. An increase of $72,632 was recorded for employee compensated absences.
(in thousands of dollars)
Governmental Activities Business-tlee Activities Total
Debt T:tees 2020 2021 2020 2021 2020 2021
Capital leases $ 8 $ $ $ $ 8 $
Comp. absences 747 833 240 227 987 1,060
Total debt $ 755 $ 833 $ 240 $ 227 $ 995 $ 1,060
More detailed information about the City's long-term debt is presented in Note 7 to the financial statements.
Economic Factors and Next Year's Budgets and Rates
The City's property taxes are received in January and April whereas sales taxes are received on a monthly basis requiring the City to maintain a reserve in order to meet cash-flow needs of the General Fund. Property tax values have risen therefore, so has the property taxes in lieu of vehicle license fees. Sales taxes have also continued to increase for the City. The City remains consistent with a conservative approach to revenues and anticipates a modest growth in General Fund revenues in the next fiscal year. The City will continue to work diligently to preserve existing reserves in order to meet additional personnel expenditures that will impact the General Fund in future fiscal years as well as impending infrastructure/capital project needs.
Personnel costs will increase for next fiscal year due to step increases for all employee groups and increases due to the Memorandum of Understandings entered into with the bargaining groups in 2021. Health benefits continue to rise as well as employer contributions to CalPERS for retirement benefits for employees.
The City is a member of a public entity risk pool (see notes to these financial statements). The City will see a 2% increase in workers compensation as well as an overall 32% increase in property, auto, and liability.
The City participates in the CalPERS retirement program for its employees. Changes that have affected the City's employer's rates include the changing of the amortization period for the unfunded accrued liability from a 30-year to a 20-year amortization period as well as phasing down the discount rate to 7%.
Following is the employee rate, employer's normal cost rate, and unfunded accrued liability (UAL) by fiscal year:
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Emeloyee
2020 8.00%
2021 8.00%
2022 8.00%
Employee
2020 7.00%
2021 7.00%
2022 7.00%
Employee
2020 7.25%
2021 7.25%
2022 7.25%
CITY OF LOS BANOS
MANAGEMENT'S DISCUSSION AND ANALYSIS
JUNE 30, 2021
2.7%@55 3%@50
Miscellaneous Safety
Employer Employer
Normal Cost UAL Employee Normal Cost
13.945% $715,298 9.00% 23.654%
15.037% $809,098 9.00% 25.540%
14.870% $973,034 9.00% 25.590%
2.0%@60 3%@55
Miscellaneous Safety
Employer Employer
Normal Cost UAL Emeloyee Normal Cost
8.668% $2,408 9.00% 20.603%
9.442% $4,743 9.00% 22.397%
9.300% $5,385 9.00% 22.470%
2.0%@62 2.7%@57
Miscellaneous Safety
Employer Employer
Normal Cost UAL Emeloyee Normal Cost
7.072% $3,357 12.75% 13.786%
7.874% $6,974 13.75% 13.884%
7.730% $7,878 13.75% 13.980%
13.75% 13.980%
UAL
$633,978
$735,609
$905,186
UAL
$1 ,159
$6,646
$7,523
UAL
$894
$5,047
$4,469 Police
$1 ,191 Fire
The City completed an actuarial study to be in compliance with Governmental Accounting Standards Board (GASB) pronouncement 75 to determine the unfunded liability for other post-employment benefits (OPEB). The City paid $881 ,554 for retirement health benefits and sent another $1,224,500 for future retiree health benefits to the California Employers' Retiree Benefit Trust (CERBT) in order to comply with the City's Actuarially Determined Contribution (ADC).
A five-year utility rate increase was adopted by City Council on June 5, 2019, that increased water, wastewater, and solid waste rates by CPI not to exceed 3.5%. These rate changes complied with Prop 218 and were approved by the City Council. In fiscal year 2020-2021 utility rates were increased by a CPI of 2.91 % as of July 1, 2020. The City will continue to evaluate current rates in the coming fiscal years to determine if the water, wastewater, and solid waste rates require additional adjusting in the future.
The City began work on an impact fee study to determine if the current impact fees in place were cost effective or if there was a need for an increase to meet future demands on the City. The development impact fee justification study was completed on December 31,2019. The revised impact fees were adopted by City Council on January 15, 2020 and became effective April 5, 2020. These impact fees were increased by CPI in September 2020.
A continued conservative budget has been prepared for FY 2021-2022 in anticipation of any lingering effects of COVID-19. The City is utilizing the CARES ACT funding to help mitigate extra expenditures associated with the pandemic. The City is also planning its uses for the ARPA funding that will be received this upcoming fiscal year as a response to the aftermath of COVID-19. The next steps for the City will be to plan for fiscal life after the pandemic and assess any vital needs that have been postponed as a result of this unprecedented event. 12 238
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REQUESTS FOR INFORMATION
This financial report is designed to provide the citizens, taxpayers, customers, investors, and creditors of the City with a general overview of the City's finances and to demonstrate the City's accountability for the money it receives. If you have questions about this report or need additional information, please contact:
City of Los Banos
Finance Department
520 J Street
Los Banos, CA 93635
(209) 827-7000
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BASIC FINANCIAL STATEMENTS
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CITY OF LOS BANOS
STATEMENT OF NET POSITION
JUNE 30, 2021
ASSETS
Cash and investments
Restricted cash and investments
Receivables:
Accounts receivable
Taxes receivable
Interest receivable
Intergovernmental receivables
Loans receivable
Internal balances
Inventories
Prepaid items
Capital assets, not being depreciated:
Land
Construction in progress
Capital assets, being depreciated:
Building and structures
Machinery and equipment
Infrastructure
Less: accumulated depreciation
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions
Deferred outflows from OPEB
Total deferred outflows of resources
LIABILITIES
Accounts payable
Deposits
Noncurrent liabilities:
Due within one year:
Compensated absences
Due in more than one year:
Compensated absences
Net pension liability
Net OPEB liability
Landfill closure and postclosure liability
Total liabilities
$
Governmental
Activities
73,321 ,517 $
550,040
3,330,563
27,758
1,334,818
2,405,672
(411 ,056)
8,607,773
2,731 ,614
18,522,589
18,491,649
143,445,228
(119,615,783)
152,742,382
4,738,901
2,684,925
7,423,826
1,489,676
11 ,087
765,302
67,576
19,192,430
13,000,726
34,526,797
Business-Type
Activities
46,183,734 $
23,107,727
2,213,597
26,329
29,674
411,056
43,651
5,000
8,067,666
246,171
10,062,987
11,461,562
71 ,182,651
(46,081,496)
126,960,309
1,209,552
874,657
2,084,209
1,666,933
813,020
226,966
5,805,496
4,235,194
4,802 ,845
17,550,454
The notes to the basic financial statements are an integral part of this statement. 16 Total
119,505,251
23,107,727
2,763,637
3,330,563
54,087
1,364,492
2,405,672
43,651
5,000
16,675,439
2,977,785
28,585,576
29,953,211
214,627 ,879
(165,697,279)
279,702,691
5,948,453
3,559,582
9,508,035
3,156,609
824,107
992,268
67,576
24,997 ,926
17,235,920
4,802,845
52,077,251
242
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions
Deferred inflows from OPEB
CITY OF LOS BANOS
ST A TEMENT OF NET POSITION
JUNE 30, 2021
(Continued)
Governmental
Activities
498,372
1,600,411
Total deferred inflows of resources 2,098,783
NET POSITION
Net investment in capital assets
Restricted for:
Public safety
Highways and streets
Parks and recreation
Development projects
Capital projects
Economic development
Landfill closure and postclosure costs
Total restricted
Unrestricted
72,183,070
7,538,082
5,466,118
343,213
28,658,988
5,244,710
2,839,774
50,090,885
1,266,673
Business-Type
Activities
179,301
521,361
700,662
54,939,541
21 ,359,383
1,748,344
23,107,727
32,746,134
Total
677,673
2,121,772
2,799,445
127,122,611
7,538,082
5,466,118
343,213
28,658,988
26,604,093
2,839,774
1,748,344
73,198,612
34,012,807
Total net position $ 123,540,628 $ 110,793,402 $ 234,334,030 The notes to the basic financial statements are an integral part of this statement. 17 243
CITY OF LOS BANOS
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2021
Net (Expense) Revenue and
Pro9ram Revenues Changes in Net Position
Operating Capital
Charges for Grants and Grants and Governmental Business-Type Exeenses Services Contributions Contributions Activities Activities Functions/Programs
Primary government:
Governmental activities:
General government $ 1,680,946 $ 749,774 $ 382,798 $ 509,691 $ (38,683) $ Public safety 18,002,198 2,990,523 523,704 1,679,019 (12,808,952) Highways and streets 6,232,243 322,331 2,891,770 6,029,369 3,011,227 Parks and recreation 4,812,593 6,255,179 1,442,586
Economic development 942,026 37,395 254,021 (650,610)
Interest on long-tenm debt 1 203 (1,203)
Total governmental activities 31,671,209 10,355,202 4,052,293 8,218,079 !9,045,635) Business-type activities:
Water 5,132,183 8,246,721 32,842 637,285 3,784,665
Wastewater 4,878,692 9,096,716 24,208 509,137 4,751 ,369 Airport 305,973 191 ,801 41 ,242 (72,930)
Solid waste 8,027,609 8 727,852 32 013 732,256
Total business-type activities 18,344,457 26,263.090 130.305 1.146.422 9,195,360 Total primary government $ 50,015,666 $ 36,618 ,292 $ 4,182,598 $ 9,364,501 !9,045,635) 9 195 360 General revenues:
Taxes:
Property taxes 9,382,154 4,077
Sales taxes 12,762,086
Transient taxes and other taxes 583,634
Franchise taxes 619,158
Use of money and property 902,417 188,669
Motor vehicle in-lieu 30,748
Gain on sale of capital assets 36,597 5,023
Miscellaneous 358,416 598,325
Total general revenues and transfers 24,675,210 796,094 Change in net position 15,629,575 9,991,454
Net position - beginning 107,911 ,053 100,801,948
Net position - ending $ 123,540,628 $ 110,793,402
The notes to the basic financial statements are an integral part of this statement. 18 Total
$ (38,683)
(12,808,952)
3,011,227
1,442,586
(650,610)
(1,203\
(9,045,635)
3,784,665
4,751 ,369
(72,930)
732,256
9 195,360
149,725
9,386,231
12,762,086
583,634
619,158
1,091 ,086
30,748
41 ,620
956 741
25,471,304
25,621 ,029
208,713,001
$ 234,334,030
244
FUND FINANCIAL STATEMENTS
The funds described below were determined to be major funds by the City in fiscal year 2021 . Individual non major funds may be found in the Combining Financial Statements and Schedules.
GENERAL FUND
This fund is the primary operating fund of the City. It accounts for normal recurring activities traditionally associated with government, which are not required to be accounted for in another fund. These activities are funded primarily by property taxes, sales and use taxes, interest and rental income, charges for services, and State grants.
IMPACT FEES SPECIAL REVENUE FUND
This fund accounts for fees collected from developers to cover the anticipated costs of improvements that will be necessary as a result of the impact the development has on the City.
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME GRANTS SPECIAL REVENUE FUND This fund accounts for certain designated projects paid for with Community Development Block Grant (CDBG) and HOME Investments Partnership Program (HOME) Federal program monies received from the State, along with repayments of CDBG and HOME loans.
STREETS AND ROADS SPECIAL REVENUE FUND
These funds are used for the maintenance, repair, and improvements of the City's 123 miles of streets, 5 miles of alleys, 227 miles of curbs and gutters, and 216 miles of sidewalks. Street services accomplishes a wide range of duties that include pavement management, concrete improvements, sidewalk maintenance, painting street and curb markings, traffic signs and signals, bridges, minor construction, flood control, and traffic surveys.
PUBLIC SAFETY SPECIAL REVENUE FUND
This fund accounts for a half-cent sales tax approved by local citizens in November 2004 by 77.9%. This measure passed is to be used for 911 services, Police, and Fire Protection. These funds are split 50/50 with the Police and Fire Departments. These funds also account for revenues received for public safety grants, impact fees and community facility districts.
CAPITAL GRANTS CAPITAL PROJECTS FUND
This fund is used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.
19 245
CITY OF LOS BANOS
BALANCE SHEET-GOVERNMENTAL FUNDS
JUNE 30, 2021
Capital
Projects
Seecial Revenue Funds Fund
CDBG Nonmajor
Impact and Home Streets and Public Capital Governmental General Fees Grants Roads Safe!( Grants
ASSETS
Cash and investments $ 26,807,676 28,667,845 $ 339,328 $ 4,587,352 $ 6,916,023 $ 5,242,716 $ Accounts receivable 452,736 29,332 9,225 30 14,064
Taxes receivable 2,572,197 725,268
Interest receivable 10,102 10,592 166 1,661 2,630 1,994 Intergovernmental receivables 89,108 10,062 117,348 1,002,406 Due from other funds 127,190
Loans receivable 2,405,672
Total assets $ 30,059,009 $ 28,717,831 $ 2 871 ,739 $ 5,591 ,449 $ 7,657,985 $ 5,244,710
LIABILITIES
Accounts payable $ 1,014,486 $ 58,843 $ 31,965 $ 8,636 $ 119,903 $ $ Due to other funds
Deposits 11 ,087
Advances from other funds 395,000
Total liabilities 1420573 58,843 31 ,965 8,636 119,903
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 116,695
Unavailable revenue - loans 2,405,672
Total deferred inflows of re sources 2 405 672 116,695
FUND BALANCES
Restricted 28,658,988 434,102 5,466,118 7,538,082 5,244,710 Committed 4,457,852
Assigned 5,911,193
Unassigned 18,269,391
Total fund balances 28,638,436 28,658 988 434,102 5,466,118 7,538,082 5,244,710 Total liabilities, deferred inflows of
resources and fund balances $ 30,059,009 $ 28,717,831 $ 2 871 739 $ 5,591 ,449 $ 7 657 985 $ 5,244,710 $ The notes to the basic financial statements are an integral part of this statement. 20 Funds
489,502
42,090
33,098
455
115,894
681,039
232,849
104,977
337,826
343,213
343 213
681 039
Total
Governmental
Funds
$ 73,050,442
547,477
3,330,563
27,600
1,334,818
127,190
2 405,672
$ 80,823,762
$ 1,466,682
104,977
11,087
395,000
1 977,746
116,695
2,405 672
2,522,367
47,685,213
4,457,852
5,91 1,193
18 269,391
76,323,649
$ 80,823,762
246
CITY OF LOS BANOS
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE STATEMENT OF NET POSITION
JUNE 30, 2021
Amounts reported for governmental activities in the statement of net position are different because:
Total fund balances - governmental funds $ 76,323,649
Capital assets used in governmental activities are not current assets or financial resources and, therefore, were not reported in the governmental funds.
Pension related deferrals are reported as deferred outflows and inflows of resources on the statement of net position.
OPEB related deferrals are reported as deferred outflows and inflows of resources on the statement of net position.
Internal service funds are not governmental funds; however, they are used by management to charge the costs of certain activities, such as insurance, central services, and maintenance to individual governmental funds. The net current assets of the internal service funds are therefore included in governmental activities in the following line items of the statement of net position:
Cash and investments
Interest receivable
Accounts receivable
Capital assets, net of accumulated depreciation
Deferred outflows from pensions
Deferred outflows from OPEB
Accounts payable and other current liabilities
Due to other funds
Compensated absences
Net pension liability
Net OPEB liability
Deferred inflows from pensions
Deferred inflows from OPEB
Internal balances
Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the funds.
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.
Net pension liability
Net OPEB liability
Compensated absences
71,976,930
4,140,567
1,051 ,071
271,075
158
2,563
206,140
120,297
82,795
(22,994)
(22,213)
(9,804)
(573,345)
(400,901)
(20,335)
(49,352)
(16,056)
2,522,367
(18,619,085)
(12,599,825)
(823,074)
Net position of governmental activities $ 123,540,628
The notes to the basic financial statements are an integral part of this statement. 21 247
CITY OF LOS BANOS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30, 2021
Capital
Projects
Seecial Revenue Funds Fund
CDBG
Impact and Home Streets and Public Capital
General Fees Grants Roads Safet~ Grants
REVENUES
Taxes:
Property 7,987,042 $ $ $ $ 1,395,112 $
Sales 9,282,344 1,1 11 ,806 3,479,742
Franchise 619,158
Other 583,634
Licenses and permits 2,168,888
Intergovernmental 686,291 148,612 137,324 2,231 ,662 237,802 Charges for services 1,911 ,040 7,900,597 13,157
Fines 35,593
Use of property and money 865,892 21 ,626 160 2,800 5,536 4,955 Loan repayments 166,407
Miscellaneous 106177 144 610 1,373 348 105,910
Total revenues 24,246,059 8,215,445 305 264 3,346616 5,237,259 4 955
EXPENDITURES
Current:
General government 1,325,624
Public safety 13,571,426 137,324 3,058,852
Highways and streets 160,312 335,123 1,797,332
Parks and recreation 1,284,383 50,700
Economic development 681 ,291 62,889
Debt service:
Interest and fiscal charges 5,100
Capital outlay:
General government 84,932 115,744
Public safety 125,949 1,422,438 1,044,830
Highways and streets 4,056
Parks and recreation 145319 387,127
Total expenditures 17,384,336 2,311 ,132 200 213 1,801 ,388 4,103,682 Excess (deficiency) of revenues over
(under) expenditures 6,861 723 5,904,313 105,051 1 545,228 1,133,577 4,955
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 33,138 2,574 5,594 Insurance recoveries 57,632
Total other financing sources (uses) 90,770 2,574 5,594 Net change in fund balances 6,952,493 5,906,887 105,051 1,545,228 1,139,171 4,955 Fund balances (deficit) - beginning 21,685 943 22,752,101 329,051 3,920,890 6,398,911 5 239 755 Fund balances - ending $ 28,638,436 $ 28,658,988 $ 434,102 $ 5 466,118 $ 7,538,082 $ 5 244,710 The notes to the basic financial statements are an integral part of this statement. 22 Nonmajor
Governmental
Funds
$
116,697
2,506,288
1,448
2,624,433
2,226,306
116,697
133,531
2 476,534
147,899
147,899
195,314
$ 343,213
Total
Governmental
Funds
$ . 9,382,154
13,873,892
619,158
583,634
2,168,888
3,558,388
12,331 ,082
35,593
902,417
166,407
358,418
43,980,031
1,325,624
16,767,602
2,292,767
3,561,389
860,877
5,100
200,676
2,593,217
4,056
665,977
28,277,285
15,702,746
41,306
57,632
98,938
15,801,684
60 521,965
$ 76,323,649
248
CITY OF LOS BANOS
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, 2021
Amounts reported for governmental activities in the statement of activities are different because:
Net change in fund balances - total governmental funds
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets are capitalized and allocated over their estimated useful lives, and reported as depreciation expense.
The capital outlay expenditures are, therefore, added back to fund balance.
Depreciation expense is deducted from the fund balance. Depreciation expense is net of internal service fund depreciation of $62, 120 which has already been allocated to internal service funds.
The net effect of various miscellaneous transactions involving capital assets (i.e., sales and donations) is to decrease net position.
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net position. This amount is the net effect of these differences in the treatment of long-term debt and related items.
Changes to net pension liability and pension related deferred outflows and inflows of resources do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.
Changes to net OPEB liability and OPEB related deferred outflows and inflows of resources do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds.
Some amounts included in the statement of activities do not provide or require the use of current financial resources and, therefore, are not reported as revenues or expenditures in the governmental funds (net change).
Unavailable revenue
Deferred loans
Compensated absences
Internal service funds are used by management to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance to individual funds. The portion of net revenue (expense) of these internal service funds arising out of the transactions with governmental funds is reported with governmental activities because they service those activities.
Change in net position of governmental activities
The notes to the basic financial statements are an integral part of this statement. 23 $ 15,801,684
7,340,038
(6,201,813)
(4,709)
3,897
(1,498,800)
367,624
116,695
(363,944)
(84,569)
153,472
$ 15,629,575
249
THIS PAGE IS LEFT BLANK INTENTIONALLY.
24 250
MAJOR PROPRIETARY FUNDS
Proprietary funds account for the City operations financed and operated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges.
The City reported all of its enterprise funds as major funds in fiscal year 2021 .
WATER
Accounts for activities associated with the acquisition or construction of water facilities and production, distribution, and transmission of potable water to users.
WASTEWATER
Accounts for activities associated with the acquisition or construction, and operation and maintenance of wastewater facilities for drainage, treatment, and disposal of sanitary wastewater.
AIRPORT
Accounts for activities associated with the operations and capital improvements of the City's municipal airport.
SOLID WASTE FUND
Accounts for activities associated with the collection and disposal of refuse throughout the City.
INTERNAL SERVICE FUNDS
Account for financial transactions related to the City's fleet maintenance and repairs, information technology services, and retiree health programs. These services are provided to other departments or agencies of the City on a cost reimbursement basis.
25 251
ASSETS
Current assets:
Cash and investments
Restricted cash and investments
Accounts receivable
Interest receivable
Intergovernmental receivables
Inventories
Prepaid items
Total current assets
Noncurrent assets:
Advances to other funds
Capital assets:
Land
Construction in progress
Buildings and improvements
Machinery and equipment
Infrastructure
Less: accumulated depreciation
Total noncurrent assets
Total assets
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions
Deferred outflows from OPEB
Total deferred outflows of resources
CITY OF LOS BANOS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2021
Business-T~ee Activities. Entererise Funds
Water Wastewater Ai~ ort Solid Waste
$ 25,555,304 $ 10,979,882 $ 685,911 $ 8,962,637
11,310,273 10,049,110 1,748,344
605,604 732,492 16,125 859,376
13,973 8,017 261 4,078
29,674
13,106 30,545
5,000
37 498 260 21 774,501 762,516 11,574,435
395,000
760,822 7,306,844
74,872 95,736 60,752 14,811
322,145 9,038,917 669,767 32,158
5,678,259 3,290,086 436,851 2,056,366
31,015,729 37,407,761 2,739,243 19,918
(18,352,311 ) (23,747,133) (2,953,986) (1,028,066)
19,894,516 33,392,211 952,627 1,095,187
57,392,776 55,166,712 1,715,143 12,669,622
433,660 464,754 311,138
324 528 307,025 243,104
758,188 771,779 554,242
Total
$ 46,183,734
23,107,727
2,213,597
26,329
29,674
43,651
5,000
71 ,609,712
395,000
8,067,666
246,171
10,062,987
11,461,562
71,182,651
(46,081,496)
55,334,541
126,944,253
1,209,552
874,657
2,084,209
The notes to the basic financial statements are an integral part of this statement. 26 Governmental
Activities .
Internal Service
Funds
$ 271,075
2,563
158
273,796
1,764
30,787
1,408,373
(1,234,784)
206,140
479,936
120,297
82,795
203,092
252
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities
Due to other funds
Deposits
Compensated absences
Total current liabilities
Noncurrent liabilities:
Net pension liability
Net OPEB liability
Landfill closure and postclosure liability
Total noncurrent liabilities
Total liabilities
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions
Deferred inflows from pensions
Total deferred inflows of resources
NET POSITION
Net investment in capital assets
Restricted for capital projects
Restricted for landfill closure and postclosure costs
Unrestricted
Total net position
CITY OF LOS BANOS
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2021
(Continued)
Business-Type Activities - Enterprise Funds
Water Wastewater Airport Solid Waste
143,865 122,813 1,958 1,398,297
804,440 5,000 3,580
84,134 85,597 57,235
1,032,439 213,410 5,538 1,455,532
2,080,938 2,232,220 1,492,338
1,571 ,403 1,486,652 1,177,139
4,802,845
3,652,341 3,718,872 7,472,322
4,684,780 3,932,282 5,538 8,927,854
64,279 68,996 46,026
193,443 183 010 144,908
257,722 252,006 190,934
19,499,516 33,392,211 952,627 1,095,187
11 ,310,273 10,049,110
1,748,344
22,398,673 8,312,882 756,978 1,261,545
$ 53,208,462 $ 51,754,203 $ 1,709,605 $ 4,105,076
Adjustment to report the cumulative internal balance for the net effect of the activity between the internal service funds and the enterprise funds over time Net position of business-type activities (page 17)
Total
1,666,933
813,020
226,966
2,706,919
5,805,496
' 4,235,194
4,802,845
14,843,535
17,550,454
179,301
521 ,361
700,662
54,939,541
21 ,359,383
1,748,344
32,730,078
110,777,346
16,056
$ 110,793,402
The notes to the basic financial statements are an integral part of this statement. 27 Governmental
Activities -
Internal Service
Funds
22,994
22,213
9,804
55,011
573,345
400,901
974,246
1,029,257
20,335
49,352
69,687
206,140
(622,056)
$ (415,916)
253
CITY OF LOS BANOS
STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
Business-T~ee Activities - Entererise Funds
Water Wastewater Aireort Solid Waste Total
Operating revenues:
Water charges $ 8,246,721 $ - $ $ $ 8,246,721
Wastewater charges 9,096,716 9,096,716
Solid waste charges 8,408,703 8,408,703
Airport charges 191,801 191,801
Interdepartmental charges
Miscellaneous 277,509 97,697 101,462 151 698 628,366
Total operating revenues 8,524,230 9,194,413 293,263 8,560,401 26,572,307 Operating expenses:
Personnel services 1,941,348 1,806,495 144 1,670,869 5,418,856 Contractual services 384,458 466,565 10,710 5,472,228 6,333,961 Utilities 856,426 246,221 156,938 65,559 1,325,144
Repairs and maintenance 444,011 637,249 30,076 706,512 1,817,848 Insurance 73,913 56,072 13,722 43,116 186,823
Other supplies and expenses 370,999 298,012 1,921 73,060 743,992 Depreciation 1 068,809 1,376,619 92,462 198,407 2,736 297 Total operating expenses 5,139,964 4,887,233 305,973 8,229,751 18,562,921 Operating income (loss) 3,384 266 4,307 180 (1 2,710) 330,650 8,009,386 Nonoperating revenues (expenses):
Investment earnings 34,038 11,694 523 6,437 52,692
Interest and fiscal charges
Rental income 34,965 34,965
Intergovernmental revenue 32,842 24,208 41 ,242 32,013 130,305 Property tax revenue 4,077 4,077
Gain (loss) on sale of assets 2,822 2,201 5,023
Landfill closure fees 319,149 319,149
Landfill closure/postclosure change
in estimate 203,271 203,271
Mfscellaneous 70,971 70,971
Total nonoperating revenues (expenses) 66,880 144,660 45,842 563,071 820,453 Income (loss) before capital contributions 3,451,146 4,451,840 33,132 893,721 8,829,839 Capital contributions 637,285 509,137 1,146,422
Change in net position 4,088,431 4,960,977 33,132 893,721 9,976,261 Net position - beginning 49,120,031 46,793,226 1,676,473 3,211 ,355 Net position - ending $ 53,208,462 $ 51,754,203 $ 1,709,605 $ 4,105,076 Adjustments for the net effect of the current year activity between the internal service funds and the enterprise funds 15,193 Changes in net position of business-type activities (page 18) $ 9,991,454 Tt,e notes to the basic financial statements are an integral part of this statement. 28 Governmental
Activities -
Internal Service
Fund
$
3,373,682
15,561
3,389,243
2,4·16,781
195,258
189,044
305,504
11 ,215
24 ,027
62,120
3,203,949
185,294
3,370
(14)
(19,985)
(1 6,629)
168,665
168,665
{584,581 )
$ (415,916)
254
CITY OF LOS BANOS
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2021
Governmental
Activities -
Business-Ti:~ Activities - Ente,:erise Funds Internal Service Water Wastewater Airport Solid Waste Total Fund
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users $ 8,244,557 $ 8,931,044 $ 184,186 $ 8,219,819 $ 25,579,606 $ Receipts from interiund services provided 3,371 ,119
Payments to suppliers (2, 128,353) (1,578,899) (237,131) (5,409,238) (9,353,621) (762,305) Payments to or on beha~ of employees for services (1,864,851) (1,873,450) (144) (1,297,958) (5,036,403) (2,526,456) Receipts from other operating revenues 277,509 97,697 101,462 151 698 628 366 15,561 Net cash provided (used) by operating activrties 4,528,862 5,576 392 48,373 1 664 321 11 ,817 948 97,919
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Loans from other funds 22,213
Advances to other funds 115,000 115,000
Property taxes and grants received 32,842 24,208 15,645 32,013 104,708 Landfill closure fees 319,149 319,149
Landfill closure/postclosure liability (55,884) (55,884) Miscellaneous 70,971 70,971
Net cash provided (used) by noncapital financing activities 147,842 95, 179 15645 295,278 553,944 22,213
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal payments on long-term debt (3,676)
Acquisition of capital assets (441 ,399) (319,679) (348,809) (1 ,109,887) (137,790) Proceeds from the sale of assets 2,822 2,201 5,023
Interest paid (1 4)
Net cash provided (used) by capital and related
financing activities (441 ,399) (316,857) (346,608) (1,104,864) (1 41,480}
CASH FLOWS FROM INVESTING ACTIVITIES
Rental receipts 34,965 34,965
Cash received from investment earnings 85,978 35467 1 521 20 837 143,803 4 321 Net cash provided (used) by investing activities 85,978 70,432 1 521 20837 178,768 4,321 Net increase (decrease) in cash and cash equivalents 4,321,283 5,425,146 65,539 1,633,828 11,445,796 (17,027) Cash and cash equivalents - beginning 32 544,294 15 603,846 620372 9,077 153 57 845665 288,102 Cash and cash equivalents - ending $ 36 865 577 $ 21 ,028,992 $ 685,911 $ 10,710,981 $ 69 291 ,461 $ 271 075 Reconciliation of O!!!!rating Income !Loss! to Cash Flows Provided !Used) b~ O!!!!rating Activities Operating income (loss) $ 3,384,266 $ 4,307,180 $ (12,710) $ 330,650 $ 8,009,386 $ 185,294 Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:
Depreciation 1,068,809 1,376,619 92,462 198,407 2,736,297 62,120 (Increase) decrease in:
Accounts receivable (150,334) (165,672) (7,615) (188,884) (512,505) (2,563) Inventories 2,640 (6,422) (3,782)
Prepaid items 17,882 39,653 760 58,295 2,338
Deferred outflows of resou!ces for pensions 56,813 65,883 47,302 169,998 63,647 Deferred outflows of resources for OPEB (12,370) 15,999 (83,456) (79,827) (5,389) Increase (decrease) in:
Accounts payable and other liabilities (19,068) 85,567 (17,342) 950,477 999,634 (39,595) Customer deposits 148,170 148,170
Compensated absences (4,330) (4,706) (4,071 ) (13,107) 1,070 Net pension liability 163,935 147,630 72,068 383,633 (139,201) Net OPEB liability (31,836) (172,393) 357,186 152,957 3,350 Deferred inflows of resources for pensions (57,671) (62,833) (42,635) (163,139) (25,103) Deferred inflows of resources for OPEB L38,044) 156,535) 26517 (68,062) (8,049) Net cash provided by operating activities $ 4,528,862 $ 5,576,392 $ 48,373 $ 1,664321 $ 11 ,817 948 $ 97,919 Schedule of Non-Cash Caeital and Financial Related Activities Capital contributions $ 637,285 $ 509,137 $ - $ $ 1,146 422 $ The notes to the basic financial statements are an integral part of this statement. 29 255
THIS PAGE IS LEFT BLANK JNTENTIONALL Y.
30 256
FIDUCIARY FUND
NSP IMPOUND CUSTODIAL FUND
A custodial fund is used to account for assets held by the City as a custodian for individual homeowners participating in the Habitat Neighborhood Stabilization Program by collecting and disbursing property taxes and insurance. The financial activities of this fund are excluded from the entity-wide financial statements but is presented in separate Fiduciary Fund financial statements. 31 257
CITY OF LOS BANOS
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUND
ASSETS
Cash
Accounts receivable
Total assets
LIABILITIES
Accounts payable
Total liabilities
NET POSITION (DEFICIT)
Restricted for:
JUNE 30, 2021
Individuals and other organizations
Total net position (deficit)
$
$
NSP Impound
Custodial Fund
10,487
4,264
14,751
1,081
1,081
13,670
13,670
The notes to the basic financial statements are an integral part of this statement. 32 258
CITY OF LOS BANOS
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUND
ADDITIONS
Collections on behalf of others:
Impound collections
Total additions
DEDUCTIONS
Payments of property insurance
Payments of property taxes
Total deductions
JUNE 30, 2021
Net increase (decrease) in fiduciary net position
Net position - beginning (restated)
Net position - ending
NSP Impound
Custodial Fund
$ 22,800
22,800
7,216
12,739
19,955
2,845
10,825
$ 13,670
The notes to the basic financial statements are an integral part of this statement. 33 259
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Los Banos (the City) was incorporated as a general law city on May 8, 1907. The City operates under the Council-Manager form of government consisting of five elected council members, including the Mayor and a City Manager appointed by the City Council. The City provides the following services as authorized:
public safety (police and fire), sanitation (solid waste disposal, sanitary, wastewater, and storm water utilities), water utility, community and economic development, streets, parks and recreation, and general administrative services.
The financial statements and accounting policies of the City conform with generally accepted accounting principles applicable to governments. Significant accounting policies are summarized below:
A. Description of the Financial Reporting Entity
As required by generally accepted accounting principles, the financial statements present the City of Los Banos as the primary government. The City does not have any component units.
B. Basis of Presentation
The City's Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Government Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
These standards require that the financial statements described below be presented.
Government-Wide Financial Statements: The Statement of Net Position and the Statement of Activities display information about the primary government (the City). These statements include the financial activities of the overall City government, except for fiduciary activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmental revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by 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. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, including all taxes, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the City's funds, including fiduciary funds. Separate statements for each fund category - governmental, proprietary, and fiduciary - are presented. The emphasis of fund financial statements is on major individual governmental and enterprise funds, each of which is displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund. Exchange 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. 34 260
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Major Funds
Major funds are defined as funds that have either assets, liabilities, revenues or expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand total. The General Fund is always a major fund.
The City may also select other funds it believes should be presented as major funds.
The City reported the following major governmental funds in the accompanying financial statements:
General Fund - The General Fund is the primary operating fund of the City. It accounts for normal recurring activities traditionally associated with government, which are not required to be accounted for in another fund. These activities are funded primarily by property taxes, sales and use taxes, interest and rental income, charges for services and State Grants.
Impact Fees Special Revenue Fund - This fund accounts for fees collected from developers to cover the anticipated costs of improvements that will be necessary as a result of the impact the development has on the City.
Community Development Block Grant (CDBG) and Home Grants Special Revenue Fund - This fund accounts for certain designated projects paid for with Community Development Block Grant (CDBG) and HOME Investments Partnership Program (HOME) Federal program monies received from the State, along with repayments of CDBG and HOME loans.
Streets and Roads Special Revenue Fund - These funds are used for the maintenance, repair, and improvement of the City's 123 miles of streets, 5 miles of alleys, 227 miles of curbs and gutters, and 216 miles of sidewalks. Street Services accomplishes a wide range of duties that include pavement management, concrete improvement, sidewalk maintenance, painting street and curb markings, traffic signs and signals, bridges, minor construction, flood control, and traffic surveys.
Public Safety Special Revenue Fund - This fund accounts for a half-cent sales tax approved by local citizens in November 2004 by 77.9%. This measure was passed to be used for 911 services, Police, and Fire protection. These funds are split 50/50 with the Police and Fire Departments. These funds also account for revenues received for public safety grants, impact fees and community facility districts.
Capital Grants Capital Projects Fund- This fund is used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.
The City reported all of its enterprise funds as major funds in the accompanying financial statements:
Water Fund - Accounts for activities associated with the acquisition or construction of water facilities and production, distribution, and transmission of potable water to users.
Wastewater Fund - Accounts for activities associated with the acquisition or construction, operation and maintenance of wastewater facilities for drainage, and treatment and disposal of sanitary wastewater.
Airport Fund - Accounts for activities associated with the operations and capital improvements of the City's municipal airport.
Solid Waste Fund - Accounts for activities associated with the collection and disposal of refuse throughout the City.
The City also reports the following fund types:
Internal Service Funds - Account for financial transactions related to the City's fleet maintenance and repairs, information technology services, and retiree health programs. These services are provided to other departments or agencies of the City on a cost reimbursement basis. 35 261
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES {Continued) C. Major Funds (Continued)
Fiduciary Fund - A custodial fund is used to account for assets held by the City as a custodian for individual homeowners participating in the Habitat Neighborhood Stabilization Program by collecting and disbursing property taxes and insurance. The financial activities of this fund are excluded from the entitywide financial statements but is presented in separate Fiduciary Fund financial statements.
D. Basis of Accounting
The government-wide and proprietary financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time the liabilities are incurred, regardless of when the related cash flows take place.
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. The City considers all revenues other than grant reimbursements reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. The City considers all grant reimbursement revenues reported in the governmental funds to be available if the revenues are collected within 180 days.
Expenditures are recorded when the related liability is incurred, except for principal and interest on general longterm debt, claims and judgments, and compensated absences, which are recognized as expenditures to the extent they have matured. Governmental capital asset acquisitions under capital leases are reported as other financing sources.
Those revenues susceptible to accrual at both the City-wide and Fund level are property, sales and franchise taxes, current service charges, and interest revenue. Fines and licenses and permits are not susceptible to accrual because they are not measurable until received in cash .
Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include taxes, entitlements, and donations. On the accrual basis, revenue from taxes is recognized in the fiscal year for which the taxes are levied or assessed. Revenues from entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied.
Grant revenues are recognized in the fiscal year in which all eligibility requirements are met. Under the terms of grant agreements, the City may fund certain programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City's policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
Certain indirect costs are included in program expenses reported for individual functions and activities.
As a general rule, the effect of interfund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes and other charges between the government's business-type activities and various other functions of the government. Elimination of these charges would distort the direct cost and program revenues reported for the various functions concerned.
Amounts reported as program revenues include 1) charges to customers or applicants for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes. 36 262
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Basis of Accounting (Continued)
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund 's principal ongoing operations. The principal operating revenues of the City's enterprise funds and internal service funds are charges to customers for sales and services. The City also recognizes as operating revenue the portion of tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
E. Property Tax Revenues
Merced County assesses properties and bills, collects, and distributes property taxes to the City. The County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on January 1.
Secured property tax is due in two installments, on November 1 and February 1, and becomes a lien on those dates. It becomes delinquent on December 10 and April 10, respectively. Unsecured property tax is due on July 31 and becomes delinquent on August 31.
The term "unsecured" refers to taxes on personal property other than real estate, land, and buildings. These taxes are secured by liens on the property being taxed. Property tax revenues are recognized by the City in the fiscal year they are assessed provided they become available as defined above.
F. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
G. Cash Equivalents
For purposes of the statement of cash flows, the City considers all highly liquid investments (including all restricted assets) with a maturity of three months or less when purchased to be cash equivalents. The City maintains a cash and investment pool that is available for use by all funds. As the proprietary funds' share of this pool is readily available when needed, such share is also considered to be cash equivalent. Deposit assets in the proprietary funds are related to insurance and benefits and are not considered cash equivalents for purposes of the statement of cash flows.
37 263
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) H. Compensated Absences
City employees are granted vacation in varying amounts and sick leave at eight hours per month. In the event of termination, an employee is reimbursed for accumulated vacation and compensatory time off leave at various rates as determined by the employee personnel manual. The value of accumulated vacation allowance is accrued as appropriated for all funds. With respect to obligations of the governmental fund types, the amounts are presented in the government-wide financial statements. Historically, the compensated absences liability for governmental activities has generally been liquidated by the General fund and other governmental funds.
Compensated absences activity for the year ended June 30, 2021 was as follows:
Governmental Business-Type
Activities Activities Total
Beginning balance $ 747,239 $ 240,073 $ 987,312
Additions 734,829 219,275 954,104
Payments (649,190) (232,382) (881 ,572)
Ending balance $ 832,878 $ 226,966 $ 1,059,844
Current portion $ 765,302 $ 226,966 $ 992,268
I. Inventory of Supplies and Prepaid Items
Inventories are physically counted annually and valued at cost, on a first-in-first-out method, which approximates market value. Inventories consist of expendable supplies held on a consumption basis, wherein the cost is recorded as an expense at the time an item is consumed.
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.
J. 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 City of Los Banos' (City) California Public Employees' Retirement System (CalPERS) plan (Plan) and additions to/deductions from the Plan's fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
K. Other Postemployment 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 Retirees Benefits 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, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used:
Valuation Date
Measurement Date
Measurement Period
June 30, 2019
June 30, 2020
July 1, 2019 to June 30, 2020
38 264
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 2 - BUDGET AND BUDGETARY ACCOUNTING
A. Budgeting Procedures
The City Council reviews and adopts an annual budget for the General, Special Revenue, Capital Projects and Enterprise Funds. The City Council holds public hearings and may modify the appropriations by general approval. Budgeted amounts may be transferred between line items within departments with the City Manager's approval. The legal level of expenditure control in the funds is considered to be at the department level.
Operating appropriations lapse at the end of each fiscal year.
The budget is reported on the same basis as the fund types and on a basis consistent with accounting principles generally accepted in the United States of America. Additional appropriations or other changes during the fiscal year may be submitted by the department for Council review and approval.
B. Deficit Fund Balance/Net Position
The following funds contained a deficit fund balance or net position as of June 30, 2021 . The deficit net position in the Internal Service Funds is caused by each fund's portion of the City's pension and other postemployment benefits liabilities. In the event the pension and other postemployment benefits liabilities become due in the future, the remaining balances will be subsidized by the City through a transfer of funds .
Internal Service Funds
Fleet Maintenance
Information Technology
NOTE 3 - CASH AND INVESTMENTS
$ 484,598
169,500
The City's dependence on property tax receipts, which are received semi-annually, requires it to maintain significant cash reserves to finance operations during the remainder of the year. The City pools cash from all sources and all funds except cash and investments held by trustees so that it can be invested at the maximum yield consistent with safety and liquidity, while individual funds can make expenditures at any time.
A. Policies
California Law requ ires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City's cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law, this collateral is held in a separate investment pool by another institution in the City's name and places the City ahead of general creditors of the institution.
The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. In order to increase security, the City employs the Trust Department of a bank as the custodian of certain City-managed investments, regardless of their form.
The City's investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year-end, and it includes the effects of these adjustments in income for that fiscal year. 39 265
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 3 - CASH AND INVESTMENTS (Continued)
A. Policies (Continued)
Except as described below, the City pools idle cash from all funds for the purpose of maximizing interest through investment activities. Pooled investments do not include certain bond proceeds. Investments are carried at fair value with the exception of money market investments and certain nonparticipating guaranteed investment contracts, which are carried at cost. The fair value of investments is based on published market prices and quotations from major investment brokers.
The Local Agency Investment Fund (LAIF) is an external investment pool established under California State statutes. LAIF is not registered with the Securities and Exchange Commission. LAIF falls under the regulatory oversight of the State of California. Based on information obtained from the State of California, the investment in LAIF has been recorded at fair value.
Interest income on pooled investments is allocated on the basis of quarterly ending cash balances in the General Fund, Special Revenue Funds, Debt Service Funds, Capital Projects Funds, Water Fund, Wastewater Fund, Airport Fund, and Solid Waste Fund as required by law or as directed by the City Council adopted budget.
The remainder or interest income is credited to all funds, as required by California Government Code.
B. Classifications
Cash and investments are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of the City debt instruments or Agency agreements.
Primary Government:
Cash and investments
Restricted cash and investments
Cash and investments in primary government
Fiduciary Fund:
Cash
Total cash and investments
Cash and investments as of June 30, 2021 consist of the following:
Cash on hand and in bank
Investments
Total cash and investments
$ 119,505,251
23,107,727
142,612,978
10,487
$ 142,623,465
$ 63,425,489
79,197,976
$ 142,623,465
Restricted cash and investments of $21,359,383 are held in the Water and Wastewater Enterprise Funds for future infrastructure impacted by development.
Restricted cash and investments of $1 ,748,344 are held in the Solid Waste Enterprise Fund to pay for landfill closure and postclosure costs.
40 266
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 3 - CASH AND INVESTMENTS {Continued)
C. Investments Authorized by the California Government Code and the City's Investment Policy The City's Investment Policy and the California Government Code allow the City to invest in the following, provided the credit ratings of the issuers are acceptable to the City and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code, or the City's Investment Policy where the City's Investment Policy is more restrictive.
Maximum Maximum
Maximum Percentage Investment
Authorized Investment Type Maturity of Portfolio In One Issuer Non-negotiable Certificates of Deposit 1 year No limit $250,000 Bankers' Acceptances 180 days No limit No Limit
U.S. Treasury Bills and Notes 5 years No limit No Limit U.S. Government Agency Securities 5 years No limit No Limit U.S. Government Sponsored Securities 5 years No limit No Limit Repurchase Agreements N/A No limit $1 Million
Commercial Paper 270 days No limit $1 Million
State Local Agency Investment Fund N/A No limit $50 Million per Account
Money Market Mutual Funds NIA No limit None
Insured Passbook on Demand Deposits
with Banks and Savings and Loans N/A No limit $250,000
D. Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City resolutions, bond indentures or State statutes. The table below identifies the investment types that are authorized for investments held by fiscal agents. The bond indentures contain no limitations for the maximum investment in any one issuer or the maximum percentage of the portfolio that may be invested in any one investment type. The table also identifies certain provisions of these debt agreements.
Minimum
Maximum Credit
Authorized Investment Type Maturity Quality
Bankers' Acceptances 360 days A-1
U.S. Treasury Bills and Notes None N/A
State General Obligations None A
Municipal Obligations None Aaa/AAA
U.S. Government Agency Securities 3 years AAA
U.S. Government Sponsored Securities 3 years AAA
Federal Housing Administration Debentures None N/A
Repurchase Agreements 1 year A
Commercial Paper 270 days A-1+
State Local Agency Investment Fund N/A N/A
Money Market Fund NIA AAm
Defeasance Securities N/A N/A
Pre-funded Municipal Obligations None AAA
Investment Agreements N/A AA
Unsecured Certificates of Deposit 30 days A-1
CalTrust None N/A
41 267
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 3 - CASH AND INVESTMENTS (Continued)
E. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investment, the greater sensitivity of its fair value to changes in market interest rates. The City generally manages its interest rate risk by holding investments to maturity.
Information about the sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity or earliest call date:
Investment Type
Held by City:
Agency Bonds
State Local Agency Investment Fund
Money Market Mutual Funds
Certificates of Deposit
Total investments
Cash on hand and in bank
Total cash and investments
12 Months
or Less
$ 1,524,729
66,252 ,372
9,918,296
1,502,579
$79,197,976
13 to 24
Months
$ - $
25 to 36
Months
- $
More than
36 Months Total
- $ 1,524,729
66,252,372
9,918,296
1,502,579
$
----- =$====- _$_ === 79 ,197,976
63,425,489
$142,623,465
The City is a participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The City reports its investments in LAIF at the fair value amount provided by LAIF, which is the same as the value of the pooled share. The balance is available for withdrawal on demand and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF's investment portfol io are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain State funds, United States Treasury Notes and Bills, and floating rate securities issued by federal agencies, government-sponsored enterprises, and corporations. At June 30, 2021 , these investments matured in an average of 291 days.
42 268
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2021
NOTE 3 - CASH AND INVESTMENTS (Continued)
F. Credit Risk
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 actual ratings as of June 30, 2021 were provided by Standard and Poor's investment rating system. The Local Agency Investment Fund was not rated as of June 30, 2021.
Investment Type AAAm AA- Total
Held by City:
Agency Bonds $ - $ 1,524,729 $ 1,524,729
Money Market Mutual Funds 9,918,296 9,918,296
Total $ 9,918,296 $ 1,524,729 11,443,025
Not rated:
State Local Agency Investment Fund 66,252,372
Certificates of Deposit 1,502,579
Cash on hand and in banks 63,425,489
Total $ 142,623,465
G. Concentration of Credit Risk
The City's potential losses from credit risk are increased if a significant portion of its resources are invested in a single issuer. If the issuer did not make good on its obligation to the City, the impact could be potentially damaging. At June 30, 2021, the City did not have any investments in any one issuer, other than money market mutual funds and the Local Agency Investment Fund, which represent 5% or more of the total investments.
H. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a city will not be able to recover its deposits or will not be able to recover collateral securities that are in possession of an outside . party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterpart (e.g., broker-dealer) to a transaction, a city 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 and investments other than the following provision for deposits:
The California Government Code requires that a financial institution secure deposits made by the state or local government units by pledging securities in an undivided collateral pool held by a depository regulated under the state law (unless so waived by the government unit.) The market value of the pledged securities in the collateral pool must equal at least 11 Oo/6 of the total amount deposited by the public agencies.
As of June 30, 2021 , the carrying amount of the City's bank deposits was $63,421 ,739 and the respective bank balances totaled $64,005,713. Of the total bank balance, $500,000 was insured through the Federal Depository Insurance Company (FDIC). The remaining $63,505,713 was collateralized with pooled securities held by the financial institution's trust department. These securities are held in the name of the financial institution and not that of the City.
43 269
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2021
NOTE 3 - CASH AND INVESTMENTS (Continued)
I. Investment Valuation
Investments, including derivative instruments that are not hedging derivatives, are measured at fair value on a recurring basis. Recurring fair value measurements are those that Governmental Accounting Standards Board (GASB) Statements require or permit in the statement of net position atJhe end of each reporting period. Fair value measurements are categorized based on the valuation inputs used to measure an asset's fair value:
Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. Investments' fair value measurements are as follows at June 30, 2021 :
Investments by Fair Value Level
Debt Securities:
Agency bonds
Certificates of Deposit
Total Debt Securities
Unclassified Investments
State Local Agency Investment Pool
Money Market Funds
Total Investments
$
Fair Value
1,524,729
1,502,579
3,027,308
66,252,372
9,918,296
76,170,668
$ 79,197,976
Fair Value Measurements
Level 1 Inputs Level 2 Inputs Level 3 Inputs
$ - $ 1,524,729 $
1,502,579
$ - $ 3,027,308 $
Certificates of deposit are valued based on the rates currently offered for deposits of similar remaining maturities. Agency bonds are valued using a matrix pricing technique that values securities based on their relationship to benchmark quoted prices.
44 270
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2021
NOTE 4 - INTERFUND TRANSACTIONS
A. Due from/to Other Funds
Due from/to Other Funds represents short-term borrowings resulting from a fund's temporary need for additional cash. Primarily, these amounts have been recorded when timing differences between when the services are provided and when they are paid for/reimbursed causes the funds to temporarily overdraw their share of pooled cash. These balances are generally expected to be repaid within the next few months and not longer than a 12- month fiscal operating cycle.
The composition of interfund balances at June 30, 2021 , is as follows:
Due From Other Funds
General Fund
General Fund
B. Advances Between Funds
Due To Other Funds
Fleet Maintenance Internal Service Fund
USDA Rural Grants Special Revenue Fund
$
$
Amount
22,213
104,977
127,190
At June 30, 2021, the following funds had long-term advances that were not expected to be repaid within one year.
Funds Making Advances Funds Receiving Advances Amount
Water Enterprise Fund General Fund $ 395,000
$ 395,000
In July 2012, the Water Enterprise Fund provided an interfund loan to the General Fund in the amount of $1,200,000 to pay off the City's 1993 Certificates of Participation and 2002 Lease Revenue Bonds early, thereby reducing future interest costs. The interfund advance bears an interest rate equivalent to the yield of the average quarterly investment portfolio or 1 %, whichever is greater. The General Fund repaid $115,000 in principal during the fiscal year ended June 30, 2021, and expects to repay the entire advance by fiscal year ending June 30, 2024.
45 271
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 5- LOANS RECEIVABLE
At June 30, 2021 , the City had the following loans receivable:
Residential Rehabilitation Program
Commercial Micro-Enterprise Program
First-Time Home Buyer Program
Neighborhood Stabilization Program
Total
A. Residential Rehabilitation Program
Outstanding
Balance as of
June 30, 2021
$
$
839,861
34,190
826,347
705,274
2,405,672
The City administers a Housing Rehabilitation Loan Program using the Housing and Community Development Act Funds. Under this program, residents with incomes below a certain level are eligible to receive low interest loans, secured by deeds of trust, for construction work on their homes. Federal grants are used to fund these loans. Upon approval of loans, the City disburses the funds , and arranges .for and collects repayments. As of June 30, 2021 , outstanding loans of this program amounted to $839,861.
B. Commercial Micro-Enterprise Program
The City along with Merced County Economic Development Corporation (MCEDCO) administered a MicroEnterprise Loan Program for technical assistance in development and implementation of small businesses.
Under this program, business owners with incomes below a certain level are eligible to receive low interest loans, secured by deeds of trust, for capital or operations of their businesses. The Micro-Enterprise Program also encourages business owners to upgrade, renovate and improve their businesses. Upon approval of the loan, the City disburses the funds, and arranges for and collects repayments. As of June 30, 2021, outstanding loans of this program amounted to $34,190.
C. First-Time Home Buyer Program
The City along with Merced County Association of Governments (MCAG) administered a First-Time Home Buyer Program using the Housing and Community Development Act Funds. Under this program, residents with incomes below a certain level are eligible to receive low or no interest loans, secured by deeds of trust, for the purchase of their first home. The First-Time Home Buyer Program encourages those that would not be able to receive a bank loan due to low income to be able to purchase their own home. Upon approval of the loan, the City disburses the funds, and arranges for and collects repayments. As of June 30, 2021, outstanding loans of this program amounted to $826,347.
D. Neighborhood Stabilization Program
In fiscal year 2012-13, the City was awarded the Neighborhood Stabilization Program (NSP) grant from the State of California Housing and Community Development Department. The purpose of the NSP is to address the housing crisis occurring within the City by providing funds to purchase, rehabilitate, and resell vacant and foreclosed properties. The City entered into various loan agreements with residents, with zero interest and a maturity of 20/30 years. At June 30, 2021 , loans outstanding totaled $705,274. 46 272
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2021
NOTE 6 - CAPITAL ASSETS
Capital assets, which include land, equipment, buildings, construction in progress, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities column in the government-wide financial statements and proprietary fund financial statements.
Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. 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. 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.
Equipment, buildings, and infrastructure of the City are depreciated using the straight-line method over the following estimated useful lives:
Machinery and Equipment
Buildings, Structures and Improvements
Infrastructure
3-20 years
25-50 years
20-60 years
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period.
A. Governmental Activities
Capital assets activity of the governmental activities for the year ended June 30, 2021 was as follows:
Balance Balance
June 30, 2020 Additions Deletions Transfers June 30, 2021 Governmental Activities:
Capital assets not being depreciated:
Land $ 8,607,773 $ $ - $ - $ 8,607,773
Construction in progress 783,478 2,348,567 (19,985) (380,446) 2,731 ,614 Total capital assets not being depreciated 9,391,251 2,348,567 (19,985) (380,446) 11 ,339,387 Capital assets being depreciated:
Buildings, structures and improvements 18,487,201 35,388 18,522,589 Machinery and equipment 17,471,155 1,165,585 (233,949) 88,858 18,491,649 Infrastructure 139,225,352 3,928,288 291,588 143,445,228 Total capital assets being depreciated 175,183,708 5,129,261 (233,949) 380,446 180,459,466 Less accumulated depreciation for:
Buildings, structures· and improvements (7,192,934) (577,592) (7,770,526) Machinery and equipment (13,431,516) (797,080) 229,240 (13,999,356) Infrastructure (92,956,640) (4,889,261 ) (97,845,901 )
Total accumulated depreciation (113,581 ,090) (6,263,933) 229,240 (1 19,615,783) Total capital assets being depreciated, net 61 ,602,618 (1,134,672) (4,709) 380,446 60,843,683 Governmental activities capital assets, net $ 70,993,869 $ 1,213,895 $ (24,694) $ $ 72,183,070 47 273
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2021
NOTE 6 - CAPITAL ASSETS (Continued)
B. Business-Type Activities
Capital assets activity of the business-type activities for the year ended June 30, 2021 was as follows:
Balance Balance
June 30, 2020 Additions Deletions Transfers June 30, 2021 Business-Type Activities:
Capital assets not being depreciated:
Land $ 8,067,666 $ $ - $ - $ 8,067,666
Construction in progress 187,918 58,253 246,171
Total capital assets not being depreciated 8,255,584 58,253 8,313,837 Capital assets being depreciated:
Buildings, structures and improvements 10,055,007 7,980 10,062,987 Machinery and equipment 10,650,096 835,037 (23,571) 11 ,461,562 Infrastructure 69,827,614 1,355,037 71 ,182,651
Total capital assets being depreciated 90,532,717 2,198,054 (23,571 ) 92,707,200 Less accumulated depreciation for:
Buildings , structures and improvements (9,317,831) (152,460) (9,470,291) Machinery and equipment (6,387,672) (688,777) 23,571 (7,052,878) Infrastructure (27,663,267) (1,895,060) ( (29,558,327)
Total accumulated depreciation (43,368,770) (2,736,297) 23,571 (46,081,496) Total capital assets being depreciated, net 47,163,947 (538,243) 46,625,704 Business-type activities capital assets, net $ 55,419,531 $ (479,990) $ - $ $ 54,939,541 C. Depreciation Allocation
Depreciation expense is charged to functions and programs based on their usage of the related assets. The amounts allocated to each function or programs are as follows:
Depreciation Allocation
Governmental Activities:
General government
Public safety
Economic development
Parks and recreation
Highways and streets
Internal service fund
Total governmental activities
Business-type Activities:
Water
Wastewater
Airport
Solid Waste
Total business-type activities
$
$
$
$
120,961
539,851
26,477
1,222,828
4,291,696
62,120
6,263,933
1,068,809
1,376,619
92,462
198,407
2,736,297
48 274
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 7 - LONG-TERM DEBT
In the government-wide financial statements and the proprietary 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. Bond premiums and discounts, including prepaid bond insurance, are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt.
In the fund financial statements, governmental fund types recognize b?nd premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Bond issuance costs are reported as debt service expenditures.
A. Current Year Transactions and Balances
Governmental Activities
Direct Borrowings
Capital Leases:
Fleet Equipment Lease
5.20%, due 07/11/2020
Fleet Equipment Lease
4.45%, due 09/05/2020
Total Governmental Activity Debt
B. Fleet Equipment Lease
Original
Issue
Amount
$ 195,413 $
70,501
$
Balance
June 30, 2020
3,676 $
3,897
Additions
- $
7,573 _$ ___ _ $
Balance
Retirements June 30, 2021
3,676 $ - $
3,897
7,573 _$ ___ _ $
Current
Portion
During fiscal year 2015-16, the City entered into a lease agreement with Ford Motor Credit Company to lease four vehicles. The cost of the equipment was $195,413, with an interest rate of 5.20% due in monthly installments ending in fiscal year 2020-21.
During fiscal year 2015-16, the City entered into a lease agreement with Ford Motor Credit Company to lease a vehicle. The cost of the equipment was $70,501 , with an interest rate of 4.45% due in monthly installments ending in fiscal year 2020-21.
The lease agreements are secured by the leased vehicles and include provisions whereby in an event of default the lessor can demand immediate payment of the outstanding principal and interest, or that the City return the leased vehicles at the cost of the City.
49 275
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 8 - LANDFILL CLOSURE AND POSTCLOSURE CARE COST
State and Federal laws and regulations require the City to clean close its landfill site (due to subsurface hydrologic condition - the site operated under waste discharge requirements) when the landfill stopped accepting waste in 1991 . The City received a clean closure extension until December 2017. The City has requested a review of the clean closure requirement by the State Water Resource Control Board and has asked to pursue alternative closure methods. Due to this request, the City's requirement to close the landfill was placed on hold until the State Water Resource Control Board finished reviewing the City's request. The State Water Resource Control Board approved an alternative method of clean closure for the landfill at the end of this fiscal year. Clean closure is expected to begin in fiscal year 2021-2022.
Most of the costs associated with closure and post closure care will be the construction cost associated with the clean closure process directly. The closure costs are ongoing with the start of the construction planned for fiscal year 2021-2022. The City anticipates ongoing maintenance costs at $72,523 annually beginning in FY 2022- 2023 for the next 30 years.
The City reports a portion of these closure and post closure care costs as an operating expense in each period based on landfill capacity used as of each balance sheet date. The $4,802,845 reported as landfill closure and post closure care liability at June 30, 2021, represents the cumulative amount reported to date based on the use of 100 percent of the estimated capacity of the landfill. These amounts are based on what it would cost to perform all closure and post closure care. Actual cost may be higher due to inflation, changes in technology, or changes in regulations.
The City is required by State and Federal laws and regulations to have financial assurance in place to finance closure and post closure care. The City has chosen to setup and fund a trust in order to meet this obligation.
Due to the closure extension and request to pursue alternative cleaning methods, the City delayed funding the trust. The State Water Resource Control Board just recently approved an alternative method of clean closure.
The City is ready to immediately fund the trust in FY 2021-2022 when the closure process is scheduled to begin.
At June 30, 2021 , there is $1,748,344 restricted for closure and post closure costs. The City expects to fund the closure and post closure costs from revenues of the solid waste collection operations, interest earnings on the accumulated assets held in trust, and internal financing if necessary.
NOTE 9 - NET POSITION AND FUND BALANCES
A. Net Position
Net position is the excess of all the City's assets and deferred outflows of resources over all its liabilities and deferred inflows of resources, regardless of fund. It is the City's policy to first apply restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net position is available. In the government-wide financial statements, net position is classified in the following categories:
Net investment in capital assets groups all capital assets netted by related debt into a component of net position.
Restricted net position presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. These restrictions principally include developer fees received for use on capital projects, debt service requirements, and grant-funding sources.
Unrestricted net position presents the net position of assets that do not meet the definition of "net investment in capital assets" or "restricted net position". 50 276
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 9 - NET POSITION AND FUND BALANCES (Continued)
B. Fund Balances
Governmental fund balances represent the net current assets of each fund . Net current assets generally represent a fund's cash and receivables, less its liabilities.
The City's fund balances are classified in accordance with Governmental Accounting Standards Board Statement No. 54 (GASS 54), Fund Balance Reporting and Governmental Fund Type Definitions, which requires the City to classify its fund balances based on spending constraints imposed on the use of resources.
For programs with multiple funding sources, the City prioritizes and expends funds in the following order:
Restricted, Committed, Assigned and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint:
Nonspendable fund balances represents balances set aside to indicate items that do not represent available spendable resources even though they are a component unit of assets. Fund balances are required to be maintained intact such as Permanent Funds, and assets not expected to be converted to cash such as prepaids, notes receivable, and land held for redevelopment are included.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation, which requires the resources to be used only for a specific purpose.
Encumbrances and nonspendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by resolution or an ordinance of the City Council which, may be altered only by formal action of the City Council. Encumbrances and nonspendable amounts subject to council commitments are included along with spendable resources.
Assigned fund balances are amounts constrained by the City's intent to be used for a specific purpose but are neither restricted nor committed. Intent is expressed by the City Council or its designee and may be changed at the direction of the City Council or its designee. This category includes encumbrances and nonspendables when it is the City's intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of special revenue, capital projects and debt service funds which have not been restricted or committed. ·
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.
51 277
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 9 - NET POSITION AND FUND BALANCES (Continued)
B. Fund Balances (Continued)
Detailed classifications of the City's fund balances as of June 30, 2021 are as follows:
CDBG
Impact and Home Streets and Public Capital
Fund Balance Classifications General Fees Grants Roads Safet~ Projects Restricted for:
General government
Public safety 7,538,082
Highways and streets 5,466,118
Parks and recreation
Development projects 28,658,988
Capital projects 5,244,710
Economic development 434,102
Total restricted 28,658,988 434,102 5,466,118 7,538,082 5,244,710 Committed for:
Public safety 200,960
Capital projects 4,000,000
Economic development 256 892
Total Committed 4,457 852
Assigned for:
General government 3,774,660
Public safety 421
Economic development 136,112
Pension reserve 2,000,000
Total assigned 5911193
Unassigned: 18,269,391
Total Fund Balances $ 28 638,436 $ 28,658,988 $ 434,102 $ 5466118 $ 7,538,082 $ 5,244 710 (A) Projects include a new Police facility and a Fire training tower Other
Governmental
. Funds Total
7,538,082
5,466,118
343,213 343,213
28,658,988
5,244,710
434 102
343,213 47,685 213
200,960
4,000,000
256 892
4 457,852
3,774,660
421
136,112
2 000 000
5,911,193
18,269,391
$ 343 213 $ 76,323,649
(B) Projects include various street improvements such as overlays throughout the City as needed and various park improvements such as playground equipment for the parks located in the assessment districts
(C) Projects include improvements to City Hall, improvements to the Community Center, traffic related improvements due to new development, Police and Fire equipment purchases and facility improvements and various economic development projects. (D) Projects include a new Emergency Operations center and various other capital projects. (E) Purchase of fire vehicles for future fleet replacement (F) Construction of a new Police Station
(G) Costs associated with the completion of the City's General Plan Update (H) Various one-time expenditures for equipment, capital improvements, and Measure H activity (I) Various one time expenditures for Public Safety capital needs (J) Projects include relocation of the municipal airport, development of an industrial park and various other economic development projects (K) Funds to pay down the Unfunded Accrued Liability or future increases in employer pension contributions C. Minimum Fund Balance Policies
(A)
(B)
(B)
(C)
(D)
(C)
(E)
(F)
(G)
(H)
(I)
(J)
(K)
The City's Budget and Fiscal Policy requires the City to strive to maintain 20-40% of the subsequent year's budgeted revenues for restricted fund balances in the special revenue funds and cash flow of 30% of General Fund expenditures for unassigned fund balance in the General Fund. 52 278
NOTE 10- PENSION PLAN
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
A. General Information about the Pension Plan
Plan Description - All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost Sharing Multiple-Employer Plan (Plan) administered by the California Public Employees' Retirement System (CalPERS). The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool (all others). Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASS Statement No. 68. Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors seven rate plans (three miscellaneous and four safety.) Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided - CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following : the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for the Plan are applied as specified by the Public Employees' Retirement Law.
The rate plan provisions and benefits in effect at June 30, 2021 are summarized as follows:
Hire date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of annual salary
Required employee contribution rates
Required employer contribution rates
Hire Date
Benefit formula
Benefit vesting schedule
Benefit payments
Retirement age
Monthly benefits, as a % of annual salary
Required employee contribution rates
Required employer contribution rates
Miscellaneous
1st Tier
Prior to
January 1, 2011
2.7%@55
5 years service
monthly for life
50 to 55
2.0% to 2.7%
8.000%
15.037%
Safety
1st Tier
Prior to
January 1, 2013
3%@50
5 years service
monthly for life
50 3.0%
9.000%
25.540%
Miscellaneous Miscellaneous
2nd Tier PEPRA
January 1, 2011 thru On or after
December 31 , 2012 January 1, 2013
2%@60 2%@62
5 years service 5 years service
monthly for life monthly for life
50 to 63 52 to 67
1.092% to 2.418% 1.0% to 2.5%
7.000% 7.250%
9.442% 7.874%
Safety
Safety PEPRA
2nd Tier Fire and Police
January 1, 2011 thru On or after
December 31 , 2012 January 1, 2013
3%@55 2.7%@57
5 years service 5 years service
monthly for life monthly for life
50 to 55 50 to 57
2.4% to 3.0% 2.0% to 2.7%
9.000% 13.750%
22.397% 13.884%
Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City's required contribution for the unfunded liability was $1,568,117 for the fiscal year ended June 30, 2021 . 53 279
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 10 - PENSION PLAN {Continued)
A. General Information about the Pension Plan (Continued) Contributions - Section 20814(c) of the California Public Employees' Retirement Law (PERL) requires that the employer rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in 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 City is required to contribute the difference_ between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.
The City's contributions to the plan recognized as a part of pension expense for the year ended June 30, 2021 were $3,012,522.
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2021, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $24,997,926.
The City's net pension liability for the Plan is measured as the proportionate share of the net pension liability.
The net pension liability of the Plan is measured as of June 30, 2020, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019, rolled forward to June 30, 2020, using standard update procedures. The City's proportion of the net pension liability was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined. The City's proportionate share of the net pension liability for the Plan as of the measurement dates ended June 30, 2019 and 2020 was as follows:
Proportion - June 30, 2019
Proportion - June 30, 2020
Change - Increase (Decrease)
0.2251%
0.2298%
0.0047%
For the year ended June 30, 2021, the City recognized pension expense of $5,011,733. At June 30, 2021, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Pension contributions subsequent to the measurement date Changes of assumptions
Differences between actual and expected experience
Net difference between projected and actual earning on plan investments
Change in employer's proportion
Differences between the employer's actual contributions and the employer's proportionate share of contributions
Total
54 Deferred Outflows
of Resources
$ 3,223,098
1,607,778
644,660
341,129
131,788
$ 5,948,453
Deferred Inflows
of Resources
$
131 ,594
167,892
378,187
$ 677,673
280
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 10 - PENSION PLAN (Continued}
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$3,223,098 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 ended June 30, 2022. Other amounts reported as deferred outflow of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Year Ending
June 30
2022
2023
2024
2025
2026
Thereafter
$ 423,655
728,182
580,927
314,918
Historically, the pension liability for governmental activities has generally been liquidated by the General fund.
C. Actuarial Assumptions
The total pension liabilities in the June 30, 2019 actuarial valuations were determined using the following actuarial assumptions:
Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Payroll Growth
Projected Salary Increase
Investment Rate of Return
Mortality
June 30, 2019
June 30, 2020
Entry-Age Normal Cost Method
7.15%
2.50%
2.75%
Varies by Entry Age and Service
7.15%(
1 )
Derived using CalPERS'
Membership Data for all Funds(
2 >
(
1 > Net of pension plan investment expenses, including inflation. (
2 > The mortality table was developed based on CalPERS specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016.
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2017, valuation were based on the results of December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experiences Study can be found on the CalPERS website. 55 281
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2021
NOTE 10 - PENSION PLAN (Continued)
D. Discount Rate
The discount rate used to measure the total pension liability was 7 .15%. 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.
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 PERF 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 shortterm and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.
The expected real rates of return by asset class are as follows:
New Strategic Real Return
Asset Class<a> Allocation Years 1-1o<b)
Global Equity 50.0% 4.80%
Fixed Income 28.0% 1.00%
Inflation Assets 0.0% 0.77%
Private Equity 8.0% 6.30%
Real Assets 13.0% 3.75%
Liquidity 1.0% 0.00%
Total 100.00%
<a) In the CalPERS CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (b) An expected inflation of 2.00% used for this period (c) An expected inflation of 2.92% used for this period 56 Real Return
Years 11+<c>
5.98%
2.62%
1.81%
7.23%
4.93%
-0.92%
282
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 10 - PENSION PLAN (Continued)
D. Discount Rate (Continued)
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate - The following presents the City's proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the City'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:
Discount Rate -1 %
6.15%
$ 38,059,417
Current Discount Rate
7.15%
$ 24,997,926
E. Pension Plan Fiduciary Net Position
Discount Rate +1%
8.15%
$ 14,243,835
Detailed information about the Plan's fiduciary net position is available in the separately issued CalPERS financial reports.
F. Payable to the Pension Plan
The City did not have any outstanding contributions payable to the pension plan as of June 30, 2021.
NOTE 11 - POSTEMPLOYMENT BENEFITS
A. Plan Description
The City administers the City Retirees Benefits Plan (OPES Plan), agent multiple employer defined benefit postemployment healthcare plan. Benefits are provided to eligible employees as follows:
Dispatchers Fire General Police
(Hired before 1/1/08) (Hired before 4/1/10) (Hired before 7/1/08) (Hired before 4/1/10) . Eligibility 50% at 1 0 years plus 5% per year to 100% at 20 years . Benefits Medical only
Provided
. Required Age 50 w/10+ yrs. of service Age 50 w/1 0+ i,:rs. of service Age 50 w/1 0+ yrs. of S!lrvice Age 50 w/1 0+ yrs. of service Service City pays all medical benefits City pays all medical benefits City pays all medical benefits City pays all medical benefits up to HMO rates based on up to HMO rates based on up to HMO rates based on up to HMO rates based on eligibility rate above eligibility rate above eligibility rate above eligibility rate above Note: No limitation to Note: No limitation to Note: No limitation to _Note: No limitation to benefits for employees benefits for employees benefits for employees benefits for employees hired prior to 8/7/02 hired prior to 8/7/02 hired prior to 8/7/02 hired prior to 8/7/02 Dependents are eligible to enroll, and benefits continue on to surviving spouses.
Eligible employees hired after the dates listed above, or with less than 10 years of service will receive the Public Employees Medical and Hospital Act minimum benefit.
57 283
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 11 - POSTEMPLOYMENT BENEFITS (Continued)
B. Employees Covered
As of the June 30, 2019 actuarial valuation, the following current and former employees were covered by the benefit terms under the OPES plan:
Active employees
Inactive employees, spouses, or beneficiaries currently receiving benefit payments Inactive employees entitled to, but not yet receiving benefits Total
C. Contributions
170
78 11
259
The OPES Plan and its contribution requirements were established by a resolution incorporated into the City's policies and procedures manual and Memoranda of Understanding with the applicable employee bargaining units and has since been eliminated for all employees hired after the dates provided in the plan description chart found in Section A of this note. The City makes contributions based on an actuarially determined rate. For the fiscal year ended June 30, 2021 , the City's cash contributions were $2,106,055 in payments to the trust and the estimated implied subsidy was $105,000 resulting in total payments of $2,211 ,055.
D. Net OPEB Liability
The City's net OPES liabil ity was measured as of June 30, 2020, and the total OPES liability used to calculate the net OPES liability was determined by an actuarial valuation as of June 30, 2019. The total OPES liability in the June 30, 2019 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Investment Rate of Return
Mortality Rate<
1 >
Pre-Retirement Turnover<
2 >
Healthcare cost trend rates
6.75%
2.75%
3% per anum, in aggregate
6.75%
Derived from CalPERS Membership
Data for all Funds
Derived from CalPERS Membership
Data for all Funds
Non-Medicare - 7.25% for 2021 ,
decreasing to an ultimate rate of 4%
in 2076
Medicare - 6.3% for 2021 ,
decreasing to an ultimate rate of 4%
in 2076
<
1 > Pre-retirement mortality information was derived from data collected during the 1997 to 2015 CalPERS Experience Study dated December 2017 and post-retirement mortality information was derived from the 2007 to 2011 CALPERS Experience Study. The Experience Study Reports may be accessed on the CalPERS website (www.calpers.ca.gov) under Forms and Publications.
<
2> Pre-retirement turnover information was developed based on CalPERS' specific data. For more details, please refer to the 2007 to 2015 Experience Study Report. The Experience Study Report may be accessed on the CalPERS website (www.calpers.ca.gov) under Forms and Publications. 58 284
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 11 - POSTEMPLOYMENT BENEFITS (Continued)
D. Net OPEB Liability (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 following table:
Global Equities
Global Debt Securities
TIPS
Commodities
REITs
Total
E. Discount Rate
Asset Class
Long-term
Target expected real
Allocation rate of return
59.00% 4.82%
25.00% 1.47%
5.00% 1.29%
3.00% 0.84%
8.00% 3.76%
100.00%
The discount rate used to measure the total OPEB liability is 6.75%. This is the expected long-term rate of return on City assets using investment Strategy 1 within the California Employers' Retiree Benefit Trust (CERBT). The projection of cash flows used to determine the discount rate assumed that the City contribution will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan's fiduciary net position is projected to cover all future OPEB payments. Therefore, the discount rate was set equal to the long-term expected rate of return. 59 285
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 11 - POSTEMPLOYMENT BENEFITS (Continued)
F. Changes in the OPEB Liability
The changes in the net OPEB liability for the OPEB Plan are as follows:
Balance at June 30, 2020
(Measurement Date June 30, 2019)
Changes recognized for the measurement period:
Service cost
Interest
Changes in benefit terms
Differences between expected and actual experience
Changes of assumptions
Contributions:
Employer - City's Contribution
Net investment income
Benefit payments, including refunds of employee
contributions
Implicit Rate Subsidy Fulfilled
Administrative expenses
Net changes
Balance at June 30, 2021
(Measurement Date June 30, 2020)
Total OPEB
Liability
$ 26,151,570
781,199
1,788,099
(784,836)
(100,000)
1,684,462
$ 27,836,032
Increase (Decrease}
OPEB Fiduciary
Net Position
$ 9,124,036
2,056,758
308,600
(784,836)
(100,000)
(4,446)
1,476,076
$ 10,600,112
$
Net OPEB
Liability
17,027,534
781,199
1,788,099
(2,056,758)
(308,600)
4,446
208,386
$ 17,235,920
Historically, the OPEB liability for governmental activities has generally been liquidated by the General fund.
G. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The following presents the net OPEB liability of the Authority 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, 2020:
$
1% Decrease
5.75%
20,963,783
Current Discount Rate
6.75%
$ 17,235,920 $
1% Increase
7.75%
14,138,454
H. Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the Authority if it were calculated using health care cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2020:
1% Decrease
$ 13,440,873
Current Healthcare Cost
Trend Rates
$ 17,235,920
60 1% Increase
$ 21,926,674
286
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2021
NOTE 11 - POSTEMPLOYMENT BENEFITS (Continued)
I. OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPES For the year ended June 30, 2021 , the City recognized an OPEB expense of $1,838,411 . At June 30, 2021 , the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred
Outflows of Deferred Inflows
Resources of Resources
OPEB contributions subsequent to the measurement date $ 2,211,055 $ Changes of assumptions 1,034,558
Differences between actual and expected experience 48,105 2,121,772 Net difference between projected and actual earning on OPEB Plan investments 265,864
Total $ 3,559,582 $ 2,121,772
The $2,211,055 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2020 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2022. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:
Year Ending
June 30
2022
2023
2024
2025
2026
Thereafter
$ (119,610)
(93,726)
(90,579)
(108,025)
(169,451)
(191,854)
NOTE 12 - RISK MANAGEMENT
The City manages risk by participating in the public entity risk pools described below and by retaining certain risks.
Public entity risk pools are formally organized as separate entities established under the Joint Exercise of Powers Act of the State of California. As separate entities, those entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each risk pool controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board.
Obligations and liabilities of these risk pools are not the City's responsibility.
The City participates with other public entities in a joint venture under a joint venture powers agreement, which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that CSJVRMA is not a component unit of the City for financial reporting purposes.
61 287
CITY OF LOS BANOS
NOTES TO THE BASIC FINANCIAL ST A TEMENTS
JUNE 30, 2021
NOTE 12 - RISK MANAGEMENT (Continued)
The City is covered for the first $1 ,000,000 of each general liability claim and $500,000 of each worker's compensation claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on a formula, which among other expenses, charges the City's account for liability losses under $1,000,000 and worker's compensation losses under $500,000. The CSJVRMA participates in excess pools, which provide general liability coverage from $1,000,000 to $29,000,000 and Workers Compensation coverage from $500,000 to $5,000,000 and purchases excess insurance above $50,000,000 to the statutory limit.
CSJVRMA is a consortium of fifty-four (54) cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500 et. seq. A Board of Directors governs the CSJVRMA, which meets 3-4 times per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA. The annual financial report may be obtained from the consortium's executive office at 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.
NOTE 13 - COMMITMENTS AND CONTINGENCIES
The City is subject to litigation arising in the normal course of business. In the opinion of the City attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the City.
The City participates in various federal grant programs, the principal of which are subject to program compliance audits pursuant to the Single Audit Act as amended. Accordingly, the government's compliance with applicable grant requirements will be established at a future date. The amount of expenditures which may be disallowed by the granting agencies cannot be determined at this time, although the government anticipates such amounts, if any, will be immaterial.
On March 11, 2020 the World Health Organization declared the outbreak of coronavirus (COVID-19) a pandemic. Accordingly, some functions of the City's operations have been limited to protect the health and safety of its employees. The financial impact that could occur as a result of the pandemic is unknown at this time.
NOTE 14- RESTATEMENT OF BEGINNING FUND BALANCE
A. Implementation of GASB 84
The City has restated the net position for custodial funds in accordance with GASB 84 Fiduciary Activities. The beginning net position of the fund identified below have been restated as presented in the following reconciliation :
Change in accounting principle:
Record the beginning custodial net position in
compliance with GASB 84
Total change in accounting principle
Beginning fund balance/net position, as restated $
NSP Impound
Custodial Funds
10,825
10,825
10,825
62 288
REQUIRED SUPPLEMENTARY INFORMATION
63 289
CITY OF LOS BANOS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES ANO CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
Budgeted Amount
Variance with
Original Final Actual Final Budget
REVENUES
Taxes:
Property $ 7,163,445 $ 7,163,445 $ 7,987,042 $ 823,597
Sales 7,376,335 7,376,335 9,282,344 1,906,009
Franchise 562,500 562,500 619,158 56,658
Other 575,000 575,000 583,634 8,634
Licenses and permits 765,357 2,358,664 2,168,888 (189,776) Intergovernmental 69,803 636,528 686,291 49,763
Charges for services 1,439,007 1,397,957 1,911 ,040 513,084 Fines 40,000 40,000 35,593 (4,407)
Use of property and money 1,035,924 958,924 865,892 (93,032) Miscellaneous 73,500 77,002 106,177 29,175
Total revenues 19,100,871 21,146,355 24,246,059 3,099,705
EXPENDITURES
Current:
General government:
Administration 1,230,752 1,312,698 1,313,711 (1,014)
Contingency 50,000 24,778 11,913 12,865
Total general government 1,280,752 1,337,476 1,325,624 11,852 Public safety:
Police 10,999,565 11 ,106,022 9,519,729 1,586,293
Fire 2,031 ,104 2,146,666 2,021,970 124,696
Building 563,400 1,608,413 1,528,049 80,364
Code enforcement 553,275 555,567 501 ,678 53,889
Total public safety 14,147,344 15,416,668 13,571,426 1,845,242 Highways and streets:
Engineering 173,298 173,298 160,312 12,986
Total highway and streets 173,298 173,298 160,312 12,986 Parks and recreation:
Recreation 1,003,269 994,519 520,209 474,310
Maintenance 793,068 802,057 764,174 37,883
Total parks and recreation 1,796,337 1,796,576 1,284,383 512,193 Economic development:
Community development 936,405 987,726 681 ,291 306,435
Total economic development 936,405 987,726 681 ,291 306,435 Debt service:
Interest and fiscal charges 5,100 5,100 5,100
Total debt service 5,100 5,100 5,100
Capital outlay 445,700 589,000 356,200 232,800
Total expenditures 18,784,936 20,305,844 17,384,336 2,921 ,508 64 290
CITY OF LOS BANOS
GENERAL FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
(Continued)
Budgeted Amount
Original Final Actual
Excess (deficiency) of revenues over
(under) expenditures 315,935 840,511 6,861 ,723
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 33,138
Insurance recoveries 57,632
Total other financing sources (uses) 90,770
Net change in fund balances 315,935 840,511 6,952,493
Fund balance - beginning 21 ,685,943 21,685,943 21,685,943 Fund balance - ending $ 22,001 ,878 $ 22,526,454 $ 28,6381436 65 Variance with
Final Budget
6,021 ,212
33,138
57,632
90,770
6,111 ,982
$ 6,111 ,982
291
CITY OF LOS BANOS
IMPACT FEES SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
Budgeted Amount
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental $ 671,200 $ 721,200 $ 148,612 $ (572,588) Charges for services 1,687,800 1,687,800 7,900,597 6,212,797 Use of property and money 152,500 152,500 21 ,626 (130,874) Miscellaneous 144,610 144,610
Total revenues 2,511,500 2,561,500 8,215,445 5,653,945
EXPENDITURES
Current:
Public safety:
Police 400,000
Total public safety 400,000
Highways and streets:
Road 576,000 642,000 335,123 306,877
Total highway and streets 576,000 642,000 335,123 306,877 Parks and recreation:
Park development 120,000 120,000 50,700 69,300
Total parks and recreation 120,000 120,000 50,700 69,300 Capital outlay 1,792,500 2,801 ,370 1,925,309 876,061
Total expenditures 2,888,500 3,563,370 2,311 ,132 1,252,238 Excess (deficiency) of revenues over
(under) expenditures (377,000) (1,001 ,870) 5,904,313 6,906,183
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 2,574 2,574
Total other financing sources (uses) 2,574 2,574
Net change in fund balances (377,000) (1,001,870) 5,906,887 6,908,757 Fund balance - beginning 22 ,752 ,101 22 ,752,101 22,752,101 Fund balance - ending $ 22,375,101 $ 21 ,750,231 $ 28,658,988 $ 6,908,757 66 292
CITY OF LOS BANOS
COMMUNITY DEVELOPMENT BLOCK GRANT AND HOME GRANTS SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
Budgeted Amount
Variance with
Original Final Actual Final Budget
REVENUES
Intergovernmental $ - $ 168,000 $ 137,324 $ (30,676)
Use of property and money 100 100 160 60
Loan repayments 59,100 59,100 166,407 107,307
Miscellaneous 1,300 1,300 1,373 73
Total revenues 60,500 228,500 305,264 76,764
EXPENDITURES
Current:
Public safety:
Code enforcement 168,000 137,324 30,676
Total public safety 168,000 137,324 30,676
Economic development 50,200 68,400 62,889 5,511
Total expenditures 50,200 236,400 200,213 36,187
Excess (deficiency) of revenues over
(under) expenditures 10,300 (7,900) 105,051 112,951
Net change in fund balances 10,300 (7,900) 105,051 112,951 Fund balance - beginning 329,051 329,051 329,051
Fund balance - ending $ 339,351 $ 321 ,151 $ 434,102 $ 112,951 67 293
CITY OF LOS BANOS
STREETS AND ROADS SPECIAL REVENUE FUND
ST ATE ME NT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
Budgeted Amount
Variance with
Original Final Actual Final Budget
REVENUES
Taxes:
Sales $ 642,259 $ 642,259 $ 1,111 ,806 $ 469,547
Intergovernmental 2,372,519 2,372,519 2,231 ,662 (140,857) Use of property and money 22,000 22,000 2,800 (19,200)
Miscellaneous 300 300 348 48
Total revenues 3,037,078 3,037,078 3,346 616 309,538
EXPENDITURES
Current:
Highways and streets:
Roads 2,024,647 2 024,647 1,797,332 227,315
Total highways and streets 2,024,647 2,024,647 1,797,332 227,315 Capital outlay 75,000 75,000 4,056 70,944
Total expenditures 2,099,647 2,099,647 1,801 ,388 298,259 Excess (deficiency) of revenues over
(under) expenditures 937,431 937,431 1,545,228 607,797
Net change in fund balances 937,431 937,431 1,545,228 607,797 Fund balances - beginning 3,920,890 3,920,890 3,920,890 Fund balances - ending $ 4,858,321 $ 4,858,321 $ 5,466,118 $ 607,797 68 294
CITY OF LOS BANOS
PUBLIC SAFETY SPECIAL REVENUE FUND
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
Budgeted Amount
Variance with
Original Final Actual Final Budget
REVENUES
Taxes:
Property $ 1,278,481 $ 1,278,481 $ 1,395,112 $ 116,631
Sales 2,599,478 2,599,478 3,479,742 880,264
Intergovernmental 133,200 209,794 237,802 28,008
Charges for services 15,500 15,500 13,157 (2,343)
Use of property and money 59,000 59,000 5,536 (53,464)
Miscellaneous 103,834 105,910 2,076
Total revenues 4,085,659 4,266,087 5,237,259 971 ,172
EXPENDITURES
Current:
Public safety:
Police 1,481 ,690 1,485,254 1,290,531 194,723
Fire 1,691 ,602 1,827,498 1,768,321 59,177
Total public safety 3,173,292 3,312,752 3,058,852 253,900 Capital outlay 476,500 1,189,943 1,044,830 145,113
Total expenditures 3,649,792 4,502,695 4,103,682 399,013 Excess (deficiency) of revenues over
(under) expenditures 435,867 (236,608) 1,133,577 1,370,185
OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 5,594 5,594
Total other financing sources (uses) 5,594 5,594
Net change in fund balances 435,867 (236,608) 1,139,171 1,375,779 Fund balance - beginning 6,398,911 6,398,911 6,398,911
Fund balance - ending $ 6,834,778 $ 6,162,303 $ 7,538,082 $ 1,375,779 69 295
CITY OF LOS BANOS
NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION
JUNE 30, 2021
NOTE 1- BUDGETARY DATA
The City Council reviews and adopts an annual budget for the General, Special Revenue, Capital Projects and Enterprise Funds. The City Council holds public hearings and may modify the appropriations by general approval. Budgeted amounts may be transferred between line items within departments with the City Manager's approval. The legal level of expenditure control in the funds is considered to be at the department level.
Operating appropriations lapse at the end of each fiscal year.
The budget is reported on the same basis as the fund types and on a basis consistent with accounting principles generally accepted in the United States of America. Additional appropriations or other changes during the fiscal year may be submitted by the department for Council review and approval.
NOTE 2 - EXCESS APPROPRIATIONS OVER APPROPRIATIONS
The City incurred expenditure in excess of appropriations in the following amounts for the year ended June 30, 2021 :
General Fund
Current:
General government:
Administration $ 1,014
70 296
Proportion of the net pension liability
Proportionate share of the net pension liabiltty
Covered payroll
Proportionate share of the net pension liability as
percentage of covered payroll
CITY OF LOS BANOS
PROPORTIONATE SHARE OF NET PENSION LIABILITY
REQUIRED SUPPLEMENT ARY INFORMATION
LAST 10 FISCAL YEARS*
2015 2016 2017 2018 - 0.2286% 0.2416% 0.2311 % 0.2261 % $ 14,362,655 $ 16,582,007 $ 19,994,163 $ 22,419,524
$ 7,839,915 $ 8,075,142 $ 8,274,888 $ 9,052,650
183.20% 205.35% 241.62% 247.66%
Plan fiduciary net position as a percentage of the total pension liability 78.86% 75.82% 71.81 % 71.38%
NOTES TO SCHEDULE
Changes In Bene.fit Terms - None
Changes in Assumptions - None
•schedule is intended to show information for ten years. Additional years will be displayed as they become available. 71 2019 2020 2021
0.2262% 0.2251% 0.2298%
$ 21 ,796,766 $ 23,063,963 $ 24,997,926
$ 9,437,456 $ 9,995,545 $ 10,680,273
230.96% 230.74% 234.06%
73.65% 74.49% 74.26%
297
Actuarially required contribution (actuarially determined) $ Contributions in relation to the actuarially determined contributions
Contribution deficiency (excess) $
Covered payroll $
Contributions as a percentage of covered payroll
CITY OF LOS BANOS
SCHEDULE OF PENSION CONTRIBUTIONS
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS*
2014 2015 2016 2017
2,007,582 $ 2,092,368 $ 2,438,630 $ 2,720,626
2,007,582 2,092,368 2,438,630 2,720,626
$ $ $_
7,839,915 $ 8,075,142 $ 8,274,888 $ 9,052,650
25.61% 25.91% 29.47% 30.05%
*Schedule is intended to show information for ten years. Additional years will be displayed as they become available. 72 2018 2019 2020 2021
$ 2,937,919 $ 2,874,876 $ 3,012,522 $ 3,223,098
2,937,919 2,874,876 3,012,522 __ 3,223,098
$ $ $ $
$ 9,437,456 $ 9,995,545 $ 10,680,273 $ 10,465,119
31.13% 28.76% 28.21% 30.80%
298
CITY OF LOS BANOS
SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS
REQUIRED SUPPLEMENT ARY INFORMATION
LAST 10 YEARS*
Total OPEB Liability:
Service cost
Interest on total OPEB liability
Changes of assumptions
Differences between expected and actual experience
Benefit payments, including refunds of employee contributions Imp11cIt rate suosIay
Net change in total OPEB liability
Total OPEB liability - beginning
Total OPEB liability - ending (a)
OPEB Plan Fiduciary Net Position:
Net investment income
Contributions
Employer - City's Contribution
Employer - Implicit Subsidy
Administrative expenses
Benefit payments, including refunds of employee contributions Implicit rate subsidy fulfilled
Net change in plan fiduciary net position
Plan fiduciary net position beginning
Plan fiduciary net position - ending (b)
Net OPEB liability - ending (a) - (b)
Plan fiduciary net position as a percentage of the total OPEB liability Covered-employee payroll
Net OPEB liability as a percentage of covered payroll
Notes to Schedule:
2018
$ 948,983
1,580,117
(580,388)
(150,022)
1,798,690
21 ,989,323
$ 23,788,013
$ 516,055
1,080,904
150,022
(2,512)
(580,388)
(1 50,022)
1,014,059
4,890,030
$ 5,904,089
$ 17,883,924
24.82%
9,057,433
197.45%
2019 2020
$ 977,452 $ 821 ,453
1,634,419 1,954,156
839,742 602,389
69,969 (2,795,350)
(685,805) (754,824)
(1 50,022) (150,022)
2,685,755 (322,198)
23,788,013 26,473,768
$ 26,473,768 $26,151,570
$ 472,333 $ 461 ,290
1,848,085 1,883,561
150,022 150,022
(3,079) (1 ,614)
(685,805) (754,824)
(150,022) (150,022)
1,631 ,534 1,588,413
5,904,089 7,535,623
$ 7,535,623 $ 9,124,036
$ 18,938,145 $ 17,027,534
28.46% 34.89%
9,306,512 11 ,322,323
203.49% 150.39%
*Schedule is intended to show information for ten years. Additional information will be displayed as it becomes available. 73 2021
$ 781 ,199
1,788,099
(784,836)
(100,000)
1,684,462
26,151 ,570
$ 27,836,032
$ 308,600
1,951 ,758
105,000
(4 ,446)
(784,836)
(100,000)
1,476,076
9,124,036
$ 10,600,112
$ 17,235,920
38.08%
11 ,563,678
149.05%
299
CITY OF LOS BANOS
SCHEDULE OF OPEB CONTRIBUTIONS
REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS*
2018 2019 2020
Actuarially Determined Contribution (ADC)
Contributions in relation to the actuarially
determined contributions
$ 1,997,107 $
(1,230,926)
2,115,559 $ 1,871,790
(1, 998,107) (2,056,758)
Contribution deficiency (excess) $ 766,181 $ 117,452 $ (184,968) Covered-employee payroll $ 9,057,433 $ 9,306,512 $ 11,322,323 Contributions as a percentage of covered payroll 13.59% 21.47% 18.17% Notes to Schedule:
Methods and assumptions used to determine contributions:
Actuarial Cost Method
Amortization Method
Amortization Period
Inflation
Assumed Payroll Growth
Health Trend Rates
Investment Rate of Return
Retirement Age
Mortality
Entry age normal, level percent of pay
Closed period , level percent of pay
26 years
2.75%
3.00%
Non-Medicare - 7.25% for 2021 , decreasing to an ultimate rate of 4% in 2076 Medicare - 6.3% for 2021, decreasing to an ultimate rate of 4% in 2076
6.75%
50 years
The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015
Pre-retirement mortality probability based on 2017 CalPERS 1997-2015 Experience Study covering all CalPERS participants. Post-retirement mortality probability based on CalPERS Experience Study 2007-2011 covering participants in CalPERS. *Schedule is intended to show information for ten years. Additional information will be displayed as it becomes available. 74 2021
$ 1,906,609
(2,211 ,055)
$ (304,446)
$ 11,563,678
19.12%
300
COMBINING AND INDIVIDUAL FUND FINANCIAL
STATEMENTS AND SCHEDULES
75 301
THIS PAGE IS LEFT BLANK INTENT!ONALL Y.
76 302
NONMAJOR GOVERNMENTAL FUNDS
SPECIAL REVENUE FUNDS
ASSESSMENT DISTRICTS
These funds are used for maintenance of sidewalks, landscaping, parks, street signs, streetlights, trees, fences, storm drains and professional seNices in designated districts within the City that are then charged to the residents through the property tax roll.
HCDGRANT
This fund is used to account for two HCD grants. The first grant provides funding for the Planning Grants Program (PGP) that is used to prepare, adopt, and implement a plan for Accelerating Housing Production and Streamlined Housing Production. This includes updating planning documents, entitlement processes or zoning ordinances in accordance with this plan. The second grant provides funding for the Local Early Action Plan (LEAP) which provides financial assistance for technical assistance, preparation, and adoption of planning documents and process improvements to accelerate housing production and facilitate compliance to implement the sixth cycle of the regional housing needs assessment. 77 303
CITY OF LOS BANOS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING BALANCE SHEET
JUNE 30, 2021
S~ecial Revenue Funds
Total
Nonmajor
Assessment HCD Governmental
Districts Grant Funds
ASSETS
Cash and investments $ 489,502 $ - $ 489,502
Accounts receivable 42,090 42,090
Taxes receivable 33,098 33,098
Interest receivable 455 455
Intergovernmental receivables 115,894 115,894
Total assets $ 565,145 $ 115,894 $ 681 ,039
LIABILITIES
Accounts payable $ 221 ,932 $ 10,917 $ 232,849
Due to other funds 104,977 104,977
Total liabilities 221,932 115,894 337,826
FUND BALANCES:
Restricted 343,213 343,213
Total fund balances 343,213 343,213
Total liabilities and fund balances $ 565,145 $ 115,894 $ 681 ,039 78 304
CITY OF LOS BANOS
NONMAJOR GOVERNMENTAL FUNDS
COMBINING STATEMENT OF REVENUES, EXPENDITURES AND
CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2021
REVENUES
Intergovernmental
Charges for services
Use of property and money
Total revenues
EXPENDITURES
Current:
Parks and recreation
Economic development
Capital outlay:
Parks and recreation
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Net change in fund balances
Fund balances - beginning
$
Seecial Revenue Funds
Assessment HCD
Districts Grant
- $ 116,697
2,506,288
1,448
2,507,736 116,697
2,226,306
116,697
133,531
2,359,837 116,697
147,899
147,899
195,314
$
Total
Nonmajor
Governmental
Funds
116,697
2,506,288
1,448
2,624,433
2,226,306
116,697
133,531
2,476,534
147,899
147,899
195,314
Fund balances - ending $ 343,213 .:....---- $ - .;.. $ __ .;;. 34.;.;3;.:,;,2;.;1~3 79 305
CITY OF LOS BANOS
ASSESSMENT DISTRICT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET TO ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
Special Revenue
Final Budgeted Actual Variance with
Amounts Amounts Final Budget
REVENUES
Charges for services $ 2,559,030 $ 2,506,288 $ (52,742) Use of property and money 3,560 1,448 (2,112)
Total revenues 2,562,590 2, 507,736 (54,854)
EXPENDITURES
Current:
Parks and recreation 2,384,675 2,226,306 158,369
Capital outlay:
Parks and recreation 171,330 133,531 37,799
Total expenditures 2,556,005 2,359,837 196,168
Excess (deficiency) of revenues over
(under) expenditures 6,585 147,899 141,314
Fund balances - beginning 195,314 195,314
Fund balances - ending $ 201 ,899 $ 343,213 $ 141,314
80 306
CITY OF LOS BANOS
HCD GRANT FUND
SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE - BUDGET TO ACTUAL
FOR THE YEAR ENDED JUNE 30, 2021
Special Revenue
Final Budgeted Actual Variance with
REVENUES
Intergovernmental
Total revenues
EXPENDITURES
Current:
Economic development
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Fund balances - beginning
Fund balances - ending
Amounts
$ 199,000
199,000
199,000
199,000
81 Amounts Final Budget
$ 116,697 $ (82,303)
116,697 {82,303)
116,697 82,303
116,697 82,303
307
THIS PAGE IS LEFT BLANK INTENTIONALLY.
82 308
INTERNAL SERVICE FUNDS
FLEET MAINTENANCE
This fund is used for the maintenance, service, and repair of the City's fleet.
INFORMATION TECHNOLOGY
This fund is used to support, maintain, and enhance the City's information technology hardware, software, and communications infrastructure.
RETIREE'S HEAL TH BENEFITS
This fund is used to charge the departments for retiree health benefits. 83 309
CITY OF LOS BANOS
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF NET POSITION
JUNE 30, 2021
Retiree's
Fleet Information Health
Maintenance Tech no log}'. Benefits Total
ASSETS
Current assets:
Cash and investments $ $ 32,984 $ 238,091 $ 271,075
Interest receivable 22 45 91 158
Accounts receivable 2,563 2,563
Total current assets 2,585 33,029 238,182 273,796
Noncurrent assets:
Capital assets:
Construction in progress 1,764 1,764
Buildings and improvements 30,787 30,787
Machinery and equipment 766,276 642,097 1,408,373
Less: accumulated depreciation (770,519) (464,265) (1,234,784) Total noncurrent assets 28,308 177,832 206,140
Total assets 30,893 210,861 238,182 479,936
DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 68,104 52,193 120,297
Deferred outflows from OPEB 43,462 39,333 82,795
Total deferred outflows of resources 111 ,566 91 ,526 203,092
LIABILITIES
Current liabilities:
Accounts payable and other current liabilities 22,364 630 22,994 Due to other funds 22,213 22,213
Compensated absences 6,798 3,006 9,804
Total current liabilities 51,375 3,636 55,011
Noncurrent liabilities:
Net pension liability 329,260 244,085 573,345
Net OPEB liability 210,449 190,452 400,901
Total long-term liabilities 539,709 434,537 974,246
Total liabilities 591,084 438,173 1,029,257
DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 10,066 10,269 20,335
Deferred inflows from OPEB 25,907 23,445 49,352
Total deferred inflows of resources 35,973 33,714 69,687
NET POSITION (DEFICIT)
Net investment in capital assets 28,308 177,832 206,140 Unrestricted (512,906) (347,332) 238,182 (622,056)
Total net position (deficit) $ (484,598) $ (169,500) $ 238,182 $ (415,916) 84 310
CITY OF LOS BANOS
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF REVENUES, EXPENSES AND
CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2021
Retiree's
Fleet Information Health
Maintenance Technology Benefits Total
Operating revenues:
Interdepartmental charges $ 828,485 $ 439,142 $ 2,106,055 $ 3,373,682 Miscellaneous 4,658 10,903 15,561
Total operating revenues 833 143 450,045 2,106,055 3,389,243 Operating expenses:
Personnel services 364,676 (53,949) 2,106,054 2,416,781 Contractual services 5,141 190,117 195,258
Utilities 188,860 184 189,044
Repairs and maintenance 305,504 305,504
Insurance 5,791 5,424 11 ,215
Other supplies and expenses 22,078 1,949 24,027
Depreciation 8,900 53,220 62,120
Total operating expenses 900,950 196,945 2,106,054 3,203,949 Operating income (loss) (67,807) 253,100 185,294
Nonoperating revenues (expenses):
Gain (loss) on sale of assets (19,985) (19,985)
Investment earnings 1,374 776 1,220 3,370·
Interest and fiscal charges (14) (14)
Total nonoperating revenues (expenses) 1,360 (19,209) 1,220 (16,629) Change in net position (66,447) 233,891 1,221 168,665
Net position (deficit) - beginning (418,151 ) {403,391 ) 236,961 (584,581 ) Net position (deficit) - ending $ (484,598) $ p 69,500) $ 238,182 $ (415,916) 85 311
CITY OF LOS BANOS
INTERNAL SERVICE FUNDS
COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2021
Retiree's
Fleet Information Health
Maintenance Technologies Benefits Total
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from interfund services provided $ 825,922 $ 439,142 $ 2,106,055 $ 3,371,119 Payments to suppliers (549,566) (212,739) (762,305)
Payments to or on behalf of employees for services (282,813) (137,589) (2,106,054) (2,526,456) Receipts from other operating revenue 4,658 10,903 15,561 Net cash provided (used) by operating activities (1,799) 99 717 97,919
CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES
Loans from other funds 22,213 22,213
Net cash provided (used) by non-capital financing activities 22,213 22,213
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Principal payments on long-term debt (3,676) (3,676)
Acquisition of capital assets (24,812) (112,978) (137,790) Interest paid (14) (14)
Net cash provided (used) by capital and related
financing activities (28,502) (112,978) (141,480)
CASH FLOWS FROM INVESTING ACTIVITIES
Investment earnings 1,574 1,115 1,632 4,321
Net cash provided (used) by investing activities 1 574 1,115 1,632 4,321 Increase (decrease) in cash and cash equivalents (6,514) (12,146) 1,633 (17,027) Cash and equivalents - beginning 6,514 45,130 236,458 288,102 Cash and equivalents - ending $ $ 32 984 $ 238 091 $ 271 ,075 Reconciliation of Operating Income /Loss) to Net Cash Provided {Used) by Operating Activities Operating income (loss) $ (67,807) $ 253,100 $ $ 185,294 Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:
Depreciation expense 8,900 53,220 62,120
(Increase) decrease in:
Accounts receivable (2,563) (2,563)
Prepaid items 2,338 2,338
Deferred outflows of resources for pensions 8,430 55,217 63,647 Deferred outflows of resources for OPEB (14,860) 9,471 (5,389) Increase (decrease) in:
Accounts payable and other liabilities (22,192) (17,403) (39,595) Compensated absences (67) 1,137 1,070
Net pension Liability 29,050 (168,251) (139,201)
Net OPEB liability 63,553 (60,203) 3,350
Deferred inflows of resources for pensions (8,940) (16,163) (25,103) Deferred inflows of resources for OPEB 4,697 (12,746) (8,049) Net cash provided (used) by operating activities $ p ,799) $ 99,717 $ $ 97,919 86 312
STATISTICAL SECTION
87 313
THIS PAGE IS LEFT BLANK /NTENTIONALL Y.
88 314
STATISTICAL SECTION -OVERVIEW
This part of the City of Los Banos' Annual Comprehensive Financial Report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the government's overall financial health.
Contents
Financial Trends: These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.
Revenue Capacity: These schedules contain information to help the reader assess the government's most significant local revenue sources, sales and property taxes.
Debt Capacity: These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information: These schedules offer demographic and economic indicators to help the reader understand the environment within which the government's financial activities take place.
Operating Information: These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the government provides and the activities it performs.
89 315
.Governmental activitie_s
Net investment in capital assets
Restricted
Un restricted
Total governmental activities
net position
Business-type activities
Net investment in capital assets
Restricted
Unrestricted
Total business-type activities
net position
Pri!Il.<i!Y.JI.OVernment
Net investment in capital assets
Restricted
Unrestricted
Total primary government
net position
$
2011-2012
90,435,796 $
10,791 ,141
11,272,314
2012-2013
87,022,967 $
9,415,962
12,020,755
CITY OF LOS BANOS
NET POSITION BY COMPONENTS
LAST TEN FISCAL YEARS
Fiscal Years
2013-2014
83,335,435 $
11 ,942,215
108999
2014-2015
74,482 ,065 $
12,507,436
(639,257)
2015-2016
83,051 ,535 $
14,014,590
4,527,558
2016-2017
77,813,813 $
19,345,542
5,374,816
2017-2018
73,679,314 $
28,042,938
(10,084,047)
2018-2019
71 ,701 ,732 $
34,310,692
(9,085,174)
2019-2020
70,986,296 $
41 ,605,638
(4 ,680,881 )
2020-2021
72,183,070
50,090,885
1,266,673
$ 112,499,251 l_ 108,459,684 $ 106,~,649 $ 86,350,244 $ _ _1_()_1593,683 $ 102,534,11_1_ l__J11,§38 ,2QQ. $ 96,927,250_ $ 107,911,053 $ 123,540,628 $ 42,580,463 $
8,453,426
14,670,827
42,539,669 $
8,349,804
17,934,205
46,049,921 $
8,154,696
16,092,089
45,206,093 $
8,748,625
18,_11Z_,680
45,816,837 $
10,468,024
21,106,896
46,906,196 $
12,796,446
23,730,905
51,171,643 $
14,747,937
20,300,902
55 ,063,074 $
15,627,011
22~ 541
55,419,531 $
18,399,783
26,982,634
54,939,541
23,107,727
32,746, 134
$ 65,704 716 $ 68,823,678 L_l(),]96,706 $ 72,082,398 $ 77,391 ,757 ~ 83, 433, 547 ~ .220,482 $ 93,008,626 $ 100,801 ,948 $ 110,793,402 $ 133,024,845 $ 129,562,636 $ 129,385,356 $ 119,688,158 $ 128,868,372 $ 124,720,009 $ 124,850 ,957 $ 126,764,806 $ 126,405,827 $ 127,122,611 19,244,567 17,765,766 20,096,911 21 ,256,061 24,482,614 32,141 ,988 42,790,875 49,937,703 60,005,421 73,198,612 25,934,572 29,954,960 26,999,088 17,488,423 25,634 454 29,105,721 10,216,855 13,233,367 22 ,301 ,753 34 1,807 $ 178,203,9~ $ 177,283,361. $ 176,481..355 $ 158,432,642 $ 178,985,440 L.1_!35_,967~ $ 177,858,687 $ 189,935,876 $ 208,713,001 $ 234,334,030 Source: City of Los Banos Finance Department
90 316
CITY OF LOS BANOS
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 Expenses
Governmental activities:
General government $ 2,010,394 $ 1,574,303 $ 1,075,846 $ 1,142,994 $ 1,371 ,651 $ 1,186,905 $ 1,487,571 $ 1,535,597 $ 1,615,041 $ 1,680,946 Public safety 10,886,906 11 ,001,775 11 ,462,611 11 ,382,513 9,687,489 12,473,523 15,813,709 16,098,104 18,938,351 18,002,198 Highways and streets 5,671,224 5,845,904 5,509,207 5,581,131 6,023,160 6,222,855 6,436,759 6,987,449 6,456,997 6,232,243 Parks and recreation 3,157,117 3,110,563 3,246,159 3,319,476 4,281,104 4,735,095 4,612,509 4,799,711 5,131,771 4,812,593 Redevelopment 1,727,676
Economic development 25,133 97,369 898,589 770,417 582,985 681 ,828 945,745 980,764 1,018,880 942,026 Interest on long-term debt 367,517 62,042 11,251 10,451 11,594 11 ,232 9,779 8,249 6,641 1,203 Total governmental activities ~ 845, 967 21,691 ,956 22,203,663 22,206,982 21,957,983 25,311,438 29,306,072 30,409,874 33,167,681 31,671 ,209 Business-type activities:
Water 4,228,356 4,043,632 4,116,815 4,012,484 4,400,180 4,356,044 4,772,454 4,928,253 4,810,242 5,132,183 Wastewater 4,174,243 4,131 ,577 4,127,310 3,996,860 4,418,235 4,197,226 4,527,236 4,557,451 4,896,520 4,878,692 Airport 508,541 595,136 509,952 427,161 361 ,224 330,699 336,645 337,840 336,588 305,973 Solid waste 5,019,961 5,626,173 6,964,870 5,419,558 6,060,817 6,282,604 5,745,491 6,732,856 7,593,755 8,027,609 Total business-type activities ~-13,931,101 14,396,518 15,718,947 ______1l, 856, 06:3 15,240,456 15,166,573 15,381 ,826 16,556,400 ____!li33 7, 105 _________1_!l_.344,457 Total primary government expenses $ 37,777,068 $ 36,088 474 $ 37,922,610 $ 36,063 045 $ 37,198 439 $ 40,478,011 $ 44,687,898 $ 46,966,274 $ 50,804,_786 $ 50,015,666 Program Revenue
Governmental activities:
Charges for services $ 3,581 ,268 $ 4,348,894 $ 3,629,571 $ 4,022,788 $ 5,001,906 $ 5,593,570 $ 8,037,154 $ 7,799,743 $ 8,896,352 $ 10,355,202 Operating grants and contributions 2,782,009 3,386,608 3,625,821 3,596,504 3,385,289 3,808,707 5,172,313 5,673,812 6,015,032 4,052,293 Capital grants and contributions __ 4_,873, 145 1,137,908 1,469,956 1,775,933 2,623,070 4,753,878 3,469,161 6,650,241 10,976,153 8,218,079 Total governmental activities 11,236,422 8,873,410 8,725,348_ __ 9_,395,22~ 11 010,265 14,156,155 16,678,628 20,123,796 25,887,537 ~ 625,57 4 Business-type activities:
Charges for services 14,390,214 16,074,638 16,802,170 17,823,033 19,539,564 20,693,974 21,568,675 20,979,032 22,831,073 26,263,090 Operating grants and contributions 90,611 22,455 24,737 15,334 24,812 34 ,588 27,363 22,604 25,342 130,305 Capital grants and contributions 159,298 653,940 833,776 1,146,422 Total business-type activities 14,480,825 16,097,093 16,826,9oZ 17,838,361_ 19,564,376 20,728,562 21 ,755,336 21 ,655,576 23,690,191 27,539,817 Total primary government program
revenue $ 25,717,247 $ 24,970,503 $ 25,552,255 $ 27,233,592 $ 30,574,641 $ 34,884,717 $ 38,433,964 $ 41,779,372 $ 49,577,728 $ 50,165,391 91 317
CITY OF LOS BANOS
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(Continued)
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 Net (expense)/revenue:
Governmental activities $ (12,609,545) $ (12,818,546) $ (13,478,315) $ (12,811,757) $ (10,947,718) $ (11,155,283) $ (12,627,444) $ (10,286,078) $ (7,280,144) $ (9,045,635) Business-type activtties 549,724 1,700,575 1,107,960 3,982,304 4,323,920 5,561,989 6,373,510 5,099,176 6,053,086 _ 9,195,360 Total primary government (expenses)
revenue, net $ t12,05s,021 > $ (11,117,971 ) $ (12,370,355) $ (8,829,453) $ (6,623,798) $ (5,593,294) $ {6,253,934) $ (5,186,902) $ (1,227,058) ~9,725 General Revenues
Governmental activities:
Taxes:
Property taxes $ 4,946,843 $ 5,676,238 $ 6,031 ,996 $ 5,578,732 $ 5,704,220 $ 6,229,501 $ 6,793,665 $ 6,793,665 $ 7,305,948 $ 9,382,154 Sales taxes 2,571,065 2,740,697 2,786,423 3,829,042 4,012,401 4,613,579 5,594,516 5,594,516 7,750,981 12,762,086 Other taxes 758,928 844,820 925,402 1,072,950 1,158,812 1,237,553 1,181,620 1,181 ,620 1,118,412 1,233,540 Use of money and property 1,024,908 1,150,414 1,092,444 1,205,110 1,145,645 1,287,188 1,935,306 1,935,306 1,876,676 902,417 Insurance recoveries 240,396
Developer contributions 1,975,532
Miscellaneous 146,716 (4,264,350) 243,265 80,389 124,913 76,560 76,560 215,189 395,013 Transfers (522,782) 15,432 (6,762) (5,124) (5,696) (3,776) (6,544) (6,544) (3,259) Extraordinary item ------ 12,051,254
Total governmental activities 8,778,962 10,574,317 6,565,153 26,191,157 12,095,771 13,488,958 15,575,123 15,575,123 18,263,947 24,675,210 Business-type activities:
Property taxes 2,390 4,598 4,493 7,626 8,454 3,860 3,717 3,717 3,963 4,077 Use of money and property 209,252 433,926 307,030 384,004 334,106 529,413 1,245,717 1,245,717 1,138,933 188,669 Developer contributions 427,312
Miscellaneous 1,206,745 66,655 99,360 161,373 131,545 158,676 432,990 432,990 594,081 603,348 Transfers (Note 4) - __(!5,432) 6,762 ~ 5,696 3,776 6,544 6,544 3,259 Total business-type activities 1,418,387 489,747 417,645 985,439 479,801 695,725_ 1,688,968 1,688,968 ~0,236 796,094 Total primary government general
revenues $ 10,197,349 $ 11,064,064 $ 6,982,798 $ 27,176,596 $ 12,575,572 $ 14,184,683 $ 17,264,091 $ 17,264,091 l__1Q,_Q04, 183 ~471,304 Changes In Net Position
Governmental $ (3,830,583) $ (2,244,229) $ (6,913,162) $ 13,379,400 $ 1,148,053 $ 2,333,675 $ 861,514 $ 5,289,045 $ 10,983,803 $ 15,629,575 Business-type 1,968,111 2,190,322 1,525,605 4,967,743 4,803,721 6,257,714 7,069,235 6,788,144 7,793,322 __ 9_,991,454 Total primary government $ {1,862,472) $ (53,907/ $ (5,387,557) $ 18,347,143 $ 5,951 ,774 $ 8,591 ,389 $ 7,930,749 $ 12,077,189 $ 18,777,125 $ 25,621,029 Source: City of Los Banos Finance Department
92 318
General Fund:
Nonspendable
Restricted
Committed
Assigned
Unassigned
Total general funds (1)(2)
All other governmental funds:
Nonspendable
Restricted
Unassigned
Total all other governmental funds
Source: City of Los Banos Finance Department
Notes:
2011-2012
$ 5,752 $
283,826
5,603 832
$ 5,893,410 $
$ $
12,898,904
(1 ,094,103)
$ 11,804,801 $
CITY OF LOS BANOS
FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
1,506 $ 698 $ 2,933 $ 3,938 $ 248
693,821 2,179,757 3,335,429 3,266,323
6,339,177 7 202,640 7,843 490 8 638 970 9,017 100
6,340,683 $ 7 897,159 $ 10,026,180 $ 11,978 337 $ 12,283,671 - $ $ - $ 852,459 $ - 12,237,064 11,732,860 12,294,820 13,818,032 19,174,130 (1,038,011 ) (751 ,255) (733,613) (701 ,772) (672,702)
11,199 053 $ 10,981,605 $ 11 561,207 $ 13,968,719 $ 18,501 ,428 (1) Increase in fund balance for FY 2013-2014 due to one time revenue from the dissolution of the Los Banos Redevelopment Agency. 2017-2018
$ 2,970
494,657
3,916,672
8,709 292
$ 13,123,591
$ 7,293
24,888,393
(659,139)
$ 24,236,547
(2) Increase in fund balance for FY 2014-2015 due to one time spike from the end of the State of California Triple Flip program and an increase in property tax. 93 2018-2019 2018-2019 2020-2021
$ 1,087 $ 2,381 $
674,349 457,876 4,457,852
3,717,891 6,214,047 5,911,193
11,437,736 15,011,639 ___1_13_,_269, 391
$ 15,831,063 $ 21,685,943 L___18,63~436
$ 4,862 $ 2,431 $
31 ,350,743 38,833,591 47,685,213
(635,273)
$ 30,720,332 $ 38,836,022 ~68~213
319
CITY OF LOS BANOS
CHANGES IN FUND BALANCES - GOVERNMENT AL FUNDS
LAST TEN FISCAL YEARS
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 Revenues
Taxes:
Property $ 7,427,582 $ 5,642,221 $ 6,262,533 $ 6,863,634 $ 6,316,878 $ 6,504 ,693 $ 7,198,259 $ 7,859,108 $ 8,546,862 $ 9,382,154 Sales 4,226,624 4,463,919 4,671 ,192 5,026,830 6,094,290 6,458,115 8,075,623 9,248,865 11 ,767,581 13,873,892 Franchise 445,375 456,482 480,391 511,545 534,702 546,061 563,611 540,449 566,328 619,158 Motor vehicle 1,010,544 815,527 1,124,654 919,197
Other taxes 282,145 286,742 364,429 398,625 523,261 595,119 652,890 621,498 518,924 583,634 Licenses and permits 200,091 305,599 305,953 456,341 855,171 1,123,244 1,012,757 763,207 1,169,141 2,168,888 Intergovernmental 768,206 1,261,856 1,686,798 1,050,293 1,595,939 2,019 ,191 2,141 ,795 2,602,521 8,125,304 3,558,388 Charges for services 3,916,232 3,337,523 2,824,440 3,477,841 5,581 ,250 7,702,436 8,538 ,554 8,661 ,055 8,562,532 12,331 ,082 Fines 97,735 68,731 60,509 62,505 50,546 64,129 67,496 59,806 45,227 35,593 Use of property and money 1,237,070 1,069,142 1,150,414 1,092,444 1,205,110 1,145,645 1,287,188 1,935,306 1,876,676 902,417 Contributions and donations 2,055
Loan repayments 182,621 166,407
Miscellaneous 199~ 66,593 141,901 98,708 250,317 280,468 356,333 271,538 216,264 358,418 Total revenues 19,812,720 17,774,335 19,073,214_ 19,957,963 23,007,464 26,439,101 29,894 506 32,563,353 41 ,577,460 ~ 98_Q,031 Expenditures
Current:
General government 1,696,680 1,495,941 1,046,961 1,067,648 1,083,155 1,117,098 1,276,300 1,229,744 1,315,025 1,325,624 Public safety 10,253,039 10,255,576 10,91 2, 197 11 ,167,699 12,202,688 13,423,807 14,592,038 14,442,012 15,509,530 16,767,602 Highways and streets 1,385,767 1,025,978 1,135,565 1,158,587 1,248,137 1,583,281 2,084,503 2,253,092 2,424,323 2,292,767 Parks and recreation 2,348,142 2,261 ,394 2,422,510 2,555,130 2,858,994 3,546,943 3,228 ,685 3,481 ,902 3,825,646 3,561 ,389 Economic development 67,515 700,675 550,212 503,184 630,829 803,714 890,423 903,798 860,877 Redevelopment 1,420,339
Debt service:
Principal 645,000 1,405,000 9,828 13,263
Interest 834,188 62,042 11 ,251 10,451 11,594 11 ,232 7,950 7,049 I 6,100 5,100 94 320
CITY OF LOS BANOS
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(Continued)
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2019.-2020 2020-2021 Capital outlay:
General government 36,895 86,723 5,425 5,000 28,245 412,723 55,642 413,056 200,676 Public safety 307,962 427,961 468,591 349,660 477,051 1,191,984 320,123 141 ,586 2,740,067 2,593,217 Redevelopment 7,528
Highways and streets 246,028 1,034,416 934,291 254,298 199,387 250,037 424,544 2,348,437 4,056 Parks and recreation 112,161 35,150 200,162 372 ,016 65,670 358,599 522,532 425,141 665,977 Economic development 519 473 6,521 3,348 100 _____i,392 251 Total expenditures 19,144,673 18,184,879 17,754,433 17,319,745 18 977 555 21 ,615,700 23,334,772 23,452,918 29,911,374 28,277,285 Excess (deficiency) of revenues over
(under) expenditures 668,047 (410,544) 1,318,781 2,638,218 4,029,909 4,823,401 6,559,734 9,1 10,435 11 ,666,086 15,702,746 Other Financing Sources (Uses)
Loss on property held for resale (893,899)
Capital lease 70,501
Insurance recoveries 240,396 81,779 50,659 57,632
Transfer in 4,629,361 218,461 164,497 130,932 235,979 126,993 27,025 1,004 824,533 Transfer out (4,652,302) (741 ,243) (149,065) (137,694) (241 ,102) (132,688) (30,801 ) (7,548) (827,792) Proceeds from sale of capital assets 24,851
Sale of capital assets 4,815 83,243 17,910 20,337 19,081 5,587 2,257,084 41 ,306 Claims and judgements ___ 750,000
Total other financing sources (uses) (916,840) 252,069 20,247 76,481 323,684 14,642 15,305 80,822 2,304,484 98,938 Extraordinary Items
Assets transferred to housing Successor
Agency (1 ,124,645)
Assets transferred to/liability assumed by
Successor Agency (8,046,913)
Total extraordinary items (9,171 ,558)
Net changes in fund balances $ (9,420,351 ) $ 1158,475) $ 1,339,028 $ 2,714,699 $ 4,353,593 $ 4,838,043 $ 6,575,039 $ 9,191 ,257 $ 13,970,570 $ 15,801,684 Debt service as a percentage of
noncapital expenditures 7.96% 8.85% 0.07% 0.06% 0.12% 0.12% 0.04% 0.03% 0.03% 0.02% Source: City of Los Banos Finance Department
95 321
Fiscal Year
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
Source:
Notes:
Real Property
Land Improvements
317,257 1,445,927
313,862 1,454,449
338,088 1,530,444
448,810 1,686,158
543,391 1,738,793
573,208 1,881,326
633,774 2,025,405
715,389 2,195,513
783,078 2,380,184
847,060 2,522,661
Merced County Assessor's Office
Merced County Auditor-Controller's Office
CITY OF LOS BANOS
ASSESSED VALUE OF TAXABLE PROPERTY
LAST TEN FISCAL YEARS
(amounts expressed in thousands)
Personal
Property
Personal Utility <
1 ) Total
51,882 2,429 1,817,495
50,534 2,429 1,821,274
50,653 2,429 1,921,614
67,439 3,167 2,205,574
67,619 3,163 2,352,966
67,928 3,152 2,525,614
67,987 3,147 2,730,313
66,186 111 2,977,199
68,165 111 3,231,538
72,207 109 3,442,037
Less Total Taxable Total Direct
Exemptions Assessed Value Rate
73,779 1,743,716 1.00%
72,002 1,749,272 1.00%
77,042 1,844,572 1.00%
78,314 2,127,260 1.00%
82,650 2,270,316 1.00%
103,904 2,421,710 1.00%
109,628 2,620,685 1.00%
118,291 2,858,908 1.00%
122,474 3,109,064 1.00%
125,358 3,316,679 1.00%
Estimated value of taxable property not readily available in the State of California. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of actual property and is subject to the limitations of Proposition 13 passed in 1978. (1) Aircraft value not available after FY 2017-2018
96 322
CITY OF LOS BANOS
TAX REVENUE BY SOURCE - GENERAL FUND
LAST TEN FISCAL YEARS
Fiscal Year Pro~ Sales and Use Franchise
2011-2012 4,411,414
2012-2013 4,919,660
2013-2014 5,541 ,291
2014-2015 6,112,770 (1)
2015-2016 5,551 ,292
2016-2017 5,675,697
2017-2018 6,200,655
2018-2019 6,764,382
2019-2020 7,275,270
2020-2021 7,987,042
Source: City of Los Banos Finance Department
Notes:
2,437,124 424,274
2,571,065 435,827
2,684,458 480,391
2,842,662 511,545
3,829,042 (2) 534,702
4,012,401 546,061
4,613,579 563,611
5,594,516 540,449
7,750,981 566,328
9,282,344 619,158
(1) Increase in property tax due to Triple Flip ending; last admin fee settlement payment. (2) Sales tax increase due to increase in Triple Flip ending and true up payments. 97 Motor Vehicle
18,734
15,232
Other Total
282,145 7,573,691
286,742 8,213,294
364,429 9,070,569
398,625 9,880,834
523,261 10,438,297
595,119 10,829,278
652,890 12,030,735
621,498 13,520,845
518,924 16,111 ,503
583,634 18,472,178
323
Fiscal Year
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
Source:
Notes:
CITY OF LOS BANOS
DIRECT AND OVERLAPPING PROPERTY TAX RA TES
(rate per $1,000 of assessed value)
LAST NINE FISCAL YEARS
Citt Direct Rates Overlappin~ Rates
Los Banos
City of County of Total Unified School Merced
Los Banos Merced District District Bond Colle.9.e Bond
0.1750 0.8250 1.0000 0.0145 0.0251
0.1953 0.8047 1.0000 0.0868 0.0250
0.1953 0.8047 1.0000 0.0961 0.0234
0.1953 0.8047 1.0000 0.1070 0.0214
0.1953 0.8047 1.0000 0.1144 0.0207
0.1953 0.8047 1.0000 0.0792 0.0209
0.1953 0.8047 1.0000 0.0711 0.0202
0.1953 0.8047 1.0000 0.0797 0.0218
0.1953 0.8047 1.0000 0.0796 0.0199
Merced County Auditor-Controller-Tax Collector
Total Rate
0.0396
0.1118
0.1195
0.1284
0.1351
0.1001
0.0913
0.1015
0.0995
In 1978, California voters passed Proposition 13 which sets the property tax rate at 1.00% fixed amount. This 1.00% is shared by all taxing agencies, including the City of Los Banos, for which the subject property resides within. The City of Los Banos's portion varies by several Tax Rate Areas (TRAs) within the City.
Information prior to 2012 is not available.
98 324
CITY OF LOS BANOS
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND TEN YEARS AGO
2020-2021 2010-2011
Percent of Percent of
Total City Total City
Owner Assessed Value Rank Assessed Value Assessed Value Rank Assessed Value WARD ROAD APARTMENTS II LP $ 26,332,537 1 0.79%
WAL-MART REAL ESTATE BUSINESS TRUST 25,642,167 2 0.77% 17,632,357 4 1.04% STONEFIELD HOME INC 23,325,755 3 0.70%
FRANCISCAN HOSPITALLER SISTERS 22,435,246 4 0.68%
TARGET CORP 21,341 ,916 5 0.64% 20,523,786 2 1.22%
D R HORTON CA3 INC 16,317,308 6 0.49%
HOME DEPOT USA INC 13,600,000 7 0.41%
PIONEER DEVELOPMENT COMPANY INC 13,109,604 8 0.40%
SUTTER VALLEY HOSPITALS 12,915,490 9 0.39%
BGRE L LC 12,908,700 10 0.39%
KAGOME USA INC 18,897,585 3 1.12%
CALIFORNIA DAIRIES INC
LOS BANOS DAIRYMEN ASSN 27,958,513 1 1.66%
COLORADO/EAGLE ROCK LLC 16,927,487 5 1.00%
MEMORIAL HOSPITAL LOS BANOS - 15,366,733 6 0.91%
LOWES HIW INC 13,454,580 7 0.80%
COMCAST OF SAN JOAQUIN INC 11 ,733,560 8 0.70%
SOLOMON FRANK JR 10,693,791 9 0.63%
MCCORDUCK PROPERTIES LOS BANOS LLC 10,676,593 10 0.63%
Top 1 O Assessed Values $ 187,928,723 5.66% $ 163,864,985 9.71% Total Assessed Value 2010-2011 $ 1,687,376,000
Total Assessed Value 2020-2021 $ 3,316,679,000
Source: Merced County Assessors Office
99 325
Fiscal
Year
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
Source:
Notes:
CITY OF LOS BANOS
PROPERTY TAX LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS
Percent of Delinquent
Current Tax Current Tax Current Taxes Tax Total Tax
Levies Collections Collected (
1 ) Collections Collections --
1,929,638 1,929,638 100% - 1,929,638
2,129,214 2,129,214 100% 2,129,214
2,352,266 2,352,266 100% 2,352,266
2,861 ,634 2,861 ,634 100% 2,861,634
3,006,979 3,006,979 100% 3,006,979
3,197,238 3,197,238 100% 3,197,238
3,537,012 3,537,012 100% 3,537,012
3,843,207 3,843,207 100% 3,843,207
4,098,951 4,098,951 100% 4,098,951
4,565,361 4,565,361 100% 4,565,361
Merced County Auditor-Controller
(1) Revenue and Taxation Code Sections 7401 through 4717 provide for an alternative method of distribution of tax levies and collections known as the Teeter Plan. Merced County distributes 100% of the current secured roll to the City of Los Banos.
100
326
Fiscal
Years
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
Source:
Notes:
CITY OF LOS BANOS
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS
Governmental Activities <
3 ) Business-Typ_e Activities<4
)
Lease Tax
Revenue Allocation Capital Notes
Bond Bonds <
1 ) Leases COP's Payable Bonds
815,000 56,684 590,000
215,905
173,077
351,212
253,750
151,203
65,593
7,573
California Municipal Statistics, City of Los Banos Finance Department (1) Tax Allocation Bonds are zero in 2011-2012 due to the State dissolving the RDAs. (2) See Assessed Value of Taxable Property schedule for Assessed Values.
Capital
Leases
(3) Governmental Activities are zero in Fiscal Year 2012-2013, due to City paying off the GF debt. (4) Business Activities are zero in Fiscal Year 2019-2020, due to City paying off Debt. 101
COP's
9,343,530
8,521 ,119
2,208,432
1,897,114
1,570,796
1,229,477
868,159
428,159
Total Percent of
Notes Primary Per Assessed
Payable Government Population Capita Valuation <
2 )
109,848 10,915,062 36,546 299 0.63%
87,530 8,608,649 37,017 233 0.49%
64,174 2,488,511 37,168 67 0.13%
39,780 2,109,971 38,670 55 0.10%
14,347 1,936,355 39,359 49 0.09%
1,483,227 39,993 37 0.06%
1,019,362 40,986 25 0.04%
493,752 41,898 12 0.02%
7,573 41 ,923 0.00%
42,869 0.00%
327
Fiscal
Year
2011-2012
2012-2013
2013-2014
2014-2015
2015-2016
2016-2017
2017-2018
2018-2019
2019-2020
2020-2021
Source:
Notes:
General Fund
Debt
CITY OF LOS BANOS
RATIOS OF GENERAL FUND DEBT OUTSTANDING
LAST TEN FISCAL YEARS
General Debt Outstandin~
Redevelopment Total Assessed
Outstandin~ Bonds (
1 l Total Property Value Population
1,461,684 1,461 ,684 1,743,715,991
1,749,273,122
215,905 - 215,905 1,844,571 ,341
173,077 173,077 2,127,260,281
351 ,212 351 ,212 2,270,316,588
253,750 253,750 2,620,761 ,000
151,203 151,203 2,620,685,704
65,593 65,593 2,858,907,614
7,573 7,573 3,109,064,142
3,316,678,388
California Municipal Statistics, City of Los Banos Finance Department. (1) Tax Allocation Bonds are zero in 2011 -2012 due to the State dissolving the RDAs. (2) General Fund debt paid ofI·in 2013
102
36,546
37,017
37 ,168
38,670
39,359
39,993
40,986
41 ,898
41 ,923
42,869
Percent of Actual
Taxable Value
of Property
0.08%
0.00%
0.01 %
0.01 %
0.02%
0.01 %
0.01 %
0.00%
0.00%
0.00%
Per Caeita
40 6
4 9
6 4
2 328
CITY OF LOS BANOS
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
2020-2021 Assessed Valuation: $ 3,316,679,000
Overlapping Tax and Assessment Debt
Merced Community College District School Facilities Improvement District No. 2 Los Banos Unified School District
Total Overlapping Tax and Assessment Debt
Direct and Overlapping General Fund Debt
Merced County General Fund Obligations
Merced County Certificates of Participation
Los Banos Unified School District Certificate of Participation Total Direct and Overlapping General Fund Debt
Overlapping Tax Increment Debt (Successor Agency)
Total Direct Debt
Total Overlapping Debt
Combined Total Debt
Ratios to 2020-2021 Assessed Valuation:
Total Overlapping Tax and Assessment Debt
Total Direct Debt ($7,573)
Combined Total Debt
Ratios to Successor Agency Redevelopment Incremental Valuation($ 655,354,565):
Total Overlapping Tax Increment Debt
1.40%
0.00%
2.52%
3.02%
$
$
Total Debt
06/30/21
5,799,847
64,768,714
23,187,669
9,420,000
19,935,000
19,919,826
City's Share of
% Applicable <
1 l Debt 6/30/21
56.262% $ 3,263,110
66.762% 43,240,889
46,503,999
12.132% 2,813,128
12.132% 1,142,834
66.762% 13,309,005
17,264,967
99.308% 19,781 ,981
83,550,947
$ 83,550,947 <
2)
Notes: (1) The percentage of overlapping debt applicable to the City is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the City divided by the district's total taxable estimated value. (2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue, and non-bonded capital lease obligations.
Source: California Municipal Statistics
103
329
CITY OF LOS BANOS
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS
(Expressed in Thousands of Dollars)
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 Assessed value $ 1,743,716 $ 1,749,272 $ 1,844,572 $ 2,127,260 $ 2,270,317 $ 2,421,710 $ 2,620,686 $ 2,858,908 $ 3,109,064 $ 3,316,679 25% of full assessed value 435,929 437,318 461 ,143 531,815 567,579 605,428 655,172 714,727 777,266 829,170 Debt limit
(15% of reduced assessed value) 65,389 65,598 69,171 79,772 85,137 90,814 98,276 107,209 116,590 124,375 Total net debt applicable to limit
Legal debt margin $ 65,389 $ 65,598 $ 69,171 $ 79,772 $ 85,137 $ 90,814 $ 98,276 $ 107,209 $ 116,590 $ 124,375 Total net debt applicable to the limit
as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Source: Assessed Valuation California Municipal Statistics Note: We have no General Obligation Bonds
104
330
CITY OF LOS BANOS
PLEDGED-REVENUE COVERAGE
LAST TEN FISCAL YEARS
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015
Water Revenue Bonds:
Water revenue $ 4,834,313 $ 5,130,735 $ 5,301,489 $ 5,413,681 Less: operating expenses(3
l (3,082,750) (2,904,393) {3,004,186) (3,107,370)
Net available revenue 1,751,563 2,226,342 2,297,303 _b306,311 Debt service<1> 559,523 561,385 4,434,626
Coverage ratio 3.13 3.97 0.52 NIA
Wastewater Revenue Bonds:
Wastewater revenue(
4 l 3,844,014 4,549,1 08 4,989,878 5,565,988
Less: operating expenses<
3 l (2,605,734) (2,705,074) (2,773,005) (2,752,898)
Net available revenue 1,238,280 1,844,034 2,216,873 2,813,090 Debt service(
2 l 817,148 810,501 2,379,577 470,309
Coverage ratio 1.52 2.28 0.93 5.98
Source: City of Los Banos Finance Department
(1) 2002 Water COP called in Fiscal Year 2013-2014
(2) 1997 Wastewater COP called in Fiscal Year 2013-2014 (3) Depreciation, Compensated Absences and Charge Outs not included in Operating Expenses (4) Revenue includes Ag Farming Income
105
2015-2016 2016-2017 2017-2018
$ 6,001,003 $ 6,342,156 $ 6,653,861
(3, 115,891 ) (3,342,002) (3,528,711)
2,885,112 3,000,_!M _____1125,150
NIA N/A NIA
6,184,581 6,930,523 7,345,806
(2,832,174) (3,077,148) (3,235,389)
3,352,407 3,853,375 4,110,417
470,115 468,929 471,598
7.13 8.22 8.72
2018-2019 2019-2020 2020-2021
$ 6,247,950 $ 7,333,876 $ 8,508,884
(3,646,595) (3,617,167) (3,977,327)
2,601,355_ 3,716,709 ____1,_531,557
N/A NIA NIA
6,962,261 7,507,222 9,299,700
(3,269,692) (3,260,548) {3,573,699)
3,692,569 4,246,674 5,726,001
468,124 468,433
7.89 9.07 NIA
331
Calendar
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020(3)
2021
Source:
CITY OF LOS BANOS
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN FISCAL YEARS
Cit:z: of Los Banos
Unemelo:z:ment
Labor
PopulationPl Force12l Emplo:z:ment Ratel2
l Numbers
36,546 16,000 13,300 16.7% 2,700
37,017 15,900 13,500 14.8% 2,400
37,168 15,800 13,800 13.1% 2,100
38,670 15,800 14,000 11.6% 1,800
39,359 15,900 14,1 00 11.0% 1,800
39,993 15,789 14,1 78 10.3% 1,633
40,986 16,100 14,700 10.4% 1,700
41 ,898 16,200 14,700 10.1% 1,700
41,923 17,400 13,900 20.0% 3,500
42,869 17,500 15,100 13.5% 2,400
(1) California State Department of Finance
(2) State of California Employment Development Department (City of Los Banos) (3) Numbers are due to COVID-19 Pandemic
106
Population1' l
258,736
262,478
264,922
266,134
271,579
274,665
279,977
282,928
283,521
284,836
Merced Count:z:
Unemelo:z:ment
Labor
Force<
2 l Emeloyment Rate12i Numbers
115,200 96,400 16.3% 18,800
114,900 98,200 14.5% 16,700
115,000 100,200 12.8% 14,700
115,100 102,000 11.4% 13,100
115,500 103,000 10.7% 12,400
114,578 103,022 10.1% 10,676
115,700 106,500 8.0% 9,300
113,400 104,000 8.1% 9,300
114,600 96,700 15.6% 17,900
116,400 103,900 10.8% 12,600
332
Em~er
Los Banos Unified School District
Memorial Hospital
Wal-Mart
Kagome
City of Los Banos
Target
Home Depot
Save Mart
APEX
Central California Irrigation Dist.
Lowes
California Dairies
Kmart
Total
Emelo:t_ees
1,210
302
300
189
185
158
141
112
102
75 2,774
Source: (1) City of Los Banos Finance Department
CITY OF LOS BANOS
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2020-2021
Percent of Total
Rank Cit:t_ Emelo:t_ment
1 8.01%
2 2.00%
3 1.99%
4 1.25%
5 1.23%
6 1.05%
7 0.93%
8 0.74%
9 0.68%
10 0.50%
18.38%
107
Emelo:t_ees
843
278
150
140
149
120
80 80
70 55
1,965
2010-2011
Rank
1 2
3 5
4 6
7 8
9 10
Percent of Total
City Employment
6.44% Los Banos Unified School District
2.12% Memorial Hospital
1.15% Wal-Mart
1.07%
1.14%
0.92% Target
0.61% Home Depot
- Save Mart
0.61% Lowes
0.53% California Dairies
0.42% Kmart
15.01%
333
CITY OF LOS BANOS
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
FUNCTION/PROGRAM
General Government:
Administration 4.88 5.21 5.18 5.35 5.35 5.68 5.13 5.13 5.13 5.13 Community and Economic 2.00 2.00 2.00 2.00 2.00 3.00 3.00 3.00 3.00 3.00 Water Admin 3.79 4.33 4.34 4.27 4.27 4.60 4.72 4.72 4.72 4.72 Waterwaste Admin 3.70 4.33 4.25 4.19 4.19 4.52 4.72 4.72 4.72 4.72 Solid Waste Admin 3.70 4.21 4.22 4.17 4.17 4.49 4.72 4.72 4.72 4.72 Police:
Sworn 39.00 39.00 39.00 39.00 39.00 40.00 41.00 41 .00 47.00 48.00 Non-Sworn 19.00 20.00 19.50 19.50 20.50 23.50 24.50 24.50 26.50 26.50 Code Enforcement 1.20 1.50 2.50 2.50 2.50 2.50 2.50 4.50 5.50 5.50 Fire:
Sworn 15.20 15.90 15.90 15.90 15.90 15.90 15.90 15.90 17.90 17.90 Non-Sworn 1.50 1.50 1.00 1.00 2.00 2.00 2.00 2.00 2.00 2.00 Building Sworn 0.75 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 Building Non-Sworn 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Public Works:
Engineering 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 0.55 Water 11.30 11.35 10.85 11.19 11.19 11 .76 11.76 11.76 11.76 11.76 Wastewater 10.70 10.70 10.26 10.59 10.59 10.90 10.90 10.90 10.90 10.90 Solid Waste 6.00 6.00 6.00 6.33 6.33 7.65 7.65 7.65 7.65 7.65 Streets 7.80 7.80 7.80 7.80 8.80 11 .05 11.05 11.05 11.05 11.05 Maintenance 7.15 7.15 7.15 7.15 7.15 9.40 10.40 10.05 10.05 10.05 Recreation 1.13 1.16 1.19 1.19 1.19 1.19 1.19 2.54 3.54 3.54 Airport 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Fleet 1.20 1.21 2.21 2.22 2.22 2.21 2.21 2.21 2.21 2.21 Redevelopment 4.45 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Information Technology 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 1.00 148.00 147.00 147.00 148.00 151 .00 164.00 167.00 170.00 182.00 181.00 Source: City of Los Banos Finance Department
108
334
CITY OF LOS BANOS
OPERATING INFORMATION, OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019
FUNCTION/PROGRAM
Police:
Jail Bookings '
2 l 1,912 1,179 1,151 1,610 1,724 1,905 1,508 1,261
Traffic Collisions '
2 l 349 358 407 421 546 631 361 425
Parking Citations <
2 l 1,234 1,380 1,102 654 966 889 611 778
Moving Citations '
2 l 3,308 2,513 3,017 2,929 3,803 2,919 1,509 707
Fire:
Fire Calls 654 628 699 677 914 973 989 961
Medical Calls 1,430 1,406 1,557 1,664 1,793 1,737 1,923 1,889 Inspections 300 606 676 720 751 732 751 816
Public Works
Streets:
Street Surfacing (Miles) (•l 0.14 0.55 0.52 1.04 1.04 3.12 Parks and Recreation:
Rec. Youth Program Enrollments '
1 l(3l(5
l 1,108 1,198 1,158 1,240 1,202 1,266 1,295 1,264
Water:
Water Delivered (millions) 2,515 2,737 2,765 2,389 2,169 2,158 2,415 2,496 Connections 10,894 10,967 10,871 10,816 11 ,369 11 ,648 11 ,974 11 ,974 Sewer:
Average Daily Flow (mgd) 2.90 2.86 2.90 2.93 2.90 2.80 2.70 2.50 Connections 10,737 10,854 10,699 10,640 11 ,077 11 ,294 11 ,601 11 ,843 Solid Waste:
Street Sweeping,
Miles per Year 22,920 21 ,697 23,704 22,576 22,386 21 ,225 22,163 23,406 Green Waste Pick-ups 10,087 10,154 11,163 10,193 10,491 10,546 10,822 11 ,341 Recycling Pick-ups 10,067 10,245 11,059 10,205 10,600 10,535 10,807 10,807 Source: Various City Departments
Notes: (1) in FY 2014-2015 the city offered British Soccer (2) Bookings, Collisions and Citation numbers have decreased due to Law changes and reduction in staffing. (3) In FY 2019-2020, the City offered 2 new youth programs (4h Stem & Volleyball), however the City did not offer Tee-Ball or Spring Soccer due to COVID-19. (4) In FY 2019-2020, the increase is due to Measure V funding and the City now owns its own equipment and is able to complete more projects. (5) No youth enrollment due to COVID-19 and all programs suspended 109
2019-2020 2020-2021
1,063 1,206
369 404
443 743
1,162 2,653
983 1,080
1,930 1,854
559 541
10.27 5.53
1,231 0
2,455 2,707
12,425 12,781
2.80 3.30
12,062 12,428
20,730 20,133
11 ,284 11 ,658
11,268 11 ,646
335
CITY OF LOS BANOS
OPERATING INFORMATION, CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
Fiscal Years
2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021
FUNCTION/PROGRAM
Police:
Stations 1 1 1 1 1 1 1 1
Patrol Units 16 16 17 18 15 14 18 16 19 19
Motorcycle Units 2 2 2 2 2 2 2 2 2 2
Fire:
Stations 2 2 2 2 2 2 2 2 2 2
Service Units 15 15 14 13 14 16 16 15 15 16
Public Works
Streets:
Miles 109.85 109.85 110 123 123 123 123 123 123 125
Parks and Recreation:
Acreage 233 233 233 233 233 233 233 233 233 281
Playgrounds 32 32 32 32 32 32 32 32 32 36
Baseball/Softball Diamonds 5 5 5 5 5 5 5 5 5 9
Soccer/Football Fields 4 4 4 4 4 4 4 4 4 4
Basketball Courts 13 13 13 13 13 13 13 13 13 14
Water:
Water Mains (miles) 170 170 170 172 172 172 172 172 172 172 Fire Hydrants 1,510 1,510 1,510 1,510 1,510 1,510 1,510 1,510 1,510 1,510 Storage Capacity (gallons) 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000 5,100,000 Sewer:
Sanitary Sewers (miles) 130 130 130 130 130 130 131 131 131 133 Solid Waste:
Street Sweepers 2 2 2 2 2 2 2 2 2 2
Source: Various City Departments
110
336
PRIC.E PAIGE, & COMPANY
Accountancy Corporation
The Place to Be
December 20, 2021
To the Honorable Mayor and
Members of the City Council
City of Los Banos, California
We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Los Banos, California (the City) for the year ended June 30, 2021 . Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards (and, if applicable, Government Auditing Standards and the Uniform Guidance), as well as certain information related to the planned scope and timing of our audit.
We have communicated such information in our letter to you dated August 20, 2021 . Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. During 2021 the City changed accounting policies related to accounting and financial reporting for fiduciary activities by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 84, Fiduciary Activities. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the fiduciary fund financial statements. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and current events and assumptions about future events.
Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City's financial statements were:
Management's estimate of the net pension liability and related deferrals is based on actuarial valuations which include significant assumptions regarding discount rate, inflation, payroll growth, projected salary increases and investment rate of return. We evaluated the key factors and assumptions used to develop the liability and related deferrals in determining that it is reasonable in relation to the financial statements taken as a whole.
Other postemployment benefit obligation is determined using terms of various health care plans offered, together with relevant actuarial assumptions and health care cost trend rates, projected annual rates and discount rate. We evaluated the key factors and assumptions used to develop the other postretirement benefit obligation in determining that it is reasonable in relation to the financial statements taken as a whole. 570 N. M:.1gnolia Avenue, Suite I 00
Clovis, CA 9361 1
ww.v.ppcpas.com
tel 559.299.9540
fax 559.299.2344
337
Management's estimate of the landfill closure and postclosure care costs is based on various factors including:
• Landfill total estimated capacity
• Cumulative capacity used
• Estimated costs to close, adjusted annually for inflation.
Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosure affecting the financial statements was:
The disclosure of the Deficit Fund Balances in Note 2 to the financial statements provides information regarding the City's funds which have liabilities that exceed their assets resulting in a deficit fund balance.
The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the financial statements.
Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole.
In addition, the attached schedule of material misstatements detected as a result of audit procedures were corrected by management.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting , reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in the management representation letter dated December 20, 2021 .
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the City's financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as City's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to management's discussion and analysis, budgetary comparison schedules, the proportionate share of net pension liability, the schedule of pension contrib.utions, the schedule of changes in OPEB liability and related ratios, and the schedule of OPEB contributions, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding 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 did not audit the RSI and do not express an opinion or provide any assurance on the RSI.
338
We were engaged to report on supplementary information as listed in the table of contents, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
Restriction on Use
This information is intended solely for the information and use of Mayor, City Council, and management of the City of Los Banos, California and is not intended to be, and should not be, used by anyone other than these specified parties.
Very truly yours,
339
Client:
Engagement:
Current Period:
Workpaper:
Account
PJEOl
CITY OF LOS BANOS
6-30-21 Audit
06/30/2021
Attachment: Uncorrected Audit Differences
Description
To record revenues received past 60 days as Deferred Revenue 288-000-355-020 Landscape & Lighting Assessmen
288-000-222-000 Deferred Revenues (PPC Created)
Total
GRAND TOTAL
Misstatement Work_eaper Reference Debit
Known Classifica 0200