Agenda packet — Los Banos City Council, February 15, 2023 (part 1 of 2)

LOs Banos • \ i Crossroa L LJ Califi , 1
www.losbanos.org
AGENDA

CITY COUNCIL MEETING

CITY HALL COUNCIL CHAMBERS
520 J Street
Los Banos, California
FEBRUARY 15, 2023-6:00 PM
Uve stream on YouTube at
, .................................................................. httgs://www.Y,_outube.com/@losbanos406 ................................................ .

If you require special assistance to attend or participate in this meeting, please call the City Clerk's Office @ (209) 827-7000 at least 48 hours prior to the meeting.

The City of Los Banos complies with the Americans with Disabilities Act (ADA) of 1990. * * * * * * * ** * * * * * * *
Si requiere asistencia especial para atender o parlicipar en esta junta por favor /lame a la oficina de la Secretaria de la ciudad al (209) 827-7000 a lo menos de 48 horas previas de la junta.

La Cuidad de Los Banos cumple con la Acta de Americanos con Deshabilidad (ADA) de 1990. · ....................................................................................................... .. ............................................................................................................................................................................ , ..... · ! 1 Any writings or documents provided to a majority of the City Council regarding any item on this agenda will be made available for public inspection at the meeting and in the City Clerk's office located at City Hall, 520 J Street, Los Banos, California during normal business hours. In addition, such writings and documents may be posted on the City's website at www.losbanos.org.
* * * * * * * ** * * * * * * *
Cualquier escritura o Jos documentos proporcionaron a una mayor/a def Ayuntamiento respecto a cualquier artfculo en este orden de/ dia sera hecho disponible para la inspecci6n publica en la reuni6n yen la oficina de la Secretaria de la ciudad en City Hall, 520 J Street, Los Banos,
California durante horas de oficina normales. Ademas, tales escrituras y los documentos pueden ser anunciados en el website de la ciudad en www.losbanos.org . ................................... , ................................................................................................................................. ............................................................... ······································ ............. · 1 . CALL TO ORDER - February 15, 2023

2. PLEDGE OF ALLEGIANCE.

3. ROLL CALL: (City Council Members)
Kenneth Lambert - District 1
Brett Jones - District 3
Paul Llanez - Mayor
Los Banos City Council Agenda- February 15, 2023
6:00 PM
__ Douglas Begonia, Jr. - District 2
Deborah Lewis - District 4

Page 1 ends

1 4. CONSIDERATION OF APPROVAL OF AGENDA.

Recommendation: Adopt the agenda as submitted.

5. PUBLIC FORUM. (Members of the public may address the City Council Members on any item of public interest that is within the jurisdiction of the City Council; includes agenda and non-agenda items. No action will be taken on non-agenda items. Speakers are limited to a five (5) minute presentation. Detailed guidelines are posted on the Council Chamber informational table.)

6. CONSIDERATION OF APPROVAL OF CONSENT AGENDA. (Items on the Consent Agenda are considered to be routine and will be voted on in one motion unless removed from the Consent Agenda by a City Council Member.) A. Check Register for #237253 - #237330 in the Amount of $188,518.70.

Recommendation: Approve the check register as submitted.

B. Minutes for the January 30, 2023 Special City Council Meeting.

Recommendation: Approve the minutes as submitted.

C. Minutes for the February 1, 2023 City Council Meeting.

Recommendation: Approve the minutes as submitted.

7. PENINSULA CLEAN ENERGY PRESENTATION UPDATE.

Recommendation: Informational item only, no action to be taken.

8. CONSIDERATION OF ADOPTION OF CITY COUNCIL RESOLUTION NO. 6611 - ACCEPTING THE 2021-2022 FISCAL YEAR AUDIT REPORTS CONSISTING OF

THE ANNUAL COMPREHENSIVE FINANCIAL REPORT AND THE
GOVERNMENT AUDITING STANDARDS REPORT.

Recommendation: Receive staff report and adopt the resolution as submitted.

9. CONSIDERATION OF ADOPTION OF CITY COUNCIL RESOLUTION NO. 6609- AMENDING DIVISION 4, SALARY SCHEDULE/EMPLOYEE CLASSIFICATIONS

RELATING TO CHANGES TO SECTION A - ADMINISTRATION AND SECTION C - COMMUNITY & ECONOMIC DEVELOPMENT.
(Continued from the February 11 2023 City Council Meeting) (To be Continued to the March 1, 2023 City Council Meeting) Recommendation: Continue to the March 1, 2023 City Council Meeting.

10. SHAUNESSYVILLAGE PARK CONCEPTUAL DESIGN PRESENTATION.

Recommendation: Receive staff report and direction from the City Council on how to proceed. 11 . CONSIDERATION OF JOSH PINHEIRO SETTLEMENT AND EMPLOYMENT AGREEMENTS.

Los Banos City Council Agenda - February 15, 2023 Page 2 of4 2 A. City Council Resolution No. 6612 - Accepting and Approving a Settlement Agreement and Release between the City of Los Banos and Josh Pinheiro.

B. City Council Resolution No. 6613 - Appointing a City Manager and Authorizing the Execution of the Los Banos City Manager Employment Agreement with Josh Pinheiro.

Recommendation: Receive staff report and consider the resolutions as submitted.

12. CONSIDERATION OF APPOINTMENT OF ONE (1) COUNCIL MEMBER TO

SERVE ON THE LEAGUE OF CALIFORNIA CITIES CENTRAL VALLEY DIVISION EXECUTIVE COMMITTEE AND ONE (1) COUNCIL MEMBER TO SERVE AS AN AL TERNA TE.

Recommendation: Appoint one (1) Council Member to serve on the committee and one (1) Council Member to serve as an alternate.

13. APPOINTMENT OF COMMISSIONERS TO THE FOLLOWING COMMISSIONS:

A. Measure H Citizens Oversight Committee
Three (3) Two (2) Year Terms - Expiring December 31, 2024.

B. Tree Commission
One (1) Two (2) Year Term - Expiring December 31, 2024.

Recommendation: Appoint commissioners to fill the vacancies.

14. ADVISEMENT OF PUBLIC NOTICES. (One Report)
Recommendation: Informational item only, no action to be taken.

15. CITY MANAGER REPORT.

Recommendation: Informational item only, no action to be taken.

16. REPORT/UPDATE ON MERCED COUNTY ASSOCIATION OF GOVERNMENTS (MCAG), PENINSULA CLEAN ENERGY (PCE), MEASURE V COMMITTEE, AND

SAN JOAQUIN VALLEY AIR POLLUTION CONTROL DISTRICT (SJVAPCD),

AND LOS BANOS DOWNTOWN PROPERTY & BUSINESS IMPROVEMENT
DISTRICT (LBDPBID).

Recommendation: Informational item only, no action to be taken.

17. CITY COUNCIL MEMBER REPORTS.

A. Kenneth Lambert - District 1
B. Douglas Begonia, Jr. - District 2
C. Brett Jones - District 3
Los Banos City Council Agenda - February 15, 2023 Page 3 of4 3 D. Deborah Lewis - District 4
E. Paul Llanez - Mayor

18. ADJOURNMENT.

I hereby certify under penalty of perjury under the laws of the State of California that the foregoing agenda was posted on the City Hall bulletin board not less than 72 hours prior to the meeting. 14 Lucille
~
L. Mallonee,
-I' . ~
City Clerk Dated this 10th day of February 2023
Los Banos City Council Agenda - February 15, 2023 Page 4 of4 4 CK# 237253 - # 237330 02/15/2023 $188,518.70
Bank Reconciliation
Checks by Date
User: jcanchola
T Cityof B LOS anos
Printed: 02/08/2023 - 3:37PM
Cleared and Not Cleared Checks
Print Void Checks
Check Check Date Name Module Void Amount
237253 1/27/2023 Gregory Almeida AP 324.08
237254 1/27/2023 Anthony Gomes AP 1,950.66
237255 1/27/2023 Aramark Uniform Ser Inc AP 2,092.43
237256 1/27/2023 AramarkUniform & Career Apparel Group, Inc. AP 141.76 237257 1/27/2023 AT&T AP 673.23
237258 1/27/2023 Dorothy June Baker AP 63.08
237259 1/27/2023 Douglas Begonia AP 400.74
237260 1/27/2023 BJ's Consumers Choice Pest Control Inc. AP 575.00 237261 1/27/2023 Robert Birdsall AP 190.00
237262 1/27/2023 Bruce's Tire Inc AP 1,895.38
237263 1/27/2023 BSK Associates AP 1,236.00
237264 1/27/2023 California Building Standards Commission AP 714.60 237265 1/27/2023 Jennifer Canchola AP Void 66.00
237266 1/27/2023 Cintas Corporation No.2 AP 411.50
237267 1/27/2023 Comcast AP I 08.16
237268 1/27/2023 Marcelino Cortez AP 120.00
237269 1/27/2023 Custom Locksmith & Alarm Inc. AP 271.56 237270 1/27/2023 Dept of Conservation Div of Admin Services AP 3,072.37 237271 1/27/2023 Double D Towing, LLC AP 130.00
237272 1/27/2023 Farmer Brothers Coffee AP 165.87
237273 1/27/2023 Fastenal Company AP 337.43
237274 1/27/2023 Fast Track Car Wash AP 206.50
237275 1/27/2023 Federal Express Corporation AP 10.98
237276 1/27/2023 Fresno City College AP 2,706.00
237277 1/27/2023 GoTo Communications, Inc. AP 3,006.09
237278 1/27/2023 Henley Pacific, LLC AP 241.33
237279 1/27/2023 Liebert Cassidy Whitmore AP 10,825.00
237280 1/27/2023 Paul Llanez AP 489.98
237281 1/27/2023 Los Banos Fitness & AP 300.00
237282 1/27/2023 Simerdeep Lasher AP 450.00
237283 1/27/2023 Marfab Inc AP 2,072.63
237284 1/27/2023 Merced County Assessor AP 500.00
237285 1/27/2023 Merced Truck & Trailer Inc AP 423.64
237286 1/27/2023 Madera Uniform & Accessories AP 3,619.20 237287 1/27/2023 Napa Auto Parts of Los Banos AP 635.89 237288 1/27/2023 Nichols-Melburg & Rossetto, AJA & Associates, Inc. AP 8,200.00 237289 1/27/2023 Gerald "Obie" O'Brien AP 77.14
237290 1/27/2023 OSE AP 78.61
237291 1/27/2023 O'Reilly Auto Parts AP 484.56
237292 1/27/2023 Pace Supply Corp. AP 64,236.80
237293 1/27/2023 Pinnacle Medical Group, Inc. AP 215.00 237294 1/27/2023 PlaceWorks, Inc. AP 18,084.60
237295 1/27/2023 Razzari Ford AP 9,653.62
237296 1/27/2023 Francisco Rosales AP 600.00
237297 1/27/2023 Save Mart Supermarkets AP 184.57
237298 1/27/2023 Sherwin Williams Co AP 43.39
5 237299 1/27/2023 Rosemarie Souto AP Void 66.00
237300 1/27/2023 Sorensens True Value AP 374.48
237301 1/27/2023 SuperiorPoo!ProducIB,LLC AP 4,968.31
237302 1/27/2023 Terryberry Company LLC AP 130.14
237303 1/27/2023 TearnCalifomia Economic Development Corp. AP 300.00 237304 1/27/2023 The Heil CO AP 220.00
237305 1/27/2023 Qinglong Hu AP 141.12
237306 1/27/2023 Rosie Villegas AP 101.87
237307 1/27/2023 QinglongHu AP 14l.l2
237308 1/27/2023 Cesar Montes AP 101.87
237309 1/27/2023 Horne Sweet Horne Property Management Co. AP 173.83 237310 1/27/2023 Latasha Salgado AP 121.49
237311 1/27/2023 Jorge Gonzalez Chavez AP 62.62
237312 1/27/2023 Vilrnos Foltenyi AP 183.64
237313 1/27/2023 Law Offices of William A Vaughn AP 12,600.00 237314 1/27/2023 Verizon Wireless AP 418.11
237315 1/27/2023 Windecker Inc AP 3,934.93
237316 1/27/2023 Westside Elderly Care AP 500.00
237317 1/27/2023 Young's Air Conditioning AP 498.00
237331 2/3/2023 Aflac-Customer Service AP 270.18
237332 2/3/2023 AFSCME District Council 57 AP 1,522.89
237333 2/3/2023 Empower Annuity Ins. Co of America AP 1,288.57 237334 2/3/2023 Empower Annuity Ins. Co of America AP 1,990.00 237335 2/3/2023 Los Banos Police Assn AP 280.00
237336 2/3/2023 Los Banos Police Assn AP 875.00
237337 2/3/2023 MissionSquare AP 8,175.00
237338 2/3/2023 MissionSquare AP 441.65
237339 2/3/2023 Nationwide Retirement Solutions AP 4,515.00 237340 2/3/2023 Professional Fire Fighter of Los Banos Local 4 703 AP 900.00 237341 2/3/2023 State Disbursement Unit AP 937.50
Break in check sequence due to the following: Total Void Check Count: 2 Check #237318 - #237328 (Payroll) Total Void Check Amount: 132.00 Check #237329 (Manual Void) Total Valid Check Count: 74 Check #237330 (Payroll) Total Valid Check Amount: 188,386.70 Total Check Count: 76
Total Check Amount: 188,518.70
6 CITY OF LOS BANOS

SPECIAL CITY COUNCIL MEETING MINUTES
JANUARY 30, 2023
ACTION MINUTES - These minutes are prepared to depict action taken for agenda items presented to the City Council. For greater detail of this meeting refer to the electronic media (CD and/or audio) kept as a permanent record.

CALL TO ORDER: Mayor Llanez called the City Council Meeting to order at the hour of 5:00 p.m.

PLEDGE OF ALLEGIANCE: The pledge of allegiance was led by Interim Police Chief Reyna.

ROLL CALL - MEMBERS OF THE CITY COUNCIL PRESENT: Council Members Doug Begonia, Brett Jones, Kenneth Lambert, Deborah Lewis, Mayor Paul Llanez; Absent:

None.

STAFF MEMBERS PRESENT: City Attorney Vaughn, City Clerk/Human Resources Director Mallonee, Interim Police Chef Reyna.

CONSIDERATION OF APPROVAL OF AGENDA: Motion by Lambert, seconded by Jones to approve the agenda as submitted. The motion carried by the affirmative action of all Council Members present.

PUBLIC FORUM: MEMBERS OF THE PUBLIC MAY ADDRESS THE CITY COUNCIL

MEMBERS ON ANY ITEM OF PUBLIC INTEREST THAT IS WITHIN THE JURISDICTION OF THE CITY; INCLUDES AGENDA AND NON-AGENDA ITEMS. NO ACTION WILL BE TAKEN ON NON-AGENDA ITEMS. Mayor Llanez opened the public forum and invited the public to come forward to speak. CITIZEN OF BANOS inquired as to a question she has asked in the past regarding the Measure H Oversight Committee, when will a meeting be held, and spoke to the history of meetings held in the past, noticed on the closed forum agenda regarding employment and hopes that when you come out to report you will advise us on the closed sessions. Mayor Llanez asked if there were any written comments received and City Clerk Mallonee stated that she had received no comments. No one else came forward to speak and the public forum was closed.

CLOSED SESSION: CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED

LITIGATION, SIGNIFICANT EXPOSURE TO LITIGATION PURSUANT TO GOVERNMENT CODE SECTION 54956.9(8): ONE POTENTIAL CASE. No reportable action.

CLOSED SESSION: PUBLIC EMPLOYMENT - CITY MANAGER {RECRUITMENT), PURSUANT TO GOVERNMENT CODE SECTION 54957. No reportable action. 7 ADJOURNMENT. Motion by Lambert, seconded by Jones, to adjourned the meeting at 5:41 p.m. The motion carried by the affirmative action of all Council Members present.

APPROVED:

Paul Llanez, Mayor
ATTEST:

Lucille L. Mallonee, City Clerk
8 CITY OF LOS BANOS

CITY COUNCIL MEETING MINUTES
FEBRUARY 1, 2023
ACTION MINUTES - These minutes are prepared to depict action taken for agenda items presented to the City Council. For detail of this meeting refer to the electronic media (CD and/or audio) kept as a permanent record.

CALL TO ORDER: Mayor Pro Tern Lambert called the City Council Meeting to order at the hour of 6:01 p.m.

PLEDGE OF ALLEGIANCE: Acting Police Chief Reyna led the pledge of allegiance.

ROLL CALL - MEMBERS OF THE CITY COUNCIL PRESENT: Council Members Brett Jones, Kenneth Lambert, Deborah Lewis; ABSENT: Council Member Begonia, Mayor Llanez.

STAFF MEMBERS PRESENT: Interim City Manager Souza Elms, City Attorney Vaughn, Acting Police Chief Reyna, City Clerk/Human Resources Director Mallonee, City Treasurer Lawrence, Public Works Director/City Engineer Than, Fire Chief Tualla CONSIDERATION OF APPROVAL OF AGENDA: Motion by Jones, seconded by Lewis to approve the agenda as submitted. The motion carried by the affirmative action of all Council Members present, Begonia and Llanez absent.

PUBLIC FORUM: MEMBERS OF THE PUBLIC MAY ADDRESS THE CITY COUNCIL

MEMBERS ON ANY ITEM OF PUBLIC INTEREST THAT IS WITHIN THE JURISDICTION OF THE CITY; INCLUDES AGENDA AND NON-AGENDA ITEMS. NO ACTION WILL BE TAKEN ON NON-AGENDA ITEMS. SPEAKERS ARE LIMITED TO A FIVE (5) MINUTE PRESENTATION. DETAILED GUIDELINES ARE POSTED ON THE COUNCIL CHAMBER INFORMATIONAL TABLE. Mayor Pro Tern Lambert opened the public forum and asked those at the meeting if they would like to speak. CLAUDIA, lives in the mobile home park where the homeless are at, spoke regarding how a lady at the mobile home park passed away and she believes that she died because of the stress, she spoke to all the bad things they have experienced with the homeless, how the homeless are breaking the law and nothing is done, she challenged the Council to come into the mobile home park, how they are law abiding citizens and live on social security, come ask us and we may be able to help, how she cannot afford to fix her toilet, is asking for help and urged the Council to start helping them at the mobile home park as much as you help the homeless; GILBERT FELIX, District Director for Assembly Member Esmeralda Soria, spoke to the area she serves and the issues she is currently working on, proud to share that she has been made chair of the Military Veterans Committee, Agriculture Committee, and urged the City to use her as a resource and looks to meeting the City Council and City leadership; NICHOLAS GOMES field representative for Congressman John Duarte and spoke regarding the area he serves and spoke to how he is here to help and serve the communities and help the congressman represent his constituents, spoke to how Merced county was designated as a 9 disaster area because of the flooding and urged anyone affected to contact the FEMA at the fairgrounds in Merced; UNNAMED PERSON, representing the Elks Lodge, spoke regarding the grants they are closing up, how they have not trespassed on the homeless encampment but have provided items to the homeless in the community to keep them warm, they have extended the give-away for food for the children, helped agencies with warm clothing, helped senior citizens help with PG & E costs by giving warm clothing, they have been doing this for about three weeks and are doing what they can to help those in need; UNNAMED PERSON, representing the Los Banos Chamber of Commerce, spoke regarding how he went to Gilroy and Hollister to see how their Chamber of Commerce's are run, how they rely on tourism, spoke regarding the upcoming Chamber events, i.e. Spring Street Fair in April, two new members - Alzheimer's Association and Titans Road Assistance, the upcoming workshop with Merced County Workforce and Hispanic to find workshops for the Los Banos business community, ribbon cuttings with Up and Up and Valley Spring Memory Care, how the Chamber is always looking for new ways to help the City, spoke regarding the upcoming Ag Booster Dinner Dance, John Lennon concert, Rotary Empty Bowls fundraiser, Los Banos Fire Department Annual Pancake Breakfast, and the updated directory the Chamber is working on updating and distributing. Mayor Pro Tern Lambert asked the City Clerk if she had received any comments to be read into the record. City Clerk Mallonee stated she received no comments. No one else came forward to speak and the public forum was closed.

CONSIDERATION OF APPROVAL OF CONSENT AGENDA. Council Member Lewis asked to remove item 7G - City Council Resolution No. 6609 -Amending Division 4, Salary Schedule/Employee Classifications Relating to Changes to Section A - Administration and Section C - Community & Economic Development for discussion and separate approval.

Motion by Lambert, seconded by Begonia, to approve the consent agenda as amended as follows: Check Register for #236808 - #237252 in the Amount of $4,925,031.82; Second Quarter Investment Report for the 2022/2023 Fiscal Year; Minutes for the January 18, 2023 City Council Meeting; City Council Resolution No. 6606 - Denying Application for Leave to Present Late Claim by Attorney Mario Cesar Valladares, Esq., on Behalf of Elizabeth Ann Lopez; City Council Resolution No. 6607 - Reauthorizing Remote Teleconference Meetings of the Legislative Bodies of the City of Los Banos Pursuant to the Provisions of AB 361; City Council Resolution No. 6608 - Appointing Gerald Giesel to the Measure P Citizens Oversight Committee; City Council Resolution No. 6609 Amending Division 4, Salary Schedule/Employee Classifications Relating to Changes to Section A Administration and Section C Community & Economic Development. The motion carried by the affirmative action of all Council Members present, Begonia and Llanez.

City Council Resolution No. 6609 - Amending Division 4, Salary Schedule/Employee Classifications Relating to Changes to Section A - Administration and Section C - Community & Economic Development. Council Member Lewis stated that in reviewing Exhibit A, it appears from what she can understand there are two employees involved in this classification and it gives an increase for the Human Resources Director of $596 and for the Community & Economic Development Director of $4,083 which is a large disparity to her, she knows that the Community & Economic Development Director as a lot of projects they oversee with 2-3 employees in that department, and with the Human Resources Director there is 2-3 employees that work directly under them and how they are also responsible for 10 all the employees in the City, she is very concerned about this salary re-evaluation and wonders if we can hire someone from the outside to look at these positions and give us another look. City Attorney Vaughn stated that you gave Brent Kuhn the authority to do a market comparison for those two classifications and his recommendations was driven by information given to you in closed session, if you are not comfortable going forward he suggested to put that on the next agenda for a time when he is here to explain it to you, adding that he reported to you his rationale and how he came to the numbers, they are two very different jobs and will be in conformance with the ranges that he was seeing outside the City of Los Banos and to be competitive with outside jurisdictions. Council Member Lewis inquired as to if Mr. Kuhn presented salary ranges during closed session for which City Attorney Vaughn stated yes adding that this is not person driven it is job driven. Council Member Lewis added that they have been underpaid for some time now and has some concerns and how these two employees have been without a justifiable wage for what they do for a very long time and feels that there is a large disparity. Lewis inquired as to why Mr.

Kuhn is not here to present this item, for which Interim City Manager Souza Elms stated that Mr. Kuhn felt confident he had gone through this item and was a consent item that has been talked about explained and explained his work schedule. Council Member Jones stated that he was in the closed session meeting and all five of us were on the same page with this, whether it is a male position or female position, it is about the job title, does not want to do this again and come up with the same conclusion.

Motion by Jones to approve City Council Resolution No. 6609 -Amending Division 4, Salary Schedule/Employee Classifications Relating to Changes to Section A - Administration and Section C - Community & Economic Development.

City Attorney noted that item will take three yes votes to approve.

Council Member Jones withdrew his motion.

Mayor Pro Tern Lambert stated that this item will be continued to the next meeting.

PUBLIC HEARING - TO RECEIVE PUBLIC COMMENT ON REVISIONS TO THE CITY OF LOS BANOS' 2020 URBAN WATER MANAGEMENT PLAN (UWMP) AND WATER

SHORTAGE CONTINGENCY PLAN (WSCP) UPDATE AND CONSIDER A RESOLUTION ACCEPTING THE 2020 UWMP AND WSCP; CITY COUNCIL RESOLUTION NO. 6610 - ACCEPTING THE 2020 REVISED URBAN WATER MANAGEMENT PLAN. Public Works Director/City Engineer Than presented the staff report, which included a PowerPoint presentation.

Mayor Pro Tern lambert opened the public hearing. No one came forward to speak and the public hearing was closed.

Motion by Jones, seconded by Lewis to adopt City Council Resolution No. 6610-Accepting the 2020 Revised Urban Water Management Plan. The motion carried by the affirmative action of all Council Members present, Begonia and Llanez absent.

ADVISEMENT OF PUBLIC NOTICES. (Three Reports) Interim City Manager Souza Elms reported that there will be three Public Hearings at the Planning Commission on February 11 8, 2023 to consider Conditional Use Permit #2023-01 and a Categorical Exemption from the California Environmental Quality Act (CEQA) pursuant to Section 13501, Existing Facilities, to allow the use of a Type 4 7 Alcohol License for the on-sale of General Alcohol for a bonafide eating place, the Roundup Bar & Grill, located at 830 I Street, Assessor's Parcel Numbers: 026-143- 003; to consider a Categorically Exemption from the CEQA and a Mobile Food Vendor Permit #2023-01 to allow the operation of a mobile food vending vehicle on route throughout the City of Los Banos within the public right-of-way for Dennis Lingo dba Bentley and Papa Hotdog; and to consider a Categorical Exemption from the CEQA pursuant to Section 15332 (Infill Development Projects) for Site Plan Review #2022-03 for the development of a self-storage facility within the Industrial Zoning District located at the northeast corner of Johnson Road and Willmott Avenue, APN 081-110-052.

CITY MANAGER REPORT: REPORT PURSUANT TO GOVERNMENT CODE SECTION 54953(C)(3) EXECUTIVE COMPENSATION: PUBLIC WORKS DIRECTOR/CITY ENGINEER. Interim City Manager Souza Elms stated that on January 26, 2023, based upon an annual performance review by herself, the Interim City Manager, the Public Works Director/City Engineer's salary will be increased to $16,259 monthly ($195,108 annually) effective February 16, 2023. She gave an update on the homeless encampment and the progress the City is making on the cleanup and closure efforts, and thanked the tireless effort of the Public Works Director/City Engineer Than and his entire department on the great work they have done during the recent sewer break situation and also thanked the other City departments, Police and Fire, for pitching in and helping Public Works during this time.

REPORT/UPDATE ON MERCED COUNTY ASSOCIATION OF GOVERNMENTS (MCAG), PENINSULA CLEAN ENERGY (PCE), SAN JOAQUIN VALLEY AIR

POLLUTION CONTROL DISTRICT (SJVAPCD), AND MEASURE V COMMITTEE, LBDPBID. Mayor Pro Tern Lambert stated that there is no report on MCAG. Council Member Lewis stated that there is no report on the SJVAPCD.

CITY COUNCIL MEMBER REPORTS:

DEBORAH LEWIS: no report
BRETT JONES: Thanked City staff and especially the Public Works Department for working so hard on a very complex sewer line replacement, welcomed new City Treasurer Lucy Lawrence and will make a great addition to the City and thanked her for stepping up for the position, spoke regarding the Downtown Association Casino Night event being held on April 29, 2023 at the Lopes Barn.

KENNETH LAMBERT: Thanked the Public Works Director/City Engineer Than and Interim City Manager Souza Elms for the updates and great work, and welcomed our new Finance Director.

DOUGLAS BEGONIA, JR.: Absent
PAUL LLANEZ: Absent
12 ADJOURNMENT. Motion by Jones, seconded by Lewis, the meeting was adjourned at 6:48 p.m. The motion carried by the affirmative action of all Council Members present, Begonia and Llanez absent.

APPROVED:

Paul Llanez, Mayor
ATTEST:

Lucille L. Mallonee, City Clerk
13 THIS PAGE IS INTENTIONALLY LEFT BLANK
14 LOsBanos
\t tlic Cro,\10,uls l ali}or11ia
Agenda Staff Report
TO: Mayor Llanez and City Council Members
FROM: Stacy Souza Elms, Interim City Manager c-i9..~
Community & Economic Development Director ~
DATE: February 15, 2023
TYPE OF REPORT: Agenda Item
SUBJECT: Peninsula Clean Energy Presentation and Update Background:

On October 21, 2020, the Los Banos City Council authorized the membership in the Peninsula Clean Energy (PCE) Authority and authorized the implementation of a Community Choice Aggregation Program in the City of Los Banos by and through the Peninsula Clean Energy Authority. PCE is a Community Choice Aggregation (CCA) program that allows local municipalities to pool, or aggregate, their energy demand to purchase electricity separate from the local investor owned utility. As a shared-service model, CCAs partner with the existing utility, Pacific Gas & Electric Company, which continues to provide power transmission, distribution, grid maintenance and billing services. Peninsula Clean Energy (PCE) is a CCA program that provides electricity to all of its member cities and unincorporated areas under a Joint Powers Authority (JPA). PCE offers competitive rates and clean energy from renewable sources.

Peninsula Clean Energy will provide the City Council a presentation and update on the April 2022 launch and programs for the City of Los Banos. 1 15

THIS PAGE IS INTENTIONALLY LEFT BLANK
16 LOsBanos
At the Crossroads of California
Agenda Staff Report
TO: Mayor Llanez & City Council Members
FROM: Brent Kuhn, Interim Finance Director
DATE: February 15, 2023
SUBJECT: 2021-2022 Fiscal Year Annual Comprehensive Finance Report TYPE OF REPORT: Non-Consent Agenda
Recommendation:

Staff recommends that Council adopt a Resolution accepting the 2021-2022 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, 2022. Overall, the City's operations show stability and steady growth, reflecting its prudent and sound management practices.

Audit Results - The City's auditors are Price Paige & Company and they issued The Independent Auditor's Report presented with the attached ACFR. The ACFR was prepared in accordance with accounting principles generally accepted in the United States of America and 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, 2022. An attached submittal letter to the audit committee (City Council) 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 an unmodified audit opinion for the past eight (8) years and the ACFR has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the 17 Government Finance Officers' Association (GFOA) for eight (8) 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 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. Award results are still pending.

Overview:

The ACFR communicates the City's financial condition and activity in 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.om.

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. These in the GovernmentWide Statements - overview of financial information including all of the City's operations by financial activity, the Fund Financial Statements - a detailed look at funds, reporting the Balance Sheet and Statement of Revenues, Expenditures and Changes in Fund Balance, and the 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 2 18
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 total fund balance for the general fund at the end of the current fiscal year was $38,160,090. Of this amount, $5,836,627 was assigned for various capital projects and Measure H expenditures, $276,926 was committed for public safety capital outlay, the City's general plan update. $32,046,537 was unassigned for discretionary use. The unassigned fund balance was 150% of the total general fund expenditures.

The general fund balance increase of 33% from the previous fiscal year or $9,521,654. The significant reasons for the increase to the total general fund balance was due to growth in property and sales tax revenues, permit activity due to increased development within the City and one-time ARP A funding. The assets in the General Fund realized an increase of 32% whereas liabilities increased by 12%.

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.

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, 2022. 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 $290,538,663 (net position). The unrestricted net position of $63,644,999 may be used to meet the government's ongoing obligations to citizens and creditors. The City's total net position increased by $56,204,633, with $47,554,651 attributable to governmental activities and $8,649,982 attributable to business-type activities. The City's total assets increased by $69,607,205 due to various equipment purchases and infrastructure improvements throughout the year. Liabilities decreased by $1,422,084. A decrease in pension and other post-employment benefits (OPEB) liabilities contributed to this decrease._The deferred outflows of resources increased by $670,856 and was mainly due to pension and OPEB related activity within the governmental type activities funds. The deferred inflows of resources increased by $15,515,512.

The increase can be largely attributed to pension and OPEB activities in the governmental type funds as well. Net position is broken out into three categories; capital, restricted and unrestricted. By far, the largest portion of the City's net position $151,529,819 (52.2%) reflects 3 19
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 $75,363,845 (25.9%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $63,644,999 (21.9%) 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.

Pension Liabilities - 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) and the Required Supplementary Information.

Cash and Investments - The ACFR also includes detailed information on the City's cash and investments. As of June 30, 2022, the City had $182.6 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 of the ACFR.

The ACFR for the Fiscal Year Ending June 30, 2022 is available for review in the Finance Department located at City Hall and on the City's website, www.losbanos.org.

Fiscal Impact:

There is no immediate financial impact or budget action necessary as a result of the recommended action.
4 20
Reviewed by:

Stacy Souza Elms
Interim City Manager
Attachments:

Resolution
Annual Comprehensive Financial Statements (ACFR)
Audit Committee Letter
Government Auditing Standards Report
5 21
RESOLUTION NO. --

A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF LOS BANOS ACCEPTING THE
2021/2022 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 2021/2022 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 15th day of February 2023, 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:

A YES: Council Members
NOES:

ABSENT:

APPROVED:

Paul Llanez, Mayor
ATTEST:

Lucille L. Mallonee, City Clerk
22 Comprehensive
Financial Report
For
Fiscal Year Ending
June 30, 2022
City of Los Banos
520 J Street
Los Banos, CA 93635
23 CITY OF LOS BANOS

CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2022
Prepared by

FINANCE DEPARTMENT
24 CITY OF LOS BANOS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022

TABLE OF CONTENTS
PAGE

INTRODUCTORY SECTION
Letter of Transmittal ...................................................................................................................................... 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 ......................................................................................................5 Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position .................................................................................................................18 Statement of Activities ......................................................................................................................20 Fund Financial Statements:

Balance Sheet – Governmental Funds ............................................................................................22 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ................................................................................23 Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds ......................................................................................................................24 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances – Governmental Funds to the Government-Wide Statement of Activities ....................................................................................................................25 Statement of Net Position – Proprietary Funds ................................................................................28 Statement of Revenues, Expenses and Changes in Net Position – Proprietary Funds ..................29 Statement of Cash Flows – Proprietary Funds ................................................................................30 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 25 CITY OF LOS BANOS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022

TABLE OF CONTENTS
(Continued)
PAGE
Required Supplementary Information
Statement of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual:

General Fund ...............................................................................................................................64 Impact Fees Special Revenue Fund ...........................................................................................66 Community Development Block Grant 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 OPEB Contributions ..........................................................................................................74 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 Districts Fund ...............................................................80 Schedule of Revenues, Expenditures and Changes in Fund
Balance – Budget to Actual – CMAQ Grant Fund ............................................................................81 Schedule of Revenues, Expenditures and Changes in Fund
Balance – Budget to Actual – HCD Grant Fund ...............................................................................82 Schedule of Revenues, Expenditures and Changes in Fund
Balance – Budget to Actual – Capital Projects Fund .......................................................................83 Combining Statement of Net Position – Internal Service Funds ...........................................................86 Combining Statement of Revenues, Expenses and Changes in Net Position – Internal Service Funds .............................................................................................87 Combining Statement of Cash Flows – Internal Service Funds ...........................................................88 26 CITY OF LOS BANOS

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR THE YEAR ENDED JUNE 30, 2022

TABLE OF CONTENTS
(Continued)
PAGE

STATISTICAL SECTION
Net Position by Components – Last Ten Fiscal Years ..............................................................................92 Changes in Net Position – Last Ten Fiscal Years .....................................................................................93 Fund Balances – Governmental Funds – Last Ten Fiscal Years ..............................................................95 Changes in Fund Balances – Governmental Funds – Last Ten Fiscal Years ...........................................96 Assessed Actual Value of Taxable Property – Last Ten Fiscal Years .......................................................98 Tax Revenue by Source – General Fund – Last Ten Fiscal Years ...........................................................99 Direct and Overlapping Property Tax Rates – Last Nine Fiscal Years ................................................... 100 Principal Property Taxpayers – Current Year and Ten Years Ago ......................................................... 101 Property Tax Levies and Collections – Last Ten Fiscal Years ............................................................... 102 Ratios of Outstanding Debt by Type – Last Ten Fiscal Years ................................................................ 103 Ratios of General Fund Debt Outstanding – Last Ten Fiscal Years ....................................................... 104 Direct and Overlapping Governmental Activities Debt ............................................................................ 105 Legal Debt Margin Information – Last Ten Fiscal Years ......................................................................... 106 Pledged-Revenue Coverage – Last Ten Fiscal Years ............................................................................ 107 Demographic and Economic Statistics – Last Ten Fiscal Years ............................................................ 108 Principal Employers – Current Year and Nine Years Ago ...................................................................... 109 Full-Time Equivalent City Government Employees by Function/Program – Last Ten Fiscal Years ....... 110 Operating Information, Operating Indicators by Function/Program – Last Ten Fiscal Years ................. 111 Operating Information, Capital Assets Statistics by Function/Program – Last Ten Fiscal Years ........... 112 27 INTRODUCTORY SECTION
28 i
LOsBanos
At the Crossroads of California
February 10, 2023
Honorable Mayor,
Members of the City Council , and
Citizens of the City of Los Banos
City Hall Phone: (209) 827-7000
520 J Street Fax: (209) 827-7010
Los Banos, CA 93635 www.losbanos.org
SUBJECT: Annual Comprehensive Financial Report - June 30, 2022 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, 2022. 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, 2022, 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, 2022, were fairly presented in conformity with GAAP. The independent auditors' report is presented as the first component of the financial 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.

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.

Profile 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 29 ii
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 delivers a full range of municipal services which include Police, Fire, Community and Economic Development, Recreation, Park Maintenance, and Public Utilities under the Council-Manager 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 is appointed 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. The 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. The 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 10 5%, down from last year's 13.5%. Merced County's unemployment rate of 9.8% is a decrease from last year's rate of 10.8%. California's unemployment rate is 4.6% also down from last year's number of 8.0%.

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 work with two recruitment firms 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 businesses 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 340 new residential permits and finalized a total of 264 permits in Fiscal Year 2021- 2022. 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 2021-2022 there was one (1) finalized commercial building permit; 336N. Mercy Springs (potential for 3 new commercial tenants). The following projects are new issuances to date for Fiscal Year 2021-2022 and will also bring additional benefit to the City: Fitness Planet, Crumb! Cookie.

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. 30 iii
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 116% 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. Cal PERS experienced (6.1 )% unfavorable investment loss and along with the reduction of the discount rate to 6.8%, the estimated overall funded status of CalPERS' was reduced to 72%. Due to the lower discount rate and the investment performance, the unfunded liability and employer normal costs will increase 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 by department are highlighted as fol lows:

Administration
• Security system replacement/key entry upgrade for City Hall • Upgrading the ERP system for utility billings, finance and payroll Community and Economic Development Department
• Downtown Gateway Sign
• Downtown Infrastructure, Streetscape and Digital Sign Police Department
• Police Station Construction
• Range Classroom Construction
• Four Police Vehicles & a Motorcycle
• Patch/Badge Rebranding
• License Plate Reader
Code Enforcement
• Animal Shelter Upgrade
• Animal Control Truck
Fire Department
• Fire Station #2 Crew Quarters
• Remodel Engine Bay Light
• Electronic Gate Controllers Station #1
• Turnouts, Rescue Equipment, & Hose Replacement
• ESO Records Management
Streets Department
• SB1 Street Overlays
• Thermoplastic Striping
• ¾ Ton Utility Pickup & 1 Ton Utility Pickup
• Backhoe Road
31 iv
• Construction Plates Stake & Form
• Pickup Truck& Oil Truck
Maintenance Department
• Downtown Tree Trimming
• BackhoefTractor Dump Trailer
• Aerial Boom Truck
• Miller & Lux Painting
Parks & Recreation
• Landscape Meadowlands II Park
• Little Page Park Playground
• Davis Park Playground
• Gardens I Park Playground
Water
• Purchase land for new well (#16)
• Roof & floor repairs for Madison office
• Purchase water meters for new construction service accounts • Upgrade Fairgrounds water line Valve Replacement
• ¾ Ton Utility Pickup SUV
• Wifi at Madison Office
• Horizontal Boring Tool
Wastewater
• Community Center parking lot storm drains
• Storm Line Colorado to Texas Ave down Pine
• Rehab West I Submersible Storm
• Pump Roof & floor repairs for Madison office
• Construction of Cresthills sewer lift station
• Sewer line repair at the junction of SR 165/152
• Repair of manholes on sewer line near WWTP
• Safety Shoring Construct potable water line from City's infrastructure near St Francis to WWTP • Border Maker Spray Rig
Solid Waste
• 1 Ton Utility Pickup
• Cameras for Street Sweepers
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 32 v
the fiscal year ended June 30, 2021. This is the eighth 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 applicable 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,
Brent Kuhn
Interim Finance Director
Stacy Souza Elms
Interim City Manager
33 THIS PAGE IS LEFT BLANK INTENTIONALLY.
34 vi
•
Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Los Banos
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2021
Executive Director/CEO
35 THIS PAGE IS LEFT BLANK INTENTIONALLY.
36 vii

CITY OF LOS BANOS

ORGANIZATION CHART
I Citizens of Los Banos I
Mayor Pro Tern Council Member Council Member Council Member District 1 District 2 Mayor District 3 District 4
Kenneth Lambert Douglas Begonia Paul Llanez Brett Jones Deborah Lewis I I
I
City Clerk I I City Treasurer
Lucy Mallonee I I
Interim City Manager
Stacy Souza Elms
I P lanning Commission I Tree Commission
I I
City Attorney
I Airport Advisory I Economic Development William Vaughn Commission Advisory Commission
I I
I Traffic Safety I Parks & Recr eation
Committee Commission
I I I Public Works Community &
Human Resources F ire Chief Director/City Interim Finance Police Chief Economic Dir ector Director Development
Paul Tualla Engineer Gary Brizzee Director
Lucy Mallonee Brent Kuhn Nirorn Than Stacy Souza Elms
37 THIS PAGE IS LEFT BLANK INTENTIONALLY.
38 viii
City of Los Banos
Directory of City Officials
June 30, 2022
Elected Officials
Mayor Paul Llanez
Mayor Pro Tem Kenneth Lambert
Council Member Brett Jones
Council Member Deborah Lewis
Council Member Doug Begonia
City Clerk Lucy Mallonee
City Treasurer Vacant
Appointed Officials
Interim City Manager Stacy Souza Elms
City Attorney William Vaughn
Human Resources Director Lucy Mallonee
Fire Chief Paul Tualla
Police Chief Gary Brizzee
Public Works Director/Engineer Nirorn Than
Interim Finance Director Brent Kuhn
Community & Economic Development Director Stacy Souza Elms 39 THIS PAGE IS LEFT BLANK INTENTIONALLY.
40 FINANCIAL SECTION
41 THIS PAGE IS LEFT BLANK INTENTIONALLY.
42 1
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and
Members of the City Council
City of Los Banos, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Los Banos, California (the City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
~ PRICE PAIGE & COMPANY
Certified Public Accountants
The Place to Be
570 N. Magnolia Avenue, Suite I 00
Clovis, CA 9361 I
www.ppc.cpa
tel 559.299.9540
fax 559.299.2344
43 2
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 5–15, budgetary comparison schedules on pages 64–70, the proportionate share of net pension liability on page 71, the schedule of pension contributions on page 72, the schedules of changes in the Net OPEB liability and related ratios on page 73, and the schedule of OPEB contributions on page 74, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing 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.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining and individual fund financial statements and schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. 44 3
The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual fund financial statements and schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 10, 2023, 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.

Clovis, California
February 10, 2023
45 4
THIS PAGE IS LEFT BLANK INTENTIONALLY.
46 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
5 As management of the City of Los Banos (the 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, 2022. 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 $290,538,663 (net position). The unrestricted net position of $63,644,999 may be used to meet the government’s ongoing obligations to citizens and creditors.

The City’s total net position increased by $56,204,633, with $47,554,651 attributable to governmental activities and $8,649,982 attributable to business-type activities. The City’s total assets increased by $69,607,205 due to various equipment purchases and infrastructure improvements throughout the year. Liabilities decreased by $1,422,084. A decrease in pension and other post-employment benefits (OPEB) liabilities contributed to this decrease.

The deferred outflows of resources increased by $670,856 and was mainly due to pension and OPEB related activity within the governmental type activities funds. The deferred inflows of resources increased by $15,515,512. The increase can be largely attributed to pension and 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 $111,587,763. This is an increase of $35,264,114 in comparison with the prior fiscal year.

Approximately 28.7% or $32,025,831 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 $38,160,090. Of this amount, $5,836,627 was assigned for various capital projects and Measure H expenditures, $276,926 was committed for public safety capital outlay, the City’s general plan update. $32,046,537 was unassigned for discretionary use.

The unassigned fund balance is 150% 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).
47 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
6 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 18–20 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 22–25 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.
48 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
7 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 28–30 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 34–61 of this report.

Other 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 (OPEB) 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 OPEB. Combining and individual fund statements and schedules can be found on pages 78–88 of this report.

Government-wide Overall Financial Analysis
Net Position: A condensed presentation of the City’s net position shown below totals $290,538,663 as of June 30, 2022.
(in thousands of dollars)
2021 2022 2021 2022 2021 2022
Current and other assets 80,560 $ 116,601 $ 72,021 $ 80,408 $ 152,581 $ 197,009 $ Capital assets 72,183 97,800 54,940 54,500 127,123 152,300 Total Assets 152,743 214,401 126,961 134,908 279,704 349,309 Deferred outflows of resources 7,424 8,149 2,084 2,030 9,508 10,179 Long-term liabilities outstanding 32,261 34,283 14,844 11,085 47,105 45,368 Other liabilities 2,266 3,526 2,706 1,740 4,972 5,266
Total liabilities 34,527 37,809 17,550 12,825 52,077 50,634 Deferred inflows of resources 2,099 13,645 701 4,670 2,800 18,315 Net position:

Net investment in capital assets 72,183 97,030 54,940 54,500 127,123 151,530 Restricted 50,091 50,603 23,108 24,761 73,199 75,364
Unrestricted 1,267 23,463 32,746 40,182 34,013 63,645
Total net position 123,541 $ 171,096 $ 110,794 $ 119,443 $ 234,335 $ 290,539 $ Governmental Activities Business-type Activities Total Activities 49 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
8 By far, the largest portion of the City’s net position $151,529,819 (52.2%) 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 $75,363,845 (25.9%) represents resources that are subject to external restrictions on how they may be used. The remaining balance of $63,644,999 (21.9%) is unrestricted and may be used to meet the government’s ongoing needs and obligations to its citizens and creditors.

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 20.
2021 2022
Program revenues $ 50,165,391 $ 67,866,041
General revenues 25,471,304 38,052,991
Governmental expenses (31,167,681) (32,484,702)
Business-type expenses (18,344,457) (17,229,697)
Net increase (decrease) 26,124,557 $ $ 56,204,633
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 $12,581,687 overall increase from the 2021 fiscal year. This increase was primarily due to increases in property, sales tax and one-time ARPA funding.

The City’s overall net position increased $56,204,633 (24%) from the prior fiscal year. The reasons for this overall increase are discussed in the following sections for governmental activities and business-type activities. 50 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
9 Key elements of this increase are as follows:
(in thousands of dollars)
2021 2022 2021 2022 2021 2022
Program revenues:

Charges for services 10,355 $ 12,870 $ 26,264 $ 23,579 $ 36,619 $ 36,449 $ Operating grants 4,052 3,757 130 26 4,182 3,783
Capital grants 8,218 26,319 1,146 1,315 9,364 27,634
General revenues:

Property taxes 9,382 10,416 4 - 9,386 10,416
Sales taxes 12,762 14,499 - - 12,762 14,499
Other taxes 1,203 1,436 - - 1,203 1,436
Use of money and property 902 629 189 (121) 1,091 508
American Rescue Plan Act - 9,817 - - - 9,817
Motor vehicle in-lieu 50 31 - - 31 50
Gain on sale of capital assets 29 37 5 52 42 81
Settlement - - - 600 - 600
Miscellaneous 217 358 598 428 956 645
Total revenues 47,300 80,039 28,336 25,879 75,636 105,918 Expenses:

General government 1,681 2,817 - 1,681 - 2,817
Public safety 18,001 16,320 - 18,001 - 16,320
Highways and streets 6,232 6,408 - 6,232 - 6,408
Parks and recreation 4,813 5,647 - 4,813 - 5,647
Economic development 942 1,288 - - 942 1,288
Interest on long-term debt 1 4 - - 1 4
Water - 5,132 - 5,370 5,132 5,370
Sewer - 4,879 - 5,095 4,879 5,095
Airport - - 306 366 306 366
Solid waste - 8,028 - 6,399 8,028 6,399
Total expenses 31,670 32,484 18,345 17,230 50,015 49,714 Increase (decrease) in
net position before transfers 15,630 47,555 9,991 8,649 25,621 56,204 Transfers - - - - - -
Increase (decrease) in
net position 15,630 47,555 9,991 8,649 25,621 56,204
Net position - beginning 107,911 123,541 100,803 110,794 208,714 234,335 Net position - ending $ 123,541 $ 171,096 $ 110,794 $ 119,443 $ 234,335 $ 290,539 Governmental Activities Business-type Activities Total Activities Governmental Activities. During the current fiscal year, net position for governmental activities increased $47,554,651 or 38.5% from the prior fiscal year for an ending balance of $171,095,279. The City is still experiencing growth in property tax due to development and home sales (this growth has also produced increased fees) and an increase in sales tax due to consumer spending. The city also received one-time ARPA funding. 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 18–19.

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 $119,443,384. The total increase in net position for business-type activities (water, wastewater, and solid waste and airport funds) was $8,649,982 or 7.8% from the prior fiscal year. The growth, in large part, is attributable to charges for services in the water, wastewater and solid waste activities being greater than the expense (in order to build reserves for replacing infrastructure). The actual charges for services decreased $2,683,386 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 $32,484,702 were offset by charges for services of $12,870,076, operating grants/contributions of $3,757,028, and capital grants/contributions of $26,318,868, bringing the net expense to cost of services to $10,461,270. Streets received a total of $26,316,481 and General Government received $2,387 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 $11,972,775. 51 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
10 (in thousands of dollars)
2021 2022 2021 2022
General government $ 1,681 $ 2,817 $ (677) $ (1,595)
Public safety 18,002 16,320 (6,515) (11,973)
Highways and streets 6,232 6,408 1,585 25,045
Parks and recreation 4,813 5,647 (820) (154)
Economic development 942 1,288 (848) (858)
Interest of long-term debt - 4 (6) (4)
Total $ 31,670 $ 32,484 $ (7,281) $ 10,461
Total Cost of Service Net Cost of Service
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 2021 to 2022. The total revenues and expenditures do not include any “other financing sources (uses).” Assets Liabilities Revenues Expenditures
General fund 9,693,465 $ 171,811 $ 11,703,892 $ 3,927,073 $ Special revenue funds 1,022,784 21,860 (1,599,331) (2,268,518) Capital projects fund 25,204,235 971,375 (69,301) 2,562,794 Other funds 12,612 5,483 221,417 367,115
Increase (Decrease) from Prior Year
As of June 30, 2022, the City’s governmental funds reported combined ending fund balances of $111,587,763 or an increase of $35,264,114 from the prior fiscal year. Approximately 48.9% of this total amount ($54,601,570) is not available for new spending because it is restricted to impact fee related projects and capital grant projects.

Of the remaining balance, $61,546 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. $32,025,831 or 28.7% as unassigned and available for spending in the future at the government’s discretion. However, approximately $6.4 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 32% whereas liabilities increased by 12%. The total fund balance for General Funded ended the year at $38,160,090 with $32,046,537 as unassigned and available for discretionary use. This was an overall fund balance increase of 33% 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, permit activity due to increased development within the City and one-time ARPA funding. Further analysis of the General Fund budget is discussed below under the “General Fund Budgetary Highlights”. 52 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
11 Major Governmental Funds. There are six major governmental funds: General 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, 2022, the impact fee funds had a total fund balance of $30.8 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, upgrades to Scout Hut facility, purchase of street trees, and expenditures related to the new Police facility. Most of the remaining fund equity position will be used on expanding public safety facilities and traffic improvements 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, 2022, was $711,122 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 utilize 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 (LTF). 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, 2022 was $6.7 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, 2022 was $5.2 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 and the Police Facilities CIP fund which is accounting for the construction of the new police station. The total fund balance at June 30, 2022 was $29.4 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, 2022 was $350,342.

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 technical services in the Building department in the amount of $326,850 for contracted permitting services. 53 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
12 Final budget compared to actual results. Total revenues exceeded budget expectations by $12,456,319 or 53%. The most significant differences between estimated revenues and actual revenues were property taxes, sales tax and ARPA funding. Revenue for property taxes was anticipated at $8,292,076 but the actual amount received was $8,839,328 for a $547,252 amount over budget. Estimated revenues for sales tax was $9,233,988 and the actual amount received was $10,515,455 exceeding the budget by $1,281,467. These positive variances exceeded the budget by 19% or $1,828,719. This was due to increased property values and home sales for property taxes and increased consumer spending within in the City. Also the City received ARPA funding in the amount of $9,826,938 in fiscal year 2021-2022, however, the City only budgeted for these funds in fiscal year 2022-2023.

Expenditure variances were positive coming in 16% under the amended budget. The most significant savings were found in general government (administration), public safety, parks and recreation, and capital outlay.

General government (administration) realized a positive variance of $612,949, public safety $1,948,389, and capital outlay $895,715. There was a total positive variance of $4,070,063 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 $2.9 million in Measure H sales tax revenue and received $3.9 million exceeding budget expectations by $1 million. Measure H expenditures were budgeted at $2,396,959 and ended the year at $2,159,476. This was an expenditure savings of $237,483 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, 2022, amounts to $152,300,338 (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 (net of accumulated depreciation) for the current fiscal year in the amount of $25,177,727.

For governmental activities, capital assets (net of accumulated depreciation) increased $25,617,060 and business-type activities decreased by. $439,333 in fiscal year 2021-2022.

A recap of the City’s capital assets, net of accumulated depreciation, is shown next:
(in thousands of dollars)
Description 2021 2022 2021 2022 2021 2022
Land 8,608 $ 30,819 $ 8,068 $ 8,068 $ 16,676 $ 38,887 $ Buildings and improvements 18,522 20,272 10,063 10,063 28,585 30,335 Equipment 18,492 19,819 11,461 12,168 29,953 31,987
Infrastructure 143,445 148,100 71,183 72,547 214,628 220,647 Construction in progress 2,731 4,389 246 405 2,977 4,794 Less: accumulated depreciation (119,615) (125,599) (46,081) (48,751) (165,696) (174,350) Total capital assets 72,183 $ 97,800 $ 54,940 $ 54,500 $ 127,123 $ 152,300 $ Governmental Activities Business-type Activities Total
The City’s depreciation expense for the year totals $9,038,213. This includes $6,199,904 in depreciation expense for governmental activities and $2,838,309 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 46–47 of this report. 54 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
13 Major capital asset events during the current fiscal year include the projects stated as follows:
 The Los Banos Designated Local Agency (DLA) transferred land in the amount of $22,104,009.  Playground Equipment at City Park paid by Recreation in the amount of $193,670.  Purchase of Backhoes with equipment paid by Streets in the amount of $153,324.  2022 Flatbed Dump Truck paid by Water fund in the amount of $62,958.  Portable video inspection camera paid by Wastewater fund in the amount of $63,347.  2022 Caterpillar 420 Backhoe Loader paid by Wastewater fund in the amount of $142,581.  2022 International Street Sweeper paid by Solid Waste fund in the amount of $355,978.  Computer Replacement Project paid by Information Technology in the amount of $31,930.

Long-term Debt: A recap of the City’s long-term debt is shown below. Changes in the total outstanding longterm debt include an increase of $14,000,000 for the current fiscal year. The increase was due to the City entering into a financing lease with California Infrastructure and Economic Development Bank (IBank) for an amount not to exceed $14,000,000 ($13,336,944 for project uses and $663,056 for capitalized interest). The proceeds from this obligation will help finance the cost of constructing the new police station and finance interest payments. An increase of $80,873 was recorded for employee compensated absences. (in thousands of dollars)
Debt Types 2021 2022 2021 2022 2021 2022
Financing lease $ 14,000 - $ $ - -$ $ 14,000 - $
Comp. absences 833 758 227 221 1,060 979
Total debt $ 833 $ 14,758 $ 227 221$ 1,060$ 14,979$
Governmental Activities Business-type Activities Total
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 have 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. Sales tax is the City’s largest source of revenue representing 43% of the General Fund. Sales tax is anticipated to increase by

3.6%. The second largest revenue is property tax which makes up 19% of the General Fund. Property tax revenues are budgeted to increase 2% in 2022-2023.

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. And a mid-year 10-15% cost-of-living increase for all employees. 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%. 55 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
14 Following is the employee rate, employer’s normal cost rate, and unfunded accrued liability (UAL) by fiscal year:

Employer Employer
Employee Normal Cost UAL Employee Normal Cost UAL
2020 8.00% 13.945% $715,298 9.00% 23.654% $633,978
2021 8.00% 15.037% $973,034 9.00% 25.540% $905,186
2022 8.00% 14.870% $940,667 9.00% 25.590% $875,076
Employer Employer
Employee Normal Cost UAL Employee Normal Cost UAL
2020 7.00% 8.668% $2,408 9.00% 20.603% $1,159
2021 7.00% 9.442% $5,385 9.00% 22.397% $7,523
2022 7.00% 9.300% $5,206 9.00% 22.470% $7,273
Employer Employer
Employee Normal Cost UAL Employee Normal Cost UAL
2020 7.25% 7.072% $3,357 12.75% 13.786% $894
2021 7.25% 7.874% $7,878 13.75% 13.884% $5,660
2022 7.25% 7.730% $7,616 13.75% 13.980% $4,320 Police

13.75% 13.980% $1,151 Fire

2.7% @ 55 3% @ 50
Miscellaneous Safety

2.0% @ 60 3% @ 55
Miscellaneous Safety

2.0% @ 62 2.7% @ 57
Miscellaneous Safety
The City completed an actuarial study to comply with Governmental Accounting Standards Board (GASB) pronouncement 75 to determine the unfunded liability for other post-employment benefits (OPEB). The City paid $950,036 for retirement health benefits and sent another $988,834 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 2021-2022 utility rates were increased by a CPI of 3.21% as of July 1, 2021. 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.
56 CITY OF LOS BANOS
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2022
15 The local economy has been steadily improving since the pandemic, however, there are indications of a looming recession due to rising inflation. Our local economy has been enjoying an increase in sales tax revenue indicating an uptick in consumer spending and will probably stay static as the economy works through the existing macroeconomic cycles. ARPA funding continues to help the City recover from the COVID pandemic and is allowing for much needed capital replacement projects that have been delayed. A continued conservative budget approach has been prepared for FY 2022-2023 in anticipation of any lingering effects of the forementioned economic issues. The City is also continuing its planned uses for the ARPA funding that was received this fiscal year as a response to the aftermath of COVID-19. The next steps for the City will be to devise and implement a spending plan for ARPA funds and utilize them to address any vital needs that have been postponed as a result of this unprecedented event and the ever changing economic landscape.

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
57 16
THIS PAGE IS LEFT BLANK INTENTIONALLY.
58 17

BASIC FINANCIAL STATEMENTS
59 The notes to the basic financial statements are an integral part of this statement. 18 CITY OF LOS BANOS

STATEMENT OF NET POSITION
JUNE 30, 2022
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments 91,303,253 $ 48,435,458 $ 139,738,711 $ Restricted cash and investments with fiscal agents 13,337,000 13,337,000 - Restricted cash and investments 29,563,801 - 29,563,801 Receivables:

Accounts receivable 700,923 1,898,536 2,599,459
Taxes receivable 3,275,497 3,275,497 -
Interest receivable 67,283 57,094 124,377
Intergovernmental receivables 5,562,959 29,674 5,592,633 Loans receivable 2,020,820 2,020,820 -
Internal balances (283,131) 283,131 -
Inventories - 50,093 50,093
Prepaid items 615,945 91,222 707,167
Capital assets, not being depreciated:

Land 30,819,214 8,067,666 38,886,880
Construction in progress 4,388,914 404,807 4,793,721
Capital assets, being depreciated:

Building and structures 20,272,446 10,062,987 30,335,433 Machinery and equipment 19,818,891 12,168,754 31,987,645 Infrastructure 148,100,152 72,547,358 220,647,510
Less: accumulated depreciation (48,751,364) (125,599,487) (174,350,851) Total assets 134,909,217 214,400,679 349,309,896

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 5,165,195 1,090,329 6,255,524 Deferred outflows from OPEB 939,400 2,983,967 3,923,367 Total deferred outflows of resources 8,149,162 2,029,729 10,178,891

LIABILITIES
Accounts payable and other current liabilities 2,626,302 600,852 3,227,154 Retainage payable 107,519 - 107,519
Unearned revenue - 61,445 61,445
Interest payable 163,333 - 163,333
Deposits 22,240 888,410 910,650
Noncurrent liabilities:

Due within one year:

Compensated absences 606,675 189,791 796,466
Due in more than one year:

Compensated absences 150,839 31,666 182,505
Long-term debt 14,000,000 - 14,000,000
Net pension liability 10,919,656 3,350,255 14,269,911
Net OPEB liability 9,212,956 2,900,383 12,113,339
Landfill closure and postclosure liability 4,802,845 - 4,802,845 Total liabilities 12,825,647 37,809,520 50,635,167
60 The notes to the basic financial statements are an integral part of this statement. 19 CITY OF LOS BANOS

STATEMENT OF NET POSITION
JUNE 30, 2022
(Continued)
Governmental Business-Type
Activities Activities Total

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 8,569,668 3,072,108 11,641,776 Deferred inflows from OPEB 5,075,374 1,597,807 6,673,181 Total deferred inflows of resources 13,645,042 4,669,915 18,314,957

NET POSITION
Net investment in capital assets 54,500,208 97,029,611 151,529,819 Restricted for:

Public safety 5,266,270 - 5,266,270
Highways and streets 6,762,331 - 6,762,331
Parks and recreation 366,141 - 366,141
Development projects - 30,864,945 30,864,945
Capital projects 24,533,088 4,611,260 29,144,348
Economic development - 2,731,942 2,731,942
Landfill closure and postclosure costs 227,868 - 227,868 Total restricted 50,602,889 24,760,956 75,363,845
Unrestricted 40,182,220 23,462,779 63,644,999
Total net position $ 119,443,384 171,095,279 $ 290,538,663 $ 61 The notes to the basic financial statements are an integral part of this statement. 20 CITY OF LOS BANOS

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Operating Capital
Charges for Grants and Grants and Governmental Business-Type Expenses Services Contributions Contributions Activities Activities Total Primary government:

Governmental activities:

General government $ 1,220,209 2,817,462 $ - $ 2,387 $ (1,594,866) $ - $ (1,594,866) $ Public safety 16,319,501 4,055,432 291,294 (11,972,775) - (11,972,775) - Highways and streets 6,408,485 1,974,701 3,161,883 26,316,481 25,044,580 25,044,580 - Parks and recreation 5,647,346 5,493,545 - (153,801) - (153,801) - Economic development 1,287,958 126,189 303,851 (857,918) - (857,918) - Interest on long-term debt - 3,950 - - (3,950) - (3,950) Total governmental activities 12,870,076 32,484,702 3,757,028 26,318,868 10,461,270 - 10,461,270 Business-type activities:

Water 8,129,168 5,368,954 - 790,010 3,550,224 - 3,550,224 Wastewater 8,649,109 5,095,317 - 524,659 4,078,451 - 4,078,451 Airport 202,422 366,282 10,000 - (153,860) - (153,860)
Solid waste 6,599,005 6,399,144 15,696 - 215,557 - 215,557 Total business-type activities 17,229,697 23,579,704 25,696 1,314,669 - 7,690,372 7,690,372 Total primary government $ 36,449,780 49,714,399 $ 3,782,724 $ 27,633,537 $ 7,690,372 10,461,270 18,151,642 General revenues:

Taxes:

Property 10,416,190 - 10,416,190
Sales 14,498,643 - 14,498,643
Transient taxes and other 748,705 - 748,705
Franchise 687,723 - 687,723
Use of money and property 629,466 (120,628) 508,838
American Rescue Plan Act 9,816,684 - 9,816,684
Motor vehicle in-lieu 49,524 - 49,524
Gain on sale of capital assets 51,723 28,954 80,677
Settlement 600,000 - 600,000
Miscellaneous 428,515 217,492 646,007
Total general revenues 959,610 37,093,381 38,052,991
Change in net position 47,554,651 8,649,982 56,204,633
Net position - beginning 110,793,402 123,540,628 234,334,030 Net position - ending $ 119,443,384 171,095,279 $ 290,538,663 $ Program Revenues Changes in Net Position
Net (Expense) Revenue and
Functions/Programs
62 21

FUND FINANCIAL STATEMENTS
The funds described below were determined to be major funds by the City in fiscal year 2022. Individual nonmajor 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.
63 The notes to the basic financial statements are an integral part of this statement. 22 CITY OF LOS BANOS
BALANCE SHEET – GOVERNMENTAL FUNDS
JUNE 30, 2022
Capital
Projects
Special Revenue Funds Fund
CDBG Nonmajor Total
Impact and Home Streets and Public Capital Governmental Governmental General Fees Grants Roads Safety Grants Funds Funds
ASSETS
Cash and investments $ 30,992,971 31,504,450 $ 686,078 $ 6,283,046 $ 4,551,259 $ 16,483,951 $ 522,185 $ 91,023,940 $ Restricted cash with fiscal agents - - - - - 13,337,000 - 13,337,000 Accounts receivable - 673,347 12,990 23 14,563 - - 700,923 Taxes receivable - 2,445,709 - 83,093 708,222 - 38,473 3,275,497 Interest receivable 22,119 23,917 522 4,113 3,355 12,049 923 66,998 Intergovernmental receivables 28,127 4,952,275 54,321 396,166 - - 132,070 5,562,959 Prepaid items - - - - - 615,945 - 615,945
Due from other funds - 152,776 - - - - - 152,776
Loans receivable - - 2,020,820 - - - - 2,020,820
Total assets $ 31,043,217 39,752,474 $ 2,774,731 $ 6,766,441 $ 5,277,399 $ 30,448,945 $ 693,651 $ 116,756,858 $

LIABILITIES
Accounts payable $ 178,272 1,290,144 $ 42,789 $ 9,017 $ 11,129 $ 863,856 $ 190,533 $ 2,585,740 $ Retainage payable - - - - - 107,519 - 107,519
Due to other funds - - - - - - 152,776 152,776
Deposits - 22,240 - - - - - 22,240
Advances from other funds - 280,000 - - - - - 280,000
Total liabilities 178,272 1,592,384 42,789 9,017 11,129 971,375 343,309 3,148,275

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - loans - - 2,020,820 - - - - 2,020,820 Total deferred inflows of resources - - 2,020,820 - - - - 2,020,820

FUND BALANCES
Nonspendable - - - - - 615,945 - 615,945
Restricted - 30,864,945 711,122 6,757,424 5,266,270 23,736,625 371,048 67,707,434 Committed 276,926 - - - - 5,125,000 - 5,401,926
Assigned 5,836,627 - - - - - - 5,836,627
Unassigned 32,046,537 - - - - - (20,706) 32,025,831
Total fund balances 30,864,945 38,160,090 711,122 6,757,424 5,266,270 29,477,570 350,342 111,587,763 Total liabilities, deferred inflows of
resources and fund balances 39,752,474 $ 31,043,217 $ 2,774,731 $ 6,766,441 $ 5,277,399 $ 30,448,945 $ 693,651 $ 116,756,858 $ 64 The notes to the basic financial statements are an integral part of this statement. 23 CITY OF LOS BANOS

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION
JUNE 30, 2022
Total fund balances - governmental funds $ 111,587,763
97,625,119
(3,190,077)
(2,042,643)
2,020,820
Net pension liability (10,557,555)
Net OPEB liability (8,998,144)
Compensated absences (747,388)
Long-term debt (14,000,000)
(163,333)
Cash and investments 279,313
Interest receivable 285
Capital assets, net of accumulated depreciation 175,011 Deferred outflows from pensions 117,855
Deferred outflows from OPEB 69,575
Accounts payable and other current liabilities (40,562) Compensated absences (10,126)
Net pension liability (362,101)
Net OPEB liability (214,812)
Deferred inflows from pensions (332,251)
Deferred inflows from OPEB (118,339)
Internal balances (3,131)
Net position of governmental activities $ 171,095,279
Capital assets used in governmental activities are not current assets or financial resources and, therefore, were not reported in the governmental funds.

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:

Amounts reported for governmental activities in the statement of net position are different because:

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.

Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenue in the 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.

Interest payable on long-term debt does not require the use of current financial resources. Therefore, interest payable is not reported as a liability in the governmental funds balance sheet.
65 The notes to the basic financial statements are an integral part of this statement. 24 CITY OF LOS BANOS
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES –

GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Capital
Projects
Special Revenue Funds Fund
CDBG Nonmajor Total
Impact and Home Streets and Public Capital Governmental Governmental General Fees Grants Roads Safety Grants Funds Funds

REVENUES
Taxes:

Property $ 8,839,328 $ - $ - $ 1,576,862 - $ $ - $ 10,416,190 - $ Sales 10,515,455 - 1,373,522 - 3,983,188 - 15,872,165 - Franchise 687,723 - - - - - 687,723 -
Other 748,705 - - - - - 748,705 -
Licenses and permits 1,983,293 - - - - - 1,983,293 -
Intergovernmental 9,978,791 40,722 152,490 1,907,986 164,971 151,361 - 12,396,321 Charges for services 2,205,929 5,915,924 - 13,740 - 2,697,582 - 10,833,175 Fines 60,238 - - - - - - 60,238
Use of property and money 831,435 (100,917) (2,557) (19,010) (12,068) (64,346) (3,093) 629,444 Loan repayments - 391,262 - - - - 391,262 -
Miscellaneous 37,649 99,054 948 357 80,184 - - 218,192
Total revenues 35,949,951 5,893,378 542,143 3,262,855 5,806,877 (64,346) 2,845,850 54,236,708

EXPENDITURES
Current:

General government 2,679,438 - - - - - 2,679,438 -
Public safety 14,138,979 2,124 152,490 3,132,262 - - 17,425,855 - Highways and streets 382,389 297,199 1,970,527 - - - 2,650,115 - Parks and recreation 1,846,431 18,234 - - - 2,310,185 - 4,174,850 Economic development 916,433 112,633 - - - 172,067 - 1,201,133 Debt service:

Interest and fiscal charges 3,950 - - - 47,055 - - 51,005 Capital outlay:

General government 34,002 308,258 - - - - 342,260 -
Public safety 710,749 - - 86,815 - 2,515,739 3,313,303 - Highways and streets 257 - - 1,022 - - - 1,279
Parks and recreation 351,373 66,333 - - - 361,397 - 779,103 Economic development - 247,408 - - - - - 247,408
Total expenditures 21,311,409 692,148 265,123 1,971,549 3,219,077 2,562,794 2,843,649 32,865,749 Excess (deficiency) of revenues over
(under) expenditures 5,201,230 14,638,542 277,020 1,291,306 2,587,800 (2,627,140) 2,201 21,370,959

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets 17,425 4,727 - - 3,688 - 4,928 30,768 Issuance of financing lease - - - - - 14,000,000 - 14,000,000 Cost of issuance - - - - - (140,000) - (140,000)
Insurance recoveries 2,387 - - - - - - 2,387
Transfers in - - - - 11,700 13,000,000 - 13,011,700
Transfers out (5,136,700) (3,000,000) - - (4,875,000) - - (13,011,700) Total other financing sources (uses) (5,116,888) (2,995,273) - - (4,859,612) 26,860,000 4,928 13,893,155 Net change in fund balances 9,521,654 2,205,957 277,020 1,291,306 (2,271,812) 24,232,860 7,129 35,264,114 Fund balances (deficits) - beginning 28,638,436 28,658,988 434,102 5,466,118 7,538,082 5,244,710 343,213 76,323,649 Fund balances (deficits) - ending 38,160,090 $ 30,864,945 $ 711,122 $ 6,757,424 $ 5,266,270 $ 29,477,570 $ 350,342 $ 111,587,763 $ 66 The notes to the basic financial statements are an integral part of this statement. 25 CITY OF LOS BANOS

RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS TO THE

GOVERNMENT-WIDE STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2022
Net change in fund balances - total governmental funds $ 35,264,114 3,478,744
(6,129,669)
28,299,114
(14,000,000)
(163,333)
730,886
507,967
Unavailable revenue (116,695)
Deferred loans (384,852)
75,686
(7,311)
Change in net position of governmental activities $ 47,554,651 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.

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).

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.

Compensated absences
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 $70,235 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 increase net position.

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.

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 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.

Accrued interest payable on long-term debt is reported in the governmentwide statement of activities, but does not require the use of current financial resources. This amount represents the change in accrued interest payable not reported in governemntal funds.
67 26
THIS PAGE IS LEFT BLANK INTENTIONALLY.
68 27

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 2022.

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
Accounts 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.
69 The notes to the basic financial statements are an integral part of this statement. 28 CITY OF LOS BANOS

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2022
Governmental
Activities -
Business-Type Activities - Enterprise Funds Internal Service Water Wastewater Airport Solid Waste Total Funds
ASSETS
Current assets:

Cash and investments 28,225,477 $ 13,915,865 $ 708,729 $ 5,585,387 $ 48,435,458 $ 279,313 $ Restricted cash and investments 12,661,779 11,871,309 - 5,030,713 29,563,801 - Accounts receivable 593,197 698,542 21,615 585,182 1,898,536 - Interest receivable 30,004 18,852 518 7,720 57,094 285
Intergovernmental receivables - - 29,674 - 29,674 -
Inventories 7,978 - 42,115 - 50,093 -
Prepaid items - 91,222 - - 91,222 -
Total current assets 41,518,435 26,595,790 802,651 11,209,002 80,125,878 279,598 Noncurrent assets:

Advances to other funds 280,000 - - - 280,000 -
Capital assets:

Land 7,306,844 760,822 - - 8,067,666 -
Construction in progress 191,813 119,383 60,752 32,859 404,807 9,381 Buildings and improvements 9,038,917 322,145 669,767 32,158 10,062,987 37,709 Machinery and equipment 5,815,251 3,525,526 445,815 2,382,162 12,168,754 1,432,941 Infrastructure 31,855,777 37,932,420 2,739,243 19,918 72,547,358 - Less: accumulated depreciation (25,124,544) (19,383,051) (3,046,370) (1,197,399) (48,751,364) (1,305,020) Total noncurrent assets 19,770,327 32,870,976 869,207 1,269,698 54,780,208 175,011 Total assets 61,288,762 59,466,766 1,671,858 12,478,700 134,906,086 454,609

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 406,874 393,326 - 290,129 1,090,329 117,855 Deferred outflows from OPEB 338,387 357,676 - 243,337 939,400 69,575 Total deferred outflows of resources 751,002 745,261 - 533,466 2,029,729 187,430

LIABILITIES
Current liabilities:

Accounts payable and other current liabilities 122,037 177,015 9,242 292,558 600,852 40,562 Unearned revenue - - - 61,445 61,445 -
Deposits 5,000 879,830 3,580 - 888,410 -
Compensated absences 64,763 69,521 - 55,507 189,791 10,126 Total current liabilities 1,126,366 191,800 12,822 409,510 1,740,498 50,688 Noncurrent liabilities:

Compensated absences 4,802 26,622 - 242 31,666 -
Net pension liability 1,249,948 1,209,022 - 891,285 3,350,255 362,101 Net OPEB liability 1,104,317 1,044,765 - 751,301 2,900,383 214,812 Landfill closure and postclosure liability - - - 4,802,845 4,802,845 - Total noncurrent liabilities 2,339,961 2,299,515 - 6,445,673 11,085,149 576,913 Total liabilities 3,466,327 2,491,315 12,822 6,855,183 12,825,647 627,601

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 1,146,923 1,108,333 - 816,852 3,072,108 332,251 Deferred inflows from OPEB 575,556 608,363 - 413,888 1,597,807 118,339 Total deferred inflows of resources 1,716,696 1,722,479 - 1,230,740 4,669,915 450,590

NET POSITION
Net investment in capital assets 19,490,327 32,870,976 869,207 1,269,698 54,500,208 175,011 Restricted for capital projects 12,661,779 11,871,309 - - 24,533,088 - Restricted for landfill closure and postclosure costs - - - 227,868 227,868 - Unrestricted 24,704,635 11,255,948 789,829 3,428,677 40,179,089 (611,163) Total net position 56,856,741 $ 55,998,233 $ 1,659,036 $ 4,926,243 $ 119,440,253 $ (436,152) 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 3,131 Net position of business-type activities (page 19) $ 119,443,384 70 The notes to the basic financial statements are an integral part of this statement. 29 CITY OF LOS BANOS

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Activities -
Business-Type Activities - Enterprise Funds Internal Service Water Wastewater Airport Solid Waste Total Fund
Operating revenues:

Water charges 8,129,168 $ - $ - $ - $ 8,129,168 $ - $
Wastewater charges - 8,649,109 - - 8,649,109 -
Solid waste charges - - - 6,571,089 6,571,089 -
Airport charges - - 202,422 - 202,422 -
Interdepartmental charges - - - - - 3,209,040
Miscellaneous 3,180 213,907 105,699 1,770 324,556 -
Total operating revenues 8,343,075 8,652,289 308,121 6,572,859 23,876,344 3,209,040 Operating expenses:

Personnel services 1,957,742 1,846,907 11,994 1,309,076 5,125,719 2,370,932 Contractual services 328,073 485,620 15,980 3,254,644 4,084,317 167,016 Utilities 936,712 274,309 193,068 88,484 1,492,573 289,002 Repairs and maintenance 491,997 639,675 32,548 716,876 1,881,096 291,515 Insurance 99,462 66,703 17,675 47,070 230,910 11,587
Other supplies and expenses 449,612 351,809 2,633 713,290 1,517,344 28,546 Depreciation 1,103,048 1,427,160 92,384 215,717 2,838,309 70,235 Total operating expenses 5,092,183 5,366,646 366,282 6,345,157 17,170,268 3,228,833 Operating income (loss) 2,976,429 3,560,106 (58,161) 227,702 6,706,076 (19,793) Nonoperating revenues (expenses):

Investment earnings (135,089) (88,365) (2,408) (35,422) (261,284) (443) Rental income - 34,965 - - 34,965 -
Intergovernmental revenue - - 10,000 15,696 25,696 -
Gain (loss) on sale of assets 16,929 3,007 - 31,779 51,715 - Landfill closure fees - - - 27,916 27,916 -
- - - (46,504) (46,504) -
Settlement revenue - - - 600,000 600,000 -
Agricultural sales 209,658 - - - 209,658 -
Total nonoperating revenues (expenses) (118,160) 159,265 7,592 593,465 642,162 (443) Income (loss) before capital contributions 2,858,269 3,719,371 (50,569) 821,167 7,348,238 (20,236) Capital contributions 790,010 524,659 - - 1,314,669 -
Change in net position 3,648,279 4,244,030 (50,569) 821,167 8,662,907 (20,236) Net position - beginning 53,208,462 51,754,203 1,709,605 4,105,076 (415,916) Net position - ending $ 55,998,233 56,856,741 $ 1,659,036 $ 4,926,243 $ (436,152) $ Adjustments for the net effect of the current year activity between the internal service funds and the enterprise funds (12,925) Changes in net position of business-type activities (page 20) $ 8,649,982 Landfill closure/postclosure change
in estimate
71 The notes to the basic financial statements are an integral part of this statement. 30 CITY OF LOS BANOS

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2022
Governmental
Activities -
Business-Type Activities - Enterprise Funds Internal Service Water Wastewater Airport Solid Waste Total Fund

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers and users $ 8,216,965 $ 8,683,059 $ 196,932 $ 6,873,199 $ 23,970,155 $ - Receipts from interfund services provided - - - - 3,211,603 - Payments to suppliers (2,267,578) (1,905,114) (266,190) (5,972,607) (10,411,489) (792,311) Payments to or on behalf of employees for services (1,818,575) (1,790,107) (11,994) (1,276,871) (4,897,547) (2,371,378) Receipts from other operating revenues 3,180 213,907 105,699 1,770 324,556 - Net cash provided (used) by operating activities 4,344,719 4,991,018 24,447 (374,509) 8,985,675 47,914

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Advances to other funds - 115,000 - - 115,000 -
Property taxes and grants received - - 10,000 77,141 87,141 - Settlement - - - 600,000 600,000 -
Agricultural sales 209,658 - - - 209,658 -
Net cash provided (used) by noncapital financing activities 115,000 209,658 10,000 677,141 1,011,799 -

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets (303,849) (381,266) (8,964) (390,230) (1,084,309) (39,106) Proceeds from the sale of assets 3,007 16,929 - 31,779 51,715 - Net cash provided (used) by capital and related
financing activities (378,259) (286,920) (8,964) (358,451) (1,032,594) (39,106)

CASH FLOWS FROM INVESTING ACTIVITIES
Rental receipts 34,965 - - - 34,965 -
Investment earnings (losses) (151,120) (99,200) (2,665) (39,062) (292,047) (570) Net cash provided (used) by investing activities (151,120) (64,235) (2,665) (39,062) (257,082) (570) Net increase (decrease) in cash and cash equivalents 4,021,679 4,758,182 22,818 (94,881) 8,707,798 8,238 Cash and cash equivalents - beginning 36,865,577 21,028,992 685,911 10,710,981 69,291,461 271,075 Cash and cash equivalents - ending 40,887,256 $ 25,787,174 $ 708,729 $ 10,616,100 $ 77,999,259 $ 279,313 $ Operating income (loss) 2,976,429 $ 3,560,106 $ (58,161) $ 227,702 $ 6,706,076 $ (19,793) $ Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation expense 1,103,048 1,427,160 92,384 215,717 2,838,309 70,235 Landfill closure fees - - (46,504) - (46,504) -
Landfill closure/postclosure change in estimate - - - 27,916 27,916 - (Increase) decrease in:

Accounts receivable 12,407 33,950 (5,490) 274,194 315,061 2,563 Inventories 5,128 (11,570) - - (6,442) -
Prepaid items (86,222) - - (86,222) - -
Deferred outflows of resources for pensions 40,334 57,880 - 21,009 119,223 2,442 Deferred outflows of resources for OPEB (33,148) (31,362) - (233) (64,743) 13,220 Increase (decrease) in:

Accounts payable and other liabilities 33,150 (776) 7,284 (1,105,739) (1,066,081) (4,645) Customer deposits 75,390 - - - 75,390 -
Compensated absences 12,009 (16,032) - (1,486) (5,509) 322 Net pension liability (871,916) (982,272) (601,053) - (2,455,241) (211,244) Net OPEB liability (467,086) (441,887) (425,838) - (1,334,811) (186,089) Deferred inflows of resources for pensions 1,044,054 1,077,927 770,826 - 2,892,807 311,916 Deferred inflows of resources for OPEB 392,546 414,920 - 268,980 1,076,446 68,987 Net cash provided (used) by operating activities 4,344,719 $ 4,991,018 $ 24,447 $ (374,509) $ 8,985,675 $ 47,914 $ Capital contributions $ 524,659 790,010 $ - $ - $ 1,314,669 $ - $ Schedule of Non-Cash Capital and Financial Related Activities Reconciliation of Operating Income (Loss) to Cash Flows Provided (Used) by Operating Activities 72 31

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. 73 The notes to the basic financial statements are an integral part of this statement. 32 CITY OF LOS BANOS

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUND
JUNE 30, 2022
NSP Impound
Custodial Fund
ASSETS
Cash $ 8,895
Accounts receivable 4,427
Total assets 13,322

LIABILITIES
Accounts payable 2,268
Total liabilities 2,268

NET POSITION (DEFICIT)
Restricted for:

Individuals and other organizations 11,054
Total net position (deficit) 11,054 $
74 The notes to the basic financial statements are an integral part of this statement. 33 CITY OF LOS BANOS

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUND
FOR THE YEAR ENDED JUNE 30, 2022
NSP Impound
Custodial Fund

ADDITIONS
Collections on behalf of others:

Impound collections $ 17,796
Total additions 17,796

DEDUCTIONS
Payments of property insurance 7,708
Payments of property taxes 12,704
Total deductions 20,412
Net increase (decrease) in fiduciary net position (2,616) Net position - beginning 13,670
Net position - ending $ 11,054
75 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
34 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Los Banos, California (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. 76 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
35 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 – Accounts 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. 77 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
36 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 are 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. 78 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
37 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, this share is also considered to be a 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.
79 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
38 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, 2022 was as follows:

Governmental Business-Type
Activities Activities Total
Beginning balance $ 832,878 $ 226,966 $ 1,059,844
Additions 468,486 149,212 617,698
Payments (154,721) (543,850) (698,571)
Ending balance 757,514 $ 221,457 $ 978,971 $
Current portion $ 189,791 606,675 $ 796,466 $
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 (the 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 June 30, 2021
Measurement Date June 30, 2021
Measurement Period July 1, 2020 to June 30, 2021
80 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
39 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, 2022. The deficit fund balance in the HCD Grant was caused by expenditures in excess of recognized revenue, which will be alleviated through additional grant funding or subsidized by the City through a transfer of funds. 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.

Governmental Funds
HCD Grant Special Revenue Fund $ 20,706
Internal Service Funds
Fleet Maintenance 513,783
Information Technology 160,132
NOTE 3 – CASH AND INVESTMENTS
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 requires 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. 81 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
40 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 State 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 $ 139,738,711
Restricted cash with fiscal agents 13,337,000
Restricted cash and investments 29,563,801
Cash and investments in primary government 182,639,512
Fiduciary Fund:

Cash 8,895
Total cash and investments $ 182,648,407
Cash and investments as of June 30, 2022 consisted of the following:

Cash on hand and in bank $ 90,765,024
Cash with fiscal agents 13,337,000
Investments 78,546,383
Total cash and investments $ 182,648,407
Restricted cash and investments of $24,533,088 are held in the Water and Wastewater Enterprise Funds for future infrastructure impacted by development.

Restricted cash and investments of $5,030,713 are held in the Solid Waste Enterprise Fund to pay for landfill closure and postclosure costs.
82 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
41 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 N/A 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 N/A 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
83 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
42 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:
12 Months 13 to 24 25 to 36 More than
Investment Type or Less Months Months 36 Months Total
Held by City:

State Local Agency Investment Fund 65,576,555 $ - $ - $ - $ 65,576,555 $ Money Market Mutual Funds 12,969,828 - - - 12,969,828
Total investments $ - 78,546,383 $ - $ - $ 78,546,383
Cash with fiscal agents 13,337,000
Cash on hand and in bank 90,765,024
Total cash and investments $ 182,648,407
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 portfolio 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, 2022, these investments matured in an average of 311 days.
84 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
43 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, 2022 were provided by Standard and Poor’s investment rating system. The Local Agency Investment Fund was not rated as of June 30, 2022.

Investment Type AAAm Total
Held by City:

Money Market Mutual Funds 12,969,828 12,969,828
Total $ 12,969,828 12,969,828
Not rated:

State Local Agency Investment Fund 65,576,555
Cash with fiscal agents 13,337,000
Cash on hand and in banks 90,765,024
Total 182,648,407 $
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, 2022, 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 110% of the total amount deposited by the public agencies.

As of June 30, 2022, the carrying amount of the City’s bank deposits was $90,761,288 and the respective bank balances totaled $91,652,336. Of the total bank balance, $500,000 was insured through the Federal Depository Insurance Company (FDIC). The remaining $91,152,336 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.
85 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
44 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 at the 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. The City does not have any investments that are measured using Level 3 inputs. Fair value measurements of the City’s investments are as follows:

Investment in the State Local Agency Investment Fund: valued at $65,576,555, based on the City’s prorata share of the fair value provided by the LAIF for the entire LAIF portfolio. LAIF invests in numerous types of investments ranging from all levels in the fair value hierarchy. Accordingly, LAIF is not an investment type that can be categorized in any level in the fair value hierarchy.

Investment in the money market mutual funds is valued at $12,969,828. Money market funds have a maturity of less than one year and are presented at amortized costs, which approximates fair value.

Since they are presented at amortized costs, they are not an investment type that can be categorized at any level in the fair value hierarchy.

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, 2022, is as follows:

Due From Other Funds Due To Other Funds Amount
General Fund HCD Grant Special Revenue Fund $ 152,776
Total $ 152,776
B. Advances Between Funds
At June 30, 2022, 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 $ 280,000
Total $ 280,000
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, 2022, and expects to repay the entire advance by fiscal year ending June 30, 2024.
86 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
45 NOTE 5 – LOANS RECEIVABLE
At June 30, 2022, the City had the following loans receivable:

Outstanding
Balance as of
June 30, 2022
Residential Rehabilitation Program $ 803,884
Commercial Micro-Enterprise Program 34,190
First-Time Home Buyer Program 586,069
Neighborhood Stabilization Program 596,677
Total $ 2,020,820
A. Residential Rehabilitation Program
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, 2022, outstanding loans of this program amounted to $803,884.

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, 2022, 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, 2022, outstanding loans of this program amounted to $586,069.

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, 2022, loans outstanding totaled $596,677. 87 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
46 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 asset’s 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 3-20 years
Buildings, Structures and Improvements 25-50 years
Infrastructure 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, 2022 was as follows:

Balance Balance
June 30, 2021 Additions Deletions Transfers June 30, 2022 Governmental Activities:

Capital assets not being depreciated:

Land 8,607,773 $ 22,211,441 $ - $ - $ 30,819,214 $
Construction in progress 3,488,381 2,731,614 - (1,831,081) 4,388,914 Total capital assets not being depreciated 25,699,822 11,339,387 - (1,831,081) 35,208,128 Capital assets being depreciated:

Buildings, structures and improvements 18,522,589 134,683 - 1,615,174 20,272,446 Machinery and equipment 18,491,649 1,428,207 (217,992) 117,027 19,818,891 Infrastructure 4,556,044 143,445,228 - 98,880 148,100,152 Total capital assets being depreciated 6,118,934 180,459,466 (217,992) 1,831,081 188,191,489 Less accumulated depreciation for:

Buildings, structures and improvements (7,770,526) (630,286) - - (8,400,812) Machinery and equipment (13,999,356) (815,885) 216,200 - (14,599,041) Infrastructure (4,753,733) (97,845,901) - - (102,599,634) Total accumulated depreciation (6,199,904) (119,615,783) 216,200 - (125,599,487) Total capital assets being depreciated, net (80,970) 60,843,683 (1,792) 1,831,081 62,592,002 Governmental activities capital assets, net $ 25,618,852 72,183,070 $ (1,792) $ - $ 97,800,130 $ 88 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
47 NOTE 6 – CAPITAL ASSETS (Continued)
B. Business-Type Activities
Capital assets activity of the business-type activities for the year ended June 30, 2022 was as follows:

Balance Balance
June 30, 2021 Additions Deletions Transfers June 30, 2022 Business-Type Activities:

Capital assets not being depreciated:

Land 8,067,666 $ - $ - $ - $ 8,067,666 $
Construction in progress 205,223 246,171 - (46,587) 404,807 Total capital assets not being depreciated 205,223 8,313,837 - (46,587) 8,472,473 Capital assets being depreciated:

Buildings, structures and improvements 10,062,987 - - - 10,062,987 Machinery and equipment 11,461,562 829,046 (168,441) 46,587 12,168,754 Infrastructure 1,364,707 71,182,651 - - 72,547,358
Total capital assets being depreciated 2,193,753 92,707,200 (168,441) 46,587 94,779,099 Less accumulated depreciation for:

Buildings, structures and improvements (9,470,291) (152,683) - - (9,622,974) Machinery and equipment (7,052,878) (753,489) 168,441 - (7,637,926) Infrastructure (1,932,137) (29,558,327) - - (31,490,464) Total accumulated depreciation (2,838,309) (46,081,496) 168,441 - (48,751,364) Total capital assets being depreciated, net (644,556) 46,625,704 - 46,587 46,027,735 Business-type activities capital assets, net $ (439,333) 54,939,541 $ - $ - $ 54,500,208 $ 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 for the year ended June 30, 2022:

Governmental Activities:

General government $ 140,488
Public safety 587,301
Economic development 27,162
Parks and recreation 1,236,641
Highways and streets 4,138,077
Internal service fund 70,235
Total governmental activities $ 6,199,904
Business-type Activities:

Water $ 1,103,048
Wastewater 1,427,160
Airport 92,384
Solid Waste 215,717
Total business-type activities $ 2,838,309
89 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
48 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 bond 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.

Current Year Transactions and Balances
Original
Issue Balance Balance Current
Amount June 30, 2021 Additions Retirements June 30, 2022 Portion Governmental Activities
Direct Borrowings
iBank Financing Lease 14,000,000 $ - $ 14,000,000 $ - $ 14,000,000 $ - $ Total Governmental Activity Debt $ 14,000,000 - $ - $ 14,000,000 $ - $ IBank Financing Lease
On December 6, 2021, the City entered into a financing lease with California Infrastructure and Economic Development Bank (IBank) for an amount not to exceed $14,000,000 ($13,336,944 for project uses and $663,056 for capitalized interest). The proceeds from this obligation will help finance the cost of constructing a new police station and finance interest payments. The capitalized interest payments commence February 1, 2021 thru February 1, 2024. The City paid the 1% origination fee from the General Fund. The financing lease has a fixed interest rate of 2.2% and payments are due every February 1 and August 1, commencing August 1, 2024 and maturing on August 1, 2051. In addition to the base rental payment that consists of principal and interest payments, commencing August 1, 2024, an additional rental payment of 0.3% of the outstanding principal component is due August 1 of each year thereafter. The additional rental payment is represented in its own column in annual payments required below.

As of June 30, 2022, The City has not drawn down any of the $13,336,944 of the loan proceeds for project costs. The total amount of the loan proceeds for this project are recorded as cash with fiscal agent in the Police Station Capital Projects Fund in the governmental funds balance sheet.

The City has certain reporting covenants required by the financing lease including providing the annual audited financial statements, annual budget approved by City Council, and annual certification of compliance. Should the City fail to cure any reporting covenant noncompliance within 30 days, an amount of $1,000 shall automatically be imposed monthly as liquidated damages charged to the City and shall continue to be imposed throughout the liquidated damages period.

The City is not permitted to prepay all or a portion of the outstanding principal until December 6, 2031, which is ten years after the effective date.
90 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
49 NOTE 7 – LONG-TERM DEBT (Continued)
IBank Financing Lease (Continued)
The annual debt service requirements for the City’s financing lease are as follows:

Base Additional
Principal Interest Rental Rental Total
Component Component Payments Payments Payments
$ 308,000 - $ 308,000 $ 42,000 $ 350,000 $
308,000 - 308,000 42,000 350,000
303,963 367,023 670,986 42,000 712,986
295,799 375,098 670,897 40,899 711,796
287,456 383,350 670,806 39,774 710,580
1,305,571 2,047,028 3,352,599 181,103 3,533,702
1,067,682 2,282,329 3,350,011 149,016 3,499,027
802,448 2,544,678 3,347,126 113,242 3,460,368
506,725 2,837,183 3,343,908 73,355 3,417,263
177,010 3,163,311 3,340,321 28,882 3,369,203
$ 5,362,654 14,000,000 $ 19,362,654 $ 752,271 $ 20,114,925 $ 2043-2047
2048-2052
ending June 30
2027
For the years
2023
2024
2025
2026
2028-2032
2033-2037
2038-2042
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 2022-2023. 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, 2022, 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.

At June 30, 2022, there is $5,030,713 restricted for closure and post closure costs. The City expects to fund any additional 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. 91 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
50 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”.

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 (GASB 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.
92 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
51 NOTE 9 – NET POSITION AND FUND BALANCES (Continued)
B. Fund Balances (Continued)
Detailed classifications of the City’s fund balances as of June 30, 2022 are as follows:

CDBG Other
Impact and Home Streets and Public Capital Governmental General Fees Grants Roads Safety Projects Funds Total
Nonspendable:

Items not in spendable form:

Prepaid items - $ - $ - $ - $ - $ 615,945 $ - $ 615,945 $ Total nonspendable - - - - - 615,945 - 615,945
Restricted for:

Public safety - - - - 5,266,270 - - 5,266,270 (A)
Highways and streets - - - 6,757,424 - - 4,907 6,762,331 (B) Parks and recreation - - - - - - 366,141 366,141 (B)
Development projects - 30,864,945 - - - - - 30,864,945 (C) Capital projects - - - - - 4,611,260 - 4,611,260 (D)
Police Station - - - - - 19,125,365 19,125,365 (F)
Economic development - - 711,122 - - - - 711,122 (C)
Total restricted 30,864,945 - 711,122 6,757,424 5,266,270 23,736,625 371,048 67,707,434 Committed for:

Public safety 200,960 - - - - - - 200,960 (E)
Police Station - - - - 5,125,000 - 5,125,000 - (F)
Economic development - 75,966 - - - - - 75,966 (G)
Total committed - 276,926 - - - 5,125,000 - 5,401,926
Assigned for:

General government 3,774,660 - - - - - - 3,774,660 (H)
Public safety 421 - - - - - - 421 (I)
Economic development 61,546 - - - - - - 61,546 (J)
Pension reserve 2,000,000 - - - - - - 2,000,000 (K)
Total assigned - 5,836,627 - - - - - 5,836,627
Unassigned: - 32,046,537 - - - - (20,706) 32,025,831
Total Fund Balances 38,160,090 $ 30,864,945 $ 711,122 $ 6,757,424 $ 5,266,270 $ 29,477,570 $ 350,342 $ 111,587,763 $ (A) Various operating costs, vehicle purchases and capital projects (B)
(C)
(D) Projects include a new Emergency Operations center and various other capital projects. (E)
(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 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.

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
Purchase of fire vehicles for future fleet replacement
Fund Balance Classifications
C. Minimum Fund Balance Policies
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. 93 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
52 NOTE 10 – PENSION PLAN
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 (the 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 GASB 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, 2022 are summarized as follows:

Miscellaneous Miscellaneous Miscellaneous
1st Tier 2nd Tier PEPRA
Prior to January 1, 2011 thru On or after
Hire date January 1, 2011 December 31, 2012 January 1, 2013 Benefit formula 2.7% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 to 55 50 to 63 52 to 67
Monthly benefits, as a % of annual salary 2.0% to 2.7% 1.092% to 2.418% 1.0% to 2.5% Required employee contribution rates 8.000% 7.000% 7.250% Required employer contribution rates 14.870% 9.300% 7.730% Safety
Safety Safety PEPRA
1st Tier 2nd Tier Fire and Police
Prior to January 1, 2011 thru On or after
Hire Date January 1, 2013 December 31, 2012 January 1, 2013 Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 to 55 50 to 57
Monthly benefits, as a % of annual salary 3.0% 2.4% to 3.0% 2.0% to 2.7% Required employee contribution rates 9.000% 9.000% 13.750% Required employer contribution rates 25.590% 22.470% 13.980% 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 $1,841,309 for the fiscal year ended June 30, 2022. 94 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
53 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, 2022 were $3,223,098.

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2022, the City reported a net pension liability for its proportionate share of the net pension liability of the Plan of $14,269,911.

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, 2021, 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, 2020, rolled forward to June 30, 2021, 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, 2020 and 2021 was as follows:

Proportion - June 30, 2020 0.2298%
Proportion - June 30, 2021 0.2639%
Change - Increase (Decrease) 0.0341%
For the year ended June 30, 2022, the City recognized pension expense of $3,413,258. At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Pension contributions subsequent to the measurement date $ 3,484,241 $ - Differences between actual and expected experience 1,986,059 - 10,631,471 -
772,549 87,600
922,705 12,675
Total $ 11,641,776 6,255,524 $
Change in employer's proportion
Differences between the employer's actual contributions and the employer's proportionate share of contributions
Net difference between projected and actual earning on plan investments
95 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
54 NOTE 10 – PENSION PLAN (Continued)
B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
$3,484,241 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, 2023. 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
2023 (1,728,071) $
2024 (1,901,478)
2025 (2,307,504)
2026 (2,933,440)
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, 2020 actuarial valuations were determined using the following actuarial assumptions:

Valuation Date June 30, 2020
Measurement Date June 30, 2021
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 7.15%
Inflation 2.50%
Payroll Growth 2.75%
Projected Salary Increase Varies by Entry Age and Service Investment Rate of Return 7.15%(1)
Mortality 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. 96 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
55 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:

Asset Class(a)
New Strategic
Allocation
Real Return
Years 1-10(b)
Real Return
Years 11+(c)
Public Equity 50.0% 4.80% 5.98%
Fixed Income 28.0% 1.00% 2.62%
Inflation Assets 0.0% 0.77% 1.81%
Private Equity 8.0% 6.30% 7.23%
Real Assets 13.0% 3.75% 4.93%
Liquidity 1.0% 0.00% -0.92%
Total 100.00%
(b) An expected inflation of 2.00% used for this period (c) An expected inflation of 2.92% used for this period (a) In the CalPERS ACFR, 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. 97 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
56 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%
Current Discount Rate

7.15%
Discount Rate +1%

8.15%
$ 14,269,911 28,050,603 $ 2,915,728 $
E. Pension Plan Fiduciary Net Position
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, 2022.

NOTE 11 – POSTEMPLOYMENT BENEFITS
A. Plan Description
The City administers the City Retirees Benefits Plan (OPEB 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 10 years plus 5% per year to 100% at 20 years  Benefits
Provided Medical only
 Required
Service
Age 50 w/10+ yrs. of service
City pays all medical benefits
up to HMO rates based on
eligibility rate above
Note: No limitation to
benefits for employees
hired prior to 8/7/02
Age 50 w/10+ yrs. of service
City pays all medical benefits
up to HMO rates based on
eligibility rate above
Note: No limitation to
benefits for employees
hired prior to 8/7/02
Age 50 w/10+ yrs. of service
City pays all medical benefits
up to HMO rates based on
eligibility rate above
Note: No limitation to
benefits for employees
hired prior to 8/7/02
Age 50 w/10+ yrs. of service
City pays all medical benefits
up to HMO rates based on
eligibility rate above
Note: No limitation to
benefits for employees
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.
98 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
57 NOTE 11 – POSTEMPLOYMENT BENEFITS (Continued)
B. Employees Covered
As of the June 30, 2021 actuarial valuation, the following current and former employees were covered by the benefit terms under the OPEB plan:

Active employees 168
Inactive employees, spouses, or beneficiaries currently receiving benefit payments 79 Inactive employees entitled to, but not yet receiving benefits 13 Total 260
C. Contributions
The OPEB 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, 2022, the City’s cash contributions were $1,941,389 in payments to the trust and the estimated implied subsidy was $104,000 resulting in total payments of $2,045,389.

D. Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2021, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2021. The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:

Actuarial Assumptions:

Discount Rate 6.25%
Inflation 2.50%
Salary Increases 2.75% per anum, in aggregate
Investment Rate of Return 6.75%
Mortality Rate Derived from CalPERS Membership
Data for all Funds
Pre-Retirement Turnover Derived from CalPERS Membership Data for all Funds
Healthcare cost trend rates Non-Medicare - 6.50% for 2023, decreasing to an ultimate rate of

3.75% in 2076
Medicare (Non-Kaiser) - 5.65% for
2023, decreasing to an ultimate rate
of 3.75% in 2076
Medicare (Kaiser) - 4.60% for 2023,
decreasing to an ultimate rate of

3.75% in 2076
(1) Discount rate was updated based on newer capital market assumptions (3) For participants eligible for supplemental benefits, age-based claims valued post-65 except for Medicare Advantage plans (4) Demographic assumptions updated to CalPERS Experience Study 2000-2019 (5) Decreased medical trend rate for Kaiser Senior Advantage (6) Mortality improvement scale was updated to Scale MP-2021 (2) Inflation rate decreased from 2.75% to 2.50% which decreased the discount rate, medical trend and aggregate salary increases by 0.25%.
99 CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
58 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 weighing 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:

Asset Class
Target
Allocation
Long-term
expected real
rate of return
Global Equities 59.00% 4.56%
Fixed Income 25.00% 0.78%
TIPS 5.00% (0.08%)
Commodities 3.00% 1.22%
REITs 8.00% 4.06%
Total 100.00%
* CalPERS approved new CERBT asset allocations in March 2022.

This is not expected to impact the expected long-term rate of return assumption for CERBT Strategy 1.

E. Discount Rate
The discount rate used to measure the total OPEB liability is 6.25%. 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. 100

CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
59 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:

Total OPEB
Liability
OPEB Fiduciary
Net Position
Net OPEB
Liability
Balance at June 30, 2021
(Measurement Date June 30, 2020) $ 10,600,112 27,836,032 $ 17,235,920 $ Changes recognized for the measurement period:

Service cost 804,635 - 804,635
Interest on total OPEB liability 1,899,949 - 1,899,949
Differences between expected and actual experience (3,799,097) - (3,799,097) Changes of assumptions 1,092,741 - 1,092,741
Contributions:

Employer - City's Contribution - 2,211,055 (2,211,055)
Net investment income - 2,913,771 (2,913,771)
Benefit payments, including refunds of employee
contributions (881,555) (881,555) -
Implicit Rate Subsidy Fulfilled (105,000) (105,000) -
Administrative expenses (4,017) - 4,017
Net changes 4,134,254 (988,327) (5,122,581)
Balance at June 30, 2022
(Measurement Date June 30, 2021) $ 14,734,366 26,847,705 $ 12,113,339 $ Increase (Decrease)
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 City 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, 2021:
1% Decrease Current Discount Rate 1% Increase

5.25% 6.25% 7.25%
$ 15,755,265 $ 12,113,339 $ 9,103,399
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 City 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, 2021:
1% Decrease
Current Healthcare Cost
Trend Rates 1% Increase
$ 8,688,804 $ 12,113,339 $ 16,340,299
101

CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
60 NOTE 11 – POSTEMPLOYMENT BENEFITS (Continued)
I. OPEB Expense and Deferred Outflows and Inflows of Resources Related to OPEB For the year ended June 30, 2022, the City recognized an OPEB expense of $1,110,432. At June 30, 2022, 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 2,045,389 $ - $ Changes of assumptions 1,837,161 -
Differences between actual and expected experience 40,817 5,131,807 Plan investments - 1,541,374
Total $ 6,673,181 3,923,367 $
Net difference between projected and actual earning on OPEB The $2,045,389 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2021 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2023. Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:

Year Ending
June 30
2023 $ (855,260)
2024 (852,113)
2025 (869,559)
2026 (930,986)
2027 (491,636)
Thereafter (795,649)
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.
102

CITY OF LOS BANOS

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2022
61 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 the 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.
103
62 THIS PAGE LEFT BLANK INTENTIONALLY.
104
63 REQUIRED SUPPLEMENTARY INFORMATION
105
64 CITY OF LOS BANOS

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Variance with
Original Final Actual Final Budget

REVENUES
Taxes:

Property 7,764,360 $ 8,292,076 $ 8,839,328 $ 547,252 $
Sales 8,318,784 9,233,988 10,515,455 1,281,467
Franchise 608,500 608,500 687,723 79,223
Other 538,000 644,200 748,705 104,505
Licenses and permits 1,339,533 1,856,033 1,983,293 127,260 Intergovernmental 61,000 163,215 9,978,791 9,815,576
Charges for services 1,708,226 1,653,226 2,205,929 552,703 Fines 29,000 29,000 60,238 31,238
Use of property and money 957,794 934,894 831,435 (103,459) Miscellaneous 78,500 78,500 99,054 20,554
Total revenues 21,403,697 23,493,632 35,949,951 12,456,319

EXPENDITURES
Current:

General government:

Administration 1,308,028 3,242,387 2,640,341 602,046
Contingency 50,000 50,000 39,097 10,903
Total general government 3,292,387 1,358,028 2,679,438 612,949 Public safety:

Administration 0.00 666,500.00 118,362.00 548,138
Police 11,137,382 11,178,719 9,986,529 1,192,190
Fire 2,146,295 2,280,061 2,035,328 244,733
Building 987,015 1,313,865 1,369,428 (55,563)
Code enforcement 615,628 648,223 629,332 18,891
Total public safety 14,886,320 16,087,368 14,138,979 1,948,389 Highways and streets:

Engineering 175,386 402,786 382,389 20,397
Total highway and streets 175,386 402,786 382,389 20,397 Parks and recreation:

Administration 0.00 75,000.00 20,523.00 54,477
Recreation 1,059,757 1,127,757 989,383 138,374
Maintenance 989,333 1,000,384 836,525 163,859
Total parks and recreation 2,049,090 2,203,141 1,846,431 356,710 Economic development:

Community development 1,152,335 1,058,662 916,433 235,902 Total economic development 1,152,335 1,058,662 916,433 235,902 Debt service:

Interest and fiscal charges 3,951 3,951 3,950 1
Total debt service 3,951 3,951 3,950 1
Capital outlay 2,239,504 2,065,480 1,343,789 895,715
Total expenditures 25,381,472 21,596,917 21,311,409 4,070,063 Budgeted Amount
106
65 CITY OF LOS BANOS

GENERAL FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
(Continued)
Budgeted Amount
Variance with
Original Final Actual Final Budget
Excess (deficiency) of revenues over
(under) expenditures (1,887,840) (193,220) 14,638,542 16,526,382

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - 17,425 17,425
Insurance recoveries - - 2,387 2,387
Transfers out (20,700) (20,700) (5,136,700) (5,116,000) Total other financing sources (uses) (20,700) (20,700) (5,116,888) (5,096,188) Net change in fund balances (213,920) (1,908,540) 9,521,654 11,430,194 Fund balance - beginning 28,638,436 28,638,436 28,638,436 - Fund balance - ending 28,424,516 $ 26,729,896 $ 38,160,090 $ 11,430,194 $ 107
66 CITY OF LOS BANOS

IMPACT FEES SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amount
Variance with
Original Final Actual Final Budget

REVENUES
Intergovernmental 237,952 $ 237,952 $ 40,722 $ (197,230) $ Charges for services 4,979,883 4,979,883 5,915,924 936,041 Use of property and money 106,800 106,800 (100,917) (207,717) Miscellaneous 1,900,000 1,900,000 37,649 (1,862,351)
Total revenues 7,224,635 7,224,635 5,893,378 (1,331,257)

EXPENDITURES
Current:

Public safety:

Police 5,000 5,000 2,124 2,876
Total public safety 5,000 5,000 2,124 2,876
Highways and streets:

Road 2,738,000 2,738,000 297,199 2,440,801
Total highway and streets 2,738,000 2,738,000 297,199 2,440,801 Parks and recreation:

Park development 130,000 130,000 18,234 111,766
Total parks and recreation 130,000 130,000 18,234 111,766 Capital outlay 3,965,000 5,215,000 374,591 3,590,409
Total expenditures 6,838,000 8,088,000 692,148 6,145,852 Excess (deficiency) of revenues over
(under) expenditures 386,635 (863,365) 5,201,230 4,814,595

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - 4,727 4,727
Transfers out - - (3,000,000) (3,000,000)
Total other financing sources (uses) - - (2,995,273) (2,995,273) Net change in fund balances (863,365) 386,635 2,205,957 1,819,322 Fund balance - beginning 28,658,988 28,658,988 28,658,988 - Fund balance - ending 27,795,623 $ 29,045,623 $ 30,864,945 $ 1,819,322 $ 108
67 CITY OF LOS BANOS

COMMUNITY DEVELOPMENT BLOCK GRANT AND HOME GRANTS SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amount
Variance with
Original Final Actual Final Budget

REVENUES
Intergovernmental 176,000 $ 176,000 $ 152,490 $ (23,510) $ Use of property and money 100 100 (2,557) (2,657)
Loan repayments 50,000 50,000 391,262 341,262
Miscellaneous 1,300 1,300 948 (352)
Total revenues 227,400 227,400 542,143 314,743

EXPENDITURES
Current:

Public safety:

Code enforcement 176,000 176,000 152,490 23,510
Total public safety 176,000 176,000 152,490 23,510
Economic development
Economic development 96,961 51,400 112,633 (15,672)
Total economic development 96,961 51,400 112,633 (15,672) Total expenditures 272,961 227,400 265,123 7,838
Net change in fund balances - (45,561) 277,020 322,581
Fund balance - beginning 434,102 434,102 434,102 -
Fund balance - ending 434,102 $ 388,541 $ 711,122 $ 322,581 $ 109
68 CITY OF LOS BANOS

STREETS AND ROADS SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amount
Variance with
Original Final Actual Final Budget

REVENUES
Taxes:

Sales $ 1,098,638 $ 1,098,638 $ 1,373,522 $ 274,884
Intergovernmental 2,424,352 2,424,352 1,907,986 (516,366) Use of property and money 17,500 17,500 (19,010) (36,510) Miscellaneous 350 350 357 7
Total revenues 3,540,840 3,540,840 3,262,855 (277,985)

EXPENDITURES
Current:

Highways and streets:

Roads 2,638,001 2,638,001 1,970,527 667,474
Total highways and streets 2,638,001 2,638,001 1,970,527 667,474 Capital outlay 1,580,000 1,580,000 1,022 1,578,978
Total expenditures 4,218,001 4,218,001 1,971,549 2,246,452 (677,161) (677,161) 1,291,306 1,968,467
Fund balances - beginning 5,466,118 5,466,118 5,466,118 - Fund balances - ending 4,788,957 $ 4,788,957 $ 6,757,424 $ 1,968,467 $ Net change in fund balances
110
69 CITY OF LOS BANOS

PUBLIC SAFETY SPECIAL REVENUE FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET AND ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Budgeted Amount
Variance with
Original Final Actual Final Budget

REVENUES
Taxes:

Property 1,298,936 $ 1,298,936 $ 1,576,862 $ 277,926 $
Sales 3,314,924 3,314,924 3,983,188 668,264
Intergovernmental 135,000 135,000 164,971 29,971
Charges for services 12,500 12,500 13,740 1,240
Use of property and money 27,040 27,040 (12,068) (39,108) Miscellaneous 79,441 - 80,184 743
Total revenues 4,867,841 4,788,400 5,806,877 939,036

EXPENDITURES
Current:

Public safety:

Police 2,734,383 1,481,305 1,418,561 62,744
Fire 1,749,759 1,915,678 1,713,701 201,977
Total public safety 3,396,983 4,484,142 3,132,262 264,721 Capital outlay 259,838 253,500 86,815 173,023
Total expenditures 3,656,821 4,737,642 3,219,077 437,744 Excess (deficiency) of revenues over
(under) expenditures 1,211,020 50,758 2,587,800 1,376,780

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - - 3,688 3,688
Transfers in 20,700 20,700 11,700 (9,000)
Transfers out - - (4,875,000) (4,875,000)
Total other financing sources (uses) 20,700 20,700 (4,859,612) (4,880,312) Net change in fund balances 71,458 1,231,720 (2,271,812) (3,503,532) Fund balance - beginning 7,538,082 7,538,082 7,538,082 - Fund balance - ending 7,609,540 $ 8,769,802 $ 5,266,270 $ (3,503,532) $ 111
70 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.

NOTE 2 – EXCESS EXPENDITURES OVER APPROPRIATIONS
The City incurred expenditure in excess of appropriations in the following amounts for the year ended June 30, 2022:

General Fund
Current:

Public safety:

Building $ 55,563
CDBG and HOME Grants Special Revenue
Current:

Economic development:

Economic development 15,672
Capital Grants Capital Projects
Debt service:

Interest and fiscal charges 47,055
Capital outlay 15,739
112
71 CITY OF LOS BANOS

PROPORTIONATE SHARE OF NET PENSION LIABILITY

REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 FISCAL YEARS*
2015 2016 2017 2018 2019 2020 2021 2022

0.2286% 0.2416% 0.2311% 0.2261% 0.2262% 0.2251% 0.2298% 0.2639% $ 14,362,655 $ 16,582,007 $ 19,994,163 $ 22,419,524 $ 21,796,766 $ 23,063,963 $ 24,997,926 $ 14,269,911 $ 7,839,915 $ 8,075,142 $ 8,274,888 $ 9,052,650 $ 9,437,456 $ 9,995,545 $ 10,680,273 $ 10,465,119 183.20% 205.35% 241.62% 247.66% 230.96% 230.74% 234.06% 136.36%

78.86% 75.82% 71.81% 71.38% 73.65% 74.49% 74.26% 86.19% NOTES TO SCHEDULEChanges in Benefit Terms - None
Changes in Assumptions - None
*Schedule is intended to show information for ten years. Additional years will be displayed as they become available.Proportionate share of the net pension liability as percentage of covered payrollProportion of the net pension liabilityProportionate share of the net pension liabilityCovered payrollPlan fiduciary net position as a percentage of the total pension liability 113
72 CITY OF LOS BANOS

SCHEDULE OF PENSION CONTRIBUTIONS

REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS*
2014 2015 2016 2017 2018 2019 2020 2021 2022
$ 2,007,582 $ 2,092,368 $ 2,438,630 $ 2,720,626 $ 2,937,919 $ 2,874,876 $ 3,012,522 $ 3,223,098 $ 3,484,241 2,092,368 2,007,582 2,438,630 2,720,626 2,937,919 2,874,876 3,012,522 3,223,098 3,484,241 $ - - $ - $ - $ - $ - $ - $ - $ - $
$ 8,075,142 7,839,915 $ 8,274,888 $ 9,052,650 $ 9,437,456 $ 9,995,545 $ 10,680,273 $ 10,465,119 $ 10,709,965 $

25.61% 25.91% 29.47% 30.05% 31.13% 28.76% 28.21% 30.80% 32.53% *Schedule is intended to show information for ten years. Additional years will be displayed as they become available.Contributions in relation to the actuarially determined contributionsContributions as a percentage of covered payrollActuarially required contribution (actuarially determined)Contribution deficiency (excess)Covered payroll 114
73 CITY OF LOS BANOS

SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS

REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS*
2018 2019 2020 2021 2022
Total OPEB Liability:

Service cost $ 948,983 $ 977,452 $ 821,453 $ 781,199 $ 804,635 Interest on total OPEB liability 1,634,419 1,580,117 1,954,156 1,788,099 1,899,949 Changes of assumptions 839,742 - 602,389 - 1,092,741
Differences between expected and actual experience 69,969 - (2,795,350) - (3,799,097) Benefit payments, including refunds of employee contributions (685,805) (580,388) (754,824) (784,836) (881,555) Implicit rate subsidy (150,022) (150,022) (150,022) (100,000) (105,000) Net change in total OPEB liability 2,685,755 1,798,690 (322,198) 1,684,462 (988,327) Total OPEB liability - beginning 23,788,013 21,989,323 26,473,768 26,151,570 27,836,032 Total OPEB liability - ending (a) $ 26,473,768 23,788,013 $ 26,151,570 $ 27,836,032 $ 26,847,705 $ OPEB Plan Fiduciary Net Position:

Net investment income $ 472,333 516,055 $ 461,290 $ 308,600 $ 2,913,771 $ Contributions
Employer - City's Contribution 1,080,904 1,848,085 1,883,561 1,951,758 2,106,055 Employer - Implicit Subsidy 150,022 150,022 150,022 105,000 105,000 Administrative expenses (3,079) (2,512) (1,614) (4,446) (4,017) Benefit payments, including refunds of employee contributions (685,805) (580,388) (754,824) (784,836) (881,555) Implicit rate subsidy fulfilled (150,022) (150,022) (150,022) (100,000) (105,000) Net change in plan fiduciary net position 1,631,534 1,014,059 1,588,413 1,476,076 4,134,254 Plan fiduciary net position beginning 5,904,089 4,890,030 7,535,623 9,124,036 10,600,112 Plan fiduciary net position - ending (b) $ 7,535,623 5,904,089 $ 9,124,036 $ 10,600,112 $ 14,734,366 $ Net OPEB liability - ending (a) - (b) $ 18,938,145 17,883,924 $ 17,027,534 $ 17,235,920 $ 12,113,339 $ Plan fiduciary net position as a percentage of the total OPEB liability 24.82% 28.46% 34.89% 38.08% 54.88% Covered-employee payroll $ 9,057,433 $ 9,306,512 $ 11,322,323 $ 11,563,678 $ 11,563,678 Net OPEB liability as a percentage of covered-employee payroll 197.45% 203.49% 150.39% 149.05% 104.75% Notes to Schedule:
*Schedule is intended to show information for ten years. Additional information will be displayed as it becomes available. 115
74 CITY OF LOS BANOS

SCHEDULE OF OPEB CONTRIBUTIONS

REQUIRED SUPPLEMENTARY INFORMATION
LAST 10 YEARS*
2018 2019 2020 2021 2022
$ 1,997,107 $ 2,115,559 $ 1,871,790 $ 1,906,609 $ 1,938,870 (1,998,107) (1,230,926) (2,056,758) (2,211,055) (2,045,389) $ 117,452 766,181 $ (184,968) $ (304,446) $ (106,519) $ $ 9,057,433 $ 9,306,512 $ 11,322,323 $ 11,563,678 $ 13,722,458

13.59% 21.47% 18.17% 19.12% 14.91%
Notes to Schedule:

Methods and assumptions used to determine contributions:

Actuarial Cost Method Entry age normal, level percent of pay Amortization Method Closed period, level percent of pay Amortization Period 25 years
Inflation 2.75%
Assumed Payroll Growth 3.00%
Health Trend Rates 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 Investment Rate of Return 6.75%
Retirement Age 50 years
Mortality
*Schedule is intended to show information for ten years. Additional information will be displayed as it becomes available.

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.

Contributions in relation to the actuarially
determined contributions
Actuarially Determined Contribution (ADC)
Contribution deficiency (excess)
Covered-employee payroll
Contributions as a percentage of covered-employee payroll 116
75 COMBINING AND INDIVIDUAL FUND FINANCIAL

STATEMENTS AND SCHEDULES
117
76 THIS PAGE IS LEFT BLANK INTENTIONALLY.
118
77 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 services in designated districts within the City that are then charged to the residents through the property tax roll.

CMAQ GRANT
This fund is used to account for the sale of equipment purchased with grant funding from the Congestion Mitigation and Air Quality (CMAQ) grants in previous fiscal years.

HCD GRANT
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. 119
78 CITY OF LOS BANOS

NONMAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
JUNE 30, 2022
Special Revenue Funds
Total
Nonmajor
Assessment CMAQ HCD Governmental
Districts Grant Grant Funds
ASSETS
Cash and investments 517,282 $ 4,903 $ - $ 522,185 $
Taxes receivable 38,473 - - 38,473
Interest receivable 919 4 - 923
Intergovernmental receivables - - 132,070 132,070
Total assets 556,674 $ 4,907 $ 132,070 $ 693,651 $

LIABILITIES
Accounts payable 190,533 $ - $ - $ 190,533 $
Due to other funds - - 152,776 152,776
Total liabilities 190,533 - 152,776 343,309
FUND BALANCES:

Restricted 366,141 4,907 - 371,048
Unassigned - - (20,706) (20,706)
Total fund balances 4,907 366,141 (20,706) 350,342
Total liabilities and fund balances $ 4,907 556,674 $ 132,070 $ 693,651 $ 120
79 CITY OF LOS BANOS

NONMAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES AND

CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue Funds
Total
Nonmajor
Assessment CMAQ HCD Governmental
Districts Grants Grant Funds

REVENUES
Intergovernmental - $ - $ 151,361 $ 151,361 $
Charges for services 2,697,582 - - 2,697,582
Use of property and money (3,072) (21) - (3,093)
Total revenues 2,694,510 (21) 151,361 2,845,850

EXPENDITURES
Current:

Parks and recreation 2,310,185 - - 2,310,185
Economic development - - 172,067 172,067
Capital outlay:

Parks and recreation 361,397 - - 361,397
Total expenditures 2,671,582 - 172,067 2,843,649
Excess (deficiency) of revenues over
(under) expenditures 22,928 (21) (20,706) 2,201

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - 4,928 - 4,928
Total other financing sources (uses) - 4,928 - 4,928
Net change in fund balances 22,928 4,907 (20,706) 7,129 Fund balances - beginning 343,213 - - 343,213
Fund balances - ending 366,141 $ 4,907 $ (20,706) $ 350,342 $ 121
80 CITY OF LOS BANOS

ASSESSMENT DISTRICTS FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET TO ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue
Final Budgeted Actual Variance with
Amounts Amounts Final Budget

REVENUES
Charges for services 2,760,536 $ 2,697,582 $ (62,954) $ Use of property and money 2,728 (3,072) (5,800)
Total revenues 2,763,264 2,694,510 (68,754)

EXPENDITURES
Current:

Parks and recreation 2,445,558 2,310,185 135,373
Capital outlay:

Parks and recreation 361,397 455,082 93,685
Total expenditures 2,900,640 2,671,582 229,058
22,928 (137,376) 160,304
Fund balances - beginning 343,213 343,213 -
Fund balances - ending 205,837 $ 366,141 $ 160,304 $
Net change in fund balance
122
81 CITY OF LOS BANOS

CMAQ GRANT FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET TO ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Special Revenue
Final Budgeted Actual Variance with
Amounts Amounts Final Budget

REVENUES
Intergovernmental 350,000 $ - $ (350,000) $
Use of property and money - (21) (21)
Total revenues 350,000 (21) (350,021)

EXPENDITURES
Current:

Highways and streets 50,000 - 50,000
Capital outlay:

Highways and streets - 300,000 300,000
Total expenditures 350,000 - 350,000
Excess (deficiency) of revenues over
(under) expenditures - (21) (21)

OTHER FINANCING SOURCES (USES)
Proceeds from sale of capital assets - 4,928 4,928
Total other financing sources (uses) - 4,928 4,928
- 4,907 4,907
Fund balances - beginning - - -
Fund balances - ending - $ 4,907 $ 4,907 $
Net change in fund balance
123
82 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, 2022
Special Revenue
Final Budgeted Actual Variance with
Amounts Amounts Final Budget

REVENUES
Intergovernmental 183,782 $ 151,361 $ (32,421) $
Total revenues 151,361 183,782 (32,421)

EXPENDITURES
Current:

Economic development 183,782 172,067 11,715
Total expenditures 172,067 183,782 11,715
(20,706) - (20,706)
Fund balances - beginning - - -
Fund balances - ending $ (20,706) - $ (20,706) $
Net change in fund balance
124
83 CITY OF LOS BANOS

CAPITAL PROJECTS FUND

SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN
FUND BALANCE – BUDGET TO ACTUAL
FOR THE YEAR ENDED JUNE 30, 2022
Final Budgeted Actual Variance with
Amounts Amounts Final Budget

REVENUES
Use of property and money - $ (64,346) $ (64,346) $
Total revenues (64,346) - (64,346)

EXPENDITURES
Debt service:

Interest and fiscal charges - 47,055 (47,055)
Capital outlay 2,515,739 2,500,000 (15,739)
Total expenditures 2,562,794 2,500,000 (62,794)
Excess (deficiency) of revenues over
(under) expenditures (2,627,140) (2,500,000) (127,140)

OTHER FINANCING SOURCES (USES)
Issuance of financing lease 14,000,000 - 14,000,000
Cost of issuance (140,000) - (140,000)
Transfers in 13,000,000 - 13,000,000
Total other financing sources (uses) 26,860,000 - 26,860,000 Net change in fund balances (2,500,000) 24,232,860 26,732,860 Fund balance - beginning 5,244,710 5,244,710 -
Fund balance - ending 2,744,710 $ 29,477,570 $ 26,732,860 $ 125
84 THIS PAGE IS LEFT BLANK INTENTIONALLY.
126
85 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 HEALTH BENEFITS
This fund is used to charge the departments for retiree health benefits. 127
86 CITY OF LOS BANOS

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF NET POSITION
JUNE 30, 2022
Retiree's
Fleet Information Health
Maintenance Technology Benefits Total
ASSETS
Current assets:

Cash and investments 6,680 $ 35,053 $ 237,580 $ 279,313 $ Interest receivable - 102 183 285
Total current assets 6,680 35,155 237,763 279,598
Noncurrent assets:

Capital assets:

Construction in progress - 9,381 - 9,381
Buildings and improvements - 37,709 - 37,709
Machinery and equipment 664,645 768,296 - 1,432,941
Less: accumulated depreciation (528,170) (776,850) - (1,305,020) Total noncurrent assets 29,155 145,856 - 175,011
Total assets 35,835 181,011 237,763 454,609

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows from pensions 65,480 52,375 - 117,855 Deferred outflows from OPEB 47,900 21,675 - 69,575
Total deferred outflows of resources 113,380 74,050 - 187,430

LIABILITIES
Current liabilities:

Accounts payable and other current liabilities 39,050 1,512 - 40,562 Compensated absences 2,042 8,084 - 10,126
Total current liabilities 47,134 3,554 - 50,688
Noncurrent liabilities:

Net pension liability 201,782 160,319 - 362,101
Net OPEB liability 147,891 66,921 - 214,812
Total noncurrent liabilities 227,240 349,673 - 576,913
Total liabilities 396,807 230,794 - 627,601

DEFERRED INFLOWS OF RESOURCES
Deferred inflows from pensions 147,532 184,719 - 332,251 Deferred inflows from OPEB 81,472 36,867 - 118,339
Total deferred inflows of resources 184,399 266,191 - 450,590

NET POSITION (DEFICIT)
Net investment in capital assets 29,155 145,856 - 175,011 Unrestricted (542,938) (305,988) 237,763 (611,163)
Total net position (deficit) (513,783) $ (160,132) $ 237,763 $ (436,152) $ 128
87 CITY OF LOS BANOS

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF REVENUES, EXPENSES AND

CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30, 2022
Retiree's
Fleet Information Health
Maintenance Technology Benefits Total
Operating revenues:

Interdepartmental charges 940,470 $ 329,700 $ 1,938,870 $ 3,209,040 $ Total operating revenues 940,470 329,700 1,938,870 3,209,040 Operating expenses:

Personnel services 340,030 92,032 1,938,870 2,370,932
Contractual services 11,704 155,312 - 167,016
Utilities 288,802 200 - 289,002
Repairs and maintenance 291,515 - - 291,515
Insurance 6,169 5,418 - 11,587
Other supplies and expenses 25,420 3,126 - 28,546
Depreciation 6,330 63,905 - 70,235
Total operating expenses 969,970 319,993 1,938,870 3,228,833 Operating income (loss) (29,500) 9,707 - (19,793)
Nonoperating revenues (expenses):

Investment earnings 315 (339) (419) (443)
Total nonoperating revenues (expenses) 315 (339) (419) (443) Change in net position (29,185) 9,368 (419) (20,236)
Net position (deficit) - beginning (484,598) (169,500) 238,182 (415,916) Net position (deficit) - ending (513,783) $ (160,132) $ 237,763 $ (436,152) $ 129
88 CITY OF LOS BANOS

INTERNAL SERVICE FUNDS

COMBINING STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED JUNE 30, 2022
Retiree's
Fleet Information Health
Maintenance Technologies Benefits Total

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from interfund services provided $ 329,700 943,033 $ 1,938,870 $ 3,211,603 $ Payments to suppliers (163,174) (629,137) - (792,311)
Payments to or on behalf of employees for services (132,132) (300,376) (1,938,870) (2,371,378) Net cash provided (used) by operating activities 13,520 34,394 - 47,914

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets (31,929) (7,177) - (39,106) Net cash provided (used) by capital and related
financing activities (7,177) (31,929) - (39,106)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment earnings 337 (396) (511) (570)
Net cash provided (used) by investing activities 337 (396) (511) (570) Increase (decrease) in cash and cash equivalents 6,680 2,069 (511) 8,238 Cash and equivalents - beginning 32,984 - 238,091 271,075 Cash and equivalents - ending 6,680 $ 35,053 $ 237,580 $ 279,313 $ Operating income (loss) (29,500) $ 9,707 $ - $ (19,793) $ Adjustments to reconcile operating income (loss)
to net cash provided (used) by operating activities:

Depreciation expense 63,905 6,330 - 70,235
(Increase) decrease in:

Accounts receivable - 2,563 - 2,563
Deferred outflows of resources for pensions (182) 2,624 - 2,442 Deferred outflows of resources for OPEB 17,658 (4,438) - 13,220 Increase (decrease) in:

Accounts payable and other liabilities 882 (5,527) - (4,645) Compensated absences (964) 1,286 - 322
Net pension liability (83,766) (127,478) - (211,244)
Net OPEB liability (123,531) (62,558) - (186,089)
Deferred inflows of resources for pensions 174,653 137,263 311,916 - Deferred inflows of resources for OPEB 13,422 55,565 - 68,987 Net cash provided (used) by operating activities 13,520 $ 34,394 $ - $ 47,914 $ Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities 130
89 STATISTICAL SECTION
131
90 THIS PAGE IS LEFT BLANK INTENTIONALLY.
132
91 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.
133
92 CITY OF LOS BANOS

NET POSITION BY COMPONENTS

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Governmental activities
Net investment in capital assets $ 87,022,967 $ 83,335,435 $ 74,482,065 $ 83,051,535 $ 77,813,813 $ 73,679,314 $ 71,701,732 $ 70,986,296 $ 72,183,070 $ 97,029,611 Restricted 9,415,962 11,942,215 12,507,436 14,014,590 19,345,542 28,042,938 34,310,692 41,605,638 50,090,885 50,602,889 Unrestricted 10,906,999 12,020,755 (639,257) 4,527,558 5,374,816 (10,084,047) (9,085,174) (4,680,881) 1,266,673 23,462,779 Total governmental activities net position $ 106,184,649 108,459,684 $ 86,350,244 $ 101,593,683 $ 102,534,171 $ 91,638,205 $ 96,927,250 $ 107,911,053 $ 123,540,628 $ 171,095,279 $ Business-type activities
Net investment in capital assets $ 42,539,669 $ 46,049,921 $ 45,206,093 $ 45,816,837 $ 46,906,196 $ 51,171,643 $ 55,063,074 $ 55,419,531 $ 54,939,541 $ 54,500,208 Restricted 8,349,804 8,154,696 8,748,625 10,468,024 12,796,446 14,747,937 15,627,011 18,399,783 23,107,727 24,760,956 Unrestricted 16,092,089 17,934,205 18,127,680 21,106,896 23,730,905 20,300,902 22,318,541 26,982,634 32,746,134 40,182,220 Total business-type activities net position $ 70,296,706 68,823,678 $ 72,082,398 $ 77,391,757 $ 83,433,547 $ 86,220,482 $ 93,008,626 $ 100,801,948 $ 110,793,402 $ 119,443,384 $ Primary government
Net investment in capital assets $ 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 $ 151,529,819 Restricted 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 75,363,845 Unrestricted 26,999,088 29,954,960 17,488,423 25,634,454 29,105,721 10,216,855 13,233,367 22,301,753 34,012,807 63,644,999 Total primary government net position $ 176,481,355 177,283,362 $ 158,432,642 $ 178,985,440 $ 185,967,718 $ 177,858,687 $ 189,935,876 $ 208,713,001 $ 234,334,030 $ 290,538,663 $ 134
93 CITY OF LOS BANOS

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 ExpensesGovernmental activities:

General government $ 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 $ 2,817,462 Public safety 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 16,319,501 Highways and streets 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 6,408,485 Parks and recreation 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 5,647,346 Economic development 97,369 898,589 770,417 582,985 681,828 945,745 980,764 1,018,880 942,026 1,287,958 Interest on long-term debt 11,251 62,042 10,451 11,594 11,232 9,779 8,249 6,641 1,203 3,950 Total governmental activities 22,203,663 21,691,956 22,206,982 21,957,983 25,311,438 29,306,072 30,409,874 33,167,681 31,671,209 32,484,702 Business-type activities:

Water 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 5,368,954 Wastewater 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 5,095,317 Airport 595,136 509,952 427,161 361,224 330,699 336,645 337,840 336,588 305,973 366,282 Solid waste 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 6,399,144 Total business-type activities 14,396,518 15,718,947 13,856,063 15,240,456 15,166,573 15,381,826 16,556,400 17,637,105 18,344,457 17,229,697 Total primary government expenses 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 $ 49,714,399 $ Program RevenueGovernmental activities:

Charges for services 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 $ 12,870,076 $ Operating grants and contributions 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 3,757,028 Capital grants and contributions 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 26,318,868 Total governmental activities 8,873,410 8,725,348 9,395,225 11,010,265 14,156,155 16,678,628 20,123,796 25,887,537 22,625,574 42,945,972 Business-type activities:

Charges for services 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 23,579,704 Operating grants and contributions 22,455 24,737 15,334 24,812 34,588 27,363 22,604 25,342 130,305 25,696 Capital grants and contributions - - - - - 159,298 653,940 833,776 1,146,422 1,314,669 Total business-type activities 16,097,093 16,826,907 17,838,367 19,564,376 20,728,562 21,755,336 21,655,576 23,690,191 27,539,817 24,920,069 Total primary government program revenue 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 $ 67,866,041 $ 135
94 CITY OF LOS BANOS

CHANGES IN NET POSITION

LAST TEN FISCAL YEARS
(Continued)
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Net (expense)/revenue:

Governmental activities (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) $ 10,461,270 $ Business-type activities 1,107,960 1,700,575 3,982,304 4,323,920 5,561,989 6,373,510 5,099,176 6,053,086 9,195,360 7,690,372 Total primary government (expenses) revenue, net (11,117,971) $ (12,370,355) $ (8,829,453) $ (6,623,798) $ (5,593,294) $ (6,253,934) $ (5,186,902) $ (1,227,058) $ 149,725 $ 18,151,642 $ General RevenuesGovernmental activities:

Taxes:

Property taxes $ 6,031,996 5,676,238 $ 5,578,732 $ 5,704,220 $ 6,229,501 $ 6,793,665 $ 6,793,665 $ 7,305,948 $ 9,382,154 $ 10,416,190 $ Sales taxes 2,786,423 2,740,697 3,829,042 4,012,401 4,613,579 5,594,516 5,594,516 7,750,981 12,762,086 14,498,643 Other taxes 925,402 844,820 1,072,950 1,158,812 1,237,553 1,181,620 1,181,620 1,118,412 1,233,540 1,485,952 Use of money and property 1,092,444 1,150,414 1,205,110 1,145,645 1,287,188 1,935,306 1,935,306 1,876,676 902,417 629,466 American Rescue Plan Act - - - - - - - - - 9,816,684
Insurance recoveries - - 240,396 - - - - - - -
Developer contributions - - 1,975,532 - - - - - - -
Miscellaneous (4,264,350) 146,716 243,265 80,389 124,913 76,560 76,560 215,189 395,013 246,446 Transfers 15,432 (6,762) (5,124) (5,696) (3,776) (6,544) (6,544) (3,259) - - Extraordinary item - - 12,051,254 - - - - - - -
Total governmental activities 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 37,093,381 Business-type activities:

Property taxes 4,493 4,598 7,626 8,454 3,860 3,717 3,717 3,963 4,077 - Use of money and property 307,030 433,926 384,004 334,106 529,413 1,245,717 1,245,717 1,138,933 188,669 (120,628) Developer contributions - - 427,312 - - - - - - -
Settlement - - - - - - - - - 600,000
Miscellaneous 99,360 66,655 161,373 131,545 158,676 432,990 432,990 594,081 603,348 480,238 Transfers (Note 4) 6,762 (15,432) 5,124 5,696 3,776 6,544 6,544 3,259 - - Total business-type activities 489,747 417,645 985,439 479,801 695,725 1,688,968 1,688,968 1,740,236 796,094 959,610 Total primary government general revenues 11,064,064 $ 6,982,798 $ 27,176,596 $ 12,575,572 $ 14,184,683 $ 17,264,091 $ 17,264,091 $ 20,004,183 $ 25,471,304 $ 38,052,991 $ Changes in Net Position
Governmental $ (6,913,162) (2,244,229) $ 13,379,400 $ 1,148,053 $ 2,333,675 $ 861,514 $ 5,289,045 $ 10,983,803 $ 15,629,575 $ 47,554,651 $ Business-type 1,525,605 2,190,322 4,967,743 4,803,721 6,257,714 7,069,235 6,788,144 7,793,322 9,991,454 8,649,982 Total primary government $ (5,387,557) (53,907) $ 18,347,143 $ 5,951,774 $ 8,591,389 $ 7,930,749 $ 12,077,189 $ 18,777,125 $ 25,621,029 $ 56,204,633 $ Source: City of Los Banos Finance Department
136
95 CITY OF LOS BANOS
FUND BALANCES – GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 General Fund:

Nonspendable $ 698 1,506 $ 2,933 $ 3,938 $ 248 $ 2,970 $ 1,087 $ 2,381 $ - $ - $ Committed - - - - - 494,657 674,349 457,876 4,457,852 276,926 Assigned 693,821 - 2,179,757 3,335,429 3,266,323 3,916,672 3,717,891 6,214,047 5,911,193 5,836,627 Unassigned 7,202,640 6,339,177 7,843,490 8,638,970 9,017,100 8,709,292 11,437,736 15,011,639 18,269,391 32,046,537 Total general funds (1)(2) 6,340,683 $ 7,897,159 $ 10,026,180 $ 11,978,337 $ 12,283,671 $ 13,123,591 $ 15,831,063 $ 21,685,943 $ 28,638,436 $ 38,160,090 $ All other governmental funds:

Nonspendable - $ - $ - $ 852,459 $ - $ 7,293 $ 4,862 $ 2,431 $ - $ 615,945 $ Restricted 11,732,860 12,237,064 12,294,820 13,818,032 19,174,130 24,888,393 31,350,743 38,833,591 47,685,213 67,707,434 Committed - - - - - - - - - 5,125,000
Unassigned (751,255) (1,038,011) (733,613) (701,772) (672,702) (659,139) (635,273) - - (20,706) Total all other governmental funds 11,199,053 $ 10,981,605 $ 11,561,207 $ 13,968,719 $ 18,501,428 $ 24,236,547 $ 30,720,332 $ 38,836,022 $ 47,685,213 $ 73,427,673 $ Source: City of Los Banos Finance Department
Notes:
(1) Increase in fund balance for FY 2013-2014 due to one time revenue from the dissolution of the Los Banos Redevelopment Agency. (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. 137
96 CITY OF LOS BANOS
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 RevenuesTaxes:

Property $ 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 $ 10,416,190 Sales 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 15,872,165 Franchise 456,482 480,391 511,545 534,702 546,061 563,611 540,449 566,328 619,158 687,723 Motor vehicle 815,527 1,124,654 919,197 - - - - - - -
Other taxes 286,742 364,429 398,625 523,261 595,119 652,890 621,498 518,924 583,634 748,705 Licenses and permits 305,599 305,953 456,341 855,171 1,123,244 1,012,757 763,207 1,169,141 2,168,888 1,983,293 Intergovernmental 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 12,396,321 Charges for services 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 10,833,175 Fines 68,731 60,509 62,505 50,546 64,129 67,496 59,806 45,227 35,593 60,238 Use of property and money 1,069,142 1,150,414 1,092,444 1,205,110 1,145,645 1,287,188 1,935,306 1,876,676 902,417 629,444 Loan repayments - - - - - - 182,621 - 166,407 391,262
Miscellaneous 141,901 66,593 98,708 250,317 280,468 356,333 271,538 216,264 358,418 218,192 Total revenues 17,774,335 19,073,214 19,957,963 23,007,464 26,439,101 29,894,506 32,563,353 41,577,460 43,980,031 54,236,708 ExpendituresCurrent:

General government 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 2,679,438 Public safety 10,255,576 10,912,197 11,167,699 12,202,688 13,423,807 14,592,038 14,442,012 15,509,530 16,767,602 17,425,855 Highways and streets 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 2,650,115 Parks and recreation 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 4,174,850 Economic development 67,515 700,675 550,212 503,184 630,829 803,714 890,423 903,798 860,877 1,201,133 Debt service:

Principal 1,405,000 - - 9,828 13,263 - - - - -
Interest 62,042 11,251 10,451 11,594 11,232 7,950 7,049 6,100 5,100 51,005 138
97 CITY OF LOS BANOS
CHANGES IN FUND BALANCES – GOVERNMENTAL FUNDS

LAST TEN FISCAL YEARS
(Continued)
Fiscal Years
2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2019-2020 2020-2021 2021-2022 Capital outlay:

General government 36,895 86,723 5,425 5,000 28,245 412,723 55,642 413,056 200,676 342,260 Public safety 427,961 468,591 349,660 477,051 1,191,984 320,123 141,586 2,740,067 2,593,217 3,313,303 Highways and streets 1,034,416 934,291 254,298 199,387 - 250,037 424,544 2,348,437 4,056 1,279 Parks and recreation 112,161 35,150 200,162 372,016 65,670 358,599 522,532 425,141 665,977 779,103 Economic development 519 - 473 6,521 3,348 100 4,392 251 - 247,408 Total expenditures 17,754,433 18,184,879 17,319,745 18,977,555 21,615,700 23,334,772 23,452,918 29,911,374 28,277,285 32,865,749 Excess (deficiency) of revenues over (under) expenditures (410,544) 1,318,781 2,638,218 4,029,909 4,823,401 6,559,734 9,110,435 11,666,086 15,702,746 21,370,959Other Financing Sources (Uses)Issuance of financing lease - - 70,501 - - - - - 14,000,000 - Cost of issuance - - - - - - - - (140,000) -
Insurance recoveries - - 240,396 - - 81,779 - 50,659 57,632 2,387 Transfer in 218,461 164,497 130,932 235,979 126,993 27,025 1,004 824,533 13,011,700 -Transfer out (741,243) (149,065) (137,694) (241,102) (132,688) (30,801) (7,548) (827,792) (13,011,700) - 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 30,768 Claims and judgements - 750,000 - - - - - - - -
Total other financing sources (uses) 20,247 252,069 76,481 323,684 14,642 15,305 80,822 2,304,484 98,938 13,893,155 Net changes in fund balances $ 1,339,028 (158,475) $ 2,714,699 $ 4,353,593 $ 4,838,043 $ 6,575,039 $ 9,191,257 $ 13,970,570 $ 15,801,684 $ 35,264,114 $ Debt service as a percentage of noncapital expenditures 8.85% 0.07% 0.06% 0.12% 0.12% 0.04% 0.03% 0.03% 0.02% 0.18% Source: City of Los Banos Finance Department
139
98 CITY OF LOS BANOS

ASSESSED VALUE OF TAXABLE PROPERTY

LAST TEN FISCAL YEARS
(amounts expressed in thousands)
Personal
Property
Less Total Taxable Total Direct
Fiscal Year Land Improvements Personal Utility (1) Total Exemptions Assessed Value Rate 2012-2013 313,862 1,454,449 50,534 2,429 1,821,274 72,002 1,749,272 1.00% 2013-2014 338,088 1,530,444 50,653 2,429 1,921,614 77,042 1,844,572 1.00% 2014-2015 448,810 1,686,158 67,439 3,167 2,205,574 78,314 2,127,260 1.00% 2015-2016 543,391 1,738,793 67,619 3,163 2,352,966 82,650 2,270,316 1.00% 2016-2017 573,208 1,881,326 67,928 3,152 2,525,614 103,904 2,421,710 1.00% 2017-2018 633,774 2,025,405 67,987 3,147 2,730,313 109,628 2,620,685 1.00% 2018-2019 715,389 2,195,513 66,186 111 2,977,199 118,291 2,858,908 1.00% 2019-2020 783,078 2,380,184 68,165 111 3,231,538 122,474 3,109,064 1.00% 2020-2021 847,060 2,522,661 72,207 109 3,442,037 125,358 3,316,679 1.00% 2021-2022 923,911 2,668,290 71,507 107 3,663,815 124,677 3,539,138 1.00% Source: Merced County Assessor's Office
Merced County Auditor-Controller's Office
Notes:
(1) Aircraft value not available after FY 2017-2018
Real Property
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. 140
99 CITY OF LOS BANOS
TAX REVENUE BY SOURCE – GENERAL FUND

LAST TEN FISCAL YEARS
Fiscal Year Property Sales and Use Franchise Motor Vehicle Other Total 2009-2010 4,518,769 2,481,027 401,372 106,334 344,271 7,851,773 2011-2012 4,411,414 2,437,124 424,274 18,734 282,145 7,573,6912012-2013 4,919,660 2,571,065 435,827 - 286,742 8,213,2942013-2014 5,541,291 2,684,458 480,391 - 364,429 9,070,5692014-2015 6,112,770 (1) 511,545 2,842,662 15,232 398,625 9,880,834 2015-2016 5,551,292 3,829,042 (2) - 534,702 523,261 10,438,297 2016-2017 5,675,697 4,012,401 546,061 - 595,119 10,829,278 2017-2018 6,200,655 4,613,579 563,611 - 652,890 12,030,735 2018-2019 6,764,382 5,594,516 540,449 - 621,498 13,520,845 2019-2020 7,275,270 7,750,981 566,328 - 518,924 16,111,503 2020-2021 7,987,042 9,282,344 619,158 - 583,634 18,472,178 2021-2022 8,839,328 10,515,455 687,723 - 748,705 20,791,211 Source: City of Los Banos Finance DepartmentNotes:
(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. 141
100

CITY OF LOS BANOS

DIRECT AND OVERLAPPING PROPERTY TAX RATES
(rate per $1,000 of assessed value)

LAST NINE FISCAL YEARS
Los Banos
City of County of Total Unified School Merced
Fiscal Year Los Banos Merced District District Bond College Bond Total Rate 2012-2013 0.1750 0.8250 1.0000 0.0145 0.0251 0.0396
2013-2014 0.1953 0.8047 1.0000 0.0868 0.0250 0.1118
2014-2015 0.1953 0.8047 1.0000 0.0961 0.0234 0.1195
2015-2016 0.1953 0.8047 1.0000 0.1070 0.0214 0.1284
2016-2017 0.1953 0.8047 1.0000 0.1144 0.0207 0.1351
2017-2018 0.1953 0.8047 1.0000 0.0792 0.0209 0.1001
2018-2019 0.1953 0.8047 1.0000 0.0711 0.0202 0.0913
2019-2020 0.1953 0.8047 1.0000 0.0797 0.0218 0.1015
2020-2021 0.1953 0.8047 1.0000 0.0796 0.0199 0.0995
2021-2022 0.1953 0.8050 1.0003 0.0796 0.0198 0.0994
Source: Merced County Auditor-Controller-Tax CollectorNotes:

City Direct Rates Overlapping Rates
Information prior to 2012 is not available.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. 142
101

CITY OF LOS BANOS

PRINCIPAL PROPERTY TAXPAYERS

CURRENT YEAR AND TEN YEARS AGO
Percent of Percent of
Total City Total City
Owner Assessed Value Rank Assessed Value Assessed Value Rank Assessed ValueWAL-MART REAL ESTATE BUSINESS TRUST $ 25,907,818 1 0.73% - -D R HORTON CA3 INC 23,967,471 2 0.68% 16,979,001 4 0.97% FRANCISCAN HOSPITALLER SISTERS 22,667,674 3 0.64% - -
TARGET CORP 21,563,017 4 0.61% - -
STONEFIELD HOME INC 21,253,128 5 0.60% 21,037,819 2 1.20% CONRAD ETHAN 20,802,859 6 0.59% - -WARD ROAD APARTMENTS II LP 19,197,531 7 0.54% 9,464,430 8 0 HOME DEPOT USA INC 13,600,000 8 0.38% - -
SUTTER VALLEY HOSPITALS 13,488,798 9 0.38% - -
BGRE L L C 12,996,451 10 0.37% -
KAGOME USA INC - - 18,513,411 3 1.06%
CAMERA PROPERTIES LLC - - 8,954,004 9 0.51%
LOS BANOS DAIRYMEN ASSN - - 24,123,814 1 1.38%COLORADO/EAGLE ROCK LLC - - 6,501,910 10 0.37%MEMORIAL HOSPITAL LOS BANOS - - 0.00%LOWES HIW INC - - 12,217,840 5 0.70% COMCAST OF SAN JOAQUIN INC - - 0.00%
SOLOMON FRANK JR - - 10,899,979 6 0.62%MCCORDUCK PROPERTIES LOS BANOS LLC - - 9,994,544 7 0.57%Top 10 Assessed Values $ 195,444,747 5.52% $ 138,686,752 7.92% Total Assessed Value 2010-2011 $ 1,746,843,921
Total Assessed Value 2020-2021 $ 3,539,138,117
Source: Merced County Assessors Office
2021-2022 2011-2012
143
102

CITY OF LOS BANOS

PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS
Percent of Delinquent
Fiscal Current Tax Current Tax Current Taxes Tax Total Tax Year Levies Collections Collected (1) Collections Collections 2009-2010 2,118,459 2,118,459 100% - 2,118,4592011-2012 1,929,638 1,929,638 100% - 1,929,6382012-2013 2,129,214 2,129,214 100% 2,129,214 - 2013-2014 2,352,266 2,352,266 100% 2,352,266 -
2014-2015 2,861,634 2,861,634 100% 2,861,634 -
2015-2016 3,006,979 3,006,979 100% 3,006,979 -
2016-2017 3,197,238 3,197,238 100% 3,197,238 -
2017-2018 3,537,012 3,537,012 100% 3,537,012 -
2018-2019 3,843,207 3,843,207 100% 3,843,207 -
2019-2020 4,098,951 4,098,951 100% 4,098,951 -
2020-2021 4,565,361 4,565,361 100% 4,565,361 -
2021-2022 4,834,896 4,834,896 100% 4,834,896 -
Source: Merced County Auditor-ControllerNotes: (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. 144
103

CITY OF LOS BANOS

RATIOS OF OUTSTANDING DEBT BY TYPE

LAST TEN FISCAL YEARS
Lease Tax Total Percent of
Fiscal Revenue Allocation Capital Financed Notes Capital Notes Primary Per Assessed Years Bond Bonds (1) Leases Leases COP's Payable Bonds Leases COP's Payable Government Population Capita Valuation (2) 2012-2013 - - - - - - - 8,521,119 - 87,530 8,608,649 37,017 233 0.49% 2013-2014 - 215,905 - - - - - 2,208,432 - 64,174 2,488,511 37,168 67 0.13% 2014-2015 - 173,077 - - - - - 1,897,114 - 39,780 2,109,971 38,670 55 0.10% 2015-2016 - 351,212 - - - - - 1,570,796 - 14,347 1,936,355 39,359 49 0.09% 2016-2017 - 253,750 - - - - - 1,229,477 - 1,483,227 - 39,993 37 0.06% 2017-2018 - 151,203 - - - - - 868,159 - 1,019,362 - 40,986 25 0.04% 2018-2019 - 65,593 - - - - - 428,159 - 493,752 - 41,898 12 0.02% 2019-2020 - 7,573 - - - - - - - 7,573 - 41,923 0.00% -
2020-2021 - - - - - - - - - - 42,869 - 0.00% -
2021-2022 - - 14,000,000 - - - - - - 14,000,000 - 46,639 300 0.49% Source: California Municipal Statistics, City of Los Banos Finance DepartmentNotes: (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.(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.

Governmental Activities (3) Business-Type Activities(4) 145
104

CITY OF LOS BANOS

RATIOS OF GENERAL FUND DEBT OUTSTANDING

LAST TEN FISCAL YEARS
General Fund Percent of Actual
Fiscal Debt Redevelopment Total Assessed Taxable Value
Year Outstanding (2) Bonds (1) Total Property Value Population of Property Per Capita 2009-2010 1,931,288 28,000,600 29,931,888 1,814,335,000 36,421 1.65% 822 2011-2012 1,461,684 1,461,684 - 1,743,715,991 36,546 0.08% 40 2012-2013 - - 1,749,273,122 - 37,017 0.00% -
2013-2014 215,905 - 215,905 1,844,571,341 37,168 0.01% 6 2014-2015 173,077 - 173,077 2,127,260,281 38,670 0.01% 4 2015-2016 351,212 - 351,212 2,270,316,588 39,359 0.02% 9 2016-2017 253,750 - 253,750 2,620,761,000 39,993 0.01% 6 2017-2018 151,203 - 151,203 2,620,685,704 40,986 0.01% 4 2018-2019 65,593 - 65,593 2,858,907,614 41,898 0.00% 2
2019-2020 7,573 - 7,573 3,109,064,142 41,923 0.00% -
2020-2021 - - 3,316,678,388 - 42,869 0.00% -
2021-2022 - - 3,539,138,117 - 46,639 0.00% -
Source: California Municipal Statistics, City of Los Banos Finance Department.Notes: (1) Tax Allocation Bonds are zero in 2011-2012 due to the State dissolving the RDAs. (2) General Fund debt paid off in 2013
General Debt Outstanding
146
105

CITY OF LOS BANOS

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
2020-2021 Assessed Valuation: $ 3,539,138,117
Total Debt City's Share of
6/30/2022 % Applicable (1) Debt 6/30/2022
Merced Community College District School Facilities Improvement District No. 2 4,869,847 $ 56.228% 2,738,218 $ Los Banos Unified School District 66.705% 62,493,714 41,686,432 Total Overlapping Tax and Assessment Debt 44,424,650
Direct and Overlapping General Fund Debt
Merced County General Fund Obligations 21,335,023 12.339% 2,632,528Merced County Office of Education Certificates of Participation 7,135,000 12.339% 880,388 Los Banos Unified School District Certificate of Participation 19,935,000 63.727% 12,703,967 Total Direct and Overlapping General Fund Debt 16,216,883 Overlapping Tax Increment Debt (Successor Agency) 18,872,859 $ 99.331% 18,746,600 Total Direct Debt -Total Overlapping Debt 79,388,133Combined Total Debt $ 79,388,133 (2) Ratios to 2020-2021 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 1.26%Total Direct Debt 0.00%Combined Total Debt 2.24% Ratios to Successor Agency Redevelopment Incremental Valuation ($ 667,208,706):

Total Overlapping Tax Increment Debt 2.81%
Notes:Source: California Municipal Statistics
Overlapping Tax and Assessment Debt
(2) Excludes tax and revenue anticipation notes, revenue, mortgage revenue, and non-bonded capital lease obligations.(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. 147
106

CITY OF LOS BANOS

LEGAL DEBT MARGIN INFORMATION

LAST TEN FISCAL YEARS
(Expressed in Thousands of Dollars)
Fiscal Years
2007-2008 2008-2009 2009-2010 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Assessed value $ 3,022,057 $ 2,862,172 $ 1,814,335 $ 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 $ 3,539,138 25% of full assessed value 755,514 715,543 453,584 435,929 437,318 461,143 531,815 567,579 605,428 655,172 714,727 777,266 829,170 884,785 Debt limit (15% of reduced assessed value) 113,327 107,331 68,038 65,389 65,598 69,171 79,772 85,137 90,814 98,276 107,209 116,590 124,375 132,718 Total net debt applicable to limit - - - - - - - - - - - - - - Legal debt margin 113,327 $ 107,331 $ 68,038 $ 65,389 $ 65,598 $ 69,171 $ 79,772 $ 85,137 $ 90,814 $ 98,276 $ 107,209 $ 116,590 $ 124,375 $ 132,718 $ 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% 0.00% 0.00% 0.00% 0.00% Source: Assessed Valuation California Municipal StatisticsNote: We have no General Obligation Bonds 148
107

CITY OF LOS BANOS

PLEDGED-REVENUE COVERAGE

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 Water Revenue Bonds:

Water revenue $ 5,301,489 5,130,735 $ 5,413,681 $ 6,001,003 $ 6,342,156 $ 6,653,861 $ 6,247,950 $ 7,333,876 $ 8,508,884 $ 8,343,075 $ Less: operating expenses(3) (3,004,186) (2,904,393) (3,107,370) (3,115,891) (3,342,002) (3,528,711) (3,646,595) (3,617,167) (3,977,327) (4,124,429) Net available revenue 2,226,342 2,297,303 2,306,311 2,885,112 3,000,154 3,125,150 2,601,355 3,716,709 4,531,557 4,218,646 Debt service(1) 4,434,626 561,385 - - - - - - - -
Coverage ratio 3.97 0.52 N/A N/A N/A N/A N/A N/A N/A N/AWastewater Revenue Bonds:

Wastewater revenue(4) 4,989,878 4,549,108 5,565,988 6,184,581 6,930,523 7,345,806 6,962,261 7,507,222 9,299,700 8,896,888 Less: operating expenses(3) (2,773,005) (2,705,074) (2,752,898) (2,832,174) (3,077,148) (3,235,389) (3,269,692) (3,260,548) (3,573,699) (3,608,221) Net available revenue 2,216,873 1,844,034 2,813,090 3,352,407 3,853,375 4,110,417 3,692,569 4,246,674 5,726,001 5,288,667 Debt service(2) 2,379,577 810,501 470,309 470,115 468,929 471,598 468,124 468,433 - - Coverage ratio 2.28 0.93 5.98 7.13 8.22 8.72 7.89 9.07 N/A N/A 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 149
108

CITY OF LOS BANOS

DEMOGRAPHIC AND ECONOMIC STATISTICS

LAST TEN FISCAL YEARS
Calendar Labor Labor
Year Population(1) Force(2) Employment Rate(2) Numbers Population(1) Force(2) Employment Rate(2) Numbers 2013 37,017 15,900 13,500 14.8% 2,400 262,478 114,900 98,200 14.5% 16,700 2014 37,168 15,800 13,800 13.1% 2,100 264,922 115,000 100,200 12.8% 14,700 2015 38,670 15,800 14,000 11.6% 1,800 266,134 115,100 102,000 11.4% 13,100 2016 39,359 15,900 14,100 11.0% 1,800 271,579 115,500 103,000 10.7% 12,400 2017 39,993 15,789 14,178 10.3% 1,633 274,665 114,578 103,022 10.1% 10,676 2018 40,986 16,100 14,700 10.4% 1,700 279,977 115,700 106,500 8.0% 9,3002019 41,898 16,200 14,700 10.1% 1,700 282,928 113,400 104,000 8.1% 9,300 2020(3) 41,923 17,400 13,900 20.0% 3,500 283,521 114,600 96,700 15.6% 17,900 2021 42,869 17,500 15,100 13.5% 2,400 284,836 116,400 103,900 10.8% 12,600 2022 46,639 17,000 15,400 9.7% 1,700 283,311 115,600 107,400 7.0% 8,100 Source: (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
City of Los Banos Merced County
Unemployment Unemployment
150
109

CITY OF LOS BANOS

PRINCIPAL EMPLOYERS

CURRENT YEAR AND NINE YEARS AGO
Percent of Total Percent of Total
Employer Employees Rank City Employment Employees Rank City EmploymentLos Banos Unified School District 1,220 1 7.92% 880 1 6.62% Los Banos Unified School District Memorial Hospital 322 2 2.09% 246 2 1.85% Memorial Hospital Wal-Mart 300 3 1.95% 180 4 1.35% Wal-Mart Kagome 187 5 1.21% 142 6 1.07%
City of Los Banos 176 6 1.14% 183 3 1.38%
Target 166 4 1.08% 158 5 1.19% Target
Home Depot 140 7 0.91% 91 9 0.68% Home DepotSave Mart 110 8 0.71% 96 8 0.72% Save Mart APEX 108 9 0.70% - 0.00%
Central California Irrigation Dist. 75 10 0.49% - 0.00% Food for Less - - 80 10 0.60%
Kmart - - 97 7 Kmart 0.01
Total 2,804 18.22% 2,153 16.20%
Source: (1) City of Los Banos Finance Department
2021-2022 2011-2012
151
110

CITY OF LOS BANOS

FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 FUNCTION/PROGRAMGeneral Government:

Administration 5.21 5.18 5.35 5.35 5.68 5.13 5.13 5.13 5.13 5.13Community and Economic 2.00 2.00 2.00 2.00 3.00 3.00 3.00 3.00 3.00 3.00Water Admin 4.33 4.34 4.27 4.27 4.60 4.72 4.72 4.72 4.72 4.72Waterwaste Admin 4.33 4.25 4.19 4.19 4.52 4.72 4.72 4.72 4.72 4.72Solid Waste Admin 4.21 4.22 4.17 4.17 4.49 4.72 4.72 4.72 4.72 4.72 Police:

Sworn 39.00 39.00 39.00 39.00 40.00 41.00 41.00 47.00 48.00 48.00Non-Sworn 20.00 19.50 19.50 20.50 23.50 24.50 24.50 26.50 26.50 26.50Code Enforcement 1.50 2.50 2.50 2.50 2.50 2.50 4.50 5.50 5.50 5.50 Fire:

Sworn 15.90 15.90 15.90 15.90 15.90 15.90 15.90 17.90 17.90 17.90Non-Sworn 1.50 1.00 1.00 2.00 2.00 2.00 2.00 2.00 2.00 2.00Building Sworn 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10Building 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 0.55Water 11.35 10.85 11.19 11.19 11.76 11.76 11.76 11.76 11.76 11.76Wastewater 10.70 10.26 10.59 10.59 10.90 10.90 10.90 10.90 10.90 10.90Solid Waste 6.00 6.00 6.33 6.33 7.65 7.65 7.65 7.65 7.65 7.65Streets 7.80 7.80 7.80 8.80 11.05 11.05 11.05 11.05 11.05 11.05Maintenance 7.15 7.15 7.15 7.15 9.40 10.40 10.05 10.05 10.05 10.05Recreation 1.16 1.19 1.19 1.19 1.19 1.19 2.54 3.54 3.54 3.54Airport 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Fleet 1.21 2.21 2.22 2.22 2.21 2.21 2.21 2.21 2.21 2.21 Redevelopment 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00Information Technology 3.00 3.00 3.00 3.00 3.00 3.00 3.00 3.00 1.00 1.00 147.00 147.00 148.00 151.00 164.00 167.00 170.00 182.00 181.00 181.00 Source: City of Los Banos Finance Department
152
111

CITY OF LOS BANOS

OPERATING INFORMATION, OPERATING INDICATORS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 FUNCTION/PROGRAMPolice:

Jail Bookings (2) 1,179 1,151 1,610 1,724 1,905 1,508 1,261 1,063 1,206 985 Traffic Collisions (2) 358 407 421 546 631 361 425 369 404 487 Parking Citations (2) 1,380 1,102 654 966 889 611 778 443 743 888 Moving Citations (2) 2,513 3,017 2,929 3,803 2,919 1,509 707 1,162 2,653 3,381 Fire:

Fire Calls 628 699 677 914 973 989 961 983 1,080 1,075Medical Calls 1,406 1,557 1,664 1,793 1,737 1,923 1,889 1,930 1,854 2,097Inspections 606 676 720 751 732 751 816 559 541 890 Public Works
Streets:

Street Surfacing (Miles) (4) 0.14 0.55 0.52 1.04 1.04 3.12 10.27 5.53 2.04 - Parks and Recreation:

Rec. Youth Program Enrollments (1)(3)(5) 1,198 1,158 1,240 1,202 1,266 1,295 1,264 1,231 0 1,621 Water:

Water Delivered (millions) 2,737 2,765 2,389 2,169 2,158 2,415 2,496 2,455 2,707 2,757Connections 10,967 10,871 10,816 11,369 11,648 11,974 11,974 12,425 12,781 13,168 Sewer:

Average Daily Flow (mgd) 2.86 2.90 2.93 2.90 2.80 2.70 2.50 2.80 3.30 3.30Connections 10,854 10,699 10,640 11,077 11,294 11,601 11,843 12,062 12,428 12,783 Solid Waste:

Street Sweeping, Miles per Year 21,697 23,704 22,576 22,386 21,225 22,163 23,406 20,730 20,133 21,903 Green Waste Pick-ups 10,154 11,163 10,193 10,491 10,546 10,822 11,341 11,284 11,658 12,035Recycling Pick-ups 10,245 11,059 10,205 10,600 10,535 10,807 10,807 11,268 11,646 12,029 Source: Various City DepartmentsNotes: (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 153
112

CITY OF LOS BANOS

OPERATING INFORMATION, CAPITAL ASSETS STATISTICS BY FUNCTION/PROGRAM

LAST TEN FISCAL YEARS
Fiscal Years
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022 FUNCTION/PROGRAMPolice:

Stations 1 1 1 1 1 1 1 1 1 1Patrol Units 16 17 18 15 14 18 16 19 19 22Motorcycle Units 2 2 2 2 2 2 2 2 2 2 Fire:

Stations 2 2 2 2 2 2 2 2 2 2Service Units 15 14 13 14 16 16 15 15 16 16 Public WorksStreets:

Miles 109.85 110 123 123 123 123 123 123 125 131
Parks and Recreation:

Acreage 233 233 233 233 233 233 233 233 281 270Playgrounds 32 32 32 32 32 32 32 32 36 36Baseball/Softball Diamonds 5 5 5 5 5 5 5 5 9 9Soccer/Football Fields 4 4 4 4 4 4 4 4 4 4Basketball Courts 13 13 13 13 13 13 13 13 14 14 Water:

Water Mains (miles) 170 170 172 172 172 172 172 172 172 172Fire Hydrants 1,510 1,510 1,510 1,510 1,510 1,510 1,510 1,510 1,510 1,620Storage 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) 130 130 130 130 130 131 131 131 133 133 Solid Waste:

Street Sweepers 2 2 2 2 2 2 2 2 2 0
Source: Various City Departments
154
February 10, 2023
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, 2022. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, 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 engagement letter. 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. No new accounting policies were adopted and the application of existing policies was not changed during fiscal year 2022. 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. 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 obligations are 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 rates. We evaluated the key factors and assumptions used develop the other postretirement benefit obligation in determining that is it reasonable in relation to the financial statements taken as a whole.

Management’s estimate of the landfill closure and post closure care cost is based on various factors including; landfill total estimated capacity, cumulated capacity used, estimated costs to close (adjusted annually for inflation). We evaluated the key factors and assumptions used to develop the landfill closure and post closure care cost in determining that it is reasonable in relation to the financial statements taken as a whole.

~ PRICE PAIGE & COMPANY
Certified Public Accountants
The Place to Be
570 N. Magnolia Avenue, Suite I 00
Clovis, CA 9361 I
www.ppc .cpa
te/ 559.299.9540
fax 559.299.2344
155
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 Balance 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. We noted two uncorrected misstatements during our audit in which the City did not recognize leases that meet the criteria for recognition in the financial statements under GASB87, Leases. This resulted in an understatement of assets and liabilities for Governmental Activities and the Wastewater fund in the approximate amount of $26,000 and $79,000, respectively. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. The uncorrected misstatements or the matters underlying them could potentially cause future period financial statements to be materially misstated, even though, in our judgment, such uncorrected misstatements are immaterial to the financial statements under audit.

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.

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 the 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.

In our audit engagement letter previously provided to you, we communicated the following significant risks of material misstatement (significant risks) as part of our audit planning:
 Management override of controls
 Improper revenue recognition due to fraud
 Implementation of GASB 87 for Lessors
During the course of the audit, we identified additional significant risks:
 Expenditures reported within the ARPA fund are commingled by function 156
 Capital asset additions are incomplete or improperly valued (as a result of contributed capital from Los Banos Designated Local Authority)
These risks were addressed within our audit procedures and we have no findings to report related to these risks.

Other Matters
We applied certain limited procedures to the management’s discussion and analysis, budgetary comparison schedules, the proportionate share of net pension liability, the schedule of pension contributions, the schedule of changes in Net 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.

We were engaged to report on the combining and individual fund financial statements and schedules (supplementary information), 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 the 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,
157
Client: CITY OF LOS BANOS
Engagement: 6-30-22 Audit
Current Period: 06/30/2022
Workpaper: Financial Statement Materiality Worksheet for Planning Purposes Account Description
Workpaper
Reference Debit Credit Net Income Effect
AJE01
To reclassify the police station fund balance adjustments as transfers. 100-498-000-000 Transfer Out 5,125,000.00 0.00
100-000-253-011 Fund Balance Committed 0.00 4,125,000.00 100-000-253-012 Fund Balance-Meas H Committed 0.00 1,000,000.00 236-000-241-010 Fund Balance-Building Reserve 0.00 4,875,000.00 236-498-000-000 Transfer Out (PPC CREATED) 4,875,000.00 0.00 245-498-000-000 Transfer Out 3,000,000.00 0.00
245-000-253-011 Fund Balance Committed 0.00 3,000,000.00 323-000-253-020 Fund Balance 13,000,000.00 0.00
323-000-499-000 Transfer In (PPC CREATED) 0.00 13,000,000.00 323-000-244-000 Fund Balance Reserve 4,084,000.00 0.00
323-000-253-020 Fund Balance 0.00 4,084,000.00
Total 30,084,000.00 30,084,000.00 0.00
AJE07
To adjust IBank issuance activity to actual
323-000-115-000 Accounts Receivable 55.56 0.00
323-000-498-000 Loan Proceeds-iBank 0.00 616,000.40
323-000-143-000 Prepaid Expenses 615,944.84 0.00
323-000-115-000 Accounts Receivable 0.00 13,337,000.00
323-000-103-050 Cash with Fiscal Agent 13,337,000.00 0.00 Total 13,953,000.40 13,953,000.40 616,000.40

Page 1 of 1 ends

Los Banos City CouncilFebruary 15, 2023

Los Banos City Council
February 15, 2023