Shafter City Council
March 5, 2024

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
Governmental Activities
Net position in the governmental activities increased by $11.12 million in fiscal year 2023 due to the following:
 There was a net increase of $2.97 million or 9.47% on Taxes compared to fiscal year 2022.  License and permits had a $2.64 million or 46.03% increase compared to the previous year.  Activity related to grants (intergovernmental) had an increase of $7.31 million compared to the previous year.
 Unrealized gain/loss (use of money) had an increase of $1.81 million compared to the previous year.
 Internal transfers showed significant decreases compared to the previous year, which explains the remainder of the net position.

Governmental Fund Revenues
Governmental fund revenues were $58.20 million, an increase in fiscal year 2023 of $15.67 million from the prior year, or 36.84%. The city had significant increases in grants. For example, the city received a $6.00 million state grant for police substation. There were other increases related to the general fund which will be explained in more detail in the general fund section. The impact fees related to traffic mitigation and LLMD accounted for $0.90 million USD.
11

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023

12

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
Governmental Activities Expenses
Fiscal year 22/23 governmental expenditures remained similar to previous year. Projected labor costs were expected to be higher, but the police department had various vacancies during the year. M&O expenditure was higher during the inflationary period.
$0.8 M $0.8 M $0.9 M
$1.7 M
$1.2 M
$1.6 M
$0.6 M
$1.3 M $1.1 M
$1.8 M
$1.4 M
$1.7 M
$0.3 M
$0.4 M $0.3 M
$0.3 M
$0.3 M
$0.5 M
$0.5 M
$2.2 M
$1.7 M
$0.8 M
$0.8 M
$1.3 M
$1.0 M
$0.4 M
$0.9 M
$1.0 M
$2.7 M
$4.8 M
$5.2 M
$6.7 M
$3.9 M
$5.3 M
$0.0 M
$1.0 M
$2.0 M
$3.0 M
$4.0 M
$5.0 M
$6.0 M
$7.0 M
$8.0 M
17/18 Actual 18/19 Actual 19/20 Actual 20/21 Actual 21/22 Actual 22/23 Actual Million USD
General Fund Charges and Fees
Charges for Services License & Permits Fines, Forfeitures, Rents & Concessions Investment Earnings Grants & Donations Other GF Revenue Total GF Charges & Fees $9.3 $7.5 $8.0
$-
$23.7
$12.4 $10.4
$2.1
$-
$10.0
$20.0
$30.0
General government Public safety Public works Culture and recreation Millions $
City of Shafter
Governmental Activities Program Revenues and Expenses
Progam Revenues Program Expenses
13

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
$12.7 M
$7.8 M
$4.7 M
$1.2 M
$1.5 M
$0.8 M
$0.6 M
$0.9 M
$0.4 M
$0.3 M
$0.2 M
$0.1 M
$0.6 M
$13.4 M
$7.8 M
$7.5 M
$1.2 M
$3.7 M
$1.1 M
$0.5 M
$0.6 M
$0.4 M
$0.4 M
$0.2 M
$0.1 M
$0.0 M
$12.3 M
$8.4 M
$5.0 M
$1.3 M
$1.1 M
$1.0 M
$0.9 M
$0.6 M
$0.4 M
$0.4 M
$0.3 M
$0.1 M
$0.0 M
$0.0 M $2.0 M $4.0 M $6.0 M $8.0 M $10.0 M $12.0 M $14.0 M $16.0 M Economic
Development
Police
Public Works
Finance
Administrative
Services
Education
Planning
City Manager
HR
City Attorney
City Clerk
City Council
Non-Dep General Fund Operating Expenditures by Department 22/23 Actual 21/22 Actual 20/21 Actual
14

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
Business-Type Activities
Operating costs had significant increases compared to the previous year. Labor cost, equipment, supplies, repairs, and other utilities were the reason for the increase. Further analysis will be provided in the enterprise funds section.
$12.7 M
$9.6 M $10.8 M $11.5 M $12.0 M $12.7 M
$2.8 M
$3.2 M $2.9 M $2.9 M $3.3 M $3.9 M
$1.5 M
$1.5 M $1.3 M $1.9 M $1.6 M
$1.7 M
$8.1 M
$8.9 M
$12.3 M
$13.1 M
$13.0 M
$11.9 M
$1.9 M
$9.4 M $3.0 M
$1.7 M
$2.6 M
$0.5 M
$11.6 M $2.5 M
$1.6 M
$39.1 M
$35.5 M
$31.0 M $31.9 M
$37.1 M
$31.9 M
$0.0 M
$5.0 M
$10.0 M
$15.0 M
$20.0 M
$25.0 M
$30.0 M
$35.0 M
$40.0 M
$45.0 M
17/18 Actual 18/19 Actual 19/20 Actual 20/21 Actual 21/22 Actual 22/23 Actual Millions
General Fund Expenditures by Category
Wages & Benefits Planned Operations Required Operations Operations -Internal Non-Oper. & Agreements Other Non-Operationa Capital Outlay Capital Projects Transfers-Out
Totals

5.5 2.5 1.6 0.4 0.4

6.5 2.9 2.2

0.6 0.7
-

5.0 10.0
Water Wastewater Refuse Transit Other
Millions $
City of Shafter
Business-type Activities Program Revenues and Expenses
Progam Revenues Program Expenses
15

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with financerelated legal requirements.

Governmental Funds
The City of Shafter’s governmental funds statements provide information on the short-term inflows, outflows, and balances of resources that are available for spending. This information is useful in assessing the City’s financial requirements. In particular, the unreserved fund balance may serve as a useful measure of City funds that are available for spending at the end of the fiscal year.

As reported in the Statement of Revenues, Expenditures and Changes in Fund Balances, revenue for the governmental funds totaled $58.20 million in fiscal year 2023. This is an increase of $15.67 million or 36.84% from fiscal year 2022 revenues of $42.53 million. General fund has an increase of $5.32 million on the operating revenues excluding internal transfers, charges, and grants compared to the previous year. General fund taxes had the biggest increase by $2.88 million whereas Sales Taxes had the biggest gain with a $1.49 million increase. Licenses and permits had a $1.10 million increase or 57.31% compared to the previous year.
2018 2019 2020 2021 2022 2023
$ 33,317,238 $ 39,221,667 $ 42,193,976 $ 44,315,308 $ 42,531,113 $ 58,198,465 Dollar Change: $ 5,904,429 1,638,832 $ 2,972,309 $ 2,121,332 $ (1,784,195) $ 15,667,352 $ Percentage Change: 5.17% 17.72% 7.58% 5.03% -4.03% 36.84% Revenue
Governmental Funds - Revenues
City of Shafter
Investment
Earnings
0%
Charges for
services
100% Operating grants
and contributions
0%
Capital grants
and contributions
0%
City of Shafter
Business-Type Activities Revenues by Source
16

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
Expenditures for governmental funds totaled $36.79 million in fiscal year 2023. This is an increase of $379,334 or 1.04% from expenditures of $36.41 million in fiscal year 2022. Projected labor costs were expected to be higher, but the police department had various vacancies during the year. M&O expenditure was higher during the inflationary period.
2018 2019 2020 2021 2022 2023
Expenditures $ 29,704,961 $ 35,802,996 $ 34,656,946 $ 34,087,464 $ 36,413,105 $ 36,792,439 Dollar Change: $ 6,180,716 $ 6,098,035 $ (1,146,050) $ (569,482) $ 2,325,641 $ 379,334 Percentage Change: 26.27% 20.53% -3.20% -1.64% 6.82% 1.04% Governmental Funds - Expenditures
City of Shafter
Overall, governmental fund revenues exceeded expenditures by $21.41 million before other financing sources and uses were taken into consideration. Of this total, general fund revenues had a $7.62 million surplus which includes $1.19 million in capital outlay. Operating expenses decreased by $1.89 million compared to the previous year. Taxes increased by $2.97 million for combined governmental funds.

Intergovernmental receipts mainly related to grants increased by $7.31 million including a $6.00 million state grant for the Shafter Police substation. Licenses and permits for the combined governmental funds increased by $2.64 million. Impact fees and special assessments related to LLMD increased by $0.80 million and $0.20 million respectively. Furthermore, unrealized gain/loss increased by $1.81 million compared to the previous year.

As of June 30, 2023, the City’s governmental funds reported a combined ending fund balance of $112.26 million, an increase of $22.07 million, or 24.47%, from the fiscal year 2022 combined ending fund balance of $90.20 million. The net increase in the general fund balance is $8.14 million. The positive increases relate to an increase in revenues of $5.32 million and a decrease in operating expenditure of $2.61 million. Furthermore, there is a transfers-in of $0.52 million. The most notable revenue impact comes from Taxes which generated a $2.89 million increase compared to the previous year. Licenses and Permits had the second largest revenue impact with a $1.10 million or 57.31% increase compared to the previous year.
2018 2019 2020 2021 2022 2023
Fund Balance $ 74,571,879 $ 75,341,199 $ 78,386,452 $ 88,504,904 $ 90,195,147 $ 112,263,211 Dollar Change: $ (9,196,482) $ 769,320 $ 3,045,253 $ 10,118,452 $ 1,690,243 $ 22,068,064 Percentage Change: -10.98% 1.03% 4.04% 12.91% 1.91% 24.47% Governmental Funds - Fund Balance
City of Shafter
Of the $112.26 million, $1.14 million or 1.02% was non-spendable, $27.93 million or 24.88% was restricted, $58.56 million or 52.16% was assigned, and $24.64 million or 21.95% was unassigned.

Non-spendable fund balance is in a form such as amounts due from fiduciary funds, or prepaid items, which cannot be spent or are subject to a legal obligation not to be spent. Restricted fund balance is funds with an externally imposed restriction on the use of the funds. Committed fund balances are funds with an internal restriction on the use of the funds imposed by the City Council of the City of Shafter.

Assigned fund balances are funds which the City has expressed intent to be used for a specific purpose.

Unassigned fund balances are the funds available to be appropriated and without any of the restrictions discussed in the above categories. Specific amounts of fund balance by category are listed on the balance sheet for governmental funds.
17

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
The general fund is the City’s main operating fund. The general fund balance contained $1.13 million that was non-spendable fund balance for advances to other funds and amounts due from the former redevelopment agency, a fiduciary fund. The general fund balance also contained $41.10 million in fund balance that was assigned including $12.61 million for long-term strategically planned capital projects, $19.91 million assigned as a loss contingency reserve for a sales tax allocation petition pending appeal before the State Board of Equalization, $1.49 million for RDA bond proceeds to be used for Shafter job center access improvements, $3.09 million for losses accumulated in other funds, and $4.00 million for future loans to the water and wastewater funds. As of June 30, 2023, the general fund had an unassigned fund balance of $25.16 million. This is an increase of $5.24 million or 26.32% from the prior year’s unassigned fund balance of $19.92 million.

As a measure of the general fund’s liquidity, it is useful to compare unassigned fund balance to total general fund operating expenditures. As of June 30, 2023, the general fund’s unassigned fund balance of $25.16 million. This amount is 75.35% of total general fund operating expenditures of $33.39 million less capital outlay of $1.19 million. 75.35% exceeds the 50.00% minimum set by policy. Furthermore, the general fund has additional assigned reserves which could be reallocated at the council’s discretion including amounts assigned to capital projects or funds available for internal loans.

Revenue growth has exceeded estimates and continued to finance growth in expenditures, preventing the use of reserves to cover recurring general fund expenditures. The city uses these excess reserves to invest in projects that generate positive returns on investment or reduce the City’s ongoing operational costs.
2018 2019 2020 2021 2022 2023
Fund Balance $ 13,111,861 $ 17,809,130 $ 20,105,952 $ 21,746,015 $ 19,915,650 $ 25,166,220 Dollar Change: $ (8,610,138) $ 4,697,269 $ 2,296,822 $ 1,640,063 $ (1,830,365) $ 5,250,570 Percentage Change: -39.64% 35.82% 12.90% 8.16% -8.42% 26.36% General Fund - Unassigned Fund Balance
City of Shafter
The federal and grant funds account for grant revenues from federal grants, state grants, local matching funds, and related project expenditures. Both revenues and expenditures can vary significantly between fiscal years depending on the extent the city has received federal grant funding. At the end of Fiscal year 2023, the state grants fund had a fund balance of $6.09 million which is assigned for the police substation.

The federal grants fund has a $3.37 million fund balance. The most recent federal grants come from ARPA funding.

The traffic mitigation improvement fund had a fund balance of $12.80 million which represents a $3.33 million increase from operating income. The main source of revenue comes from impact fees.

The transportation fund became a major fund in fiscal year 2012. This fund receives Transit Development Act (TDA) funds which are used to fund current streets and roads projects. When funds are received, they are considered deferred revenues because they are not earned until they are used. Transportation fund revenues and expenditures usually breakeven; however fiscal year 2023 had a $0.49 million deficit which is expected to be recovered with KernCog claims during 23/24. 18

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
Proprietary Funds
The City’s proprietary fund statements provide the same type of information found in the government-wide financial statements. There are six enterprise funds, four are major enterprise funds reported in the proprietary funds Statement of Revenues, Expenses and Changes in Net Position. They are the water fund, wastewater fund, rail, and telecommunications fund that are considered major funds.

The remaining two non-major enterprise funds are the refuse fund, and transit services fund.

Revenue for business-type activities totaled $10.52 million in fiscal year 2023, an increase of $0.85 million or 8.78% more than fiscal year 2022 revenue of $9.67 million. All balance sheet accounts were transferred to the General Fund or to the General Fixed Asset Account Group (GFAG). 2018 2019 2020 2021 2022 2023
Revenue: $21,555,664 $22,546,579 $21,828,575 $13,595,857 $9,667,871 $10,516,824 Dollar Change: $1,055,264 $990,915 ($718,004) ($8,232,718) ($3,927,986) $848,953 Percentage Change: 5.15% 4.60% -3.18% -37.72% -28.89% 8.78% Proprietary Funds - Revenues
City of Shafter
Expenses in the proprietary funds totaled $12.99 million in fiscal year 2023. This is an increase of $4.30 million or 49.53% from fiscal year 2022 expenditures of $8.68 million. Various proprietary funds had significant increases in operating costs.
2018 2019 2020 2021 2022 2023
Expenses: $25,601,106 $23,418,940 $25,313,519 $15,130,860 $8,684,075 $12,985,060 Dollar Change: $794,142 ($2,182,166) $1,894,579 ($10,182,659) ($6,446,785) $4,300,985 Percentage Change: 3.20% -8.52% 8.09% -40.23% -42.61% 49.53% Proprietary Funds - Expenses
City of Shafter
The business-type funds experienced a decrease in net position of $2.36 million or 4.68% in fiscal year 2023.

Effective July 1, 2017 the City implemented a five-year rate increase plan for refuse, water and wastewater, to address operational losses in recent years and provide for future capital needs. Recent inflation pressures along with needs in capital projects merit a new rate study. The rail fund is expected to continue to incur losses due to depreciation expense until additional customers are added. 2018 2019 2020 2021 2022 2023
Ending Net Position $48,974,693 $50,751,683 $52,580,533 $51,519,202 $50,483,556 $48,119,048 Dollar Change: $8,592,436 $1,776,990 $1,828,850 ($1,061,331) ($1,035,646) ($2,364,508) Percentage Change: 21.28% 3.63% 3.60% -2.02% -2.01% -4.68% Proprietary Funds Ending Net Position
City of Shafter
19

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
Water Services Fund
The water services fund had a -$0.83 million decrease in its ending net position for fiscal year 2023 resulting in a total ending net position of $21.36 million. The depreciation/amortization expense was $1.07 million.

Of the total ending net position of $21.36 million, $18.89 million is net investment in capital assets. The remaining $2.47 million is unrestricted, which is 11.55% of the net position. Water services fund revenues were $5.64 million in fiscal year 2023. This represents an increase of $0.58 million or 11.56% from fiscal year 2022 revenues of $5.05 million. Operating expenses were significantly higher compared to the previous year. Labor cost within the operating costs increased by $0.22 million or 24.90%. Labor costs had salaries and wage increases and the utility billing team had direct charges to the Water fund. The Utility Billings team used to be charged to the general fund. Internal charges and overhead increased by $0.43 million or 76.76%. The MCCF correctional facility used to be the largest fund in the city. The MCCF used to receive the largest internal overhead charges. The smaller enterprise funds now have a larger share of overhead costs as a direct result of MCCF closure. M&O excluding labor costs had a $0.52 million increase or 21.99% compared to the previous year. The increase was mainly due to increases in Repairs/Maintenance and other expenses directly related to recent inflation.

Wastewater Services Fund
The wastewater services fund net position decreased $0.42 million and ended the fiscal year with a total net position of $17.64 million. This is a -2.36% decrease in net position from fiscal year 2022. Like the water fund, the wastewater operating expenses exceeded the operating revenues. Labor cost remained like the previous years, but other M&O had significant increases directedly related to recent inflation.

GENERAL FUND HIGHLIGHTS
General fund taxes have a five-year Compound Annual Growth Rate (CAGR) of 7.38% which is higher than inflation during the same period. The revenue growth exceeded Labor Cost and M&O growth for the same period which is from fiscal year 18/19 to 22/23. Sales and property taxes had a similar CAGR at

6.10% and 11.17% respectively. The franchise taxes had a 16.90% CAGR. Licenses and Permits had a similar CAGR at 6.08% which reflects the recent growth in commercial and residential buildings.

Operating expenses had modest changes over several years. Labor cost had a 5.73% five-year CAGR.

M&O excluding labor cost had a 4.83% CAGR. Fiscal year 23/24 expects to have significant increases in both labor and M&O mainly due to recent inflationary pressures.

Operating revenues had an increase of $5.32 million or 13.19% compared to the previous year. On the other hand, operating expenditures had a decrease of $1.89 million or 5.67% compared to the previous year.
20

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023

CAPITAL ASSETS AND DEBT ADMINISTRATION
Capital Assets
The city has a standard capitalization approach for its roads and parking lots. The approach utilizes depreciation applied to all eligible infrastructure capital assets. Depreciation is reported for these assets and amounts are capitalized in connection with improvements that lengthen the lives of the roads and parking lots. Costs for maintenance and preservation of these assets are covered in the period incurred.

The City maintains an inventory of the roads and parking lots and performs periodic condition assessments to establish the condition levels of the systems.

As reported in the Statement of Net Position, capital assets for the City’s governmental and business-type activities totaled $96.09 million (net of depreciation/amortization) as of June 30, 2023. The investments in capital assets are land; construction in progress; buildings; improvements; machinery and equipment; park facilities; roads and streets. The net change in the City’s fiscal year 2023 capital assets from fiscal year 2022, net of depreciation/amortization, a modest increase of less one tenth of 1% or $425,766. The governmental activities had an increase of $1.02 million or 2.04% and the business-type activities had a decrease of $0.60 million or -1.32%.

For the government-wide statement of net position presentation, all depreciable capital assets were depreciated/amortized from the acquisition date to the end of the current fiscal year.

Governmental fund financial statements record minor capital asset purchases as expenditures. Ongoing infrastructure projects are accounted for in construction in progress.

0.00 5.00

10.00 15.00

20.00 25.00

30.00 35.00

40.00 45.00
2017 2018 2019 2020 2021 2022 2023
Millions
City of Shafter - General Fund Revenues and Expenditures Revenues Expenditures
21

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
2023 2022 2023 2022 2023 2022
Land 9,694,125 9,694,125 628,861 628,861 10,322,986 10,322,986 Buildings and improvements 9,724,778 10,536,715 2,967,487 3,139,177 12,692,265 13,675,892 Improvements other than buildings 4,015,903 4,256,506 1,960,596 2,052,751 5,976,499 6,309,257 Machinery and equipment 762,236 717,436 2,818,745 3,033,082 3,580,981 3,750,518 Automotive equipment 805,253 471,285 287,758 452,295 1,093,011 923,580 Infrastructure 24,425,208 24,507,054 32,887,529 33,971,317 57,312,737 58,478,371 Construction in process 1,009,419 80,431 3,153,561 2,129,022 4,162,980 2,209,453 Subscription Asset 851,309 103,055 - 954,364 - -
Total $ 51,288,231 $ 50,263,552 $ 44,807,592 $ 45,406,505 $ 96,095,823 $ 95,670,057 Capital Assets Net of Depreciation/Amortization
City of Shafter
As of June 30, 2023 and 2022
Activities Activities Total
Governmental Business-Type
Additional information about the City’s capital assets can be found in Note 5 of the financial statements.

Long-term debt.

As of June 30, 2023, the city had no bonded debt. The only City of Shafter third-party debt, $0.07 million in total, represents loans and agreements with the North of the River Sanitary District, secured solely by wastewater enterprise fund revenues.
202320222023202220232022
Wastewater Loan Agreements - 68,038 - 206,202 68,038 206,202 Total $ - $ 68,038 - $ $ 206,202 $ 68,038 $ 206,202
Activities Activities Total
Governmental Business-Type
As of June 30, 2023 and 2022
Outstanding Debt - General Obligation and Revenue Bonds, Long-term Contracts and Agreements City of Shafter
The City of Shafter has no general obligation debt. The City’s limit for general obligation debt exceeds $200 million, which represents 10% of the total assessed valuation of the city.

During the current fiscal year, the City of Shafter did not issue any new debt or refinance any existing debt. Additional information pertaining to City of Shafter’s debt administration and outstanding long-term obligations can be found in Note 6, Long-Term Debt, of the Notes to the Financial Statements.

Claims and litigation liabilities are not recorded as the City has sufficient reserves with the Central San Joaquin Risk Management Authority to cover outstanding claim reserves for workers’ compensation claims and liability claims. There were minimal outstanding liability claims against the City at the end of fiscal year 2023.
22

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET AND RATES
The following factors were taken into consideration in preparation of the fiscal year 2023-23 budget.

Budgeting Approach: The City of Shafter conducts financial planning on a “Recurring Revenues versus Recurring Expenditure Basis” to insure financial stability. One-time revenues are not used to pay for recurring operating expenditures. Detailed projections are developed throughout the year and used to monitor recurring revenues and drive decisions regarding any cost or service level increase. This approach has served the city well over the years and resulted in a strong balance sheet and stable annual operations.

Employee Wages and Benefits: Modest cost-of–living increases were incorporated into the 2022-2023 budget. The City Council did authorize the payment of the increases to health, dental and life insurance costs for City employees. As commercially available health insurance has been increasing by double digits, the City made a shift in 2017 to pool with other public agencies for health insurance through two Joint Powers Authorities (JPA). These JPA agreements typically require a three-year minimum commitment and are the assumed providers for 2020-2021.

Utility User Charges: The City has implemented a five-year rate increase for water, wastewater, and refuse utilities effective July 1, 2017. For 2019-2020 these rates are set to increase by 6%, 5%, and 3% respectively compared to the prior year. The rate plans were developed to cover the City’s increasing operational costs in addition to capital needs and regulatory costs. Current rates remain unchanged despite recent inflation costs. The management team will recommend a new rate study in FY 23/24, but it must be authorized by the city council.

Capital Projects: The city spent $5.27 million in CIP projects on the fiscal year 22/23. The following table lists related projects and expenses within the same period.

Project Description
19-20
Actual
20-21
Actual
21-22
Actual
22-23
Actual
23-24 YTD
Actual
ST00033-2022 Poso St & Storm Drain Improvnt - - - 750,916 - ST00030-2022 Street Improvement-E.Euclid - - 1,355 503,250 - WA00015-Well 21 Development 181,330 2,750 10,499 428,735 490,025 WA00007-Water Meter Retrofits 67,126 360,704 799,524 406,972 110,106 PK00005-2022 Park Lighting Improvements - - 34,197 346,731 - WA00001-Major Well Or Casing Repairs 193,701 264,621 207,492 310,351 - PK00002-Kirschenmann Park Field Imp. - - 7,080 260,888 184,371 WW00006-Wwtp Plant Maintenance Proj. - - 72,784 259,520 340,747 ST00006-Pavement Sealing 303,493 4,603 308,790 189,833 394,471 WW00004-Lift Station Improvements 7,584 39,345 715,052 181,527 - Others 7,252,634 5,401,469 3,212,332 1,636,200 5,016,213 Totals 7,528,397 6,550,962 5,369,106 5,274,923 6,535,932 City of Shafter
CIP Projects
23

CITY OF SHAFTER
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2023
Other Economic Factors: Investment earnings are projected to increase with higher interest rates and larger cash balances. Shafter is home to several oil related businesses. Sales taxes had significant decreases from the top five major contributors; however, there was an unexpected boost from the recent fulfilment center which allowed sales taxes to exceed all expectations. Gossamer Grove, a roughly 3,500 lot housing development in Southeast Shafter is continuing under construction and selling homes.

Additionally, there are a couple of large industrial developments currently permitted or under construction in the Wonderful Industrial Park. With all this development we are anticipating continued growth in assessed valuation and population over the next few years.

REQUESTS FOR INFORMATION
The financial report is designed to provide our citizens, taxpayers, customers and investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Individuals are free to contact the City of Shafter’s Finance Department with questions or requests for additional financial information.

All inquiries can be made by calling 661-746-5001 or visit us at https://www.shafter.com/42/Finance. 24

BASIC FINANCIAL STATEMENTS
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26

GOVERNMENT-WIDE FINANCIAL STATEMENTS
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CITY OF SHAFTER
Statement of Net Position
Governmental Business-Type
Activities Activities Total
Assets:

Cash and investments $ 107,071,072 $ 6,580,445 $ 113,651,517 Receivables:

Accounts receivable, net 341,207 636,758 977,965
Interest receivable 521,993 31,220 553,213
Leases 1,135,905 1,975,835 3,111,740
Internal balances 2,361,742 (2,361,742) -
Prepaid costs 26,850 52,874 79,724
Due from other governments 9,040,122 3,000 9,043,122
Due from Successor Agency 1,119,015 - 1,119,015
Capital assets not being depreciated/amortized 10,703,544 3,782,422 14,485,966 Capital assets, net of depreciation/amortization 40,584,687 41,025,170 81,609,857 Total Assets 172,906,137 51,725,982 224,632,119
Deferred Outflows of Resources:

Related to pensions 9,759,569 817,053 10,576,622
Related to OPEB 310,479 36,702 347,181
Total Deferred Outflows of Resources 10,070,048 853,755 10,923,803 Liabilities:

Accounts payable 4,115,778 1,431,822 5,547,600
Accrued liabilities 380,167 38,707 418,874
Accrued interest 2,238 1,451 3,689
Unearned revenues 148,874 - 148,874
Deposits payable 97,053 196,062 293,115
Noncurrent liabilities:

Due within one year:

Compensated absences 765,427 138,176 903,603
Bonds and loans - 68,038 68,038
Subscription liability 185,696 28,157 213,853
Due in more than one year:

Compensated absences 135,075 24,383 159,458
Subscription liability 598,295 68,561 666,856
Net pension liability 2,332,668 170,925 2,503,593
OPEB liability 891,256 105,238 996,494
Total Liabilities 9,652,527 2,271,520 11,924,047
Deferred Inflows of Resources:

Related to pensions 3,272,361 250,863 3,523,224
Related to OPEB 330,248 38,761 369,009
Deferred inflow related to leases 1,125,712 1,899,545 3,025,257 Total Deferred Inflows of Resources 4,728,321 2,189,169 6,917,490 Net Position:

Net investment in capital assets 50,504,240 44,642,836 95,147,076 Restricted:

Traffic safety 268,220 - 268,220
Law enforcement 433,965 - 433,965
Road maintenance and transportation 6,334,546 - 6,334,546 Low and moderate income housing 7,829,228 - 7,829,228
Lighting and landscape maintenance 1,451,673 - 1,451,673 Water capital improvements 1,779,128 - 1,779,128
Wastewater capital improvements 9,339,546 - 9,339,546
Refuse capital improvements 303,937 - 303,937
New park and park improvements 192,527 - 192,527
Unrestricted 90,158,327 3,476,212 93,634,539
Total Net Position $ 168,595,337 $ 48,119,048 $ 216,714,385 June 30, 2023
Primary Government
See Notes to Financial Statement.
29

CITY OF SHAFTER
Statement of Activities
Year Ended June 30, 2023
Operating Capital
Charges for Contributions Contributions
Expenses Services and Grants and Grants
Functions/Programs:

Primary Government:

Governmental Activities:

General government $ 23,644,884 $ 9,308,197 $ - $ -
Public safety 12,423,683 1,058,668 6,475,555 1,419
Culture and recreation 2,101,829 - - -
Public works 10,366,240 683,710 - 7,292,894
Interest on long-term debt 329 - - -
Total Governmental Activities 48,536,965 11,050,575 6,475,555 7,294,313 Business-type Activities:

Water Services 6,522,566 5,544,092 - 4,000
Wastewater Services 2,933,128 2,463,592 - -
Rail Spur Services 364,887 - - -
Refuse Collection Services 2,119,740 1,619,575 4,000 29,847 Transit Services 577,264 44,459 318,899 -
Fiber Optic and Communication Tower 332,492 394,239 - - Total Business-Type Activities 12,850,077 10,065,957 322,899 33,847 Total Primary Government $ 61,387,042 $ 21,116,532 $ 6,798,454 $ 7,328,160 General Revenues and Transfers:

General Revenues:

Taxes:

Property taxes
Sales taxes
Franchise taxes
Other taxes
Motor vehicle in lieu - unrestricted
Investment earnings
Other
Gain on sale of capital asset
Transfers
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning
Net Position at End of Year
Program Revenues
See Notes to Financial Statement.
30

Primary Government
Governmental Business-Type
Activities Activities Total
$ (14,336,687) $ - $ (14,336,687)
(4,888,041) - (4,888,041)
(2,101,829) - (2,101,829)
(2,389,636) - (2,389,636)
(329) - (329)
(23,716,522) - (23,716,522)
- (974,474) (974,474)
- (469,536) (469,536)
- (364,887) (364,887)
- (466,318) (466,318)
- (213,906) (213,906)
- 61,747 61,747
- (2,427,374) (2,427,374)
(23,716,522) (2,427,374) (26,143,896)
2,901,610 - 2,901,610
25,136,604 - 25,136,604
1,281,802 - 1,281,802
111,561 - 111,561
3,954,781 - 3,954,781
1,492,550 (55,444) 1,437,106
9,243 94,275 103,518
- (23,288) (23,288)
(47,323) 47,323 -
34,840,828 62,866 34,903,694
11,124,306 (2,364,508) 8,759,798
157,471,031 50,483,556 207,954,587
$ 168,595,337 $ 48,119,048 $ 216,714,385
Net (Expenses) Revenues and
Changes in Net Position
See Notes to Financial Statement.
31

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32

FUND FINANCIAL STATEMENTS
33

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34

Governmental Funds Financial Statements
General Fund – The General Fund is used to account for resources traditionally associated with government which are not required legally or by sound financial management to be accounted for in another fund.

Transportation Fund – This fund is used to account for the City's share of motor fuel tax revenues and special state grants that are legally restricted to construction and maintenance of local roads within the City limits.

Traffic Mitigation Improvement Fund – This fund was established to account for expenditures for the cost of traffic related projects.

State Grant Fund – This fund is used to account for various capital projects funded by state grants. 35

CITY OF SHAFTER
Balance Sheet
Governmental Funds
June 30, 2023
General
Assets:

Cash and investments $ 61,723,540 $ - $ 12,735,193 $ 6,085,019 Receivables:

Accounts receivable, net 341,207 - - -
Interest 301,460 2,598 61,720 24,241
Leases 1,135,905 - - -
Prepaid costs 13,635 - - -
Due from other governments 5,170,972 3,668,886 - -
Due from other funds 3,130,370 - - -
Due from Successor Agency 1,119,015 - - -
Total Assets $ 72,936,104 $ 3,671,484 $ 12,796,913 $ 6,109,260 Liabilities, Deferred inflows of Resources,
and Fund Balances:

Liabilities:

Accounts payable $ 3,809,204 $ 19,333 $ - $ 18,026
Accrued liabilities 359,179 - - -
Unearned revenues 142,362 - - -
Deposits payable 97,053 - - -
Due to other funds - 509,442 - -
Total Liabilities 4,407,798 528,775 - 18,026
Deferred inflows of resources:

Unavailable revenues - 3,668,886 - -
Leases 1,125,712 - - -
Total Deferred inflows of Resources 1,125,712 3,668,886 - - Fund Balances (Deficit):

Nonspendable:

Prepaid costs 13,635 - - -
Due from Successor Agency 1,119,015 - - -
Restricted for:

Traffic safety - - - -
Fire and police improvements - - - 6,091,234
Law enforcement - - - -
Road maintenance and transportation - - - -
Low and moderate income housing - - - -
Lighting and landscape maintenance - - - -
Water capital improvements - - - -
Wastewater capital improvements - - - -
Refuse capital improvements - - - -
New park and park improvements - - - -
Assigned to:

Loss contingency - State BOE contingency 19,909,458 - - - RDA bond proceeds for Shafter Job Center Access Improv. 1,490,000 - - - Accumulated losses in other funds 3,090,688 - - -
Funds available to loan to Water and Wastewater Funds 4,000,000 - - - Strategically planned capital projects 12,613,578 - - - Capital asset replacement - - - -
MCCF Building and equipment replacement - - - -
Traffic mitigation projects - - 12,796,913 -
Median Mitigation improvement - - - -
Unassigned 25,166,220 (526,177) - -
Total Fund Balances (Deficit) 67,402,594 (526,177) 12,796,913 6,091,234 Total Liabilities, deferred inflows of
resources, and Fund Balances $ 72,936,104 $ 3,671,484 $ 12,796,913 $ 6,109,260 Capital
Projects Fund
Special
Revenue Fund
Transportation
Traffic Mitigation
Improvement State Grants
See Notes to Financial Statement.
36

CITY OF SHAFTER
Balance Sheet
Governmental Funds
June 30, 2023
Assets:

Cash and investments
Receivables:

Accounts receivable, net
Interest
Leases
Prepaid costs
Due from other governments
Due from other funds
Due from Successor Agency
Total Assets
Liabilities, Deferred inflows of Resources,
and Fund Balances:

Liabilities:

Accounts payable
Accrued liabilities
Unearned revenues
Deposits payable
Due to other funds
Total Liabilities
Deferred inflows of resources:

Unavailable revenues
Leases
Total Deferred inflows of Resources
Fund Balances (Deficit):

Nonspendable:

Prepaid costs
Due from Successor Agency
Restricted for:

Traffic safety
Fire and police improvements
Law enforcement
Road maintenance and transportation
Low and moderate income housing
Lighting and landscape maintenance
Water capital improvements
Wastewater capital improvements
Refuse capital improvements
New park and park improvements
Assigned to:

Loss contingency - State BOE contingency
RDA bond proceeds for Shafter Job Center Access Improv.

Accumulated losses in other funds
Funds available to loan to Water and Wastewater Funds
Strategically planned capital projects
Capital asset replacement
MCCF Building and equipment replacement
Traffic mitigation projects
Median Mitigation improvement
Unassigned
Total Fund Balances (Deficit)
Total Liabilities, deferred inflows of
resources, and Fund Balances
Other Total
Governmental Governmental
Funds Funds
$ 26,527,320 $ 107,071,072
- 341,207
129,433 519,452
- 1,135,905
3,235 16,870
200,264 9,040,122
- 3,130,370
- 1,119,015
$ 26,860,252 $ 122,374,013
$ 225,689 $ 4,072,252
- 359,179
6,512 148,874
- 97,053
120,903 630,345
353,104 5,307,703
8,501 3,677,387
- 1,125,712
8,501 4,803,099
3,235 16,870
- 1,119,015
268,220 268,220
- 6,091,234
433,965 433,965
6,334,546 6,334,546
1,737,994 1,737,994
1,451,673 1,451,673
1,779,128 1,779,128
9,339,546 9,339,546
303,937 303,937
192,527 192,527
- 19,909,458
- 1,490,000
- 3,090,688
- 4,000,000
- 12,613,578
4,551,537 4,551,537
1,180 1,180
- 12,796,913
105,046 105,046
(3,887) 24,636,156
26,498,647 112,263,211
$ 26,860,252 $ 122,374,013
See Notes to Financial Statement.
37

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38

CITY OF SHAFTER
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2023
Amounts reported for governmental activities in the Statement of Net Position are different because:

Total fund balances - governmental funds $ 112,263,211
Capital assets, net of accumulated depreciation/amortization, used in governmental activities are not financial resources and, therefore, are not reported in the funds. 50,945,253 Differences between expected and actual experiences, assumption changes, and net differences between projected and actual earnings and contributions subsequent to the measurement date for the postretirement benefits (pension and OPEB) are recognized as deferred outflows of resources and deferred inflows of resources on the Statement of Net Position.

Deferred outflows - pension related $ 9,328,206
Deferred outflows - OPEB related 290,282
Deferred inflows - pension related (3,135,219)
Deferred inflows - OPEB related (309,993)
Total deferred outflows and inflows related to postemployment benefits 6,173,276 Other long-term assets that are not available to pay for current period expenditures and, therefore, are either deferred or not reported in the funds.

Unavailable revenues 3,677,387
Total long-term assets 3,677,387
The internal service funds are used by management to charge the costs of fleet management and risk management to individual funds. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the Statement of Net Position. 94,740 Long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds.

Subscriptions payable $ (615,881)
Compensated absences (862,257)
Net pension liability (2,243,849)
Net OPEB liability (836,543)
Total long-term liabilities (4,558,530)
Net Position of Governmental Activities $ 168,595,337
See Notes to Financial Statement.
39

CITY OF SHAFTER
Statement of Revenues,
Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2023
General
Revenues:

Taxes $ 33,365,359 $ - $ - $ -
Licenses, permits and fees 3,029,433 - 3,254,663 -
Intergovernmental 88,393 758,145 - 6,299,341
Special assessments - - - -
Charges for services 2,018,985 - - -
Use of money and property 1,714,615 2,811 77,426 51,677 Fines, forfeitures and penalties 49,869 - - -
Miscellaneous 39,078 - - -
Total Revenues 40,305,732 760,956 3,332,089 6,351,018
Expenditures:

Current:

General government 18,467,971 - - -
Public safety 7,882,558 - - -
Culture and recreation 264,395 - - -
Public works 4,726,338 - - -
Capital outlay 1,900,905 1,254,587 5,731 259,784
Debt service:

Principal retirement - subscriptions 151,833 - - -
Interest 329 - - -
Total Expenditures 33,394,329 1,254,587 5,731 259,784
Excess (Deficiency) of Revenues
Over (Under) Expenditures 6,911,403 (493,631) 3,326,358 6,091,234 Other Financing Sources (Uses):

Transfers in 516,564 - - -
Transfers out - - - -
Subscription proceeds 709,636 - - -
Total Other Financing Sources
(Uses) 1,226,200 - - -
Net Change in Fund Balances 8,137,603 (493,631) 3,326,358 6,091,234 Fund Balances, Beginning of Year 59,264,991 (32,546) 9,470,555 - Fund Balances (Deficit), End of Year $ 67,402,594 $ (526,177) $ 12,796,913 $ 6,091,234 Special
Revenue Fund
Transportation
Traffic
Mitigation
Improvement State Grants
Capital
Projects Funds
See Notes to Financial Statement.
40

CITY OF SHAFTER
Statement of Revenues,
Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2023
Revenues:

Taxes
Licenses, permits and fees
Intergovernmental
Special assessments
Charges for services
Use of money and property
Fines, forfeitures and penalties
Miscellaneous
Total Revenues
Expenditures:

Current:

General government
Public safety
Culture and recreation
Public works
Capital outlay
Debt service:

Principal retirement - subscriptions
Interest
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Subscription proceeds
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances (Deficit), End of Year
Other Total
Governmental Governmental
Funds Funds
$ 958,135 $ 34,323,494
2,083,634 8,367,730
3,234,210 10,380,089
942,514 942,514
- 2,018,985
185,556 2,032,085
44,621 94,490
- 39,078
7,448,670 58,198,465
- 18,467,971
- 7,882,558
- 264,395
669,414 5,395,752
1,208,594 4,629,601
- 151,833
- 329
1,878,008 36,792,439
5,570,662 21,406,026
417,308 933,872
(981,470) (981,470)
- 709,636
(564,162) 662,038
5,006,500 22,068,064
21,492,147 90,195,147
$ 26,498,647 $ 112,263,211
See Notes to Financial Statement.
41

CITY OF SHAFTER
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
Year ended June 30, 2023
Amounts reported for governmental activities in the Statement of Activities are different because:

Net change in fund balances - total governmental funds $ 22,068,064 Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays exceeded depreciation/amortization expense in the current period.

Capital outlay $ 4,068,610
Depreciation/amortization expense (3,189,344)
879,266
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds. 1,510,129
Debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position.

Issuance of subscriptions (767,714)
Principal payments - subscriptions 151,833
(615,881)
The internal service funds are used by management to charge the costs of fleet management and risk management to individual funds. The net revenue of activities of internal service funds is reported with governmental activities. (856,015)
Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.

Compensated absences (109,129)
Changes in pension liability/asset and related deferred outflows and inflows of resources (11,661,337) Changes in OPEB liability and related deferred outflows and inflows of resources (90,791) (11,861,257)
Change in Net Position of Governmental Activities $ 11,124,306 See Notes to Financial Statement.
42

Proprietary Funds Financial Statements
Water Services Fund – This fund is used to account for the activities of the City's water pumping, treatment and distribution operations.

Wastewater Services Fund – This fund is used to account for the activities of the City's wastewater collection and treatment operations.

Rail Spur Services Fund – This fund is used to account for the activities of the City's Rail operations created with the construction of an initial rail spur within the City. The enterprise account is being built and significant operational revenue is expected in future years. The revenue from this operation is initially pledged for repayment of a loan advanced by the General Fund.

Fiber Optic and Communication Tower – This fund is used to account for the activities of the City’s fiber optic distribution operations to separate service areas within the City. The enterprise account is being built and operational revenue is expected in future years. The revenue from this operation is initially pledged for repayment of a loan advanced by the General Fund.

Internal Service Funds – These funds are used to provide goods and services by one department or agency to other departments or agencies of the City on a cost reimbursement basis. 43

CITY OF SHAFTER
Statement of Net Position
Proprietary Funds
June 30, 2023
Other
Enterprise
Funds
Assets:

Current:

Cash and investments $ 2,870,197 $ 3,278,757 - - $ 431,491 Receivables:

Accounts receivable, net 282,732 162,846 9,280 92,110 89,790 Interest 14,356 14,952 - - 1,912
Leases 15,441 - - 113,386 -
Prepaid costs 48,714 3,088 29 711 332
Due from other governments - - - - 3,000
Total Current Assets 3,231,440 3,459,643 9,309 206,207 526,525 Noncurrent:

Leases receivable 813,928 - - 1,033,080 -
Capital assets - net of accumulated depreciation/amortization 18,927,799 14,842,740 7,976,234 2,746,663 314,156 Total Noncurrent Assets 19,741,727 14,842,740 7,976,234 3,779,743 314,156 Total Assets 22,973,167 18,302,383 7,985,543 3,985,950 840,681 Deferred Outflows of Resources:

Related to pensions 486,737 168,474 12,434 - 149,408
Related to OPEB 21,858 7,563 584 - 6,697
Total Deferred Outflows of Resources 508,595 176,037 13,018 - 156,105 Liabilities:

Current:

Accounts payable 764,728 522,990 2,580 5,240 136,284
Accrued liabilities 23,821 8,045 445 - 6,396
Accrued interest 572 477 - - 402
Deposits payable 99,547 48,893 - - 47,622
Due to other funds - - 1,551,747 616,269 193,726
Subscription liability 12,292 10,469 - - 5,396
Compensated absences 57,633 34,335 21,111 - 25,097
Bonds and loans payable - 68,038 - - -
Total Current Liabilities 958,593 693,247 1,575,883 621,509 414,923 Noncurrent:

Subscription liability 26,483 21,995 - - 20,083
Compensated absences 10,170 6,059 3,725 - 4,429
Net pension liability 101,896 35,267 2,605 - 31,157
OPEB liability 62,741 21,711 1,606 - 19,180
Total Noncurrent Liabilities 201,290 85,032 7,936 - 74,849 Total Liabilities 1,159,883 778,279 1,583,819 621,509 489,772 Deferred Inflows of Resources:

Related to pensions 149,201 51,643 3,811 - 46,208
Related to OPEB 23,234 8,041 593 - 6,893
Related to leases 793,197 - - 1,106,348 -
Total Deferred Inflows of Resources 965,632 59,684 4,404 1,106,348 53,101 Net Position (Deficit):

Net investment in capital assets 18,889,024 14,742,238 7,976,234 2,746,663 288,677 Unrestricted 2,467,223 2,898,219 (1,565,896) (488,570) 165,236 Total Net Position (Deficit) $ 21,356,247 $ 17,640,457 $ 6,410,338 $ 2,258,093 $ 453,913 Fiber Optic and
Communication
Tower
Business-Type Activities - Enterprise Funds
Water
Services
Wastewater
Services
Rail Spur
Services
See Notes to Financial Statement.
44

CITY OF SHAFTER
Statement of Net Position
Proprietary Funds
June 30, 2023
Assets:

Current:

Cash and investments
Receivables:

Accounts receivable, net
Interest
Leases
Prepaid costs
Due from other governments
Total Current Assets
Noncurrent:

Leases receivable
Capital assets - net of accumulated depreciation/amortization Total Noncurrent Assets
Total Assets
Deferred Outflows of Resources:

Related to pensions
Related to OPEB
Total Deferred Outflows of Resources
Liabilities:

Current:

Accounts payable
Accrued liabilities
Accrued interest
Deposits payable
Due to other funds
Subscription liability
Compensated absences
Bonds and loans payable
Total Current Liabilities
Noncurrent:

Subscription liability
Compensated absences
Net pension liability
OPEB liability
Total Noncurrent Liabilities
Total Liabilities
Deferred Inflows of Resources:

Related to pensions
Related to OPEB
Related to leases
Total Deferred Inflows of Resources
Net Position (Deficit):

Net investment in capital assets
Unrestricted
Total Net Position (Deficit)
Governmental
ActivitiesInternal
Totals Service Funds
$ 6,580,445 $ -
636,758 -
31,220 2,541
128,827 -
52,874 9,980
3,000 -
7,433,124 12,521
1,847,008 -
44,807,592 342,978
46,654,600 342,978
54,087,724 355,499
817,053 431,363
36,702 20,197
853,755 451,560
1,431,822 43,526
38,707 20,988
1,451 2,238
196,062 -
2,361,742 138,283
28,157 48,836
138,176 32,509
68,038 -
4,264,155 286,380
68,561 119,274
24,383 5,736
170,925 88,819
105,238 54,713
369,107 268,542
4,633,262 554,922
250,863 137,142
38,761 20,255
1,899,545 -
2,189,169 157,397
44,642,836 174,868
3,476,212 (80,128)
$ 48,119,048 $ 94,740
See Notes to Financial Statement.
45

CITY OF SHAFTER
Statement of Revenues, Expenses
and Changes in Fund Net Position
Proprietary Funds
Year Ended June 30, 2023
Other
Enterprise
Funds
Operating Revenues:

Charges for services $ 5,544,092 $ 2,463,592 $ - $ 394,239 $ 1,664,034 Miscellaneous 92,240 686 - - 1,349
Total Operating Revenues 5,636,332 2,464,278 - 394,239 1,665,383 Operating Expenses:

Salaries and wages 1,569,703 580,626 65,499 - 659,003
Administration 54,856 573,990 1,332 43,595 135,768
Contractual 1,533,028 - 6,894 112,596 330,267
Materials - 9,695 - - 6,417
Maintenance and repair 212,405 771,851 7,290 6,845 34,679 Utilities 2,044,567 97,002 3,318 15,674 8,379
Equipment and supplies 36,474 64,635 634 938 1,363,635
Depreciation/amortization expense 1,070,857 832,253 279,920 152,844 158,454 Total Operating Expenses 6,521,890 2,930,052 364,887 332,492 2,696,602 Operating Income (Loss) (885,558) (465,774) (364,887) 61,747 (1,031,219) Nonoperating Revenues (Expenses):

Interest revenue 23,275 34,468 - (125,658) 8,471
Interest expense (676) (3,076) - - (402)
Grants 4,000 4,000 - - 352,746
Gain (loss) on disposal of capital assets - - - - (23,288) Total Nonoperating
Revenues (Expenses) 26,599 35,392 - (125,658) 337,527
Income (Loss) Before Transfers (858,959) (430,382) (364,887) (63,911) (693,692) Transfers in 33,817 13,506 - - -
Changes in Net Position (825,142) (416,876) (364,887) (63,911) (693,692) Net Position:

Beginning of Year 22,181,389 18,057,333 6,775,225 2,322,004 1,147,605 End of Fiscal Year $ 21,356,247 $ 17,640,457 $ 6,410,338 $ 2,258,093 $ 453,913 Fiber Optic and
Communication
Tower
Business-Type Activities - Enterprise Funds
Water
Services
Wastewater
Services
Rail Spur
Services
See Notes to Financial Statement.
46

CITY OF SHAFTER
Statement of Revenues, Expenses
and Changes in Fund Net Position
Proprietary Funds
Year Ended June 30, 2023
Operating Revenues:

Charges for services
Miscellaneous
Total Operating Revenues
Operating Expenses:

Salaries and wages
Administration
Contractual
Materials
Maintenance and repair
Utilities
Equipment and supplies
Depreciation/amortization expense
Total Operating Expenses
Operating Income (Loss)
Nonoperating Revenues (Expenses):

Interest revenue
Interest expense
Grants
Gain (loss) on disposal of capital assets
Total Nonoperating
Revenues (Expenses)
Income (Loss) Before Transfers
Transfers in
Changes in Net Position
Net Position:

Beginning of Year
End of Fiscal Year
Governmental
ActivitiesInternal
Totals Service Funds
$ 10,065,957 $ 2,118,221
94,275 253,286
10,160,232 2,371,507
2,874,831 1,285,497
809,541 105,289
1,982,785 1,119,337
16,112 -
1,033,070 55,567
2,168,940 190,942
1,466,316 538,065
2,494,328 124,327
12,845,923 3,419,024
(2,685,691) (1,047,517)
(59,444) 193,880
(4,154) (2,653)
360,746 -
(23,288) -
273,860 191,227
(2,411,831) (856,290)
47,323 275
(2,364,508) (856,015)
50,483,556 950,755
$ 48,119,048 $ 94,740
See Notes to Financial Statement.
47

CITY OF SHAFTER
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2023
Other
Enterprise
Funds
Cash Flows from Operating Activities:

Cash received from customers and users $ 5,642,979 $ 2,522,907 $ - $ 370,633 $ 1,663,945 Cash paid to suppliers for goods and services (3,359,774) (1,111,549) (18,349) (179,671) (1,785,280) Cash paid to employees for services (1,117,934) (372,259) (24,093) - (309,503) Net Cash Provided (Used) by Operating Activities 1,165,271 1,039,099 (42,442) 190,962 (430,838) Cash Flows from Non-Capital
Financing Activities:

Cash transfers in 33,817 13,506 - - -
Repayment received from other funds - - 42,442 - 32,408 Repayment made to other funds - - - (65,304) -
Subsidy from federal and state grants 4,000 4,000 - - 352,745 Net Cash Provided (Used) by
Non-Capital Financing Activities 37,817 17,506 42,442 (65,304) 385,153 Cash Flows from Capital
and Related Financing Activities:

Subsidy from federal and state grants - - - - 1,874
Acquisition and construction of capital assets (1,335,502) (535,866) - - (9,174) Principal paid on capital debt - (138,164) - - -
Interest paid on capital debt (104) (7,687) - - -
Principal paid on subscription liability (12,955) (11,028) (5,867) Proceeds from sales of capital assets - - - - 88,407
Net Cash Provided (Used) by
Capital and Related Financing Activities (1,348,561) (692,745) - - 75,240 Cash Flows from Investing Activities:

Interest received 15,284 31,523 - (125,658) 8,033
Net Cash Provided (Used) by
Investing Activities 15,284 31,523 - (125,658) 8,033
Net Increase (Decrease) in Cash
and Cash Equivalents (130,189) 395,383 - - 37,588
Cash and Cash Equivalents at Beginning of Year 3,000,386 2,883,374 - - 393,903 Cash and Cash Equivalents at End of Year $ 2,870,197 $ 3,278,757 $ - $ - $ 431,491 Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) $ (885,558) $ (465,774) $ (364,887) $ 61,747 $ (1,031,219) Adjustments to reconcile operating income (loss)
net cash provided (used) by operating activities:

Depreciation/amortization 1,070,857 832,253 279,920 152,844 158,454 (Increase) decrease in accounts receivable 121,114 9,736 - (1,771) (8,722) (Increase) decrease in prepaid expense (16,727) (3,088) (29) (711) (332) (Increase) decrease in net pension asset 478,363 195,352 29,468 - 264,586 (Increase) decrease in deferred inflow of resources - pensions (60,906) 12,597 17,953 - 115,219 (Increase) decrease in deferred inflow of resources - OPEB 1,113 2,204 1,081 - 7,772 Increase (decrease) in accounts payable 538,283 408,712 1,148 688 93,722 Increase (decrease) in accrued liabilities (26,381) (8,185) (749) - (6,640) Increase (decrease) in deposits payable (93,235) 48,893 - - 37,606 Increase (decrease) in deferred revenue - - - - (29,847) Increase (decrease) in compensated absences (7,421) (3,485) (357) - 1,149 (Increase) decrease in leases receivable 14,021 - - 125,658 - Increase (decrease) in deferred leases revenue inflows (35,253) - - (147,493) - Increase (decrease) in OPEB liability (2,572) (6,061) (3,055) - (21,317) Increase (decrease) in deferred outflows of resources - pensions 52,544 10,543 (3,085) - (14,314) Increase (decrease) in deferred outflows of resources - OPEB 17,029 5,402 150 - 3,045 Total Adjustments 2,050,829 1,504,873 322,445 129,215 600,381 Net Cash Provided (Used) by
Operating Activities $ 1,165,271 $ 1,039,099 $ (42,442) $ 190,962 $ (430,838) Fiber Optic and
Communication
Tower
Business-Type Activities - Enterprise Funds
Water
Services
Wastewater
Services
Rail Spur
Services
See Notes to Financial Statement.
48

CITY OF SHAFTER
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2023
Cash Flows from Operating Activities:

Cash received from customers and users
Cash paid to suppliers for goods and services
Cash paid to employees for services
Net Cash Provided (Used) by Operating Activities
Cash Flows from Non-Capital
Financing Activities:

Cash transfers in
Repayment received from other funds
Repayment made to other funds
Subsidy from federal and state grants
Net Cash Provided (Used) by
Non-Capital Financing Activities
Cash Flows from Capital
and Related Financing Activities:

Subsidy from federal and state grants
Acquisition and construction of capital assets
Principal paid on capital debt
Interest paid on capital debt
Principal paid on subscription liability
Proceeds from sales of capital assets
Net Cash Provided (Used) by
Capital and Related Financing Activities
Cash Flows from Investing Activities:

Interest received
Net Cash Provided (Used) by
Investing Activities
Net Increase (Decrease) in Cash
and Cash Equivalents
Cash and Cash Equivalents at Beginning of Year
Cash and Cash Equivalents at End of Year
Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss)
Adjustments to reconcile operating income (loss)
net cash provided (used) by operating activities:

Depreciation/amortization
(Increase) decrease in accounts receivable
(Increase) decrease in prepaid expense
(Increase) decrease in net pension asset
(Increase) decrease in deferred inflow of resources - pensions (Increase) decrease in deferred inflow of resources - OPEB Increase (decrease) in accounts payable
Increase (decrease) in accrued liabilities
Increase (decrease) in deposits payable
Increase (decrease) in deferred revenue
Increase (decrease) in compensated absences
(Increase) decrease in leases receivable
Increase (decrease) in deferred leases revenue inflows
Increase (decrease) in OPEB liability
Increase (decrease) in deferred outflows of resources - pensions Increase (decrease) in deferred outflows of resources - OPEB Total Adjustments
Net Cash Provided (Used) by
Operating Activities
Governmental
ActivitiesInternal
Totals Service Funds
$ 10,200,464 $ 2,371,507
(6,454,623) (2,017,287)
(1,823,789) (819,753)
1,922,052 (465,533)
47,323 275
74,850 -
(65,304) 138,283
360,745 -
417,614 138,558
1,874 -
(1,880,542) (33,709)
(138,164) -
(7,791) (415)
(29,850) (65,921)
88,407 -
(1,966,066) (100,045)
(70,818) 189,339
(70,818) 189,339
302,782 (237,681)
6,277,663 237,681
$ 6,580,445 $ -
$ (2,685,691) $ (1,047,517)
2,494,328 124,327
120,357 -
(20,887) (7,507)
967,769 445,151
84,863 (21,226)
12,170 1,603
1,042,553 (580)
(41,955) (7,028)
(6,736) -
(29,847) -
(10,114) 1,400
139,679 -
(182,746) -
(33,005) (7,107)
45,688 38,569
25,626 14,382
4,607,743 581,984
$ 1,922,052 $ (465,533)
See Notes to Financial Statement.
49

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50

Fiduciary Funds Financial Statements
Custodial Funds – These funds account for assets held by the City in a fiduciary capacity for individuals, private organizations, and other governments that are not held in trusts or equivalent arrangements.

RDA Successor Agency Private Purpose Trust Fund – This fund is used to account for monies received from the Kern County Auditor Controller for the repayment of the enforceable obligations of the former Shafter Community Development Agency. These funds are restricted for the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule (ROPS). 51

CITY OF SHAFTER
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2023
Assets:

Cash and cash equivalents $ 109,620 $ 818,420
Cash and investments with fiscal agent - 555
Accounts receivable, net
Accrued interest 515 -
Receivables (net of uncollectibles) - 6,431
Total Assets 110,135 825,406
Deferred Outflows of Resources:

Deferred charge on refunding - 69,155
Total Deferred Outflows of Resources - 69,155
Liabilities:

Accrued interest - 64,619
Deposits payable 82,300 -
Due to City 11 1,119,015
Long-term liabilities:

Due in one year - 525,000
Due in more than one year - 8,857,441
Total Liabilities 82,311 10,566,075
Net Position (Deficit):

Restricted for other organizations and governments 27,824 (9,671,514) Total Net Position $ 27,824 $ (9,671,514)
PrivatePurpose Trust
Fund
Successor
Agency
Custodial
Funds
See Notes to Financial Statements.
52

CITY OF SHAFTER
Statement of Changes In Fiduciary Net Position
Fiduciary Funds
Year Ended June 30, 2023
Custodial
Funds
Additions:

Taxes $ - $ 1,161,484
Interest and change in fair value of investments 716 8,537 Miscellaneous 12,664 -
Total Additions 13,380 1,170,021
Deductions:

Administrative expenses 250,000
Interest expense 8,396 409,283
Total Deductions 8,396 659,283
Changes in Net Position 4,984 510,738
Net Position (Deficit) - Beginning of the Year 22,840 (10,182,252) Net Position (Deficit) - End of the Year $ 27,824 $ (9,671,514) PrivatePurpose Trust
Fund
Successor
Agency
See Notes to Financial Statements.
53

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54

NOTES TO THE BASIC FINANCIAL STATEMENTS
55

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56

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basic financial statements of the City of Shafter, California (City) have been prepared in conformity with Generally Accepted Accounting Principles of the United States of America (U.S. GAAP) as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting standards in the United States. The more significant of the City’s accounting policies are described below.

A. Financial Reporting Entity
The City was incorporated in 1938 and became a Charter City in 1995. The local government is comprised of five Council members who are elected every four years and act under powers granted under a City Charter. The City provides a variety of services including general administration, public safety, street and highway maintenance, maintenance of water, wastewater and refuse, and operation of a correctional facility, however the correctional facility was closed in October 2020.

In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The primary criteria for including a potential component unit within the reporting entity are the governing body’s financial accountability and a financial benefit or burden relationship and whether it is misleading to exclude. A primary government is financially accountable and shares a financial benefit or burden relationship if it appoints a voting majority of an organization’s governing body and it is able to impose its will on the organization, or if there is a potential for the organization to provide specific financial benefits to or impose specific financial burdens on the primary government. A primary government may also be financially accountable if an organization is fiscally dependent on the primary government regardless of whether the organization has a separately elected governing board, a governing board appointed by a higher level of government, or a jointly appointed board, and there is a potential for the organization to provide specific financial benefits to, or impose specific financial burdens on the primary government.

Blended Component Units
The financial reporting entity consists of the primary government, the City, and its component units. Component units are legally separate entities for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the primary government is accountable and their exclusion would cause the reporting entity’s financial statements to be misleading or incomplete.

Blended component units, although legally separate entities, are, in substance part of the government’s operation and so data from these units are combined with data of the primary government. Discretely presents component units, on the other hand, are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the government. The City has no blended or discretely presented component units.

The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, deferred outflows, liabilities, deferred inflows, fund equity, revenues, and expenditures or expenses, as appropriate.

Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. 57

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Basis of Accounting and Measurement Focus
Government - Wide Financial Statements
The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduciary activities of the City are not included in these statements.

These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets, deferred outflows of resources, liabilities, deferred inflows of resources, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Certain types of transactions are reported as program revenues for the City in three categories:
 Charges for services
 Operating grants and contributions
 Capital grants and contributions
Certain eliminations have been made in regard to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities and Changes in Net Position, internal service fund transactions have been eliminated; however, those transactions between governmental and business- type activities have not been eliminated. The following interfund activities have been eliminated:
 Due to/from other funds
 Advances to/from other funds
 Transfers in/out
Governmental Fund Financial Statements
Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and non-major funds aggregated. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the Net Position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets, deferred outflows of resources, current liabilities, and deferred inflows of resources are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.

Revenues are recorded when received in cash, except for that revenues subject to accrual (generally 60 days after year-end) are recognized when due. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. 58

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Unearned revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Unearned revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when the government has a legal claim to the resources, the unearned revenue is removed from the Balance Sheet and revenue is recognized.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences.

The City reports the following major Governmental Funds:

General Fund - The General Fund is used to account for resources traditionally associated with government which are not required legally or by sound financial management to be accounted for in another fund.

Transportation Fund - This fund is used to account for the City’s share of motor fuel tax revenues and special state grants that are legally restricted to construction and maintenance of local roads within the City limits.

Traffic Mitigation Improvement Fund – This fund was established to account for expenditures for the cost of traffic related projects.

State Grant Fund – This fund is used to account for various capital projects funded by state grants.

Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Fund Net Position, and a Statement of Cash Flows for each major Proprietary Fund.

A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements.

Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets, deferred outflows of resources, liabilities, and deferred inflows of resources (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts.

Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as non-operating expenses.

The City reports the following major Proprietary Funds:

Water Services Fund - This fund is used to account for the activities of the City's water pumping, treatment and distribution operations.

Wastewater Services Fund - This fund is used to account for the activities of the City's wastewater collection and treatment operations.

Rail Spur Services Fund – This fund is used to account for the activities of the City's Rail operations created with the construction of an initial rail spur within the City. 59

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Fiber Optic & Communication Tower Fund - This fund is used to account for the activities of the City’s fiber optic distribution operations to separate service areas within the City.

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

The City reports the following Internal Service Funds:

Building Maintenance Fund - This fund is used to account for the accumulation and allocation of costs associated with the maintenance of the City Hall building.

Liability Coverage Fund - This fund is used to account for the accumulation and allocation of costs associated with risk management.

Vehicle Maintenance Fund - This fund is used to account for the accumulation and allocation of costs associated with the maintenance of the City fleet of vehicles.

Information Technology Fund - This fund is used to account for the costs associated with automation maintenance of the City's various computers, servers and interdepartmental electronic communications.

Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements include a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The City's Fiduciary Funds represent the Private Purpose Trust Fund and Custodial Fund.

The City reports the following activities:

Custodial Funds - These funds account for assets held by the City in a fiduciary capacity for individuals, private organizations, and other governments that are not held in trusts or equivalent arrangements.

RDA Successor Agency Private Purpose Trust Fund - This fund is used to account for non-housing activities of the Successor Agency to the Shafter Community Development Agency.

C. Cash, Cash Equivalents and Investments
The City pools its available cash for investment purposes. The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as Cash and Investments.

Certain disclosure requirements for Deposits and Investment Risks were made in the following areas:
i. Interest Rate Risk
ii. Credit Risk
 Overall
 Custodial Credit Risk
 Concentrations of Credit Risk
Highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.
60

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The City participates in an investment pool managed by the State of California titled Local Agency Investment Fund (LAIF), which has invested a portion of the pool funds in Structured Notes and Asset-backed Securities.

LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these Structured Notes and Asset-backed Securities are subject to market risk as to change in interest rates.

For purpose of the statement of cash flows, cash equivalents are defined as investments with original maturities of 90 days or less, which are readily convertible to known amounts of cash. The City considers all pooled cash and investments held by the City as cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all cash and investments with fiscal agent as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.

D. Fair Value Measurement
U.S. GAAP establishes a framework for measuring fair value, and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position, are categorized based upon the level of judgment associated with the inputs used to measure their fair value.

Levels of inputs are as follows:

Level 1 – Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.

Level 2 – Inputs, other than quoted prices included in Level 1, which are observable for the assets or liabilities through corroboration with market data at the measurement date.

Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets or liabilities at the measurement date.

E. Inventories
Inventories consist of material and supplies which are stated at cost using the first-in, first-out method. Inventories are recognized as expenditures when consumed rather than when purchased.

F. Prepaid Items
Certain payments to vendors applicable to future accounting periods are recorded as prepaid items. Prepaid items do not reflect current appropriable resources and, thus, an equivalent portion of fund balance is shown as nonspendable.

G. Interfund Transactions
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” or “advances to/from other funds” (i.e., the current portion of interfund loans). Any residual balances outstanding between the governmental activities and business- type activities are reported in the Governmental-Wide Financial Statements as “internal balances.” H. Capital Assets
Capital assets, which include land, buildings, improvements, equipment and infrastructure assets (e.g. roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business-type activities in the Government-Wide Financial Statements. Capital assets are recorded at historical cost or estimated historical cost if actual cost is not available. Gifts or contributions of capital assets are recorded at acquisition value when received. City policy has set the capitalization threshold for reporting capital assets at $5,000 and for reporting infrastructure assets at $10,000. 61

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Depreciation/amortization is recorded on a straight-line basis over the useful lives of the assets as follows:

Years
Buildings and improvements 10-40
Machinery and equipment 3-40
Infrastructure 15-60
Subscription assets Shorter of the subscription asset's Useful life or the subscription term
Asset Type
The City defines infrastructure as the basic physical assets that allow the City to function. The assets include:
 Street system
 Site amenities such as parking and landscaped areas used by the City in the conduct of its business Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into pavement, curb and gutters, sidewalks, medians, streetlights, traffic control devices (signs, signals and pavement markings), landscaping and land. These subsystems were not delineated in the Basic Financial Statements. The appropriate operating department maintains information regarding the subsystems.

For all infrastructure systems, the City elected to use the Basic Approach for infrastructure reporting. Estimated historical costs were developed in one of three ways: (1) historical records; (2) standard unit costs appropriate for the construction/acquisition date; or (3) present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation, defined as the total depreciation from the date of construction/acquisition to the current date on a straight line, unrecovered cost method was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the estimated historical cost.

I. Interest Payable
In the Government-Wide Financial Statements, interest payable of long-term debt is recognized as the liability is incurred for Governmental Fund types and Proprietary Fund types.

In the Fund Financial Statements, Proprietary Fund types recognize the interest payable when the liability is incurred.

J. Unearned Revenues
In the Government-Wide Financial Statements, unearned revenues is recognized for transactions for which revenue has not yet been earned. Typical transactions recorded as unearned revenues in the Government-Wide Financial Statements are prepaid charges for services.

In the Fund Financial Statements, unearned revenue is recorded when transactions have not yet met the revenue recognition criteria based on the modified accrual basis of accounting. The City records unearned revenue for transactions for which revenues have not been earned, or for which funds are not available to meet current financial obligations. Typical transactions for which unearned revenue is recorded are grants received but not yet earned interest on interfund advances receivable, long-term assessments and loans receivable.

K. Compensated Absences
The City has compensated absences of regular vacation (for all departments) and sick leave (for selected departments based on contractual agreements) which are accounted for in accordance with U.S. GAAP. The City’s liability for vested and unpaid compensated absences that exceed expendable available financial resources for governmental fund types is reported in the Government-Wide Financial Statements. 62

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Compensated absences liabilities of governmental activities are generally liquidated by the General Fund, while the amounts recorded in the business-type activities are liquidated by the fund that originally incurred the expense.

L. Bond Premiums and Discounts
For governmental fund statements, bond premiums and discounts are recognized during the current period. Bond proceeds are reported as other financing sources of the applicable premium or discount.

For government-wide and proprietary fund statements, bond premiums and discounts are deferred and amortized over the life of the bonds using a straight-line method. Bonds payable are reported net of the applicable bond premium or discount.

M. Long-Term Debt
Government-Wide Financial Statements
Long-term debt and other long-term obligations are reported as liabilities in the appropriate activities.

Fund Financial Statements
The Governmental Fund Financial Statements do not present long-term debt but are shown in the Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position.

Proprietary Fund Financial Statements use the same principles as those used in the Government-Wide Financial Statements.

N. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

O. Other Postemployment Benefits (OPEB)
For purposes of measuring the Total OPEB liability, deferred outflows of resources and deferred inflows of resources related to pensions, and OPEB expense, information about the fiduciary net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are reported by the plans (Note 10).

CalPERS
Valuation date June 30, 2021
Measurement date June 30, 2022
Measurement period July 1, 2021 to June 30, 2022
63

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The following timeframes are used for OPEB reporting:

P. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expenses/expenditure) until then. The City has several items that qualify for reporting in this category that are deferred items related to pensions and OPEB.

In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has several items that qualify for this category, a deferred gain on refunding results from the difference in the carrying value of the refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. There are also several items that qualify for reporting in this category related to pensions and OPEB.

Q. Net Position
In the Government-Wide Financial Statements and the proprietary fund financial statements, Net Position are classified in the following categories:

Net Investment in Capital Assets - This component of net position consists of capital assets, net of accumulated depreciation/amortization, reduced by outstanding balances of debt and deferred gain on refinancing that are attributed to the acquisition, construction, or improvement of those assets.

Restricted - This component of net position consists of restricted assets reduced by liabilities and deferred outflows/inflows of resources related to those assets.

Unrestricted - This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position.

R. Fund Balances
In the Governmental Fund Financial Statements fund balances are classified in the following categories:

Nonspendable - Items that cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds.

Restricted - Restricted fund balances encompass the portion of net resources subject to externally enforceable legal restrictions. This includes externally restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation.

OPEB
Valuation date June 30, 2022
Measurement date June 30, 2022
Measurement period July 1, 2021 to June 30, 2022
64

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Committed - Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself (resolution or ordinance) at its highest level of decision making, normally the governing body and that remain binding unless removed in the same manner. The City Council is considered the highest authority for the City.

Assigned - Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The City Council has authorized the City Manager and the Director of Finance for that purpose. The City Council may also assign fund balance, however, unlike commitments, assignments generally only exist temporarily, and additional action does not normally have to be taken for the removal of an assignment.

Unassigned - These are either residual positive net resources of the General Fund in excess of what can properly be classified in one of the other categories, or negative balances in all other funds.

S. Spending Policy
Government-Wide Financial Statements and the Proprietary Fund Financial Statements When an expense is incurred for purposes for which both restricted and unrestricted Net Position are available, the City’s policy is to apply restricted Net Position first.

Governmental Fund Financial Statements
When expenditures are incurred for purposes for which all restricted, committed, assigned and unassigned fund balances are available, the City’s policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance:
 Restricted
 Committed
 Assigned
 Unassigned
T. Property Taxes
In 1978, a State constitutional amendment (Article XIIIA) provided that the ad valorem real property tax rate be limited to 1% of market value and be levied only by the county and shared with all other jurisdictions. The County of Kern collects the property taxes and distributes them to taxing jurisdictions on the basis of the taxing jurisdictions’ assessed valuation, subject to adjustments for voter-approved debt. Property taxes are formally due on November 1 and February 1 and become delinquent as of December 10 and April 10, respectively. Taxes become a lien on the property effective March 1 of the preceding year.

U. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted of the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets, deferred outflows of resources, liabilities, deferred inflows of resources and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.

V. Leases
Lessee - The City is a lessee for noncancellable leases of equipment. The City recognizes a lease liability and an intangible right-to-use lease asset (lease asset) in the financial statements. The City recognizes lease liabilities with an initial, individual value of $10,000 or more.
65

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the right-to-use lease asset is amortized on a straight-line basis over its useful life.

Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments.  The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
 The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

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

Right-to-use lease assets are reported with other capital assets and lease liabilities are reported with long-term debt on the statement of net position.

The City did not have any lessee to implement and recognize in FY22/23.

Lessor - The City is a lessor for a noncancellable lease of a cell tower site. The City recognizes a lease receivable and a deferred inflow of resources in the financial statements.

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

Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses its estimated incremental borrowing rate as the discount rate for leases.  The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

W. Subscription-Based Information Technology Arrangements The City is a subscriber for a noncancellable subscription of information technology services. The City recognizes a subscription liability and an intangible right-to-use subscription asset (subscription asset) in the government-wide financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or more.

At the commencement of a subscription, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription 66

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to subscriptions include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) lease term, and (3) subscription payments.
 The City uses the interest rate charged by the vendor as the discount rate. When the interest rate charged by the vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for subscriptions.
 The subscription term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liability are composed of fixed payments that the City is reasonably certain to exercise.

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

Subscription assets are reported with other capital assets and subscription liabilities are reported with long-term debt on the statement of net position.

X. New Accounting Pronouncements
GASB Statement No. 91
In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures.

Application of this statement is effective for the City’s fiscal year ending June 30, 2023.

GASB Statement No. 92
In January 2020, GASB issued Statement No. 92, Omnibus 2020. The primary objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve consistency of authoritative literature by addressing practice issues that have been identified during implementation and application of certain GASB Statements. Application of this statement is effective for the City’s fiscal year ending June 30, 2022.

GASB Statement No. 93
In March 2020, GASB issued Statement No. 93, Replacement of Interbank Offered Rates. Some governments have entered into agreements in which variable payments made or received depend on an interbank offered rate (IBOR)—most notably, the London Interbank Offered Rate (LIBOR). As a result of global reference rate reform, LIBOR is expected to cease to exist in its current form at the end of 2022, prompting governments to amend or replace financial instruments for the purpose of replacing LIBOR with other reference rates, by either changing the reference rate or adding or changing fallback provisions related to the reference rate. The objective of this Statement is to address those and other accounting and financial reporting implications that result from the replacement of an IBOR. Application of this statement is effective for the City’s fiscal year ending June 30, 2022. 67

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 1: REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) GASB Statement No. 94
In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements. The primary objective of this Statement is to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). As used in this Statement, a PPP is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction. Application of this statement is effective for the City’s fiscal year ending June 30, 2023.

GASB Statement No. 96
In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements. This Statement provides guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA.

Application of this statement is effective for the City’s fiscal year ending June 30, 2023.

Y. Upcoming Governmental Accounting Standards Implementation The City is currently analyzing its accounting practices to determine the potential impact on the financial statements for the following GASB statements:

GASB Statement No. 99
In April 2022, GASB issued Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. Application of this statement is effective for the City’s fiscal years ending June 30, 2023 and June 30, 2024.

GASB Statement No. 100
In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. Application of this statement is effective for the City’s fiscal year ending June 30, 2024.

GASB Statement No. 101
In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. Application of this statement is effective for the City’s fiscal year ending June 30, 2025.
68

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2: CASH AND INVESTMENTS
The following is a summary of pooled cash and investments, including cash and investments with fiscal agents at June 30, 2023.

Cash and investments consisted of the following at June 30, 2023:

A. Deposits
At June 30, 2023, the carrying amount of the City’s deposits was $9,127,570 and the bank balances were $12,475,334. The total bank balance was covered by federal depository insurance or by collateral held by the City’s agent in the City’s name.

B. Risks Disclosures
Interest Rate Risk
As a means of limiting its exposure to fair value losses arising from rising interest rates, the City’s investment policy provides that final maturities of securities cannot exceed five years. However, under the investment policy, reserve funds may be invested in securities exceeding five years if the maturity of such investments is made to coincide as nearly as practicable with the expected use of the funds. Specific maturities of investments depend on liquidity needs. At June 30, 2023, the City’s pooled cash and investments had the following maturities:

Fiduciary
Funds
Governmental Business-Type Statement of
Activities Activities Total Net Position Total
Cash and investments 107,071,072 $ 6,580,445 $ 113,651,517 $ 928,040 $ 114,579,557 $ Cash and investments with fiscal agent - - - 555 555
Total cash and investments 107,071,072 $ 6,580,445 $ 113,651,517 $ 928,595 $ 114,580,112 $ Government-Wide Statement of Net Position
Cash:

Cash on hand 5,759 $
Deposits with financial institution 9,127,570
Total cash 9,133,329
Investments
Investments 105,446,228
Investments held by bond trustee 555
Total investments 105,446,783
Total cash and investments 114,580,112 $
69

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
Credit Risk
It is the City’s policy that commercial paper have a rating of “A-1” or higher by a nationally recognized statistical rating organization (NRSRO) and with a maturity date not exceeding 270 days from the date of purchase.

Medium- term notes, with a final maturity not exceeding four years from the date of purchase, must have a rating of AA or the equivalent by a NRSRO. Medium-term notes with a final maturity exceeding four years from the date of purchase shall be rated at least AA or the equivalent by a NRSRO at the time of purchase. According to the City’s investment policy, the aggregate investment in medium-term notes will not exceed 30% of the City’s total portfolio or 5% per issuance. Federal instrumentalities must have a rating of AA or the equivalent by a NRSRO at the time of purchase. The Local Agency Investment Fund (LAIF), administered by the State of California, has a separate investment policy, governed by Government Code Sections 16480-16481.2, that provides credit standards for its investments.

At June 30, 2023, the City’s pooled cash and investments had the following credit risk:

Custodial Credit Risk
All pooled certificates of deposit and bank balances are entirely insured or collateralized. The California Government Code requires California banks and savings and loan associations to secure an agency’s deposits by pledging government securities as collateral. The market value of the pledged securities must equal at least 110% Total 1 year or less 1-3 years 3-5 years 5+ years
$ 9,768,401 9,768,401 $ - $ - $ - $
6,124,945 6,124,945 - - -
1,427,783 1,427,783 - - -
988,930 13,240,978 5,707,000 6,545,048 -
177,791 177,791 - - -
17,932,549 47,236,260 13,741,310 15,562,401 -
- 1,250,584 1,250,584 - -
9,858,127 19,271,709 7,325,489 2,088,093 -
- 62,385 - - 62,385
1,169,439 6,885,392 1,495,208 4,220,745 -
Money Market Mutual Funds 555 555 - - -
Total Investments 105,446,783 $ 47,448,520 $ 29,519,591 $ 28,416,287 $ 62,385 $ Savings Plan
Investment Maturities
Investment Type
Local Agency Investment Fund
Money Market
Certificate of Deposit
California CLASS
Held by Bond Trustee
U.S. Government Agency Securities
Non U.S. Government
Agency Securities
Corporate Securities
Mortgage Backed Securities
Municipal Securities
Total
Minimum
Legal Rating
Ratings at Year
End
AA or AAA
Ratings at Year
End
A/A-1 Not Rated
$ N/A - 9,768,401 $ - $ 9,768,401 $
N/A - 6,124,945 - 6,124,945
N/A - 1,427,783 - 1,427,783
A-1 2,228,979 13,240,978 1,731,000 9,280,999
AA+ - 177,791 - 177,791
N/A 47,236,260 47,236,260 - -
A - 1,250,584 - 1,250,584
AA 16,222,672 19,271,709 2,800,037 249,000
N/A 62,385 62,385 - -
N/A 6,885,392 6,885,392 - -
Money Market Mutual Funds 555 AA 555 - -
Total Investments 105,446,783 $ 72,636,243 $ 4,531,037 $ 28,279,503 $ Held by Bond Trustee
Investment Type
Local Agency Investment Fund
Money Market
Certificate of Deposit
Savings Plan
U.S. Government Agency Securities
Non U.S. Government
Agency Securities
Corporate Securities
Mortgage Backed Securities
Municipal Securities
California CLASS
70

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
of an agency’s deposits. California law also allows financial institutions to secure local agency deposits by pledging first trust deed mortgage notes having a value of 150% of a local agency’s deposits. The City may waive collateral requirements for deposits which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC).

For an investment, custodial credit risk is the risk that, in the event of the failure of the counter party, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. All securities, with the exception of the Certificates of Deposits, money market funds and LAIF, are held by a third-party custodian (Union Bank of California Trust Division). Union Bank is a registered member of the Federal Reserve Bank.

The securities held by Union Bank are in street name, and an account number assigned to the City identifies ownership. The City makes all investment purchases, other than LAIF, money market, and Certificates of Deposits, on a Delivery versus Payment (DVP) basis as an additional protection against custodial credit risk.

Concentration of Credit Risk
With the exception of LAIF, the City’s investment policy contains limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. With the exception of LAIF, the City has not invested more than 5% of its total investment value with any one issuer.

C. External Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by the California Government Code under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based on the City’s pro rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. LAIF is not registered with the Securities and Exchange Commission and is not rated. Deposits and withdrawals in LAIF are made on the basis of $1 and not fair value. Accordingly, the City’s investment in this pool is measured on uncategorized inputs not defined as Level 1, 2, or 3.

NOTE 3: FAIR VALUE MEASUREMENTS
GASB Statement No. 72, Fair Value Measurement and Application establishes general principles for measuring fair value and standards of accounting and financial reporting for assets and liabilities measured at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset. 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. With the exception of LAIF which is uncategorized, all of the City’s investments are valued using Level 2 inputs.
71

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 3: FAIR VALUE MEASUREMENTS (CONTINUED)
Fair value of assets measured on a recurring basis at June 30, 2023, are as follows:

NOTE 4: INTERFUND BALANCES AND TRANSACTIONS
Due to/Due from Other Funds
As of June 30, 2023, interfund receivables and payables were as follows:

Current interfund balances arise in the normal course of operations to cover cash shortages and are expected to be repaid shortly after the end of the fiscal year.

June 30, 2023 Level 2
Investments measured by fair value level:

Negotiable certificates of deposit 16,753,733 $ 16,753,733 $ U.S. Government Agency Securities 47,236,260 47,236,260 Non U.S. Government Agency Securities 1,250,584 1,250,584 Corporate Securities 8,820,712 8,820,712
Mortgage Backed Securities 62,385 62,385
Municipal Securities 6,885,392 6,885,392
Total Investments by fair value level 81,009,066 81,009,066 $ Investments not subject to the fair value hierarchy:

Local agency investment funds - State of CA 9,768,401
Money market mutual funds 1,428,338
Certificate of deposit 13,240,978
Total investments not subject to the fair value hierarchy 24,437,717 Total investments 105,446,783 $
Receivable Fund Amount Purpose
General Fund Transportation Fund $ 509,442 Overdrawn Cash General Fund Housing and Community Development Overdrawn Cash 3,887 General Fund Landscape and Lighting District 117,016 Overdrawn Cash General Fund Rail Spur Services Fund 1,551,747 Overdrawn Cash General Fund Transit Services Fund 193,726 Overdrawn Cash General Fund Fiber Optic & Communication Tower Fund 616,269 Overdrawn Cash General Fund Building Maintenance Overdrawn Cash 12,030 General Fund Liability Coverage Overdrawn Cash 4,995
General Fund Vehicle Maintenance Overdrawn Cash 58,222
General Fund Information Technology Overdrawn Cash 63,036 Total $ 3,130,370
Payable Fund
72

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 4: INTERFUND BALANCES AND TRANSACTIONS (CONTINUED) Transfers In/Out
Interfund transfers for the year ended June 30, 2023 were as follows:

Transfers were made from Other Governmental Funds to General, Road Maintenance and Rehabilitation Act, Water Services, Wastewater Services, and Information Technology Fund for $981,470 for administration costs.

NOTE 5: CAPITAL ASSETS
A. Governmental Activities
Summary of changes in capital assets for governmental activities for the year ended June 30, 2023 are as follows:

Transfers In Amount Purpose
General Fund Other Governmental Funds 516,564 Administrative Costs Subtotal 516,564
Non-Major Governmental Funds Other Governmental Funds 417,308 Administrative Costs Subtotal 417,308
Water Services Other Governmental Funds 33,817 Administrative Costs Subtotal 33,817
Wastewater Services Other Governmental Funds 13,506 Administrative Costs Subtotal 13,506
Information Technology Other governmental funds Administrative Costs 275 Subtotal 275
Total $ 981,470
Transfers Out
Balance
July 1, 2022 Additions Deletions
Balance
June 30, 2023
Capital assets, not being depreciated/amortized
$ 9,694,125 $ - $ 9,694,125 - $
80,431 928,988 1,009,419 -
Total capital assets, not being depreciated/amortized 9,774,556 928,988 10,703,544 - Capital assets, being depreciated/amortized
Buildings and Improvements 31,304,401 - 31,304,401 -
Improvements, other than buildings 5,895,852 2,927 5,898,779 - Machinery and Equipment 3,831,260 249,008 4,080,268 -
Automotive equipment 3,004,604 572,231 (75,287) 3,501,548 Infrastructure 69,520,013 1,579,650 71,099,663 -
Subscription Asset 1,005,546 - 1,005,546 -
Total capital assets, being depreciated/amortized 113,556,130 3,409,362 (75,287) 116,890,205 Accumulated Depreciation/Amortization:

Buildings and Improvements (20,767,686) (811,937) (21,579,623) - Improvements, other than buildings (1,639,346) (243,530) (1,882,876) - Machinery and Equipment (3,113,824) (204,208) (3,318,032) - Automotive equipment (2,533,319) (238,263) 75,287 (2,696,295) Infrastructure (45,012,959) (1,661,496) (46,674,455) -
Subscription Asset (154,237) - (154,237) -
Total accumulated depreciation/amortization (73,067,134) (3,313,671) 75,287 (76,305,518) Total capital assets, being depreciated/amortized, net 40,488,99 6 95,691 40,584,687 - Total capital assets, net $ 50,263,552 $ 1,024,679 $ 51,288,231 - $ Land
Construction in Progress
73

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 5: CAPITAL ASSETS (CONTINUED)
Depreciation expense was charged to functions/programs as follows:

B. Business-Type Activities
Summary of changes in capital assets for business-type activities for the year ended June 30, 2023 are as follows:

Depreciation/amortization expenses for business-type activities for the year ended June 30, 2023 are as follows:

General government $ 108,120
Public safety 438,186
Public Works 2,234,489
Culture and recreation 408,549
Internal Service Funds 124,327
Total depreciation/amortization expenses $ 3,313,671
Balance
July 1, 2022 Additions Deletions
Balance
June 30, 2023
Capital assets, not being depreciated/amortized
$ - 628,861 $ - $ 628,861 $
2,129,022 1,024,539 3,153,561 -
Total capital assets, not being depreciated/amortized 2,757,883 1,024,539 3,782,422 - Capital assets, being depreciated/amortized
Buildings and Improvements 6,821,633 - 6,821,633 -
Improvements, other than buildings 2,682,991 - 2,682,991 - Machinery and Equipment 5,630,250 123,272 5,753,522 -
Automotive equipment 2,273,903 115,627 (918,478) 1,471,052 Infrastructure 59,729,700 617,101 60,346,801 -
Subscription Asset 126,570 - 126,570 -
Total capital assets, being depreciated/amortized 77,138,477 982,570 (918,478) 77,202,569 Accumulated Depreciation/amortization:

Buildings and Improvements (3,682,456) (171,690) (3,854,146) - Improvements, other than buildings (630,240) (92,155) (722,395) - Machinery and Equipment (2,597,168) (337,609) (2,934,777) - Automotive equipment (1,821,608) (168,470) 806,784 (1,183,294) Infrastructure (25,758,383) (1,700,889) (27,459,272) -
Subscription Asset (23,515) - (23,515) -
Total accumulated depreciation/amortization (34,489,855) (2,494,328) 806,784 (36,177,399) Total capital assets, being depreciated/amortized, net 42,648,62 2 (1,511,758) (111,694) 41,025,170 Total capital assets, net $ 45,406,505 $ (487,219) $ (111,694) $ 44,807,592 Land
Construction in Progress
Water Services $ 1,070,857
Wastewater Services 832,253
Rail Spur Services 279,920
Refuse Collection Services 82,538
Transit Services 75,916
Fiber Optic & Communication Tower 152,844
Total depreciation/amortization expenses $ 2,494,328
74

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 6: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS A. Lease Receivable and Inflows of Resources
The City, as a lessor, had entered into 87 lease agreements involving land and infrastructure. Out of these, 21 are qualified leases under GASB Statement No. 87. The related receivables of these leases were initially measured on July 1, 2021, with the City’s adoption of the new lease standards. The City also had deferred inflows of resources during the fiscal year totaling $3,025,257. This total includes $345,067 of lease revenue, $47,142 of interest revenue and $10,121 of variable and other payments excluded in the initial measurement of the lease receivables.

The following is a summary of the 21 qualified leases and description of the lease arrangements:

Land Leases - The City is the lessor for 4 ground lease agreements related to land including railroad track, certain tide and submerged lands with varied terms and the latest expiring on December 31, 2015. Interest rates vary between .947% to 1.802%. Total payments for the current year ranged from $5,265 to $32,000.

Infrastructure Leases - The City entered into 17 lease agreements with fiber optic networks for commercial fiber user fees related to telecommunications. These agreements are for the installation, operation, and maintenance of telecommunication sites, mounting structures and equipment associated with the transmission and reception of radio communication signals. These agreements are all qualified leases under GASB Statement No. 87 with periods covering various ranges and the latest expiring on August 2, 2039. Interest rates range from 0.308% to

1.612%. Total payments for the current year varied from $145 to $25,000.

Future annual lease receivables as of June 30, 2023, are as follows:

Balance Principal Balance Lease Interest
Lease at 6/30/2022 Payments at 6/30/2023 Revenue Revenue Land $ 1,293,442 $ (157,539) $ 1,135,903 $ 197,574 $ 17,689 Infrastructure 2,115,516 (139,679) 1,975,837 147,493 29,453 Total $ 3,408,958 $ (297,218) $ 3,111,740 $ 345,067 $ 47,142 Lease Receivable Inflows of Resources
Fiscal Year Ended
June 30 Principal Interest Total
2024 $ 160,286 $ 13,191 $ 173,477
2025 163,093 11,402 174,495
2026 165,962 9,583 175,545
2027 168,892 7,733 176,625
2028 114,577 5,866 120,443
2029-2033 300,395 15,533 315,928
2034-2038 62,698 487 63,185
Total $ 1,135,903 $ 63,795 $ 1,199,698
Governmental Activities
75

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 6: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED)
The remaining 13 agreements that are not qualified under GASB Statement No. 87 are either short-term in nature, do not meet the City’s threshold or outside the scope of the standard. These non-qualified lease agreements have not been recognized and measured as part of the City’s lease receivable, and the receipts related to these agreements are recognized as revenue as appropriate under standard GAAP revenue recognition rules.

B. Subscription-Based Information Technology Arrangements The City implemented GASB Statement No. 96 in the fiscal year ended June 30, 2023. The primary objective of this statement is to enhance the relevance and consistency of information about governments' subscription based-information technology arrangement (SBITA) activities. This statement establishes a single model for SBITA accounting based on the principle that SBITAs are financings of the right to use an underlying asset.

Under this Statement, a subscriber is required to recognize a subscription liability and an intangible right-to-use subscription asset, For additional information, refer to the disclosures below.

The City has entered into various SBITAs as the subscriber for the use of Software. An initial subscription liability was recorded in the amount of $178,950 during the current fiscal year. The terms of these subscriptions range from 16 to 72 months. As of June 30, 2023, the total value of the subscription liability was $880,709. The City is required to make annual principal and interest payments ranging from $42 to $38,500. The subscriptions have interest rates ranging from 1.85% to 3.25%. Information on the subscription assets as of June 30, 2023 are as follows:

Fiscal Year Ended
June 30 Principal Interest Total
2024 $ 128,829 $ 30,786 $ 159,615
2025 105,631 29,375 135,006
2026 107,558 27,971 135,529
2027 112,171 26,496 138,667
2028 94,556 25,008 119,564
2029-2033 480,070 103,384 583,454
2034-2038 473,638 64,396 538,034
2039-2043 341,164 27,791 368,955
2044-2046 132,220 3,608 135,828
Total $ 1,975,837 $ 338,815 $ 2,314,652
Business-Type Activities
Amount of
SBITA Capital Accumulated
Assets Amortization
$ 1,005,546 $ 154,238
Subtotal - governmental activities $ 1,005,546 $ 154,238 Governmental Activities
Subscription Type
Software as a service
76

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 6: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED)
The future principal and interest subscription payments as of June 30, 2023, were as follows:

Amount of
SBITA Capital Accumulated
Assets Amortization
$ 23,515 126,570 $
Subtotal - business activities 126,570 $ 23,515 $
Total 1,132,116 $ 177,753 $
Subscription Type
Software as a service
Business-type Activities
Balance
July 1, 2022 Additions Deletions
Balance
June 30,
2023
Due Within
One Year
Governmental Activities 160,843 840,902 217,754 783,991 185,696 Business-type Activities 18,107 108,461 29,850 96,718 28,157 Total $ 178,950 $ 949,363 $ 247,604 $ 880,709 $ 213,853 Fiscal Year
Ending
June 30, Principal Interest Principal Interest Principal Interest 2024 185,696 $ 15,302 $ 28,157 $ 5,553 $ 213,853 $ 20,856 $ 2025 173,388 11,945 19,481 3,913 192,870 15,858
2026 172,964 8,845 19,863 2,471 192,827 11,316
2027 124,440 5,675 14,474 1,075 138,914 6,749
2028 127,504 2,875 14,741 543 142,245 3,418
Totals 783,991 $ 44,642 $ 96,718 $ 13,554 $ 880,709 $ 58,196 $ Governmental Activities Business-type Activities Total
77

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 7: LONG-TERM DEBT
The City’s long-term debt payable for the business-type activities, and fiduciary funds at June 30, 2023 are as follows:

A. Governmental Activities
There is currently no governmental activities long-term debt at June 30, 2023.

B. Business-Type Activities
Summary of changes in business-type activities long-term debt for the year ended June 30, 2023 are as follows:

Santa Fe Reach - Capacity - Loan Agreement - Wastewater Enterprise - Original Amount $966,222 A loan agreement was entered into in July, 2003, with North of the River Sanitary District (District) to purchase pipeline capacity in their regional wastewater collection pipeline. The City purchased this capacity from the District for the Santa Fe Reach project. The terms of the agreement are based on semi-annual payments at a rate of

4.0% per annum for a twenty (20) year term. The principal amount outstanding as of June 30, 2023 was $68,038.

The annual debt service requirements on the loan agreement outstanding at June 30, 2023, were as follows:

Year Ending
June 30, Principal Interest Total
2024 68,038 $ 2,052 $ 70,090 $
Total 68,038 $ 2,052 $ 70,090 $
78

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 7: LONG-TERM DEBT (CONTINUED)
2013 Refunding Revenue Bonds - Original Issue $690,161
In February 2013, the $8,110,000 principal amount of the 2013 Refunding Revenue Bonds was issued to refund the 2003 Refunded Revenue Bonds issue which is owned by North of the River Sanitary District (District), County of Kern (County), and the City. A joint exercise of powers agreement was entered into on February 6, 1990, with the District and County for the issuance of the bonds and the operation of the sewage system. The bonds mature annually through May 1, 2023. The interest on the bonds is payable semi-annually on May 1 and November 1.

The interest rate on the bonds ranges from 2.0% to 4.4%. The City is obligated contractually to remit to the District its 8.51% share of all principal and interest payments over the 11 year life of the bonds. Therefore, the City’s portion of the original principal amount of the bonds is $629,315. Under the Indenture, the principal due on the Bonds is subject to acceleration upon the occurrence of an event of default. The Trustee shall apply amounts on deposit in the funds and accounts in accordance with the Indenture. The loan was paid off as of June 30, 2023.

C. Fiduciary Funds
Summary of changes in fiduciary funds long-term debt for the year ended June 30, 2023 are as follows:
2016 Refunding Tax Allocation Bonds, Series A – Original Issue $12,530,000 On December 28, 2016, the Agency issued Successor Agency to the Shafter Community Development Agency Taxable Tax Allocation Refunding Bonds, 2016 Series A in the amount of $12,530,000, maturing through 2036 in annual principal payments ranging in amounts from $470,000 to $880,000. Interest is payable semi-annually ranging from 1.375% to 4.375%. The proceeds of the bonds were used to decrease the 2006 Tax Allocation Bonds Series A Project Area No. 1 original issue $9,150,000 and 2006 Tax Allocation Bonds Series A Project Area No. 2 original issue $6,685,000. The bonds are secured by pledged tax revenues on the taxable property within the former Shafter Community Development Project Area. Bonds outstanding at June 30, 2023 were $9,535,000.

In the event of default, bond owners will be limited to enforcing the obligation of the Agency to repay the Bonds on an annual basis to the extent of the Pledged Tax Revenues. No real or personal property in the Project Areas is pledged to secure the Bonds, and it is not anticipated that the Agency will have available moneys sufficient to redeem all of the Bonds upon the occurrence of an Event of Default.

Balance
July 1, 2022 Additions Deletions
Balance
June 30, 2023
Amount Due
Within One
Year
Amount Due In
More Than One
Year
2016 Refunding Tax Allocation Bonds,
Series A $ 10,050,000 $ (515, - $ 000) $ 9,535,000 $ 525,000 $ 9,010,000 Less Deferred Amounts
Bond discounts (163,859) - 11,300 (152,559) (152,559) - Total $ 9,886,141 $ (503, - $ 700) $ 9,382,441 $ 525,000 $ 8,857,441 79

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 7: LONG-TERM DEBT (CONTINUED)
The annual debt service requirements on the loan outstanding at June 30, 2023, were as follows:

NOTE 8: COMPENSATED ABSENCES
Summary of changes in compensated absences for the year ended June 30, 2023 is as follows:

NOTE 9: NON-CITY OBLIGATION
The following bond issues are not reported in the City’s financial statements, because they are special obligations payable solely from and secured by specific revenue sources described in the resolutions and official statements of the respective issues. Neither the faith and credit nor the taxing power of the City, the County, the State of California, or any political subdivision thereof, is pledged for payment of these bonds.

Assessment Bonds - Original Issue $155,143
On December 21, 1994, the City issued a Limited Obligation Improvement Bond, Assessment District No. 92-1, for the North Park/North Shafter Water Project. The principal amount of $155,143 and matures in increments through 2034 in semi-annual principal payments ranging in amounts from $1,253 to $8,100. Interest is payable semi-annually at 4.5% per annum. The principal amount of bonds outstanding at June 30, 2023, was $77,500.

Variable Rate Demand Industrial Development 1999 Revenue Bonds - Original Issue $3,500,000 On June 2, 1999, the Shafter Industrial Development Authority issued the Variable Rate Demand Industrial Development Revenue Bonds, Series 1999 in the amount of $3,500,000. The principal amount matures in increments through 2029 in annual principal payments ranging in amount from $65,000 to $195,000. The bonds bear a variable interest rate. The outstanding amount of the bonds at June 30, 2023 was $995,000.

Year Ending
June 30, Principal Interest Total
2024 $ 525,000 $ 379,509 $ 904,509
2025 545,000 362,450 907,450
2026 565,000 344,060 909,060
2027 585,000 324,288 909,288
2028-2032 3,265,000 1,235,032 4,500,032
2033-2037 4,050,000 455,924 4,505,924
Total $ 9,535,000 $ 3,101,263 $ 12,636,263
Balance
July 1, 2022 Additions Deletions
Balance
June 30, 2023
Due Within
One Year
Governmental Acitivies 789,973 $ 1,797,053 $ (1,686,524) $ 900,502 $ 765,427 $ Business-Type Activies 172,673 373,712 (383,826) 162,559 138,176 Total 962,646 $ 2,170,765 $ (2,070,350) $ 1,063,061 $ 903,603 $ Original
Amount
Outstanding
Balance
June 30, 2023
Assessment Bonds $ 155,143 $ 77,500
Variable Rate Demand Industrial
Development 1999 Revenue Bonds 3,500,000 995,000
Total $ 3,655,143 $ 1,072,500
80

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10: PENSION PLANS
A. General Information about the Pension Plans
Plan Descriptions
All qualified permanent and probationary employees are eligible to participate in either the City’s Miscellaneous Employee Pension Plan (Miscellaneous Plan) or Safety Employee Pension Plan (Safety Plan), both of which are cost-sharing multiple employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS). Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

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 of the Miscellaneous Plan and Safety Plan with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death 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.

Benefits Provided
The Plans’ provisions and benefits in effect at June 30, 2021, measurement date, are:

Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.0% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments Monthly for life Monthly for life
Retirement age 50 - 55 52 - 67
Monthly benefits, as a % of eligible
compensation 2.00% 2.00%
Required employee contribution rates 7.000% 6.985%
Required employer contribution rates 10.880% 6.985%
Final annual compensation 1 year 1 year
Hire date
Prior to
January 1, 2013
On or after
January 1, 2013
Benefit formula 2.5% @ 55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments Monthly for life Monthly for life
Retirement age 50 50 - 63
Monthly benefits, as a % of eligible 20% to 2.5% 1.092% to Required employee contribution rates 7.000% 13.034%
Required employer contribution rates 21.790% 13.130%
Final annual compensation 1 year 1 year
Miscellaneous
Safety
81

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10: PENSION PLANS (CONTINUED)
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS. 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.

For the year ended June 30, 2023, the contributions recognized as part of pension expense for each Plan were as follows:

B. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30, 2023, the City reported net pension liabilities for its proportionate shares of the Net Pension Liability/(Asset) of the Plans as follows:

The City’s net pension liability/(asset) for each Plan is measured as the proportionate share of the net pension liability/(asset). The net pension liability/(asset) of each of the Plans is measured as of June 30, 2021, and the total pension liability/(asset) for each Plan used to calculate the net pension liability/(asset) 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/(asset) was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The City’s proportionate share of the net pension liability/(asset) for each Plan as of June 30, 2021 and 2022 was as follows:

Miscellaneous Safety Total
Contributions - employer $ 569,834 $ 453,710 $ 1,023,544 Miscellaneous Safety Total
Proportionate share of net pension liability/(asset) 1,618,281 $ $ 885,312 $ 2,503,593 Miscellaneous Safety Total
Proportion - June 30, 2021 0.00000% -0.00013% -0.00013% Proportion - June 30, 2022 0.00035% -0.00078% -0.00043% Change - Increase(Decrease) 0.00035% -0.00065% -0.00030% 82

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10: PENSION PLANS (CONTINUED)
For the year ended June 30, 2023, the City recognized pension expense/(income) of $14,245,696.

At June 30, 2023, 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
Contribution made after the measurement date $ 569,834 $ - Difference between expected and
actual experiences 32,498 (21,766)
Change of assumption 165,827 -
Net difference between projected and actual
earnings on pension plan investments 296,426 -
Adjustment due to differences in proportions 6,665,831 - Differences between contributions
and proportionate share - (2,347,847)
Total $ 7,730,416 $ (2,369,613)
Miscellaneous Plan
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Contribution made after the measurement date 453,710 $ - $ Difference between expected and
actual experiences 36,640 (9,614)
Change of assumption 89,266 -
Net difference between projected and actual
earnings on pension plan investments 139,803 -
Adjustment due to differences in proportions 2,126,787 - Differences between contributions
and proportionate share - (1,143,997)
Total $ (1,153,611) 2,846,206 $
Safety Plan
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Contribution made after the measurement date 1,023,544 $ - $ Difference between expected and
actual experiences 69,138 (31,380)
Change of assumption 255,093 -
Net difference between projected and actual
earnings on pension plan investments 436,229 -
Adjustments due to differences in proportions 8,792,618 - Differences between contributions
and proportionate share - (3,491,844)
Total $ 10,576,622 $ (3,523,224)
Aggregate Total
83

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10: PENSION PLANS (CONTINUED)
For the Miscellaneous Plan and Safety Plan, $569,834 and $453,710, respectively, was reported as deferred outflows of resources related to pensions resulting from City’s contributions subsequent to the measurement date and will be recognized as a reduction of the net pension liability/(asset) in the year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized in pension expense as follows:

Actuarial Assumptions
The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:

Fiscal Period
ended June 30, Miscellaneous Plan Safety Plan
2024 1,749,031 $ 450,227 $
2025 1,744,483 447,968
2026 1,116,151 255,408
2027 181,304 85,282
Total 4,790,969 $ 1,238,885 $
Deferred Outflows/(Inflows) of Resources
Actuarial Cost Method Entry Age Normal in accordance with the requirements of GASB Statement No. 68.

Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by Entry Age and Service
Investment Rate of 6.90%
Mortality Rate Table Derived using CalPERS’ Membership Data for all Funds. The mortality table used was
developed based on CalPERS’ specific data.

The table includes 15 years of mortality
improvements using Society of Actuaries Scale
BB.

Post Retirement Benefit
Increase
Contract COLA up to 2.30% until Purchasing
Power Protection Allowance Floor on
Purchasing Power applies, 2.75% thereafter.

Actuarial Assumptions
84

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10: PENSION PLANS (CONTINUED)
The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2017 valuation were based on the results of a December 2017 actuarial experience study for the period 1997 to 2015. Further details of the Experience Study can be found on the CalPERS website.

Discount Rate
In determining the long-term expected rate of return, CalPERS took into account, both short-term and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. 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 (11-60 years) using a building-block approach.

Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the 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 rounded down to the nearest one quarter of one percent.

The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

The discount rate used to measure the total pension liability was 6.90% for the plan. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. Based on the testing, none of the tested plans run out of assets. Therefore, the current 6.90% discount rate is adequate and the use of the municipal bond rate calculation is not necessary. The long term expected discount rate of 6.90% is applied to all plans in the Public Employees Retirement Fund (PERF). The stress test results are presented in a detailed report called “GASB Crossover Testing Report” that can be obtained from the CalPERS website under the GASB 68 Section.

Asset Class
New Strategic
Allocation
Real Return
Years 1 - 101,2
Global Equity - cap-weighted 30.00% 4.45%
Global Equity - non-cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Estate 15.00% 3.21%
Leverage -5.00% -0.59%
1 An expected inflation of 2.30% was used for this period. 2 Figures are based on the 2021-22 Asset Liability Management study. 85

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 10: PENSION PLANS (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 position liability for the Plan, calculated using the discount rate for each 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:

Pension Plan Fiduciary Net Position
Detailed information about the pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.

C. Payable to the Pension Plan
At June 30, 2022, the City had no outstanding amounts owed to the pension plan for contributions for the year ended June 30, 2023.

NOTE 11: OTHER POST-EMPLOYMENT HEALTH BENEFITS
A. General Information about OPEB
Plan Description
The City provides postemployment health benefits through a single-employer defined benefit plan administered by the City. Employees of the Miscellaneous bargaining group and other non-represented employees, who retire from the City with ten years or more of contiguous City service, are eligible for a Post-Retirement Health Benefit for themselves and spouse or child or children. This benefit is finite in nature and provides for the cost of benefits for one year only. This cost is computed at the rate of the current health care premiums and the current dental premiums, in place at the time of retirement.

Eligibility
Employees of the City are eligible for retiree health benefits if they retire within 120 days of their separation date.

Membership in the plan consisted of the following at June 30, 2022, the date of the latest actuarial valuation:

Discount Rate -
1%

6.15%
Current Discount

6.90%
Discount Rate
+1%

8.15%
Miscellaneous $ 8,302,270 $ 1,618,281 $ (3,880,984)
Safety 3,847,153 885,312 (1,535,324)
Total $ 12,149,423 $ 2,503,593 $ (5,416,308)
Active plan members 75
Retirees 1
Total 76
86

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 11: OTHER POST-EMPLOYMENT HEALTH BENEFITS (CONTINUED) Contributions
The obligation of the City to contribute to the plan is established and may be amended by the Board of Directors.

The Board of Directors has established a policy of funding the actuarially determined contribution (ADC) on a pay as you go basis. For the fiscal year ended June 30, 2023, the City’s average contribution rate was 0.33% of covered - employee payroll. Employees are not required to contribute to the plan.

B. Total OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB Total OPEB Liability
The City’s total OPEB liability was measured as of June 30, 2022. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2022. The total OPEB liability at June 30, 2023 was $996,494.

Actuarial Assumptions
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:

The actuarial assumptions used in the June 30, 2022 valuation were based on the results of an actuarial experience study for the period July 1, 2021 through June 30, 2022.

Discount Rate 3.54%
Inflation 2.50%
Aggregate payroll increases 2.75%
Expected long-term investment rate of return n/a
Mortality, Termination, and Disability CalPERS 2000-2019 Experience Study Mortality Improvement Scale Post-retirement mortality projected fully generational with Scale MP-2021
Healthcare Trend Rate - Non-Medicare An annual healthcare cost trend rate of 8.50% initially reduced by decrements to an ultimate of 3.45% therefore.

Healthcare Trend Rate - Medicare An annual healthcare cost trend rate of 6.25% initially reduced by decrements to an ultimate of 3.45% therefore.
87

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 11: OTHER POST-EMPLOYMENT HEALTH BENEFITS (CONTINUED) Discount Rate
The discount rate used to measure the total OPEB liability was 2.16 percent. This discount rate is the mid-point, rounded to five basis points, of the range of 3-20 year municipal bond rate indices; S&P Municipal bond 20 Year High Grade Rate Index, Bond Buyer 20-Bond GO Index, and Fidelity GO AA 20 Year Bond Index.

Change in the Total OPEB Liability
Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (2.54 percent) or 1-percentage- point higher (4.54 percent) than the current discount rate:

Sensitivity of the Total OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (5.5 percent decreasing to

3.0 percent) or 1-percentage-point higher (7.5 percent decreasing to 5.0 percent) than the current healthcare cost trend rates:

Total OPEB
Liability
Balance at June 30, 2022 (6/30/2021 Measurement Date) 1,229,492 $ Changes Recognized for the Measurement Period:

Service Cost 146,857
Interest on the total OPEB liability 28,421
Differences between expected and actual experience (234,723) Changes of assumptions (52,435)
Benefit payments (121,118)
Net Changes during July 1, 2021 to June 30, 2022 (232,998) Balance at June 30, 2023 (6/30/22 Measurement Date) $ 996,494 Discount Rate -1% Current Discount Discount Rate +1%

2.54% 3.54% 4.54%
$ 1,080,936 $ 996,494 $ 917,519
Plan's Total OPEB Liability/(Asset)
Healthcare Cost Healthcare Cost Healthcare Cost
Trend Rate -1% Trend Rate Trend Rate +1%
$ 996,494 873,440 $ 1,144,042 $
Plan's Total OPEB Liability/(Asset)
88

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 11: OTHER POST-EMPLOYMENT HEALTH BENEFITS (CONTINUED) OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB For the fiscal year ended June 30, 2023, the City recognized OPEB expense of $369,592. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

The difference between projected OPEB plan investment earnings and actual earnings is amortized over a five year period. The remaining gains and losses are amortized over the expected average remaining service life. The expected average remaining service life is 12.0 years, which was determined as of July 1, 2021, the beginning of the measurement period, for employees covered by the OPEB plan benefit terms as of the valuation date.

Amount reported as deferred outflows of resources related to OPEB will be recognized as future OPEB expense as follows:

NOTE 12: RISK MANAGEMENT AND SELF-INSURANCE
The City participates with other public entities in a joint venture under a joint 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. All funds of the City, including the enterprise funds, are included in the above risk management and self-insurance program.

The City is covered for the first $1,000,000 of each general liability claim and $500,000 of each workers’ compensation claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on an estimated claims liabilities formula which, among other expenses, includes reported and incurred but not reported (IBNR) claims, and charges the City’s account for liability losses under $25,000 and workers’ compensation losses under $50,000.

The CSJVRMA participates in an excess pool which provides general liability coverage from $1,000,000 to $29,500,000 and workers’ compensation coverage from $500,000 to the statutory limit. The City has had no settlements which exceeded insurance coverage in the last ten fiscal years, and no changes in insurance coverage from the prior year. The City’s deductible amount is included with the premiums.

Deferred Outflows
of Resources
Deferred Inflows
of Resources
Changes of assumptions 174,975 $ 62,003 $
Differences between expected and actual experience 100,631 307,006 Employer contributions made subsequent
to the measurement date 71,575 -
$ 369,009 347,181 $
Measurement
Period Ended
June 30,
Deferred
Outflows/(Inflows) of
Resources
2024 $ 757
2025 757
2026 757
2027 (511)
2028 (1,232)
Thereafter (93,931)
Total $ (93,403)
89

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 12: RISK MANAGEMENT AND SELF-INSURANCE (CONTINUED) The CSJVRMA is a consortium of fifty-four (54) cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets 3 per year, consisting of one member appointed by each member city. The day-to-day business is handled by a management group employed by CSJVRMA. At the termination of the joint powers agreement and after all claims has been settled, any excess or deficit will be divided among the cities in accordance with its governing documents. Financial statements for CSJVRMA can be obtained at csjvrma.org.

The audited financial position and results of operations for the CSJVRMA as of and for the year ended June 30, 2023, are presented below:

NOTE 13: OTHER REQUIRED DISCLOSURES
A. Deficit Net Position/Fund Balances
At June 30, 2023, the following funds had deficit net position or deficit unrestricted net position, which will be eliminated through the reduction in future expenses and/or the use of new funding sources:

Expenditures Exceeding Appropriations
For the year ended June 30, 2023, expenditures exceeded appropriations in the following funds/functions:

Total Assets $ 150,837,823
Total Liabilities $ 118,663,929
Net Position $ 150,837,823
Operating Revenues $ 66,885,024
Operating Expenses $ 47,584,363
Nonoperating Revenues (Expenses) $ (7,973,544)
Change in Net Position $ 11,327,117
Fund Type Funds Deficit
Governmental Funds Transportation $ (526,177)
Housing and Community Development (3,887)
Internal Service Funds Building Maintenance (23,661)
Vehicle Maintenance (63,456)
Fiduciary Funds RDA Successor Agency (9,671,514)
Function
Excess
Expenditures
Federal Grants Special Revenue Fund Capital Outlay (309,665) SLESF Grants Special Revenue Fund Transfers Out (188,897) Lighting and Lanscaping District Special Revenue Fund Public Works (98,828) Traffic Mitigation Improvement Capital Project Fund Capital Outlay (5,731) Fund
90

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 14: COMMITMENTS AND CONTINGENCIES
The excess expenditure over appropriations for the General Government function in the General Fund was related to a sales tax sharing agreement whereby the City is required to pay a designated portion of sales tax dollars generated to a 3rd party. This excess is offset by excess revenue over the amount budgeted in taxes revenue in the General Fund.

Litigation
There are various claims and legal actions pending against the City for which no provision has been made in the accompanying general purpose financial statements. In the opinion of the City attorney and City management, liabilities arising from these claims and legal actions, if any, will not have an adverse material effect on the financial position of the City.

Grants
The City has received Federal grants for specific purposes that are subject to review and audit by the Federal government. Although such audits could result in expenditure disallowance under grant terms, and any required reimbursements are not expected to be material.

Construction Commitments
The following material construction commitments existed at June 30, 2023:

State Board of Equalization Local Sales Tax Allocation Petition In 2010, a petition was filled with the State Board of Equalization challenging the 1% local sales tax allocation for a large Shafter based retailer going back to the fourth quarter of 2009. This petition is ongoing and will most likely not be resolved for several years. In the meantime, the City is continuing to receive the local sales tax revenue from this retailer. Although management and the City’s attorney believe the City has a strong case, the City has assigned $17,394,397 of General Fund Balance as a loss contingency reserve in case of an adverse outcome.

Project Name
Contract
Amount
Expenditures
as of
June 30, 2023
Remaining
Commitments
Santa Fe Should Improvement 1,447,479 $ - $ 1,447,479 $ 2023 James Street Streelight Enhancement 225,010 - 225,010 Veterans Park Basketball Court 283,027 - 283,027
Kirschenmann Park Irrigation System Upgrade 336,649 - 336,649 91

CITY OF SHAFTER
Notes to the Basic Financial Statements
For the Year Ended June 30, 2023
NOTE 15: PRIOR PERIOD ADJUSTMENTS
Changes to or within the Reporting Entity
The Traffic Mitigation Improvement and State Grants Capital Projects Fund were previously reported as nonmajor governmental funds during the prior fiscal year. Due to a significant increase in assets of the fund during the year, it met the requirements of being presented as a major fund, in accordance with GASB Statement No. 34, during the fiscal year ended June 30, 2023. The effects of that change to or within the financial reporting entity are shown in the column below.

NOTE 16: SUBSEQUENT EVENTS
The City evaluated subsequent events for recognition and disclosure through February 16, 2024, the date which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2023 that required recognition or disclosure in such financial statements.

June 30, 2022 Changes to or
As Previously within the June 30, 2022
Reported Reporting Entity As Restated
Governmental funds
Major funds
General fund 59,264,991 $ - $ 59,264,991 $
Transportation (32,546) - (32,546)
Traffic Mitigation Improvement - 9,470,555 9,470,555
State Grants - - -
Nonmajor funds 30,962,702 (9,470,555) 21,492,147
Total governmental funds 90,195,147 $ - $ 90,195,147 $
92

REQUIRED SUPPLEMENTARY INFORMATION
93

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94

CITY OF SHAFTER
Notes to Required Supplementary Information
For the Year Ended June 30, 2023
NOTE 1: BUDGETARY INFORMATION
Budgetary Policy and Control
The City Council adopts an annual budget, submitted by the City Manager prior to the beginning of the new fiscal year. Public hearings are conducted prior to its adoption by the City Council. All appropriations lapse at year-end with the exception of capital improvement budgets which lapse when exhausted or within three years if not re- appropriated. The City Council has the legal authority to amend the budget at any time during the fiscal year.

The City Manager has the authority to make adjustments to the operating budget within a fund. Transfers of operating budgets between funds or from appropriated reserve accounts, use of unappropriated fund balances, cancellation of appropriation and all changes in capital improvement project budgets require the approval of the City Council. Supplemental appropriations during the fiscal year were not material.

The annual budget is prepared on a basis consistent with generally accepted accounting principles. It is adopted for all governmental type funds, except for Debt Service Funds. Capital Projects Funds adopt project-length plans and are therefore not presented in this report.

The City maintains budgetary controls to ensure compliance with legal provisions embodied in the appropriated budget approved by the City Council. The level of budgetary control (that is, the level at which expenditures cannot legally exceed the appropriated amount) for the operating budget is at the fund level. 95

CITY OF SHAFTER
Budgetary Comparison Statement
General Fund
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 59,264,991 $ 59,264,991 $ 59,264,991 $ - Resources (Inflows):

Taxes 30,687,821 30,687,821 33,365,359 2,677,538
Licenses, permits and fees 1,768,313 1,768,313 3,029,433 1,261,120 Intergovernmental 9,420,379 162,116 88,393 (73,723)
Charges for services 2,002,155 2,002,155 2,018,985 16,830 Use of money and property 1,003,242 1,003,242 1,714,615 711,373 Fines, forfeitures and penalties 12,290 12,290 49,869 37,579 Miscellaneous 90,100 103,262 39,078 (64,184)
Transfers in 1,440,176 1,440,176 516,564 (923,612)
Amounts Available for Appropriation 105,699,667 96,454,566 100,796,923 4,342,357 Charges to Appropriation (Outflow):

General government 18,686,422 18,778,240 18,467,971 310,269 Public safety 8,479,690 8,473,499 7,882,558 590,941
Culture and recreation 353,837 373,169 264,395 108,774
Public works 5,291,367 5,482,964 4,726,338 756,626
Capital outlay 13,085,000 5,208,489 1,900,905 3,307,584 Total Charges to Appropriations 45,896,316 38,316,361 33,394,329 4,922,032 Budgetary Fund Balance, June 30 $ 59,803,351 $ 58,138,205 $ 67,402,594 $ 9,264,389 96

CITY OF SHAFTER
Budgetary Comparision Schedule
Transportation
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance (Deficit), July 1 $ (32,546) $ (32,546) $ (32,546) $ - Resources (Inflows):

Intergovernmental 850,000 850,000 758,145 (91,855)
Use of money and property 6,173 6,173 2,811 (3,362)
Amounts Available for Appropriation 823,627 823,627 728,410 (95,217) Charges to Appropriation (Outflow):

Capital outlay 1,525,000 1,528,283 1,254,587 273,696
Total Charges to Appropriations 1,525,000 1,528,283 1,254,587 273,696 Budgetary Fund Balance (Deficit), June 30 $ (701,373) $ (704,656) $ (526,177) $ 178,479 97

CITY OF SHAFTER
Schedule of Changes in the Total OPED Liability and Related Ratios As of June 30, For the Last Ten Fiscal Years 1
2023 2022 2021 2020
Measurement Date 6/30/2022 6/30/2021 6/30/2020 6/30/2019 Total OPEB Liability
Service cost $ 146,857 $ 142,020 $ 128,353 $ 119,132
Interest on the total OPEB liability 28,421 28,307 42,434 41,112 Actual and expected experience difference (234,723) - (119,666) - Changes in assumptions (52,435) 4,828 97,708 30,457
Benefit payments (121,118) (168,970) (19,108) (80,664)
Net change in total OPEB liability (232,998) 6,185 129,721 110,037 Total OPEB liability - beginning 1,229,492 1,223,307 1,093,586 983,549 Total OPEB liability - ending (a) $ 996,494 $ 1,229,492 $ 1,223,307 $ 1,093,586 Covered-employee payroll $ 10,570,782 $ 10,859,666 $ 8,175,600 $ 6,904,125 Net OPEB liability as a percentage
of covered-employee payroll 9.4% 11.3% 15.0% 15.8%
Notes to Schedule:
1 Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 98

2019 2018 2017
6/30/2018 6/30/2017 6/30/2016
$ 87,622 $ 66,630 $ 64,533
25,248 19,164 17,574
166,836 - -
107,545 (31,411) 33,613
(42,632) (42,461) (14,403)
344,619 11,922 101,317
638,930 627,008 525,691
$ 983,549 $ 638,930 $ 627,008
$ 6,654,022 $ 5,982,927 $ 5,594,858

14.8% 10.7% 11.2%
99

CITY OF SHAFTER
Schedule of Proportionate Share of the Net Pension Liability/(Asset) Miscellaneous Plan
As of June 30, For the Last Ten Fiscal Years 1
Proportionate Share
of the Net Pension Plan's Fiduciary Net
Proportion of the Proportionate Share Liability/(Asset) as a Position as a % Reporting Date 2 Net Pension of Net Pension Percentage of of the Total as of June 30, Liability/(Asset) Liability/(Asset) Covered Payroll Covered Payroll Pension Liability 2023 0.00035% $ 1,618,281 $ 6,705,334 24.1% 88.3%
2022 0.00000% (7,086,949) 8,071,316 -87.8% 88.3%
2021 -0.00506% (550,450) 10,029,113 -5.5% 75.1%
2020 -0.03600% (1,439,873) 9,962,904 -14.5% 75.3%
2019 -0.05790% (2,182,345) 9,503,909 -23.0% 75.3%
2018 0.06842% 2,697,227 9,075,068 29.7% 73.3%
2017 0.05028% 1,746,829 8,759,952 19.9% 74.1%
2016 -0.01018% (279,264) 8,385,083 -3.3% 78.4%
2015 0.15966% 4,009,888 8,140,857 49.3% 79.8%
Notes to Schedule of Proportionate Share of the Net Pension Liability:

Benefit Changes: None
Changes of Assumptions: Effective with the June 30, 2021 valuation date, the accounting discount rate was reduced from 7.15% to 6.90%. 1 Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
2 The proportions and proportionate share of the net pension liability are measured as of one year behind the reporting date. Refer to notes to basic financial statements.
100

CITY OF SHAFTER
Schedule of Proportionate Share of the Net Pension Liability/(Asset) Safety Plan
As of June 30, For the Last Ten Fiscal Years 1
Proportionate Share
of the Net Pension Plan's Fiduciary Net
Proportion of the Proportionate Share Liability/(Asset) as a Position as a % Reporting Date 2 Net Pension of Net Pension Percentage of of the Total as of June 30, Liability/(Asset) Liability/(Asset) Covered Payroll Covered Payroll Pension Liability 2023 -0.00078% $ 885,312 $ 1,372,566 64.5% 88.3%
2022 -0.00013% (2,747,083) 1,604,669 -171.2% 88.3%
2021 -0.00037% 18,262 2,113,776 0.9% 75.1%
2020 -0.00670% (418,601) 1,983,520 -21.1% 75.3%
2019 -0.01160% (679,163) 1,896,452 -35.8% 75.3%
2018 0.01888% 1,127,918 1,909,531 59.1% 73.3%
2017 0.01545% 800,238 1,600,988 50.0% 74.1%
2016 -0.00077% (31,768) 1,369,953 -2.3% 78.4%
2015 0.03114% 1,830,106 1,330,051 137.6% 79.8%
Notes to Schedule of Proportionate Share of the Net Pension Liability:

Benefit Changes: None
Changes of Assumptions: Effective with the June 30, 2021 valuation date, the accounting discount rate was reduced from 7.15% to 6.90%. 1 Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
2 The proportions and proportionate share of the net pension liability are measured as of one year behind the reporting date. Refer to notes to basic financial statements.
101

CITY OF SHAFTER
Schedule of Plan Contributions
Miscellaneous Plan
As of June 30, For the Last Ten Fiscal Years 1
Fiscal Year Actuarially Actual Contribution Contribution Ending Determined Employer Deficiency Covered as a % of June 30, Contribution Contribution (Excess) Payroll Covered Payroll 2023 $ 569,834 $ 569,834 $ - $ 6,893,592 8.3%
2022 500,845 500,845 - 6,705,334 7.5%
2021 637,064 637,064 - 8,071,316 7.9%
2020 843,597 843,597 - 10,029,113 8.4%
2019 795,495 795,495 - 9,962,904 8.0%
2018 803,239 5,075,239 (4,272,000) 9,503,909 53.4%
2017 683,489 683,489 - 9,075,068 7.5%
2016 653,073 653,073 - 8,759,952 7.5%
2015 677,066 2,711,386 (2,034,320) 8,385,083 32.3%
Notes to Schedule of Plan Contributions:

Valuation Date: June 30, 2021
Methods and assumptions used to determine contribution rates:

Actuarial cost method: Entry Age Normal
Amortization method: Varies by date established and source. May be level dollar or level percent of pay and may include direct rate smoothing.

Remaining amortization period: Differs by employer rate plan but not more than 29 years Inflation: 2.3%
Salary Increases: Varies by entry age and service
Investment rate of return: 6.9%
Cost of Living Adjustments: 2.0%
Retirement age: Based on the 2017 CalPERS Experience Study for the period 1997-2015 1 Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.

Mortality: Based on the 2017 CalPERS Experience Study for the period 1997-2015. Post-retirement mortality rates include 15 years of projected on-going mortality improvements using 90% of Scale MP 2016 published by the Society of Actuaries. 102

CITY OF SHAFTER
Schedule of Plan Contributions
Safety Plan
As of June 30, For the Last Ten Fiscal Years 1
Fiscal Year Actuarially Actual Contribution Contribution Ending Determined Employer Deficiency Covered as a % of June 30, Contribution Contribution (Excess) Payroll Covered Payroll 2023 $ 453,710 $ 453,710 $ - $ 3,283,931 13.8%
2022 439,623 439,623 - 1,372,566 32.0%
2021 413,337 413,337 - 1,604,669 25.8%
2020 361,604 361,604 - 2,113,776 17.1%
2019 320,722 320,722 - 1,983,520 16.2%
2018 349,243 2,034,243 (1,685,000) 1,896,452 107.3%
2017 299,645 299,645 - 1,909,531 15.7%
2016 257,507 257,507 - 1,600,988 16.1%
2015 299,437 299,437 - 1,369,953 21.9%
Notes to Schedule of Plan Contributions:

Valuation Date: June 30, 2021
Methods and assumptions used to determine contribution rates:

Actuarial cost method: Entry Age Normal
Amortization method: Varies by date established and source. May be level dollar or level percent of pay and may include direct rate smoothing.

Remaining amortization period: Differs by employer rate plan but not more than 29 years Inflation: 2.3%
Salary Increases: Varies by entry age and service
Investment rate of return: 6.9%
Cost of Living Adjustments: 2.0%
Retirement age: Based on the 2017 CalPERS Experience Study for the period 1997-2015 Mortality: Based on the 2017 CalPERS Experience Study for the period 1997-2015. Post-retirement mortality rates include 15 years of projected on-going mortality improvements using 90% of Scale MP 2016 published by the Society of Actuaries. 1 Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
103

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104

SUPPLEMENTARY INFORMATION
105

Non-Major Governmental Funds
Special Revenue Funds:

Federal Grants Fund - This fund is used to account for various Federal Highway and transportation grants received by the City.

Traffic Safety Fund - This fund is used to account for the City's share of traffic violation fines allocated for traffic enforcement and signage.

SLESF Grants Fund - This fund is used to account for revenues and expenditures associated with front line law enforcement and municipal police services.

State Gasoline Tax Fund - This fund is used to account for the City's share of gasoline taxes that are apportioned under Streets and Highways Code sections 2105, 2106, 2107, and 2107.5 of the State of California. These funds are restricted to activities and purchases that assist in the construction of and maintenance of local roads within the City limits.

Police Services Fund - This fund is used to account for the fines imposed by the County of Kern and local donations to assist with the Drug Awareness and Rehabilitation Education program (DARE).

Asset Forfeiture Fund - This fund is used to account for revenues associated with the sale of assets seized from individuals convicted of drug related crimes. The expenditures of this fund must assist in drug abuse enforcement or education.

Road Maintenance and Rehabilitation Act Fund - This fund is used to account for intergovernmental revenues and expenditures relative to the State of California Road Maintenance and Rehabilitation Act for maintenance or reconstruction related to streets.

Housing and Community Development Fund - This fund is used to account for revenues and expenditures related to programs and projects funded with Housing & Community Development grant proceeds.

Low and Moderate Income Housing Fund - This fund is used to account for balance of the former low and moderate income housing funds of the former Shafter Community Development Agency and revenues and expenditures related to such housing projects and programs.

Lighting and Landscaping District Fund - This fund is used to account for funds received from the lighting and landscaping district to provide for alternative sources of funding for maintenance and service of landscaping and public lighting facilities located within the public areas of the assessment districts.

Capital Projects Funds:

Water Capital Improvement Fund - This fund was established to account for the impact fees charged to developers for the improvements that will become necessary to keep pace with the demands placed on existing plant assets. This allows for an incremental charge for existing capacity to be established that will build additional plant capacity in staged phases.

Wastewater Capital Improvement Fund - This fund was established to account for the impact fees charged to developers for the improvements that will become necessary to keep pace with the demands placed on existing plant assets.

Refuse Capital Improvement Fund - This fund was established to account for the impact fees charged to developers for the cost of new refuse collecting system that will become necessary to keep pace with the demands placed on existing assets.
106

Non-Major Governmental Funds
Capital Projects Funds, Continued:

Park Capital Improvement Fund - This fund was established to account for the park-in-lieu fee that is charged to developers for the cost of new parks or improvements to existing parks.

Capital Assets Replacement Fund - This fund was established to account for the purchase or construction of a new City Hall facility. The purpose of the fund is to set-aside and restricts assets to replace existing facilities in the future.

MCCF Building and Equipment Replacement Fund - This fund is used to account for the activities of the City's small prison equipment and building replacement operations that must be provided under a triple net lease with the owner.

Median Mitigation Improvement Fund - This fund was established to account for expenditures for the cost of median installation related projects that serve more than one project or multiple phases of projects. 107

CITY OF SHAFTER
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Assets:

Cash and investments $ 3,293,151 $ 261,350 $ 232,772 $ 2,187,190 Receivables:

Interest 19,480 1,261 1,963 10,974
Prepaid costs - - - -
Due from other governments 62,352 5,697 - 43,600
Total Assets $ 3,374,983 $ 268,308 $ 234,735 $ 2,241,764 Liabilities, Deferred inflows of Resources,
and Fund Balances:

Liabilities:

Accounts payable $ - $ 88 $ - $ 83,384
Unearned revenues 6,512 - - -
Due to other funds - - - -
Total Liabilities 6,512 88 - 83,384
Deferred inflows of resources:

Unavailable revenues - - - -
Total Deferred inflows of Resources - - - -
Fund Balances(Deficit):

Nonspendable:

Prepaid costs Nonspendable other 10 - - - -
Restricted for:

Traffic safety - 268,220 - -
Law enforcement - - 234,735 -
Road maintenance and transportation 3,368,471 - - 2,158,380 Low and moderate income housing - - - -
Lighting and landscape maintenance - - - -
Water capital improvements - - - -
Wastewater capital improvements - - - -
Refuse capital improvements - - - -
New park and park improvements - - - -
Assigned to:

Capital asset replacement - - - -
MCCF Building and equipment replacement - - - -
Median Mitigation improvement - - - -
Unassigned - - - -
Total Fund Balances (Deficit) 3,368,471 268,220 234,735 2,158,380 Total Liabilities, deferred inflows of
resources, and Fund Balances (Deficit) $ 3,374,983 $ 268,308 $ 234,735 $ 2,241,764 Federal Grants Traffic Safety SELSF Grants
State Gasoline
Tax
Special Revenue Funds
108

CITY OF SHAFTER
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Assets:

Cash and investments
Receivables:

Interest
Prepaid costs
Due from other governments
Total Assets
Liabilities, Deferred inflows of Resources,
and Fund Balances:

Liabilities:

Accounts payable
Unearned revenues
Due to other funds
Total Liabilities
Deferred inflows of resources:

Unavailable revenues
Total Deferred inflows of Resources
Fund Balances(Deficit):

Nonspendable:

Prepaid costs Nonspendable other 10
Restricted for:

Traffic safety
Law enforcement
Road maintenance and transportation
Low and moderate income housing
Lighting and landscape maintenance
Water capital improvements
Wastewater capital improvements
Refuse capital improvements
New park and park improvements
Assigned to:

Capital asset replacement
MCCF Building and equipment replacement
Median Mitigation improvement
Unassigned
Total Fund Balances (Deficit)
Total Liabilities, deferred inflows of
resources, and Fund Balances (Deficit)

(CONTINUED)
$ 3,549 $ 194,720 $ 817,783 $ -
17 944 605 -
- - - -
- - 80,114 8,501
$ 3,566 $ 195,664 $ 898,502 $ 8,501
$ - $ - $ 90,807 $ -
- - - -
- - - 3,887
- - 90,807 3,887
- - - 8,501
- - - 8,501
- - - -
- - - -
3,566 195,664 - -
- - 807,695 -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - (3,887)
3,566 195,664 807,695 (3,887)
$ 3,566 $ 195,664 $ 898,502 $ 8,501
Asset Forfeiture
Road Maintenance
and Rehabilitation
Act
Housing and
Community
Police Services Development
Special Revenue Funds
109

CITY OF SHAFTER
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Assets:

Cash and investments
Receivables:

Interest
Prepaid costs
Due from other governments
Total Assets
Liabilities, Deferred inflows of Resources,
and Fund Balances:

Liabilities:

Accounts payable
Unearned revenues
Due to other funds
Total Liabilities
Deferred inflows of resources:

Unavailable revenues
Total Deferred inflows of Resources
Fund Balances(Deficit):

Nonspendable:

Prepaid costs Nonspendable other 10
Restricted for:

Traffic safety
Law enforcement
Road maintenance and transportation
Low and moderate income housing
Lighting and landscape maintenance
Water capital improvements
Wastewater capital improvements
Refuse capital improvements
New park and park improvements
Assigned to:

Capital asset replacement
MCCF Building and equipment replacement
Median Mitigation improvement
Unassigned
Total Fund Balances (Deficit)
Total Liabilities, deferred inflows of
resources, and Fund Balances (Deficit)

$ 1,729,607 $ 1,612,638 $ 1,770,589 $ 9,294,723
8,387 7,461 8,539 44,823
- 3,235 - -
- - - -
$ 1,737,994 $ 1,623,334 $ 1,779,128 $ 9,339,546
$ - $ 51,410 $ - $ -
- - - -
- 117,016 - -
- 168,426 - -
- - - -
- - - -
- 3,235- - -
- - - -
- - - -
- - - -
1,737,994 - - -
- 1,451,673 - -
- - 1,779,128 -
- - - 9,339,546
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
1,737,994 1,454,908 1,779,128 9,339,546
$ 1,737,994 $ 1,623,334 $ 1,779,128 $ 9,339,546
Water Capital
Improvement
Wastewater
Capital
Improvement
Low and Mod
Income Housing
Lighting and
Landscaping
Ditstrict
Special Revenue Funds Capital Projects Funds
110

CITY OF SHAFTER
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Assets:

Cash and investments
Receivables:

Interest
Prepaid costs
Due from other governments
Total Assets
Liabilities, Deferred inflows of Resources,
and Fund Balances:

Liabilities:

Accounts payable
Unearned revenues
Due to other funds
Total Liabilities
Deferred inflows of resources:

Unavailable revenues
Total Deferred inflows of Resources
Fund Balances(Deficit):

Nonspendable:

Prepaid costs Nonspendable other 10
Restricted for:

Traffic safety
Law enforcement
Road maintenance and transportation
Low and moderate income housing
Lighting and landscape maintenance
Water capital improvements
Wastewater capital improvements
Refuse capital improvements
New park and park improvements
Assigned to:

Capital asset replacement
MCCF Building and equipment replacement
Median Mitigation improvement
Unassigned
Total Fund Balances (Deficit)
Total Liabilities, deferred inflows of
resources, and Fund Balances (Deficit)

(CONTINUED)
$ 302,470 $ 191,616 $ 4,529,572 $ 1,051
1,467 911 21,965 129
- - - -
- - - -
$ 303,937 $ 192,527 $ 4,551,537 $ 1,180
$ - $ - $ - $ -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
- - - -
303,937 - - -
- 192,527 - -
- - 4,551,537 -
- - - 1,180
- - - -
- - - -
303,937 192,527 4,551,537 1,180
$ 303,937 $ 192,527 $ 4,551,537 $ 1,180
Refuse Capital
Improvement
Park Capital
Improvement
Capital Assets
Replacement
MCCF Building
and Equipment
Replacement
Capital Projects Funds
111

CITY OF SHAFTER
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2023
Assets:

Cash and investments
Receivables:

Interest
Prepaid costs
Due from other governments
Total Assets
Liabilities, Deferred inflows of Resources,
and Fund Balances:

Liabilities:

Accounts payable
Unearned revenues
Due to other funds
Total Liabilities
Deferred inflows of resources:

Unavailable revenues
Total Deferred inflows of Resources
Fund Balances(Deficit):

Nonspendable:

Prepaid costs Nonspendable other 10
Restricted for:

Traffic safety
Law enforcement
Road maintenance and transportation
Low and moderate income housing
Lighting and landscape maintenance
Water capital improvements
Wastewater capital improvements
Refuse capital improvements
New park and park improvements
Assigned to:

Capital asset replacement
MCCF Building and equipment replacement
Median Mitigation improvement
Unassigned
Total Fund Balances (Deficit)
Total Liabilities, deferred inflows of
resources, and Fund Balances (Deficit)

$ 104,539 $ 26,527,320
507 129,433
- 3,235
- 200,264
$ 105,046 $ 26,860,252
$ - $ 225,689
- 6,512
- 120,903
- 353,104
- 8,501
- 8,501
- 3,235-
- 268,220
- 433,965
- 6,334,546
- 1,737,994
- 1,451,673
- 1,779,128
- 9,339,546
- 303,937
- 192,527
- 4,551,537
- 1,180
105,046 105,046
- (3,887)
105,046 26,498,647
$ 105,046 $ 26,860,252
Capital Projects
Funds
Total Other
Governmental
Funds
Median
Mitigation
Improvement
112

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113

CITY OF SHAFTER
Combining Statement of Revenues,
Expenditures and Changes In Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Revenues:

Taxes $ - $ - $ - $ 500,938
Licenses, permits and fees - - - -
Intergovernmental 3,068,939 - 165,271 -
Special assessments - - - -
Use of money and property 31,516 1,760 2,555 15,704
Fines and forfeitures - 44,621 - -
Total Revenues 3,100,455 46,381 167,826 516,642
Expenditures:

Current:

Public works - - - -
Capital outlay 509,665 2,926 - 174,701
Total Expenditures 509,665 2,926 - 174,701
Excess (Deficiency) of Revenues
Over (Under) Expenditures 2,590,790 43,455 167,826 341,941 Other Financing Sources (Uses):

Transfers in - - - -
Transfers out (792,573) - (188,897) -
Total Other Financing Sources
(Uses) (792,573) - (188,897) -
Net Change in Fund Balances 1,798,217 43,455 (21,071) 341,941 Fund Balances, Beginning of Year 1,570,254 224,765 255,806 1,816,439 Fund Balances (Deficit), End of Year $ 3,368,471 $ 268,220 $ 234,735 $ 2,158,380 Federal Grants Traffic Safety SELSF Grants
State Gasoline
Tax
Special Revenue Funds
114

CITY OF SHAFTER
Combining Statement of Revenues,
Expenditures and Changes In Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Revenues:

Taxes
Licenses, permits and fees
Intergovernmental
Special assessments
Use of money and property
Fines and forfeitures
Total Revenues
Expenditures:

Current:

Public works
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances (Deficit), End of Year

(CONTINUED)
$ - $ - $ 457,197 $ -
- - - -
- - - -
- - - -
22 1,230 1,489 -
- - - -
22 1,230 458,686 -
- - - -
- - 502,184 -
- - 502,184 -
22 1,230 (43,498) -
- - 417,308 -
- - - -
- - 417,308 -
22 1,230 373,810 -
3,544 194,434 433,885 (3,887)
$ 3,566 $ 195,664 $ 807,695 $ (3,887)
Asset Forfeiture
Road
Maintenance and
Rehabilitation Act
Housing and
Community
Police Services Development
Special Revenue Funds
115

CITY OF SHAFTER
Combining Statement of Revenues,
Expenditures and Changes In Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Revenues:

Taxes
Licenses, permits and fees
Intergovernmental
Special assessments
Use of money and property
Fines and forfeitures
Total Revenues
Expenditures:

Current:

Public works
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances (Deficit), End of Year

$ - $ - $ - $ -
- - 304,712 1,657,110
- - - -
- 942,514 - -
10,931 11,525 12,198 62,646
- - - -
10,931 954,039 316,910 1,719,756
- 669,414 - -
- - - 19,118
- 669,414 - 19,118
10,931 284,625 316,910 1,700,638
- - - -
- - - -
- - - -
10,931 284,625 316,910 1,700,638
1,727,063 1,170,283 1,462,218 7,638,908
$ 1,737,994 $ 1,454,908 $ 1,779,128 $ 9,339,546
Low and Mod
Income Housing
Lighting and
Landscaping
Ditstrict
Water Capital
Improvement
Wastewater
Capital
Improvement
Special Revenue Funds Capital Projects Funds
116

CITY OF SHAFTER
Combining Statement of Revenues,
Expenditures and Changes In Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Revenues:

Taxes
Licenses, permits and fees
Intergovernmental
Special assessments
Use of money and property
Fines and forfeitures
Total Revenues
Expenditures:

Current:

Public works
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances (Deficit), End of Year

(CONTINUED)
$ - $ - $ - $ -
257 121,555 - -
- - - -
- - - -
1,913 1,599 28,628 1,180
- - - -
2,170 123,154 28,628 1,180
- - - -
- - - -
- - - -
2,170 123,154 28,628 1,180
- - - -
- - - -
- - - -
2,170 123,154 28,628 1,180
301,767 69,373 4,522,909 -
$ 303,937 $ 192,527 $ 4,551,537 $ 1,180
Capital Assets
Replacement
MCCF Building
and Equipment
Replacement
Refuse Capital
Improvement
Park Capital
Improvement
Capital Projects Funds
117

CITY OF SHAFTER
Combining Statement of Revenues,
Expenditures and Changes In Fund Balances
Nonmajor Governmental Funds
For the Year Ended June 30, 2023
Revenues:

Taxes
Licenses, permits and fees
Intergovernmental
Special assessments
Use of money and property
Fines and forfeitures
Total Revenues
Expenditures:

Current:

Public works
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):

Transfers in
Transfers out
Total Other Financing Sources
(Uses)
Net Change in Fund Balances
Fund Balances, Beginning of Year
Fund Balances (Deficit), End of Year

$ - $ 958,135
- 2,083,634
- 3,234,210
- 942,514
660 185,556
- 44,621
660 7,448,670
- 669,414
- 1,208,594
- 1,878,008
660 5,570,662
- 417,308
- (981,470)
- (564,162)
660 5,006,500
104,386 21,492,147
$ 105,046 $ 26,498,647
Capital Projects
Funds
Total Other
Governmental
Funds
Median
Mitigation
Improvement
118

CITY OF SHAFTER
Budgetary Comparision Schedule
Federal Grants
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $1,570,254 $ 1,570,254 $ 1,570,254 $ - Resources (Inflows):

Intergovernmental 4,440,176 4,468,126 3,068,939 (1,399,187) Use of money and property - - 31,516 31,516
Transfers in 1,560,600 1,560,600 - (1,560,600)
Amounts Available for Appropriation 7,571,030 7,598,980 4,670,709 (2,928,271) Charges to Appropriation (Outflow):

Capital outlay - 200,000 509,665 (309,665)
Transfers out 4,440,176 1,440,176 792,573 647,603
Total Charges to Appropriations 4,440,176 1,640,176 1,302,238 337,938 Budgetary Fund Balance, June 30 $3,130,854 $ 5,958,804 $ 3,368,471 $ (2,590,333) 119

CITY OF SHAFTER
Budgetary Comparision Schedule
Traffic Safety
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 224,765 $ 224,765 $ 224,765 $ - Resources (Inflows):

Use of money and property 3,000 3,000 1,760 (1,240)
Fines, forfeitures and penalties 26,520 26,520 44,621 18,101 Amounts Available for Appropriation 254,285 254,285 271,146 16,861 Charges to Appropriation (Outflow):

Capital outlay 4,520,000 4,520,000 2,926 4,517,074
Total Charges to Appropriations 4,520,000 4,520,000 2,926 4,517,074 Budgetary Fund Balance, June 30 $(4,265,715) $ (4,265,715) $ 268,220 $ 4,533,935 120

CITY OF SHAFTER
Budgetary Comparision Schedule
Slesf Grants
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 255,806 $ 255,806 $ 255,806 $ - Resources (Inflows):

Intergovernmental - - 165,271 165,271
Use of money and property 5,000 5,000 2,555 (2,445)
Amounts Available for Appropriation 260,806 260,806 423,632 162,826 Charges to Appropriation (Outflow):

Transfers out - - 188,897 (188,897)
Total Charges to Appropriations - - 188,897 (188,897)
Budgetary Fund Balance, June 30 $ 260,806 $ 260,806 $ 234,735 $ (26,071) 121

CITY OF SHAFTER
Budgetary Comparision Schedule
State Gasoline Tax
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $1,816,439 $ 1,816,439 $ 1,816,439 $ - Resources (Inflows):

Taxes 536,990 536,990 500,938 (36,052)
Use of money and property 5,922 5,922 15,704 9,782
Amounts Available for Appropriation 2,359,351 2,359,351 2,333,081 (26,270) Charges to Appropriation (Outflow):

Capital outlay 1,100,000 1,100,000 174,701 925,299
Transfers out 651,233 651,233 - 651,233
Total Charges to Appropriations 1,751,233 1,751,233 174,701 1,576,532 Budgetary Fund Balance, June 30 $ 608,118 $ 608,118 $ 2,158,380 $ 1,550,262 122

CITY OF SHAFTER
Budgetary Comparision Schedule
Asset Forfeiture
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 194,434 $ 194,434 $ 194,434 $ - Resources (Inflows):

Use of money and property 3,000 3,000 1,230 (1,770)
Amounts Available for Appropriation 197,434 197,434 195,664 (1,770) Budgetary Fund Balance, June 30 $ 197,434 $ 197,434 $ 195,664 $ (1,770) 123

CITY OF SHAFTER
Budgetary Comparision Schedule
Road Maintenance and Rehabiliation Act
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 433,885 $ 433,885 $ 433,885 $ - Resources (Inflows):

Taxes 423,529 423,529 457,197 33,668
Use of money and property - - 1,489 1,489
Transfers in (11,767) (11,767) 417,308 429,075
Amounts Available for Appropriation 845,647 845,647 1,309,879 464,232 Charges to Appropriation (Outflow):

Capital outlay 1,200,000 1,200,550 502,184 698,366
Total Charges to Appropriations 1,200,000 1,200,550 502,184 698,366 Budgetary Fund Balance, June 30 $ (354,353) $ (354,903) $ 807,695 $ 1,162,598 124

CITY OF SHAFTER
Budgetary Comparision Schedule
Low and Moderate Income Housing
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,727,063 $ 1,727,063 $ 1,727,063 $ - Resources (Inflows):

Use of money and property 25,000 25,000 10,931 (14,069) Amounts Available for Appropriation 1,752,063 1,752,063 1,737,994 (14,069) Budgetary Fund Balance, June 30 $ 1,752,063 $ 1,752,063 $ 1,737,994 $ (14,069) 125

CITY OF SHAFTER
Budgetary Comparision Schedule
Lighting and Landscaping District
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 1,170,283 $ 1,170,283 $ 1,170,283 $ - Resources (Inflows):

Special assessments 695,616 695,616 942,514 246,898
Use of money and property - - 11,525 11,525
Amounts Available for Appropriation 1,865,899 1,865,899 2,124,322 258,423 Charges to Appropriation (Outflow):

Public works 570,586 570,586 669,414 (98,828)
Total Charges to Appropriations 570,586 570,586 669,414 (98,828) Budgetary Fund Balance, June 30 $ 1,295,313 $ 1,295,313 $ 1,454,908 $ 159,595 126

CITY OF SHAFTER
Budgetary Comparison Schedule
Water Capital Improvement
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $1,462,218 $ 1,462,218 $ 1,462,218 $ - Resources (Inflows):

Licenses, permits and fees 203,000 203,000 304,712 101,712 Use of money and property 15,404 15,404 12,198 (3,206)
Amounts Available for Appropriation 1,680,622 1,680,622 1,779,128 98,506 Budgetary Fund Balance, June 30 $1,680,622 $ 1,680,622 $ 1,779,128 $ 98,506 127

CITY OF SHAFTER
Budgetary Comparison Schedule
Wastewater Capital Improvement
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $7,638,908 $ 7,638,908 $ 7,638,908 $ - Resources (Inflows):

Licenses, permits and fees 1,524,000 1,524,000 1,657,110 133,110 Use of money and property 60,000 60,000 62,646 2,646
Amounts Available for Appropriation 9,222,908 9,222,908 9,358,664 135,756 Charges to Appropriation (Outflow):

Capital outlay 250,000 250,000 19,118 230,882
Total Charges to Appropriations 250,000 250,000 19,118 230,882 Budgetary Fund Balance, June 30 $8,972,908 $ 8,972,908 $ 9,339,546 $ 366,638 128

CITY OF SHAFTER
Budgetary Comparison Schedule
Refuse Capital Improvement
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 301,767 $ 301,767 $ 301,767 $ - Resources (Inflows):

Licenses, permits and fees 2,329 2,329 257 (2,072)
Use of money and property 3,379 3,379 1,913 (1,466)
Amounts Available for Appropriation 307,475 307,475 303,937 (3,538) Budgetary Fund Balance, June 30 $ 307,475 $ 307,475 $ 303,937 $ (3,538) 129

CITY OF SHAFTER
Budgetary Comparison Schedule
Park Capital Improvement
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 69,373 $ 69,373 $ 69,373 $ - Resources (Inflows):

Licenses, permits and fees 6,785 6,785 121,555 114,770
Use of money and property 544 544 1,599 1,055
Amounts Available for Appropriation 76,702 76,702 192,527 115,825 Budgetary Fund Balance, June 30 $ 76,702 $ 76,702 $ 192,527 $ 115,825 130

CITY OF SHAFTER
Budgetary Comparison Schedule
Capital Asset Replacement
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $4,522,909 $ 4,522,909 $ 4,522,909 $ - Resources (Inflows):

Licenses, permits and fees 335,580 335,580 - (335,580)
Use of money and property 50,000 50,000 28,628 (21,372) Amounts Available for Appropriation 4,908,489 4,908,489 4,551,537 (356,952) Budgetary Fund Balance, June 30 $4,908,489 $ 4,908,489 $ 4,551,537 $ (356,952) 131

CITY OF SHAFTER
Budgetary Comparison Schedule
Median Mitigation Improvement
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 104,386 $ 104,386 $ 104,386 $ - Resources (Inflows):

Licenses, permits and fees 2,122 2,122 - (2,122)
Use of money and property 1,600 1,600 660 (940)
Amounts Available for Appropriation 108,108 108,108 105,046 (3,062) Budgetary Fund Balance, June 30 $ 108,108 $ 108,108 $ 105,046 $ (3,062) 132

CITY OF SHAFTER
Budgetary Comparison Schedule
Traffic Mitigation Improvement
Year Ended June 30, 2023
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 $ 9,470,555 $ 9,470,555 $ 9,470,555 $ - Resources (Inflows):

Licenses, permits and fees 1,500,000 1,500,000 3,254,663 1,754,663 Use of money and property 130,000 130,000 77,426 (52,574) Amounts Available for Appropriation 11,100,555 11,100,555 12,802,644 1,702,089 Charges to Appropriation (Outflow):

Capital outlay - - 5,731 (5,731)
Transfers out Payment to refunded bond escrow agent 897,600- 897,600- - 897,600- Total Charges to Appropriations 897,600 897,600 5,731 891,869 Budgetary Fund Balance, June 30 $ 10,202,955 $ 10,202,955 $ 12,796,913 $ 2,593,958 133

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134

Non-Major Enterprise Funds
Refuse Collection Services Fund - This fund is used to account for the activities of the City's refuse collection and recycling operations.

Transit Services Fund - This fund is used to account for the activities of the government's public transit operations.
135

CITY OF SHAFTER
Combining Statement of Net Position
Non-Major Proprietary Funds
June 30, 2023
Totals
Assets:

Current:

Cash and investments $ 431,491 $ - $ 431,491
Receivables:

Accounts receivable, net 89,790 - 89,790
Accrued interest 1,912 - 1,912
Prepaid costs 9 323 332
Due from other governments - 3,000 3,000
Total Current Assets 523,202 3,323 526,525
Noncurrent:

Capital assets - net of accumulated depreciation 92,494 221,662 314,156 Total Noncurrent Assets 92,494 221,662 314,156
Total Assets 615,696 224,985 840,681
Deferred Outflows of Resources:

Related to pensions 46,915 102,493 149,408
Related to OPEB 2,306 4,391 6,697
Total Deferred Outflows of Resources 49,221 106,884 156,105 Liabilities:

Current:

Accounts payable 133,678 2,606 136,284
Accrued liabilities 2,331 4,065 6,396
Accrued interest 402 - 402
Deposits payable 47,622 - 47,622
Due to other funds - 193,726 193,726
Subscription liability 5,396 - 5,396
Accrued compensated absences 21,591 3,506 25,097
Total Current Liabilities 211,020 203,903 414,923
Noncurrent:

Subscription liability 20,083 - 20,083
Accrued compensated absences 3,810 619 4,429
Net pension liability 9,697 21,460 31,157
OPEB liability 5,970 13,210 19,180
Total Noncurrent Liabilities 39,560 35,289 74,849
Total Liabilities 250,580 239,192 489,772
Deferred Inflows of Resources:

Related to pensions 14,790 31,418 46,208
Related to OPEB 2,211 4,682 6,893
Total Deferred Inflows of Resources 17,001 36,100 53,101 Net Position:

Net investment in capital assets 67,015 221,662 288,677 Unrestricted (deficit) 330,321 (165,085) 165,236
Total Net Position $ 397,336 $ 56,577 $ 453,913
Business-Type Activities - Enterprise Funds
Refuse
Collection
Services
Transit
Services
136

CITY OF SHAFTER
Combining Statement of Revenues, Expenses
and Changes in Fund Net Position
Non-Major Proprietary Funds
Year Ended June 30, 2023
Totals
Operating Revenues:

Charges for services $ 1,619,575 $ 44,459 $ 1,664,034
Miscellaneous 1,349 - 1,349
Total Operating Revenues 1,620,924 44,459 1,665,383
Operating Expenses:

Salaries and wages 339,751 319,252 659,003
Administration - 135,768 135,768
Contractual 326,614 3,653 330,267
Materials 5,656 761 6,417
Maintenance and repair 20,915 13,764 34,679
Utilities 744 7,635 8,379
Equipment and supplies 1,343,120 20,515 1,363,635
Depreciation/amortization expense 82,538 75,916 158,454 Total Operating Expenses 2,119,338 577,264 2,696,602
Operating Income (Loss) (498,414) (532,805) (1,031,219) Nonoperating Revenues (Expenses):

Interest revenue 8,471 - 8,471
Interest expense (402) - (402)
Grants 33,847 318,899 352,746
Gain (loss) on disposal of capital assets (23,288) - (23,288) Total Nonoperating
Revenues (Expenses) 18,628 318,899 337,527
Income (Loss) Before Transfers (479,786) (213,906) (693,692) Changes in Net Position (479,786) (213,906) (693,692)
Net Position:

Beginning of Year 877,122 270,483 1,147,605
End of Fiscal Year $ 397,336 $ 56,577 $ 453,913
Transit
Services
Business-Type Activities - Enterprise Funds
Refuse
Collection
Services
137

CITY OF SHAFTER
Combining Statement of Cash Flows
Non-Major Proprietary Funds
Year Ended June 30, 2023
Totals
Cash Flows from Operating Activities:

Cash received from customers and users $ 1,619,961 $ 43,984 $ 1,663,945 Cash paid to suppliers for goods and services (1,602,861) (182,419) (1,785,280) Cash paid to employees for services (94,757) (214,746) (309,503) Net Cash Provided (Used) by Operating Activities (77,657) (353,181) (430,838) Cash Flows from Non-Capital
Financing Activities:

Repayment received from other funds - 32,408 32,408
Subsidy from federal and state grants 33,846 318,899 352,745 Net Cash Provided (Used) by
Non-Capital Financing Activities 33,846 351,307 385,153 Cash Flows from Capital
and Related Financing Activities:

Subsidy from federal and state grants - 1,874 1,874
Acquisition and construction of capital assets (9,174) - (9,174) Principal paid on subscription liability (5,867) - (5,867) Proceeds from sales of capital assets 88,407 - 88,407
Net Cash Provided (Used) by
Capital and Related Financing Activities 73,366 1,874 75,240 Cash Flows from Investing Activities:

Interest received 8,033 - 8,033
Net Cash Provided (Used) by
Investing Activities 8,033 - 8,033
Net Increase (Decrease) in Cash
and Cash Equivalents 37,588 - 37,588
Cash and Cash Equivalents at Beginning of Year 393,903 - 393,903 Cash and Cash Equivalents at End of Year $ 431,491 $ - $ 431,491 Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) $ (498,414) $ (532,805) $ (1,031,219) Adjustments to reconcile operating income (loss)
net cash provided (used) by operating activities:

Depreciation/amortization 82,538 75,916 158,454
(Increase) decrease in accounts receivable (8,722) - (8,722) (Increase) decrease in prepaid expense (9) (323) (332)
(Increase) decrease in net pension asset 160,373 104,213 264,586 (Increase) decrease in deferred inflow of resources - pensions 124,103 (8,884) 115,219 (Increase) decrease in deferred inflow of resources - OPEB 7,114 658 7,772 Increase (decrease) in accounts payable 94,197 (475) 93,722 Increase (decrease) in accrued liabilities (1,231) (5,409) (6,640) Increase (decrease) in deposits payable 37,606 - 37,606 Increase (decrease) in unearned revenue (29,847) - (29,847) Increase (decrease) in compensated absences (438) 1,587 1,149 Increase (decrease) in OPEB liability (20,170) (1,147) (21,317) Increase (decrease) in deferred outflows of resources - pensions (24,484) 10,170 (14,314) Increase (decrease) in deferred outflows of resources - OPEB (273) 3,318 3,045 Total Adjustments 420,757 179,624 600,381
Net Cash Provided (Used) by
Operating Activities $ (77,657) $ (353,181) $ (430,838) Non-Cash Investing, Capital, and Financing Activities:

Gain/(Loss) on disposition of capital assets $ (111,695) $ - $ (111,695) Business-Type Activities - Enterprise Funds
Refuse
Collection
Services
Transit
Services
138

Internal Service Funds
Building Maintenance Fund - This fund is used to account for the accumulation and allocation of costs associated with the maintenance of the City Hall building.

Liability Coverage Fund - This fund is used to account for the accumulation and allocation of costs associated with risk management.

Vehicle Maintenance Fund - This fund is used to account for the accumulation and allocation of costs associated with the maintenance of the City fleet of vehicles.

Information Technology Fund - This fund is used to account for the costs associated with automation maintenance of the City's various computers, servers and interdepartmental electronic communications. 139

CITY OF SHAFTER
Combining Statement of Net Position
Internal Service Fund
June 30, 2023
Totals
Assets:

Current:

Receivables:

Accrued interest $ - $ 1,623 $ 279 $ 639 $ 2,541
Prepaid costs 10,119 - 222 (361) 9,980
Total Current Assets 10,119 1,623 501 278 12,521
Noncurrent:

Capital assets - net of accumulated depreciation - - - 342,978 342,978 Total Noncurrent Assets - - - 342,978 342,978
Total Assets 10,119 1,623 501 343,256 355,499
Deferred Outflows of Resources:

Related to pensions 35,088 35,470 55,211 305,594 431,363 Related to OPEB 2,092 1,903 2,480 13,722 20,197
Total Deferred Outflows of Resources 37,180 37,373 57,691 319,316 451,560 Liabilities:

Current:

Accounts payable 30,342 2,204 3,623 7,357 43,526
Accrued liabilities 2,249 1,233 2,219 15,287 20,988
Accrued interest - - - 2,238 2,238
Due to other funds 12,030 4,995 58,222 63,036 138,283
Subscription liability - - - 48,836 48,836
Accrued compensated absences 523 1,538 16,445 14,003 32,509 Total Current Liabilities 45,144 9,970 80,509 150,757 286,380 Noncurrent:

Subscription liability - - - 119,274 119,274
Accrued compensated absences 92 271 2,902 2,471 5,736
Net pension liability 6,392 6,895 11,557 63,975 88,819
OPEB liability 3,964 4,241 7,120 39,388 54,713
Total Noncurrent Liabilities 10,448 11,407 21,579 225,108 268,542 Total Liabilities 55,592 21,377 102,088 375,865 554,922 Deferred Inflows of Resources:

Related to pensions 13,908 12,634 16,924 93,676 137,142 Related to OPEB 1,460 1,572 2,636 14,587 20,255
Total Deferred Inflows of Resources 15,368 14,206 19,560 108,263 157,397 Net Position:

Net investment in capital assets - - - 174,868 174,868
Unrestricted (23,661) 3,413 (63,456) 3,576 (80,128)
Total Net Position $ (23,661) $ 3,413 $ (63,456) $ 178,444 $ 94,740 Governmental Activities - Internal Service Funds
Building
Maintenance
Liability
Coverage
Vehicle
Maintenance
Information
Technology
140

CITY OF SHAFTER
Combining Statement of Revenues, Expenses
and Changes in Fund Net Position
Internal Service Funds
Year Ended June 30, 2023
Totals
Operating Revenues:

Charges for services $ 370,440 $ 711,564 $ 137,848 $ 898,369 $ 2,118,221 Miscellaneous - 251,176 - 2,110 253,286
Total Operating Revenues 370,440 962,740 137,848 900,479 2,371,507 Operating Expenses:

Administration and general 130,727 65,875 243,403 845,492 1,285,497 Source of supply 67,207 - 10,504 27,578 105,289
Pumping 35,943 935,327 48,847 99,220 1,119,337
Treatment 36,076 - 8,586 10,905 55,567
Refuse collection 174,361 - 8,101 8,480 190,942
Cost of sales and services 18,692 - 21,116 498,257 538,065 Depreciation expense - - - 124,327 124,327
Total Operating Expenses 463,006 1,001,202 340,557 1,614,259 3,419,024 Operating Income (Loss) (92,566) (38,462) (202,709) (713,780) (1,047,517) Nonoperating Revenues (Expenses):

Interest revenue - 3,459 595 189,826 193,880
Interest expense - - - (2,653) (2,653)
Total Nonoperating
Revenues (Expenses) - 3,459 595 187,173 191,227
Income (Loss) Before Transfers (92,566) (35,003) (202,114) (526,607) (856,290) Transfers in - - - 275 275
Changes in Net Position (92,566) (35,003) (202,114) (526,332) (856,015) Net Position (Deficit):

Beginning of Year 68,905 38,416 138,658 704,776 950,755 End of Fiscal Year $ (23,661) $ 3,413 $ (63,456) $ 178,444 $ 94,740 Governmental Activities - Internal Service Funds
Building
Maintenance
Liability
Coverage
Vehicle
Maintenance
Information
Technology
141

CITY OF SHAFTER
Combining Statement of Cash Flows
Internal Service Funds
Year Ended June 30, 2023
Totals
Cash Flows from Operating Activities:

Cash received from customers and users $ 370,440 $ 962,740 $ 137,848 $ 900,479 $ 2,371,507 Cash paid to suppliers for goods and services (336,415) (933,123) (95,291) (652,458) (2,017,287) Cash paid to employees for services (68,295) (39,945) (121,024) (590,489) (819,753) Net Cash Provided (Used) by Operating Activities (34,270) (10,328) (78,467) (342,468) (465,533) Cash Flows from Non-Capital
Financing Activities:

Cash transfers in - - - 275 275
Repayment made to other funds 12,030 4,995 58,222 63,036 138,283 Net Cash Provided (Used) by
Non-Capital Financing Activities 12,030 4,995 58,222 63,311 138,558 Cash Flows from Capital
and Related Financing Activities:

Acquisition and construction of capital assets - - - (33,709) (33,709) Interest paid on capital debt - - - (415) (415)
Principal paid on subscription liability - - - (65,921) (65,921) Net Cash Provided (Used) by
Capital and Related Financing Activities - - - (100,045) (100,045) Cash Flows from Investing Activities:

Interest received - 1,836 316 187,187 189,339
Net Cash Provided (Used) by
Investing Activities - 1,836 316 187,187 189,339
Net Increase (Decrease) in Cash
and Cash Equivalents (22,240) (3,497) (19,929) (192,015) (237,681) Cash and Cash Equivalents at Beginning of Year 22,240 3,497 19,929 192,015 237,681 Cash and Cash Equivalents at End of Year $ - $ - $ - $ - $ - Reconciliation of Operating Income to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) $ (92,566) $ (38,462) $ (202,709) $ (713,780) $ (1,047,517) Adjustments to reconcile operating income (loss)
net cash provided (used) by operating activities:

Depreciation - - - 124,327 124,327
(Increase) decrease in prepaid expense (7,646) - (222) 361 (7,507) (Increase) decrease in net pension asset 46,946 29,553 93,013 275,639 445,151 (Increase) decrease in deferred inflow of resources - pensions 15,328 (7,301) 36,925 (66,178) (21,226) (Increase) decrease in deferred inflow of resources - OPEB 403 (483) 2,490 (807) 1,603 Increase (decrease) in accounts payable 3,510 2,204 2,085 (8,379) (580) Increase (decrease) in accrued liabilities 2,249 (2,072) (3,318) (3,887) (7,028) Increase (decrease) in compensated absences 836 447 2,978 (2,861) 1,400 Increase (decrease) in OPEB liability (3,071) 310 (7,012) 2,666 (7,107) Increase (decrease) in deferred outflows of resources - pensions (1,050) 4,277 (3,990) 39,332 38,569 Increase (decrease) in deferred outflows of resources - OPEB 791 1,199 1,293 11,099 14,382 Total Adjustments 58,296 28,134 124,242 371,312 581,984 Net Cash Provided (Used) by
Operating Activities $ (34,270) $ (10,328) $ (78,467) $ (342,468) $ (465,533) Governmental Activities - Internal Service Funds
Building
Maintenance
Liability
Coverage
Vehicle
Maintenance
Information
Technology
142

Custodial Funds
Modified Community Correctional Facility (MCCF) Inmate Custodial Funds – These funds account for monies received while operating the Modified Community Correctional Facility but which are not property of the City.

North Park/North Shafter Fund – This fund accounts for the activities Assessment District No. 92-1. 143

CITY OF SHAFTER
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2023
MCCF
Inmate Funds
Assets:

Cash and cash equivalents $ 11 $ 109,609 $ 109,620
Accounts receivable, net
Accrued interest - 515 515
Total Assets 11 110,124 110,135
Liabilities:

Deposits payable - 82,300 82,300
Due to City 11 - 11
Total Liabilities 11 82,300 82,311
Net Position (Deficit):

Restricted for other organizations and governments - 27,824 27,824 Total Net Position $ - $ 27,824 $ 27,824
North
Park/North
Shafter Fund Total
See Notes to Financial Statements.
144

CITY OF SHAFTER
Statement of Changes In Fiduciary Net Position
Custodial Funds
Year Ended June 30, 2023
MCCF
Inmate Funds
Additions:

Interest and change in fair value of investments $ - $ 716 $ 716 Miscellaneous - 12,664 12,664
Total Additions - 13,380 13,380
Deductions:

Interest expense - 8,396 8,396
Total Deductions - 8,396 8,396
Changes in Net Position - 4,984 4,984
Net Position (Deficit) - Beginning of the Year - 22,840 22,840 Net Position (Deficit) - End of the Year $ - $ 27,824 $ 27,824 North
Park/North
Shafter Fund Total
See Notes to Financial Statements.
145

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146

STATISTICAL SECTION (UNAUDITED)
147

THIS PAGE INTENTIONALLY LEFT BLANK
148

STATISTICAL SECTION (UNAUDITED)
This part of the City of Shafter's 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 City's overall financial health.

Contents Page
Financial Trends - These schedules contain information to help the reader to understand how the City's financial performance and well-being have changed over time.

1. Net Position by Component – Last Ten Fiscal Years ................................................................................ 150

2. Changes in Net Position – Last Ten Fiscal Years ..................................................................................... 152

3. Governmental Activities Tax Revenue by Source – Last Ten Fiscal Years .............................................. 156

4. Governmental Activities Sales Tax Revenues by Business Category – Last Ten Fiscal Years ................................................................................................................................ 157

5. Fund Balances of Governmental Funds – Last Ten Fiscal Years ............................................................. 158

6. Changes in Fund Balances of Governmental Funds – Last Ten Fiscal Years ......................................... 160

7. General Governmental Revenues by Source – Last Ten Fiscal Years ..................................................... 162 Revenue Capacity - These schedules contain information to help the reader assess the City's property tax.

8. Assessed Value of Taxable Property – Last Ten Fiscal Years ................................................................. 163

9. Direct and Overlapping Property Tax Rates – Last Ten Fiscal Years ....................................................... 164

10. Principal Property Taxpayers – Current Year and Nine Years Ago .......................................................... 166

11. Property Tax Levies and Collections – Last Ten Fiscal Years .................................................................. 167 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.

12. Ratios of Outstanding Debt by Type – Last Ten Fiscal Years .................................................................. 168

13. Historical and Overlapping Debt – Last Ten Fiscal Years ......................................................................... 170 Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place.

14. Demographic and Economic Statistics – Last Ten Fiscal Years ............................................................... 172

15. Principal Employers – Current Year and Ten Years Ago .......................................................................... 174 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 City provides and the activities it performs.

16. Full-time and Part-time City Employees Funded by Function – Last Ten Fiscal Years ............................ 175

17. Operating Indicators by Function – Last Ten Fiscal Years ....................................................................... 176

18. Capital Assets Statistics by Function – Last Ten Fiscal Years ................................................................. 177 Sources: Unless otherwise noted, the information in these schedules was derived from the City's Annual Comprehensive financial reports for the relevant year.
149

CITY OF SHAFTER
Net Position By Component
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Governmental activities:

Net investment in capital assets $ 32,365,663 $ 28,413,250 $ 29,611,048 $ 23,168,573 Restricted 7,547,228 7,194,403 8,033,789 993,526
Unrestricted 62,563,324 62,689,600 67,966,535 51,122,765 Total governmental activities $ 102,476,215 $ 98,297,253 $ 105,611,372 $ 75,284,864 Business-type activities:

Net investment in capital assets $ 32,997,522 $ 45,247,744 $ 45,885,714 $ 46,783,879 Unrestricted 4,230,507 1,018,010 (2,124,745) (6,401,622) Total business-type activities $ 37,228,029 $ 46,265,754 $ 43,760,969 $ 40,382,257 Primary government:

Net investment in capital assets $ 65,363,185 $ 73,660,994 $ 75,496,762 $ 76,089,267 Restricted 7,547,228 7,194,403 8,033,789 8,968,882
Unrestricted 66,793,831 63,707,610 65,841,790 67,179,252 Total primary government net position $ 139,704,244 $ 144,563,007 $ 149,372,341 $ 152,237,401 Fiscal Year
150

2018 2019 2020 2021 2022 2023
$ 24,858,194 $ 32,365,663 $ 28,413,250 $ 44,475,566 $ 50,263,552 $ 50,504,240 6,352,954 7,547,228 7,194,403 12,674,126 16,868,739 27,932,770 58,480,562 62,563,324 62,689,600 76,928,223 90,338,740 90,158,327 $ 89,691,710 $ 102,476,215 $ 98,297,253 $ 134,077,915 $ 157,471,031 $ 168,595,337 $ 49,015,719 $ 49,475,583 $ 52,032,825 $ 52,007,797 $ 45,200,303 $ 44,642,836 (41,026) 1,276,100 547,708 (488,595) 5,283,253 3,476,212 $ 48,974,693 $ 50,751,683 $ 52,580,533 $ 51,519,202 $ 50,483,556 $ 48,119,048 $ 79,607,499 $ 89,427,684 $ 95,217,045 $ 96,483,363 $ 95,463,855 $ 95,147,076 10,736,419 12,846,282 9,708,578 12,674,126 16,868,739 27,932,770 65,796,359 65,883,414 70,348,734 76,439,628 95,621,993 93,634,539 $ 156,140,277 $ 168,157,380 $ 175,274,357 $ 185,597,117 $ 207,954,587 $ 216,714,385 Fiscal Year
151

CITY OF SHAFTER
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Expenses:

Governmental Activities:

General government $ 10,672,479 $ 10,672,479 $ 13,149,940 $ 11,956,687 Public safety 4,913,997 4,913,997 4,958,937 6,204,114
Fire 157,422 157,422 244,982 292,406
Public works 4,116,268 4,116,268 4,063,021 4,443,142
Culture & recreation 892,782 892,782 1,009,002 1,217,965 Interest on long-term debt - - - -
Total governmental activities expenses 20,752,948 20,752,948 23,425,882 24,114,314 Business-type activities:

Water 3,171,826 3,171,826 3,481,988 3,458,616
Wastewater 1,744,861 1,744,861 2,085,894 2,149,564
Modified community correctional facility operations 8,619,863 8,619,863 16,001,708 16,799,773 Modified community correctional facility COP 1,004,764 1,004,764 613,376 - Refuse collection services 1,030,146 1,030,146 1,151,779 1,200,421 Transit services 283,836 283,836 313,136 347,624
Fiber optic & communication tower 67,046 67,046 303,043 354,832 Rail spur services 383,499 383,499 453,795 496,134
Total business-type activities expenses 16,305,841 16,305,841 24,404,719 24,806,964 Total primary government expenses 37,058,789 37,058,789 47,830,601 48,921,278 Program Revenues:

Governmental Activities:

Charges for services
General Government $ 4,910,683 $ 4,910,683 $ 6,759,926 $ 6,857,466 Public safety 1,118,582 1,118,582 161,313 760,305
Public works 2,188,192 2,188,192 3,112,912 2,630,967
Culture & recreation 145,352 145,352 46,168 14,896
Operating grants and contributions 19,914 19,914 25,142 165,034 Capital grants and contributions 8,715,530 8,715,530 1,386,698 1,913,148 Total governmental activities 17,098,253 17,098,253 11,492,159 12,341,816 Business-type activities:

Charges for services:

Water 2,972,018 2,972,018 3,198,827 3,141,346
Wastewater 1,360,884 1,360,884 1,514,281 1,640,635
Modified community corrections facility 7,125,399 7,125,399 13,735,074 13,855,918 Refuse collection services 1,099,987 1,099,987 1,166,075 1,163,476 Transit services 47,844 47,844 53,801 56,807
Fiber Optic & communication tower Services 33,167 33,167 120,617 132,028 Rail Spur Services 367,940 367,940 318,785 27,250
Operating grants and contributions 232,004 232,004 151,627 287,396 Capital grants and contributions 263,969 263,969 388,979 91,846 Total business-type activities program revenues 13,503,212 13,503,212 20,648,066 20,396,702 Total primary government program revenues $ 30,601,465 $ 30,601,465 $ 32,140,225 $ 32,738,518 Fiscal Year
152

(CONTINUED)
2018 2019 2020 2021 2022 2023
$ 13,874,474 $ 14,252,931 $ 18,153,345 $ 18,593,802 $ 14,162,171 $ 23,644,884 5,864,836 6,147,990 7,233,609 8,477,288 3,831,549 12,423,683 - - - - - -
4,431,680 4,706,558 4,967,919 6,677,328 5,138,132 10,366,240 1,197,934 1,219,642 1,237,182 659,182 (1,099,921) 2,101,829 - - - - - 329
25,368,924 26,327,121 31,592,055 34,407,600 22,031,931 48,536,965 3,879,784 3,963,562 4,799,662 4,482,734 4,276,541 6,522,566 2,489,418 2,374,999 2,472,967 2,620,461 2,016,122 2,933,128 17,079,707 14,766,071 15,653,274 5,486,922 459,861 -
- - - - - -
972,840 1,012,346 1,156,643 1,366,704 941,354 2,119,740 389,616 403,708 388,791 455,275 247,316 577,264
320,432 375,556 359,335 265,723 351,850 332,492
469,309 522,698 479,847 453,041 381,854 364,887
25,601,106 23,418,940 25,310,519 15,130,860 8,674,898 12,850,077 50,970,030 49,746,061 56,902,574 49,538,460 30,706,829 61,387,042 $ 6,728,390 $ 4,415,751 $ 7,243,754 $ 9,745,034 $ 7,016,970 $ 9,308,197 406,321 1,678,707 431,338 134,619 122,308 1,058,668
3,603,483 4,495,996 407,755 1,148,514 2,711,537 683,710 13,848 30,402 - - - -
164,966 164,296 259,700 1,261,559 197,041 6,475,555
1,139,320 1,881,146 3,721,835 4,512,359 2,980,928 7,294,313 12,056,328 12,666,298 12,064,382 16,802,085 13,028,784 24,820,443 3,698,790 4,436,026 4,343,041 4,918,463 5,037,773 5,544,092 1,798,535 2,021,085 1,985,144 2,366,344 2,415,468 2,463,592 14,205,083 14,105,693 13,359,775 3,998,498 - -
1,061,137 1,047,175 1,041,957 1,228,478 1,410,767 1,619,575 58,829 57,568 40,029 21,591 39,924 44,459
134,078 148,802 159,531 174,565 292,451 394,239
188,840 120,915 24,720 900 - -
190,141 267,172 424,344 5,366 67,220 322,899
118,749 125,611 - 387,384 525,694 33,847
21,454,182 22,330,047 21,378,541 13,101,589 9,789,297 10,422,703 $ 33,510,510 $ 34,996,345 $ 33,442,923 $ 29,903,674 $ 22,818,081 $ 35,243,146 Fiscal Year
153

CITY OF SHAFTER
Changes in Net Position
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Net Revenues (Expense):

Governmental activities $ (3,654,695) $ (3,654,695) $ (11,933,723) $ (11,772,498) Business-type activities (2,802,629) (2,802,629) (3,756,653) (4,410,262) Total primary government net expense (6,457,324) (6,457,324) (15,690,376) (16,182,760) General Revenues and Other Changes in Net Position:

Governmental activities:

Taxes:

Property taxes 1,018,122 1,018,122 1,296,584 1,499,108
Sales taxes 14,800,239 14,800,239 14,978,921 14,300,406 Gas tax 500,746 500,746 368,069 325,586
Franchise tax - - - -
Other taxes (83,648) (83,648) 84,569 189,815
Motor vehicle in lieu, unrestricted 1,622,435 1,622,435 1,855,958 2,099,610 Investment earnings 1,052,833 1,052,833 1,142,751 855,702 Other general revenues 146,322 146,322 642,270 66,363
Extraordinary Gain/(Loss) - - - -
Special Items Gain/:(Loss) 4,484,726 4,484,726 - -
Transfers (7,102,575) (7,102,575) (1,121,280) (978,556) Total government activities 16,439,200 16,439,200 19,247,842 18,358,034 Business-type activities:

Investment earnings 53,047 53,047 47,663 18,395
Other general revenues 9,295 9,295 82,925 85,303
Extraordinary Gain/(Loss) - - - -
Transfers 7,102,575 7,102,575 1,121,280 978,556
Total business-type activities 7,164,917 7,164,917 1,251,868 1,082,254 Total primary government 23,604,117 23,604,117 20,499,710 19,440,288 Changes in net position
Governmental activities $ 12,784,505 $ 12,784,505 $ 7,314,119 $ 6,585,536 Business-type activities 4,362,288 4,362,288 (2,504,785) (3,328,008) Total primary government $ 17,146,793 $ 17,146,793 $ 4,809,334 $ 3,257,528 The City receives capital additons of infrastructure due to development.

Gas tax was reclassified as capital grants and contributions - public works in fiscal year 2020.

Fiscal Year
154

(CONTINUED)
2018 2019 2020 2021 2022 2023
$ (13,312,596) $ (13,660,823) $ (19,527,673) $ (17,605,515) $ (9,003,147) $ (23,716,522) (4,146,924) (1,088,893) (3,931,978) (2,029,271) 1,114,399 (2,427,374) (17,459,520) (14,749,716) (23,459,651) (19,634,786) (7,888,748) (26,143,896) 1,670,464 1,788,640 1,943,805 2,336,157 2,545,919 2,901,610 15,869,586 18,692,355 22,417,415 22,014,895 23,647,976 25,136,604 451,407 769,842 - - - -
- - 785,221 903,471 1,105,290 1,281,802
142,920 (88,866) 92,230 94,632 108,562 111,561
2,047,646 2,222,405 2,449,731 2,835,678 3,069,166 3,954,781 665,212 3,098,836 2,410,215 561,277 (119,850) 1,492,550 413,675 72,157 30,977 4,975 74,662 9,243
- - - - 3,688,708 -
- - - 788,700 - -
(12,637,878) (2,649,351) (5,313,794) (21,604) (1,724,170) (47,323) 8,623,032 23,906,018 24,815,800 29,518,181 32,396,263 34,840,828 18,923 122,599 155,272 75,978 (163,334) (55,444)
82,559 93,933 294,762 418,290 41,908 94,275
- - - - (3,743,612) (23,288)
12,637,878 2,649,351 5,313,794 21,604 1,724,170 47,323
12,739,360 2,865,883 5,763,828 515,872 (2,140,868) 62,866 21,362,392 26,771,901 30,579,628 30,034,053 30,255,395 34,903,694 $ (4,689,564) $ 10,245,195 $ 5,288,127 $ 11,912,666 $ 23,393,116 $ 11,124,306 8,592,436 1,776,990 1,831,850 (1,513,399) (1,026,469) (2,364,508) $ 3,902,872 $ 12,022,185 $ 7,119,977 $ 10,399,267 $ 22,366,647 $ 8,759,798 Fiscal Year
155

Sales Other Taxes Unrestricted
Fiscal Property and Use & Franchise Gas Motor Vehicle Business Year Tax Tax Fees Tax License Taxes License Total
2013-14 1,018,122 14,800,239 373,197 500,746 1,622,435 43,901 18,358,640 2014-15 1,448,963 15,461,196 382,278 468,155 1,722,278 47,232 19,530,102 2015-16 1,296,584 14,978,921 403,059 368,069 1,855,958 49,579 18,952,170 2016-17 1,499,108 14,300,406 462,268 325,586 20,999,610 53,133 37,640,111 2017-18 1,670,464 15,869,586 537,499 451,407 2,047,646 56,828 20,633,430 2018-19 1,788,640 18,692,355 62,034 769,842 2,222,405 60,942 23,596,218 2019-20 1,943,805 22,417,415 877,451 818,792 2,449,731 64,874 28,572,068 2020-21 2,309,754 22,014,895 1,039,499 811,480 2,820,686 68,732 29,065,046 2021-22 2,514,862 23,647,976 1,244,908 876,110 3,069,166 80,872 31,433,894 2022-23 2,901,610 25,136,604 1,393,363 958,135 3,954,781 97,166 34,441,659 Source: City of Shafter
Property taxes which are the in lieu amount for replacement of motor vehicle license fees have been subtracted from the property tax column and placed in the VLF column.

CITY OF SHAFTER
Governmental Activities Tax Revenue By Source
Last Ten Fiscal Years
(Accrual Basis of Accounting)
156

Fiscal Business General Food Year over Year
Year to Business Transportation Retail Products Construction County Pool Total Change 2013-14 4,124,868 714,780 4,047,095 340,273 3,902,364 1,907,875 15,037,255 15.47% 2014-15 3,403,033 683,350 4,722,015 325,671 4,474,136 1,292,316 14,900,521 -0.91% 2015-16 2,058,564 617,571 5,321,565 317,892 4,898,703 1,772,878 14,987,173 0.58% 2016-17 1,448,082 574,277 5,537,588 316,351 4,715,817 1,896,780 14,488,894 -3.32% 2017-18 2,353,676 626,303 6,047,193 286,617 5,523,905 1,994,392 16,832,085 16.17% 2018-19 2,497,396 642,122 6,894,623 286,077 5,945,805 2,495,792 18,761,814 11.46% 2019-20 1,960,291 618,098 7,746,187 268,191 5,544,568 2,761,516 18,898,851 0.73% 2020-21 1,004,530 673,654 10,014,844 411,927 5,956,186 3,715,397 21,776,539 15.23% 2021-22 1,228,430 924,807 11,082,819 310,951 6,031,670 4,089,912 23,668,590 25.24% 2022-23 1,794,689 998,237 12,522,093 329,650 5,390,038 4,101,897 25,136,604 15.43% Sales tax is based on the gross 1% local Bradly Burns Sales and Use Tax.

Direct allocations only and do not incluse state-wide and county-wide pools Source: City of Shafter, MuniServices, LLC.

CITY OF SHAFTER
Governmental Activities Sales Tax Revenues By Business Category Last Ten Fiscal Years
(Accrual Basis of Accounting)
157

CITY OF SHAFTER
Fund Balances of Governmetal Funds
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
General Fund:

Nonspendable $ 282,211 $ 454,500 $ 335,734 $ 1,437,038
Assigned 21,858,072 16,856,016 37,501,707 42,138,208
Unassigned 32,699,287 39,009,295 22,850,298 21,722,000
Total general fund $ 54,839,570 $ 56,319,811 $ 60,687,739 $ 65,297,246 All other governmental funds:

Nonspendable $ 1,438,610 $ 1,438,610 $ 1,555,460 $ 1,555,460 Restricted 7,547,228 5,755,793 6,878,911 7,993,314
Assigned 6,953,451 7,514,317 7,784,159 8,922,341
Unassigned - - (313,514) -
Total all other governmental funds $ 15,939,289 $ 14,708,720 $ 15,905,016 $ 18,471,115 Fiscal Year
158

2018 2019 2020 2021 2022 2023
$ 1,370,550 $ 1,356,170 $ 1,343,814 $ 1,286,270 $ 1,272,409 $ 1,132,650 40,681,889 32,265,562 34,542,535 36,986,070 38,076,932 41,103,724 13,111,861 17,809,130 20,105,952 21,746,015 19,915,650 25,157,220 $ 55,164,300 $ 51,430,862 $ 55,992,301 $ 60,018,355 $ 59,264,991 $ 67,393,594 $ - $ - $ - $ - $ - $ 3,235
10,736,419 12,846,282 9,708,578 12,674,126 16,868,739 27,932,770 8,671,160 11,064,055 12,702,113 15,821,374 14,097,850 17,454,676 - - (16,540) (8,951) (36,433) (530,064)
$ 19,407,579 $ 23,910,337 $ 22,394,151 $ 28,486,549 $ 30,930,156 $ 44,860,617 Fiscal Year
159

CITY OF SHAFTER
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(Accrual Basis of Accounting)
2014 2015 2016 2017
Revenues:

Property taxes $ 1,268,719 $ 1,684,387 $ 1,530,566 $ 1,985,530 Property tax in lieu of VLF 1,622,435 1,722,278 1,855,958 2,099,610 Other taxes 17,668,108 17,287,480 16,047,199 16,239,813 Licenses, permits and fees 3,150,714 2,764,717 3,102,903 3,190,405 Fines, forfeitures and penalties 34,180 208,083 33,019 57,879 Investment earnings 1,351,037 1,164,033 1,457,881 1,142,416 Lease revenue - - - -
Intergovernmental 6,284,673 2,369,918 491,873 645,350
Charges for services 4,629,114 6,637,216 6,402,917 6,251,040 Other 146,322 327,710 642,270 66,363
Total revenues $ 36,155,302 $ 34,165,822 $ 31,564,586 $ 31,678,406 Expenditures:

Current:

General government $ 70,796,079 $ 14,417,458 $ 12,801,949 $ 11,662,684 Public safety 4,822,522 4,914,231 5,114,334 6,041,656
Public works 2,785,214 2,777,875 2,786,169 2,988,119
Culture & recreation 718,277 796,246 795,307 953,518
Capital outlay 9,367,997 4,233,005 3,591,448 1,878,267
Debt Service:

Principal retirement - - - -
Interest and fiscal charges - - - -
Total expenditures $ 88,490,089 $ 27,138,815 $ 25,089,207 $ 23,524,244 Excess (deficiency) of revenues
over (under) expenditures $ (52,334,787) $ 7,027,007 $ 6,475,379 $ 8,154,162 Other financing sources (uses):

Transfers in $ 3,034,085 $ 892,214 $ 780,544 $ 256,388
Transfers out (10,136,660) (7,669,549) (1,691,699) (1,234,944) Extraordinary Gain/(Loss) - - - -
Special Items Gain/(Loss) 4,484,726 - - -
Proceeds from sale of capital assets - - - -
Subscription proceeds - - - -
Total other financing sources
(uses) (2,617,849) (6,777,335) (911,155) (978,556)
Net change in fund balances $ (54,952,636) $ 249,672 $ 5,564,224 $ 7,175,606 Fiscal Year
160

2018 2019 2020 2021 2022 2023
$ 2,120,395 $ 2,264,943 $ 2,503,442 $ 3,042,383 $ 3,537,685 $ 2,901,610 2,047,646 2,222,405 2,449,731 2,820,686 2,820,686 3,933,782 17,186,233 20,424,376 24,968,801 23,824,480 25,737,938 27,488,102 3,812,988 5,969,293 4,797,163 8,885,156 5,729,984 8,367,730 41,750 30,195 53,365 151,151 94,564 94,490
1,012,254 3,462,138 2,448,254 581,939 (84,256) 1,531,848 - - 322,631 302,332 302,332 500,237
565,438 979,428 1,808,311 3,033,340 3,069,353 10,380,089 6,116,859 3,796,732 2,715,151 1,444,044 1,222,654 2,018,985 413,675 72,157 127,127 229,797 100,173 981,592
$ 33,317,238 $ 39,221,667 $ 42,193,976 $ 44,315,308 $ 42,531,113 $ 58,198,465 $ 16,969,395 $ 13,811,448 $ 17,567,544 $ 18,200,283 $ 20,485,110 $ 18,467,971 5,622,796 5,885,692 6,464,485 7,461,897 7,654,419 7,882,558 3,059,487 3,374,188 3,463,367 4,390,489 4,860,155 5,395,752 881,622 915,189 896,334 257,135 274,058 264,395
3,171,661 11,816,479 6,265,216 3,777,660 3,139,363 4,629,601 - - - - - 151,833
- - - - - 329
$ 29,704,961 $ 35,802,996 $ 34,656,946 $ 34,087,464 $ 36,413,105 $ 36,792,439 $ 3,612,277 $ 3,418,671 $ 7,537,030 $ 10,227,844 $ 6,118,008 $ 21,406,026 $ 396,286 $ 343,915 $ 568,195 $ 199,246 $ 3,677,637 $ 933,872 (13,205,044) (2,993,266) (5,881,988) (220,850) (5,438,121) (981,470) - - - - (2,667,281) -
- - - - - -
- - - 788,700 - -
- - - - - 709,636
(12,808,758) (2,649,351) (5,313,793) 767,096 (4,427,765) 662,038 $ (9,196,481) $ 769,320 $ 2,223,237 $ 10,994,940 $ 1,690,243 $ 22,068,064 Fiscal Year
161

Fines Use of
Licenses Forfeitures Money Inter- Charges
Fiscal Permits and and governmental for Other Total
Year Taxes and Fees Penalties Property Revenue Services Revenues Governmental 2013-14 20,559,262 3,150,714 34,180 1,351,037 6,284,673 4,629,114 146,322 36,155,302 2014-15 20,694,145 2,764,717 208,083 1,164,033 2,369,918 6,637,216 327,710 34,165,822 2015-16 19,433,723 3,102,903 33,019 1,457,881 491,873 6,402,917 642,270 31,564,586 2016-17 20,324,953 3,190,405 57,879 1,142,416 645,350 6,251,040 66,363 31,678,406 2017-18 21,354,274 3,812,988 41,750 1,012,254 565,438 6,116,859 413,675 33,317,238 2018-19 24,911,724 5,969,293 30,195 3,462,138 979,428 3,796,732 72,157 39,221,667 2019-20 29,921,974 4,797,163 53,365 2,448,254 1,808,311 2,715,151 449,758 42,193,976 2020-21 29,687,549 8,885,156 151,151 884,271 3,033,340 1,444,044 229,797 44,315,308 2021-22 32,096,309 5,729,984 94,564 218,076 3,069,353 1,222,654 100,173 42,531,113 2022-23 35,266,008 8,367,730 94,490 2,032,085 10,380,089 2,018,985 39,078 58,198,465 Source: City of Shafter

CITY OF SHAFTER
General Governmental Revenues by Source
Last Ten Fiscal Years
(Modified Accrual Basis of Accounting)
All Governmental Funds
162

CITY OF SHAFTER
Assessed Value of Taxable Property
Last Ten Fiscal Years
(In Thousands)
Fiscal Year Taxable Taxable Total
Ended Assessed Assessed Direct Tax
June 30 Secured Unsecured Value Secured Unsecured Utility Value Rate 2013-14 801,604 60,539 862,143 263,531 60,123 1,427 325,081 3.830% 2014-15 865,019 57,176 922,195 281,546 55,856 1,427 338,829 3.500% 2015-16 898,906 99,515 998,421 284,331 56,002 1,281 341,614 3.420% 2016-17 1,065,208 75,586 1,140,794 315,372 75,772 1,382 392,526 3.290% 2017-18 1,204,353 56,071 1,260,424 321,755 66,586 1,382 389,723 3.100% 2018-19 1,283,375 70,134 1,353,509 332,611 62,976 1,382 396,969 3.590% 2019-20 1,421,154 79,946 1,501,100 354,961 69,806 1,382 426,150 2.502% 2020-21 1,663,286 76,955 1,740,241 363,184 71,016 1,264 435,464 2.510% 2021-22 1,838,516 74,720 1,913,236 383,633 70,294 1,264 455,191 1.171% 2022-23 2,257,331 307,168 2,564,499 399,243 72,981 1,264 473,488 1.171% Source: Kern County Assessor Data;
Source: City of Shafter Comprehensive Annual Financial Report For the Year Ended June 30th, 2020; City Redevelopment Agency
MuniServices an Avenu Insights and Analytics Company
(1) 2021-22 Represent TRA 006-001;
163

CITY OF SHAFTER
Direct and Overlapping Property Tax Rates
(Rate Per $100 of Assessed Value)
Last Ten Fiscal Years
2014 2015 2016 2017
Overlapping Tax & Assessment Debt: Shafter Allocation
Factor
Kern County High School 2.425 2.443 1.696 1.167
Kern County Community College COP - - 1.094 1.848
Richland School District 52.135 53.543 53.494 52.914
Rio Bravo-Greeley School District 6.566 9.352 1.103 1.419 Rosedale Union School District - - 3.834 4.420
Norris School District 1.086 1.059 1.689 1.111
City of Shafter - 1915 Act Bonds 100.000 100.000 100.000 100.000 Kern Community College Assessment District 1.442 1.469 1.186 1.264 Kern Community College Assessment District No. 1 - - - - Total Assessment Rate 1.630 1.520 1.830 1.700
Direct and Overlapping General Fund Debt: Shafter
Allocation Factor
Kern County COP 1.291 1.308 0.975 1.018
Kern County Pension Obligations 1.291 1.308 0.975 1.018 Kern County Board of Education COP 1.291 1.308 0.975 1.018 Kern County Community College COP 1.304 1.332 0.968 1.035 Kern County Community College Benefit
Obligations 1.304 1.332 0.968 1.035
Kern High School COP 2.425 2.443 1.696 1.848
Rio Bravo-Greedley Union School District
Obligations 6.566 9.352 1.103 1.410
City of Shafter - - - -
Total Direct & Overlapping Rate 3.830 3.500 3.660 3.390 Overlapping Tax Increment Debt (Successor Agency) 100.000 100.000 100.000 100.000 Source: MuniServices, LLC.

Fiscal Year
In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of the Example Unified School District bonds. 164

2018 2019 2020 2021 2022 2023

2.417 2.425 2.443 3.573 3.787 4.407
- - - - - -

54.167 52.135 53.543 64.266 65.505 65.619

3.520 6.566 9.352 23.576 24.725 33.930

4.895 - - - - -

1.091 1.086 1.059 6.708 8.059 10.124
100.000 100.000 100.000 100.000 100.000 100.000

1.464 1.442 1.469 2.286 2.427 2.837
- - - 2.272 2.412 2.82

1.680 1.630 1.520 1.630 1.570 0.000

1.282 1.291 1.308 2.223 2.397 2.754

1.282 1.291 1.308 2.223 2.397 2.754

1.282 1.291 1.308 2.223 2.397 2.754

1.315 1.304 1.332 2.050 2.173 2.542

1.315 1.304 1.332 2.050 2.173 2.542

2.417 2.425 2.443 - -

3.502 6.566 9.352 23.576 24.725 33.930
- - - 100.000 100.000 100.000

4.000 3.830 3.500 2.510 2.370 0.000
100.000 100.000 100.000 100.000 100.000 100.000
Fiscal Year
165

Taxpayer Taxable Value
Percent of
Total City
Taxable Value Taxable Value
Percent of
Total City
Taxable
Value
Ross Dress For Less Inc $ 290,774,922.00 9.57%
Walmart Stores East LP 245,153,037 8.07%
Amazon.Com Services LLC 216,344,650 7.12%
4100 Express Ave LLC 180,974,291 5.96%
Target Corporation 123,648,726 4.07% 129,714,583 10.93% Wonderful Real Estate Dev LLC 122,144,765 4.02%
Lennar Homes Of Cal Inc 72,025,524 2.37% 24,406,709 2.06% Paramount Logistics Park 141 LLC 57,183,828 1.88% 26,062,564 2.20% BJ Serv Co U S A 50,726,622 1.67% 50,722,785 4.27%
Bidart Bros Inc 44,579,082 1.47% 43,025,512 3.62%
Grimmway Enterprises Inc 42,951,833 1.41% 15,932,960 1.34% Elk Corporation Of Texas 39,901,074 1.31% 37,488,230 3.16% Garlic Company 32,826,049 1.08% 21,523,763 1.81%
Farmland Reserve Inc 30,225,243 0.99%
Mariner Ave Prop LLC 25,333,402 0.83%
4000 Fanucchi Way Prop LLC 25,142,877 0.83%
Golden West BF LP 21,765,701 0.72%
Grapery Inc 19,471,676 0.64%
Kenneth O Lester Co Inc 18,155,368 0.60% 8,519,375 0.72% Zachary Acquisition Co LLC 15,586,620 0.51%
Building Materials Manufacturing Corp 14,320,504 0.47% 17,586,911 1.48% Seventh Standard LP 12,033,093 0.40%
GMC Roofing & Bldg Paper Products Inc 9,745,729 0.32% 5,972,372 0.50% American Tire Distributors Inc 8,965,718 0.30%
Rexco Shafter LLC 8,670,000 0.29%
Vintage Production Cal LLC 142,509,065 12.00%
Roll Real Est Dev LLC 40,827,242 3.44%
Tryad Service Corporation 17,001,604 1.43%
Nabors Well Serv Co 13,525,099 1.14%
Weatherford Us LP 13,475,574 1.14%
Suburban Land Reserve Inc 10,468,793 0.88%
Shafter Jt Powers Financing Au 7,791,772 0.66%
Calif Paper Products LLC 7,218,040 0.61%
A L Good Living Trust Uad 2 5,004,080 0.42%
37 Shafter Riteaid LLC 4,979,355 0.42%
Global Properties 4,894,964 0.41%
Sill Properties 4,810,955 0.41%
Hyponex Corporation 4,282,589 0.36%
MI LLC 3,623,900 0.31%
Total Top 25 Taxpayers $ 1,728,650,334 56.90% $ 661,368,796 55.71% Total Taxable Value $ 3,037,985,815 100.00% $ 1,187,224,652 100.00% MuniServices an Avenu Insights and Analytics Company
Source: Kern County Assessor Data

CITY OF SHAFTER
Principal Property Tax Payers
Last Fiscal Year and Nine Years Ago
2023 2014
166

CITY OF SHAFTER
Property Tax Levies and Collections
Last Ten Fiscal Years
Fiscal
Taxes Levied
for the Collections in
Year Ended Fiscal Year Total Percent Subsequent Percent June 30 (Original Levy) Adjustments
Adjusted Levy
Amount of Levy
Years
Amount of Levy
2014 969,095 181,247 1,150,342 944,781 82.13% 197,081 1,141,862 99.26% 2015 1,093,573 (2,619) 1,090,954 1,078,323 98.84% 6,046 1,084,369 99.40% 2016 1,158,634 13,788 1,172,421 1,155,301 98.54% 10,250 1,165,551 99.41% 2017 1,290,938 59,919 1,350,857 1,343,064 99.42% 7,494 1,350,558 99.98% 2018 1,528,966 28,699 1,557,665 1,537,674 98.72% 13,298 1,550,972 99.57% 2019 1,635,697 9,711 1,645,408 1,622,400 98.60% - 1,622,400 98.60% 2020 1,629,581 (50,508) 1,579,073 1,552,960 98.35% - 1,552,960 98.35% 2021 1,990,346 75,000 2,065,346 2,061,912 99.83% - 2,061,912 99.83% 2022 2,152,359 35,620 2,187,979 2,183,949 99.82% - 2,183,949 99.82% 2023 2,564,499 (55,860) 2,508,639 2,501,026 99.70% - 2,501,026 99.70% NOTE:

The amounts presented include City property taxes.

Allocation of "Collections in Subsequent Years" are based on actual prior levy collections allocated between levy years based on an estimate.

Source: Kern County Auditor Controller's Office
Collected within the Fiscal Year
of Levy Total Collections to Date
167

CITY OF SHAFTER
Rations of Outstanding Debt by Type
Last Ten Fiscal Years
Fiscal Year General Tax Total Sales and Wastewater Certificates Loans Total Total Percentage Debt Ended Obligation Allocation Governmental Loan Revenue of and Business-type Primary of Personal Per June 30 Bonds Bonds Loans Activities Agreements Bonds Participation Leases Activities Government Income Capita 2014 - - - - 2,106,456 573,575 4,993,565 - 7,673,596 7,673,596 0.91% 439 2015 - - - - 1,819,347 516,558 3,429,144 - 5,765,049 5,765,049 0.65% 321 2016 - - - - 1,524,142 458,689 - - 1,982,831 1,982,831 0.22% 110 2017 - - - - 1,220,494 398,694 - - 1,619,188 1,619,188 0.16% 86 2018 - - - - 908,208 337,848 - - 1,246,056 1,246,056 0.12% 65 2019 - - - - 587,029 275,300 - - 862,329 862,329 0.07% 41 2020 - - - - 256,727 210,624 - - 467,351 467,351 0.04% 23 2021 - - - - 196,304 142,970 - - 339,274 339,274 0.00% 19 2022 - - - - 133,442 72,760 - - 206,202 206,202 0.00% 10 2023 - - - - 68,067 - - - 68,067 68,067 0.00% 3
Notes: Details regarding the City's outstanding debt can be found in the notes to the financial statements.

Governmental Activities Business-type Activities
168

CITY OF SHAFTER
Historical and Overlapping Debt
Last Ten Fiscal Years
Overlapping Tax and Assessment Debt
Kern County High
School District
% Applicable Debt
Rio Bravo-Greeley
Union School District
% Applicable Debt
Rosedale Union
School District
% Applicable Debt
Kern Community
College Assess. District
% Applicable Debt
2014 2.425% 4,785,767 6.566% 737,068 0.000% - 0.000% -
2015 2.443% 4,421,615 6.352% 1,025,515 0.000% - 0.000% - 2016 2.636% 5,180,167 14.205% 1,517,846 0.000% - 0.000% - 2017 2.932% 7,978,740 20.431% 2,125,084 0.000% - 0.000% - 2018 3.050% 9,849,249 19.547% 1,942,482 0.000% - 0.000% - 2019 3.122% 9,308,281 19.208% 1,849,497 0.000% - 0.000% - 2020 3.283% 8,967,554 22.503% 2,103,589 0.000% - 0.000% 91,300 2021 3.573% 13,435,774 23.576% 2,113,038 0.000% - 2.286% 2,440,558 2022 3.787% 13,207,966 24.725% 2,118,262 0.000% - 2.412% 3,645,815 2023 4.407% 14,229,155 33.930% 2,769,577 0.000% - 2.820% 9,301,860 Norris School
District
% Applicable Debt
Richland School
District
% Applicable Debt
Kern County
Community College
Dist Repair &
Improve
% Applicable Debt
City of Shafter 1915 Act
Bonds
% Applicable Debt
2014 1.086% 196,501 52.135% 10,992,259 1.442% 2,189,839 100.000% 114,000 2015 1.059% 228,629 53.543% 10,989,345 1.469% 2,169,872 100.000% 110,600 2016 1.156% 312,322 56.415% 11,217,733 1.655% 2,384,956 100.000% 110,600 2017 1.767% 472,620 56.867% 10,774,966 1.886% 2,579,597 100.000% 103,400 2018 3.197% 849,904 60.943% 10,916,662 1.961% 2,528,829 100.000% 99,500 2019 4.363% 1,151,205 61.317% 10,231,555 1.992% 2,400,581 100.000% 95,500 2020 5.694% 2,103,589 61.840% 9,683,719 2.091% 1,577,241 100.000% 91,300 2021 6.708% 2,106,078 64.266% 9,409,314 227.200% 2,484,504 100.000% 86,900 2022 8.059% 2,938,428 65.505% 8,759,742 2.427% 2,298,638 100.000% 82,300 2023 10.124% 3,338,319 65.619% 7,911,779 2.837% 2,516,378 100.000% 77,500 169

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170

CITY OF SHAFTER
Historical and Overlapping Debt
Last Ten Fiscal Years
2022-23 Assessed Valuation: $ 3,049,259,446
OVERLAPPING TAX AND ASSESSMENT DEBT: Total Debt
06/30/2023 % Applicable
(1) City's Share of
Debt 06/30/23
Kern County Community College District School Facilities Improvement District
$ 88,698,557 2.837% $ 2,516,378
Kern County Community College District School Facilities Improvement District No. 1
329,853,183 2.820% 9,301,860
Kern County Union High School District 322,876,209 4.407% 14,229,155 Richland School District 12,057,147 65.619% 7,911,779
Norris School District 32,974,305 10.124% 3,338,319
Rio Bravo-Greeley Union School District 8,162,621 33.930% 2,769,577 RNR School Financing Authority Community Facilities District No. 92-1 114,210,000 4.657% 5,318,760 City of Shafter 1915 Act Bonds 77,500 100.000% 77,500
Total Overlapping Tax and Assessment Debt 45,463,327
DIRECT AND OVERLAPPING DEBT:

Kern County General Fund Obligations $ 104,963,511 2.754% $ 2,890,695 Kern County Pension Obligations 94,617,067 2.754% 2,605,754 Kern County Board of Education Certificates of Participation 31,330,000 2.754% 862,828 Kern County Community College District Certificates of Participation 73,200,000 2.542% 1,860,744 Kern County Community College District Benefit Obligations 23,000,000 2.542% 584,660 Rosedale Union School District General Fund Obligations 9,550,000 3.901% 372,546 100.000% -
9,177,227

0.000% 10,550,000
$ 65,190,554 (2)
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue bonds and non-bonded capital lease obligations.

Ratios to 2022-2023 Assessed Valuation:

Total Direct and Overlapping Tax and Assessment Debt 1.49% Total Direct Debt 0.00%
Combined Total Debt 2.10%
Ratios to Redevelopment Incremental Valuation ($397,075,889):

Total Overlapping Tax Increment Debt 2.40%
Source: Avenu Insights & Analytics
California Municipal Statistics, Inc.
(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 assessed value.

Combined Total Debt
City of Shafter
Total Direct and Overlapping General Fund Obligation Debt OVERLAPPING TAX INCREMENT DEBT (Successor Agency)
171

CITY OF SHAFTER
Demographic and Economic Statistics
Last Ten Calendar Years
Fiscal Year City Population (1)
City Unemployment
Rate (2) County Population (1)
County Unemployment
Rate (2)
2013-14 17,461 21.0% 873,092 11.8%
2014-15 17,970 8.8% 874,264 10.2%
2015-16 18,048 8.7% 886,507 10.6%
2016-17 18,868 8.8% 895,112 9.4%
2017-18 19,271 10.7% 905,801 7.3%
2018-19 20,886 8.4% 916,464 6.0%
2019-20 20,441 24.6% 917,553 18.3%
2020-21 20,448 11.5% 914,193 12.5%
2021-22 20,486 5.9% 907,324 6.0%
2022-23 21,318 7.0% 907,476 8.6%
MuniServices an Avenu Insights and Analytics Company
(1) State of California Department of Finance;
(2) State of California Employment Development Department; (3) U.S. Census Bureau, adjusted for inflation;
(4) Includes Richland School District (SD), Kern High SD, and Maple Elementary SD; Source: City of Shafter Comprehensive Annual Financial Report For the Year Ended June 30th, 2022; 172

Per Capita Personal
Income (3) Personal Income (3) Median Age (2)
Public School
Enrollment (4)
48,248 842,458,328 26.3 40,840
49,424 888,149,280 27.4 41,130
50,322 908,213,983 26.6 41,866
52,744 995,172,471 26.3 42,463
56,100 1,081,096,548 26.5 43,279
59,173 1,235,887,278 27.1 44,101
61,544 1,258,012,319 26.7 45,232
66,430 1,358,363,094 27.2 46,047
76,303 1,563,144,282 27.4 46,555
89,000 1,897,302,000 27.4 46,690
173

CITY OF SHAFTER
Principal Employers
Current Year and Nine Years Ago
Employer
Number of
Employees
Percent of Total
Employment
Number of
Employees
Amazon Fulfillment Center 2,087 24.85%
Ross Distribution Center* 1,581 18.82%
Target Distribution 1,516 18.05% 600
Grimmway Enterprises 660 7.86% 450
Richland School District 464 5.52% 497
Walmart Distribution Center 315 3.75%
GAF Materials Corp 237 2.82%
Wonderful Orchards 224 2.67%
Shafter High School (Kern HS District) 161 1.92% 142
Hillman Group Distribution Center 133 1.58%
Shafter Nursing Care 132 1.57%
Baker Hughes 450
JD Rush (Also Tryad Serv. Corp.) 250
City of Shafter 188
MI Swaco 145
Williams-Sonoma 115
Global Fabricators 109
7,510 89.40% 2,947
Total Labor Force (3) 8,400
*No response from business, previous year's count applied.

MuniServices an Avenu Insights and Analytics Company
(1) State of California Employment Development Department; 2023 2014
Source: 2014, City of Shafter Comprehensive Annual Financial Report For the Year Ended June 30th, 2014; Results based on direct correspondence with city’s local businesses. 174

Function 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 General government 18 19 21 21 22 22 22 19 17 17
General government - PT - - - - - - - - - 1
Public safety (1) 36 37 39 42 42 42 42 42 40 47
Public works 15 17 18 21 21 22 22 16 20 24
Public Works - PT - - - - - - - 1 1 1
Education Partnership - - - - - - - 2 2 2
Education Partnership - PT - - - - - - - 11 12 22
Community Developemnt 7 8 8 8 10 10 10 11 11 12
Water 6 6 6 6 6 6 6 6 6 6
Wastewater 3 3 3 3 2 2 2 3 3 3
Refuse collection 6 5 5 4 4 4 4 3 1 1
Transit service 7 8 8 8 8 9 9 1 1 1
Transit service - PT - - - - - - - 3 3 3
Rail Operations 2 2 1 0 0 0 0 - - -
MCCF Facility (2) 86 90 90 89 90 90 90 1 - -
Sub-Total - FT 184 194 198 201 205 207 207 104 101 113
Sub-Total - PT - - - - - - - 15 16 27
Total 184 194 198 201 205 207 207 119 117 140
1 Police service and Animal Control only all staffing. Fire services are provided by the County of Kern thru a fee for service contract. 2 MCCF Facility is a Modified Community Correctional Facility housing State of California inmates thru a contract with the State.

Source: City of Shafter
Full-Time Employees as of June 30
Last Ten Fiscal Years
Full-Time and Part-Time City Employees

CITY OF SHAFTER
Funded by Function
175

CITY OF SHAFTER
Operating Indicators by Function
Last Ten Fiscal Years
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Police:

Calls for service 18,636 19,152 18,596 21,406 18,604 17,714 21,389 22,319 16,690 11,537 Total Crime UCR 638 709 709 646 656 752 589 627 669 610 Arrests & citations 1,152 1,047 1,003 1,148 1,027 1,027 1,611 3,867 2,295 2,386 Felony arrests 284 261 249 214 191 173 221 363 259 311
Misdemeanor arrests 867 788 754 934 836 854 1,390 1,705 1,167 1,386 Property loss 993,488 1,145,223 1,152,412 1,139,318 1,127,895 1,178,881 121,041 2,775,459 1,677,592 1,297,698 Property Recovery 408,420 576,025 696,746 610,893 437,310 581,736 507,193 917,578 699,345 116,225 Traffic citations 797 793 468 1,158 747 762 1,438 1,801 868 587 Traffic accidents 160 166 200 238 244 229 251 221 166 195 Parking citations 163 91 111 300 137 247 255 83 75 67
Animal Control:

Citations 1 10 10 14 5 8 5 4 19 5
Violations 1,406 1,687 1,779 2,347 1,691 1,141 1,597 1,478 1,057 616 Adoptions 657 668 342 349 936 912 704 660 420 505
Public works:

Street resurfacing (miles) 1 2 1 1 0 1 0 1 1 1
Water:

New connections (SFE) 147 155 38 66 71 148 28 36 12 27
Average daily production
(thousands of gallons) 4,950 4,226 3,764 4,119 4,443 4,349 4,482 4,483 4,363 4,069 Sewer:

New connections (SFE) 157 115 105 225 231 277 151 11 6 23 Average daily sewage
treatment (thousands of gallons) 1,260 1,260 1,330 1,430 1,430 1,400 1,360 1,330 1,370 1,390 Source: City of Shafter
Fiscal Year
176

Fiscal Year 2014 2015 2016 2017 2018 2019 2020 2022 2023 Police:

Stations 1 1 1 1 1 1 1 1 1
Fire:

Fire stations (County) 1 1 1 1 1 1 1 1 1
Public works:

Streets (miles) 82.70 84.00 84.00 98.00 117.00 123.00 124.00 140.00 149.00 Streetlights 831 854 860 860 990 994 1,074 1,489 1,557
Traffic signals 6 6 7 8 8 8 8 9 9
Parks and recreation:

Parks 5 5 5 5 6 6 8 9 10
Water:

Water mains (miles) 86.00 87.00 88.28 90.00 108.00 109.00 111.00 119.00 121.00 Maximum daily capacity
(thousands of gallons) 10,000 10,000 10,500 10,500 10,500 10,000 8,600 9,300 9,300 Wastewater:

Sanitary sewers (miles) 45.00 45.00 45.64 45.64 50.00 57.00 86.00 95.00 101.00 Storm sewers (miles) 5.00 5.00 5.41 6.00 8.00 8.00 10.00 11.00 12.00 Maximum daily treatment capacity
(thousands of gallons) 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Source: City of Shafter
Capital Asset Statistics by Function

CITY OF SHAFTER
Last Ten Fiscal Years
177

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178

1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Shafter, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Shafter, California (the “City”), as of and for the year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated February 26, 2024.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We identified certain deficiencies in internal control, described in the accompanying schedule of findings and responses as item 2023-001 that we consider to be a material weakness.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.

However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

To the Honorable Mayor and Members of the City Council
City of Shafter, California
City of Shafter’s Response to Findings
Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying schedule of findings and responses. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Brea, California
February 26, 2024

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

SCHEDULE OF FINDINGS AND RESPONSES
Reference Number
2023-001
Evaluation of Finding
Material Weakness on Financial Reporting
Condition
During our audit, we found the following conditions related to the accounts payable balances that resulted in a material audit adjustment to the financial statements:

Reconciling Subsidiary Ledgers and the General Ledger
While the City has processes and procedures in place to review and reconcile the accounts payable subsidiary ledgers to the general ledger, this did not occur on a continuous basis as changes occurred during the yearend closing process. As a result, this caused:
• Immaterial variances between the subsidiary ledgers and the general ledger, at the fund level. • Inclusion of immaterial activity that could not be substantiated or were unadjusted from the prior year. • Postings to the incorrect funds not being corrected timely; account balances for expenditures and accounts payable within the State Gasoline Tax and Road Maintenance and Rehabilitation Act Funds to be understated by $83,384 and $90,807, respectively, and the State Grants Fund to be materially overstated by $174,192. This activity was material to the State Grants Fund.

Transactions Improperly Excluded from Accounts Payable
Aside from the transactions corrected between funds as noted above, we identified subsequent activity related to the State Grants Fund in the amount of $9,409 through performance of our search for unrecorded liabilities that was improperly excluded from accounts payable as of June 30, 2023, as it related to services performed during the 2023 fiscal year. This activity was material to the State Grants Fund.

Criteria
Management is responsible for the preparation and fair presentation, as well as the accuracy of its financial statements, including disclosures in accordance with accounting principles generally accepted in the United States of America. This includes the design, implementation, and maintenance of internal controls relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud.

Cause of Condition
It was determined that the errors were caused due to reconciliation procedures of the accounts payable subsidiary ledger and subsequent activity not being reviewed and reconciled to the general ledger as changes occurred, during the year-end closing process and accounts payable review.

Effect or Potential Effect of Condition
The result of this condition caused variances between the general ledger and accounts payable subsidiary ledgers, inclusive of errors reported within accounts payable balances and associated expenditure amounts provided at the start of the audit. Additionally, improperly excluded subsequent activity from inclusion within the expenditures and accounts payable balances. Without remediation, the potential effect could be incomplete and inaccurate financial reporting.

Recommendation
We recommend a reconciliation of accounts payable from the general ledger to the outstanding accounts payable register is performed throughout the year, and continuously during the year-end closing process, to determine that all additions to, and payments of, accounts payable are correctly recorded and to determine whether there are any disputed items. Additionally, we recommend the City perform a thorough review of the accounts payable activity

To the Honorable Mayor and Members of the City Council
City of Shafter, California
subsequent to City’s accounts payable cutoff date, to ensure that items are properly accrued and reflected into the correct fiscal year.

Client Response
The discrepancy in the balance was promptly rectified through the implementation of a journal entry. The divergence in the payable balance between two distinct revenue funds stemmed from a correction made to a vendor invoice. While the software successfully adjusted the subledger, it encountered a glitch in accurately updating the corresponding payable balance in the same adjustment. It's important to note that this software bug falls beyond the manager's sphere of control. Nevertheless, finance managers should have undertaken a secondary reconciliation on a fund-by-fund basis.

Moving forward, a more proactive approach will be adopted to mitigate such discrepancies. Future accounts payable aging reconciliations will be conducted monthly throughout the entire audit process, focusing on both fund and subledger details to capture and address any potential account code corrections. This enhanced frequency and detailed scrutiny aim to ensure a more robust and accurate financial reconciliation process.

1611 E. Fourth Street, Suite 200
Santa Ana, CA 92701
(714) 569-1000
203 N. Brea Blvd, Suite 203
Brea, CA 92821
(714) 672-0022
21 Waterway Avenue, Suite 30089
The Woodlands, TX 77380
(936) 828-4587
2151 River Plaza Dr., Suite 150
Sacramento, CA 95833
(916) 503-9691
24422 Avenida de la Carlota, Suite 275
Laguna Hills, CA 92653
(949) 829-8299
www.lslcpas.com
February 26, 2024
To the Honorable Mayor and Members of the City Council
City of Shafter, 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 Shafter, California (the “City”) for the year ended June 30, 2023. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated June 13, 2023. 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. As described in Note 1 to the financial statements, the City changed accounting policies related to subscription-based information technology arrangements by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 96, in fiscal year 2022-2023. Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Revenues, Expenses and Changes in Net Position. 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 estimates of the net pension liability and total other postemployment benefits liability are based on actuarial valuation estimates. We evaluated the methods, assumptions, and data used to develop the actuarial valuation estimates in determining that they are reasonable in relation to the financial statements taken as a whole.

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.

To the Honorable Mayor and Members of the City Council
City of Shafter, California
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. The attached schedule summarizes uncorrected misstatements of the financial statements. Management has determined that their effects are immaterial, both individually and in the aggregate, to the financial statements taken as a whole. 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. Material misstatements detected as a result of audit procedures were corrected by management, and are described in a separate letter dated February 26, 2024.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated February 26, 2024.

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.

Other Matters
We applied certain limited procedures to management’s discussion and analysis, the budgetary comparison schedules for the General Fund and major special revenue fund, and the required pension and other postemployment benefits schedules, 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.

To the Honorable Mayor and Members of the City Council
City of Shafter, California
We were engaged to report on the combining and individual fund financial statements and schedules 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.

We were not engaged to report on other information included in the annual report which is comprised of the introductory and statistical sections, which accompany the financial statements but are not RSI. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Future GASB Pronouncements
The following Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management:

Fiscal Year 2023-2024
GASB Statement No. 99, Omnibus 2022.

Fiscal Year 2024-2025
GASB Statement No. 101, Compensated Absences.

Future Projects
Comprehensive Project, Financial Reporting Model.

Comprehensive Project, Revenue and Expense Recognition.

Major Project, Going Concern Uncertainties and Severe Financial Stress.

Major Project, Infrastructure Assets.

Practice Issue, Classification of Nonfinancial Assets.

Practice Issue, Risks and Uncertainties Disclosures.

Pre-Agenda Research Activities, Subsequent Events.

Restriction on Use
This information is intended solely for the information and use of City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,
Brea, California

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

ATTACHMENT
Summary of Unadjusted Audit Differences
Name of Governmental Unit: City of Shafter
Date of Combined Balance Sheet: June 30, 2023
Opinion Unit, Fund Type or Fund: All funds
Unadjusted Audit Differences Cause
Accounts payable aging detail discrepancy
City did not
properly reconcile
AP aging detail to
the GL balance $ 18,745
Variance in property taxes
Adjustment from
County to City
Records 275,998
Reconciliation of customer deposits
Timing of
adjustments (15,004)
SERAF Loan
Adjustment to
ROPS payment
schedule (9,000)
Cumulative effect (before effect of prior year differences) 270,739 Effect of unadjusted audit difference - prior year -
Cumulative effect (after effect of prior year differences) $ 270,739 Current Year Over
(Under) Revenues and
Expenditures/Expenses
and Changes in Fund
Balance/Equity

MANAGEMENT REPORT

CITY OF SHAFTER

CITY COUNCIL REPORT
MEETING DATE: March 5, 2024
FROM: Gabriel A. Gonzalez, City Manager
PREPARED BY: Alex Gonzalez, Deputy Public Works Director SUBJECT: AWARD A PROFESSIONAL SERVICES CONTRACT TO ORDIZMELBY ARCHITECTS, INC. IN AN AMOUNT UP TO $90,000 FOR

THE DESIGN OF THE NEW AQUATICS CENTER BUILDING

RECOMMENDATION
Council find the action is not defined as a “project” per Section 15378(b)(4) of the CEQA Guidelines; approve a professional service agreement with Ordiz-Melby Architects, Inc. in an amount up to $90,000.00 for Architectural and Engineering Design Services for the New Aquatic Center Building; and authorize the City Manager to execute said agreement.

BACKGROUND
At a special meeting held on December 19, 2023, the City Council directed staff to proceed with steps to design and construct a new main building for the Aquatics Center rather than rehabilitating and retrofitting the existing structure. Staff previously worked with Ordiz-Melby Architects, Inc., (Ordiz-Melby) who had prepared a building site plan several years ago to develop a scaled-down version from 5,000 to 3,000 square feet. The updated plan is relatively close to the current building in size and still offers restrooms, locker rooms, a concession stand, office space, and storage rooms. The layout can also be constructed using a modular process, which could expedite construction and save costs.

Ordiz-Melby submitted a cost proposal of $75,000 to advance their design for completing architectural and engineering plans for bidding and construction. Staff attempted to obtain another proposal from TETER Architects & Engineers, the design consultant currently working on the City Police Sub-Station project, but they declined due to a lack of staff and resources to commit to the project.

ANALYSIS
The work Ordiz-Melby has completed to date and their familiarity with the site makes them the most qualified and capable firm to award the next phase of the project. Their current proposal also includes bidding and construction administration support services to assist with technical questions that may arise. A project budget of $90,000 is recommended to cover the submitted proposal and allow for any contingencies that might occur during the design process.

AWARD A PROFESSIONAL SERVICES CONTRACT TO ORDIZ-MELBY ARCHITECTS, INC. IN AN AMOUNT UP TO $90,000 FOR THE DESIGN OF THE NEW AQUATICS CENTER BUILDING - 2 -
Staff has determined that the proposal can be awarded on a sole source basis in that it complies with Section 2.68.270 - Supplies, equipment, and contractual services - Exceptions.

FISCAL IMPACT
The Council previously dedicated $715,387 of the City’s Federal American Rescue Plan Act allocation towards improvements at the Aquatic Centers (Capital Improvement Project No. PF00002). There is a sufficient project balance to complete the recommended architectural and engineering services for the new building. No budget action is necessary.

CEQA ANALYSIS
The action is not defined as a “project” per Section 15378(b)(4) of the CEQA Guidelines because the action is the approval of a professional services agreement for Architectural and Engineering plan development and, therefore, it is the creation of a governmental funding mechanism or other fiscal activity that does not involve any commitment to a specific project that can result in a potentially significant impact and not subject to CEQA.

APPROVED BY THE CITY ATTORNEY
Not Applicable

ALTERNATIVES
Staff can seek additional proposals from other qualified firms to further ensure a competitive procurement process. However, the working knowledge Ordiz-Melby offers will enable them to complete the required work more efficiently than if a new firm is introduced to the project. Mostly because restoring operations at the Aquatics Center is a high-priority project, alternative action is not recommended.

NEXT STEPS
Staff will issue a professional services contract to Ordiz-Melby, so they can begin preparing plans for construction, which should be completed by this summer.

ATTACHMENTS

1. Ordiz-Melby Architects, Inc. Proposal - Aquatic Center New Build

January 22, 2024
Mr. Michael James - Public Works Director
720 Commerce Way
Shafter, CA 93263
Re: Architectural/Engineering Services Proposal for:

Shafter Aquatic Center 269 Poso Avenue –New Construction Mr. James,
Thank you for the opportunity to offer this proposal for Architectural/Engineering services. We have provided below a general description of the project scope and our proposed fee.

Project Scope
Our understanding of the scope for the Project is as outlined below. Please note this outline forms the basis for our proposal. Changes in the scope as outlined may have impacts on the amounts quoted.

The Project includes a new modular building for the Aquatic Center located at 269 Poso Avenue. The scope of the work shall include following:

1. Demolition of existing building by owner.

2. Provide new modular building to include the following (based on previous schematic plan):
a. Reception Area with counter
b. Boys & Girls restroom and locker rooms, Janitor and storage room c. Bag room w/ pass-thru window & Concessions with pass-thru window d. Office

3. Site work
a. Accessible parking
b. Accessible path of travel from parking to new building entrance & from a public way.

4. Civil engineering for new grading plan at parking and new entrance (no areas within fenced pool area)

5. Mechanical and Electrical Engineering for site utilities

6. This project is subject to City of Shafter plan review.

7. Bid Modular Building for manufacturer selection.
a. Modular Building manufacturer will provide engineering for the building, including structural, mechanical & electrical.

Deliverables:

1. Existing topo of parking lot to building entry point

2. Grading plan, Site plan and details

3. New building floor plan, exterior elevations, reflected ceiling plan, interior elevations where necessary, room finish schedule and door schedule. Interior finishes selections.

4. Electrical Site plan and details

5. Plumbing Site plan and details.

Services
Our services shall include schematic design, design development, construction documents, bidding assistance and construction administration. We will assist with bidding for the modular building and coordination of plan information.

Project coordination, telephone and travel expenses within the county are included in the proposed fee.