Agenda — Taft City Council, June 16, 2026

TAFT CITY COUNCIL/SUCCESSOR AGENCY

JOINT REGULAR MEETING AGENDA
TUESDAY, JUNE 16, 2026

CITY HALL COUNCIL CHAMBER
209 E. KERN ST., TAFT, CA 93268
_____________________________________________________________________________________________________________________________ City of Taft Council Meetings are being held in-person with full capacity seating and are livestreamed at https://www.youtube.com/user/CityofTaft. Public comment can be made in person and also can be received per the following:
• Written comments may be dropped off in the drop box in front of City Hall. • Comments may be emailed to the City Clerk at [email protected]. • Made by phone to the City Clerk’s office at (661) 763-1222. • Public comments will be accepted up until 5:00 PM the day of the meeting. • Any comments received will be read into the record.
_____________________________________________________________________________________________________________________________ REGULAR MEETING 6:00 P.M.

Pledge of Allegiance
Invocation
Roll Call: Mayor Noerr
Mayor Pro Tem Bryant
Councilmember Krier
Councilmember Waldrop
Councilmember Chavira

1. SWEARING IN OF OFFICER – DAVID LAWSON

2. PRESENTATION BY SHARON RAHBAN WITH PRICE PAIGE COMPANY – 2026/2027 BUDGET

3. APPROVAL OF FINAL BUDGET FOR FISCAL YEAR 2025-2026 AND PROPOSED BUDGET FOR FISCAL YEAR 2026-2027
Recommendation –
Motion to adopt resolution entitled A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT ADOPTING THE CITY OF TAFT FINAL BUDGET FOR FISCAL YEAR 2025-2026 AND PROPOSED BUDGET FOR THE FISCAL YEAR 2026-2027.

4. CITIZEN REQUESTS/PUBLIC COMMENTS

COMMENTS ARE TO BE RECEIVED AS STATED IN ABOVE POLICY

THIS IS THE TIME AND PLACE FOR THE GENERAL PUBLIC TO ADDRESS THE CITY COUNCIL ON MATTERS WITHIN ITS JURISDICTION. STATE LAW PROHIBITS THE COUNCIL FROM ADDRESSING ANY ISSUE NOT PREVIOUSLY INCLUDED ON THE AGENDA. COUNCIL MAY RECEIVE COMMENT AND SET THE MATTER FOR A SUBSEQUENT MEETING. PLEASE LIMIT COMMENTS TO FIVE MINUTES.

5. COUNCIL STATEMENTS (NON-ACTION)

6. DEPARTMENT REPORTS

7. CITY MANAGER STATEMENTS

8. CITY ATTORNEY STATEMENTS
City of Taft Council/Successor Agency Meeting
Agenda
June 16, 2026

Page 2 of 3 ends

9. FUTURE AGENDA REQUESTS
***************************************************************************************************** CONSENT CALENDAR ITEMS 10-15
All items listed on the Consent Calendar shall be considered routine and will be enacted by one roll call vote. There will be no separate discussion of these items unless a member of the City Council requests specific items to be removed from the Consent Calendar for separate action. Any item removed from the Consent Calendar will be considered after the regular business items. Are there any items on the consent calendar that any member of the public would like to comment on?

10. MINUTES
June 02, 2026, Regular
Recommendation – Approve as submitted.

11. PAYMENT OF BILLS
Warrant # 052926 Check No. 202156-202169 $ 94,650.70
Recommendation – Approve payment of the bills.

12. LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 ENGINEERS REPORT Recommendation –
Motion to 1) receive 2026-2027 Engineer’s Report for Landscape Maintenance District No. 1; and 2) adopt a resolution entitled A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

TAFT DECLARING ITS INTENTION TO REVIEW THE IMPROVEMENTS AND FEES FOR LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 AND SET THE PUBLIC HEARING FOR JULY 21, 2026 and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15061(b)(3) of the CEQA Guidelines.

13. RESOLUTION DETERMINING REASONABLE EFFORTS TO ENCOURAGE PUBLIC PARTICIPATION PURSUANT TO GOVERNMENT CODE § 54953.4
Recommendation –
Motion to adopt a resolution entitled RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

TAFT DETERMINING REASONABLE EFFORTS TO ENCOURAGE PUBLIC PARTICIPATION IN MEETINGS PURSUANT GOVERNMENT CODE § 54953.4.

14. COMMERCIAL WASTE DUMP WILL SERVE PROCEDURES
Recommendation –
Receive the informational item regarding Commercial Waste Dump Will Serve Procedures and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.

15. ANNUAL AUDITED FINANCIAL STATEMENTS FOR FY 2022-2023 Recommendation –
Motion to receive and file the Annual Audited Comprehensive Financial Reports for the year ended June 30, 2023 and find that the activity is not a project per the California Environmental City of Taft Council/Successor Agency Meeting
Agenda
June 16, 2026

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Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.
******************************************************************************************************

CLOSED SESSION
A. CONFERENCE WITH LABOR NEGOTIATOR, CRAIG JONES, CITY MANAGER Government Code 54957.6 – All units
B. CONFERENCE WITH REAL PROPERTY NEGOTIATOR, CRAIG JONES- CITY MANAGER Government Code Section 54956.8 – undisclosed parcels
C. CONFERENCE WITH LEGAL COUNSEL – EXISTING LITIGATION
Government Code Section 54956.9 (a) – Taft Union High School vs. City of Taft Kern County Superior Court Case No. S-1500-CV-283804
D. CONFERENCE WITH LEGAL COUNSEL – ANTICIPATED LITIGATION Government Code Section 54956.9(b) – One (1) undisclosed case

ADJOURNMENT
AMERICANS WITH DISABILITIES ACT: In compliance with the Americans with Disabilities Act, if you need special assistance, a disability-related modification or accommodation, agenda materials in an alternative format, or auxiliary aids to participate in this meeting, please contact the Office of the City Clerk at (661) 763-1222 or [email protected] as soon as possible. Providing at least 72 hours’ notice will help ensure that reasonable arrangements can be made.

AFFIDAVIT OF POSTING
I, Faith Melton, declare as follows:

That I am the City Clerk for the City of Taft; that an agenda was posted on a public information bulletin board located near the door of the Civic Center Council Chamber on June 11, 2026, at ________ a.m./p.m., pursuant to 1987 Brown Act Requirements.

I declare under penalty of perjury that the foregoing is true and correct.

Executed June 11, 2026, at Taft, California.

Signature ___________ _________
REVIEWED BY:

CITY CLERK FINANCE DEPARTMENT CITY MANAGER
City of Taft Agenda Report
DATE: JUNE 16, 2026
TO: HONORABLE MAYOR AND COUNCIL MEMBERS
AGENDA MATTER:

APPROVAL OF FINAL BUDGET FOR FISCAL YEAR 2025-2026 AND PROPOSED BUDGET FOR FISCAL YEAR 2026-2027
SUMMARY STATEMENT:

Attached hereto are the final operating and capital expenditure budgets for the Fiscal Year 2025-2026 and the proposed operating and capital expenditure budgets for the Fiscal Year 2026-2027. These budgets maintain the conservative fiscal policies of the City Council.

These budgets were reviewed by the Finance Committee on June 1, 2026 and were recommended to be presented to the Council for adoption.

The budgets with respect to certain grant funds, which are multi-year fixed agreed amounts for specific activities to be performed in accordance with contract agreements with state and federal agencies, are controlled by the guidelines, laws and regulations of the grant agreements; hence, they are not included in these budgets.

RECOMMENDED ACTION
Motion to adopt resolution entitled A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT ADOPTING THE CITY OF TAFT FINAL BUDGET FOR FISCAL YEAR 2025-2026 AND PROPOSED BUDGET FOR THE FISCAL YEAR 2026-2027.

IMPACT ON BUDGET (Y/N): N/A
ATTACHMENT (Y/N): Yes, Budget Document, Budget Overview and Resolution PREPARED BY: Finance Department
RESOLUTION NO. _________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT
ADOPTING THE CITY OF TAFT FINAL BUDGET FOR FISCAL YEAR 2025- 2026 AND PROPOSED BUDGET FOR THE FISCAL YEAR 2026-2027
WHEREAS, the City Manager has prepared and presented to the City Council of the City of Taft the final budget for fiscal year 2025-2026 and the proposed budget for fiscal year 2026- 2027; and
WHEREAS, the City Council has studied these budgets at length; and WHEREAS, all changes and necessary modifications have been made to said budgets.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Taft, California as follows:

That the final budget for fiscal year 2025-2026 and the proposed budget for fiscal year 2026-2027, with the exception of certain grant budgets, are hereby adopted and by reference made a part hereof. The City Clerk is hereby directed to keep a copy of these budgets in her office for public inspection and provide a copy of said budgets for filing with the Finance Director.

PASSED, APPROVED AND ADOPTED on this 16th day of June, 2026. _____________________________
Dave Noerr, Mayor
ATTEST:
_____________________________
Faith Melton,
City Clerk
STATE OF CALIFORNIA }
COUNTY OF KERN }SS
CITY OF TAFT }
I, Faith Melton, City Clerk of the City of Taft, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Taft at a regular meeting thereof held on the 16th day of June, 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:
_____________________________
Faith Melton,
City Clerk

TAFT CITY COUNCIL/SUCCESSOR AGENCY

MINUTES
JUNE 02, 2026
The June 2, 2026 regular joint meeting of the Taft City Council/Taft Successor Agency, held in the Council Chamber at Taft City Hall, 209 East Kern Street, Taft, CA 93268, was opened by Mayor Dave Noerr at 6:00 PM. The Pledge of Allegiance was led by Council Member Carlos Chavira and invocation was given by Pastor Sean Piefer.

PRESENT: Mayor Dave Noerr and Mayor Pro Tem Josh Bryant Council Members Carlos Chavira, Orchel Krier and Ron Waldrop City Manager Craig Jones and City Attorney Jason Epperson City Clerk Faith Melton

1. PUBLIC HEARING - UPDATING AND ESTABLISHING USER AND REGULATORY FEES The public hearing was opened at 6:05 PM to receive comment, having none the hearing was closed.

Motion: Moved by Bryant, seconded by Krier to adopt A RESOLUTION OF THE CITY

COUNCIL OF THE CITY OF TAFT, CALIFORNIA, ADOPTING A SCHEDULE OF USER AND REGULATORY FEES FOR VARIOUS CITY SERVICES and direct staff to apply the 3.16% inflation factor.

AYES: Krier, Bryant, Chavira, Waldrop, Noerr
PASSED: 5-0

2. CITIZEN REQUESTS/PUBLIC COMMENTS
Kenny Shugart spoke in regard to septic and sewer businesses not having the correct permits.

Chamber of Commerce Board President, Glenn Black introduced the new Chamber Director, Stephanie Layton.

The newly hired Chamber of Commerce Director, Stephanie Layton, explained she is excited to help local businesses and reminded everyone of the events happening on Center Street on July 3rd and 4th.

3. COUNCIL STATEMENTS (NON-ACTION)
Council Member Waldrop had no comment.

Council Member Chavira reminded everyone that tomorrow is graduation so stay hydrated, and don’t forget to vote.

Council Member Krier mentioned that the events on the 3rd and 4th of July will be great events for the 250 celebration of America and said he was thankful to have the right to vote.

Mayor Pro Tem Bryant congratulated both classes that are graduating, thanked Stephanie for the information and reminded everyone that the city is not a for-profit organization.

City of Taft Council/Successor Agency Meeting
Minutes
June 02, 2026

Page 2 of 5 ends

Mayor Noerr welcomed Stephanie and mentioned that the Chamber is pivotal in our community. He also reminded the community to be careful with kids being out and about for summer and said he loves summer and the City of Taft.

4. DEPARTMENT REPORTS
Taft Police Chief, Damon McMinn, gave the May Police Department Statistics.

5. CITY MANAGER STATEMENTS
There was none.

6. CITY ATTORNEY STATEMENTS
There was none.

7. FUTURE AGENDA REQUESTS
Noerr requested we have a future agenda item regarding the wastewater treatment plant, Bryant concurred.
********************************************************************************************* CONSENT CALENDAR ITEMS 8-12, 14
 Noerr removed item 13.

Motion: Moved by Krier seconded by Bryant to approve consent calendar items 8-12,

14. AYES: Krier, Bryant, Chavira, Waldrop, Noerr
PASSED: 5-0

8. MINUTES
May 19, 2026, Regular
Recommendation – Approve as submitted.

9. PAYMENT OF BILLS
Warrant # 051526 Check No. 202072-202074 $ 424.4
Warrant # 052226 Check No. 202075-202155 $ 461,473.15
Recommendation – Approve payment of the bills.

10. RESOLUTIONS CALLING FOR A GENERAL MUNICIPAL ELECTION AND REQUEST THE

KERN COUNTY BOARD OF SUPERVISORS TO APPROVE CONSOLIDATION WITH THE

STATEWIDE GENERAL ELECTION
Recommendation –
City of Taft Council/Successor Agency Meeting
Minutes
June 02, 2026

Page 3 of 5 ends

1. Motion to adopt a resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF TAFT, CALIFORNIA, CALLING AND GIVING NOTICE OF THE HOLDING OF A GENERAL MUNICIPAL ELECTION TO BE HELD ON TUESDAY, NOVEMBER 3, 2026, FOR

THE ELECTION OF CERTAIN OFFICERS AS REQUIRED BY THE PROVISIONS OF THE LAWS OF THE STATE OF CALIFORNIA RELATING TO GENERAL LAW CITIES and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.

2. Motion to adopt a resolution entitled: A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF TAFT, CALIFORNIA, REQUESTING THE BOARD OF SUPERVISORS OF THE

COUNTY OF KERN TO CONSOLIDATE A GENERAL MUNICIPAL ELECTION TO BE HELD ON NOVEMBER 3, 2026, WITH THE STATEWIDE GENERAL ELECTION TO BE HELD ON THE DATE PURSUANT TO SECTION 10403 OF THE ELECTION CODE and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.

11. STREET CLOSURES AND SPECIAL EVENT PERMIT FOR THE 2026 SELF BREWED COFFEE

HOUSE RE-BRANDING EVENT
Recommendation –
Motion to adopt a resolution entitled A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF TAFT AUTHORIZING THE SPECIAL EVENT PERMIT AND STREET CLOSURES FOR THE 2026 SELF BREWED COFFEE HOUSE RE-BRANDING EVENT ON SATURDAY, JUNE 13, 2026 and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.

12. APPROVAL OF SPECIAL EVENT PERMIT 2026-06 FOR THE TAFT CHAMBER OF COMMERCE TO HOST A 4TH OF JULY CELEBRATION ON AND AROUND CENTER STREET FROM FRIDAY, JULY 3, 2026, TO SATURDAY, JULY 4, 2026
Recommendation –

1. Motion to approve a resolution entitled A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF TAFT APPROVING A SPECIAL EVENT PERMIT FOR THE TAFT CHAMBER OF COMMERCE TO HOST A CELEBRATION FOR THE 250TH ANNIVERARY OF AMERICA ALONG CENTER STREET ON JULY 3RD AND JULY 4TH, 2026

2. Find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15061(b)(3) of the CEQA Guidelines.

14. FARMING CONTRACT EXTENSION - TAFT MUNICIPAL WASTEWATER TREATMENT

FACILITY
Recommendation –
Motion to approve the five-year contract extension option with Westside Hay LLC and authorize the Mayor to execute the agreement extension and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.

13. ADOPTION OF THE CITY OF TAFT’S STATE REQUIRED ZERO-EMISSION BUS ROLL-OUT PLAN
City of Taft Council/Successor Agency Meeting
Minutes
June 02, 2026

Page 4 of 5 ends

 Noerr reminded everyone that is mandated by the State to have zero-emission vehicles by 2030. Jones stated the City had received a grant for zero-emission buses and it would be good to use grant money for this while it is available.

Motion: Moved by Bryant, seconded by Krier, to approve a resolution entitled resolution entitled A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT ADOPTING THE CITY OF TAFT’S 2026 ZERO-EMISSION BUS ROLLOUT PLAN. AND DIRECT THE CITY’S ASSISTANT FINANCE DIRECTOR TO

FILE THE ATTACHED PLAN AND RESOLUTION WITH THE CALIFORNIA AIR RESOURCES BOARD NO LATER THAN JUNE 12, 2026 and find that the activity is not a project per the California Environmental quality act (CEQA) as set forth in section 15060(c)(3) and section 15378 of the CEQA guidelines.

AYES: Krier, Bryant, Chavira
NOES: Waldrop, Noerr
PASSED: 3-0

15. ADOPTION OF SENATE BILL 707 TELECONFERENCING AND DISRUPTION POLICIES AND

RESOLUTIONS
Motion: Moved by Bryant, seconded by Krier, to approve a resolution entitled

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT ADOPTING A

COUNCIL POLICY TO ESTABLISH PROCEDURES FOR REQUIRED HYBRID CITY COUNCIL MEETING and a resolution entitled RESOLUTION OF THE

CITY COUNCIL OF THE CITY OF TAFT ADOPTING COUNCIL POLICY

FOR DISRUPTION OF REMOTE PARTICIPATION DURING A
COUNCIL MEETING.

AYES: Krier, Bryant, Chavira, Waldrop, Noerr
PASSED: 5-0

16. ECONOMIC DEVELOPMENT SERVICES -HDL ECON SOLUTIONS DELIVERABLES TASK ONE
Noerr claimed he hopes this is successful. Bryant reminded everyone that we do not pick businesses; they pick our location based on statistics. The report was received and filed. ********************************************************************************************* At 7:09 PM the regular meeting was recessed to closed session.

Page 5 of 5 ends

Government Code Section 54956.9 (a) – Taft Union High School vs. City of Taft Kern County Superior Court Case No. S-1500-CV-283804
 The City Council discussed in closed session the two items agendized for closed session discussion and directions were given to staff and negotiators. The City Council took no other reportable action.

ADJOURNMENT - With no further business to conduct, the meeting was adjourned at 7:38 PM. __________ ____________
Faith Melton Dave Noerr
City Clerk Mayor

REVIEWED BY:

CITY CLERK FINANCE DIRECTOR CITY MANAGER
City of Taft Agenda Report
DATE: JUNE 16, 2026
TO: HONORABLE MAYOR AND COUNCIL MEMBERS
AGENDA MATTER:

LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 ENGINEERS REPORT SUMMARY STATEMENT:

The funds from Maintenance District No. 1 are collected by the Kern County Assessor’s Office and disbursed to the City as a special assessment. These assessments, when collected, will go to their respective funds to pay for the maintenance and operation of the landscaping, walls, lighting and drainage of the Maintenance District.

It is necessary to complete an Engineer’s Report annually to evaluate the annual assessment on the lots within the Maintenance District and to add new lots to the Maintenance district if needed. The City Engineer has prepared an Engineer’s Report for Landscape Maintenance District No. 1, in accordance with Section 22623 of the Streets and Highway Code. The Engineer’s Report is available for review.

Staff has prepared the attached resolution for Council to receive the Engineer’s Report and to set the Public Hearing for July 21, 2026, at 6:00 p.m. for Council consideration of any improvements and fees for Landscape Maintenance District No. 1. The resolution also directs the City Clerk to publish the resolution at least 10 days prior to the public hearing.

RECOMMENDED ACTION
Motion to 1) receive 2026-2027 Engineer’s Report for Landscape Maintenance District No. 1; and 2) adopt a resolution entitled A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT

DECLARING ITS INTENTION TO REVIEW THE IMPROVEMENTS AND FEES FOR LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 AND SET THE PUBLIC HEARING FOR JULY 21, 2026 and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15061(b)(3) of the CEQA Guidelines.

IMPACT ON BUDGET (Y/N): Revenue for Landscape District
ATTACHMENT (Y/N): Yes, Resolution & Engineers Report
PREPARED BY: Office of the City Clerk
RESOLUTION NO.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT DECLARING ITS

INTENTION TO REVIEW THE IMPROVEMENTS AND FEES FOR LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1 AND SET THE PUBLIC HEARING FOR JULY 21, 2026
WHEREAS, the City of Taft is a municipal corporation duly created and existing pursuant to the Constitution and laws of the State of California; and
WHEREAS, the City approved Landscape and Lighting Maintenance District No.1 on June 15, 1993 in accordance with the Landscape and Lighting Act of 1972 as found in the California Streets and Highways Code Section 22500 et seq. (the Act); and
WHEREAS, the Landscaping and Lighting Act of 1972 requires the annual assessment of existing Districts; and
WHEREAS, the maintenance district has been formed pursuant to the Landscaping and Lighting Act of 1972, and have been brought into compliance with Proposition 218; and WHEREAS, the City Engineer has filed the Engineer’s Report with the City Clerk.

NOW, THEREFORE, BE IT RESOLVED the City Council of the City of Taft, does hereby find, resolve, determine and order as follows:

Section 1. The Engineer’s Report is received.

Section 2. A public hearing is to be held at 6:00 p.m., Tuesday, July 21, 2026.

Section 3. The City Clerk shall give notice by causing this resolution of intention to be published pursuant to Sections 22552 and 22553 of the California Streets and Highways Code.

PASSED, APPROVED, AND ADOPTED this 16th day of June 2026.

Dave Noerr, Mayor
ATTEST:

Faith Melton
City Clerk
STATE OF CALIFORNIA}
COUNTY OF KERN } SS
CITY OF TAFT }
I, Faith Melton, City Clerk of the City of Taft, California, do hereby certify that the foregoing Resolution was duly and regularly introduced and adopted at a regular meeting thereof held on the 16th day of June 2026, by the following vote:

AYES: COUNCIL MEMBER:

NOES: COUNCIL MEMBER:

ABSENT: COUNCIL MEMBER:

ABSTAIN: COUNCIL MEMBER:

Faith Melton
City Clerk

ENGINEER'S REPORT AND ASSESSMENT

CITY OF TAFT
LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1
FUND 20556
Fiscal Year 2026-2027
TRACT 5574
TRACT 5956 UNIT I
TRACT 5956 UNIT II
TRACT 5956 UNIT III
TRACT 6114
TRACT 6501
TRACT 7227 PHASE 1 AND 2
PREPARED BY:

BHT ENGINEERING, INC.
218 S. H St. Ste. 203
BAKERSFIELD, CA. 93304
(661) 558-4641
DATE:

JUNE 2026

CONTENTS
ENGINEER'S REPORT AND ASSESSMENT ............................................................................................... 4 ENGINEER OF WORK STATEMENT ......................................................................................................... 1 A) Plans and Specifications for the Improvements ........................................................................................ 2 B) Estimate of The Cost of the Improvements ............................................................................................... 2 C) Diagram of The Assessment District ......................................................................................................... 2 D) Assessment of The Estimated Costs of The Improvements ..................................................................... 2 E) Tract Diagrams .......................................................................................................................................... 2 F) Findings ...................................................................................................................................................... 2 EXHIBIT "A" ........................................................................................................................................ 3 EXHIBIT “B” ........................................................................................................................................ 4 EXHIBIT "C" ........................................................................................................................................ 5 EXHIBIT "D" ........................................................................................................................................ 9 PROPOSITION 218 BENEFIT ANALYSIS .................................................................................................. 9 Special Benefit ............................................................................................................................................ 9 General Benefit ........................................................................................................................................... 9 EXHIBIT "E" ....................................................................................................................................... 10 TRACT 5574-1 ............................................................................................................................................. 11 TRACT 5956 UNIT 1 .................................................................................................................................... 12 TRACT 5956 UNIT 2 .................................................................................................................................... 13 TRACT 5956 UNIT 3 .................................................................................................................................... 14 TRACT 6114 ................................................................................................................................................ 15 TRACT 6501 ................................................................................................................................................ 16 TRACT 7227 PHASE 1 ................................................................................................................................ 17 TRACT 7227 PHASE 2 ................................................................................................................................ 18 EXHIBIT "F" ....................................................................................................................................... 19 APPENDIX “A” tract location maps ........................................................................................................ 20 TRACT 5574 AERIAL ............................................................................................................................... 20 TRACT 5574 TYPICAL MAINTENANCE PICTURE ................................................................................. 21 TRACT 5956 PH-1 AERIAL ...................................................................................................................... 22 TRACT 5956 PH-2 AERIAL ...................................................................................................................... 23 TRACT 5956 PH-3 AERIAL ...................................................................................................................... 24 TRACT 5956 TYPICAL MAINTENANCE PICTURES .............................................................................. 25 TRACT 6114 AERIAL ............................................................................................................................... 26 TRACT 6141 TYPICAL MAINTENANCE PICTURES .............................................................................. 27 TRACT 6501 AERIAL ............................................................................................................................... 28 TRACT 6501 TYPICAL MAINTENANCE PICTURES .............................................................................. 29 TRACT 7227 PH 1 AND 2 AERIAL .......................................................................................................... 30 TRACT 7227 PH 1 AND 2 TYPICAL MAINTENANCE PICTURES ......................................................... 31

CITY OF TAFT

ENGINEER'S REPORT
LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT NO. 1
(Pursuant to the Landscaping and Lighting Act of 1972)
The undersigned hereby submits the attached report pursuant to the instructions of the City Council.

Dated: June 8th 2026 By:

Juan M. Pantoja, PE - Engineer of Work
I HEREBY CERTIFY that the enclosed Engineer's Report, together with the Assessment and Assessment Diagram attached, was filed with me on the day of 2026.

City Clerk of the City of Taft
Kern County, California
By: ___________________________________
Yvette Mayfield
I HEREBY CERTIFY that the enclosed Engineer's Report, together with the Assessment and Assessment Diagram attached, was approved, and confirmed by the City Council of the City of Taft, California, on the day of ,2026.

City Clerk of the City of Taft
Kern County, California
By:___________________________________
Yvette Mayfield
I HEREBY CERTIFY that the enclosed Engineer's Report, together with the Assessment and Assessment Diagram thereto attached, was filed with the County Auditor of the County of Kern, State of California, on the day of ,2026.

City Clerk of the City of Taft
Kern County, California
By: ___________________________________
Yvette Mayfield
1 | Page

ENGINEER OF WORK STATEMENT

CITY OF TAFT
LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT No. 1
I, Juan M. Pantoja, Engineer of Work for Landscape and Lighting Maintenance District No. 1 (District), City of Taft, Kern County, California, make this report as directed by the City Council, pursuant to Section 22585 of the Streets and Highways Code (Landscaping and Lighting Act of 1972).

Taft collects annual special assessments to maintain the improvements listed in this report.

1. The costs for maintaining, repairing, replacing, and operating all streetlights within the district, as shown on the Street Improvement Plans for Tract 5574, Tracts 5956 Units I–III, Tract 6114, Tract 6501, and Tract 7227 Phases 1 and 2.

2. The servicing, operation, maintenance, repair, and replacement of designated landscaping— including park landscaping, sound walls, and associated facilities—shall be conducted within the boundaries of the District.

3. The Engineer’s Report for Landscape and Lighting Maintenance District No. 1 covers the landscaped areas shown on maps filed with the City Clerk at City Hall in Taft. These maps are included as part of the report by reference (see Exhibit “E”).

The Engineer’s Report summarizes the district, its changes, and proposed assessments for Fiscal Year 2026/2027. The budget includes projected expenses, deficits, surpluses, revenues, and fund balances used to determine annual parcel assessments. In this report, “parcel” refers to a property with its own Assessor’s Parcel Number (APN) from the Kern County Assessor’s Office. The Auditor/Controller uses APNs and fund numbers to identify properties assessed for landscape maintenance on the tax roll.

The City Council will review and may update the Engineer’s Report. Once approved, they will authorize assessment collection for Fiscal Year 2026/2027, with details sent to the County Auditor/Controller for inclusion on the property tax roll.

2 | Page
This report is divided into six sections:

A) PLANS AND SPECIFICATIONS FOR THE IMPROVEMENTS
The City Clerk has filed the plans and specifications for the improvements, which are included in this report and describe their nature, location, and scope.

B) ESTIMATE OF THE COST OF THE IMPROVEMENTS
Improvement cost estimate.

C) DIAGRAM OF THE ASSESSMENT DISTRICT
This document lists the estimated improvement costs for each parcel in the district, including Tract Number, Lot number, Landscape and Lighting District Assessment Number, Assessor's Parcel Number, property addresses, and tax assessment details for 2026/2027, based on Kern County Assessor records as of May 2026 or Clerk updates. The list is organized by assessment number as referenced in "EXHIBIT E".

D) ASSESSMENT OF THE ESTIMATED COSTS OF THE IMPROVEMENTS A summary of how the undersigned calculated the proposed assessment for each parcel in the district.

E) TRACT DIAGRAMS
Tract diagrams display every parcel of real property found within the assessment district, and these diagrams are linked to Exhibit "C" using assessment numbers.

F) FINDINGS
A statement of findings with respect to the continuation of assessments for this Landscaping and Lighting Maintenance District No. 1, in compliance with Proposition 218 of the State of California, which went into effect July 1, 1997.

3 | Page
EXHIBIT "A"

DESCRIPTION OF IMPROVEMENTS
(Pursuant to the Landscaping and Lighting Act of 1972)
Tract 5574 (Lots 1 through 28)
Tract 5956 Unit I (Lots 1 through 14)
Tract 5956 Unit II (Lots 1 through 14)
Tract 5956 Unit III (Lots 1 through 20)
Tract 6114 (Lots 1-7)
Tract 6501 (Lots 1 – 13)
Tract 7227 Phase 1 (Lots 1-32) Phase 2 (Lots 1-16)
The improvement plans have been submitted individually to the Clerk of the legislative body and are hereby referenced as part of this report.
4 | Page
EXHIBIT “B”
5 | Page
EXHIBIT "C"
ASSESSMENT ROLL FUND 20556
Tract
#
Phase Lot No. Tax Number Situs Address Assessment
Flat Amount
5574 1 03262101003 619 GRAYDON AVE $ 86.00
5574 2 03262102006 615 GRAYDON AVE $ 86.00
5574 3 03262103009 611 GRAYDON AVE $ 86.00
5574 4 03262104002 607 GRAYDON AVE $ 86.00
5574 5 03262105005 603 GRAYDON AVE $ 86.00
5574 6 03262201000 620 GRAYDON AVE $ 86.00
5574 7 03262202003 616 GRAYDON AVE $ 86.00
5574 8 03262203006 612 GRAYDON AVE $ 86.00
5574 9 03262204009 608 GRAYDON AVE $ 86.00
5574 10 03262205002 604 GRAYDON AVE $ 86.00
5574 11 03262206005 619 WESTOVER AVE $ 86.00
5574 12 03262207008 615 WESTOVER AVE $ 86.00
5574 13 03262208001 611 WESTOVER AVE $ 86.00
5574 14 03262209004 607 WESTOVER AVE $ 86.00
5574 15 03262210006 603 WESTOVER AVE $ 86.00
5574 16 03262301007 620 WESTOVER AVE $ 86.00
5574 17 03262302000 616 WESTOVER AVE $ 86.00
5574 18 03262303003 612 WESTOVER AVE $ 86.00
5574 19 03262304006 608 WESTOVER AVE $ 86.00
5574 20 03262305009 604 WESTOVER AVE $ 86.00
5574 21 03262306002 600 WESTOVER AVE $ 86.00
5574 22 03262307005 700 MALLORY CT. $ 86.00
5574 23 03262308008 704 MALLORY CT. $ 86.00
5574 24 03262309001 708 MALLORY CT. $ 86.00
5574 25 03262310003 712 MALLORY CT. $ 86.00
5574 26 03262311006 716 MALLORY CT. $ 86.00
5574 27 03262401004 720 MALLORY CT. $ 86.00
5574 28 03262403000 724 MALLORY CT. $ 86.00
5956 PH 1 1 03263101006 108 BRANDON AVE. $ 86.00
5956 PH 1 2 03263102009 106 BRANDON AVE. $ 86.00
5956 PH 1 3 03263103002 104 BRANDON AVE. $ 86.00
5956 PH 1 4 03263104005 102 BRANDON AVE. $ 86.00
5956 PH 1 5 03263105008 100 BRANDON AVE. $ 86.00
5956 PH 1 6 03263201003 728 MALLORY CT. $ 86.00
5956 PH 1 7 03263202006 806 MALLORY CT. $ 86.00
5956 PH 1 8 03263203009 800 MALLORY CT. $ 86.00
5956 PH 1 9 03263204002 810 MALLORY CT. $ 86.00
5956 PH 1 10 03263301000 101 BRANDON AVE. $ 86.00
5956 PH 1 11 03263302003 103 BRANDON AVE. $ 86.00
5956 PH 1 12 03263303006 100 BRANDON AVE. $ 86.00
5956 PH 1 13 03263304009 107 BRANDON AVE. $ 86.00
5956 PH 1 14 03263305002 109 BRANDON AVE. $ 86.00

6 | Page
Tract
#
Phase Lot No. Tax Number Situs Address Assessment
Flat Amount
5956 PH2 1 03264101009 108 LEE ST. $ 86.00
5956 PH2 2 03264102002 106 LEE ST. $ 86.00
5956 PH2 4 03264104008 102 LEE ST. $ 86.00
5956 PH2 5 03264105001 100 LEE ST. $ 86.00
5956 PH2 6 03264201006 812 MALLORY CT. $ 86.00
5956 PH2 7 03264202009 814 MALLORY CT. $ 86.00
5956 PH2 8 03264203002 816 MALLORY CT. $ 86.00
5956 PH2 9 03264204005 818 MALLORY CT. $ 86.00
5956 PH2 10 03264301003 101 LEE ST. $ 86.00
5956 PH2 11 03264302006 103 LEE ST. $ 86.00
5956 PH2 12 03264303009 105 LEE ST. $ 86.00
5956 PH2 13 03264304002 107 LEE ST. $ 86.00
5956 PH2 14 03264305005 109 LEE ST. $ 86.00
5956 PH3 1 03265101002 108 JAMES AVE. $ 86.00
5956 PH3 2 03265102005 106 JAMES AVE. $ 86.00
5956 PH3 3 03265103008 104 JAMES AVE. $ 86.00
5956 PH3 4 03265104001 102 JAMES AVE. $ 86.00
5956 PH3 5 03265105004 100 JAMES AVE. $ 86.00
5956 PH3 6 03265201009 820 MALLORY CT. $ 86.00
5956 PH3 7 03265202002 822 MALLORY CT. $ 86.00
5956 PH3 8 03265203005 824 MALLORY CT. $ 86.00
5956 PH3 9 03265204008 826 MALLORY CT. $ 86.00
5956 PH3 10 03265306001 101 JAMES AVE. $ 86.00
5956 PH3 11 03265307004 103 JAMES AVE. $ 86.00
5956 PH3 12 03265303002 105 JAMES AVE. $ 86.00
5956 PH3 13 03265304005 107 JAMES AVE. $ 86.00
5956 PH3 14 03265305008 109 JAMES AVE. $ 86.00
5956 PH3 15 03265407001 111 TERRACE DR. $ 86.00
5956 PH3 16 03265408004 109 TERRACE DR. $ 86.00
5956 PH3 17 03265409007 107 TERRACE DR. $ 86.00
5956 PH3 18 03265410009 105 TERRACE DR. $ 86.00
5956 PH3 19 03265411002 103 TERRACE DR. $ 86.00
5956 PH3 20 03265406008 101 TERRACE DR. $ 86.00
6114 1 03266101005 106 SAGE ST. $ 86.00
6114 2 03266102008 104 SAGE ST. $ 86.00
6114 3 03266103001 102 SAGE ST. $ 86.00
6114 4 03266104004 100 SAGE ST. $ 86.00
6114 5 03266201002 101 SAGE ST. $ 86.00
6114 6 03266202005 103 SAGE ST. $ 86.00
6114 7 03266203008 105 SAGE ST. $ 86.00
6501 1 03268101001 313 AMBER ST. $ 86.00
6501 2 03268102004 311 AMBER ST. $ 86.00
6501 3 03268103007 309 AMBER ST. $ 86.00
6501 4 03268104000 307 AMBER ST. $ 86.00
6501 5 03268105003 305 AMBER ST. $ 86.00
6501 6 03268106006 303 AMBER ST. $ 86.00
6501 7 03268107009 301 AMBER ST. $ 86.00
7 | Page
Tract
#
Phase Lot No. Tax Number Situs Address Assessment
Flat Amount
6501 8 03268201008 300 AMBER ST. $ 86.00
6501 9 03268202001 302 AMBER ST. $ 86.00
6501 10 03268203004 304 AMBER ST. $ 86.00
6501 11 03268204007 306 AMBER ST. $ 86.00
6501 12 03268205000 308 AMBER ST. $ 86.00
6501 13 03268206003 310 AMBER ST. $ 86.00
7227 PH 1 1 03269101004 702 SANDY CREEK AVE $ 86.00
7227 PH 1 2 03269102007 706 SANDY CREEK AVE $ 86.00
7227 PH 1 3 03269103000 710 SANDY CREEK AVE $ 86.00
7227 PH 1 4 03269104003 714 SANDY CREEK AVE $ 86.00
7227 PH 1 5 03269107006 718 SANDY CREEK AVE $ 86.00
7227 PH 1 6 03269201001 431 HILLARD ST $ 86.00
7227 PH 1 7 03269202004 427 HILLARD ST $ 86.00
7227 PH 1 8 03269203007 423 HILLARD ST $ 86.00
7227 PH 1 9 03269204000 419 HILLARD ST $ 86.00
7227 PH 1 10 03269205003 415 HILLARD ST $ 86.00
7227 PH 1 11 03269206006 409 HILLARD ST $ 86.00
7227 PH 1 12 03269207009 405 HILLARD ST $ 86.00
7227 PH 1 13 03269208002 401 HILLARD ST $ 86.00
7227 PH 1 14 03269209005 702 RIVERWALK AVE $ 86.00
7227 PH 1 15 03269210007 706 RIVERWALK AVE $ 86.00
7227 PH 1 16 03269211000 710 RIVERWALK AVE $ 86.00
7227 PH 1 17 03269212003 402 PALM ST $ 86.00
7227 PH 1 18 03269213006 406 PALM ST $ 86.00
7227 PH 1 19 03269214009 410 PALM ST $ 86.00
7227 PH 1 20 03269215002 414 PALM ST $ 86.00
7227 PH 1 21 03269216005 418 PALM ST $ 86.00
7227 PH 1 22 03269217008 422 PALM ST $ 86.00
7227 PH 1 23 03269218001 426 PALM ST $ 86.00
7227 PH 1 24 03269301008 427 PALM ST $ 86.00
7227 PH 1 25 03269302001 423 PALM ST $ 86.00
7227 PH 1 26 03269303004 419 PALM ST $ 86.00
7227 PH 1 27 03269304007 415 PALM ST $ 86.00
7227 PH 1 28 03269305000 409 PALM ST $ 86.00
7227 PH 1 29 03269306003 405 PALM ST $ 86.00
7227 PH 1 30 03269307006 401 PALM ST $ 86.00
7227 PH 1 31 03269308009 718 RIVERWALK AVE $ 86.00
7227 PH 1 32 03269311007 722 RIVERWALK AVE $ 86.00
8 | Page
Tract No. Phase Lot No. Tax Number Situs Address Assessment Flat Amount
7227 PH 2 1 03270101006 730 Sandy Creek Ave $ 86.00
7227 PH 2 2 03270102009 726 Sandy Creek Ave $ 86.00
7227 PH 2 3 03270103002 722 Sandy Creek Ave $ 86.00
7227 PH 2 4 03270201003 422 Diamond St $ 86.00
7227 PH 2 5 03270202006 418 Diamond St $ 86.00
7227 PH 2 6 03270203009 414 Diamond St $ 86.00
7227 PH 2 7 03270204002 410 Diamond St $ 86.00
7227 PH 2 8 03270205005 406 Diamond St $ 86.00
7227 PH 2 9 03270206008 402 Diamond St $ 86.00
7227 PH 2 10 03270207001 726 Riverwalk Ave $ 86.00
7227 PH 2 11 03270301000 730 Riverwalk Ave $ 86.00
7227 PH 2 12 03270302003 401 Diamond St $ 86.00
7227 PH 2 13 03270303006 405 Diamond St $ 86.00
7227 PH 2 14 03270304009 409 Diamond St $ 86.00
7227 PH 2 15 03270305002 415 Diamond St $ 86.00
7227 PH 2 16 03270306005 419 Diamond St $ 86.00
9 | Page
EXHIBIT "D"
The 1972 Act permits the establishment of assessment districts by agencies for the purpose of providing certain public improvements, including the acquisition, construction, installation and servicing of landscape improvements and related facilities. The 1972 Act requires that the cost of these improvements be levied according to benefit rather than assessed value:

Section 22573 defines the net amount to be assessed as follows:
"The net amount to be assessed upon lands within an assessment district may be apportioned by any formula or method which fairly distributes the net amount among all assessable lots or parcels in proportion to the estimated benefits to be received by each such lot or parcel from the improvements." Article 4 Section 53087.4(a)(1) of the Government Code states that the landscaping assessment for each parcel is calculated using an "assessment unit" (AU). A single-family detached residential parcel with public streets and streetlights is assigned one AU.

Starting from this foundation, the other parcels are compared based on their equivalent benefits within the district. The assessment formula can be found in Exhibit “B”.

PROPOSITION 218 BENEFIT ANALYSIS
Special Benefit
Maintaining landscaped areas in the district directly benefits nearby properties by creating a more pleasant environment. These landscape improvements visually enhance the adjoining developments and are vital to the parcels' appearance. Without proper upkeep, these parcels would suffer aesthetically, making maintenance a distinct benefit to district properties.

Lighting and landscape improvements were added to support development in each Tract, or for future shared needs. Their upkeep only directly benefits those properties, with any extra maintenance beyond safety requirements providing no clear advantage to the wider public or other properties outside each Tract.

General Benefit
There is no general benefit provided by the maintenance of the improvements provided in the LLMD #1. All expenses used to calculate the LLMD #1 assessment support the provision of a specific benefit to the parcels paying the assessment and no expenses included provide a general benefit to properties outside the assessment district.
10 | Page
EXHIBIT "E"

TRACT DIAGRAMS
LEGEND:

MAINTAINED LANDSCAPE

STATEMENT OF FINDINGS
WITH RESPECT TO PROPOSITION 218
(Effective July 1, 1997)

CITY OF TAFT
LANDSCAPE AND LIGHTING MAINTENANCE DISTRICT No. 1
I. All properties comprising Landscape and Lighting Maintenance District No. 1 were entered into the District by the Developers of those Tracts as per the "Conditions of Approval" for recordation of those Tracts, and per the Landscape and Lighting Act of 1972.

II. Tract 5574 was included in and established the Landscape and Lighting Maintenance District No. 1 on June 15, 1993.

III. Tract 5956 Unit I was included in the Landscape and Lighting Maintenance District No. 1 on July 3, 2001.

IV. Tract 5956 Unit II was included in the Landscape and Lighting Maintenance District No. 1 on July 16, 2003.

V. Tract 5956 Unit III was included in the Landscape and Lighting Maintenance District No. 1 on June 17, 2003.

VI. Tract 6114 was included in the Landscape and Lighting Maintenance District No. 1 on January 5, 2005.

VII. Tract 6501 was included in the Landscape and Lighting Maintenance District No. 1 on June 8, 2005.

VIII. Tract 7227 Phase 1 was included in the Landscape and Lighting Maintenance District No. 1 on February 22, 2016.

IX. Tract 7227 Phase 2 was included in the Landscape and Lighting Maintenance District No. 1 on July 16, 2019
20 | Page

ATTACHMENTS
APPENDIX “A” TRACT LOCATION MAPS
TRACT 5574 AERIAL
21 | Page
TRACT 5574 TYPICAL MAINTENANCE PICTURE
Typical Landscape Maintenance on Tract 5574. Looking West on A Street 22 | Page
TRACT 5956 PH-1 AERIAL
23 | Page
TRACT 5956 PH-2 AERIAL
24 | Page
TRACT 5956 PH-3 AERIAL
25 | Page
TRACT 5956 TYPICAL MAINTENANCE PICTURES
Typical Landscape Maintenance on Tract 5956 at Graydon Ave and A St intersection.

Looking north-east on A Street near Terrace Dr
26 | Page
TRACT 6114 AERIAL
27 | Page
TRACT 6141 TYPICAL MAINTENANCE PICTURES
Typical Landscape Maintenance on Tract 6114 at Sage St and A St intersection. Looking north-east 28 | Page
TRACT 6501 AERIAL
29 | Page
TRACT 6501 TYPICAL MAINTENANCE PICTURES
Typical Landscape Maintenance on Tract 6501
Looking West on Oak Street
30 | Page
TRACT 7227 PH 1 AND 2 AERIAL
31 | Page
TRACT 7227 PH 1 AND 2 TYPICAL MAINTENANCE PICTURES
Typical Landscape Maintenance on Tract 7227. Looking East on River Walk Ave.

Looking West on River Walk Ave
REVIEWED BY:

CITY CLERK FINANCE DIRECTOR CITY MANAGER
City of Taft Agenda Report
DATE: JUNE 16, 2026
TO: HONORABLE MAYOR AND COUNCIL MEMBERS
AGENDA MATTER:

RESOLUTION DETERMINING REASONABLE EFFORTS TO ENCOURAGE PUBLIC PARTICIPATION PURSUANT TO GOVERNMENT CODE § 54953.4
SUMMARY STATEMENT:

Senate Bill 707 (2025) amended the Brown Act to require local legislative bodies to make reasonable efforts to encourage participation in public meetings, including outreach to communities and organizations that do not traditionally participate. The attached resolution formally establishes the City of Taft’s reasonable efforts, including use of existing communication channels, outreach to communitybased organizations, availability of agendas online, and optional outreach to media.

This action ensures compliance with Government Code § 54953.4(b)(3)(C) and affirms that the City may adjust its outreach methods over time based on resources, technology, and community needs.

RECOMMENDED ACTION
Motion to adopt a resolution entitled RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT

DETERMINING REASONABLE EFFORTS TO ENCOURAGE PUBLIC PARTICIPATION IN MEETINGS PURSUANT TO GOVERNMENT CODE § 54953.4.

IMPACT ON BUDGET (Y/N): No
ATTACHMENT (Y/N): Yes; Resolution
PREPARED BY: City Clerk
RESOLUTION NO. __________

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TAFT

DETERMINING REASONABLE EFFORTS TO ENCOURAGE PUBLIC

PARTICIPATION IN MEETINGS PURSUANT TO GOVERNMENT
CODE § 54953.4
WHEREAS, the Ralph M. Brown Act (Government Code § 54950 et seq.) establishes requirements for open and public meetings of local legislative bodies; and WHEREAS, Senate Bill 707 (2025) amended the Brown Act to include additional requirements intended to encourage participation in public meetings, particularly among communities that do not traditionally participate in public meetings; and WHEREAS, Government Code § 54953.4(b)(3)(C) requires the City Council of the City of Taft to determine and make reasonable efforts to invite groups that do not traditionally participate in public meetings to attend those meetings; and WHEREAS, such reasonable efforts may include outreach to media organizations serving the jurisdiction, including civic, neighborhood, community-based, civil rights, and good government organizations; and
WHEREAS, Government Code § 54953.4(b)(3)(C)(ii) provides legislative bodies with broad discretion in determining appropriate reasonable efforts and clarifies that no action shall arise from failing to provide notice to any specific group; and WHEREAS, the City Council of the City of Taft is committed to promoting transparency, accessibility, and broad public participation in its public meetings; and WHEREAS, the City Council of the City of Taft currently uses a variety of communication methods to inform the public of meetings and opportunities to participate; and WHEREAS, the activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act (CEQA) State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3), no environmental review is required.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Taft as follows:

Section 1. Determination of Reasonable Efforts. The City Council of the City of Taft determines the following to constitute reasonable efforts to encourage participation in meetings pursuant to Government Code § 54953.4(b)(3)(C):

1. Media Outreach. The City of Taft may include media organizations serving the jurisdiction, including media organizations serving non-English-speaking communities, in the distribution of meeting agendas, notices, or other meeting-related information, as appropriate.

2. Electronic Access and Agenda Subscriptions. The City of Taft shall maintain methods for members of the public to access meeting agendas and related materials electronically, including through the City of Taft’s website.

3. On the website, the city also provides options for members of the public to subscribe to receive meeting agendas, notices, or other updates.

4. Community and Organizational Outreach. The City of Taft will provide meeting information through existing communication channels and partnerships with community- Resolution No. _______
based organizations, neighborhood groups, civic organizations, civil rights organizations, good government organizations, and organizations serving non-English-speaking communities, as opportunities arise and consistent with available resources.

5. Use of Existing Communication Channels. The City of Taft may use existing outreach methods to share meeting information and participation opportunities, including, but not limited to, the agency website, email notifications, agenda subscription services, newsletters, social media platforms, public counters, bulletin boards, community meetings, and other established communication tools.

6. Flexible and Evolving Methods: The efforts identified in this Resolution are intended to provide a flexible framework for outreach and public participation. The City of Taft may modify, expand, or adjust its outreach methods over time based on available resources, evolving communication practices, changes in technology, and the needs of the community.

Section 2. No Requirement to Provide Notice to Any Specific Group. Consistent with Government Code Section 54953.4(b)(3)(C)(ii), this Resolution does not require notice to any specific group or organization, and no action shall arise from the failure to provide notice to any specific group or organization.

PASSED, APPROVED, AND ADOPTED this 16th day of June 2026 ________________________________
Dave Noerr, Mayor
ATTEST:
__________________________________
Faith Melton
City Clerk

STATE OF CALIFORNIA )

COUNTY OF KERN ) SS

CITY OF TAFT )
I, Faith Melton, City Clerk of the City of Taft, do hereby certify that the foregoing Resolution was duly and regularly adopted by the City Council of the City of Taft at a regular meeting thereof held on the 16th day of June, 2026, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:
__________________________________
Faith Melton
City Clerk
City of Taft Agenda Report
DATE: JUNE 16, 2026
TO: HONORABLE MAYOR AND COUNCIL MEMBERS
AGENDA MATTER:

COMMERCIAL WASTE DUMP WILL SERVE PROCEDURES
SUMMARY STATEMENT:

City staff reviewed and updated internal procedures for commercial waste haulers using the City's Wastewater Treatment Facility dump station at 1120 E. Ash Street. As a result, additional requirements have been established for commercial dump applications and willserve approvals. Businesses seeking to use the facility must acknowledge and agree to comply with these updated conditions as part of the application and approval process. • Maintain all required permits, registrations, licenses, and authorizations in good standing with the Kern County Environmental Health Division and any other applicable regulatory agencies. • Ensure that only approved waste materials are transported to and disposed of at the facility. • Comply with all City of Taft facility rules, operating procedures, and disposal requirements. • Provide documentation or proof of regulatory compliance upon request by the City of Taft.

RECOMMENDED ACTION
Receive the informational item regarding Commercial Waste Dump Will Serve Procedures and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.

IMPACT ON BUDGET (Y/N): No
ATTACHMENT (Y/N): Yes, Copy of correspondence letter to businesses PREPARED BY: Finance Department
REVIEWED BY:

CITY CLERK FINANCE DEPARTMENT CITY MANAGER
June 9, 2026
The City of Taft reminds all commercial customers utilizing the City of Taft Dump Station Facility that they are responsible for maintaining compliance with all applicable permits and environmental regulations established by the Kern County Public Health Services Department – Environmental Health Division, as well as all local, state, and federal laws governing waste transportation and disposal activities.

To maintain authorization to use the City of Taft Dump Station Facility, all commercial customers must submit the following documents to the City no later than July 31, 2026:
• Current Annual Health Permit issued by the Kern County Environmental Health Division • Current Certificate of Liability Insurance
The Certificate of Liability Insurance must provide minimum coverage limits of $1,000,000 per occurrence and $2,000,000 aggregate and must name the City of Taft as an Additional Insured.

By utilizing the City of Taft Dump Station Facility, your business acknowledges and agrees to:
• Maintain all required permits, registrations, licenses, and authorizations in good standing with the Kern County Environmental Health Division and any other applicable regulatory agencies. • Ensure that only approved waste materials are transported to and disposed of at the facility. • Comply with all City of Taft facility rules, operating procedures, and disposal requirements. • Provide documentation or proof of regulatory compliance upon request by the City of Taft.

Documentation may be emailed to [email protected].

Failure to provide the required documentation by July 31, 2026, may result in suspension of dump station privileges until compliance has been verified.

For additional information regarding permit and compliance requirements, please visit the Kern County Environmental Health Division website at:
https://www.kernpublichealth.com/permitting-compliance/waste/septic-and-grease-pumpers The City of Taft appreciates your cooperation and commitment to ensuring the safe, lawful, and environmentally responsible management of waste disposal activities.

Sincerely,
Celia Campos
City of Taft | Assistant Finance Director
209 E. Kern St.| Taft, CA 93268
(661) 763 - 1222
REVIEWED BY:

CITY CLERK FINANCE DIRECTOR CITY MANAGER
City of Taft Agenda Report
DATE: JUNE 16, 2026
TO: HONORABLE MAYOR AND COUNCIL MEMBERS
AGENDA MATTER:

ANNUAL AUDITED FINANCIAL STATEMENTS FOR FY 2022-2023
SUMMARY STATEMENT:

These Audit Reports were presented and reviewed by the Finance Committee on May 19, 2026, and were recommended to be forwarded to the City Council to be received and filed.

Attached are the Annual Audited Reports for the years ended June 30, 2023, which includes the Annual Comprehensive Financial Report (ACFR), Wastewater Treatment Plant Financial Statements (WWTP) and Management Report for Wastewater Treatment Plant.

RECOMMENDED ACTION
Motion to receive and file the Annual Audited Comprehensive Financial Reports for the year ended June 30, 2023 and find that the activity is not a project per the California Environmental Quality Act (CEQA) as set forth in Section 15060(c)(3) and Section 15378 of the CEQA Guidelines.

IMPACT ON BUDGET (Y/N): No
ATTACHMENT (Y/N): Yes, Comprehensive Annual Financial Reports dated June 30, 2023, WWTP Financial Statements and Management
Report for Wastewater Treatment Plant
PREPARED BY: Finance Department

CITY OF TAFT

ANNUAL FINANCIAL REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2023
i

CITY OF TAFT

ANNUAL FINANCIAL REPORT
JUNE 30, 2023

TABLE OF CONTENTS

FINANCIAL SECTION

Independent Auditor’s Report ................................................................................................................... 1 Basic Financial Statements
Government-wide Financial Statements
Statement of Net Position ................................................................................................................. 5 Statement of Activities ..................................................................................................................... 6 Governmental Funds Financial Statements
Balance Sheet ................................................................................................................................... 8 Reconciliation of the Balance Sheet of Governmental
Funds to the Statement of Net Position .................................................................................... 11 Statement of Revenues, Expenditures, and Changes
in Fund Balances ...................................................................................................................... 12 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds
to the Statement of Activities .................................................................................................. 15 Proprietary Funds Financial Statements
Statement of Net Position ............................................................................................................... 16 Statement of Revenues, Expenses, and Changes in Fund Net Position .......................................... 18 Statement of Cash Flows ................................................................................................................ 20

Fiduciary Funds Financial Statements
Statement of Net Position ............................................................................................................... 22 Statement of Changes in Net Position ............................................................................................ 23 Notes to Basic Financial Statements .................................................................................................. 25 Required Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – General Fund .......................................................................................... 62 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – WWTP Special Revenue Fund .............................................................. 63 Schedule of Plan’s Proportionate Share of Net Pension Liability and Related Ratios as of Measurement Date – Combined Plan .................................................................................. 64 Schedule of Pension Contributions – Combined Plan .................................................................... 66 Other Supplemental Information
Major Fund Budgetary Comparison Schedule
Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – WWTP Capital Projects Fund ................................................................ 70

CITY OF TAFT

ANNUAL FINANCIAL REPORT
JUNE 30, 2023
TABLE OF CONTENTS (Continued)
Non-Major Governmental Funds
Combining Balance Sheet .............................................................................................................. 72 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances ......................................................................................................................... 74 Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual –
Traffic Safety Special Revenue Fund ................................................................................ 76 Gas Tax Special Revenue Fund ......................................................................................... 77 TDA Special Revenue Fund .............................................................................................. 78 Asset Forfeiture Special Revenue Fund ............................................................................ 79 Landscape Assessment District Special Revenue Fund .................................................... 80 Crime Prevention Special Revenue Fund .......................................................................... 81 RMRA Special Revenue Fund .......................................................................................... 82 Private-Purpose Trust Funds
Combining Statement of Net Position - Private-Purpose Trust Funds ........................................... 84 Combining Statement of Changes in Net Position -
Private- Purpose Trust Funds ................................................................................................... 85 1 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS OFFICIALS

PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES CRAIG A HARTZHEIM, CPA 9465 WILSHIRE BLVD., 3RD FLOOR 5800 HANNUM AVENUE, SUITE E HADLEY Y HUI, CPA BEVERLY HILLS, CA 90212 CULVER CITY, CA 90230 ADAM V GUISE, CPA TEL: 310.670.2745 TEL: 310.670.2745
TRAVIS J HOLE, CPA FAX: 310.670.1689 FAX: 310.670.1689
WILSON LAM, CPA www.mlhcpas.com www.mlhcpas.com
INDEPENDENT AUDITOR’S REPORT
To the City Council
City of Taft, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Taft, California (City) as of and for the fiscal year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

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

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

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

Required Supplementary Information
Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the budgetary comparison information on pages 62 and 63, the schedule of plan’s proportionate share of net pension liability and related ratios on page 64 and the schedule of pension contributions on page 66, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. .
3 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The WWTP Capital Projects budgetary comparison schedule, the combining and individual nonmajor governmental and fiduciary funds financial statements and budgetary comparison schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the WWTP Capital Projects budgetary comparison schedule, the combining and individual nonmajor governmental and fiduciary funds financial statements and budgetary comparison schedules are fairly stated, in all material respects, in relation to the basic financial statements taken as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated May 11, 2026, on our consideration of the City of Taft, California’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City of Taft, California’s internal control over financial reporting and compliance.

Moss, Levy & Hartzheim, LLP
Culver City, California
May 11, 2026
4 This page intentionally left blank
ASSETS
Cash and investments 6,238,937 $ 7,743,148 $ 13,982,085 $ Restricted cash and investments 397,760 23,536 421,296
Cash and investments with fiscal agents 2,735,687 - 2,735,687 Accounts receivable 2,663,763 726,607 3,390,370
Interest receivable 17,697 36,152 53,849
Internal balances (2,975,319) 2,975,319 -
Notes receivable 3,263,105 - 3,263,105
Prepaid expenses 108,695 9,047 117,742
Capital assets, not being depreciated 2,336,855 12,239 2,349,094 Capital assets, being depreciated 28,247,370 12,287,144 40,534,514 Capital assets, accumulated depreciation (16,942,165) (8,919,652) (25,861,817) Total assets 26,092,385 14,893,540 40,985,925

DEFERRED OUTFLOWS OF RESOURCES
Pension related 5,715,842 1,702,700 7,418,542
Total deferred outflows of resources 5,715,842 1,702,700 7,418,542

LIABILITIES
Accounts payable 834,337 118,142 952,479
Accrued payroll 76,912 17,655 94,567
Accrued interest payable 36,785 - 36,785
Retention payable 45,381 2,816 48,197
Unearned revenue 223,582 49,284 272,866
Deposits payable 2,493 57,561 60,054
Noncurrent liabilities:

Due within one year 147,214 29,773 176,987
Due in more than one year 3,347,402 111,378 3,458,780
Net pension liability 9,975,207 3,878,770 13,853,977
Total liabilities 14, 4,265,379 689,313 18,954,692

DEFERRED INFLOWS OF RESOURCES
Pension related 787,117 253,050 1,040,167
Total deferred inflows of resources 787,117 253,050 1,040,167

NET POSITION
Net investment in capital assets 10,330,499 3,309,007 13,639,506 Restricted for:

Streets and roads 1,298,538 - 1,298,538
Public safety 95,841 - 95,841
Pensions 2,735,687 - 2,735,687
Community development 3,833,814 - 3,833,814
Capital projects - WWTP 4,714,431 - 4,714,431
Unrestricted (6,677,013) 8,768,804 2,091,791
Total net position 16,331,797 $ 12,077,811 $ 28,409,608 $

See accompanying notes to financial statements

CITY OF TAFT

STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental
Activities
Business-type
Activities Total
5 CITY OF TAFT

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Expenses
Governmental activities:

General government (3,317,463) $ 481,726 $ 2,391,107 $ - $ Public safety (1,355,427) 41,313 266,066 -
Public works (2,108,476) 203,190 418,713 132,835
Community development (931,880) - 175,238 306,111
Interest on long-term debt (96,855) - - -
Total governmental activities (7,810,101) 726,229 3,251,124 438,946 Business-type activities:

Community correctional facility (CCF) (316,424) - - -
Federal WWTP (624,898) 721,507 - -
Sewer (1,123,537) 1,276,976 - -
Refuse (1,043,541) 1,049,452 51,658 -
Transit (847,099) 357,285 51,806 -
Total business-type activities (3,955,499) 3,405,220 103,464 - Total primary government (11,765,600) $ 4,131,449 $ 3,354,588 $ 438,946 $ General revenues:

Taxes:

Property taxes
Sales tax
Other taxes
Investment earnings
Miscellaneous
Total general revenues
Change in net position
Net position, beginning of fiscal year
Prior period adjustments
Net position, beginning of fiscal year, restated
Net position, end of fiscal year
See accompanying notes to financial statements
Program Revenues
Charges for
Services
Operating Grants
and Contributions
Capital
Grants and
Contributions
6 Net (Expense) Revenue and Change in Net Position
$ - (444,630) $ (444,630) $
- (1,048,048) (1,048,048)
- (1,353,738) (1,353,738)
- (450,531) (450,531)
- (96,855) (96,855)
- (3,393,802) (3,393,802)
(316,424) - (316,424)
96,609 - 96,609
153,439 - 153,439
57,569 - 57,569
(438,008) - (438,008)

(446,815) - (446,815)
(446,815) (3,393,802) (3,840,617)
- 1,713,145 1,713,145
- 3,812,520 3,812,520
- 164,512 164,512
106,385 243,714 350,099
- 477,990 477,990
106,385 6,411,881 6,518,266
(340,430) 3,018,079 2,677,649
12,356,209 13,203,776 25,559,985
62,032 109,942 171,974
12,418,241 13,313,718 25,731,959
$ 12,077,811 16,331,797 $ 28,409,608 $
Business-type
Activities Total
Governmental
Activities
7 CITY OF TAFT

GOVERNMENTAL FUNDS

BALANCE SHEET
JUNE 30, 2023
ASSETS General
Revolving Loan
Fund CDBG
Revolving Loan
Fund Home
Cash and investments $ 10,118 - $ 244,064 $
Cash and investments with fiscal agents - 2,735,687 -
Restricted cash and investments - - -
Receivables:

Accounts - 1,181,515 -
Interest 28 336 680
Notes 1,806,474 - 1,329,280
Prepaid items - 100,966 -
Total assets 4,018,504 $ 1,816,620 $ 1,574,024 $

LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES

LIABILITIES
Accounts payable $ - 777,749 $ - $
Accrued payroll - 68,149 -
Due to other funds - - -
Deposit payable - 2,493 -
Unearned revenue - 223,582 -
Retention payable - 29,191 -
Advance from - 1,768,978 -
Total liabilities 2,870,142 - -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 195,768 1,329,280 1,806,474
Total deferred inflows of resources 195,768 1,806,474 1,329,280

FUND BALANCES
Nonspendable 100,966 - -
Restricted 2,735,687 10,146 244,744
Unassigned (1,884,059) - -
Total fund balances (deficits) 952,594 10,146 244,744
Total liabilities, deferred inflows of
resources, and fund balances 4,018,504 $ 1,816,620 $ 1,574,024 $ See accompanying notes to financial statements
8 WWTP Special
Revenue
WWTP Capital
Projects
Total Nonmajor
Governmental
Funds Total
$ 4,533,074 - $ $ 6,223,153 1,435,897 $
- - - 2,735,687
168,735 229,025 - 397,760
- 1,187,063 2,663,763 295,185
12,622 - 17,654 3,988
- - 3,263,105 127,351
- 410 104,345 2,969
$ 4,714,431 1,416,498 $ 1,865,390 $ 15,405,467 $
$ - 44,573 $ $ 828,024 5,702 $
- 1,808 74,735 4,778
- 880,008 1,206,341 326,333
- - 2,493 -
- - 223,582 -
- - 45,381 16,190
- - 1,768,978 -
- 926,389 353,003 4,149,534
- 1,178,425 4,670,394 160,447
- 1,178,425 160,447 4,670,394
- 410 2,969 104,345
4,714,431 - 1,478,365 9,183,373
- (688,726) (129,394) (2,702,179)
4,714,431 (688,316) 1,351,940 6,585,539
$ 4,714,431 1,416,498 $ 1,865,390 $ 15,405,467 $
9 10
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CITY OF TAFT

GOVERNMENTAL FUNDS

RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
Fund balances of governmental funds 6,585,539 $
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets, lease assets, net of depreciation and amortization have not been included as financial resources in governmental funds.

These amounts do not include internal service fund capital assets costing $63,385 and accumulated depreciation and amortization of $46,109).

Total capital assets 30,520,840 $
Accumulated depreciation (16,896,056) 13,624,784
Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. Long-term liabilities include certificates of participation , lease refinancing bonds, leases payable, compensated absences, and net pension liability (not including compensated absences of $8,805 and lease liabilities of $22,636 from internal service funds). (13,438,382) Deferred outflows and inflows of resources relating to pensions: In governmental funds, deferred outflows and inflows of resources relating to pensions are not reported because they are applicable to future periods. In the statement of net position, deferred outflows and inflows of resources relating to pensions are reported.

Deferred inflows of resources relating to pensions (787,117) $ Deferred outflows of resources relating to pensions 5,715,842 4,928,725 Internal service funds are used by management to charge the costs of certain activities such as vehicle maintenance to individual funds.

The assets and the liabilities of the internal service fund must be added to the statement of net position. (2,478)
Certain revenues are deferred in the governmental funds because the availability criteria is not met. These revenues are not deferred in the statement of net position. 4,670,394
Accrued interest payable from the current portion of interest due on long-term debt issuance have not been reported in the governmental funds. (36,785)
Net position of governmental activities 16,331,797 $
See accompanying notes to financial statements
11 CITY OF TAFT

STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
General
Revolving Loan
Fund CDBG
Revolving Loan
Fund Home

REVENUES
Property taxes $ - 1,713,145 $ - $
Sales taxes - 3,569,348 -
Other taxes - 407,684 -
Licenses, permits, and fees - 304,098 -
Fines and forfeitures - 1,828 -
Use of money and property 75 356,408 (625)
Intergovernmental 8,173 1,335,937 186,499
Current service charges - 354,855 -
Other - 286,878 -
Total revenues 8,330,181 8,248 185,874

EXPENDITURES
Current:

General government - 1,899,962 -
Public safety - 3,944,501 -
Public works - 1,159,911 -
Community development - 601,427 4,188
Capital outlay - 1,253,525 -
Debt service:

Principal retirement - 7,398 -
Interest and fiscal charges - 1,602 -
Total expenditures 8,868,326 - 4,188
Excess of revenues
over (under) expenditures (538,145) 8,248 181,686

OTHER FINANCING SOURCES (USES)
Transfers in - 47,768 -
Transfers out (8,278) (100,067) -
Total other financing sources (uses) (52,299) (8,278) - Net change in fund balances (590,444) (30) 181,686
Fund balances (deficits), beginning of fiscal year 1,433,096 10,176 63,058 Prior period adjustments 109,942 - -
Fund balances (deficits) , beginning of fiscal
year, restated 1,543,038 10,176 63,058
Fund balances (deficits), end of fiscal year 952,594 $ 10,146 $ 244,744 $ See accompanying notes to financial statements
12 WWTP Special
Revenue
WWTP Capital
Projects
Total Nonmajor
Governmental
Funds Total
$ - - $ $ 1,713,145 - $
- - 3,569,348 -
- - 407,684 -
- - 304,098 -
- - 6,476 4,648
12,371 11,006 380,064 829
- 648,203 3,091,910 913,098
- 42,667 409,834 12,312
- - 286,878 -
12,371 701,876 930,887 10,169,437
- 983,408 2,883,370 -
- - 4,358,824 414,323
- - 1,251,840 91,929
- - 930,812 325,197
- - 1,267,535 14,010
- 73,698 84,795 3,699
- 57,172 59,575 801
- 1,114,278 849,959 10,836,751
12,371 (412,402) 80,928 (667,314)
131,200 - 279,035 100,067
- (141,324) (279,035) (29,366)
131,200 (141,324) 70,701 -
143,571 (553,726) 151,629 (667,314)
4,570,860 (134,590) 1,200,311 7,142,911
- - - 109,942
4,570,860 (134,590) 1,200,311 7,252,853
$ 4,714,431 (688,316) $ 1,351,940 $ 6,585,539 $
13 14
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Net change in fund balances of governmental funds (667,314) $ Amounts reported for governmental activities in the statement of activities differs from the amounts reported in the statement of revenues, expenditures, and changes in fund balance because:

Governmental funds report capital outlay as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation or amortization expense (does not include internal service fund depreciation and amortization of $3,169).

This activity is reconciled as follows:

Capital outlay 1,267,535 $
Capitalized outlays deemed to be repairs and maintenance or not meeting capitalization thresholds (419,784)
Depreciation and amortization expense (1,030,057) (182,306) Certain notes receivable are reported in the governmental funds as expenditures and then offset by deferred revenue as they are not available to pay current expenditures. Likewise, when the note is collected, it is reflected in revenue. This is the net change between notes receivable collected and issued. 198,191
In governmental funds, pension costs are recognized when employer contributions are made. In the statement of activities, pension costs are recognized on the accrual basis. This fiscal year, the difference between accrual-basis pension costs and actual employer contributions was: 3,162,541 Accrued interest is interest due on long-term debt payable. The net change for the period is (36,479)
Revenues that are measurable but not available. Amounts are not recorded as revenue under the modified accrual basis of accounting. 460,719 Internal service funds are used by management to charge the costs of certain activities, such as vehicle maintenance to individual funds. The net revenues (expenses) of the internal service fund are reported under governmental activities. 3,412
Debt repayments are reported as expenditures in the governmental funds.

The repayment is not an expense in the statement of activities as it is a reduction of a long-term liability. The balance for compensated absences reflects the difference between absences accrued and absences paid (does not include internal service fund compensated absences change of $242 or principal payment on long term debt of $3,699).

Principal payment on long term debt 84,795
Compensated absences (5,480)
Change in net position of governmental activities 3,018,079 $ See accompanying notes to financial statements
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

CITY OF TAFT

GOVERNMENTAL FUNDS

RECONCILIATION OF STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

TO THE STATEMENT OF ACTIVITIES
15 CCF Federal WWTP Sewer
ASSETS
Current assets:

Cash and investments 1,886,429 $ 265,153 $ 3,932,332 $
Restricted cash and investments - - -
Receivables:

Accounts - 342,355 207,356
Interest 5,263 15,249 10,999
Due from other funds - 1,206,341 -
Prepaid items - 354 509
Total current assets 1,891,692 1,829,452 4,151,196
Noncurrent assets:

Advance to - 3,980,077 -
Capital assets, not being depreciated 12,239 - -
Capital assets, being depreciated/amortized 248,904 5,966,927 2,979,263 Capital assets, accumulated depreciation or
amortization (239,232) (5,014,491) (2,156,664)
Total noncurrent assets 21,911 4,932,513 822,599
Total assets 1,913,603 6,761,965 4,973,795

DEFERRED OUTFLOWS OF RESOURCES
Pension related 1,190,599 57,004 108,348
Total deferred outflows of resources 1,190,599 57,004 108,348

LIABILITIES
Current Liabilities:

Accounts payable 90,396 9,046 8,297
Accrued payroll 1,526 1,024 1,916
Unearned revenue - - -
Deposits payable - - 33,250
Retention payable 2,816 - -
Current portion of compensated absences - 2,698 5,064
Current portion of lease liabilities - 3,821 3,821
Total current liabilities 94,738 16,589 52,348
Noncurrent liabilities:

Compensated absences - 8,096 15,192
Lease liabilities - 18,815 18,815
Advances from - - -
Net pension liability 2,696,969 130,416 250,574
Total noncurrent liabilities 2,696,969 157,327 284,581
Total liabilities 2,791,707 173,916 336,929

DEFERRED INFLOWS OF RESOURCES
Pension related 177,729 8,452 15,903
Total deferred inflows of resources 177,729 8,452 15,903

NET POSITION
Net investment in capital assets 19,095 929,800 799,963 Unrestricted 115,671 5,706,801 3,929,348
Total net position 134,766 $ 6,636,601 $ 4,729,311 $
See accompanying notes to financial statements
Enterprise Funds

CITY OF TAFT

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2023
Business-type Activities
16 Governmental
Activities
Refuse Transit
Total Enterprise
Funds
Internal Service
Fund
$ - 1,659,234 $ 7,743,148 $ 15,784 $
23,536 - 23,536 -
59,289 117,607 726,607 -
- 4,641 36,152 43
- - 1,206,341 -
7,290 894 9,047 4,350
90,115 1,782,376 9,744,831 20,177
- - 3,980,077 -
- - 12,239 -
2,799,567 292,483 12,287,144 63,385
(1,235,373) (273,892) (8,919,652) (46,109)
1,564,194 18,591 7,359,808 17,276
1,654,309 1,800,967 17,104,639 37,453
152,767 193,982 1,702,700 -
152,767 193,982 1,702,700 -
7,498 2,905 118,142 6,313
8,016 5,173 17,655 2,177
39,284 10,000 49,284 -
- 24,311 57,561 -
- - 2,816 -
3,626 6,922 18,310 2,201
- 3,821 11,463 3,821
58,424 53,132 275,231 14,512
10,878 20,767 54,933 6,604
- 18,815 56,445 18,815
2,211,099 - 2,211,099 -
350,950 449,861 3,878,770 -
2,572,927 489,443 6,201,247 25,419
2,631,351 542,575 6,476,478 39,931
22,571 28,395 253,050 -
22,571 28,395 253,050 -
1,564,194 (4,045) 3,309,007 (5,360)
(2,411,040) 1,428,024 8,768,804 2,882
$ (846,846) 1,423,979 $ 12,077,811 $ (2,478) $
Business-type Activities
Enterprise Funds
17 CCF Federal WWTP Sewer

OPERATING REVENUES
Charges for services $ 721,507 - $ 1,274,453 $
Connection and installation fees - - 2,096
Other - - 427
Total operating revenues - 721,507 1,276,976

OPERATING EXPENSES
Salaries and wages 54,385 - 93,737
Pension and other employee benefits 5,954 (47,491) 5,922 Training and development - - -
Contract and professional services 43,065 2,310 14,142
Maintenance and operations 11,923 115,287 648,314
Materials and supplies 2,545 3,159 449
Insurance 72,648 147,256 51,381
Utilities 51,798 59,164 2,474
Administrative service charges - 140,374 21,916
Depreciation 240,637 10,061 76,702
Bad debt expense - - 5,328
Other operating expenses 119,226 26,678 83,913
Total operating expenses 316,424 624,097 1,122,736
Operating income (loss) (316,424) 97,410 154,240

NONOPERATING REVENUES (EXPENSES)
Investment income (loss) 45,538 16,322 31,558
Interest expense (801) - (801)
Intergovernmental - - -
Total nonoperating revenues (expenses) 16,322 44,737 30,757 Changes in net position (300,102) 142,147 184,997
Total net position, beginning of fiscal year 434,868 6,494,454 4,493,809 Prior period adjustments - - 50,505
Total net position, beginning of fiscal year, restated 434,868 6,494,454 4,544,314 Total net position, end of fiscal year 134,766 $ 6,636,601 $ 4,729,311 $ See accompanying notes to financial statements
Business-type Activities
Enterprise Funds

CITY OF TAFT

STATEMENT OF REVENUES, EXPENSES, AND

CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
18 Governmental
Activities
Refuse Transit
Total Enterprise
Funds
Internal Service
Fund
$ 357,273 1,049,452 $ $ 3,402,685 $ 254,500
- - 2,096 -
12 - 439 -
357,285 1,049,452 3,405,220 254,500
239,990 173,716 561,828 117,214
163,124 17,498 145,007 82,505
- 2,400 2,400 -
21,235 540,084 620,836 -
124,463 137,759 1,037,746 9,877
13,670 565 20,388 9,972
44,460 47,366 363,111 -
- 9,583 123,019 8,785
61,761 - 224,051 14,376
128,112 6,600 462,112 3,169
2,932 - 8,260 -
100,062 54,459 384,338 4,222
847,099 1,042,740 3,953,096 250,120
(489,814) 6,712 (547,876) 4,380
- 12,967 106,385 (167)
- (801) (2,403) (801)
51,806 51,658 103,464 -
51,806 63,824 207,446 (968)
(438,008) 70,536 (340,430) 3,412
(408,838) 1,341,916 12,356,209 (5,890)
- 11,527 62,032 -
(408,838) 1,353,443 12,418,241 (5,890)
$ (846,846) 1,423,979 $ 12,077,811 $ (2,478) $
Business-type Activities
Enterprise Funds
19 STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Business-type Activities
Enterprise Funds
CCF Federal WWTP Sewer
Cash Flows from Operating Activities:

Cash received from customers and users - $ 426,213 $ 1,265,677 $ Cash paid to suppliers for goods and services (260,642) (323,909) (942,645) Cash paid to employees for services (259,176) (83,343) (143,716) Net cash provided (used) by operating activities (519,818) 18,961 179,316 Cash Flows from Capital and Related Financing Activities:

Acquisition, proceeds, and construction of capital assets - - - Interest paid - (801) (801)
Principal paid - (3,699) (3,699)
Net cash provided (used) by capital and related financing activities - (4,500) (4,500) Cash Flows from Non-Capital Financing Activities:

Intergovernmental grants received - - -
Cash received (paid) to/from other funds, including interest 260,154 (1,235,234) - Net cash provided by non-capital financing activities: 260,154 (1,235,234) - Cash Flows from Investing Activities:

Interest received 11,307 31,330 21,689
Net cash provided by investing activities 11,307 31,330 21,689 Net increase (decrease) in cash and cash equivalents (248,357) (1,189,443) 196,505 Cash and Cash Equivalents at Beginning of Fiscal Year 2,134,786 1,454,596 3,735,827 Cash and Cash Equivalents at End of Fiscal Year 1,886,429 $ 265,153 $ 3,932,332 $ Reconciliation to Statement of Net Position:

Cash and investments 1,886,429 $ 265,153 $ 3,932,332 $
Restricted cash and investments - - -
Total cash and cash equivalents 1,886,429 $ 265,153 $ 3,932,332 $ Reconciliation of Operating Income (Loss) to Net Cash
Provided (Used) by Operating Activities:

Operating income (loss) (316,424) $ 97,410 $ 154,240 $
Adjustments to reconcile operating income (loss) to
net cash provided (used) by operating activities:

Depreciation 10,061 240,637 76,702
(Increase) decrease in accounts receivable - (295,294) (11,299) (Increase) decrease in prepaid expenses - (354) (509)
(Increase) decrease in deferred outflows of resources - pension (661,055) (32,726) (64,925) Increase (decrease) in deferred inflows of resources - pension (1,026,602) (51,774) (98,527) Increase (decrease) in net pension liability 1,379,464 63,720 122,879 Increase (decrease) in accounts payable 90,396 (434) 2,041 Increase (decrease) in accrued payroll 1,526 (2,178) (3,385) Increase (decrease) in unearned revenue - - -
Increase (decrease) in deposits payable - - 2,198
Increase (decrease) in retention payable 2,816 - -
Increase (decrease) in compensated absences - (46) (99) Total adjustments (203,394) (78,449) 25,076
Net cash provided (used) by operating activities (519,818) $ 18,961 $ 179,316 $ See accompanying notes to financial statements

CITY OF TAFT
20 Governmental
Business-type Activities Activities
Internal
Enterprise Funds Service
Refuse Transit Totals Fund
$ 362,678 1,038,946 $ 3,093,514 $ 254,500 $
(321,803) (902,682) (2,751,681) (45,928)
(468,075) (270,747) (1,225,057) (203,458)
(427,200) (134,483) (883,224) 5,114
(389) - (389) -
(317) (801) (2,720) (1,011)
- (3,698) (11,096) (3,699)
(706) (4,499) (14,205) (4,710)
51,806 51,658 103,464 -
397,110 - (577,970) -
448,916 51,658 (474,506) -
- 9,462 73,788 -
- 9,462 73,788 -
21,010 (77,862) (1,298,147) 404
2,526 1,737,096 9,064,831 15,380
$ 23,536 1,659,234 $ 7,766,684 $ 15,784 $
$ - 1,659,234 $ 7,743,148 $ 15,784 $
23,536 - 23,536 -
$ 23,536 1,659,234 $ 7,766,684 $ 15,784 $
$ (489,814) 6,712 $ (547,876) $ 4,380 $
128,112 6,600 462,112 3,169
(17,671) (1,799) (326,063) -
(7,290) (894) (9,047) (4,350)
(87,372) (117,379) (963,457) -
(139,948) (176,118) (1,492,969) -
170,970 221,283 1,958,316 -
1,360 (54,076) 39,287 5,654
(8,816) (6,457) (19,310) (3,981)
23,064 (8,707) 14,357 -
- (2,786) (588) -
- - 2,816 -
205 (862) (802) 242
62,614 (141,195) (335,348) 734
$ (427,200) (134,483) $ (883,224) $ 5,114 $
21 Inmate
Private-Purpose Custodial
Trust Funds Fund
ASSETS
Cash and investments 253,802 $ - $
Cash and investment with fiscal agents 46 -
Prepaid items 297 -
Capital assets - nondepreciable 1,698,163 -
Capital assets - being depreciated 407,116 -
Capital assets - accumulated depreciation (297,173) -
Total assets 2,062,251 -

LIABILITIES
Accounts payable 41,692 -
Accrued payroll 327 -
Accrued interest payable 12,874 -
Bonds payable due within one year 282,000
Loan payable to City of Taft due in more than one year 1,588,959 - Bonds payable due in more than one year 948,000 -
Total liabilities 2,873,852 -

NET POSITION
Unrestricted (811,601) -
Total net position (deficit) (811,601) $ - $
See accompanying notes to financial statements

CITY OF TAFT

STATEMENT OF NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2023
22 CITY OF TAFT

FIDUCIARY FUNDS

STATEMENT OF CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Private Purpose Trust
Funds Inmate Custodial Fund
Additions:

Investment revenue (loss) 46 $ - $
Taxes and assessments 453,493 -
Total additions 453,539 -
Deductions:

Community development 138,777 -
Interest expense 42,207 -
Payments on behalf of inmates - 11,579
Depreciation 10,178 -
Total deductions 191,162 11,579
Change in net position 262,377 (11,579)
Net Position (Deficit), Beginning of fiscal year (1,073,978) 11,579 Net Position (Deficit) - End of fiscal year $ - (811,601) $ See accompanying notes to financial statements
23 24
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CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
25 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Taft, California (the City), which was founded on November 7, 1910, has a population of 9,052 living within an area of 15.05 square miles. It is located in Western Kern County 119 miles northwest of Los Angeles, 280 miles south of San Francisco, and 37 miles southwest of Bakersfield in the foothills of the western edge of southern San Joaquin Valley.

The financial statements of the City have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles.

A. Reporting Entity
In evaluating how to define the City for financial reporting purposes, management has considered all potential component units. The decision to include a potential component unit in the reporting entity was made by applying the criteria set forth in the U.S. GAAP. The basic—but not the only—criterion for including a potential component unit within the reporting entity is the governing body’s ability to exercise oversight responsibility.

The most significant manifestation of this ability is financial interdependency. Other manifestations of the ability to exercise oversight responsibility include, but are not limited to, the selection of the governing authority, the designation of management, the ability to significantly influence operations and accountability for fiscal matters. The other criteria used to evaluate potential component units for inclusion or exclusion from the reporting entity is the existence of special financing relationships, regardless of whether the City is able to exercise oversight responsibilities. Based upon the application of these criteria, the following is a brief review of each potential component unit addressed in defining the City’s reporting entity.

Included within the reporting entity:
 Taft Public Financing Authority. A nonprofit public benefit corporation created in 1994 through a Joint Exercise of Powers agreement between the City of Taft and the Taft Community Development Agency established for the purpose of, among other things, issuing bonds to provide financing and refinancing for public capital improvements of the City and Agency. (Separate financial statements are not prepared for this entity.)
 Taft Public Improvement Corporation. A nonprofit public benefit corporation created in 1989 to provide services for the betterment of the City. These services include constructing various capital improvements for the City, assisting with the creation or expansion of the City’s facilities, the purchase and sale of real or personal property and assisting the City to finance, acquire, construct, and install such property. (Separate financial statements are not prepared for this entity.)  Greater Taft Transportation Authority. The Greater Taft Transportation Authority (GTTA) was formed in April 2001 as a joint exercise of powers between the City of Taft and Taft Community Development Agency pursuant to the California Government Code Section 6500 et seq. (Separate financial statements are not prepared for the GTTA.)

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
26 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Accounting and Reporting Policies
The City has conformed to the pronouncements of the GASB, which are the primary authoritative statements of accounting principles generally accepted in the United States of America applicable to state and local governments.

C. Fund Accounting
The accounts of the City are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, deferred inflow/outflow of resources, fund equity, revenues, and expenditures/expenses. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into generic fund types and broad categories as follows:

Governmental Funds:
 General Fund. The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in other funds.  Special Revenue Funds. The Special Revenue Funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes.  Capital Projects Fund. The Capital Project Fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities (other than those financed by Proprietary Funds).

Proprietary Funds:
 Enterprise Funds. The Enterprise Funds are used to account for operations that are financed and operated in a manner similar to a private business enterprise – where the intent of the City Council is that the costs (expenses including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges.  Internal Service Fund – Garage Fund. The Garage Fund is used to account for the cost of providing vehicle maintenance to operating funds. Costs are recovered by user charges.

Fiduciary Funds:

 Custodial Funds. The Custodial Funds are account for activities carried out exclusively for the benefit of others outside the City but not administered through other fiduciary trusts or equivalent arrangements. for assets held by the City as an agent. City has one custodial fund, the Inmate Custodial Fund, which records amounts earned by or deposited on behalf of inmates for utilization in the prison commissary.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
27 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Fund Accounting (Continued)
 Private Purpose Funds. These funds are for disbursements made only for those activities to wind down the business of the former Taft Community Development Agency (TCDA). These activities include but are not limited to the payment of debt service related to the bonds issued by the TCDA as well as other contractual commitments.

D. Basis of Accounting/Measurement Focus
Government-wide Financial Statements
The City’s Government-wide Financial Statements include a Statement of Net Position and a Statement of Activities (including changes in Net Position). These statements present summaries of governmental and business-type activities of the City. Fiduciary activities of the City are not included in these statements.

These statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all the City’s assets and liabilities, including capital assets and infrastructure as well as long-term debt, 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 the liability is incurred. The Statement of Activities demonstrates the degree to which the direct expenses of a given function are offset by program revenues. Direct expenses are those that are clearly categories: 1) charges for services, 2) operating grants and contributions, and 3) capital grants and contributions.

Charges for services include revenues from customers or applicants who purchase, use, or directly benefit from the goods, services, or privileges provided by a given function. Grants and contributions include revenues restricted to meeting the operational or capital requirements of a particular function. Taxes and other items not properly included among program revenue are reported as general revenue.

Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to interfund activities, payables, and receivables. All internal balances in the Statement of Net Position have been eliminated.

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 aggregated non-major funds. An accompanying schedule is presented to reconcile and explain the differences in fund balances 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 qualifications of GASB Statement No. 34.

The governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the current financial resources’ measurement focus, only current assets, deferred outflows of resources, current liabilities and deferred inflows of resources are generally included on their balance sheets. The reported fund balance is considered to be a measure of “available spendable resources”. The governmental fund operating statements present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Accordingly, they are said to present a summary of sources and uses of “available spendable resources” during a period.

Noncurrent portions of long-term receivables due to governmental funds are reported on their balance sheets in spite of their spending measurement focus. Recognition of governmental fund type revenue represented by

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
28 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Basis of Accounting/Measurement Focus (Continued)
Governmental Fund Financial Statements (Continued)
noncurrent receivables is deferred until they become current receivables or are offset by due to other governments. Revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after year-end) are recognized when due. Those revenues susceptible to accrual are property taxes, sales taxes, interest revenues, charges for services, and special assessments. Licenses, fines, and permit revenues are not susceptible to accrual because they generally are not measurable until received in cash. Grants revenues are recorded if payment is expected within 365 days of year end.

Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on long-term obligations which are recognized when due.

Because of their current financial resources focus, expenditure recognition for governmental fund types excludes amounts represented by non-current liabilities. Since they do not affect net current assets, such longterm amounts are not recognized as governmental fund expenditures or fund liabilities.

The City reports the following major governmental funds:

The General Fund is the government’s primary operating fund. It accounts for all financial resources of the City, except those required to be accounted for in another fund.

The Revolving Loan Fund – CDBG was established to account for Community Development grants by using Community Development program revenue.

The Revolving Loan Fund – HOME was established to account for funds as direct loans for rehabilitation or reconstruction of dwellings owned and occupied by qualifying low- and moderate-income households.

The WWTP Capital Projects Fund is used to account for capital asset acquisition and construction of the wastewater treatment plant.

The WWTP Special Revenue Fund is used to account for special projects related to the City’s share of the wastewater treatment plant.

Proprietary Fund Financial Statements
Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses, and Changes in Net Position, and a Statement of Cash Flows. All proprietary fund types are accounted for using the accrual basis of accounting and the economic resources measurement focus. Their revenues are recognized when earned, and expenses are recognized when incurred. All liabilities associated with their activity are also included in the Statement of Net Position.

Proprietary Funds include enterprise funds. The City reports the following major enterprise funds:

The CCF Fund is used to account for the operations of the Community Correctional Facility. The CCF provides housing and program services to the California Department of Corrections, but the program ended in the fiscal year ending June 30, 2021. See subsequent event note.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
29 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Basis of Accounting/Measurement Focus (Continued)
Proprietary Fund Financial Statements (Continued)
The Federal WWTP Fund is used to account for the operations related to building and maintaining a wastewater treatment plant for the federal prison.

The Sewer Fund is used to account for the operations of the City’s sewer system.

The Transit Fund is used to record the operations of the Taft Area Transit Dial-A-Ride service. The enterprise collects fares from users of the service.

The Refuse Fund is used to record the operation of the refuse removal enterprise of the City. The enterprise collects user fees for the collection of refuse from businesses and residents in the City of Taft.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the City’s proprietary funds are charges to customers for services. Operating expenses include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. The principal operating revenue of the internal service fund is charges to other funds. Operating expenses for the internal service fund include the costs of vehicle maintenance.

Internal Service Fund Statements
The City reports one internal service fund for the Central Garage. This fund is established to account for any activity that provides goods or services to other funds or departments of the primary government and its component units, or to other governments, on a cost-reimbursement basis. See proprietary funds above for accounting for internal service funds.

Fiduciary Fund Financial Statements
Fiduciary Fund Financial Statements include a Statement of Net of Position and a Statement of Changes in Net Position. The fiduciary funds are used to report assets held in a trustee or agency capacity for others and therefore, are not available to support City programs. Since these assets are being held for the benefit of a third party, these funds are not incorporated into the government-wide statements.

The City’s fiduciary funds are a custodial fund and private purpose trust funds. These funds use the accrual basis of accounting; custodial funds are held on behalf of inmates housed in the Community Correctional Facility. The fund is custodial in nature (assets equal liabilities) and therefore do not involve measurement of results of operations. The private purpose trust funds are used to account for the redevelopment agency successor agency by the City as trustee. Trust funds are accounted for on the economic resources measurement focus.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
30 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Budgetary Policy and Control
General Budget Policies
The City Council approves each year’s budget submitted by the City Manager prior to the beginning of the new fiscal year. Public meetings are conducted prior to its adoption by the Council. All appropriations lapse at yearend. 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 adjust the operating budget within each fund. Transfers of operating budget appropriations between funds or to or from appropriated reserve accounts, use of unappropriated fund balances, cancellation of appropriations and all changes in capital improvement project budgets require the approval of the City Council.

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 fund level. Formal budgetary integration is employed as a management control device during the fiscal year for the Governmental Fund Types.

F. Cash/Investment Policy
In order to maintain an effective investment program, all cash, except certain trust and agency cash and restricted cash, is pooled, and amounts not required for day-to-day financial transactions are invested as approved by the City Council on a pooled basis and earnings are allocated to each fund on the basis of its average cash balance at the end of each quarter.

GASB Statement No. 31, “Accounting and Financial Reporting for Certain Investments and External Pools”, requires governmental entities to report certain investments at fair value in the balance sheet and recognize the corresponding change in the fair value of investments in the year in which the change occurred. In accordance with GASB Statement No. 31, the City has adjusted certain investments to fair value (when material).

G. Capital Assets and Depreciation
Capital assets, which include buildings, machinery and equipment, infrastructure assets (roads, bridges, etc.), and right to use leased assets are reported in the government-wide financial statements as well as proprietary fund financial statements. Capital assets are defined by as long-lived assets (in excess of one year) tangible assets with an initial, individual cost of more than $5,000 and any purchases and/or construction of infrastructure that exceeds $50,000 and/or extends the useful life of the asset. Such assets are recorded at historical cost or estimated historical cost if actual historical cost is not available.

Capital assets are depreciated over their estimated useful lives using the straight-line method. This means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each fiscal year until the asset is fully depreciated. The purpose of depreciation is to spread the cost of capital assets over the useful life of these assets. The amount charged to depreciation expense each fiscal year represents that fiscal year’s pro rata share of the cost of capital assets.

Depreciation of capital assets is charged as an expense against operations each year and the total amount of depreciation taken over the years, called accumulated depreciation, is reported on the Statement of Net Position of the government-wide financial statements as a reduction in the book value of capital assets.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
31 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) G. Capital Assets and Depreciation (Continued)
The City has assigned the useful lives listed below to capital assets:

Structures and improvements 20-40 Years
Machinery and equipment 5-20 Years
Infrastructure
Pavement 40 Years
Concrete 60 Years
H. Deferred Outflow/Inflow of Resources
In addition to assets, the statement of net position and balance sheet 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 position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has deferred outflows of resources on pensions in the statement of net position.

In addition to liabilities, the statement of net position and balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and will not be recognized as an inflow of resources (revenue) until that time. The City has deferred inflows of resources-deferred revenue – loans/notes on the governmental funds’ financial statements and pensions in the statement of net position.

I. Interfund Transactions
Quasi-external transactions are accounted for as fund revenues or expenditures/expenses. Transactions, which constitute reimbursements to a fund for expenditures/expenses are recorded as expenditures/expenses in the reimbursing fund, and as reductions of the expenditures/expenses in the reimbursed fund.

J. Capitalized Interest
No interest cost relating to construction was capitalized during the fiscal year ending June 30, 2023.

K. Compensated Absences
The compensated absences accrual on June 30, 2023, amounted to $228,436 for Governmental Activities and $73,243 for Business-type Activities.
 Sick leave liability
Generally, employees earn one day of sick leave per month with a maximum accumulation of 720 hours.

All employees are entitled to payment for accumulated sick leave up to the lower of 50 percent of earned days or forty-five days, upon retirement, death, or disability.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
32 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. Compensated Absences (Continued)
 Vacation leave liability
Employees earn ten days’ vacation leave per fiscal year, for less than four years of service; from four years through nine years of service, fifteen days are earned; from ten years through nineteen years of service, twenty days are earned; and after nineteen years, twenty-five days. All employees are able to accrue an amount equal to twice the employee’s annual accrual, after which further accrual will cease. Accumulated vacation is payable upon termination.

L. Property Taxes
Property Taxes attach as an enforceable lien on property as of January 1. Taxes are levied on July 1 and are payable in two installments which are delinquent after December 10 and April 10. Unsecured personal property taxes become due on July 1st of each year and are delinquent, if unpaid by August 31st. Kern County bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized on the modified accrual basis of accounting method. The County is permitted by State Law (Proposition 13) to levy taxes at 1 percent of full value (at time of purchase). The City receives a share of this basic levy proportionate to what it received in the 1976 to 1978 period.

M. Cash Flows
Proprietary fund type cash and investments are used in the preparation of the statement of cash flows as investments are pooled and are not allocated to specific funds. Each of these funds’ share of pooled cash and investments is considered cash for purposes of the statement of cash flows since these amounts are immediately available for withdrawal. For the purposes of the Proprietary Funds’ Statement of Cash Flows, the City considers all investments with a maturity of three months or less when purchased to be cash equivalents.

N. Use of Restricted Resources
When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, and then unrestricted resources as they are needed. Restricted resources are defined as resources received from outside agencies dedicated for specific purposes (grants for example).

O. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, deferred outflows or resources, liabilities, and deferred inflows of resources and disclosures of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates.

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

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
33 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. New Accounting Pronouncements
GASB Statement Number 96 “Subscription-Based Information Technology Arrangements” Implementation
Governmental Accounting Standards Board issued Statement No. 96 “Subscription-Based Information Technology Arrangements” to provide guidance on the accounting and financial reporting for subscriptionbased information technology arrangements (SBITAs) for government end users. The 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.

This standard had no material impact on the City’s financial statements.

Future Accounting Standards:

GASB has issued the following statements which may impact on the City’s financial reporting requirements in the The provisions of Statement Number 99 “Omnibus 2022” are effective as follows: the requirements related to the extension of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective for the fiscal year ending June 30, 2022; the requirements related to leases, PPPs, and SBITAs, are effective for fiscal years beginning after June 15, 2022; and the requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023.

The provisions for Statement Number 100 “Accounting Changes and Error Corrections-an amendment of GASB Statement No. 62” are effective for fiscal years beginning after June 15, 2023.

The provisions of Statement Number 101 “Compensated Absences” are effective for fiscal years beginning after December 15, 2023.

The provisions of Statement Number 102 “Certain Risk Disclosures” are effective for fiscal years beginning after June 15, 2024.

The provisions for Statement Number 103 “Financial Reporting Model Improvements” are effective for fiscal years beginning after June 15, 2025.

The provisions for Statement Number 104 “Disclosure of Certain Capital Assets” are effective for fiscal years after June 15, 2025.

The provisions for Statement Number 105 “Subsequent Events” are effective for fiscal years after June 15, 2026.

R. Prior Period Adjustments
The City increased the opening net position of the Governmental Activities to record $114,942 grant receivable not accrued in the previous fiscal year and decreased the opening net position of the Governmental Activities for an incorrectly accrued $5,000 grant receivable resulting in a net increase to the opening net position of the Governmental Activities of $109,942 as of July 1, 2022.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
34 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) R. Prior Period Adjustments (Continued)
The City increased the opening net position of the Business-type Activities by $62,032 to record receivables of the Sewer Enterprise Fund and the Refuse Enterprise Fund as of July 1, 2022.

The City increased the beginning net position as of July 1, 2022, of the Sewer Enterprise Fund and the Refuse Enterprise Fund by $50,505 and $11,527, respectively for receivables excluded from the financial statements in the previous fiscal year.

See the tables below for the adjustments to fund balance and net position as of July 1, 2022:

Governmental Business-type
Activities Activities
Net Position July 1, 2022 as originally stated 13,203,776 $ 12,356,209 $ Operating grant recorded in error (5,000) -
Operating grant not recorded 114,942 -
Accounts receivable not recorded - 62,032
Net Position July 1, 2022 as restated 13,313,718 $ 12,418,241 $ General
Fund
Fund Balance July 1, 2022 as originally stated 1,433,096 $ Operating grant recorded in error (5,000)
Operating grant not recorded 114,942
Fund Balance July 1, 2022 as restated 1,543,038 $
Sewer Refuse
Fund Fund
Net Position July 1, 2022 as originally stated 4,493,809 $ 1,341,916 $ Accounts receivable not recorded 50,505 11,527
Net Position July 1, 2022 as restated 4,544,314 $ 1,353,443 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
35 NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY A. General Budget Policies

1. The budget adopted by the City Council provides for the general operation of the City. It includes proposed expenditures and the means of financing them.

2. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the fiscal year. All amendments made during the fiscal year are included in the budgetary amounts reported herein. The “appropriated budget” covers all City expenditures. Actual expenditures may not exceed budgeted appropriations at the fund level, which is the legal level of budgetary control.

3. Formal budgetary integration is employed as a management control device during the fiscal year.

Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures. Appropriations which are encumbered lapse at fiscal year-end, and then are added to the following fiscal year’s budgeted appropriations.

4. Budgets for the General, Special Revenue, Capital Projects, and Debt Service Funds are adopted on a basis substantially consistent with accounting principles generally accepted in the United States of America (U.S.

GAAP). Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items.

Budget comparisons are not presented for the Proprietary funds, as the City is not legally required to adopt a budget for this type of funds.

There were no budgets adopted for the following funds: RLF-CDBG (major fund), Revolving Loan Fund – Home (major fund), Cal Homes Revolving Loan, TARP Revolving Loan, and the Inmate Trust Fund.

5. Capital projects are budgeted through the Capital Projects Funds. Appropriations for capital projects authorized but not constructed or completed during the fiscal year are carried forward as continuing appropriations into the following fiscal year’s budget.

6. Under Article XIII-B of the California constitution (the GANN Spending Limitation Initiative), the City is restricted as to the amount of annual appropriations from the proceeds of taxes, and if proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or returned to the taxpayers through revised tax rates or revised fee schedules, or an excess in one year may be offset by a deficit in the following year. For the fiscal year ended June 30, 2023, based on calculations by City staff, proceeds of taxes did not exceed appropriations. Further, section 5 of Article XIII-B allows the City to designate a portion of fund balance for general contingencies, to be used for any purpose.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
36 NOTE 2 – STEWARDSHIP, COMPLIANCE, AND ACCOUNTABILITY (CONTINUED) B. Deficit Fund Balances/Net Position
The following funds contained deficit fund balances/net position as of June 30, 2023:

The City anticipates that future revenue or transfers will be sufficient to cover these deficits.

C. Excess of Expenditures over Appropriations
Excess of expenditures over appropriations in departments/cost centers of individual funds:

Major Governmental Fund:

WWTP Special Revenue Fund $ 688,316
Nonmajor Governmental Fund:

Needs Center Blding Renovation 19,086
Landscape Assessment District 110,308
Major Proprietary Fund:

Transit 846,846
Internal Service Fund: 2,478
Final
Expenditures Appropriations Excess
Major Governmental Funds
General Fund
General government 1,899,962 $ 1,518,577 $ (381,385) $
Public safety 3,944,501 3,920,337 (24,164)
Public works 1,159,911 1,001,079 (158,832)
Community development 601,427 598,944 (2,483)
Capital outlay 1,253,525 1,153,348 (100,177)
Principal 7,398 - (7,398)
Interest 1,602 - (1,602)
WWTP
Principal 73,698 69,000 (4,698)
Nonmajor Governmental Funds
TDA
Capital outlay 14,010 - (14,010)
Asset forfeiture
Principal 3,699 - (3,699)
Interest 801 - (801)
Crime prevention
Public safety 319,357 273,334 (46,023)

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
37 NOTE 3 – CASH AND INVESTMENTS
The City maintains a cash and investment pool that is available for use by all funds. Cash and investments on June 30, 2023, consisted of the following:

Investments authorized by the California Government Code and the City’s Investment policy The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restrictive). The table also identifies certain provisions of the California Government Code (or the City’s investment policy, where more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustee that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City’s investment policy.

Statement of Net Position:

Cash and investments 13,982,085 $
Restricted cash and investments 421,296
Cash and investments with fiscal agents 2,735,687
Statement of Fiduciary Net Position:

Cash and investments 253,802
Cash and investments with fiscal agents 46
Total cash and investments 17,392,916 $
Cash on hand 6,672 $
Deposits held by financial institutions 2,221,584
Investments 15,164,660
Total cash and investments 17,392,916 $
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage/
Amount of
Portfolio
Maximum
Investment in
One Issuer
U.S. Treasury Obligations 5 Years None None
Certificates of Deposit 5 Years None None
Negotiable Certificates of Deposit 3 Years 30% None
Passbook Savings Accounts N/A None None
County Pooled Investment Funds N/A 50% None
Local Agency Investment Fund (LAIF) N/A $75,000,000 $75,000,000 U.S. Agency Securities N/A None None

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
38 NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Investment Authorized by Debt Agreements
Investments of debt proceeds held by bond trustee are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The table below identifies the investment types that are authorized for investments held by bond trustee. The table also identifies certain provisions of these debt agreements that address interest rate risk.

Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.

Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. Information about the sensitivity of the fair values of the City’s investments (including investments held by bond trustee) to market interest rate fluctuations are provided by the table below that shows the distribution of the City’s investments by maturity:

Authorized Investment Type
Maximum
Investment in
One Issuer
Maximum
Percentage/
Amount of
Portfolio
Maximum
Maturity
U.S. Agency Securities None None None
Money Market Mutual Funds None None N/A
Commercial Paper None None 270 days
Certificates of Deposit None None 5 years
Repurchase Agreements None None 180 days
U.S. Treasury Obligations None None 365 days
Time Deposits None None 365 days
Remaining Maturity (in Months)
12 Months 13 to 24 25 to 60
Investment Type or Less Months Months Total
State Investment Pool (LAIF) 6,560,968 $ - $ - $ 6,560,968 $ PARS Investment Pool 2,735,687 - - 2,735,687
Certificates of Deposit 1,044,306 881,397 2,350,362 4,276,065 Mutual Funds 230,000 - - 230,000
U.S. Agency Securities - - 1,361,940 1,361,940
Total 10,570,961 $ 881,397 $ 3,712,302 $ 15,164,660 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
39 NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.

Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of fiscal year-end for each investment type:

Concentration of Credit Risk
The City is in compliance with restrictions imposed by the investment policy, which limits certain types of investments. As of June 30, 2023, the City has not invested more than 5% of its total investments in any one issuer.

Investments guaranteed by the United States Government and investments in mutual funds and external investment pools are excluded from this requirement.

Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of a failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party.

The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provisions for deposits: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total fair value deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.

GASB Statement No. 40 requires that the following disclosure be made with respect to custodial credit risks relating to deposits and investments: All of the City deposits with financial institutions (including Certificates of Deposit) in excess of federal depository insurance limits were held in pledged collateral accounts as described above.

As of June 30, 2023, all of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in collateralized accounts. As of June 30, 2023, the City’s investment in the following type was held by the same broker-dealer (Counterparty) that was used by the City to buy the security:

S&P Rating
Minimum Exempt From
Investment Type Amount Legal Rating Disclosure AAA AA+ A Not Rated State Investment Pool (LAIF) 6,560,968 $ N/A - $ - $ - $ - $ 6,560,968 $ PARS Investment Pool 2,735,687 N/A - - - - 2,735,687
Certificates of Deposit 4,276,065 N/A - - - - 4,276,065 Mutual Funds 230,000 AAA - 230,000 - - -
U.S. Agency Securities 1,361,940 N/A - - 1,361,940 - -
Total 15,164,660 $ - $ 230,000 $ 1,361,940 $ - $ 13,572,720 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
40 NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Custodial Credit Risk (Continued)
Investment Type Reported Amount
U.S. Agency Securities $1,361,940
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon 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 a governmental investment pool managed and directed by the California State Treasurer and is not registered with the Securities and Exchange Commission. An oversight committee, comprised of California State officials and various participants, provided oversight to the management of the fund. The daily operations and responsibilities of LAIF fall under the auspices of the State Treasurer’s office. The City is a voluntary participant in the investment pool.

Fair Value Measurements:

The City pool investment categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. These principles recognize a three-tiered fair value hierarchy, as follows:

Level 1: Investments reflect prices quoted in active markets; Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not considered to be active; and, Level 3: Investments reflect prices based upon unobservable sources.

The City pool investment has the following recurring fair value measurements as of June 30, 2023:

Fair Value Measurements Using
Investment by Fair Value Level Fair Value
Quoted Prices in
Active Markets
for Identical
Assets (Level 1)
Significant Other
Observable Input
(Level 2)
Significant
Unobservable
Inputs (Level 3)
Debt securities
Certificates of deposits 4,276,065 $ - $ 4,276,065 $ - $ Mutual funds 230,000 230,000 - -
US Government Agency Securities 1,361,940 - 1,361,940 - Total Investments Measured at Fair Value 5,868,005 $ 230,000 $ 5,638,005 $ - $ Investments Measured at Amortized Cost
LAIF 6,560,968
PARS 2,735,687
Total Pooled Investments 15,164,660 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
41 NOTE 4 – NOTES RECEIVABLE
The City operates a loan program whereby funds are made available to eligible businesses and individuals for various purposes. Grant funds were originally used to start the program and repayments are required to be used for the same purpose. As of June 30, 2023, the balance of notes receivable was $3,263,105 of this amount, $3,263,105 are deferred housing notes, which are due when the properties are transferred. These notes are collateralized by the titles of the properties. These notes carry interest rates between 1% to 5%. All the notes are deferred inflows - unavailable revenue offsets.

NOTE 5 – LOAN RECEIVABLE FROM SUCCESSOR AGENCY TRUST FUND The City loaned $1,588,959 to the former redevelopment agency to purchase land for redevelopment purposes. The redevelopment agency was dissolved pursuant to state law (see Note #16 for further details on the dissolution and Successor Agency Trust Fund). The loan bears no interest and is only eligible to be repaid after all third-party obligations of the Successor Agency Trust Fund are paid. The City has estimated that the Successor Agency Trust Fund will not have sufficient resources to repay this loan in the foreseeable future and has recorded an allowance for the full amount of the loan receivable. On June 30, 2023, the loan receivable balance was $1,588,959 with an allowance of $1,588,959 for a net loan receivable of $0.

NOTE 6 – INTERFUND ACTIVITIES
In general, the City uses interfund transfers to (1) move revenues from the funds that collect them to the funds that statute or budget requires to expend them, (2) use unrestricted revenues collected in the General Fund to help finance various programs and capital projects accounted for in other funds in accordance with budgetary authorization, and (3) move cash to debt service funds from the funds responsible for payment as debt service payments become due.

In general, the effect of the interfund activity has been eliminated from the government-wide financial statements.

Interfund transfers during the fiscal year ended June 30, 2023, are as follows:

Transfers In Transfers Out
Major Governmental Funds:

General 47,768 $ 100,067 $
Revolving Loan Fund CDBG - 8,278
WWTP Special Revenue - 141,324
WWTP Capital Projects 131,200 -
Nonmajor Governmental Fund:

Traffic Safety - 3,428
Crime Prevention 100,067 -
Gas Tax - 25,938
Total interfund transfers 279,035 $ 279,035 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
42 NOTE 6 – INTERFUND ACTIVITIES (CONTINUED)
Current interfund balances arise in the normal course of business (i.e., one fund loaning funds to pay for current expenditures) and are expected to be repaid shortly after the end of the fiscal year. The following is a summary of interfund balances as of June 30, 2023.

Interfund balances that are not expected to be repaid shortly after the end of the fiscal year are classified as advances to/from. These amounts will be repaid in future years when the WWTP proprietary fund is closed down and the City receives Transportation Development Act reimbursements. It is anticipated that the General Fund and Transit Fund will be fully funded no later than the fiscal year ended June 30, 2026.

Due from Due to
(Receivable) (Payable)
Major Governmental Funds:

WWTP Special Revenue - $ 880,008 $
Major Proprietary Fund:

Federal WTTP 1,206,341 -
Nonmajor Governmental Funds:

TDA - 14,010
Needs Center Blding Renovation - 202,129
TARP Revolving Loan - 418
Landscape Assessment District - 109,776
Total 1,206,341 $ 1,206,341 $
Advance to Advance from
(Receivable) (Payable)
Major Governmental Funds:

General - $ 1,768,978 $
Major Proprietary Fund:

Transit - 2,211,099
Federal WTTP 3,980,077 -
Total 3,980,077 $ 3,980,077 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
43 NOTE 7 – CAPITAL ASSETS AND DEPRECIATION
In accordance with GASB Statement No. 34, the City has reported all capital assets including infrastructure in the government-wide statement of net position. The City elected to use the basic approach as defined by GASB Statement No. 34 for all infrastructures reporting, whereby depreciation expense and accumulated depreciation have been recorded. The following table presents the capital asset activity for the fiscal year ended June 30, 2023.

Depreciation expense was charged to functions/programs of the primary government as follows:

Balance Balance
Governmental Activities July 1, 2022 Additions Deletions Transfers June 30, 2023 Capital assets not being depreciated:

Land 1,450,162 $ - $ - $ - $ 1,450,162 $
Construction in progress 522,293 662,617 - (298,217) 886,693 Total capital assets not being depreciated 1,972,455 662,617 - (298,217) 2,336,855 Capital assets being depreciated/amortized:

Structures and improvements 15,024,743 7,756 - - 15,032,499 Machinery and equipment 4,200,998 177,376 - - 4,378,374 Infrastructure:

Roadway system 7,956,171 - - 298,217 8,254,388
Bridges 265,183 - - - 265,183
Right to Use Buildings 316,926 - - - 316,926
Total capital assets being depreciated
or amortized 27,764,021 185,132 - 298,217 28,247,370
Less accumulated depreciation
and amortization for:

Structures and improvements (8,148,631) (532,540) - - (8,681,171) Machinery and equipment (3,538,612) (244,356) - - (3,782,968) Infrastructure:

Roadway system (3,741,800) (240,484) - - (3,982,284)
Bridges (265,183) - - - (265,183)
Right to use buildings (214,713) (15,846) - - (230,559) Total accumulated depreciation/amortization (15,908,939) (1,033,226) - - (16,942,165) Total capital assets, being depreciated
or amortized net of accumulated
depreciation/amortization 11,855,082 (848,094) - 298,217 11,305,205 Total Governmental activities capital assets,
net of accumulated depreciation or
amortization 13,827,537 $ (185,477) $ - $ - $ 13,642,060 $ General government 447,680 $
Public safety 137,661
Public works 441,501
Community development 6,384
Total depreciation/amortization expense - governmental activities 1,033,226 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
44 NOTE 7 – CAPITAL ASSETS AND DEPRECIATION (CONTINUED) Changes in business-type activities capital assets:

Depreciation for business-type activities was charged to functions/programs as follows:

Balance Deletions Balance
Business-type activities July 1, 2022 Additions and Reclasses June 30, 2023 Capital assets not being depreciated:

Land 11,850 $ - $ - $ 11,850 $
Construction in progress - 389 - 389
Total capital assets not being depreciated 11,850 389 - 12,239 Capital assets being depreciated:

Structures and improvements 7,446,142 - (200,544) 7,245,598 Machinery and equipment 2,443,800 - (476,577) 1,967,223 Sewer infrastructure 2,884,168 - - 2,884,168
Right to use buildings 190,155 - - 190,155
Total capital assets being depreciated 12,964,265 - (677,121) 12,287,144 Less accumulated depreciation
and amortization for:

Structures and improvements (5,016,493) (222,773) 200,544 (5,038,722) Machinery and equipment (1,981,292) (157,728) 476,577 (1,662,443) Sewer infrastructure (2,008,056) (72,104) - (2,080,160) Right to use buildings (128,820) (9,507) - (138,327)
Total accumulated depreciation (9,134,661) (462,112) 677,121 (8,919,652) Total capital assets, being depreciated,
net of accumulated depreciation 3,829,604 (462,112) - 3,367,492 Total Business-type activities capital assets,
net of accumulated depreciation 3,841,454 $ (461,723) $ - $ 3,379,731 $ CCF 10,061 $
Federal WWTP 240,637
Sewer 76,702
Refuse 6,600
Transit 128,112
Total depreciation expense - business-type activities 462,112 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
45 NOTE 8 – GOVERNMENTAL ACTIVITIES LONG-TERM LIABILITIES During the fiscal year ended June 30, 2023, the following changes occurred to the governmental activities longterm liabilities:

Certificates of Participation
Certificates of Participation (COP) are long-term instruments which are tax exempt and therefore, issued at interest rates below current market levels for taxable investments.

On June 15, 2015, the WWTP entered into a loan financing program with the United States Department of Agriculture, acting through its agency the USDA Rural Development, to finance a portion of the cost and expense of the acquisition and construction of certain improvements to the wastewater treatment system of the City of Taft via the execution and delivery of certificates of participation.

The City entered into a financing program with the Taft Public Improvement Corporation, a California nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California (the "Corporation"), for the purchase by the Corporation of the real property on which the wastewater system is situated (the "Site"), together with the existing wastewater treatment system improvements (the "Existing Facilities") situated thereon, and the purchase by the City from the Corporation of the completed Project.

The City is in receipt of a Letter of Conditions, originally dated November 8, 2012 and extended through April 10, 2017 (the "Letter of Conditions"), from USDA Rural Development, setting forth certain conditions to be satisfied by the City with respect to receipt from USDA Rural Development of funding for the project, comprised of a loan in the amount of not-to-exceed $3,619,000 to be represented by the Certificates of Participation. The Installment payments shall be payable during a period of not more than 40 years and the interest rate shall not exceed 1.75% per annum. During the fiscal year 2016-17, the City spent $3,251,654 for the project which was completed in May 2017. The City received loan funds of $1,895,222 during the fiscal year 2016-17 with the remaining certificates of participation issued of $1,356,432 disbursed to the City during FY 2017-18. The certificates of participation had an outstanding principal balance of $3,153,000 as of June 30, 2023.

Governmental Activities: Balance Balance Due in
Direct Borrowings July 1, 2022 Additions Deletions June 30, 2023 One Year Certificates of participation 3,223,000 $ - $ (70,000) $ 3,153,000 $ 71,000 $ 333 Commerce Way Lease 131,674 - (18,494) 113,180 19,105 Total Certificates, Bonds, and
Leases 3,354,674 - (88,494) 3,266,180 90,105
Compensated absences 222,714 5,722 - 228,436 57,109
Total Long term liabilities 3,577,388 $ 5,722 $ (88,494) $ 3,494,616 $ 147,214 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
46 NOTE 8 – GOVERNMENTAL ACTIVITIES LONG-TERM DEBT (CONTINUED) Certificates of Participation maturity schedule:
1998 Revenue Refunding Bonds and 2019 Revenue Refunding Bonds The former Redevelopment Agency and the Taft Financing Authority entered into a loan agreement dated November 1, 1998 pursuant to which the former Redevelopment Agency borrowed proceeds of the 1998 Revenue Refunding bonds and agreed to make loan payments to the Taft Financing Authority. On December 1, 1998, the Taft Financing Authority issued $5,060,800 of 1998 Revenue Refunding Bonds for the purpose of refinancing the 1993 Revenue Bonds and certain loans from the City of Taft. The 1998 Revenue Bonds interest rates range from

4.25 to 5.80%. Interest is payable semiannually each January 1 and July 1 and principal is paid annually each January 1 through 2028. Tax increment revenue is pledged as collateral for the repayment of the bonds. In addition, the City of Taft agreed to lease the police station and the lease payments were pledged to the payment of the 1998 Revenue Bonds. After dissolution of the Redevelopment Agency, these bonds were paid from the Successor Agency Trust Fund with the City of Taft’s General Fund paying to the Successor Agency Trust Fund the lease payment each year.

The lease portion of the debt of the 1998 Revenue Refunding Bonds should have been recorded as long-term debt of the governmental activities and not as a liability of the Successor Agency Trust Fund. On July 1, 2018, the City of Taft recorded an opening balance adjustment for the remaining principal balance of the lease portion of the 1998 Revenue Refunding Bonds of $905,000.

The City, the Taft Public Financing Authority, and the Successor Agency Trust Fund desired to refinance the 1998 Revenue bonds. On June 1, 2019, the Taft Public Financing Authority issued $2,310,000 Revenue Refunding Bonds to refinance the 1998 Revenue bonds to pay off the remaining outstanding debt of the 1998 Revenue bonds for both the City of Taft and the Successor Agency. The City of Taft paid the outstanding principal of $905,000 on the 1998 Revenue Refunding Bonds to reduce the outstanding principal to $0 as of June 30, 2019. The present value of the savings on the prior debt is $196,462. Principal and interest are due beginning August 1, 2019, and are due semiannually on August 1st and February 1st through February 2025. The City determined that the 2019 revenue bonds were an expense of the Successor Agency Trust Fund during the 2022 fiscal year and recorded a prior period adjustment. See Note 16 for the debt reported as part of the Successor Agency Trust Fund.

Fiscal Year
Ended June 30 PRINCIPAL INTEREST TOTAL
2024 71,000 $ 55,178 $ 126,178 $
2025 73,000 53,935 126,935
2026 74,000 52,657 126,657
2027 75,000 51,362 126,362
2028 77,000 50,050 127,050
2029-2033 403,000 229,635 632,635
2034-2038 439,000 193,148 632,148
2039-2043 480,000 153,318 633,318
2044-2048 523,000 109,830 632,830
2049-2053 570,000 62,475 632,475
2054-2056 368,000 12,985 380,985
Total $ 1,024,573 3,153,000 $ 4,177,573 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
47 NOTE 8 – GOVERNMENTAL ACTIVITIES LONG-TERM DEBT (CONTINUED) The City of Taft paid the outstanding principal of $905,000 on the 1998 Revenue Refunding Bonds to reduce the outstanding principal to $0 as of June 30, 2019. The present value of the savings on the prior debt is $196,462.

Principal and interest are due beginning August 1, 2019, and are due semiannually on August 1st and February 1st through February 2025. The City’s principal outstanding for the 2019 Revenue Refunding Bonds was $0 as of June 30, 2023.
333 Commerce Way Lease Payable
On January 1, 2009, the City entered into a lease agreement for the rental of the building at 333 Commerce Way in the City of Taft. The lease agreement initial term ended on December 31, 2013, with rental payments of $2,000 for the first year and rental payments of $3,000 for the remaining term of the lease agreement. In July 2011, the City signed an addendum to the lease agreement to extend the lease beginning on January 1, 2014 for another fifteen years to end on December 31, 2028, with monthly rental payments of $3,000 for the extended term. The City has the right to cancel the lease beginning on December 31, 2018. Upon notice of cancellation by the City, the City shall have 180 days to provide a qualified tenant to assume the remaining lease period subject to approval by the landlord. If a qualified tenant cannot be found within this time the City may then terminate the lease and pay a lump sum lease buy-out fee amounting to twelve months of lease payments which currently would total $36,000.

The City has no plans to exercise their termination option. 333 Commerce Way Lease Payable schedule
Compensated Absences
The short-term portion of the liability is determined to be the amount due to employees for future absences, which is attributable to services already rendered, and which is expected to be paid during the next fiscal year. The general fund is expected to liquidate approximately 75 percent of the liability, the WWTP special revenue fund approximately 10 percent, and other funds, the remaining 15 percent.

Fiscal Year
Ended June 30 PRINCIPAL INTEREST TOTAL
2024 19,105 $ 3,396 $ 22,501 $
2025 19,734 2,765 22,499
2026 20,386 2,114 22,500
2027 21,058 1,442 22,500
2028 21,753 747 22,500
2029 11,144 106 11,250
Total $ 10,570 113,180 $ 123,750 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
48 NOTE 9 – BUSINESS-TYPE ACTIVITIES LONG-TERM DEBT
During the fiscal year ended June 30, 2023, the following changes occurred to the business-type activities longterm liabilities:
333 Commerce Way Lease Payable schedule
Compensated Absences
The liability is recorded in the various funds and is determined to be the amount due to employees for future absences, which is attributable to services already rendered. The amount estimated to be paid during the next fiscal year is classified with current liabilities, with the remainder classified with noncurrent liabilities.

NOTE 10 – PENSION PLAN
A. General Information about the Pension Plan
Plan Descriptions - All qualified employees are eligible to participate in the City’s separate Safety (fire and police) and Miscellaneous (all other) plans, cost-sharing multiple employers defined benefit pension plans administered by the California Public Employees' Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and Local Government 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.

Benefits Provided - CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries.

Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for nonduty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, Business type activities Balance Balance Due in
Direct Borrowings July 1, 2022 Additions Deletions June 30, 2023 One Year 333 Commerce Way Lease 79,004 $ - $ (11,096) $ 67,908 $ 11,463 $ Total Leases payable 79,004 - (11,096) 67,908 11,463
Compensated absences 74,045 - (802) 73,243 18,310
Total business-type activities 153,049 $ - $ (11,898) $ 141,151 $ 29,773 $ Fiscal Year
Ended June 30 PRINCIPAL INTEREST TOTAL
2024 11,463 $ 2,037 $ 13,500 $
2025 11,841 1,659 13,500
2026 12,232 1,268 13,500
2027 12,635 865 13,500
2028 13,052 448 13,500
2029 6,685 64 6,749
Total $ 6,341 67,908 $ 74,249 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
49 NOTE 10 – PENSION PLAN (CONTINUED)
A. General Information about the Pension Plan (Continued) the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost-of-living adjustments for each plan are applied as specified by the Public Employees' Retirement Law.

The Plans’ provisions and benefits in effect on June 30, 2023, are summarized as follows:

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 l following notice of a change in the rate. Funding contributions for both Plans 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 fiscal 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 fiscal year ended June 30, 2023, the contributions recognized as part of pension expense for the combined plan was $1,220,368.

B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2023, the City reported net pension liability for its proportionate share of the net pension liability in the amount of $13,853,977.

The City’s net pension liability is measured as the proportionate share of the net pension liability. The net pension liability is measured as of June 30, 2022, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2021, rolled forward to June 30, 2022, using standard update procedures. The City's proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially Tier I Tier II Pepra
Hire date Prior to October 3, 1996 On or after October 3, 1996 On or after January 1, 2013 Benefit formula 2.0%@50 2.0%@55 2.0%@57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 - 55 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 2.0% to 2.7% 1.4% to 2.0% 1.426% to 2.0% Required employee contribution rates 8.936% 6.92% 9.500% Required employer contribution rates 15.719% 14.740% 10.800% City Safety Plan
Tier I PEPRA
Hire date Prior to January 1, 2013 On or after January 1, 2013 Benefit formula 2.0%@55 2.0%@62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 63 52 - 67
Monthly benefits, as a % of eligible compensation 1.4% to 2.4% 1.0% to 2.5% Required employee contribution rates 7.00% 6.75%
Required employer contribution rates 10.320% 7.470%
City Miscellaneous Plan

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
50 NOTE 10 – PENSION PLAN (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
determined. The City’s proportionate share of the net pension liability for the Plan as of the measurement dated ended June 30, 2021, and 2022 was as follows:

For the fiscal year ended June 30, 2023, the City recognized pension credit of $2,308,221. On June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

The City reported $1,352,430 as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the fiscal year ended June 30, 2024. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Proportion - June 30, 2021 0.13040%
Proportion - June 30, 2022 0.11990%
Change - Increase -0.01050%
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between expected and actual
experience 606,308 $ (219,026) $
Changes of assumptions 1,869,466
Changes of employer's proportions 496,253
Net difference between projected and actual
earnings on pension plan investments 3,094,085
Changes in proportion and differences
between City contributions and
proportionate share of contributions (821,141)
City contributions subsequent to the
measurement date 1,352,430
$ (1,040,167) 7,418,542 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
51 NOTE 10 – PENSION PLAN (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Actuarial Assumptions - The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:
*The mortality table used was developed based on CalPERS’ specific data. The table includes 15 years of mortality improvements using the Society of Actuaries Scale MP-2020.

Discount Rate - The discount rate used to measure the total pension liability was 6.9%. The projection of cash flows used to determine the discount rate assumed contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plans fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefits payments to determine the total pension liability.

Fiscal Year Ended
June 30
2024 1,404,627 $
2025 1,125,380
2026 606,331
2027 1,889,607
total 5,025,945 $
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation 2.30%
Payroll Growth 2.80%
Salary increases** Varies by entry Age and Service
Investment Rate of Return 6.90%
Mortality* Derived using CalPERS'
Membership Data for all
Funds

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
52 NOTE 10 – PENSION PLAN (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

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

The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

The table on the next page reflects the long-term expected real rates of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate. (a) An expected inflation of 2.20% was used for this period. (b) Figures are based on the 2021 Asset Liability Management study.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate -The following presents the net pension liability of the Local Government for each Plan, calculated using the discount rate for each Plan, as well as what the City's 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:

Assumed
Asset Real Return
Asset Class Allocation Years 1 - 10 (a) (b)
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% 0.59%
Total 100.00%

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
53 NOTE 10 – PENSION PLAN (CONTINUED)
B. Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions (Continued)
Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS’ financial reports.

NOTE 11 – NET POSITION AND FUND BALANCES
Governmental and Business -Type Activities
Net Position
GASB Statement No. 63 requires that the difference between assets added to the deferred outflows of resources and liabilities added to the deferred inflows of resources be reported as net position. In the Government-wide financial statements, proprietary fund financial statements, and private-purpose trust fund financial statements, net position is classified as either net investment in capital assets, restricted, or unrestricted.  Net Investment in Capital Assets describes the portion of net position which is represented by the current net book value of the City’s capital assets, less the outstanding balance of any debt issued to finance these assets.
 Restricted describes the portion of net position, which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter. These principally include debt service requirements, capital projects, and deferred improvement funds restricted to low and moderate income housing purposes.  Unrestricted describes the portion of net position which is not restricted as to use.

When both restricted and unrestricted net position are available, restricted resources are depleted first before the unrestricted resources are used.

Fund Balances
Fund balance is classified as nonspendable, restricted, committed, assigned and/or unassigned based primarily on the extent to which the City is bound to observe constraints imposed upon the use of the resources in the government funds.
1% Decrease 5.90%
Net Pension Liability 20,463,856 $
Current Discount Rate 6.90%
Net Pension Liability 13,853,977 $
1% Increase 7.90%
Net Pension Liability 8,431,288 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
54 NOTE 12 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets including low value vehicle coverage; errors and omissions; injuries to employees and natural disasters for which the City obtains insurance coverage. Public entity risk pools are formally organized and separate entities established under the Joint Exercise Powers Act of the State of California. As separate legal entities, those entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influences by member municipalities beyond their representation of that board. Obligations and liabilities of these risk pools are not the City’s responsibility. The City has joined together with other cities to form a public entity risk pool known as the Central San Joaquin Valley Risk Management Authority (CSJVRMA), a joint powers authority established in accordance with the California government code. The relationship between the City and the CSJVRMA is such that the CSJVRMA is not a component unit of the City for financial reporting purposes.

Financial statements for the CSJVRMA may be obtained from the CSJVRMA’s management.

The CSJVRMA maintains separate records for each member for each year of participation. The records track cash paid to the CSJVRMA through deposit premium assessments, the City’s self-insured retention portion of claims paid, and the City’s allocation of shared risks. Three years after the close of the workers’ compensation coverage year and five years after the close of the general liability coverage year, CSJVRMA assesses the status of all members for that year, then either makes a refund to a member if it has a positive balance (i.e., payout and reserve experience is less than premiums paid) or collects any deficit.

Worker’s Compensation
The City is self-insured for the first $50,000 of each claim. The City participates in a risk sharing pool through CSJVRMA for claims between $50,000 and $500,000. The CSJVRMA participates in another excess pool through the Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX) for the purchase of obtaining excess coverage. LAWXC provides $4,500,000 coverage limits in excess of the CSJVRMA retained limit of $500,000 and participates in the Public Risk Innovation, Solutions, and Management JPA (PRISM) for coverage in excess of $5 million up to the statutory limit. During the 2022/2023 fiscal year, 54 cities participated in the program.

General Liability
The City is self-insured for the first $25,000 of each claim. The City participates in a risk sharing pool through CSJVRMA for claims between $25,000 and $1,000,000. The CSJVRMA is a member of the California Affiliated Risk Management Authorities (CARMA) program for the purpose of obtaining excess coverage in a risk sharing pool. The CARMA program provides coverage from $1,000,000 to $29,500,000. The CARMA program has 54 members participating in the pooled liability program during the 2022/2023 fiscal year. CSJVRMA was established under the provisions of California Government Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets three to four times per year, consisting of one member appointed by each member city.

The day-to-day business is handled by a management group employed by the CSJVRMA.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
55 NOTE 12 – RISK MANAGEMENT (CONTINUED)
The financial position and results of operations for the CSJVRMA as of June 30, 2023, is presented below:

At the termination of the joint powers agreement and after all claims have been settled, any excess or deficit will be divided among the cities in accordance with its governing documents. Audited financial statements are available from the Central San Joaquin Risk Management Authority at 6371 Auburn Boulevard, Citrus Heights, CA 95621.

During the past three fiscal years, none of the above programs of protection have had settlements or judgments that exceeded pooled or insured coverage. There have been no significant reductions in pooled or insured liability coverage from coverage in the prior fiscal year.

NOTE 13 – COMMITMENTS AND CONTINGENCIES
The City has received State and Federal funds for specific purposes that are subject to review by the grantor agencies. Although such audits could generate expenditure disallowances under the terms of the grants, it is believed that any required reimbursements will not be material.

From time to time, the City is involved in various litigation matters incidental to operations, which in the opinion of the City, the ultimate outcome will not a material effect on operations.

Total Assets 153,984,502 $
Total Liabilities 120,022,096 $
Total Retained Earnings 33,962,406
Total Liabilities and Retained Earnings 153,984,502 $
Revenues for Fiscal Year 73,024,624 $
Expenses for Fiscal Year 71,236,112
Change in Net Position 1,788,512 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
56 NOTE 14 – FUND EQUITY
Fund Balance – Governmental Funds
As of June 30, 2023, fund balances of the governmental funds are classified as follows:
 Nonspendable – amounts that cannot be spent either because they are in nonspendable form or because they are legally or contractually required to be maintained intact.  Restricted – amounts that can be spent only for specific purposes because of constitutional provisions or enabling legislation or because of constraints that are externally imposed by creditors, grantors, contributors, or the laws or regulations of other governments.  Committed – amounts that can be used only for specific purposes determined by a formal action of the governing board as the highest level of decision-making authority for the City. Commitments may be established, modified, or rescinded only through ordinances or resolutions approved by the governing board.
 Assigned – amounts that do not meet the criteria to be classified as restricted or committed but that are intended to be used for specific purposes. Under the City’s adopted policy, only the governing board or director may assign amounts for specific purposes.
 Unassigned – all other spendable amounts.

Fund Balance – Governmental Funds
When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally, unassigned funds, as needed, unless the City Council has provided otherwise in its commitment or assignment actions.

General
Revolving
Loan Fund
CDBG
Revolving
Loan Fund
Home
WWTP
Special
Revenue
WWTP
Capital
Projects
Total Non-major
Governmental
Funds Total
Nonspendable:

Prepaid items $ 100,966 $ - $ - $ 410 $ - $ 2,969 104,345 $ Total Nonspendable 100,966 - - 410 - 2,969 104,345

Restricted for:

Streets and roads - - - - - 1,284,528 1, 284,528
Public safety - - - - - 92,872 92,87 2
Pension 2,735,687 - - - - - 2,735,687
Community development - 10,146 244,744 - - 100,965 355, 855 Capital Projects - WWTP - - - - 4,714,431 - 4,714,431
Total Restricted 2,735,687 10,146 244,744 - 4,714,431 1,478,365 9,183,373

Unassigned (1,884,059) - - (688,726) - (129,394) (2,702,179)

Total Fund Balances $ 952,594 $ 10,146 $ 244,744 $ (688,316) $ 4,714,431 $ 1,351,940 $ 6,585,539

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
57 NOTE 15 – AGREEMENT – JOINT SEWAGE PROJECT
Under agreements between the City of Taft, the Taft Heights Sanitation District, and the Ford City Sanitation District dated May 29, 1950, amended on March 7, 1966, restated April 24, 1972, and restated August 21, 1991, covering the “Joint Sewage Project – 1972,” the City operates and maintains the Wastewater Treatment Plant (WWTP) serving the City and the two Sanitation Districts. The City includes the activities of the WWTP within its fund structure since the Agreement specifies that the City shall act on its own behalf and on behalf of the other Districts in operating and maintaining the WWTP. The City maintains the accounting records for the WWTP and has physical custody of its assets. The Agreement specifies that the City shall contribute 52 percent of the revenue required to operate and maintain the WWTP, with the other Districts providing a combined 48 percent of the operating revenue. Since the WWTP is not a separate legal entity, it is not considered a component unit.

NOTE 16 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Taft that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon dissolution of a redevelopment agency, either the City or other unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 17, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 12.

After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence as the date of the dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

The Bill directs the State Controller of the State of California review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the state Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
58 NOTE 16 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (CONTINUED)
Prior to that date, the final seven months of activity of the redevelopment agency continued to be reported in the governmental funds of the City. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City.

Capital Asset activity for the fiscal year ended June 30, 2023 was as follows:

Loans payable to the City of Taft totaling $1,588,959 were made to the former Redevelopment Agency by the City for the purchase of land for redevelopment purposes. These loans were approved to be repaid by the California Department of Finance and are listed on the Recognized Obligation Payment Schedule (ROPS) of the Successor Agency Trust Fund. There is no scheduled date of repayment as all taxes and assessments collected each year are currently being used to satisfy other obligations of the Successor Agency Trust Fund that are due and payable.

The following is a schedule of long-term liabilities for the fiscal year ended June 30, 2023:

The former Redevelopment Agency and the Taft Financing Authority entered into a loan agreement, dated November 1, 1998, pursuant to which the former Redevelopment Agency borrowed proceeds of the 1998 Revenue Refunding bonds and agreed to make loan payments to the Taft Financing Authority. On December 1, 1998, the Taft Financing Authority issued $5,060,800 of 1998 Revenue Refunding Bonds for the purpose of refinancing the Balance Balance
July 1, 2022 Additions Deletions June 30, 2023
Capital assets not being depreciated:

Land 1,698,163 $ - $ - $ 1,698,163 $
Total capital assets not being depreciated 1,698,163 - - 1,698,163 Capital assets being depreciated:

Structures and improvements 407,116 - - 407,116
Total capital assets being depreciated 407,116 - - 407,116 Less accumulated depreciation for:

Structures and improvements (286,995) (10,178) - (297,173) Total accumulated depreciation (286,995) (10,178) - (297,173) Total capital assets, being depreciated
net of accumulated depreciation 120,121 (10,178) - 109,943 Total Governmental activities capital assets,
net of accumulated depreciation 1,818,284 $ (10,178) $ - $ 1,808,106 $ Balance Balance Due in
July 1, 2022 Additions Deletions June 30, 2023 One Year 2019 Revenue Refunding Bonds 1,504,000 $ - $ (274,000) $ 1,230,000 $ 282,000 $ Total long-term liabilities 1,504,000 $ - $ (274,000) $ 1,230,000 $ 282,000 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
59 NOTE 16 – SUCCESSOR AGENCY TRUST FOR ASSETS OF FORMER REDEVELOPMENT AGENCY (CONTINUED)
1993 Revenue Bonds and certain loans from the City of Taft. The 1998 Revenue Bonds interest rates range from

The City, the Taft Public Financing Authority, and the Successor Agency Trust Fund desired to refinance the 1998 Revenue bonds. On June 1, 2019, the Taft Public Financing Authority issued $2,310,000 Revenue Refunding Bonds and entered into a loan agreement with the Successor Agency Trust Fund to acquire the aggregate principal of $1,778,000. The Taft Financing Authority assigned these payments to the former Redevelopment Agency Taft Public Financing Authority issued the 2019 Revenue Refunding Bonds for $2,310,000 of which $1,587,000 was recorded as a long-term liability of the Successor Agency Trust. The first payment of principal and interest is due on August 1, 2019. Principal and interest are due semiannually on August 1st and February 1 with the last payment due on February 1, 2028. The bonds have an interest rate of 3.14%.

The maturity schedule of the bonds is as follows:

NOTE 17 - OTHER MATTERS
Pursuant to City Resolution No. 3392-12 dated January 11, 2012, which was in part the result of the California Supreme Court’s ruling in California Redevelopment Association vs. Matosantos Case No. S194861 which upheld AB26x1 that dissolved all of the redevelopment agencies in California, the City determined that it is in the best interests to serve as Successor Agency.

Further, pursuant to the above Resolution, the City had the Taft Housing Authority assumed all rights, powers, assets, liabilities, duties, and obligations associated with housing activities of the Taft Community Development Agency. City Resolution 3284, dated March 15, 2011, created a Housing Authority and designated City Council members as the Housing Authority Commissioners. Presently, any Taft Housing Authority expenditure actions need approval of the Successor Agency.

NOTE 18 – SUBSEQUENT EVENTS
Management has evaluated events through the date the financial statements were available for issuance. The following events are considered subsequent events for financial statement purposes:

PRINCIPAL INTEREST TOTAL
2024 282,000 $ 36,408 $ 318,408 $
2025 302,000 27,397 329,397
2026 207,000 18,667 225,667
2027 219,000 12,073 231,073
2028 220,000 5,181 225,181
Total $ 99,726 1,230,000 $ 1,329,726 $

CITY OF TAFT

NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2023
60 NOTE 18 – SUBSEQUENT EVENTS (CONTINUED)
Community Correctional Facility (CCF)
The Community Correctional Facility (CCF), which is accounted for as an enterprise fund, was closed during the fiscal year ended June 30, 2021. The facility historically provided housing and program services to the California Department of Corrections (CDC). During the fiscal year ended June 30, 2024, the City invested approximately $1 million to restore and rehabilitate the facility. The CCF was reopened during that fiscal year and now operates to provide housing for federally charged and federally housed inmates. The reopening of the facility is expected to provide a renewed revenue stream for the City.

Federal Wastewater Treatment Plant (WWTP)
The Federal Wastewater Treatment Plan (WWTP), also reported as an enterprise fund, was closed during the fiscal year ended June 30, 2025. The closure resulted from the termination of the City’s contract with the Federal Bureau of Prisons for the use of the facility. The City has determined that the remaining cash balance within this fund will be transferred to the General Fund to mitigate its negative cash position.

CITY OF TAFT

MAJOR FUND BUDGETARY COMPARISON SCHEDULES
JUNE 30, 2023
61 Budgetary comparison schedules are presented as Required Supplementary Information for the General Fund as provided for by GASB Statement No. 34. The budgetary comparison schedules for the remaining major funds are presented to aid in additional analysis and is not a required part of the basic financial statements or Required Supplementary Information.

Budgets were not adopted for the Revolving Loan Fund CDBG and Revolving Loan Fund Home.

CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

GENERAL FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Original Budget Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Property taxes $ 1,813,366 1,621,794 $ $ (100,221) 1,713,145 $ Sales taxes 3,098,896 1,425,255 470,452 3,569,348
Other taxes 374,006 237,229 33,678 407,684
Licenses, permits, and fees 289,967 321,088 14,131 304,098 Fines and forfeitures 1,592 995 236 1,828
Use of money and property 430,960 394,547 (74,552) 356,408 Intergovernmental 1,685,965 159,605 (350,028) 1,335,937 Current services charges 355,239 332,350 (384) 354,855
Other 121,775 25,905 165,103 286,878
Total revenues 4,518,768 8,171,766 8,330,181 158,415

EXPENDITURES
Current:

General government 1,518,577 1,341,437 (381,385) 1,899,962 Public safety 3,920,337 3,866,463 (24,164) 3,944,501
Public works 1,001,079 1,000,650 (158,832) 1,159,911
Community development 598,944 714,248 (2,483) 601,427
Capital outlay 1,153,348 991,500 (100,177) 1,253,525
Debt service :

Principal - - (7,398) 7,398
Interest - - (1,602) 1,602
Total expenditures 7,914,298 8,192,285 8,868,326 (676,041) Excess (deficiency) of revenues
over expenditures (3,395,530) (20,519) (538,145) (517,626)

OTHER FINANCING SOURCES (USES)
Transfers in 244,569 3,395,530 (196,801) 47,768
Transfers out (111,603) - 11,536 (100,067)
Total other financing sources (uses) 3,395,530 132,966 (52,299) (185,265) Net change in fund balance - 112,447 (590,444) (702,891) Fund balance, beginning of fiscal year 1,543,038 1,543,038 1,543,038 - Fund balance, end of fiscal year 1,543,038 $ 1,655,485 $ 952,594 $ (702,891) $ 62 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

WWTP SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Original
Budget Final Budget
Actual
Amounts
Variance
with Final
Budget
Positive
(Negative)

REVENUES
Use of money and property - $ 70 $ 11,006 $ 10,936 $
Intergovernmental 1,256,545 1,222,197 648,203 (573,994) Current service charges 47,312 19,820 42,667 (4,645)
Other - 8,819 - -
Total revenues 1,285,184 1,269,579 701,876 (567,703)

EXPENDITURES
Current:

General government 999,630 1,025,566 983,408 16,222
Debt service:

Principal retirement 69,000 70,000 73,698 (4,698)
Interest and fiscal charges 57,610 56,403 57,172 438
Total Expenditures 1,151,969 1,126,240 1,114,278 11,962 Excess (Deficiency) of Revenues
Over Expenditures 133,215 143,339 (412,402) (555,741)

OTHER FINANCING SOURCES (USES)
Transfers out (133,215) (143,339) (141,324) 2,015
Total other financing sources (uses) (133,215) (143,339) (141,324) 2,015 Net change in fund balance - - (553,726) (553,726)
Fund balance (deficit), beginning of fiscal year (134,590) (134,590) (134,590) - Fund balance (deficit), end of the fiscal year (134,590) $ (134,590) $ (688,316) $ $ (553,726) 63 6/30/22 6/30/21 6/30/20 6/30/19 6/30/18
FY 22-23 FY 21-22 FY 20-21 FY 19-20 FY 18-19
Plan's proportion of the Net
Pension Liability (Asset) 0.1199% 0.1304% 0.1084% 0.1047% 0.1014% Plan's proportionate share of the
Net Pension Liability (Asset) 13,853,977 $ 7,053,422 $ 11,793,149 $ 10,725,745 $ 9,767,575 $ Covered employee payroll*** 2,957,505 $ 6,413,288 $ 6,855,165 $ 6,721,235 $ 6,967,796 $ Plan's proportionate share of the
Net Pension Liability (Asset) as
a percentage of its covered
employee payroll. 468.43% 109.98% 172.03% 159.58% 140.18% Plan's fiduciary net position
as a percentage of the Plan's
Total Pension Liability 73.45% 89.75% 77.54% 77.75% 77.63% *Historical information is required only for measurement periods for which GASB 68 is applicable. **Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown. ***Covered-Employee Payroll is based on pensionable earnings provided by the employer. However, GASB 68 defined covered-employee payroll as the total of employees that are provided pensions through the pension plan. Accordingly, if pensionable earnings are different from total earnings for covered-employees, the employer should display in the disclosure footnotes the payroll based on total earnings for the covered group and recalculate the required payroll-related ratios.

Schedule of Plan's Proportionate Share of the Net Pension Liability and Related Ratios June 30, 2023

CITY OF TAFT

REQUIRED SUPPLEMENTARY INFORMATION
Cost Sharing Defined Benefit Pension Plan
Last 10 Fiscal Years**
Measurement Date*
64 1
6/30/17 6/30/16 6/30/15 6/30/14
FY 17-18 FY 16-17 FY 15-16 FY 14-15
Plan's proportion of the Net
Pension Liability (Asset) 0.0985% 0.0966% 0.0926% 0.3110% Plan's proportionate share of the
Net Pension Liability (Asset) 9,771,417 $ 8,359,216 $ 6,358,590 $ 1,953,362 $ Covered employee payroll*** 6,380,226 $ 6,246,307 $ 3,097,235 $ 3,127,348 $ Plan's proportionate share of the
Net Pension Liability (Asset) as
a percentage of its covered
employee payroll. 153.15% 133.83% 205.30% 62.46%
Plan's fiduciary net position
as a percentage of the Plan's
Total Pension Liability 76.64% 74.06% 78.40% 84.31%
Measurement Date*

CITY OF TAFT

REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2023
Cost Sharing Defined Benefit Pension Plan
Last 10 Fiscal Years**
Schedule of Plan's Proportionate Share of the Net Pension Liability and Related Ratios (Continued) 65 FY 22-23 FY 21-22 FY 20-21 FY 19-20 FY 18-19
Actuarially Determined Contribution** 1,352,430 $ 1,220,368 $ 1,383,788 $ 1,265,189 $ 1,093,954 $ Contributions in Relation to the
Actuarially Determined Contribution ** 1,220,368 1,352,430 1,383,788 1,265,189 1,093,954 Contribution Deficiency (Excess) - $ - $ - $ - $ - $
Covered Employee Payroll**** 3,010,239 $ 2,957,505 $ 6,413,288 $ 6,855,165 $ 6,721,235 $ Contributions as a Percentage of
Covered Employee Payroll**** 44.93% 41.26% 21.58% 18.46% 16.28% * Historical information is required only for measurement periods for which GASB 68 is applicable. **Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions. CalPERS has determined that employer obligations referred to as "side funds" do not conform to the circumstances described in paragraph 120 of GASB 68, therefore are not considered separately financed liabilities.
*** Fiscal year 2015 was the 1st year of implementation, therefore only nine years are shown. ****Covered-Employee Payroll is based on pensionable earnings provided by the employer. GASB 68 defines covered-employee payroll as the total of employees that are provided pensions through the pension plan. If pensionable earnings are different from total earnings for covered-employees, the employer should display in the disclosure footnotes the payroll based on total earnings for the covered group and recalculate the required payroll-related ratios.

Notes to Schedule:

The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2017-18 were from the June 30, 2017 funding valuation reports.

Actuarial Cost Method Entry Age Normal
Amortization Method/Period For details see the June 30, 2020 public funding valuations.

Asset Valuation Method Actuarial Value of Assets. For details, see June 30, 2020 funding valuation report.

Inflation 2.50%
Salary Increases 2.75%
Investment Rate of Return 7.15%
Retirement Age Based on the December 2020 CALPERS' Experience Study.

Mortality Based on the mortality table used based on CalPERS' specific data, The table includes 15 years of mortality improvements using Society of Actuaries Scale MP-2020.

For more details on this table, please refer to the 2020 experience study report.

Schedule of Pension Contributions *

CITY OF TAFT

REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2023
Cost Sharing Defined Benefit Pension Plan
Last 10 Fiscal Years***
66 FY 17-18 FY 16-17 FY 15-16 FY 14-15
Actuarially Determined Contribution** 942,747 $ 883,603 $ 766,472 $ 921,972 $ Contributions in Relation to the
Actuarially Determined Contribution ** 942,747 883,603 766,472 921,972 Contribution Deficiency (Excess) - $ - $ - $ - $
Covered Employee Payroll**** 6,967,796 $ 6,380,226 $ 6,246,307 $ 3,097,235 $ Contributions as a Percentage of
Covered Employee Payroll**** 13.53% 13.85% 12.27% 29.77%

CITY OF TAFT

REQUIRED SUPPLEMENTARY INFORMATION
June 30, 2023
Cost Sharing Defined Benefit Pension Plan
Last 10 Fiscal Years***
Schedule of Pension Contributions * (Continued)
67 68
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69 CITY OF TAFT

MAJOR CAPITAL PROJECT FUND
JUNE 30, 2023
WWTP Capital Projects Fund
The WWTP Capital Projects Fund is used to account for capital asset acquisition and construction of the wastewater treatment plant

CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

WWTP CAPITAL PROJECTS FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Original
Budget Final Budget
Actual
Amounts
Variance
with Final
Budget
Positive

REVENUES
Use of money and property 5,000 $ 5,000 $ 12,371 $ 7,371 $ Total revenues 5,000 5,000 12,371 7,371

OTHER FINANCING SOURCES (USES)
Transfers in 147,255 147,255 131,200 (16,055)
Transfers out (152,255) (157,255) - 157,255
Total other financing sources (uses) (5,000) (10,000) 131,200 141,200 Net change in fund balance - (5,000) 143,571 148,571
Fund balance, beginning of fiscal year 4,570,860 4,570,860 4,570,860 - Fund balance, end of the fiscal year 4,570,860 $ 4,565,860 $ 4,714,431 $ $ 148,571 70 71

CITY OF TAFT

NON-MAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023

SPECIAL REVENUE FUNDS
Traffic Safety
This Fund was established to receive the City’s share of traffic fines and reimburse the General Fund for police activities related to traffic safety and traffic control devices.

Gas Tax
This fund was established to receive a share of the revenues derived from the State taxes on gasoline.

Inmate Welfare Trust
The inmate welfare trust fund account is established and maintained pursuant to Penal Code Sections 5005, 5006.1, 5007, and 5008 and the Business Administration Manual, Chapter 4200. All entries to the inmate welfare trust fund are supported by source documentation.

Transportation and Development Act (TDA)
This fund was established to receive and expend the City’s allocation of sales tax under SB 325. This bill reduced the State’s percentage of sales tax by 1.4 percent and allowed the counties within the State of California to increase their sales tax percentage by ¼ percent. The funds generated by this ¼ percent are allocated to the counties and a portion of this is then allocated to the cities within each county and restricted to street purposes.

Needs Center Building Renovation
This fund was established to track the activity of a CDBG grant that was award to a subrecipient of the City for the renovation of the Taft Needs Center building.

Cal Home Revolving Loan
This fund was established to account for all CalHome grant received by the City.

Tarp Revolving Loan
This fund was established to account for funds received from the State of California CDBG program whose intent is to provide financing to new and existing businesses for a healthy economic environment.

Asset Forfeiture
This fund was established to receive funds that are seized from narcotics dealers or following the sale of dealer assets.

Landscape Assessment District
This fund was established in connection with a single-family housing development project (Tract No. 5574) and will be used to record expenditures and revenues relative to formation and operation of a Landscape Maintenance District in that tract.

Crime Prevention
This fund was established to account for receipts from the State COPS grant program and related expenditures.

RMRA
This Fund was established to utilize grant funds for transportation projects, particularly for streets and roads.

Needs
Inmate Center
Traffic Gas Welfare Blding
Safety Tax Trust TDA Reno
ASSETS
Cash and investments 877 $ 709,849 $ - $ 110,290 $ - $
Receivables:

Accounts 914 18,740 - 14,010 221,215
Interest 2 1,976 - 307 -
Notes - - - - -
Prepaid items - - - - -
Total assets 1,793 $ 730,565 $ - $ 124,607 $ 221,215 $

LIABILITIES, DEFERRED

INFLOWS OF RESOURCES,

AND FUND BALANCES

LIABILITIES
Accounts payable - $ - $ - $ - $ 2,896 $
Accrued payroll - - - - -
Due to other funds - - - 14,010 202,129
Retention payable - - - - 16,190
Total liabilities - - - 14,010 221,215

DEFERRED INFLOWS

OF RESOURCES
Unavailable revenue - - - 14,010 19,086

FUND BALANCES
Nonspendable - - - - -
Restricted 1,793 730,565 - 96,587 -
Unassigned - - - - (19,086)
Total fund balances (deficits) 1,793 730,565 - 96,587 (19,086) Total liabilities, deferred inflows
of resources, and fund balances 1,793 $ 730,565 $ - $ 124,607 $ 221,215 $

CITY OF TAFT

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING BALANCE SHEET
June 30, 2023
Special Revenue Funds
72 Total
Cal Home TARP Landscape Non-Major
Revolving Revolving Asset Assessment Crime Governmental Loan Loan Forfeiture District Prevention RMRA Funds
$ - 100,685 $ 74,381 $ - $ 17,641 $ 422,174 $ 1,435,897 $ 418 - 5,877 - - 34,011 295,185
- 280 204 - 48 1,171 3,988
- 127,351 - - - - 127,351
- - - - 2,969 - 2,969
$ 418 228,316 $ 80,462 $ - $ 20,658 $ 457,356 $ 1,865,390 $ $ - - $ - $ 335 $ 698 $ 1,773 $ 5,702 $
- - - 197 4,581 - 4,778
418 - - 109,776 - - 326,333
- - - - - - 16,190
418 - - 110,308 5,279 1,773 353,003
- 127,351 - - - - 160,447
- - - - 2,969 - 2,969
- 100,965 80,462 - 12,410 455,583 1,478,365
- - - (110,308) - - (129,394)
- 100,965 80,462 (110,308) 15,379 455,583 1,351,940
$ 418 228,316 $ 80,462 $ - $ 20,658 $ 457,356 $ 1,865,390 $ Special Revenue Funds
73 Needs
Inmate Center
Traffic Gas Welfare Blding
Safety Tax Trust TDA Reno

REVENUES
Fines and forfeitures 4,648 $ - $ - $ - $ - $
Use of money and property 23 433 20 - -
Intergovernmental - 212,305 - 215 306,111
Current service charges - - - - -
Total revenues 4,671 212,738 20 215 306,111

EXPENDITURES
Current:

Public safety - - 79,673 - -
Public works - - - - -
Community development - - - - 325,197
Capital outlay - - - 14,010 -
Debt service:

Principal retirement - - - -
Interest and fiscal charges - - - - -
Total expenditures - - 79,673 14,010 325,197
Excess of revenues
over (under) expenditures 4,671 212,738 (79,653) (13,795) (19,086)

OTHER FINANCING SOURCES (USES)
Transfers in - - - - -
Transfers out (3,428) (25,938) - - -
Total other financing sources (uses) (3,428) (25,938) - - - Net change in fund balances 1,243 186,800 (79,653) (13,795) (19,086) Fund balances (deficits), beginning
of fiscal year 550 543,765 79,653 110,382 -
Fund balances (deficits), end
end of fiscal year 1,793 $ 730,565 $ - $ 96,587 $ (19,086) $

CITY OF TAFT

NON-MAJOR GOVERNMENTAL FUNDS

COMBINING STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Special Revenue Funds
74 Total
Cal Home TARP Landscape Non-Major
Revolving Revolving Asset Assessment Crime Governmental Loan Loan Forfeiture District Prevention RMRA Funds
$ - - $ - $ - $ - $ - $ 4,648 $
- 194 223 - (212) 148 829
- - 35,097 - 165,275 194,095 913,098
- - - 12,312 - - 12,312
- 194 35,320 12,312 165,063 194,243 930,887
- - 15,293 - 319,357 - 414,323
- - - 21,810 - 70,119 91,929
- - - - - - 325,197
- - - - - - 14,010
- - 3,699 - - - 3,699
- - 801 - - - 801
- - 19,793 21,810 319,357 70,119 849,959
- 194 15,527 (9,498) (154,294) 124,124 80,928
- - - - 100,067 - 100,067
- - - - - - (29,366)
- - - - 100,067 - 70,701
- 194 15,527 (9,498) (54,227) 124,124 151,629
- 100,771 64,935 (100,810) 69,606 331,459 1,200,311
$ - 100,965 $ 80,462 $ (110,308) $ 15,379 $ 455,583 $ 1,351,940 $ Special Revenue Funds
75 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

TRAFFIC SAFETY SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Fines and forfeitures 3,428 $ 4,648 $ 1,220 $
Use of money and property - 23 23
Total revenues 3,428 4,671 1,243

OTHER FINANCING SOURCES (USES)
Transfers out (3,428) (3,428) -
Total other financing sources (uses) (3,428) (3,428) -
Net change in fund balance - 1,243 1,243
Fund balance, beginning of fiscal year 550 550 -
Fund balance, end of fiscal year 550 $ 1,793 $ 1,243 $
76 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

GAS TAX SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Use of money and property 5,897 $ 433 $ (5,464) $
Intergovernmental 214,996 212,305 (2,691)
Total revenues 220,893 212,738 (8,155)

OTHER FINANCING SOURCES (USES)
Transfers out (220,893) (25,938) 194,955
Total other financing sources (uses) (220,893) (25,938) 194,955 Net change in fund balance - 186,800 186,800
Fund balance, beginning of fiscal year 543,765 543,765 - Fund balance, end of fiscal year 543,765 $ 730,565 $ 186,800 $ 77 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

TDA SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Intergovernmental - $ 215 $ 215 $
Total revenues - 215 215

EXPENDITURES
Capital outlay - 14,010 (14,010)
Total expenditures - 14,010 (14,010)
Excess (deficiency) of revenues over
expenditures - (13,795) (13,795)

OTHER FINANCING SOURCES (USES)
Transfers out (316,073) - 316,073
Total other financing sources (uses) (316,073) - 316,073 Net change in fund balance (316,073) (13,795) 302,278
Fund balance, beginning of fiscal year 110,382 110,382 - Fund balance, end of fiscal year (205,691) $ 96,587 $ 302,278 $ 78 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

ASSET FORFEITURE SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Use of money and property 415 $ 223 $ (192) $
Intergovernmental 27,372 35,097 7,725
Total revenues 27,787 35,320 7,533

EXPENDITURES
Current:

Public safety 16,199 15,293 906
Debt service :

Principal - 3,699 (3,699)
Interest - 801 (801)
Total expenditures 16,199 19,793 (3,594)
Net change in fund balance 11,588 15,527 3,939
Fund balance, beginning of fiscal year 64,935 64,935 -
Fund balance, end of fiscal year 76,523 $ 80,462 $ 3,939 $ 79 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

LANDSCAPE ASSESSMENT SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Current service charges 12,269 $ 12,312 $ 43 $
Total revenues 12,269 12,312 43

EXPENDITURES
Current:

Public works 24,318 21,810 2,508
Total expenditures 24,318 21,810 2,508
Net change in fund balance (12,049) (9,498) 2,551
Fund balance (deficit), beginning of fiscal year (100,810) (100,810) - Fund balance (deficit), end of fiscal year (112,859) $ (110,308) $ 2,551 $ 80 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

CRIME PREVENTION SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Use of money and property 446 $ (212) $ (658) $
Intergovernmental 161,285 165,275 3,990
Total revenues 161,731 165,063 3,332

EXPENDITURES
Current:

Public safety 273,334 319,357 (46,023)
Total expenditures 273,334 319,357 (46,023)
Excess (deficiency) of revenues
over expenditures (111,603) (154,294) (42,691)

OTHER FINANCING SOURCES (USES)
Transfers in 111,603 100,067 (11,536)
Total other financing sources (uses) 111,603 100,067 (11,536) Net change in fund balance - (54,227) (54,227)
Fund balance, beginning of fiscal year 69,606 69,606 -
Fund balance, end of fiscal year 69,606 $ 15,379 $ (54,227) $ 81 CITY OF TAFT

SCHEDULE OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCE - BUDGET AND ACTUAL

RMRA SPECIAL REVENUE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Final Budget Actual Amounts
Variance with
Final Budget
Positive
(Negative)

REVENUES
Use of money and property - $ 148 $ 148 $
Intergovernmental - 194,095 194,095
Total revenues - 194,243 194,243

EXPENDITURES
Current:

Public works 273,334 70,119 203,215
Total expenditures 273,334 70,119 203,215
Net change in fund balance (273,334) 124,124 397,458
Fund balance, beginning of fiscal year 331,459 331,459 - Fund balance, end of fiscal year $ 455,583 58,125 $ 397,458 $ 82 83

CITY OF TAFT

PRIVATE-PURPOSE TRUST FUNDS
JUNE 30, 2023
Private-Purpose Trust Funds are used to account for assets and liabilities held by the City of Taft in a trustee capacity.

Capital Projects Fund
This fund is used to account for capital assets and other activities of the former redevelopment agency.

Post RDA Debt Retirement Fund
This fund is used to account for administration and debt retirement activities related to the former redevelopment agency.

CITY OF TAFT

COMBINING STATEMENT OF NET POSITION

PRIVATE PURPOSE TRUST FUNDS
JUNE 30, 2023
Capital Projects
Fund
Post RDA Debt
Retirement Fund Total
ASSETS
Cash and investments $ 253,802 - $ $ 253,802
Cash and investment with fiscal agents 46 - 46
Prepaids 297 - 297
Capital assets - nondepreciable - 407,116 407,116
Capital assets - being depreciated - 1,698,163 1,698,163 Capital assets - accumulated depreciation - (297,173) (297,173) Total assets 1,808,106 254,145 2,062,251

LIABILITIES
Accounts payable 41,692 - 41,692
Accrued payroll 327 - 327
Accrued interest payable 12,874 - 12,874
Bonds payable due within one year 282,000 - 282,000
Advance due to City of Taft due in more than
one year 1,588,959 - 1,588,959
Bonds payable due in more than one year 948,000 - 948,000 Total liabilities - 2,873,852 2,873,852

NET POSITION (DEFICIT)
Unrestricted 1,808,106 (2,619,707) (811,601)
Total Net Position (Deficit) 1,808,106 $ (2,619,707) $ (811,601) $ 84 Capital Projects
Fund
Post RDA Debt
Retirement
Fund Total
Additions:

Investment revenue $ 46 - $ $ 46
Taxes and assessments 453,493 - 453,493
Total additions - 453,539 453,539
Deductions:

Community development 138,777 - 138,777
Interest expense 42,207 - 42,207
Depreciation - 10,178 10,178
Total deductions 10,178 180,984 191,162
Change in net position (10,178) 272,555 262,377
Net Position (Deficit), beginning of fiscal year 1,818,284 (2,892,262) (1,073,978) Net Position (Deficit) - end of fiscal years 1,808,106 $ (2,619,707) $ (811,601) $

CITY OF TAFT

PRIVATE PURPOSE TRUST FUNDS

COMBINING STATEMENT OF CHANGES IN NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
85 86
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WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS

SANITATION DISTRICT

FINANCIAL STATEMENTS
JUNE 30, 2023

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WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS

SANITATION DISTRICT

FINANCIAL STATEMENTS
JUNE 30, 2023
Table of Contents
INDEPENDENT AUDITOR’S REPORT ......................................................................................................... 1 BASIC FINANCIAL STATEMENTS:

Government-wide Financial Statements
Statement of Net Position ......................................................................................................................... 4 Statement of Activities ............................................................................................................................. 5 Fund Financial Statements
Balance Sheet – Governmental Funds ...................................................................................................... 6 Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position ..................................................................................................... 7 Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds .................................................................................................... 8 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities ................................ 9 Notes to the Basic Financial Statements ............................................................................................................ 10

REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual – Special Revenue Fund ................................................................................... 20

OTHER SUPPLEMENTARY INFORMATION
Schedule of Revenues, Expenditures, and Changes in Fund Balance Budget and Actual – Capital Projects Fund .................................................................................... 21 1 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA MEMBER AMERICAN INSTITUTE OF C.P.A.’s • CALIFORNIA SOCIETY OF C.P.A.’s • CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS • CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS

OFFICIALS

PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES CRAIG A HARTZHEIM, CPA 8383 WILSHIRE BLVD., SUITE 800 5800 HANNUM AVE., SUITE E HADLEY Y HUI, CPA BEVERLY HILLS, CA 90211 CULVER CITY, CA 90230 ADAM V GUISE, CPA TEL: 310.670.2745 TEL: 310.670.2745
TRAVIS J HOLE, CPA FAX: 310.670.1689 FAX: 310.670.1689
WILSON LAM, CPA www.mlhcpas.com www.mlhcpas.com
INDEPENDENT AUDITOR’S REPORT
Opinions
We have audited the accompanying financial statements of the governmental activities and each major fund of the Wastewater Treatment Plant of the City of Taft / Ford City-Taft Heights Sanitation District (the WWTP), as of and for the fiscal year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the WWTP’s basic financial statements, as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the WWTP, as of June 30, 2023, and the respective changes in financial position for the fiscal year then ended in accordance with accounting principles generally accepted in the United States of America.

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the WWTP’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

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

Required Supplementary Information
Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

Accounting principles generally accepted in the United States of America require that the budgetary comparison information on page 20 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
3 Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the WWTP’s basic financial statements. The Schedule of Revenues, Expenditures, and Changes in Fund Balance, Budget and Actual – Capital Projects Fund is presented for the purpose of additional analysis and is not a required part of the basic financial statements. The Schedule of Revenues, Expenditures, and Changes in Fund Balance, Budget and Actual – Capital Projects Fund is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report May 15, 2026, on our consideration of the WWTP’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the WWTP’s internal control over financial reporting and compliance.

Moss, Levy & Hartzheim, LLP
Culver City, California
May 15, 2026

GOVERNMENT-WIDE FINANCIAL STATEMENTS
ASSETS
Current Assets:

Cash and investments $ 4,533,074
Restricted cash and investments 397,760
Accounts receivable 1,187,063
Interest receivable 12,622
Prepaids 410
Total Current Assets 6,130,929
Noncurrent Assets:

Capital assets:

Non-depreciable:

Land 32,519
Depreciable, net of accumulated depreciation and amortization 3,169,091 Total Noncurrent Assets 3,201,610
Total Assets 9,332,539

LIABILITIES
Current Liabilities:

Accounts payable 44,573
Accrued payroll 1,808
Accrued interest payable 3,985
Due to City of Taft 880,008
Compensated absences 4,356
Lease payable 3,821
Certificates of participation (COP) payable 71,000
Total Current Liabilities 1,009,551
Noncurrent Liabilities:

Compensated absences 13,067
Lease payable 18,815
Certificates of participation (COP) payable 3,082,000
Total Noncurrent Liabilities 3,113,882
Total Liabilities 4,123,433

NET POSITION
Net investment in capital assets 25,974
Restricted 5,183,132
Total Net Position 5,209,106 $

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental
Activities
The notes to the basic financial statements are an integral part of this statement. 4 Net
(Expense)/Revenue
and Changes in
Net Position
Governmental
Expenses Activities
Governmental Activities:

General government 1,244,579 $ 42,667 $ 1,251,705 $ - $ 49,793 $ Interest and fiscal charges 57,082 - - - (57,082)
Total Governmental Activities 1,301,661 $ 42,667 $ 1,251,705 $ - $ (7,289) General Revenues:

Investment earnings 23,377
Total General Revenues 23,377
Change in Net Position 16,088
Net Position, Beginning of Fiscal Year 5,193,018
Net Position, End of Fiscal Year $ 5,209,106
Function/Program
Program Revenues

WASTEWATER TREATMENT PLANT
Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
The notes to the basic financial statements are an integral part of this statement. 5 FUND FINANCIAL STATEMENTS
ASSETS
Cash and investments 4,533,074 $ - $ 4,533,074 $
Restricted cash and investments 168,735 229,025 397,760 Accounts receivable - 1,187,063 1,187,063
Interest receivable - 12,622 12,622
Prepaid items 410 - 410
Total Assets $ 1,416,498 4,714,431 $ 6,130,929 $

LIABILITIES AND FUND BALANCES

LIABILITIES
Accounts payable - $ 44,573 $ 44,573 $
Accrued payroll - 1,808 1,808
Due to City of Taft - 880,008 880,008
Total Liabilities - 926,389 926,389

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - 1,178,425 1,178,425
Total Deferred Inflows of Resources - 1,178,425 1,178,425

FUND BALANCES
Nonspendable 410 - 410
Restricted 4,714,431 - 4,714,431
Unassigned - (688,726) (688,726)
Total Fund Balances 4,714,431 (688,316) 4,026,115
Total Liabilities, Deferred Inflows of Resources,
and Fund Balances $ 1,416,498 4,714,431 $ 6,130,929 $
WWTP
Capital
Projects
WWTP
Special
Revenue
Total
Governmental
Funds

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

BALANCE SHEET - GOVERNMENTAL FUNDS
JUNE 30, 2023
The notes to the basic financial statements are an integral part of this statement. 6 Fund Balances of Governmental Funds 4,026,115 $
Amounts reported for governmental activities in the statement of net position are different because:

Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds. This balance reflects the accrued compensated absences. (17,423) Interest on long-term liabilities is not due and payable in the current period and, therefore, not reported in the governmental funds. (3,985)
Certain revenues are unavailable in the governmental funds because the availability criteria has not been met. These revenues are recognized in the statement of net position. 1,178,425 Long-term liabilities are not due and payable in the current period and, therefore, are not reported in the governmental funds.

Certificates of Participation (3,153,000) $
Lease Payable (22,636) (3,175,636)
Capital assets, net of accumulated depreciation, used in governmental funds are not current financial resources and, therefore, are not reported in the governmental funds. 3,201,610 Net Position of Governmental Activities 5,209,106 $

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET

TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
The notes to the basic financial statements are an integral part of this statement. 7 REVENUES
Intergovernmental - $ 648,203 $ 648,203 $
Use of money and property 12,371 11,006 23,377
Charges for services - 42,667 42,667
Total Revenues 12,371 701,876 714,247

EXPENDITURES
Current:

General government - 993,532 993,532
Debt Service:

Principal retirement - 73,698 73,698
Interest and fiscal charges - 57,172 57,172
Total Expenditures - 1,124,402 1,124,402
Excess (Deficiency) of
Revenues Over Expenditures 12,371 (422,526) (410,155)

OTHER FINANCING SOURCES (USES)
Transfers in 131,200 - 131,200
Transfers out - (131,200) (131,200)
Total Other Financing Sources (Uses) 131,200 (131,200) - Net Change in Fund Balances 143,571 (553,726) (410,155) Fund Balances (Deficit), Beginning of Fiscal Year 4,570,860 (134,590) 4,436,270 Fund Balances (Deficit), End of Fiscal Year $ (688,316) 4,714,431 $ 4,026,115 $ WWTP
Capital
Projects
WWTP
Special
Revenue
Total
Governmental
Funds

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
FOR THE FISCAL YEAR ENDED JUNE 30, 2023
The notes to the basic financial statements are an integral part of this statement. 8 Net Change in Fund Balances of Governmental Funds (410,155) $ Amounts reported for governmental activities in the Statement of Activities differs from the amounts reported in the Statement of Revenues, Expenditures, and Changes in Fund Balances because:

Certain revenues are unavailable in the governmental funds because the availability criteria has not been met. These revenues are recognized in the statement of net position. 603,502
Governmental funds report capital outlay as expenditures. However, in the statement of activities, the costs of those assets are allocated over their estimated useful lives as depreciation expense. This activity is reconciled as follows:

Depreciation/amortization expense (251,198)
Interest payable on long-term liabilities is not due and payable in the current period and, therefore, is not recorded in the current period. 90 Debt repayments are reported as expenditures in the governmental funds. The repayment is not an expense in the statement of activities, as it is a reduction of a long-term liability. The balance for compensated absences reflects the difference between absences accrued and absences paid.

Principal payment certificates of participation 70,000
Lease payable 3,698
Compensated absences 151
Change in Net Position of Governmental Activities $ 16,088

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

RECONCILIATION OF THE GOVERNMENTAL FUNDS STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES TO THE STATEMENT OF ACTIVITIES FOR THE FISCAL YEAR ENDED JUNE 30, 2023
The notes to the basic financial statements are an integral part of this statement. 9 NOTES TO THE BASIC FINANCIAL STATEMENTS

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
10 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The primary function of this organization is the operation and maintenance of the sewer treatment facility serving the City of Taft (the City) and the Ford City-Taft Heights Sanitation District. In accordance with the terms of the “Joint Exercise of Powers Agreements” between the City of Taft, Taft Heights, and Ford City Sanitation District dated May 29, 1950, amended March 7, 1966, restated April 24, 1972, and restated August 21, 1991, covering the “Joint Sewage Project – 1972,” the City of Taft was designated to act on its own behalf and on behalf of each of the other agencies, to operate and maintain the Wastewater Treatment Plant (WWTP). All costs to operate and maintain the facilities shall be paid by the City of Taft and the other agencies in the following cost share ratios:
52 percent shall be paid by the City of Taft
19 percent shall be paid by the Taft Heights Sanitation District 29 percent shall be paid by the Ford City Sanitation District The WWTP has access to the services and facilities of the City and the City’s staff. The City assists the WWTP in the planning, financing, acquisition, construction, and maintenance or operation of the activities undertaken by the WWTP in accordance with the agreements and the applicable state and federal law. The costs incurred and paid by the City on behalf of the WWTP may include a part of the salaries and benefits of the City officers and employees who performed services for the WWTP and are reimbursed by the WWTP.

The financial statements of the WWTP have been prepared in accordance with accounting principles generally accepted in the United States of America (USGAAP) as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the standard-setting body for governmental accounting and financial reporting. The more significant of the accounting principles are described below:

A. Reporting Entity
The City of Taft operates the WWTP pursuant to the Joint Exercise of Powers Agreement noted above. The WWTP is not a separate legal entity and therefore is not included as a component unit of the City. Because of the City’s oversight responsibilities, the funds of the WWTP are included within the fund structure of the City.

The financial statements of the WWTP do not purport to, and do not, present fairly the financial position of the City of Taft as a whole or the Ford City or Taft Heights Sanitation Districts as a whole.

B. Fund Accounting
The accounts of the Wastewater Treatment Plant are organized on the basis of funds, each of which is considered to be a separate accounting entity. The operations of each fund are accounted for with a separate set of selfbalancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The WWTP uses two funds as follows:

Capital Projects Fund – the Capital Projects Fund is used to account for financial resources to be used for the acquisition or construction of major capital facilities.

Special Revenue Fund – the Special Revenue Fund is used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific purposes.

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
11 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Basis of Accounting/Measurement Focus
Consistent with the City’s implementation of GASB Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis – for State and Local Governments, the WWTP financial statements report information on both the accrual and modified accrual basis of accounting. The differences between the two presentations are discussed below.

Statement of Net Position and the Statement of Activities The Statement of Net Position and the Statement of Activities are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all the WWTP’s assets and liabilities, including capital assets, 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, and expenses are recognized when the liability is incurred. Interfund activities (such as transfers) are eliminated from these statements.

Balance Sheet and Statement of Revenues, Expenditures, and Changes in Fund Balance Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures, and Changes in Fund Balance for each fund. A separate statement is presented to report the differences in fund balance as presented in these statements to the net position presented in the Statement of Net Position. All governmental funds are accounted for on a “spending” or “financial flow” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are generally included on their balance sheets. Their reported fund balance is their net current assets, which is considered only to be a measure of available resources. Governmental fund operating statements present a summary of sources and uses of available resources during a period by presenting increases and decreases in net position. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become measurable and available to finance expenditures of the current period. Accordingly, revenues are recorded when received in cash, except that revenues subject to accrual (generally 60 days after fiscal year end) are recognized when due. Revenues susceptible to accrual are investment earnings and assessments from member governments.

Expenditures are generally recognized under the modified accrual basis of accounting when the related fund liability is incurred, except for principal and interest on long term obligations which are recognized when due.

D. Budgetary Policy and Control

1. General Budget Policies
The Taft City Council approves each fiscal year’s budget for the WWTP as part of the overall City 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 Council. All appropriations lapse at fiscal year-end. The City Council has the legal authority to amend the budget at any time during the fiscal year. The City Manager has the authority

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
12 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Budgetary Policy and Control (Continued)

1. General Budget Policies (Continued)
to adjust the operating budget within program areas. Transfers of operating budget appropriations between program areas or to or from appropriated reserve accounts, use of unappropriated fund balances, cancellation of appropriations and all changes in capital improvement project budgets require the approval of the City Council.

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 that is the program area – total for all funds. Formal budgetary integration is employed as a management control device during the fiscal year for the Governmental Funds.

2. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of funds are recorded in order to reserve that portion of the applicable appropriation, is employed in the governmental funds. Encumbrances do not constitute expenditures or liabilities.

E. Cash/Investment
In order to maintain an effective investment program, all cash is pooled with the cash and investments of the City of Taft and amounts not required for day-to-day financial transactions are invested as approved by the Taft City Council on a pooled basis and earnings are allocated to each fund on the basis of its average cash balance at the end of each quarter. Investments are carried at fair value.

F. Capital Assets and Depreciation and Amortization
Capital assets, which include land, right to use leased assets, buildings, infrastructure, machinery, and equipment, are reported in the Statement of Net Position. Capital assets are defined as assets with an initial individual cost of more than $5,000. Sensitive items with costs below $5,000 are also included. Such assets are recorded at historical cost or estimated historical cost if actual historical cost is not available. Donated capital assets are valued at their estimated fair value on the date donated.

Capital assets are depreciated over their estimated useful lives using the straight-line method. This means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated. The purpose of depreciation is to spread the cost of capital assets over the useful lives of these assets. The amount charged to depreciation expense each fiscal year represents that fiscal year’s pro-rata share of the cost of capital assets.

Depreciation of capital assets is charged as an expense against operations each fiscal year and the total amount of depreciation taken over the years, called accumulated depreciation, is a reduction in the book value of the capital assets. The WWTP has assigned the useful lives listed below to capital assets.

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
13 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Capital Assets and Depreciation (Continued)
Structures and improvements 20-40 years
Machinery and equipment 5-20 years
G. Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

H. Use of Restricted Resources
When both restricted and unrestricted resources are available for use, it is the WWTP’s policy to use restricted resources first, and then unrestricted resources as they are needed. Restricted resources are defined as resources received from outside agencies dedicated for specific projects or purposes.

I. Due to the City of Taft
Current interfund balances arise in the normal course of business (i.e. one fund loaning funds to pay for current expenditures) and are expected to be repaid shortly after the end of the fiscal year. Amounts due from other funds of the City of Taft are reported separately from interfund balances which comprise only entities reported in these financial statements.

J. Deferred Inflow of Resources
Receivables that are collected after sixty days are considered to be unavailable for payment of current expenditures on the governmental fund statements. When the WWTP meets all of the eligibility requirements other than time, the City records a receivable and an offsetting deferred inflow of resources. These amounts are recognized as revenue on the government-wide statement of net position. The deferred inflows representing the receivable for the other participants of the WWTP total $1,178,425 as of June 30, 2023.

K. New Accounting Pronouncements
Governmental Accounting Standards Board (GASB) Statement No. 96 “Subscription-Based Information Technology Arrangements” Implementation
GASB issued Statement No. 96 “Subscription-Based Information Technology Arrangements” to provide guidance on the accounting and financial reporting for subscription-based information technology arrangements (SBITAs) for government end users. The 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. This standard had no material impact on the WWTP’s financial statements.

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
14 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) K. New Accounting Pronouncements (Continued)
Future Accounting Standards
GASB has issued the following statements which may impact on the City’s financial reporting requirements in the future:

The provisions of Statement Number 99 “Omnibus 2022” are effective as follows: the requirements related to the extension of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63 are effective for the fiscal year ending June 30, 2022; the requirements related to leases, PPPs, and SBITAs, are effective for fiscal years beginning after June 15, 2022; and the requirements related to financial guarantees and the classification and reporting of derivative instruments within the scope of Statement 53 are effective for fiscal years beginning after June 15, 2023.

The provisions for Statement Number 100 “Accounting Changes and Error Corrections-an amendment of GASB Statement No. 62” are effective for fiscal years beginning after June 15, 2023.

The provisions of Statement Number 101 “Compensated Absences” are effective for fiscal years beginning after December 15, 2023.

The provisions of Statement Number 102 “Certain Risk Disclosures” are effective for fiscal years beginning after June 15, 2024.

The provisions for Statement Number 103 “Financial Reporting Model Improvements” are effective for fiscal years beginning after June 15, 2025.

The provisions for Statement Number 104 “Disclosure of Certain Capital Assets” are effective for fiscal years beginning after June 15, 2025.

The provisions for Statement Number 105 “Subsequent Events” are effective for fiscal years beginning after June 15, 2026.

NOTE 2 – CASH AND INVESTMENTS
The WWTP’s cash and investments are pooled with the funds of the City for deposit and investment purposes.

Interest on pooled cash and investments is credited to the funds based on each prospective fund’s average cash balance at each quarter end. Detailed information concerning the City of Taft’s pooled cash and investments can be found in the City’s Annual Financial Report for the fiscal year ended June 30, 2023. The WWTP’s cash and investments balance at June 30, 2023 is $4,533,074.

The WWTP’s cash and investments are held within the City of Taft’s investment pool. As the WWTP does not hold specific investments or deposits in its name, the cash and investments are not evidenced by deposits or securities that exist in physical or book entry form.

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
15 NOTE 2 – CASH AND INVESTMENTS
The WWTP 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. These principles recognize a three-tiered fair value hierarchy. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The WWTP had investments in the City of Taft’s investment pool (amortized cost), however, the external pool is not measured under Level 1, 2, or 3.

NOTE 3 – CAPITAL ASSETS AND DEPRECIATON
During the fiscal year ended June 30, 2023, the following changes in capital assets occurred:

Depreciation and amortization expense of $251,198 was charged to general government on the Statement of Activities for the fiscal year ended June 30, 2023.

Balance Prior Period Balance
Governmental Activities July 1, 2022 Additions Deletions Adjustment June 30, 2023 Capital assets not being depreciated:

Land 32,519 $ - $ - $ - $ 32,519 $
Total capital assets not being depreciated 32,519 - - - 32,519 Capital assets being depreciated/amortized:

Machinery and equipment 233,521 - - - 233,521
Structures and improvements 6,687,207 - - - 6,687,207
Right to Use Buildings 23,614 - - 23,614
Total capital assets being depreciated 6,944,342 - - - 6,944,342 Less accumulated depreciation and amortization for:

Machinery and equipment (229,770) (3,751) - - (233,521) Structures and improvements (3,291,114) (244,278) - - (3,535,392) Right to Use Buildings (3,169) (3,169) - - (6,338)
Total accumulated depreciation/amortization (3,524,053) (251,198) - - (3,775,251) Total capital assets, being depreciated or
amortized net of accumulated
depreciation/amortization 3,420,289 (251,198) - - 3,169,091 Total Governmental activities capital assets,
net of accumulated depreciation
or amortization 3,452,808 $ (251,198) $ - $ - $ 3,201,610 $

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
16 NOTE 4 – INERFUND TRANSFERS
Interfund transfers as of June 30, 2023 were as follows:

The transfer into the Capital Project Fund is for building a reserve that will be used at a future date for large maintenance projects and/or reconstruction of the facility. This is an agreed upon amount between all District members.

NOTE 5 – GOVERNMENTAL ACTIVITIES LONG-TERM LIABILITIES
During the fiscal year ended June 30, 2023, the following changes occurred in the governmental long-term liabilities:

On June 15, 2015, the WWTP has entered into a loan financing program with the United States Department of Agriculture, acting through its agency the USDA Rural Development, to finance a portion of the cost and expense of the acquisition and construction of certain improvements to the wastewater treatment system of the WWTP via the execution and delivery of certificates of participation.

The WWTP entered into a financing program with the Taft Public Improvement Corporation, a California nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California (the "Corporation"), for the purchase by the Corporation of the real property on which the wastewater system is situated (the "Site"), together with the existing wastewater treatment system improvements (the "Existing Facilities") situated thereon, and the purchase by the WWTP from the Corporation of the completed Project.

The WWTP is in receipt of a Letter of Conditions, originally dated November 8, 2012 and extended through April 10, 2017 (the "Letter of Conditions"), from USDA Rural Development, setting forth certain conditions to be satisfied by the WWTP with respect to receipt from USDA Rural Development of funding for the Project, comprised Transfers Transfers
Fund In Out
WWTP Capital Projects 131,200 $ - $
WWTP Special Revenue - (131,200)
Total 131,200 $ (131,200) $
Balance Balance Due in
Direct Borrowings July 1, 2022 Additions Deletions June 30, 2023 One Year Certificates of Participation $ 3,223,000 $ - $ (70,000) $ 3,153,000 $ 71,000 333 Commerce Way Lease 26,334 - (3,698) 22,636 3,821
Total Certificates and Leases 3,249,334 - (73,698) 3,175,636 74,821 Compensated Absences 17,574 - (151) 17,423 4,356
Total Long term liabilities $ 3,266,908 $ - $ (73,849) $ 3,193,059 $ 79,177

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
17 NOTE 5 – GOVERNMENTAL ACTIVITIES LONG-TERM LIABILITIES (CONTINUED) Certificates of Participation (Continued)
of a loan in the amount of not-to-exceed $3,619,000 to be represented by the Certificates of Participation. The installment payments shall be payable during a period of not more than 40 years, and the interest rate shall not exceed 1.75% per annum.

During the fiscal year 2016-17, the WWTP spent $3,251,654 for the project which was completed in May 2017.

The WWTP received loan funds of $1,895,222 during the fiscal year 2016-17 with the remaining certificates of participation issued of $1,356,432 disbursed to the WWTP during FY 2017-18. The certificates of participation had an outstanding principal balance of $3,153,000 as of June 30, 2023.

Certificates of Participation maturity schedule:
333 Commerce Way
On January 1, 2009, the City entered into a lease agreement for the rental of the building at 333 Commerce Way in the City of Taft. The lease agreement initial term ended on December 31, 2013, with rental payments of $2,000 for the first year and rental payments of $3,000 for the remaining term of the lease agreement. In July 2011, the City signed an addendum to the lease agreement to extend the lease beginning on January 1, 2014 for another fifteen years to end on December 31, 2028, with monthly rental payments of $3,000 for the extended term. The City has the right to cancel the lease beginning on December 31, 2018. Upon notice of cancellation by the City, the City shall have 180 days to provide a qualified tenant to assume the remaining lease period subject to approval by the landlord. If a qualified tenant cannot be found within this time the City may then terminate the lease and pay a lump sum lease buy-out fee amounting to twelve months of lease payments which currently would total $36,000.

The City has no plans to exercise their termination option.

Fiscal year ending
June 30, Principal Interest Total
2024 $ 71,000 $ 55,178 $ 126,178
2025 73,000 53,935 126,935
2026 74,000 52,657 126,657
2027 75,000 51,362 126,362
2028 77,000 50,050 127,050
2029-2033 403,000 229,635 632,635
2034-2038 439,000 193,148 632,148
2039-2043 480,000 153,318 633,318
2044-2048 523,000 109,830 632,830
2049-2053 570,000 62,475 632,475
2054-2056 368,000 12,985 380,985
Totals $ 3,153,000 $ 1,024,573 $ 4,177,573
Certificates of Participation

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
18 NOTE 5 – GOVERNMENTAL ACTIVITIES LONG-TERM LIABILITIES (CONTINUED) 333 Commerce Way (Continued)
333 Commerce Way Lease Payable schedule:

Compensated Absences
Compensated absences are determined to be the amount due to employees for future absences, which are attributable to services already rendered. The amount estimated to be paid during the next fiscal year is classified with current liabilities, with the remainder classified with noncurrent liabilities.

NOTE 7 – NET POSITION/FUND BALANCES
Net position is divided into three captions. These captions apply to net position as determined at the governmentwide level and are described below:

Net Investment in Capital Asset describes the portion of net position which is represented by the current net book value of the District’s capital assets, less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the District cannot unilaterally alter. These principally include debt service requirements.

Unrestricted describes the portion of net position which is not restricted as to use.

Fund balances are divided into five classifications based primarily on the extent to which the WWTP is bound to observe constraints imposed upon the use of the resources in the governmental funds. The classifications are as follows:

1. Nonspendable Fund Balance
That portion of a fund balance that includes amounts that cannot be spent because they are either (a) not in a spendable form, such as prepaid items, inventories of supplies, or loans receivable; or (b) legally or contractually required to be maintained intact, such as the principal portion of an endowment.

Fiscal year ending
June 30, Principal Interest Total
2024 $ 3,821 $ 679 $ 4,500
2025 3,947 553 4,500
2026 4,077 423 4,500
2027 4,212 288 4,500
2028 4,351 149 4,500
2029 2,228 21 2,249
Total $ 22,636 $ 2,113 $ 24,749
333 Commerce Way

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY-TAFT HEIGHTS SANITATION DISTRICT

NOTES TO THE BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
19 NOTE 7 – NET POSITION/FUND BALANCES (CONTINUED)

2. Restricted Fund Balance
That portion of a fund balance that reflects constraints placed on the use of resources (other than nonspendable items) that are either (a) externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.

3. Committed Fund Balance
That portion of a fund balance that includes amounts that can only be used for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision making authority and remain binding unless removed in the same manner.

4. Assigned Fund Balance
That portion of a fund balance that includes amounts that are constrained by the government’s intent to be used for specific purposes, but that are neither restricted nor committed. Such intent needs to be established at either the highest level of decision making, or by an official designated for that purpose.

Enabling legislation authorizes the WWTP to assess, levy, charge, or otherwise mandate payment of resources (from external resource providers) and includes legally enforceable requirements that those resources be used only for the specific purposes stipulated in the legislation. Legal enforceability means that the WWTP can be compelled by an external party, such as citizens, public interest groups, or the judiciary to use resources created by enabling legislation only for the purposes specified by the legislation.

5. Unassigned Fund Balance
That portion of a fund balance that includes amounts that do not fall into one of the above categories. A General Fund is the only fund that should report this category of fund balance.

NOTE 8 – DEFICIT FUND BALANCE
The WWTP Special Revenue Fund has a negative fund balance of $688,316 as of June 30, 2023. The WWTP anticipates that future revenue will be sufficient to cover these deficits.

REQUIRED SUPPLEMENTARY INFORMATION
Original Final

REVENUES
Intergovernmental 1,256,545 $ 1,222,197 $ 648,203 $ (573,994) $ Use of money and property - 70 11,006 10,936
Charges for services 19,820 47,312 42,667 (4,645)
Other 8,819 - - -
Total Revenues 1,285,184 1,269,579 701,876 (567,703)

EXPENDITURES
Current:

General government 1,025,566 999,630 993,532 6,098
Debt service:

Principal retirement 70,000 69,000 73,698 (4,698)
Interest and fiscal charges 56,403 57,610 57,172 438
Total Expenditures 1,151,969 1,126,240 1,124,402 1,838
Excess (Deficiency) of Revenues
Over Expenditures 133,215 143,339 (422,526) (565,865)

OTHER FINANCING SOURCES (USES)
Transfers out 133,215 143,339 (131,200) (274,539)
Total other financing sources (uses) 133,215 143,339 (131,200) (274,539) Net Change in Fund Balance 266,430 286,678 (553,726) (840,404) Fund Balance (Deficit), Beginning of Fiscal year (134,590) (134,590) (134,590) - Fund Balance (Deficit), End of the Fiscal Year 131,840 $ 152,088 $ (688,316) $ (840,404) $

WASTEWATER TREATMENT PLANT
Variance with
Final Budget
Positive
(Negative)
Budgeted Amounts Actual
Amounts

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN

FUND BALANCE - BUDGET AND ACTUAL - SPECIAL REVENUE FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2023
20 OTHER SUPPLEMENTARY INFORMATION
Original Final

REVENUES
Use of money and property 5,000 $ 5,000 $ 12,371 $ 7,371 $ Total Revenues 5,000 5,000 12,371 7,371

OTHER FINANCING SOURCES (USES)
Transfers in 147,255 147,255 131,200 (16,055)
Transfers out (157,255) (152,255) - 157,255
Total Other Financing Sources (Uses) (5,000) (10,000) 131,200 141,200 Net Change in Fund Balance - (5,000) 143,571 148,571
Fund Balance, Beginning of Fiscal Year 4,570,860 4,570,860 4,570,860 - Fund Balance, End of Fiscal Year 4,570,860 $ 4,565,860 $ 4,714,431 $ 148,571 $ Variance with
Final Budget
Positive
(Negative)
Actual
Amounts

WASTEWATER TREATMENT PLANT

CITY OF TAFT / FORD CITY - TAFT HEIGHTS SANITATION DISTRICT

SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN

FUND BALANCE - BUDGET AND ACTUAL - CAPITAL PROJECTS FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2023
Budgeted Amounts
21 WASTEWATER TREATMENT PLANT

CITY OF TAFT/FORD CITY-TAFT HEIGHTS

SANITATION DISTRICT

MANAGEMENT REPORT
AND
AUDITOR’S COMMUNICATION LETTER
June 30, 2023

WASTEWATER TREATMENT PLANT

CITY OF TAFT/FORD CITY-TAFT HEIGHTS

SANITATION DISTRICT
June 30, 2023

TABLE OF CONTENTS
Required Communication under Statement on Auditing Standards No. 114 .......................... 1 Independent Auditor’s 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 ................................................................................................................... 4 Current Year Recommendations .................................................................................................. 6 Status of Prior Year Recommendations ....................................................................................... 7 1 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS

OFFICIALS

May 15, 2026
To the City Council
City of Taft, California
We have audited the financial statements of the governmental activities and each major fund of the Wastewater Treatment Plant of the City of Taft/Ford City-Taft Heights Sanitation District (the WTTP) for the fiscal year ended June 30, 2023. Professional standards require that we provide you with the information about our responsibilities under auditing standards generally accepted in the United States of America and Government Auditing Standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information to you in a previous letter.

Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the WWTP are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during the fiscal year. We noted no transactions entered into by the WWTP during the fiscal 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 financial statements were:

Management’s estimates of the historical cost and useful lives of certain capital assets and right to use leased assets are based on historical data and industry guidelines. We evaluated the key factors and assumptions used to develop these estimates and determined that they are reasonable in relation to the financial statements taken as a whole.

The financial statement disclosures are neutral, consistent, and clear. 2 Difficulties Encountered in Performing the Audit
Due to significant turnover in WWTP personnel, we encountered significant delays in obtaining the information needed to complete the audit in a timely fashion.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management.

Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate to each opinion unit’s financial statements taken as a whole.

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 May 15, 2026.

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 the Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Special Revenue Fund which is required supplementary information (RSI) that supplement 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.
3 We were engaged to report on the WWTP Capital Projects Fund budgetary comparison schedule which accompanies the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

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

Very truly yours,

MOSS, LEVY & HARTZHEIM, LLP
Culver City, CA
May 15, 2026
4 OFFICES: BEVERLY HILLS ∙ CULVER CITY ∙ SANTA MARIA
MEMBER AMERICAN INSTITUTE OF C.P.A.’S ∙ CALIFORNIA SOCIETY OF MUNICIPAL FINANCE OFFICERS ∙ CALIFORNIA ASSOCIATION OF SCHOOL BUSINESS

OFFICIALS

PARTNERS COMMERCIAL ACCOUNTING & TAX SERVICES GOVERNMENTAL AUDIT SERVICES CRAIG A HARTZHEIM, CPA 8383 Wilshire Blvd., SUITE 800 5800 HANNUM AVE., SUITE E HADLEY Y HUI, CPA BEVERLY HILLS, CA 90211 CULVER CITY, CA 90230 ADAM V GUISE, CPA TEL: 310.670.2745 TEL: 310.670.2745
TRAVIS J HOLE, CPA FAX: 310.670.1689 FAX: 310.670.1689
WILSON LAM, CPA www.mlhcpas.com www.mlhcpas.com
INDEPENDENT AUDITOR’S 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 City Council
City of Taft, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of the Wastewater Treatment Plant of the City of Taft/Ford City-Taft Heights Sanitation District (the WWTP) as of and for the fiscal year ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the WWTP’s basic financial statements, and have issued our report thereon dated May 15, 2026.

Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the WWTP’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 opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of WWTP’s internal control.

Accordingly, we do not express an opinion on the effectiveness of WWTP’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 have not been identified. We did identify a certain deficiency in internal control, described in the accompanying schedule of findings as item 2023-001 that we consider to be a material weakness. 5 Compliance and Other Matters
As part of obtaining reasonable assurance about whether the WWTP’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 determination of financial statement amounts. 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 that are required to be reported under Government Auditing Standards.

WWTP’s Response to Findings
The WWTP’s response to the findings identified in our audit are described in the accompanying schedule of findings. The WWTP’s responses were not subjected to the auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on it.

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 entity’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 entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Very truly yours,

MOSS, LEVY & HARTZHEIM, LLP
Culver City, CA
May 15, 2026

WASTEWATER TREATMENT PLANT OF THE

CITY OF TAFT/FORD CITY-TAFT HEIGHTS

SANITATION DISTRICT
June 30, 2023
6 CURRENT YEAR FINDINGS

MATERIAL WEAKNESS
2023-001 The WWTP’s closing process was not completed timely resulting in audited financial statements that were not completed timely.

Criteria:

The WWTP’s closing process should be completed within six months of fiscal year end in order to allow for the completion of the audited financial statements and single audit (as necessary) within nine months of the fiscal year end and allow for current and relevant information.

Condition:

The WWTP’s closing process was not completed within six months of the end of the fiscal year.

Effect:

Completing the closing process and issuing audited financial statements and a single audit in a timely manner helps assist the City in maintaining proper internal controls over operations and in compliance with laws.

Recommendation:

We recommend that the WWTP complete the closing process within six months of the fiscal year end and to issue audited financial statements within nine months of the fiscal year end.

Management’s response:

The WWTP has experienced significant turnover and understaffing in its Finance Department. To alleviate this, an outside financial consultant has been hired to assist with the closing process and other finance department responsibilities. Beginning in the 2025-2026 fiscal year, the WWTP’s financial records will be closed timely.

WASTEWATER TREATMENT PLANT OF THE

CITY OF TAFT/FORD CITY-TAFT HEIGHTS

SANITATION DISTRICT
June 30, 2023
7 STATUS OF PRIOR YEAR FINDINGS
2022-001 The City’s closing process was not completed timely resulting in audited financial statements that were not completed timely.

Condition:

The City’s closing process was not completed within six months of the end of the fiscal year.

Effect:

Completing the closing process and issuing audited financial statements in a timely manner helps assist the City in maintaining proper internal controls over operations.

Status:

Repeat finding for 2022-2023 fiscal year. See finding 2023-001 for further information.

Taft City CouncilJune 16, 2026

Taft City Council
June 16, 2026