Agenda — Tehachapi City Council, January 18, 2022 (part 2 of 3)

Check No Vendor No Vendor Nrme Check Dat€
Reference
CheckAmount
lnvoice No Description
Total for Vendor 2600 (Holliday Rock Co. Inc.):

SymbolAru
PD/Retired Badge
Total for this ACH Check for Vendor 2827:

Total for Vendor 2827 (SymbolArts):

Cardmembet Service
Impact PBs/Cornrnunicatin Equipment
Govcmment Jobs.com/Employee Recruitment
Sheraton Universal Hoteyl€ague ofCA CitieVT
Mt. card€n Nursery/Tr€€ for Pioneer Park
Total for this ACH Check for Vcndor 2893:

Total for Vendor 2893 (Cardmember Service):

Richards Watson & Gershon
Gc/Professional Fees thru Nov 30 2021
Ref/Professional Fees ihru Nov 30 202 I
GG/Professional Fees thru Nov 30 2021
Gc/Professional Fees thru Nov 30 2021
Total for this ACH Chcck for Vsndor 2994:

Total for Veodor 2994 (Richards Watson & Gershon):

Verizon Wireless
Fin/Mobile Broadband #872239130Nov 14-Dec
GGA,lobile Broadband #7 7 2237 654 N ov | 9 -D et
PwMobile Broadbard #7 7 2237 654N ov lg-Del
PD/Mobile Broadband #7 72231 654N ov lg-Dec
ED^4obile Broadband #11 2237 654 Nov 19 -Dec
PD^tobile Broadband #37 223'1 6'1 6trN ov 2 | -D ec
GG/Mobil€ Broadband #372231 67 6Nov 21 -De(
TotNl for this ACH Check for Vendor 3011:

Total for Vendor 301I (Verizon Wi.eless):

E&WTheatresIncED/On-ScreenAdv€rtising Oct-Dec 2021
Total for this ACH Check for Vendor 3064:

Total for Vendor 3064 (E & W Theatres Inc.):
682.54
284.t2
ACH 2827
0418149-tN
ACH 3064
ao_23
ACH 3173
1079
S. G. Soto Tires Service
PWE-209 Front Tires
248.12
ACH 2893
A-5912
B-2849
c-7890
D- 1498
2994
235037
235037-A
235038
235040
ACH 3011
9895063533
9895372071
9a9531207 r-A
989537207l-B
94953',t207 t-C
9895492481
9895492481-A
288.12
404.00
199.00
55E.47
tl t .59
1,333.06
ACH
1,333.06
2,489.85
4,200.00
118.00
5,106.24
I1,914.09
I1,914.09

38.01 151.M
6r2.r6

78.O2
3E.01

76.02 38.01
r,o31.27
|,03t.27
450.00
450.00
478.88
AP Checks by Date - Detail by V€ndor Number (llll/2022 10:34 Alrt) Page 6 CheckNo Vendor No
Invoice No
Vendor Name Check Dlle
Rcfcr€Dce
ChcckAmount
ACH 3179
30764
Total for lhis ACH Check for Vendor 3 I 73 :

Total for Vendor 3l ?3 (S. G. Soto Tires Service):

Liberty Composting Inc.

Swr/Biosolids hauling/Nov 202 I
Total for this ACH Check for Vendor 3179:

Total for Vendor 3179 (Liberty Composting Inc.):

Bright House Nerworks
Cc^ntemet Services Dec 21 2o2l-l^n20 2022
Total for lhis ACH Ch€ck for Vendor 3274:

Total for Vendor 3274 (Bright House Network):

RSINet
AiT/AWOS
Total for this ACH Check for Vendor 3363:

Total for Vendor 3363 (RSINet):

Don's Pro Technolog;r Auto Repair
Smog Tesi V- I I
Smog T€st V-27
Smog Test V-39
Smog Test V-7
Smog Test V-31
Smog Test V-4
Smog T€st V-25
Smog Test V-l8
Smog Test V-22
Total for tbis ACH Check for Vendor 3564:

Total for Vendor 3554 (Don's Pro Technology Auto Repair):

EPIC Aviation LLC
Air/AV Gas I 00LL
Total for this ACH Check for V€ndor 35?7:

Total for Vendor 3577 (EPIC Aviation LLC):
478.88
7,9E5.10
7,9E5.10
32'14
064495401122221
7,985.10
t74.05
ACH
ACH
174.05
ACH 3363
6256
174.05
180.00
3564
77772
78048
78072
18074
't80?6
78087
74092
78098
78t24
180.00

52.10 52.70

51.70 51.70

59.95 51.70
5l.70
4't5.55
475.55
15,133.49
357'l
75t2412
ACH 3684
7900021 60-004
Unit€d Rentals
Pwconnex Rental
15,133.49
15,133.49
102.61
AP Checks by Dat€ - D€tail by vendor Number ( lllll2022 10.34 AM\ Tolal for this ACH Check for vendor 3684:

Page 7 ends

CheckNo Vendor No
Invoice No
Vendor Neme Check Dat€
Refcre|!ce
CheckAmount
ACH 3708
coT0122
coTo122-A
coT0l22-B
coT0t22-c
coTot 22-D
coTo122-E
coTo122-F
coTol22-c
coTol22-H
coTot22-l
Total for Vendor 3684 (United Rentals):

Customized Custodial Services
Jan 2022 Janitorial Servic€s for Visitor Center
Jan 2022 Janitorial Services for Public Works
Jan 2022 Janitorial Services for Wate. Dept
Jan 2022 Jadtorial Services for Sew€r Faciliti
Jan 2022 Janitorial Services for Ahport
Jan 2022 Janibrial Services fm Senior Cmter
Jan 2022 Janitorial Sewic€s for City Hatt
Jan 2022 Janitorial Services for Annex
Jan 2022 Janitorial Services for Police D€pr
Jao 2022 Janitorial S€rvices foi Bus Station
Total for this ACH Check for Vendor 3708:

Total for Vendor 3708 (Customized Custodial Services):

Open & Shut Enterprises
Air/Qtly Gate S€rvices
PD/Qdy Gate Ssrvices
Wtr/Qdy cate S€rvices
Swr/Qtly Gate S€rvic€s
Total for this ACH Ch€ck for Vendor 3726:

Total for Vendor 3726 (Open & Shut Enterprises):

Traclor Supply Credit Plan
Wti/Powsr lnv€iter
PWRainJacket-KQuetrby
PWCold Weath€r Bib - K Quenby
Wtr/Grindei
PwRubber Boots/K Ba.low
PWTree Ties- E Teh Blvd
PWTree Ties- E Teh Blvd
PWTrce Ties- E Teh Blvd
PWTree Ti€s- E T€h Blvd
Tolal for this ACH Check for Vendor 3730:

Total for Vendor 3730 (Tractor Supply Credit Plan):

Diamond Technologies
IT/ProductioD Suppo( Coverage \tMwars
Total for this ACH Check for Vendor 3807:

Total for Vendor 3807 @iamond Technologies):

Global Corporate Trust Svc TFMCM9705 (
Strts&Rds/Facility Leas€ #CIEDB-o1-019nnt
Wtr/Facility Leas€ #CIEDB-o1-019[nt
Swr/Facility Leas€ #CIEDB-01-0l9^nt
102.61
105.00
262.00
305.50
305.50
516.00
519.00
1,026.00
622.O0
2,215.OO
160.00
6,096.00
ACH 3726
90292
90292-A
90292-8
90292-C
ACH 3730
A- 100636012
B-200433416
c-200134668
D.100640133
E-100641198
F- 100642153
G-100642151
H-20M36641
r-200437235
6,096.00
340.00
1?0.00

42.50 42.50
595.00

36.80 32.t6

72.92 t't4.19
12't.62

48.24 74.97

4.4E
ACH 3807
30178
594.40
I,155.00
1,156.00
ACH 3824
63445
6344s-A
63445-B
I,156.00
6,648.28
400.50
96t.20
AP Ch€cks by Date - Detail by Vendor Number (l/1112022 lO:34 ll.l|'l) Page 8 Check No Vendor No
Invoice No
Vendor Name
Description
Check Date
Reference
CheckAmount
Total for this ACH Check for Vendor 3824:

Total for Vendor 3824 (Global Corporate Trust Svc TFMCM9705 U.S. Bank):

O'Reilly Automotive Inc
PW/F-I R€pairs
PW r'-24 Brakes/Toggle Swirch
PWF-1 Repain
PD/TE-27 Head Lamp License Plat€ Bulb
PWTE-2? Head Lamp Licensc Plate Bulb
PW,ry-27 Oil Filter/Oil
GG,t/-29 Oil Fillerloil
Pw/T- I 04 Connector
PWRetum F-l Core Retum
PWA/41 Oil Filt€r/Oil
PWA/-s Banery/Alternabrny'-Belt
Pwnr'-s Aliemator
PW,Ar'-s Battery
PWShop Supplies- Wiper Blades
PWAr'- 1 ? Ignition/Brakes
PWShop Supplies
PWAy'-24 Hub Assernbly/Sock
Pw/D-105 Battery
PW,ry-I7 Th€mostat
PWAr'-24 Biakes
PW,^/-l7 RepaiE
PWAr'-l? Htrb Assembly
PD/TE-35 Oil Filter
PD/TE- l9 Oil Filter/Air FilterNiper Balde
PD/TE-2 I Oil Filter/Air Filtcrn iper Baldes
PD/TE-37 Oil Filier
PD/TE-38 Oil Filter
PD/TE-3 I Oil Filter/Air FilrerNiper Blades
PD/TE-34/AiI Fitter/Wipgr Blades
PW,4r'-22 Battery
Pwsafety Glov€s
PD/TE-38 Maintenance
PD/TE-3 I Oil Filter/Retum
PD/TE-3 I Oil Filter/R€tum
PD/TE-34 Oil Filter
PD/TE- l9 Wiper Blades
PD/TE- l9 Wipcr Blades
Pw,^y'-s Core Retum
Wtinr'-42 Fih€rs & Motor Oil
Pwsbop/Wi!'er Fluid./Antift ez
PWshop/Wiper Fluid./Antift eez
PW,^/-40 Oil Filter
PD,Body Bolt
Wtr/Tools
8,009.98
ACH 3848
4447 -494942
4441495142
4447-495209
4447495340
4441-495341
4447496054
4447-496058
444'1496061
4447496.4.0r
4447496403
4447-4965aa
4441496591
444't 496629
444't 496630
4447496657
4447491375
4447 497487
444't -497&'8
4441497649
444't498223
4441494257
4447498295
4447-49a314
4447-498375
4447-49E377
444749E379
4447-498380
4447 49838r
4447-498382
444749a426
4441 -49442',1
4441494443
4447494583
4447498584
4447 49a5a5
4447 498828
4441-49a831
4447 4992't0
4447499354
4447 499363
44474994t7
4/,47499428
4447 499429
44414994'78
ACH 3855
00429766-00
8,009.98

13.93 253.56

91.70 66.87
172.24

74.43 45.67

4.a2
-22.OO
5t.24
43t.32
-6.35
161.62
155.4t
293.06
308.98
284.64

43.43 -23t.07

90.83 424.21
1 .71

82.22 96.49

7.7 |
7 .'t I
103.45

95.14 205.40

31.69 21.44
-7.71
-1.71

7.11 11.16

10.90 -44.O0

76.46 9t.25

40.32 10.39

4.28 46.O9
Total for this ACH ch€ck for Vendor 3848:

Total for Vendor 3848 (O'Reilly Automotive Inc):

Cenrral Valley Occupational Med crp
Fin/Pr€-Placement Physical Exarn/H Jon€s
3,674.47
3,678.87

88.00 AP Check by Dat€ - Delail by Vendor Numb€r ( llll/zmz lO:34 AM) Page 9 CheckNo Vendor No
Invoice No
Vendor Name
Description
Check Drte
Reference
CheckAmount
ACH 3868
814801
00429166-00-A
0M297 66-00-B
3914
R 19014-6
R20013-3.1
401I
cLt0519-8821
4036
80/22792
E0556523
4065
156828 S
PD/Pre-Placement Physical Exam/P Hock
PwPre-Placemetrt Physical Exam,M Salas
Totai for this ACH Check for Vendor 3855:

Total for Vendor 3855 (Central Valley Occupational Med Grp):

Traflic Management Inco.porated
Strts/Signs and Posts
Total for this ACH Check fm Vendor 3868:

Total for Vendor 3868 (Traffic Management Incorporated):

R.C. Becker & Son, Inc.

AT? Snyd€r Ave Gap
Snyder Road Rehab
Total for this ACH Check for Vendor 3914:

Total for Vendor 3914 (R.C. Becker & Son, Inc.):

Babcock Inboratories, Inc.

SWr/WWTP tab Sarnpl€s
Total for this ACH Check for Vendor 401 I :

Total for Vendor 4011 (Babcock Laboratories, Inc.):

Waxie Sanitary Supply
PDdanilorial Suppli€s
GG/Clean & Soft
Total for this ACH Check for Vendor 4036:

Total for Vendor 4036 (Waxie Sanitary Supply):

American Safety Services llrc
Sdsafety clov€s
Totrl for lhis ACH Check for Vendor 4065:

Total for Vendor 4065 (American Safety Services Inc):

Waste Manag€ment
Retuse Contract Nov 202 I Billing
Recycling Contract Nov 202 I Billing
Kem County Bin Disposal Fee Nov 2021 Billmg
Total for this ACH Check for Vendor 4 142:

Total for Vendor 4142 (Waste Management):
178.00
203.00
469.00
3,772.54
3,772.54
ACH
ACH
3,712.s4
38,969.t0
35,161.95
't4,13't.75
ACH
74,13't.75
1,032.40
1,032.40
1,032.40
17r.O9

49.36 220.45
220.45
877.63
877.63
ACH 4142
11302021-A
11302021-B
1130202\-c
817.63
84,099.58
t7,69r.35
t2,624.81
t14,4t5.'t4
114,4t5.74
AP Ch€cks by Date - Detail by Vendor Nurnber (l/ll /2022 10:34 NA Page l0 CheckNo Vendor No
Invoice No
Vendor Nrme Check Drte
Rcfcr€lce
Ch€ckAmount
ACH 4157
P191716
P342529
Q131530
ACH
Core & Main LP
Wti/Met€r Extenders
Wtr/Register
Wtr/Wat€r L€ak on Valley
1,t65.17
544.83
532.26
Total for this ACH Check for V€trdoi 41 57:

Tolal for Vndor 415? (Core & Main LP):

Total for lhis ACH Check for'lqdor 4222:

Total for Vendor 4222 (WM Recycle America):
2,242.86
4222
AC2636472
AC2636412-A
2,242.86
544.26
105.?8
WM Recycle America
Wr/Waste Disposal
StrB,^iy'aste Disposal
650.(X
ACH
650.M
1,839.00
4234
201209158
ACI{ 42'12
0371681-IN
03716E2-IN
0371683-IN
0371684-IN
0371685-IN
43t2
2t3457009
ACH 4331
I187319
I187319-A
XIO Inc
WIr/SCADA Qtly Fee
Total for this AcH Check fot Verdor 4234:

Total for Vetrdor 4234 (XIO Inc):

Amber Chemical Irc
Wtr/Hypochlorite - Curry Tank
Wtr^lypochlorite, Wa.hlstrom Well
Wtr^lypochlorite - Dennison Well
Wt/Hypochlorite - Mojave Well
Wts/Hypochlorite - Minion Well
Total for lhis ACH Ch€ck for Vendor 4272:

Tolal for Vendor 4272 (Amber Chemical Inc):

ACC Business
GC/Fiber for PD Nov 1l-Dec l0 2021
Total for this ACH Check fot Vendor 43 12:

Total for Vendor 43 I 2 (ACC Business):

Klein Denatale Goldner Attomey at Law
Groundwaier Sustainability hojcct
Groundv,?ter Sustainability Project
1,839.00
1,839.00
507.08
tol.42
633.85
253.54
43t.02
t,926.91
ACH
t,926.91
698.58
698.58
1,228.00
1,228.00
Total for this ACH Check for Vendor 433 I :

Total for Vendor 4331 Klein Denatale Goldrer Attomey at Law):

ACH 4353 Canon Financial Services Inc
27't'79931 GG/Canon CoDierNov 2021
2456.00
2,456.OO
3t4.22
AP Checks by Dat€ - D€tail by V€ndor Number (l/1112022lo:34 lM Page 11 Check No Vendor No
Invoice No
Vendor Nrme Chcck Datc
Refer€rce
CheckAmourt
2777993t-A
2777993r-B
DSD/Canon CopierNov 2021
PD/Cano! Copi€r/Nov 2021
Total for tbis ACH Check for Vendor 4353:

Total for Vetdor 4353 (Canon Financial Services lnc):

Lease Servicing Center Inc
Swr/E-216 Sweeper Lease
Total for lhis ACH Check for Vendor 4358:

Tolal for Vendor 4358 (Lease Servicing Cenie! Inc):

Orkin
AirlPest Inspection #337 I | 033
Total for this ACH Ch€ck for Vendor 4389:

Total for Vendor 4389 (Orkin):

Spriagbrook Holding Co. LLC
civic Pay & Pay Pad Transaction Fe€s/Dec 2021
Total for this ACH Chcck for Vendor 4,100:

Total for Vendor 4400 (Springbrook Holding Co. LLC):

Quadient Finance USA Irc.

Neopost-hiority Mail Nov lE-Dec 142021
Total for this ACH Check for Vsndor 4420:

Total for Vendor ,{420 (Quadient Finance USA Inc.):

The Irw Edwards Group
Public Oprinion RcsearcVsf at€gic R€conmenda
Public Opinion Researcl/Strat€gic Recoft henda
Total for rhis ACH Check for Verdor 4549:

Total for Vendor 4549 (The Lew Edwards Group):

Linde Gas & Equipment Inc
Industrial Acetylene
Tolal for this ACH Check fm Vendor 4569:

Total for Vendor 4569 (Linde Gas & Equipment Inc):

Pace Analytical Services LLC
Wtr/Curq/ Res€rviot Weekly Blended Nitrat€
270.33
222.6s
807.20
ACH 4358
49072
80't.20
7,055.96
7,oss.96
1,0s5.96
141.00
aalr
ACH
ACH
ACH
4389
22t3&900
44W
nw-008273
4420
1728627 -17 4656r
4549
006
007
141.00
141.00
730.90
730.90
ACH
730.90
138.55
138.55
13E.55
6,000.00
6,000.00
12,000.00
12,000.00
195.84
4569
67843423
ACH 45't7
843't686
195.84
195.84

15.00 AP Checks by Date - Detail by Vendor Number (l/1112022lO:.34 ^M)
Pzge 12
CheckNo VendorNo VcndorNrme Check D|t€
Reference
Check AmouDt
Itrvoica No
R431946
8437986
4586
0332- t 03{D00
Wn/Bact riologicd-Tehachapi BlvdMulberry S
Wtr/Cuny Re*rvior We€kly Blended Nihate
Total for this ACH Chcck for Vetrdor 4577:

Total for Vendor 45?7 (Pace Analyical Services LLC):

Royal Industrial Solutions
Sft/Cornputer Program Updatc
Tottl for this ACH Check for vendor 4586:

Total for Vendor 4586 (Royal Industrial Solutions):

Report Total (65 checks):

36.00 15.00
427,315.11
AP Checks by Date - Detail by Vondor Number (Illlm22 l0t34 liM, Pagc 13 Accounts Payable
Checks by Date - Detail byVendorNumber
User: afrescas
|BDO22 l:31 PM

CITY OF
ChecLNo Vetrdor No
Involce No
V€|rdor NrEe
Dcrcription
ryTEHACHAPI

CALIFORNIA
Check Drtc
R€fercnce
Check Amount
ACH 0362
0367465
036,'532
03676{.3
0367660
0368010
RSI Petoleum Products
Pwrutrbaded Cosolin€/Di€sel Fuel
PWAhleaded Gacoline
PWrur eeded Grsoline/Di€sel Fuel
PWAjnleadcd Gasoline
PvruDbad€d Grsoliue/Dies€l Fuel
1,652.E1
444.t5
I,qI_17
t,060.52
1,t4t.47
Tolal for this ACH Check for V€odor 0362:

Total for Vcndor 0362 (RSI P€tolcum Products);
Report Total (l checks):
62m.12
6200.12
AP CheckB by Dat€ - Dctail by Vendor Numbff ( | /312022 l:3 | PMI Pege I Accounts Payable
Checks by Date - Detail by Vendor Number
User: afrescas
lllll2022 10:.34 AM

CITY OF
ChcckNo vfldorNo
Invoice No
ryTEl.l+S!t-4ll
Chcck Amount
I)eN.rlptlotr Referapcc
Verdor Nrne Chcctr Drte
ACH 0362
0367735
036t061
036E183
036830t
036t357
0368460
036a561
036860E
RSI Petrolcum Products
PWrur €ad€d GssoliN
Pwrulkaded Gasolin
Pwrulk{ded Garolirc
PwAjnlcadcd Gasolirc
Pwrud€ad€d Gasoline
Pwrunkad€d Gasolirc
Pwrunbadcd Grsolitrc
Pwrunhrd€d Gasolhcr'Dies€l Fuol
639.03
815.?8
697.95
? I1.55
1,331.16
648.10
657.t7
\444.42
Totsl for thit ACE Check for Vendot 0362:

Total for Vcndor 0362 (RSl Petrol€um Products):

Rspon Total (l checks):
594s.s6
6,915.56
AP Check by Date - Dctail by V.odor Nunber (1/LlnO22 10:34 l\M) Pege I

CITY OF

TEHACHAPI

CALIFORNIA

COUNCIL REPORTS
MEETING DATE: JANUARY !8,2022 AGENDA SECTION: FINANCE

APPROVED

DEPARTMENT H

CITY MANAGER
TO: HONORABLE MAYOR SMITH AND COUNCIL MEMBERS
FROM: HANNAH CHUNG, FINANCE DIRECTOR
DATE: JANUARY 4,2022
SUBJECT: AMEND CAPITAL ASSET POUCY AND PROCEDURES

BACKGROUND
ln order to keep all policies up to date, it is important to evaluate existing policies from time to time and make necessary changes. As such, staff felt that the current Capital Asset Policy (Policy) was outdated and decided to proceed with a policy update. The changes made to the current Policy are:

1. Added more descriptive definitions and explanations to the capital asset categories

2. Changed capitalization thresholds

3. Modified the life of assets in certain categories.

The proposed changes in dollar amount for capitalization thresholds are as shown below:

Assets Description
Capitalization Threshold Change
From To
Machinery & Equipment 5,000 10,000
Furniture & Fixture 5,000 10,000
lntangible Assets 5,000 10,000
La nd 5,000 10,000
Land lmprovements 5,000 50,000
Buildings / Hangars 5,000 50,000
Building lmprovements 5,000 50,000
I nfrastructu re 5,000 50,000
Capital Lease Property 5,000 50,000
Leasehold I mprovements 5,000 50,000
Construction in Progress 5,000 50,000
Staff considered the current 55,000 capitalization threshold low for machinery, equipment and furniture and considerably low for lands, buildings and infrastructure. Therefore, the threshold for each category of assets was adjusted to be more reasonable and economically suitable. 6;f
Furthermore, the useful life of the capital asset categories was also reviewed and modified. A comparison of current and proposed policy is listed below:

Assets Description Useful Life Change (in Years)
Old Policy New Poliry
Buildings 30 15 to 50
Computers, Printers 4 4to 5
Furniture and Fixture 4to30 5to 10
Machinery a nd Equipment 4to30 5to20
I mprovement - I nfrastructure 10 to 40 15 to 50
I nfrastructure 20 to 40 20 to 40
Sidewalks, Curbs & Gutters 20 to 40 20 to 40
Traffic Signals 40 40
Water & Sewer Main 40 40
Pa rks 40 40
Vehicles 5 5
Land / Water Rights N/A lndefinite
FISCAL !MPACT
None

RECOMMENDATION
Approve the resolution to amend CapitalAssets Policy as presented by staff

Page 2 of 2 ends

City of Tehachapi

CAPITAL ASSET POLICY
Effective Date: Januarv 19,2022 Updated Date: January 18,2022

PURPOSE
The purpose of this policy is to provide uniform criteria for identifying and properly classifying City expenditures for capitalization. This policy also provides guidelines for determining the economic useful lives of capital assets (also known as fixed assets) as well as capitalization thresholds. Proper capital asset accounting provides the City with the data necessary to:

1. Prepare financial reports

2. Safeguard sizable investments

3. ldentify custodial responsibility

4. Assist with risk managemenUinsurance activities

5. Recover costs from Federal and State programs or reimbursement programs

BACKGROUND
Capital assets are broadly defined as financial resources that are tangible or intangible in nature and have a useful life greater than one year. Examples of capital asset categories are Land, Buildings, lmprovements, Machinery & Equipment, Furniture & Fixtures and lntangible Assets such as Water Rights.

The City's Capital Asset Policy defines capital assets under each classification, addresses useful life ranges, sets minimum capitalization thresholds and gives examples of costs to include in the value of the capital asset. Additionally, the policy discusses the treatment of unique items such as water rights, computer software, capital leases, self-constructed assets, donated assets, construction in progress, costs incurred subsequent to acquisition and transfers of assets between funds or departments.

Capital assets are to be accounted for at historical cost or if cost is not practically determinable, at estimated fair market value at the time of acquisition or when placed into service. The historical cost is the value of the asset on the date acquired by the City. Generally, cost includes all expenses associated with the acquisition, shipment, construction and installation of a capital asset.

RESPONSIBILITY
F i na nce Di rec.lotRespons i bi I ity
The Finance Director or his/her designee wil! determine the category and life of assets and maintain the capital asset records in the financial software. Furthermore, he or she is responsible to keep the required capital asset records either in a hard copy format or electronic copy until the retention period is expired pursuant to City's Record Retention Schedule.

Citv Staff Responsibilitv
An inventory of all capital assets is to be completed when requested by the Finance Department annually. To facilitate fulfillment of the requirements of this section and in order to prepare accurate financial reports, Finance Staff shall maintain accurate and upto-date capital asset accounting records.

CAPITALIZATION THRESHOLDS
The City has established minimum capitalization thresholds for administrative purposes. All below the icable class threshold are to be in the current fiscal r

USEFUL LIFE RANGE
Class Capitalization Th reshold
Land $50,000
lmprovements - Land $50,000
Buildings / Airport Hangars $50,000
lmprovements - Building $50,000
lnfrastructure: Pavement, Water & Sewer Lines, All
Other
$50,000
Capital Lease Property $50,000
Leasehold I m provements $50,000
Construction in Progress $50,000
Machinery & Equipment $10,000
Furnitures & Fixtures $10,000
lntangible Assets $10,000
Water Rights Ail
Class Useful Life in Years
Land / Water Rights lndefinite
lmprovements to Land 15 to 50 years
Buildings 15 to 50 years
lmprovements to Building 15 to 50 years
Machinery, Equipment & Vehicles 5 to 20 years
lnformation Systems, Computers & Peripheral Equipment 4 to 5 years Furnitures & Fixtures 5 to 10 years
lnfrastructure Items:

Pavement 40 years
Curbs & Gutters 20 to 40 years
Sidewalks 20 to 40 years
Medians 40 years
Traffic Signals 40 years
Street Lights 40 years
Storm Drain Lines, lnlets, Manholes & Pump Stations 40 years Sewer Lines, Lift Stations, Manholes & Water Lines 40 years Water Reservoirs & Water Wells 40 years
Parks 40 years

ACQUISITION OF CAPITAL ASSETS
Land and Land lmprovements
Land: A real property other than structures and land improvements.

Land lmprovements: Non-building assets that enhance the quality or facilitate the use of land.

Examples of depreciable land improvements include parking lots, driveways, sidewalks, retaining wa!!s, fencing, outdoor lighting, landscaping, irrigation systems, recreation areas, athletic fields and courts and fountains. Land improvements such as fill, grading and excavation that provide permanent benefits and incur limited deterioration with use or the passage of time are to be classified with land as non-depreciable.

Capitalizafion.' Land, land improvements and rights-of-way valued at $50,000 or more will be capitalized.

Valuation' The cost of land includes all expenditures in connection with acquisition and preparation for use such as, but not limited to purchase price, appraisal and negotiation fees, title search and filing/recording fees, relocation costs, costs of consents, clearing, filing and grading land for use, condemnation costs, demolition or removal of structures, surveying fees or hazardous waste clean-up. Receipts from the sales of salvage should be credited against the land cost. In the case of land and buildings acquired as a single parcel, the value of the land and buildings should be determined individually and recorded separately.

Buildinqs and Buildins lmprovements
Buildings.' Structures that are physical property of a permanent nature that enclose people, equipment, services or functions. Buildings may include major high-cost components such as boilers, elevators and HVAC systems. When these components are replaced, they should be recorded separately in the capital asset system to simplify future replacement transactions and because their useful lives can differ from buildings.

Building lmprovemenfs.'These are additions or improvements to buildings that increase value or extend the useful life of a building. Refer to "Treatment of Costs Subsequent to Acquisition" section of this document for more specific information. Examples include replacing major building components, structural additions to buildings, major energy conservation projects, installation of upgraded plumbing or electrical systems, and major renovations of exterior structural deterioration.

Capitalizafion.' Buildings and Building lmprovements valued at or more than $50,000 will be capitalized.

Valuation: The cost of Buildings and Building lmprovements includes all expenditures in connection with acquisition of construction, such as purchase price or construction costs, fixtures attached to the structure, filing and other closing costs, inspections and tests, architect's fees, payments of damages, costs of permits and licenses, and insurance costs during construction.

The cost shall be reduced for sale of salvage from materials charged against the construction, discounts, allowances and rebates secured, and amounts recovered through surrender of liability and casualty insurance. For proprietary funds only, the actual or imputed interest costs associated with the construction period shall be capitalized in accordance with Financial Accounting Standards Board (FASB) Statement No. 34, FASB Statement No. 62, and supplemental updates.
lnfrastructure
lnfrastructure: lnfrastructure is categorized as community service assets that are long-lived, generally stationary in nature, and normally preserved for a significantly greater number of years than most capital assets. Examples include pavements, curbs, gutters, and sidewalks associated with roadways, bridges, sewer systems, water distribution systems, and water drainage systems.

Expansions and lmprovemenfs fo lnfrastructure: These are capital outlays that increase the asset's capacity, efficiency, or level of service, such as adding lanes to a road.

Capitalization: lnfrastructure and infrastructure improvements valued at or more than $50,000 will be capitalized. Refer to "Treatment of Costs Subsequent to Acquisition" section of this document for more specific information.

Valuation'The cost of infrastructure includes the purchase price, contract prices, internal costs (see Self-Constructed Assets paragraph), and any other expenditures necessary to put the infrastructure into its intended state of operation. Refer to the Building paragraph for examples of costs to include.

Land purchased for infrastructure projects shall be capitalized into the Land account. Land must be capitalized as a separate non-depreciable asset at fair market value as of the date of acceptance.

Preservation costs that significantly extend the useful life of an asset beyond its original estimated useful life, but do not increase the capacity of the asset, are generally capitalized.

Examples are seismic retrofitting bridges and roads reconstruction.

Maintenance costs which allow an infrastructure asset to continue to operate at its intended level of service during its originally established useful life are not to be capitalized.

Machinerv & Equipment
Machinery & Equipment Physical moveable personal property such as machines, tools, furniture, vehicles, aircraft, mobile/office trailers, and computer servers comprise the Machinery & Equipment category. lt does not include major systems integrated into a building or structure such as elevators, boilers or HVAC.

Capitalization: lndividual units valued at or more than $10,000 and a useful life of more than one (1) year.

The group method for capitalization may apply in limited circumstances for equipment. Grouping includes a number of different units purchased at the same time whose defined purpose is to work in conjunction with one another, their independent operation is not feasible, and replacement of which is extended as a whole. Purchase of multiple identical units (e.9., 5 computers @ $2,000 each) rarely represents valid grouping. Examples of valid grouping include:

Modular Furniture - lnitial lot purchases and each subsequent lot or component of more than $10,000, or
Computer server - lnitial hardware and software components designed to work exclusively with one another and valued at more than $10,000, or Unique multi-device systems for communications or police vehicles meeting the $10,000 threshold.

Valuation' The cost of equipment includes all costs necessary to acquire and place the equipment into service such as purchase or construction price less discounts, installation costs, shipping and handling, initial operational training, sale, use, or transportation taxes. The cost of new equipment should not be reduced by the value of trade-ins. Trade-ins shall be retired from the capital asset and financial systems, and any resultant gain or loss for the asset being tradein should be recognized on its disposition for Proprietary Funds. lntanqible Assets
lntangibleAssefs.'lntangible assets are financial assets that lack physicalsubstance. Common examples of intangible assets include water rights, easements, rights-of-way and computer software.

Water Rights: Water rights shall have its own category. Water rights are not subject to depreciation and all costs associated with acquiring the water rights shall be capitalized.

Software Capitalization: An individual software application or license purchased for the City's use shall be capitalized if it is valued at more than $10,000 and its useful life will be more than one (1) year.

Software Valuation' Software purchases as a component of a system designed to work exclusively with specific hardware shall be capitalized with the hardware using the group method and the $10,000 threshold as noted in the equipment paragraph above. Vendor modification, such as patches and version upgrades, used to keep software in a usable state as opposed to adding significant new capabilities, should be charged as maintenance expense.

Capital Leases
The capitalization of Capital Leases which meet the $10,000 threshold shall be subject to the rules of GovernmentalAccounting Standard Board (GASB) Statement No. 87.

Self-Constructed Assets
Capital assets constructed by the City are recorded in the same manner as those acquired by purchase or construction contract. Costs are to be tracked in the project module and the progress costs should be captured in the CIP account at the end of the fiscal year if the project is still in progress. These costs include direct labor, materials, equipment usage and overhead. City employee's overhead is limited to those items, such as worker's compensation, employee group a
insurance premiums, City's contribution on retirement, leave accrual allowances, employer paid payroll taxes and other direct labor costs. Once the construction of the asset is completed, the amount of total costs will be transferred to a capital asset account.

Leasehold lmprovements
Leasehold improvements are improvements to buildings or structures that the City leases to be used during the term of that lease. Leasehold improvements are permanent in nature in that they involve physical modifications to a leased property. As such, moveable equipment or office furniture that is not attached to the leased property is not considered a leasehold improvement.

Leasehold improvements do not have a residual value as they revert to the lessor at the expiration of the lease.

Leasehold improvements over the $50,000 threshold are capitalized by the lessee and are amortized over the shorter of (1) the remaining lease term, or (2) the useful life of the improvement. lmprovements made in lieu of rent shall not be capitalized. lf the lease contains an option to renew and the likelihood of renewal is uncertain, the leasehold improvement should be written off over the life of the initial lease term or useful life of the improvement, whichever is shorter.

Eminent Domain
The value of the capital asset obtained through eminent domain shall include all direct costs included in reaching a settlement with the seller.

Works of Art and Historical Treasures
Works of Art and HistoricalTreasures shall be capitalized and recorded at historicalcost. Works of Art and Historical Treasures that are inexhaustible should not be depreciated.

Donated Assets
Capital assets that are donated to the City are to be recorded at fair market value as of the date of acceptance by the City Council, plus any ancillary costs necessary to place those assets into service.

ADDITIONAL CAPITAL ASSET ISSUES
Treatment of Costs Subsequent to Acquisition
Major expenditures that increase future benefits of an existing capital asset beyond its previously assessed standard of performance shall be capitalized. After a capital asset has been placed into service, subsequent expenditures are capitalized if they meet the asset's class threshold and:
o Extend the estimated life or increase the value of the asset as per established thresholds defined in this document, or
. lncrease the future service potential, (capacity or efficiency) of the asset, or o Are a new major fixture of a building (e.9., elevator, boiler, HVAC, roof), or o For depreciated roads, the'base' has been impacted by a reconstruction.

The determination as to whether expenditures meet any of these factors shall be made by an evaluation of engineering design, physical condition, cost and other relevant factors.

Alteration or Remodeling of buildings and costs to change the physical structure or arrangement of capital assets that do not extend the building's useful life shall not be capitalized.

Construction in Proqress
Construction in Progress includes new construction or improvements to land, buildings, vehicles/equipment or infrastructure that have not been physically completed or have not had all project costs processed by fiscalyear-end, and the final cost is expected to exceed the threshold for its class.

Depreciation
Depreciation is the process of allocating the cost of depreciable capital assets over a period of time rather than incurring the entire cost as an expense in the year of acquisition. The process recognizes an asset's periodic cost of use and declining usefulness over time. Land, certain land improvements, water rights, certain works of art and historicaltreasurers are inexhaustible and are therefore not depreciated.

As a matter of policy, the City has elected to adopt the straight-line method of depreciation.

Depreciation will begin on the first day of the asset's first full month of service and end on the final day of the final month of service. The straight-line method of depreciation shall be applied as follows:
(Asset Cost - ResidualValue) / Estimated Useful Life in Years = Annual Depreciation Expense Residual value is the amount that can be anticipated to be recovered when the asset is no longer useful for its intended purpose. Useful life should approximate the time an asset will provide service to the City.

Capital assets that become fully depreciated or have residual value and are still in use must remain in the financial capital accounts and identified within the capital asset system until they are disposed.

MAINTENANCE VS. ADDITIONS . TREATMENT OF COSTS

1. Maintenance is defined as expenditures which neither materially add to the value of property nor appreciably prolong its life, but merely keep it in an ordinary efficient operating condition. Maintenance costs shall not be capitalized. Road maintenance such as slurry seal, overlay and street striping are considered maintenance and should not be categorized as a capital asset. Furthermore, building maintenance such as roof replacement, new paint and flooring replacement are considered as building repair and maintenance.

2. Capitalized expenditures are defined as expenditures that materially add to the value or betterment of property/equipment or appreciably extend its life. The cost of capitalized expenditures should be added to the book value of the asset where the original cost of a component being improved can be specifically identified. !NVENTORY CONTROL
Department heads or designees are responsible for safeguarding capital assets under their control from theft, loss or abuse.
!n general, inventory control is applied only to movable capital assets such as Machinery and Equipment and office furniture and not to land, buildings, or other immovable capital assets.

Capital assets subject to inventory controlwill be accounted for and controlled through the same systems and procedures used to account and control capital assets subject to capitalization.

PURCHASING CAPITAL ASSETS

1. Review departmental budget to ensure the requested asset has been included in the current year's budget.

2. lf the desired asset is not in the budget, a department head must contact the Finance Department to determine the appropriate action.

3. Computer equipment and computer software purchases should be made by the lT administrator /consultant. lf it is imperative for a department head to purchase computer equipmenUsoftware due to a special circumstance, the purchase must be reviewed and approved by the lT consultant.

4. Provide "Capital Assets lnformation Form" in Exhibit 'A" if required by the Finance Department.

5. An asset number will be assigned to the capital asset by the Finance Department and logged into the capital asset software module.

TRANSFERRING AN ASSET TO A DIFFERENT FUND'DEPARTMENT
1 . Use the "Capital Asset Transfer / Disposal Form" in Exhibit "B" if requested by the Finance Department.

2. lnform the Finance Department for capital asset module update. Make sure to include the date of transfer, correct department, location and asset description.

3. For vehicle transfers include date of transfer, blue book value, condition and mileage. ln addition, provide a copy of the blue book report.

DISPOSAL OF ASSET / SURPLUS PROPERTY
All capital assets that have reached the end of their useful life and/or have a zero-dollar ($0) book value for reporting purposes will be considered surplus property. Surplus property can be disposed, donated to other public or non-profit agencies, or sold to the public through a public property auction website upon Council's approval.

Prior to disposal or donation of any properties, a department head is required to inform the Finance Department by forwarding a "Capital Asset Transfer / Disposal Form". Furthermore, for assets that are sold through the public property auction website, a list of the assets and the sold amount of each individual asset must be sent to the Finance Department. Proceeds from the sale of capital assets will be credited to the fund which purchased the asset.

Misplaced/Lost Assets
ln the event a capital asset is stolen, lost or missing, department heads are responsible for ensuring that the "Capital Asset Missing Report", Exhibit "C", is completed in detail and they must obtain the City Manager's signature prior to submitting the form to the Finance Department for processing.

CAPITAL ASSET INFORMATION FORM
Asset #:

Asset:

Acquisition Date:

Vendor:

Original Cost:

Acquisition Method
tr Purchase
tr Other
tr Construction
tr Donation
tr Lease
tr Grant
Manufacturer:

Model:

Serial #
Type Code
Fund #:

Department:

Account #:

Site Location
Name Signature
EXHIBIT "A"

CITY OF TEHACHAPI

CAPITAL ASSET TRANSFER / DISPOSAL FORM
EXHIBIT "B'
Request Date:

Transferrino From
Location
Department:

Transferrinq To:

Department:

Location
Item # Asset # Serial #
1 2
3 4
5 6
7 8
I
10 Descri on
Justification
Authorized Signature of Releasing Department:

City Manager:

Finance
Date
Date
Capital Asset System Updated Date
Report By:

CITY OF TEHACHAPI

CAPITAL ASSET MISSING REPORT
EXHIBIT "C''
Report Date:

Description of Missing Asset(s):

Asset lD#: Missing Date:

Asset Location Replacement Value:

Asset(s) Value:

Action Taken:

Result:

Signature Date
To Be Completed By Finance Department
Action by Finance Dept:

Result:

Signature Date
City Manager Date

CITY OF

TEHACHAPI

LEGAL DEPARTMENT
RESOTUTION NO.

A RESOTUTION OF THE CIW COUNCIL OF THE CITY OF TEHACHAP!

ADOPTING A CAPITAT ASSET POIICY REIATING TO CONTROT AND APPROPRIATE USE OF CIW ASSETS AND REPEAT RESOTUTION 36-13 WHEREAS, the City Council of the City of Tehachapi (the "City Council") adopted its Fixed Asset Policy and Procedures (the "2013 Poliry") by resolution on November 4, 2OL3 to insure adequate control, appropriate use, and proper accounting of all assets owned by the City; and WHEREAS, the City Council wishes to update, amend, and replace the 2013 Policy with the Capital Asset Policy attached hereto as Exhibit "A" and by this reference made a part hereof (the "Capital Asset Policy").

NOW, THEREFORE, BE lT RESOLVED by the City Council of the City of Tehachapi as follows:

7. That the foregoing recitals are true and correct.

2. That the City Council hereby adopts the Capital Asset Policy attached hereto as Exhibit "A" and by this reference made a part hereof.

PASSED AND ADOPTED on the 18th dayJanuary,2022 at a regular meeting of the City Council of the City of Tehachapi by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

I
CITYOF

TEHACHAPI

LEGAL DEPARTMENT
PHILIP A. SMITH, Mayor, City of
Tehachapi, California
ATTEST:

TORI MARSH, CMC, City Clerk,
City of Tehachapi, California
I hereby certify that the foregoing resolution was duly and regularly adopted by the City Council of the City of Tehachapi at a regular meeting thereof held on January L8,2022.

TORI MARSH, CMC, City Clerk
City of Tehachapi, California
2 City of Tehachapi

CAPITAL ASSET POLICY
Effective Date: January 19,2022 Updated Date: January 18,2022

The City's CapitalAsset Policy defines capitalassets under each classification, addresses useful life ranges, sets minimum capitalization thresholds and gives examples of costs to include in the value of the capital asset. Additionally, the policy discusses the treatment of unique items such as water rights, computer software, capital leases, self-constructed assets, donated assets, construction in progress, costs incurred subsequent to acquisition and transfers of assets between funds or departments.

RESPONSIBILITY
Finance Director Responsibilitv
The Finance Director or his/her designee will determine the category and life of assets and maintain the capital asset records in the financial software. Furthermore, he or she is responsible to keep the required capita! asset records either in a hard copy format or electronic copy until the retention period is expired pursuant to City's Record Retention Schedule.

1. Prepare financial reports

2. Safeguard sizable investments

3. ldentify custodial responsibility

4. Assist with risk managemenUinsurance activities

5. Recover costs from Federal and State programs or reimbursement programs.

CAPITALIZATION THRESHOLDS
The City has established minimum capitalization thresholds for administrative purposes. All urchases below the cable class threshold are to be nsed in the current fiscal

USEFUL LIFE RANGE
Class Capitalization Th reshold
Land $50,000
lmprovements - Land $50,000
Buildings / Airport Hangars $50,000
lmprovements - Building $50,000
lnfrastructure: Pavement, Water & Sewer Lines, All
Other
$50,000
Capital Lease Property $50,000
leasehold lmprovements $50,000
Construction in Progress $50,000
Machinery & Equipment $10,000
Furnitures & Fixtures $10,000
lntangible Assets $10,000
Water Rights Ail
Class Useful Life in Years
land / Water Rights !ndefinite
lmprovements to Land 15 to 50 years
Buildings 15 to 50 years
I mprovements to Building 15 to 50 years
Machinery, Equipment & Vehicles 5 to 20 years
lnformation Systems, Computers & Peripheral Equipment 4 to 5 years Furnitures & Fixtures 5 to 10 years
lnfrastructure ltems:

ACQUISITION OF CAPITAL ASSETS
Larul and Land lmprovements
Land: A real propefi other than structures and land improvements.

Land lmprovements: Non-building assets that enhance the quality or facilitate the use of land.

Examples of depreciable land improvements include parking lots, driveways, sidewalks, retaining walls, fencing, outdoor lighting, landscaping, irrigation systems, recreation areas, athletic fields and courts and fountains. Land improvements such as fill, grading and excavation that provide permanent benefits and incur limited deterioration with use or the passage of time are to be classified with land as non-depreciable.

Capitalization: Land, land improvements and rights-of-way valued at $50,000 or more will be capitalized.

Valuation' The cost of land includes all expenditures in connection with acquisition and preparation for use such as, but not limited to purchase price, appraisal and negotiation fees, title search and filing/recording fees, relocation costs, costs of consents, clearing, filing and grading land for use, condemnation costs, demolition or removal of structures, surveying fees or hazardous waste clean-up. Receipts from the sales of salvage should be credited against the land cost. ln the case of land and buiHings acquired as a single parcel, the value of the land and buildings should be determined individually and recorded separately.

Butldinqs and Building lmprovements
Buildings.' Structures that are physical property of a permanent nature that enclose people, equipment, services or functions. Buildings may include major high-cost components such as boilers, elevators and HVAC systems. \A/hen these components are replaced, they should be recorded separately in the capital asset system to simplify future replacement transactions and because their useful lives can differ from buildings.

Building lmprovements.'These are additions or improvements to buildings that increase value or extend the useful life of a building. Refer to "Treatment of Costs Subsequent to Acquisition" section of this document for more specific information. Examples include replacing major building components, structural additions to buildings, major energy conservation projects, installation of upgraded plumbing or electrical systems, and major renovations of exterior structu ral deterioration.

Capitalizafion.' Buildings and Building lmprovements valued at or more than $50,000 will be capitalized.

Valuation' The cost of Buildings and Building lmprovements includes all expenditures in connection with acquisition of construction, such as purchase price or construction costs, fixtures attached to the structure, filing and other closing costs, inspections and tests, architect's fees, payments of damages, costs of permits and licenses, and insurance costs during construction.

Expansions and lmprovemenb to lnfrastrucfure: These are capital outlays that increase the asset's capacity, efficiency, or level of service, such as adding lanes to a road.

Land purchased for infrastructure projects shall be capitalized into the Land account. Land must be capitalized as a separate non-depreciable asset at fair market value as of the date of acceptance.

Preservation costs that significantly extend the useful life of an asset beyond its original estimated useful life, but do not increase the capacity of the asset, are generally capitalized.

Examples are seismic retrofitting bridges and roads reconstruction.

Maintenance costs which allow an infrastructure asset to continue to operate at its intended level of service during its originally established useful life are not to be capitalized.

Capitalizafion: lndividual units valued at or more than $10,000 and a useful life of more than one (1) year.

The group method for capitalization may apply in limited circumstances for equipment. Grouping includes a number of different units purchased at the same time whose defined purpose is to work in conjunction with one another, their independent operation is not feasible, and replacement of which is extended as a whole. Purchase of multiple identical units (e.g., 5 computers @ $2,000 each) rarely represents valid grouping. Examples of valid grouping include:

Valuation' The cost of equipment includes all costs necessary to acquire and place the equipment into service such as purchase or construction price less discounts, installation costs, shipping and handling, initia! operational training, sale, use, or transportation taxes. The cost of new equipment should not be reduced by the value of trade-ins. Trade-ins shall be retired from the capital asset and financial systems, and any resultant gain or loss for the asset being tradein should be recognized on its disposition for Proprietary Funds. lntansible Assets
lntangible Asseb.'lntangible assets are financial assets that lack physical substance. Common examples of intangible assets include water rights, easements, rights-of-way and computer software.

Water Righb: Water rights shall have its own category. Water rights are not subject to depreciation and all costs associated with acquiring the water rights shall be capitalized.

Capital Leases
The capitalization of Capital Leases which meet the $10,000 threshold shall be subject to the rules of GovernmentalAccounting Standard Board (GASB) Statement No. 87.

Self-Constructed Assets
Capital assets constructed by the City are recorded in the same manner as those acquired by purchase or construction contract. Costs are to be tracked in the project module and the progress costs should be captured in the CIP account at the end of the fiscal year if the project is still in progress. These costs include direct labor, materials, equipment usage and overhead. City employee's overhead is limited to those items, such as worker's compensation, employee group a
a
insurance premiums, City's contribution on retirement, leave accrual allowances, employer paid payroll taxes and other direct labor costs. Once the construction of the asset is completed, the amount of total costs will be transferred to a capital asset account.

Leasehold improvements do not have a residual value as they revert to the lessor at the expiration of the lease.

Eminent Domain
The value of the capital asset obtained through eminent domain shall include all direct costs included in reaching a settlement with the seller.

Works of Art and Historical Treasures
Works of Art and HistoricalTreasures shall be capitalized and recorded at historical cost. Works of Art and Historical Treasures that are inexhaustible should not be depreciated.

ADDITIONAL CAPITAL ASSET ISSUES
Treatment of Costs S ent to Acquisition
Major expenditures that increase future benefits of an existing capital asset beyond its previously assessed standard of performance shall be capitalized. After a capital asset has been placed into service, subsequent expenditures are capitalized if they meet the asset's class threshold and:
o Extend the estimated life or increase the value of the asset as per established thresholds defined in this document, or
o lncrease the future service potential, (capacity or efficiency) of the asset, or o Are a new major fixture of a building (e.9., elevator, boiler, HVAC, roof), or o For depreciated roads, the'base' has been impacted by a reconstruction.

The determination as to whether expenditures meet any of these factors shall be made by an evaluation of engineering design, physical condition, cost and other relevant factors.

Alteration or Remodeling of buildings and costs to change the physical structure or arrangement of capital assets that do not extend the building's useful life shall not be capitalized.

Gonstruction in Proqress
Construction in Progress includes new construction or improvements to land, buildings, vehicles/equipment or infrastructure that have not been physically completed or have not had all project costs processed by fiscalyear-end, and the final cost is expected to exceed the threshold for its class.

Depreciation
Depreciation is the process of allocating the cost of depreciable capital assets over a period of time rather than incurring the entire cost as an expense in the year of acquisition. The process recognizes an asset's periodic cost of use and declining usefulness over time. Land, certain land improvements, water rights, certain works of art and historical treasurers are inexhaustible and are therefore not depreciated.

As a matter of policy, the City has elected to adopt the straight-line method of depreciation.

MAINTENANCE VS. ADDITIONS . TREATMENT OF COSTS

INVENTORY CONTROL
Department heads or designees are responsible for safeguarding capital assets under their control from theft, loss or abuse.
!n general, inventory control is applied only to movable capital assets such as Machinery and Equipment and office furniture and not to land, buildings, or other immovable capital assets.

Capital assets subject to inventory controlwill be accounted for and controlled through the same systems and procedures used to account and control capital assets subject to capitalization.

PURGHASING CAPITAL ASSETS

1. Review departmental budget to ensure the requested asset has been included in the current year's budget.

2. lf the desired asset is not in the budget, a department head must contact the Finance Department to determine the appropriate action.

4. Provide "Capital Assets lnformation Form" in Exhibit "A' if required by the Finance Department.

5. An asset number will be assigned to the capital asset by the Finance Department and logged into the capital asset software module.

TRANSFERRING AN ASSET TO A DIFFERENT FUND'DEPARTMENT

1. Use the "CapitalAsset Transfer / Disposal Form" in Exhibit "B" if requested by the Finance Department.

2. lnform the Finance Department for capital asset module update. Make sure to include the date of transfer, correct department, location and asset description.

3. For vehicle transfers include date of transfer, blue book value, condition and mileage. ln addition, provide a copy of the blue book report.

DISPOSAL OF ASSET
'

SURPLUS PROPERTY
All capital assets that have reached the end of their useful life and/or have a zero-dollar ($0) book value for reporting purposes will be considered surplus property. Surplus property can be disposed, donated to other public or non-profit agencies, or sold to the public through a public property auction website upon Council's approval.

Prior to disposal or donation of any properties, a department head is required to inform the Finance Department by forwarding a "CapitalAsset Transfer / Disposal Form". Furthermore, for assets that are sold through the public property auction website, a list of the assets and the sold amount of each individual asset must be sent to the Finance Department. Proceeds from the sale of capital assets will be credited to the fund which purchased the asset.

CAPITAL ASSET INFORMATION FORM
EXHIBIT "A''
Asset #:

Asset:

Acquisition Date:

Ve
Original Cost
Acquisition Method:

Manufacturer:
tr Purchase
tr Other
tr Construction
tr Donation
tr Lease
tr Grant
Model
Serial #:

Type Code:

Fund #:

Department:

Account #:

Site Location
Name Signature
CITY OF TEHACHAP!

CAPITAL ASSET TRANSFER / DISPOSAL FORM
EXHIBIT'8"
Request Date:

Location
Transferrinq From Transferrinq To:

Department:

Location:

Item # Asset # Serial #
1 2.

3. 4
5 6
7 8
I

10. Descri
Justification
Authorized Signature of Releasing Department:

City Manager:

Finance:

Date
Date
Capital Asset System Updated Date
Report By

CITY OF TEHACHAPI

CAPITAL ASSET MISSING REPORT
EXHIBIT'C"
Report Date
Description of Missing Asset(s):

Asset lD#: Missing Date:

Replacement Value: $
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CITY OF

TEHACHAPI

CALIFORNIA

COUNCIL REPORTS
MEETING DATE: JANUARY L8,2022 AGENDA SECTION: FINANCE DIRECTOR

APPROVED

DEPARTMENT
CITY
TO: HONORABLE MAYOR SMITH AND COUNCIL MEMBERS
FROM: HANNAH CHUNG, F!NANCE DIRECTOR
DATE: JANUARY 4,2022
SUBJECT: FISCAL YEAR END 2021 FINANCIAL REPORTS

BACKGROUND
The City's financial transactions for fiscal year 2O2O-2I are now audited and the financial reports are completed.

The reports included in this agenda are: Annual Comprehensive Financial Report (ACFR), lndependent Auditor's Report on Internal Control and Compliance, Report on the City's Appropriations Limit, and Statements of Audit Standards 114 Communication Letter.

Comprehensive Annuol Finonciol Report
The City's Annual Comprehensive Financial Report is comprised of:
!. lntroductory Section
a. Letter of Transmittal
b. Directory of Officials
c. Organizational Chart
d. Certificate of Achievement for Excellence in Financial Reporting

2. Financial Section
a. lndependent Auditor's Report
b. Management Discussion & Analysis
c. Basic Financial Statements
d. Required Supplementary lnformation
e. Supplementary lnformation
a
E-J

3. Statistical Section
Continued from the last two years, the City submitted 2O2O-2L ACFR to Government Finance Officers Association for Achievement for Excellence in Financial Reporting Award ("Award"). The City received the Award since FY 20L7-18.
lndependent Auditor's Report on lnternol Control over Financiol Reporting ond on Compliance ond Other Motters Bosed on on Audit ol Financiol Stotements a lnternal Control over Financial Reporting: The auditor stated, "During our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified" Compliance and Other Matters: The auditor stated, 'The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under G ove rn m e nta I Au d iti n g Sta nd a rd s."
lndependent Accountan(s Report on Agreed-Upon Procedures Applied to Appropriotions Limit Worksheets
The Appropriations Limitation imposed by Propositions 4 and 111 creates a restriction on the amount of revenue which can be appropriated in any fiscal year. The auditor performed agreed-upon procedures based on standards established bythe American lnstitute of Certified Public Accountants and reported the findings. Staff calculates the annual appropriations limit as a part of the budget process. The appropriations limit for fiscal year 2O2O-2L was 5L4,253,273 which was 5684,798 more than 2019-20 appropriations limit.

The auditor agrees with our appropriation calculation for the audit year as well as the prior year.

Statements of Audit Stondords (SAS) 774 Communicotion Letter o This is Auditor's communication with the governing board for the financial reporting process.
o No significant findings are reported.

RECOMMENDATION
lnformation only

Page 2 of 2 ends

CITY OF TEHACHAPI, CALIFORNIA

ANNUAL COMPREHENSIVE FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2021
Prepared by:

Finance Department
City of Tehachapi
Annual Comprehensive Financial Report
Year Ended June 30, 2021

TABLE OF CONTENTS
I. INTRODUCTORY SECTION PAGE
Letter of Transmittal 1 - 5
Directory of Officials 6
Organizational Chart 7
Certificate of Achievement for Excellence in Financial Reporting 8 II. FINANCIAL SECTION
Independent Auditor’s Report 9 - 11
Management’s Discussion & Analysis 12 - 23
Basic Financial Statements:

Government-wide Financial Statements:

Statement of Net Position 24
Statement of Activities 25 - 26
Fund Financial Statements:

Balance Sheet - Governmental Funds 27 - 28
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position 29 Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds 30 - 31 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities 32
Statement of Net Position - Proprietary Funds 33 - 34
Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds 35 - 36 Statement of Cash Flows - Proprietary Funds 37 - 38
Statement of Net Position - Fiduciary Funds 39
Statement of Changes in Net Position - Fiduciary Funds 40 Notes to Financial Statements 41 - 62
Required Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:

General Fund 63
Facility Impact Fee Special Revenue Fund 64
Traffic Mitigation Special Revenue Fund 65
Schedule of the City’s Proportionate Share of the Net Pension Liability 66 Schedule of Plan Contributions 67
Notes to Required Supplementary Information 68
Supplementary Information:

Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:

Roads and Pedestrian Safety Capital Projects Fund 69
Street Projects Capital Projects Fund 70
Non-Major Governmental Funds:

Combining Balance Sheet 71
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 72 Non-Major Special Revenue Funds:

Combining Balance Sheet 73 - 74
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 75 - 76 City of Tehachapi
Annual Comprehensive Financial Report
Year Ended June 30, 2021
TABLE OF CONTENTS - Continued
Supplementary Information - Continued: PAGE
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:

TDA 3 Bike Safety Special Revenue Fund 77
Oil Recycling Grant Special Revenue Fund 78
Lighting District Special Revenue Fund 79
Beverage Container Recycling Special Revenue Fund 80
Streets and Roads Special Revenue Fund 81
Gas Tax Special Revenue Fund 82
Non-Major Capital Project Funds:

Combining Balance Sheet 83
Combining Statement of Revenues, Expenditures and Changes in Fund Balances 84 Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual:

Building and Planning Capital Projects Fund 85
Parks and Recreation Capital Projects Fund 86
Custodial Funds:

Combining Statement of Fiduciary Net Position 87
Combining Statement of Changes in Fiduciary Net Position 88 III. STATISTICAL SECTION
Table of Contents 89
Net Position by Component 90 - 91
Changes in Net Position 92 - 95
Fund Balances of Governmental Funds 96 - 97
Changes in Fund Balances of Governmental Funds 98 - 99
Assessed Value of Taxable Property 100 - 101
Direct and Overlapping Property Tax Rates 102 - 103
Principal Property Tax Payers 104
Property Tax Levies and Collections 105
Ratios of Outstanding Debt by Type 106 - 107
Ratios of General Bonded Debt Outstanding 108
Direct and Overlapping Governmental Activities Debt 109 Legal Debt Margin Information 110 - 111
Pledged Revenue Coverage 112
Demographic and Economic Statistics 113 - 114
Principal Employers 115
Full-time and Part-time City Employees 116
Operating Indicators 117 - 118
Capital Asset Statistics 119

THIS PAGE INTENTIONALLY LEFT BLANK

INTRODUCTORY SECTION
1 2
3 As development in town directly relates to the City's future finances, the listed prospective projects will affect the City's long-term financial planning.

Planning/Entitlement Projects:

1. A Specific Plan for a 210-acre senior living master planned community is proposed for northeast Tehachapi. The community is being designed with residential and small commercial areas and with a congregant care facility.

2. A new 140-acre master planned community is proposed in the center of town. The development is advocating for up to 1,000 new housing units along with over 9 acres of park space.

3. Two new industrial buildings on Bailey Court totaling approximately 15,000 sq. ft. are undergoing the entitlement process.

4. Two new residential buildings are proposed within the Green Street Micro Village project that currently includes a barber shop, office building, and storage shed on the southwest corner of West E Street and South Green Street.

5. A three-story, 85 room Hampton Inn is proposed at the northeast corner of Challenger Drive and Capital Hills Parkway.

6. An AT&T cell tower at Tehachapi Hill is being considered.

Cash Management Policies and Practices
After annual review, the City updates its Investment Policy and submits it to the City Council for approval. In addition, a Treasurer's Report which includes all bank balances and investment portfolio information is generated monthly and submitted to Council.

To maximize interest Income and maintain liquidity, the City pools operating cash for its various funds and invests the monies. City and agency funds are invested pursuant to the City's Investment Policy in compliance with Section 53601 of the California Government Code. The authorized investment types include the investment pools such as the Local Agency Investment Fund (State of California pool) and Central San J�aquin Valley Rick Management Authority investment pool through Chandler Asset Management, U.S. Treasury Obligations, U.S.

Government Agency Issues, and Certificates of Deposit as well as mutual funds and money market funds. The investments are made based on the priorities of safety, liquidity, and yield.

Investment of debt proceeds held by bond trustees are governed by provisions of the debt agreements, rather than the general provisions of the California Government Code in the City's Investment Policy.

Awards and Acknowledgements
Distinguished Budget Presentation Award (Budget Award) from Government Finance Officers Association (GFOA): Continuing from the prior year, the City again received the Budget Award for a budget period from July 1, 2021 through June 30, 2022. GFOA established the Distinguished Budget Presentation Awards Program in 1984 to encourage and assist state and local governments to prepare budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and Local Budgeting and GFOA's best practices on budgeting.
4 5
City of Tehachapi
Directory of Officials
Elected Officials
Mayor Phil Smith
Mayor Pro Tem Michael Davies
Council Member Joan Pogon-Cord
Council Member Christina Scrivner
Council Member Susan Wiggins
City Clerk Tori Marsh
City Treasurer Stacy Curry
Administration
City Manager Greg Garrett
Finance Director Hannah Chung
Chief of Police Kent Kroeger
Public Works Director Don Marsh
Development Services Director Jay Schlosser
General Services Director Ashley Whitmore
City Attorney Thomas Schroeter
6 Department
Function
Contract Service
Organizational Chart
City of Tehachapi
City Residents
City Council
City Manager,
Greg Garrett
Development
Services
----------------------
Jay Schlosser,
Director
Public Works
----------------------
Don Marsh,
Director
Administration
----------------------
Ashley Whitmore,
Director
Police
--------------------
Kent Kroeger,
Chief
Finance
----------------------
Hannah Chung,
Director
Engineering
Planning
Public Safety
Code
Enforcement
Public Works Finance/
Accounting
Risk
Management
Personnel
Water Coordination
Wastewater
City Clerk
Airport
City
Attorney
Fire
Service
IT
Animal
Transit
Building
General
Administration
Economic
Development
---------------------
Corey Costello,
Coordinator
Refuse
7 Government Finance Officers Association
Certificate of
Achievement
for Excellence
in Financial
Reporting
Presented to
City of Tehachapi
California
For its Annual Comprehensive
Financial Report
For the Fiscal Year Ended
June 30, 2020
Executive Director/CEO
8 FINANCIAL SECTION
Independent Auditor’s Report
The Honorable City Council
City of Tehachapi, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Tehachapi, California (City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

9 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Tehachapi, California, as of June 30, 2021, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, budgetary comparison information, and other required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Tehachapi’s basic financial statements. The introductory section, schedules listed in the supplementary information section of the table of contents, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements.

The schedules listed in the supplementary information section of the table of contents are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedules listed in the supplementary information section of the table of contents are fairly stated in all material respects in relation to the basic financial statements as a whole.

The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 10 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 28, 2021, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is 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 City’s internal control over financial reporting and compliance.

December 28, 2021
11 MANAGEMENT’S DISCUSSION AND ANALYSIS
The management of the City of Tehachapi has provided this narrative overview and analysis of the City’s financial activities for the fiscal year ended June 30, 2021. The City encourages readers to consider the financial statements and notes presented here in conjunction with the financial statements which are included with this report.

Financial Highlights
 The City’s net position increased 6% to $68,731,855 from $64,928,736 as a result of this year’s operations.  Total City revenues, including program and general revenues, were $23,712,197 which is $2,762,270 more than the prior year.
 Total City expenses, including governmental and business-type expenses, were $20,159,173 which is $1,642,273 more than the prior year.
 Net position in governmental activities increased by $3,737,887 to $49,968,534, an 8% increase.  Net position in business type activities increased by $65,232 to $18,763,321, a 0.4% increase.  Governmental revenues increased by $2,702,633 to $15,779,222, a 21% increase.  Governmental expenses increased by $1,171,028 to $12,118,403, an 11% increase.  Revenues from business-type activities increased by $59,637 to $7,932,975, a 1% increase.  Expenses from business-type activities increased by $471,245 to $8,040,770 a 6% increase.  General fund revenue was increased by $3,832,259 to $12,697,650, a 43% increase.  General fund expense was increased by $1,304,489 to $9,410,305, a 16% increase.  The fund balance of the General Fund as of June 30, 2021 was $13,627,985; an increase of $3,287,345 or 32% from the prior year.

Overview of Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements. The City’s basic financial statements are comprised of:

1. Government-wide Financial Statements

2. Fund Financial Statements

3. Notes to Financial Statements
This report also contains Required Supplementary Information and Supplementary Information in addition to the Basic Financial Statements.

The Government-wide Financial Statements
The government-wide financial statements are designed to provide readers with a broad overview of the City of Tehachapi’s finances, in a manner similar to a private-sector business. The focus of government-wide financial statements is on the overall financial position and activities of the government as a whole. These financial statements are constructed around the concept of a primary government. The primary government is then broken down into two different activities, governmental activities and business-type activities.

Governmental activities include the following:

General Government Administration, finance and accounting, human resources, economic development, legal services, and the City Clerk’s office Public Works Maintenance and repair of roads and buildings, landscaping, lighting, drainage, and community promotions
Public Safety Police and fire services
Community Development Planning, engineering, building inspections, and development services The services under governmental activities are supported by taxes and specific program revenues. 12 Business-type activities include refuse, water, wastewater, transit, and airport services. Unlike governmental services, business-type activities are supported by charges paid by users based on the amount services they use.

The government-wide financial statements are comprised of the Statement of Net Position and Statement of Activities.

The Statement of Net Position is prepared using accounting principles that are similar to a private-sector business.

The purpose of the Statement of Net Position is to report all assets held and liabilities owed by the City. The difference between the City’s total assets and total liabilities is labeled as net position and this difference is similar to the total owners’ equity presented by a private-sector business. Although the purpose of the City is not to accumulate net position in general, increases or decreases of net position may serve as an indicator of the financial position of the City.

The Statement of Activities presents the revenues and expenses of the City. Again, the items presented on the Statement of Activities are measured in a manner similar to the approach used by a private-sector business, in that revenues are recognized when earned and expenses are recognized when incurred. The difference between revenue and expense is called change in net position in the City’s financial report whereas it is called net income in a private-sector business.

Fund Financial Statements
Unlike government-wide financial statements, the focus of fund financial statements is directed to specific activities of the City rather than the City as a whole. All of the City’s funds are composed of three categories: governmental funds, proprietary funds, and fiduciary funds.

Fund financial statements provide detailed information about each of the City’s most significant funds, called major funds. The concept of a major fund, and the determination of which funds are major, was established by Governmental Accounting Standards Board (GASB) Statement 34 and replaces the concept of combining like funds and presenting them in total. Instead, each major fund is presented individually, while all non-major funds are summarized and presented in a single column.

Governmental funds are used to account for essentially the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in evaluating a government’s near-term financing requirements.

Because the focus of governmental funds is narrower than that of the government-wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. By doing so, readers may better understand the long-term impact of the government’s near-term financing decisions.

The City of Tehachapi maintains 13 active individual governmental funds. Information is presented separately in the Governmental Fund Balance Sheet and the Governmental Fund Statement of Revenues, Expenditures and Changes in Fund Balances. The funds categorized under major funds are: General Fund, Facility Impact Fee Fund, Traffic Mitigation Fund, Roads and Pedestrian Safety Fund and Street Projects Fund. Data from seven governmental projects are combined into Street Projects fund which is a capital projects fund. Funds such as the gas tax funds, Transportation Development Act grant funds, small capital project funds, landscape lighting district funds, and drainage basin assessment district funds are grouped into the Other Governmental Funds.

The projects included in the Pedestrian Safety Funds are Railroad Pedestrian Safety and Antelope Run Bike Path.

Twelve projects are included in the Street Projects Fund. They are the Enhanced Striping, Tree Planting and Stormwater Capture, Enhanced Pedestrian Crossings, Snyder Ave. Gap Closure, Summit Rehabilitation, West Park Frontage Improvement, Northside Neighborhood Improvement Ph II, Snyder Ave. Road Rehabilitation, Pinon Road Extension, Surface Treatment of Residential Streets, Dennison Bicycle-Pedestrian Improvement and Local City Streets Rehabilitation projects.
13 Proprietary funds record revenues when they are earned and record expenses at the time liabilities are incurred.

The only type of proprietary funds the City of Tehachapi maintains is enterprise funds. The Refuse, Water, Sewer, Transit, and Airport funds are enterprise funds and presented as business-type activities in the government-wide financial statements. Proprietary funds provide the same type of information as the government-wide financial statements, only in more detail. The City considers Water, Sewer, Airport and Refuse Funds to be major funds whereas the Transit Fund is categorized as a non-major proprietary fund.

Fiduciary funds are used to account for resources held for the benefit of parties outside the government. The City’s fiduciary fund activities are reported in a separate section of this report under the Statement of Fiduciary Net Position. These activities are excluded from the City’s other financial statements because the City cannot use assets belonging to fiduciary funds to finance its operations. Financial activities included in the fiduciary statement consist of the Successor Agency to the former Tehachapi RDA (Successor Agency), Special Assessment Districts (AD), and the Community Facilities District (CFD).

Notes to the Financial Statements
The notes give additional information that is essential to a full understanding of the data provided in the governmentwide and fund financial statements.

Required Supplementary / Supplementary Information
In addition to the basic financial statements and accompanying notes, this report also presents certain Required Supplementary Information and Supplementary Information. The Required Supplementary Information section includes budgetary comparison schedules for major governmental funds and the Supplementary Information section includes an illustration of conditions and activities for all non-major funds as well as special district agency funds.

Government-wide Financial Analysis
Statement of Net Position Summary
The City’s overall financial position and operations for the past two years are summarized in the table above based on the information included in the government-wide financial statements. At June 30, 2021, the City’s overall assets exceeded total liabilities by $68,731,855 which is called net position. The net position that resulted from governmental activities was $49,968,534 and from business-type activities was $18,763,321. Net position may serve over time as an indicator of a government’s financial position. 2021 2020 2021 2020 2021 2020
ASSETS
Current and Other Assets 15,311,706 12,748,214 7,191,467 7,635,105 22,503,173 20,383,319 Capital Assets 39,746,243 38,753,886 15,585,174 15,556,890 55,331,417 54,310,776 Total Assets 55,057,949 51,502,100 22,776,641 23,191,995 77,834,590 74,694,095 DEFERRED OUTFLOWS OF RESOURCES 1,212,803 1,099,632 472,575 449,775 1,685,378 1,549,407

LIABILITIES
Current Liabilities 1,586,594 1,852,326 1,113,124 1,579,219 2,699,718 3,431,545 Long-term Liabilities 4,672,146 4,463,302 3,340,904 3,310,507 8,013,050 7,773,809 Total Liabilities 6,258,740 6,315,628 4,454,028 4,889,726 10,712,768 11,205,354 DEFERRED INFLOWS OF RESOURCES 43,478 55,457 31,867 53,955 75,345 109,412

NET POSITION
Net Investment in Capital Assets 38,817,981 37,634,315 13,897,605 13,126,463 52,715,586 50,760,778 Restricted 3,895,674 4,714,742 1,286,582 3,095,393 5,182,256 7,810,135 Unrestricted 7,254,879 3,881,590 3,579,134 2,476,233 10,834,013 6,357,823 Total Net Position 49,968,534 46,230,647 18,763,321 18,698,089 68,731,855 64,928,736 Governmental Activities Business-Type Activities Total
14 The largest portion of the City’s net position is investments in capital assets. The Net Investment in Capital Assets (e.g., land, infrastructure, buildings, machineries, and equipment) was increased to $52,715,586 (77% of total net position) from $50,760,778. This increase of $1,954,808 resulted from added capital assets less removed capital projects and depreciation expense. The Net Investment in Capital Assets is calculated by deducting the accumulated depreciation amount as well as associated debts from the total capital assets booked. The capital projects still in progress at the end of the fiscal year are included in the construction in progress (CIP) balance until the projects are completed. Listed are the projects included in CIP at the end of 2020/21:

Governmental Activities:

Rail Corridor Pedestrian Safety Enhanced Pedestrian Crossings Snyder Gap Closure Northside Neighborhood Improvement Ph II Snyder Ave. Road Rehabilitation Pinon Road Extension
Fuel Storage System Dennison Bicycle & Pedestrian Improvements Tree Planting & Stormwater Capture Public Works Office Trailer Business-type Activities:

Airport Taxiway Relocation Ph I Airport Taxiway Relocation Ph 2 Cherry & Dennison Water Main
Upon completion, the following projects will be categorized in a specific group of fixed assets and will start being depreciated. The capital projects completed during the fiscal year 2020/21 were Antelope Run Bike Path Expansion and West Park Frontage Improvement.

The City started capturing its capital assets in governmental funds beginning in fiscal year 2002/2003. In accordance with GASB 34, the City was not required to retroactively capture its capital assets because the City fell under Implementation Phase III rules due to the size of its revenue in fiscal year 1999/2000. Although the City’s investments in capital assets are reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, as the capital assets themselves cannot be used to liquidate these liabilities.

In 2012, GASB 68 was issued to improve financial reporting by state and local governments for pensions and replaced GASB 27. The City implemented GASB 68 from fiscal year 2014/15 forward as required and the pension information is recorded in the Statement of Net Position. The Deferred Outflows/Inflows of Resources are composed of deferred pension contributions, proportionate share differences, and pension actuarial amounts. The Net Pension Liability balance as of June 30, 2021 was $5,395,363.

While the restricted net position was decreased by $2,627,879 to $5,182,256, the unrestricted net position was increased by $4,476,190 to $10,834,013. For the most part, the decrease in restricted fund balance was attributable to reserve funds that were used to pay for capital projects. However, the unrestricted fund balance increase was primarilyfrom the General Fund. Detailed explanations will be further illustrated in General Fund section.

Governmental Activities
Governmental activities increased the City’s net position by $3,737,887 to $49,968,534, accounting for 73% of the city-wide total net position. The net position balance is composed of $38,817,981 of net investment in capital assets, $3,895,674 of restricted fund balance and $7,254,879 unrestricted fund balance.

The governmental capital assets include not only general fixed assets costing over $5,000 but also infrastructure constructed after the year 2004 as required by GASB Statement 34. The balance in net investment in capital assets represents 78% of the total Net Position in the Governmental Activities section. The $1,183,666 increase in net investment in capital assets was primarily from grant funded capital projects. Furthermore, while the restricted net position was reduced by $819,068 from the prior year the unrestricted net position was increased by $3,373,289.

The restricted fund balance reduction was essentially due to the use of the special revenue funds for capital projects whereas the unrestricted fund increase was generated by the General Fund. Readers may find how the Fund Balances in Governmental Funds are derived from the Net Position of Governmental Activities from the section 15 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position in the body of financial report.

Business-type Activities
The City operates five business-type activities. These activities are captured in four major funds (Water, Sewer, Airport and Refuse) and one non-major fund (Transit). The net position in business-type activities was increased by $65,232 to $18,763,321 accounting for 27% of the city-wide total net position. The enterprise funds contributing to the increase of net position were Water $16,676, Airport, $59,978, Transit $18,142, and Refuse $1,536 whereas Sewer Fund’s net position was decreased by $31,100.

The net position balance is composed of $13,897,605 of net investment in capital assets; $1,286,582 of restricted net position, and $3,579,134 of unrestricted net position. While net investment in capital assets and unrestricted net position were increased by $771,142 and 1,102,901 respectively, the restricted net position was decreased by $1,808,811.

The decrease in restricted net position as well as increase in unrestricted net position was caused by the reclassification of capital debt from the prior year balance. The reclassed amount was approximately $1.3 million.

In addition to the debt reclassification, the use of fee fund reserves for capital projects such as the purchase of water rights, Ground Water Sustainability project and capital project debt service payments also affected the decrease of restricted net position.

Statement of Activities
2021 2020 2021 2020 2021 2020
Revenue
Program Revenues:

Charges for Services 1,317,300 1,539,415 7,353,937 7,340,207 8,671,237 8,879,622 Operating Contributions & Grants 2,402,243 648,183 470,547 320,217 2,872,790 968,400 Capital Grants & Contributions 2,483,627 3,035,468 2,483,627 3,035,468 General Revenues:

Property Taxes 2,599,168 1,709,886 2,599,168 1,709,886
Sales Taxes 3,693,947 4,509,206 3,693,947 4,509,206
Other Taxes 2,836,305 1,076,649 2,836,305 1,076,649
License and Permits 289,184 261,244 289,184 261,244
Miscellaneous 104,657 62,374 58,527 77,460 163,184 139,834 Interest 52,791 234,164 34,183 130,005 86,974 364,169
Loss on Disposal - 15,781 - 5,449 15,781 5,449
Total Revenues 15,779,222 13,076,589 7,932,975 7,873,338 23,712,197 20,949,927 Expenses
Primary Government
General Government 3,772,260 3,754,511 3,772,260 3,754,511 Public Works 2,212,546 2,158,019 2,212,546 2,158,019
Public Safety 4,934,643 3,701,640 4,934,643 3,701,640
Community Development 1,158,064 1,286,798 1,158,064 1,286,798 Interest 40,890 46,407 40,890 46,407
Business-type Activities
Refuse 1,456,930 1,417,141 1,456,930 1,417,141
Water 2,882,279 2,509,423 2,882,279 2,509,423
Sewer 2,469,560 2,479,478 2,469,560 2,479,478
Transit 305,301 260,754 305,301 260,754
Airport 926,700 902,729 926,700 902,729
Motocross - -
Total Expenses 12,118,403 10,947,375 8,040,770 7,569,525 20,159,173 18,516,900 3,660,819 2,129,214 (107,795) 303,813 3,553,024 2,433,027 Transfers (173,027) (146,962) 173,027 146,962 - -
Change in Net Position 3,487,792 1,982,252 65,232 450,775 3,553,024 2,433,027 Net Position at Beginning of Year 46,230,647 44,248,395 18,698,089 18,247,314 64,928,736 62,495,709 Prior Period Adjustment 250,095 250,095 -
Net Position at End of Year 49,968,534 46,230,647 18,763,321 18,698,089 68,731,855 64,928,736 Governmental Activities Business Type Activities Total
Excess (Deficiency) of Revenue
16 Financial Analysis of Individual Funds
The City uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.

Please note that unlike the government-wide financial statements discussed previously, the fund statements are reflected on a modified accrual basis.

Governmental Funds
As of June 30, 2021, the City’s governmental funds reported a combined ending fund balance of $13,652,268. This is a $3,758,786 or approximately 38% fund balance increase from the prior year. As shown in the table below, the increase is attributed to favorable operations in the General Fund and development fees receipts in various special revenue funds. The negative fund balances in capital project funds mean capital project grant revenues were not received yet. Fund balance changes in the governmental funds are summarized as follows:

Governmental Funds Balance Summary
The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the fund balance in the General Fund was $13,627,985 which includes $148,269 of prepaid expenses as well as $3,061,592 due from other funds (loans receivable). The General Fund is the only discretionary fund out of the 13 operating governmental funds and any fund shortages in other funds at the end of fiscal year are mostly covered by the General Fund. The summary of loan balances as of June 30, 2021 are as listed:

The two-million-dollar loan to the Facility Impact Fee Fund originated in 2014 with the construction of a new police facility. The advances made to the Streets and Roads Fund and capital projects funds are because of the timing of the receipt of grant revenues. Annual fund deficits in the Airport and certain Landscape Lighting Districts funds are covered by General Fund through operating transfers not as loans because those funds are not capable of making debt payments in the foreseeable future. To date, the General Fund has subsidized $2,200,541 and $596,830 to the Airport Fund and Landscape Lighting Districts respectively.

In addition to advances and prepaid expenses in the General Fund, the GASB 54 committed fund balance is not spendable without Council’s authorization and can only be used for a declared emergency situation. The committed Loan Balance as of 06/30/21
Roads and Pedestrian Safety Fund $ 5,447
Facility Impact Fee Fund 2,000,000
Streets Project Funds 466,852
Airport Fund -
Non-major Government Funds 297,806
Transit Fund 74,571
Special Districts 216,916
$ 3,061,592
$ Increase %
(Decrease) Change
General Fund $13,627,985 $10,340,640 $3,287,345 32%
Facility Impact Fee ($3,031,765) ($3,097,512) $65,747 -2% Traffic Mitigation $2,521,154 $2,376,328 $144,826 6%
Roads and Pedestrian Safety $58,928 ($287,417) $346,345 121% Street Projects ($599,542) ($450,599) ($148,943) -33%
Other Governmental Funds $1,075,508 $1,012,042 $63,466 6% TOTAL $13,652,268 $9,893,482 $3,758,786 38%
Capital Project
June 30, 2021 June 30, 2020
Special Revenue
17 fund amount is calculated annually based on GASB 54 requirements and approved by the City Council. The committed fund balance for the fiscal year 2020/21 was $1,158,946. The spendable fund balance after the deduction of outstanding advances, prepaid expenses, and committed funds may be used to pay for future capital projects for the City’s general operations.

Among five major governmental funds, two governmental funds had negative fund balances at the end of this fiscal year. These funds are the Facility Impact Fee Fund ($3,031,765), Street Projects Funds ($599,542). Other than the Facility Impact Fee Fund, the negative fund balances will be eventually covered by various capital project grants.

The deficit fund balance in the Street Projects Funds is timing related. Capital projects in these funds are all grant funded projects and grants are collected on a reimbursement basis. The negative fund balance in the Facility Fee Fund will be paid by future fee collections from developers. As mentioned earlier, this deficit originated with the construction of the new police facility and the remodeling of the City Hall Annex which is currently occupied by Development Services Department. The Facility Fee Fund deficit was covered by the General Fund ($2,000,000) and Sewer Connection Fee Fund ($1,031,765).

Certain special revenue funds, miscellaneous capital project funds, landscape lighting maintenance district (LLD) funds, and drainage benefit assessment district (DBAD) funds are included in Other Governmental Funds. The special revenue funds are various development fee funds with a specific purpose for the use of the funds. The combined fund balance of Other Governmental Funds was $1,075,508. The main sources of the positive fund balance in Other Governmental Funds were from certain LLD and DBAD funds.

Proprietary Funds
The balances in net position of the proprietary funds are summarized below:

The net position in the Water Fund at the end of fiscal year 2020/21 was $7,227,441 which was a $16,676 increase from the fiscal year 2019/20. This increase in net position in a proprietary fund is similar to the net income in a private sector business. The increase will be accumulated in the net position and the unrestricted portion of net position will fund future water related capital projects. Compared to the prior year, both Water Fund revenues and expenses were increased by $157,629 and $372,856 respectively. The revenue increase was mostly from water sales revenue increase. There are various factors affecting the water sales revenue. The main factors are changes in the annual Los Angeles area November Consumer Price Index (CPI), customers’ water consumption, additional water connections, and constrictions. The CPI used for the water rates increased in July, 2020 by 3.1%. On the expenditure side, the most notable variances are from increases in operating and maintenance cost ($143,639), water rights lease ($124,170) and uncapitalized Groundwater Sustainability project cost ($131,201).

As shown in the table above, the Sewer Fund recognized a $31,100 reduction in net position from the prior year which resulted in a year-end net position of $9,823,907. Compared to the prior year, both Sewer Fund revenues and expenses were decreased by $281,172 and $9,918 respectively. The revenue decrease was mainly caused by a reduction in sewer development fees ($224,544). The development fee revenue usually fluctuates year to year depending on the volume of developments occurring in town. On the expense side, while the capital project costs were increased by $120,445 from the Groundwater Sustainability project, the operating expenses including $ Increase %
(Decrease) Change
Water Fund $7,227,441 $7,210,765 $16,676 0%
Sewer Fund $9,823,907 $9,855,007 ($31,100) 0%
Airport Fund $1,515,553 $1,455,575 $59,978 4%
Refuse Fund $100,016 $98,480 $1,536 2%
Non-Major Fund Transit Fund $96,404 $78,262 $18,142 23% TOTAL $18,763,321 $18,698,089 $65,232 0%
June 30, 2021
Major Fund
June 30, 2020
18 personnel expenses were decreased by $130,372 mainly from the repair and maintenance category. During fiscal year 2019/20, major repairs and maintenance work was performed on sewer processing facilities.

The Airport Fund’s net position at the end of the fiscal year was $1,515,553, an increase of $59,978 from the prior year. The Airport Fund’s net position increase was entirely as a result of the General Fund’s subsidy. In 2020/21, $171,351 was transferred to the Airport Fund for operating support from the General Fund. The operating transfer is calculated based on the budget; however, the actual deficit came in less than what was budgeted. Total operating transfers from the GF to the Airport Fund since FY 2000/01 has been $2,200,541. During fiscal year 2020/21, both Airport Fund’s total revenues and expenses were increased by $138,018 and $23,971 respectively compared to the prior fiscal year. The actual revenue increase from operations without General Fund’s subsidy was $91,166 and this increase was primarily proceeding from the receipt of various grants including a $43,000 of COVID-19 related grant. On the expense side, the airport ground soil stabilizing project along with extensive weed abatement created the most variance.

The Refuse Fund recognized a $1,536 net gain during the fiscal year resulting $100,016 ending net position. The City contracts for refuse services with Waste Management Company and receives 10% of total refuse and recycling service revenues from the contractor for administration, billing, and accounts collection services provided by the City. In July, 2020, the refuse service fees were increased by 3.01%.

General Fund Budgetary Highlights
A detailed budgetary comparison schedule for the year ended June 30, 2021 is presented as Required Supplementary Information following the Notes to the Financial Statements. The final budget amounts differ from those shown in the original 2020/21 five-year budget. This modification is a result of changes made by mid-year budget adjustments.

General Fund
The General Fund’s fiscal year end fund balance was $13,627,985 which includes a $3,287,345 positive net change in fund balance. In comparison to the final budget, this year’s operations resulted in a $3,414,211 favorable fund balance variance. A 46% of this positive variance was contributed by a $1,556,254 grant received from Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) under the American Rescue Plan Act (ARPA). CSLFRF is intended to provide resources to help states and local governments to turn the tide on the COVID-19 pandemic, address its economic fallout, and lay the foundation for a strong and equitable recovery. The City expects another $1,556,254 in CSLFRF funding in fiscal year 2023-24 and intends to use the funds for government services as stipulated under the revenue loss category in the Interim Final Rule published by the Department of the Treasury.

Furthermore, total revenues and expenditures grew $3,190,092 and $662,332 respectively from the prior year. The detailed budget to actual numbers comparison of the General Fund is included in the Required Supplementary Information section in the Financial Report. Again, the most significant portion (or 68%) of the positive revenue variance was from the COVID-19 related grants from the Coronavirus Aid, Relief and Economic Security Act (CARES) as well as ARPA.

The biggest increase in General Fund expenditures was from personnel costs. The personnel costs are composed of many different expenditures such as regular wages, overtime pay, cash-outs of accruals, employer payments on Budget Variance Actual Variance
2020/21 Actual vs. 2020/21 vs.

Final Budget 2019/20
increase(decrease) increase(decrease)
Revenues incl. Other Sources 7,759,910 9,994,870 12,697,650 9,507,558 2,702,780 3,190,092 Expenditures incl. Other Uses 7,659,241 10,121,736 9,410,305 8,747,983 711,431 662,322 Net changes 100,669 (126,866) 3,287,345 759,575 3,414,211 2,527,770 Fund Balance Beginning (Adjusted) 10,340,640 10,340,640 10,340,640 9,581,065 Fund Balance - Ending 10,441,309 10,213,774 13,627,985 10,340,640 Original Budget Final Budget 2020/21
Actual
2019/20
Actual
19 employees’ retirement plan, the City’s contribution on employees’ health insurance premiums, employer taxes such as FICA and Medicare, state unemployment insurance premiums, worker’s compensation insurance premiums, employee recruitment expense, and employee promotion and recognition expenses. The COLA increase for all employees in fiscal year 2020/21 was 3.2%.

The General Fund major revenue variances compared to the prior year with key reasons are listed below:

The major expenditure variances compared to the prior year with key reasons are listed below:

Capital and Debt Administration
Capital Assets
The City of Tehachapi’s investment in capital assets for both governmental and business-type activities as of June 30, 2021 amounted to $55,331,417 (net of accumulated depreciation) which was a $770,546 increase from fiscal year 2019/20 as shown in the table below. Of the total, increases of $742,262 and $28,284 were from governmental activities and business activities respectively. The detail of changes in the capital asset balance can be found in the Notes Section 2-C.

The main contributor to the increase in investment in capital assets for governmental activities was from grant funded infrastructure projects which are still in construction in progress (CIP). The Rail Corridor Pedestrian Safety project alone added $1,390,824 to the CIP balance under governmental activities. The list of projects in CIP are Increase/(Decrease)
Major Variances
COVID-19 Grants 2,170,553 $ COVID-19 relief grants from the federal government Sales Tax $ 615,301 Sales tax increase from on-line sales tax allocation, general consumer goods, home improvement goods, restaurants
Public Safety Power Shut Off Grant $ 300,000 CA state grant to help local agencies to prepare for fire prevention related power shut-offs
Transient Occupancy Tax $ Recovery from initial COVID-19 related decrea 194,248 ses Property Tax $ Increase from Prop-13 and RDA property tax in 176,524 crement Vehicle License Fee in Lieu $ Economy 112,142
Interest Income $ COVID-19 related financial market downturn (128,560) Development Services $ Development related (334,314)
Total Major Variances $ 3,105,894
Revenues
2020/21 vs 2019/20 Reasons
Increase/(Decrease)
Major Variances
Personnel Cost 321,418 $
Additional full time Police dispatcher, CalPERS unfunded accrued liability payment increase, promotions, merit and cost of living allowance increase, less billing on school resource officer's wage to school district due to COVID19 related campus closure Plan Check Engineering Service (293,827) $ Development related Consulting/Contract Services 120,524 $ Sign code update, fire service consultation Computers/IT Related Expenses 116,701 $ Laptops and computer equipment to accommodate COVID-19 work from home
Police Vehicles Purchase 120,766 $ 4 Police vehicles replacement Generators 206,352 $ Covered by PSPS grant ($300,000)
Fuel Storage System 103,153 $ New fuel storage facility at Public Works yard Total Major Variances 695,087 $
Expenses
2020/21 vs 2019/20 Reasons
20 shown in the Government-wide Financial Analysis section of this report. The governmental assets that were completed and transferred out of CIP and reclassed to the Improvement Other category are:

The largest addition to capital assets in business activity was the purchase of 75.67 acre-feet of water rights for $483,690.

Capital Assets
In FY 2020/21, certain assets were deleted from the books as shown in Notes Section 2-C. The detailed information on deleted assets is presented in the table below.

Deleted Capital Assets
Long-Term Debt
The City of Tehachapi’s total long-term debt was decreased by $349,835 compared to the prior year. As shown in the table below, the largest decrease was from the reduction in bonds principal. In FY 2020-21, a $605,000 principal payment was made to the 2004 Water and Sewer Refunding Revenue bonds and these bonds are now paid off.

Asset Accumulated
Original Cost Depreciation
Governmental Government Machine & Equip Auction $ 313,270 $ 313,270 Machine & Equip Asset transfer to Business 15,677 15,677 Removed - no longer exists 10,534 10,534
$ 339,481 $ 339,481
Business Water Building Removed - no longer exists $ 78,401 $ 78,401 Machine & Equip Auction 191,660 191,660
Airport Building Removed - no longer exists 264,510 264,510 Improvement-Other Replaced - no longer exists 253,899 253,899 $ 788,470 $ 788,470
Activity Fund Asset Category Transaction
Antelope Run Bikepath Expansion $ 347,469
West Park Frontage Improvements 273,586
$ 621,055
2021 vs 2020
2021 2020 2021 2020 2021 2020 Increase(Decr)
Non-Depreciable Assets:

Land 1,384,613 1,384,613 740,469 740,469 2,125,082 2,125,082 0 Water Rights 1,758,774 1,275,084 1,758,774 1,275,084 483,690 Construction in Progress 3,416,904 1,641,011 387,231 293,173 3,804,135 1,934,184 1,869,951 Total Non-Depreciable Assets 4,801,517 3,025,624 2,886,474 2,308,726 7,687,991 5,334,350 2,353,641 Depreciable Assets - Net of Accumulated Depreciation
Buildings 5,249,088 5,521,865 6,096,093 6,296,712 11,345,181 11,818,577 (473,396) Machinery and Equipment 1,130,999 887,324 530,395 564,787 1,661,394 1,452,111 209,283 Improvements Other than Buildings 28,377,072 29,374,653 6,072,212 6,386,665 34,449,284 35,761,318 (1,312,034) Parks 187,567 194,515 187,567 194,515 (6,948)
Other 0
Total Depreciable Assets - Net 34,944,726 35,978,357 12,698,700 13,248,164 47,643,426 49,226,521 (1,583,095) Total Capital Assets 39,746,243 39,003,981 15,585,174 15,556,890 55,331,417 54,560,871 770,546 Governmental Activities Total Business Type Activities
21 The increase in net pension liability (Unfunded Accrued Liability” UAL) was economy related and mainly due to a reduction in investment income at CalPERS. The City implemented a ten-year UAL payment plan starting in FY 2021/22. The reader may find detailed long-term debt and capital lease information in Notes Section 2-F.

Furthermore, the City employees’ detailed pension information is included in Notes Section 3-B.

State statutes limit the amount of general obligation debt a governmental entity may issue to fifteen percent of its total assessed valuation. The City has not exceeded this limit.

Next Year’s Budget and Economic Factors
In June of 2021, the Council adopted the 2021/22 through 2025/26 five-year budget with total appropriations of $27,019,930 in fiscal year 2021/22. The following factors were taken into consideration in compiling the next fiscal year budget:
 A 1% CPI increase was used for a cost-of-living allowance calculation for employees.  The 2021/22 budgeted General Fund revenue is $10,536,384 which is $2,509,055 less than the actual revenue received in 2020/21. The considerable variance is from COVID-19 related grants the City received in 2020/21.
 The 2021/22 General Fund expenditure budget amount of $9,952,546 is projected at $181,157 more than the actual expenditures in 2020/21. The major difference is from the ten-year employees’ pension UAL payment plan which was implemented starting in FY 2021/22.  Compared to the actual amount in FY 2020/21, the water sales revenue was budgeted at a 0.5% decrease whereas the sewer service charges were budgeted at status quo.  Approximately 33 and 42 equivalent dwelling units (EDU) were considered in new water and sewer connection fee revenues calculation.
 Budgeted new positions are two full-time employees, a police officer and an executive assistant, in the Police Department, and a part-time laborer in the Public Works Department.  Capital projects and equipment purchases included in this budget are:
o Various equipment and software for General Government: $44,872 o New radio water meters: $75,000
o Public Works building structure improvement: $85,000
o Water rights lease: $69,000
o Water rights purchase: $3,200,000 (will be financed)
o New tie-in from Mojave Well to Snyder Well: $300,000
o Cherry Lane water main replacement: $500,000
o Groundwater Sustainability Study: $200,000
o Recycled water pump station: $95,000
o Concrete for sewer system drying bed: $25,000
o Industrial waste pre-treatment system: $50,000
o Tree Planting and Stormwater Capture: $559,367
o Snyder Gap Closure: $926,090
o Snyder Ave. Road Rehabilitation: $107,969
o Pinon Road Extension: $923,100
o Surface Treatment of Residential Streets: $350,000
2021 vs 2020
2021 2020 2021 2020 2021 2020 Increase(Decr)
Bonds 0 0 184,500 792,650 184,500 792,650 (608,150)
Loans 0 0 1,291,168 1,391,462 1,291,168 1,391,462 (100,294) Capital Leases 928,262 1,119,571 211,901 246,315 1,140,163 1,365,886 (225,723) Net Pension Liability 3,751,459 3,373,687 1,643,904 1,494,225 5,395,363 4,867,912 527,451 Compensated Absences 273,503 272,275 240,550 184,897 514,053 457,172 56,881 Total Long-Term Liabilities 4,953,224 4,765,533 3,572,023 4,109,549 8,525,247 8,875,082 (349,835) Governmental Activities Business Type Activities Total
22 As has been the general practice, the City’s budget was built in a conservative manner. The City continues to produce the favorable budget without deficit for all major funds namely the General Fund, Water Fund and Sewer Fund. The City’s General Fund revenues such as sales tax, transient occupancy tax and passport processing have shown significant recovery from COVID-19 related decline as consumer spending and traveling have increased.

There are great economic concerns regarding the high inflation rate (6.8% CPI-U in November, 2021). This rate is the highest since the early 1980’s (13.5%). As a result, the stability of the economy is in question and certain economists are even predicting another economy downturn by the year 2023. Regardless, the consumer spending stays high and unemployment rate is low. As of October 2021, the unemployment rate in the City of Tehachapi was 6.2% which was 1.1% lower than the State of California unemployment rate of 7.3% (1). More data are included in the Economic Condition section in the Transmittal Letter of this financial report.

Sources: (1) California Employment Development Department 23 BASIC FINANCIAL STATEMENTS
Governmental Business-type
Activities Activities Total
ASSETS
Cash and Investments 12,310,867 $ 4,892,438 $ 17,203,305 $ Receivables (Net of Allowance) 3,565,935 1,106,035 4,671,970 Internal Balances (957,194) 957,194 -
Restricted Cash and Investments 26,913 235,152 262,065
Prepaids 148,269 648 148,917
Advances to Fiduciary Funds 216,916 - 216,916
Capital Assets, Not Being Depreciated 4,801,517 2,886,474 7,687,991 Capital Assets, Depreciated, Net 34,944,726 12,698,700 47,643,426 Total Assets 55,057,949 22,776,641 77,834,590

DEFERRED OUTFLOWS OF RESOURCES
Deferred Outflows Related to Pensions 1,212,803 472,575 1,685,378

LIABILITIES
Current Liabilities:

Accounts Payable 1,091,467 686,954 1,778,421
Accrued Liabilities 177,561 67,483 245,044
Accrued Interest Payable 9,575 1,919 11,494
Deposits Payable 26,913 125,649 152,562
Unearned Revenue - - -
Noncurrent Liabilities:

Due within One Year 281,078 231,119 512,197
Due in More Than One Year 4,672,146 3,340,904 8,013,050 Total Liabilities 6,258,740 4,454,028 10,712,768

DEFERRED INFLOWS OF RESOURCES
Deferred Inflows Related to Pensions 43,478 31,867 75,345

NET POSITION
Net Investment in Capital Assets 38,817,981 13,897,605 52,715,586 Restricted for:

Construction and Expansion of Facilities - 1,286,582 1,286,582 Highways and Streets 3,393,435 - 3,393,435
Community Development 76,507 - 76,507
Parks 425,732 - 425,732
Unrestricted 7,254,879 3,579,134 10,834,013
Total Net Position $ 49,968,534 $ 18,763,321 $ 68,731,855 City of Tehachapi
Statement of Net Position
June 30, 2021
The accompanying notes are an integral part of this statement. 24 Charges Operating Capital
for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Governmental Activities:

General Government 3,772,260 $ 765,604 $ 1,798,908 $ - $ Public Works 2,212,546 416,734 - 2,483,627
Public Safety 4,934,643 102,124 561,819 -
Community Development 1,158,064 32,838 41,516 -
Interest 40,890 - - -
Total Governmental Activities 12,118,403 1,317,300 2,402,243 2,483,627 Business-type Activities:

Water 2,882,279 2,857,982 - -
Sewer 2,469,560 2,384,184 - -
Airport 926,700 649,898 151,534 -
Refuse 1,456,930 1,457,637 - -
Transit 305,301 4,236 319,013 -
Total Business-type Activities 8,040,770 7,353,937 470,547 - Total Primary Government 20,159,173 $ 8,671,237 $ 2,872,790 $ 2,483,627 $ General Revenues:

Property Taxes
Sales and Use Taxes
Property Tax in Lieu
Transient Occupancy Tax
Licenses and Permits
Franchise Tax
Other Taxes
Miscellaneous Revenues
Investment Earnings
Gain on Disposal
Transfers In (Out)
Total General Revenues and Transfers
Change in Net Position
Net Position - Beginning of Year, Restated
Net Position - End of Year
Program Revenues
City of Tehachapi
Statement of Activities
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 25 Governmental Business-type
Activities Activities Total
$ - (1,207,748) $ (1,207,748) $
- 687,815 687,815
- (4,270,700) (4,270,700)
- (1,083,710) (1,083,710)
- (40,890) (40,890)
- (5,915,233) (5,915,233)
(24,297) - (24,297)
(85,376) - (85,376)
(125,268) - (125,268)
707 - 707
17,948 - 17,948
(216,286) - (216,286)
(216,286) (5,915,233) (6,131,519)
- 2,599,168 2,599,168
- 3,693,947 3,693,947
- 1,543,538 1,543,538
- 842,473 842,473
- 289,184 289,184
- 240,569 240,569
- 209,725 209,725
58,527 104,657 163,184
34,183 52,791 86,974
15,781 - 15,781
173,027 (173,027) -
281,518 9,403,025 9,684,543
3,487,792 65,232 3,553,024
46,480,742 18,698,089 65,178,831
$ 49,968,534 $ 18,763,321 $ 68,731,855
Net (Expense) Revenue and Changes in Net Position
26 Capital Projects
Roads and
General Facility Traffic Pedestrian
Fund Impact Fee Mitigation Safety
ASSETS
Cash and Investments $ 8,191,112 $ 2,521,154 - $ $ 262,464 Restricted Cash and Investments 26,913 - - -
Receivables 2,554,956 - - -
Due from Other Funds 844,676 - - -
Prepaids 148,269 - - -
Advances to Other Funds 2,000,000 - - -
Advances to Fiduciary Funds 216,916 - - -
Total Assets $ 13,982,842 $ 2,521,154 - $ $ 262,464

LIABILITIES
Accounts Payable $ 159,034 $ - $ - $ 198,089
Accrued Liabilities 168,910 - - -
Due to Other Funds - - - 5,447
Deposits Payable 26,913 - - -
Unearned Revenue - - - -
Advances from Other Funds 3,031,765 - - -
Total Liabilities 354,857 3,031,765 - 203,536

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - -
Total Deferred Inflows of Resources - - - -

FUND BALANCES
Nonspendable 2,365,185 - - -
Restricted - 2,521,154 - 58,928
Committed 1,158,946 - - -
Unassigned 10,103,854 (3,031,765) - -
Total Fund Balances 13,627,985 (3,031,765) 2,521,154 58,928 Total Liabilities, Deferred Inflows of
Resources and Fund Balances 13,982,842 $ $ 2,521,154 - $ $ 262,464 City of Tehachapi
Balance Sheet
Governmental Funds
June 30, 2021
Special Revenue
The accompanying notes are an integral part of this statement. 27 Capital Projects
Other Total
Street Governmental Governmental
Projects Funds Funds
$ 309,692 $ 1,026,445 $ 12,310,867
- - 26,913
594,982 415,997 3,565,935
- - 844,676
- - 148,269
- 2,000,000 -
- - 216,916
$ 904,674 $ 1,442,442 $ 19,113,576
$ 673,867 $ 60,477 $ 1,091,467
- 8,651 177,561
466,852 297,806 770,105
- - 26,913
- - -
- 3,031,765 -
1,140,719 366,934 5,097,811
363,497 - 363,497
363,497 - 363,497
- 2,365,185 -
1,075,508 - 3,655,590
- 1,158,946 -
(599,542) 6,472,547 -
(599,542) 1,075,508 13,652,268
$ 904,674 $ 1,442,442 $ 19,113,576
28 THIS PAGE INTENTIONALLY LEFT BLANK
Fund Balances of Governmental Funds $ 13,652,268
Amounts reported for governmental activities in the Statement of Net Position are different because:

Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds:

Capital Assets 60,303,108
Accumulated Depreciation (20,556,865)
Long-term liabilities, including bonds payable, are not due and payable in the current period and therefore, are not reported in the funds:

Capital Leases Payable (928,262)
Net Pension Liability (3,751,459)
Compensated Absences (273,503)
Accrued Interest Payable (9,575)
Amounts for deferred inflows and deferred outflows related to the City's Net Pension Liability are not reported in the funds.

Deferred Outflows Related to Pensions 1,212,803
Deferred Inflows Related to Pensions (43,478)
Long-term assets are not available for current use. Amounts are deferred under the modified accrual basis of accounting. 363,497 Net Position of Governmental Activities $ 49,968,534
City of Tehachapi
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2021
The accompanying notes are an integral part of this statement. 29 Capital Projects
Roads and
General Facility Traffic Pedestrian
Fund Impact Fee Mitigation Safety

REVENUES
Taxes $ 8,716,837 $ - $ - $ -
Licenses, Permits, and Fines 409,306 - - -
Intergovernmental 2,677,691 - 1,713,156 -
Charges for Services 745,376 81,061 148,010 24,013
Investment Earnings 38,604 - 9,596 -
Miscellaneous Revenues 109,836 - - -
Total Revenues 12,697,650 81,061 157,606 1,737,169

EXPENDITURES
Current:

General Government 1,349,959 - - -
Public Works 1,236,782 9,826 - -
Public Safety 4,934,643 - - -
Community Development 1,158,064 - - -
Capital Outlay 206,352 - 3,960 1,392,559
Debt Service:

Interest 20,453 5,488 - -
Principal 154,232 - - -
Total Expenditures 9,060,485 15,314 3,960 1,392,559
Excess (Deficiency) of Revenues
Over Expenditures 3,637,165 65,747 153,646 344,610

OTHER FINANCING SOURCES (USES)
Transfers In - - - 1,735
Transfers Out (349,820) - (8,820) -
Total Other Financing Sources (Uses) (349,820) - (8,820) 1,735 Net Change in Fund Balances 3,287,345 65,747 144,826 346,345 Fund Balances, Beginning of Year 10,340,640 (3,097,512) 2,376,328 (287,417) Fund Balances, End of Year $ 13,627,985 $ (3,031,765) $ 2,521,154 $ 58,928 City of Tehachapi
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
Year Ended June 30, 2021
Special Revenue
The accompanying notes are an integral part of this statement. 30 Capital Projects
Other Total
Street Governmental Governmental
Projects Funds Funds
$ - $ 693,769 $ 9,410,606
- - 409,306
705,277 637,301 5,733,425
25 13,655 1,012,140
- 4,592 52,792
- 3,341 113,177
705,302 1,352,658 16,731,446
- 38,326 1,388,285
- 994,788 2,241,396
- 4,934,643 -
- 1,158,064 -
1,245,658 2,848,529 -
- 14,949 40,890
- 33,594 187,826
1,245,658 1,081,657 12,799,633
(540,356) 271,001 3,931,813
391,413 174,457 567,605
- (381,992) (740,632)
391,413 (207,535) (173,027)
(148,943) 63,466 3,758,786
(450,599) 1,012,042 9,893,482
$ (599,542) $ 1,075,508 $ 13,652,268
31 THIS PAGE INTENTIONALLY LEFT BLANK
Net Changes in Fund Balances - Total Governmental Funds $ 3,758,786 Amounts reported for governmental activities in the Statement of Activities are different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of these assets is allocated over their estimated useful lives as depreciation expense.

Capital Outlay 2,880,792
Depreciation Expense (2,135,117)
Loss on Disposal (3,413)
The issuance of long-term debt (e.g., bonds, leases) provides current financial resources to governmental funds, while the repayment of the principal of long-term debt consumes the current financial resources of governmental funds. Neither transaction, however, has any effect on net assets. Also, governmental funds report the effect premiums and discounts when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities.

Payments on Capital Leases 191,309
Some revenues reported in the Statement of Activities are not considered available to finance current expenditures and therefore are not reported as revenues in the governmental funds. (952,224)
Amounts for deferred inflows and deferred outflows related to the City's Net Pension Liability are not reported in the funds. This is the net change in deferred inflows and outflows related to the net pension liability.

Deferred Outflows Related to Pensions 113,171
Deferred Inflows Related to Pensions 11,979
The amounts below included in the Statement of Activites do not provide (require) the use of current financial resources and, therefore, are not reported as revenues or expenditures in governmental funds (net change):

Compensated Absences (1,228)
Net Pension Liability (377,772)
Accrued Interest Payable 1,509
Change in Net Position of Governmental Activities $ 3,487,792 City of Tehachapi
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 32 Water Sewer Airport
ASSETS
Current Assets:

Cash and Investments $ 1,399,031 $ 3,172,233 $ 171,021
Accounts Receivable (Net of Allowance) 416,797 261,574 38,157 Prepaid Expenses - 553 95
Restricted Cash and Investments 235,152 - -
Total Current Assets 2,050,980 3,434,360 209,273
Noncurrent Assets:

Advances to Other Funds 1,031,765 - -
Capital Assets, Not Being Depreciated 1,817,240 613,614 455,620 Capital Assets, Net of Accumulated Depreciation 4,589,033 6,958,080 1,151,587 Total Capital Assets (Net of Accumulated
Depreciation) 6,406,273 7,571,694 1,607,207
Total Noncurrent Assets 6,406,273 8,603,459 1,607,207
Total Assets 8,457,253 12,037,819 1,816,480

DEFERRED OUTFLOWS OF RESOURCES
Deferred Pension Related Items 215,741 205,467 51,367

LIABILITIES
Current Liabilities:

Accounts Payable 161,643 151,752 136,256
Accrued Liabilities 29,594 24,117 8,954
Accrued Interest Payable 1,051 868 -
Due to Other Funds - - -
Customer Deposits Payable 125,649 - -
Compensated Absences - Current 35,232 32,294 7,022
Capital Leases Payable - Current 31,121 5,013 -
Loans and Bonds Payable - Current 2,600 107,702 -
Total Current Liabilities 386,890 321,746 152,232
Noncurrent Liabilities:

Advances Payable - - -
Compensated Absences 61,458 60,083 17,913
Capital Leases Payable 115,879 59,888 -
Net Pension Liability 750,478 714,741 178,685
Loans and Bonds Payable 116,300 1,249,066 -
Total Noncurrent Liabilities 1,044,115 2,083,778 196,598 Total Liabilities 1,431,005 2,405,524 348,830

DEFERRED INFLOWS OF RESOURCES
Deferred Pension Related Items 14,548 13,855 3,464

NET POSITION
Net Investment in Capital Assets 6,140,373 6,150,025 1,607,207 Restricted:

Construction and Expansion of Facilities 95,109 1,191,473 - Unrestricted 991,959 2,482,409 (91,654)
Total Net Position $ 7,227,441 $ 9,823,907 $ 1,515,553
City of Tehachapi
Statement of Net Position
Proprietary Funds
June 30, 2021
The accompanying notes are an integral part of this statement. 33 Non-Major
Refuse Transit Fund Total
$ 150,153 $ - $ 4,892,438
191,057 198,450 1,106,035
- - 648
- - 235,152
341,210 198,450 6,234,273
- - 1,031,765
- - 2,886,474
- 12,698,700 -
- 15,585,174 -
- 16,616,939 -
341,210 198,450 22,851,212
- - 472,575
221,445 15,858 686,954
3,289 1,529 67,483
- - 1,919
- 74,571 74,571
- - 125,649
5,285 4,850 84,683
- - 36,134
- - 110,302
230,019 96,808 1,187,695
- - -
11,175 5,238 155,867
- - 175,767
- - 1,643,904
- - 1,365,366
11,175 5,238 3,340,904
241,194 102,046 4,528,599
- - 31,867
- 13,897,605 -
- - 1,286,582
100,016 96,404 3,579,134
$ 100,016 $ 96,404 $ 18,763,321
34 Water Sewer Airport

OPERATING REVENUES
Charges for Services $ 2,857,982 $ 2,384,184 $ 649,898
Miscellaneous 14,877 31,162 12,219
Total Operating Revenues 2,872,859 2,415,346 662,117

OPERATING EXPENSES
Personnel Services 1,295,416 1,043,804 310,385
Maintenance and Operations 1,310,913 1,073,939 475,888
Depreciation 262,206 299,927 140,427
Total Operating Expenses 2,868,535 2,417,670 926,700
Operating Income (Loss) 4,324 (2,324) (264,583)

NONOPERATING REVENUES (EXPENSES)
Intergovernmental - - 151,534
Investment Earnings 10,315 23,114 -
Gain/(Loss) on Disposal of Capital Assets 15,781 - -
Interest Expense (13,744) (51,890) -
Total Nonoperating Revenues (Expenses) 12,352 (28,776) 151,534 Income (Loss) Before Capital Contributions
and Operating Transfers 16,676 (31,100) (113,049)
Transfers In - - 173,027
Transfers Out - - -
Change in Net Position 16,676 (31,100) 59,978
Net Position - Beginning of Year 7,210,765 9,855,007 1,455,575 Net Position - End of Year 7,227,441 $ 9,823,907 $ 1,515,553 $ City of Tehachapi
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 35 Non-Major
Refuse Transit Fund Total
$ 1,457,637 $ 4,236 $ 7,353,937
269 - 58,527
1,457,906 4,236 7,412,464
108,308 58,675 2,816,588
1,348,622 246,626 4,455,988
- - 702,560
1,456,930 305,301 7,975,136
976 (301,065) (562,672)
- 319,013 470,547
560 194 34,183
- - 15,781
- - (65,634)
560 319,207 454,877
1,536 18,142 (107,795)
- - 173,027
- - -
1,536 18,142 65,232
98,480 78,262 18,698,089
$ 100,016 $ 96,404 $ 18,763,321
36 Water Sewer

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from Customers $ 2,820,905 $ 2,423,823
Payments to Employees for Services (1,227,385) (977,278) Payments to Suppliers for Goods and Services (1,299,673) (1,068,636) Net Cash Provided (Used) by Operating Activities 377,909 293,847

CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Cash Received from Other Funds - 65,747
Cash Paid to Other Funds - -
Intergovernmental Revenue - -
Net Cash Provided (Used) by Noncapital and Related Financing Activities 65,747 -

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Acquisition and Construction of Capital Assets (485,294) (114,709) Interest Paid (52,132) (13,961)
Capital Grants - -
Proceeds from Sale of Capital Assets 32,000 -
Proceeds from Capital Lease - -
Payments on Capital Lease Obligations (29,557) (4,857)
Payments on Long-term Debt (89,300) (623,094)
Net Cash Provided (Used) by Capital and Related Financing Activities (794,792) (586,112)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received 23,114 10,315
Net Cash Provided (Used) by Investing Activities 23,114 10,315 Net Increase (Decrease) in Cash and Cash Equivalents (328,022) (281,950) Cash and Cash Equivalents, Beginning of the Year 1,916,133 3,500,255 Cash and Cash Equivalents, End of the Year 1,634,183 $ 3,172,233 $ Reconciliation of Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:

Operating Income (Loss) $ (2,324) 4,324 $
Adjustments to Reconcile Operating Income (Loss) to
Net Cash Provided (Used) by Operating Activities:

Depreciation 299,927 262,206
Changes in Operating Assets and Liabilities:

Decrease (Increase) in Accounts Receivable (54,508) 8,477 Decrease (Increase) in Prepaid Expenses - (553)
Decrease (Increase) in Deferred Outflows - Pensions (10,409) (9,913) Increase (Decrease) in Accounts Payable 8,926 2,988
Increase (Decrease) in Accrued Liabilities 2,314 2,868
Increase (Decrease) in Compensated Absences 20,191 20,965 Increase (Decrease) in Net Pension Liability 68,332 65,078 Increase (Decrease) in Deferred Inflows - Pensions (10,083) (9,604) Increase (Decrease) in Deposits Payable 2,554 -
TOTAL CASH PROVIDED (USED) BY OPERATING ACTIVITIES $ 377,909 293,847 $

NONCASH INVESTING, CAPITAL AND FINANCING ACTIVITIES
Amortization Related to Long-term Debt $ 553 $ 3,397
City of Tehachapi
Statement of Cash Flows
Proprietary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 37 Non-Major
Airport Refuse Transit Fund Total
$ 1,447,504 644,144 $ 67,026 $ 7,403,402 $
(101,753) (293,896) (55,573) (2,655,885)
(1,337,603) (387,063) (260,236) (4,353,211)
8,148 (36,815) (248,783) 394,306
- 173,027 - 238,774
- (18,113) (70,424) (88,537)
- 151,534 319,013 470,547
- 306,448 248,589 620,784
(147,061) - - (747,064)
- - - (66,093)
- - - -
- - - 32,000
- - - -
- - - (34,414)
- - - (712,394)
(147,061) - (1,527,965) -
- 560 194 34,183
- 560 194 34,183
122,572 8,708 - (478,692)
48,449 141,445 5,606,282 -
$ 171,021 $ 150,153 $ - $ 5,127,590
$ (264,583) $ 976 $ (301,065) $ (562,672)
140,427 - - 702,560
(17,973) (10,402) 62,790 (11,616)
(95) - - (648)
(2,478) - - (22,800)
87,807 9,980 (13,610) 96,091
1,113 1,039 259 7,593
5,099 6,555 2,843 55,653
16,269 - - 149,679
(2,401) - - (22,088)
- - - 2,554
$ (36,815) $ 8,148 $ (248,783) $ 394,306
$ - $ - $ - $ 3,950
38 Successor Agency
Custodial Private-purpose
Funds Trust Fund
ASSETS
Cash and Investments $ 85,277 $ 383,342
Cash with Fiscal Agent - 400,578
Other Assets 355,557 -
Total Assets $ 440,834 $ 783,920

LIABILITIES
Accounts Payable $ 6,455 $ -
Advances from City of Tehachapi 216,915 -
Interest Payable - 27,050
Long-term Debt - 9,688,000
Total Liabilities $ 223,370 9,715,050

NET POSITION
Net Position Held for the Benefit of Others 217,464 -
Net Position (Deficit) Held in Trust for Successor Agency - (8,931,130) Total Net Position $ 217,464 $ (8,931,130)
City of Tehachapi
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2021
The accompanying notes are an integral part of this statement. 39 Successor Agency
Custodial Private-purpose
Funds Trust Fund

ADDITIONS
Contributions:

Taxes and Assessments - $ 626,933 $
Investment Earnings
Interest Income 332 2,619
Total Additions 332 629,552

DEDUCTIONS
Administrative Costs 8,607 255,740
Interest on Bonds - 330,996
Total Deductions 8,607 586,736
Change in Net Position (8,275) 42,816
Net Position - Beginning of Year 225,739 (8,973,946)
Net Position - End of Year 217,464 $ (8,931,130) $
City of Tehachapi
Statement of Changes in Net Position
Fiduciary Funds
Year Ended June 30, 2021
The accompanying notes are an integral part of this statement. 40 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A) Reporting Entity
The City of Tehachapi was incorporated August 13, 1909 under the general laws of the State of California.

The City operates under a Council/City Manager form of government and provides the following services:
public safety (police and fire); community services; public works; general administrative services; and capital improvements.

As required by accounting principles generally accepted in the United States of America, these financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government’s operations and so data from these units are combined with data of the primary government.

The following is a brief overview of the component units included in the accompanying financial statements of the City.

Tehachapi City Financing Corporation (TCFC) - The Tehachapi City Financing Corporation was formed on September 26, 1990, as a Nonprofit Public Benefit Corporation to render financial assistance to the City by issuing debt instruments. The members of the City Council serve in the capacity of the Board of Directors for the TCFC. The City has operational responsibility for the TCFC and has a financial benefit/burden relationship. The TCFC is included as a blended component of the City.

The TCFC does not issue separate financial statements.

B) Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements (i.e., the Statement of Net Position and the Statement of Activities) report information on all of the nonfiduciary activities of the primary government and its component units. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.

The Statement of Activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are expenses that are clearly identifiable with a specific program, project, function or segment. Program revenues include: 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues.

Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.

The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. The fiduciary funds also use the accrual basis of accounting. 41 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Property taxes are recognized as revenues in the year for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the providers have been met.

Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collected within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period.

Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

Taxes, intergovernmental revenues, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and are therefore recognized as revenues of the current fiscal period.

Only the portion of special assessments receivable due within the current fiscal period is considered to be susceptible to accrual as revenue of the current period. All other revenue items are considered to be measurable and available only when cash is received by the City.

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 Facility Impact Fee Special Revenue Fund is used to account for the restricted funds received to construct City facilities.

The Traffic Mitigation Special Revenue Fund is used to account for development impact fees restricted for traffic mitigation.

The Roads and Pedestrian Safety Capital Projects Fund is used to account for the financial resources and expenditures necessary for various road and pedestrian safety projects.

The Street Projects Capital Projects Fund is used to account for the financial resources and expenditures necessary for various street projects.

The City reports the following major proprietary funds:

The Water Utility, Sewer Utility, Airport and Refuse Funds are used to account for those 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.

Additionally, the City reports the following fund types:

The Custodial Funds are used to account for funds that are custodial in nature and do not involve measurements of results of operations. The City accounts for transactions of its special assessment districts and community facilities districts as custodial funds.

The Successor Agency Private-purpose Trust Fund is issued to account for the dissolution of the former Tehachapi Redevelopment Agency.

As a general rule, the effect of inter-fund activity has been eliminated from the government-wide financial statements. Exceptions to this general rule are payments in-lieu of taxes and other charges between the City’s water and sewer function and various other functions of the City. Elimination of these charges would distort the direct costs and program revenues reported for the various functions concerned. 42 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Amounts reported as program revenues include: 1) charges to customers or applicants for goods, services, or privileges provided; 2) operating grants and contributions; and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds are charges to customers for sales and services. Operating expenses for enterprise funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed.

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 and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reporting period. Actual results could differ from those estimates.

C) Implementation of Governmental Accounting Standards Board (GASB) Pronouncements The Governmental Accounting Standards Board has issued the following Statements, which may affect the City’s financial reporting requirements in the future:

GASB 87 – Leases: This Statement requires recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that leases are financings of the right to use an underlying asset. The requirements of this Statement are effective for reporting periods beginning after June 15, 2021.

GASB 89 – Accounting for Interest Cost Incurred before the End of a Construction Period: This Statement establishes accounting requirements for interest cost incurred before the end of a construction period. The requirements of this Statement are effective for reporting periods beginning after December 15, 2020.

GASB 91 - Conduit Debt Obligations: The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice. The requirements of this Statement are effective for reporting periods beginning after December 15, 2021.

D) Assets, Liabilities, and Net Position or Equity
Deposits and Investments
For purposes of the Statement of Cash Flows, the City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition.

The City follows the practice of pooling cash and investments of all funds except for funds held in separate trust agreements. Interest income earned on pooled cash and investments is allocated quarterly to the various funds based on the average of the three months cash balance. Interest income from cash and investments of funds excluded from pooled cash is credited directly to the related fund. Investments are stated at fair value (the value at which an investment could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale).
43 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Receivables and Payables
Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (i.e., the current portion of the interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of the interfund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.” Advances between funds, as reported in the fund financial statements, are offset by a nonspendable fund balance account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and property tax receivables are shown net of allowance for uncollectibles.

Taxes are levied on July 1 and are payable in two installments on December 10 and April 10. The County bills and collects the property taxes and remits them to the City in installments during the year. City property tax revenues are recognized when levied to the extent that they result in current receivables. The County is permitted by State Law (Proposition 13) to levy taxes at 1% of full market value (at time of purchase) and can increase the property tax rate no more than 2% per year. The City receives a share of this basic levy.

Prepaid Items
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed, rather than when purchased.

Restricted Assets
Amounts shown as restricted assets have been restricted by either bond indenture, by law, or contractual obligations to be used for specified purposes, such as servicing bonded debt and construction of capital assets. Included in cash and investments are restricted cash assets of $400,578 held by the various bond trustees and fiscal agents, $109,503 held for capital improvements and customer deposits, and $152,562 held for capital improvements and customer deposits in the Water Utility Fund.

Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the government-wide financial statements. Capital assets are defined by the City as assets with an initial, individual cost of more than $5,000 and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Donated capital assets received prior to the implementation of GASB 72 were recorded at fair value on the date of donation. Donated capital assets received subsequent to the implementation of GASB 72 are recorded at acquisition value as of the date received. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed.

44 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Capital assets of the City are depreciated using the straight-line method over the following estimated useful lives:

Buildings 30 years
Machinery and Equipment 4 - 30 years
Structures and Other Improvements 10 - 40 years
Capital lease obligations of the Proprietary Funds are accounted for in the year of inception as a liability of the fund. The related asset is recorded as an asset of the fund.

Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits.

Employees over the age of 55 who retire from the City are paid out 50% of their accrued sick leave. All vacation pay and 50% of available sick hours for employees’ over age 55 are accrued when incurred in the government-wide and proprietary funds financial statements. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations.

Long-term Obligations
In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type activities, or proprietary fund type statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.

Net Position
In the government-wide financial statements, net position is classified in the following categories:

Net investment in the 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 regulation, laws, or other restrictions which the City cannot unilaterally alter.

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

Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents consumption of net position that applies to future period(s) and so will not be recognized as an outflow of resources (expense) until then. The City reports deferred outflows related to pensions. 45 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has certain items, which arise only under the modified accrual basis of accounting, which qualify for reporting in this category. Accordingly, unavailable revenue is reported in the governmental funds balance sheet. The governmental funds report unavailable revenues from property taxes, special assessments, grant receivables, and other miscellaneous receivables. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. In addition, the City reports deferred inflows related to pensions.

Net Position Flow Assumption
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the statement of net position, a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position.

Fund Balances
Fund balances in governmental funds are reported in classifications that comprise a hierarchy based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in those funds can be spent. Sometimes the City will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance).

In order to calculate the amounts to report as restricted, committed, assigned, and unassigned fund balance in the governmental fund financial statements a flow assumption must be made about the order in which the resources are considered to be applied. It is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.

The following classifications describe the relative strength of the spending constraints placed on the purposes for which resources can be used:

Nonspendable Fund Balance - Amounts that cannot be spent either because they are in nonspendable form or are required to be maintained intact.

Restricted Fund Balance - Amounts that are constrained to specific purposes by state or federal laws, or externally imposed conditions by grantors or creditors.

Committed Fund Balance - Amounts constrained for a specific purpose by City Council resolution. It would require the same action by City Council to remove the constraint. The City’s committed fund balance includes:

General Fund Emergency Contingency - The City’s General Fund balance committed for emergency contingencies has been set by resolution and is for specific uses listed as the declaration of a state or federal state of emergency or a local emergency.

Assigned Fund Balance - Amounts that are constrained by the City Council’s intent to use specified financial resources for specific purposes, but are neither restricted nor committed. The City’s fund balance policy delegates the authority to assign amounts to be used for specific purposes to the Finance Director for the purpose of reporting these amounts in the annual financial statements. 46 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued Unassigned Fund Balance - This classification includes the residual balances of the government’s general fund and includes all spendable amounts not contained in other classifications. In other funds, the unassigned classification is used only to report deficit balances resulting from overspending for specific purposes for which amounts had been restricted, committed or assigned.

Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Tehachapi’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 at fair value. 2) DETAILED NOTES ON ALL FUNDS
A) Cash and Investments
The City’s cash and investments consisted of the following at June 30, 2021:

The City’s deposits and investments are reflected in the basic financial statements as follows:

Deposits
Custodial Credit Risk - Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The City’s deposit policy requires deposits to be covered by the federal depository insurance and collateral having a market value of 110% of the uninsured deposit. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits: the California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2021, the City’s deposits (bank balances) were insured by the Federal Depository Insurance Corporation or collateralized as required under California Law.

Demand Deposits $ 816,462
Petty Cash 1,868
Investments 17,516,237
Total Cash and Investments 18,334,567 $
Governmental Business-type Fiduciary
Activities Activities Funds Total
Cash and Investments $ 12,310,867 $ 4,892,438 $ 468,619 $ 17,671,924 Restricted Cash and Investments 26,913 235,152 400,578 662,643 Total Cash and Investments 12,337,780 $ $ 5,127,590 $ 869,197 $ 18,334,567 47 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
Investments
As of June 30, 2021, the City had the following investments:

Authorized Investments
The investments listed above are managed by the City’s Finance Director and fiscal agents (bond trustees acting in accordance with bond covenants). Investments managed by the City’s Finance Director are invested in accordance with the City’s investment policy. Investments managed by bond trustees are invested in accordance with provisions of the respective bond agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The City’s Finance Director has direct oversight over the City’s pooled investment fund which covers cash and investments of the City’s governmental funds, proprietary funds, and agency funds which are invested in accordance with the City’s investment policy. The investment policy generally complies with California Government Code Section 53601 and its primary detail is as follows:

Maximum Maximum
Authorized Maximum Percentage Investment Minimum
Investment Type Maturity of Portfolio In One Issuer Ratings

U.S. Agencies 5 years 100% 100% None
U.S. Treasury Bills, Notes and Bonds 5 years 100% 100% None Local Agency Investment Fund (LAIF) N/A None None None
Guaranteed Investment Contract N/A None None AA
Certificates of Deposit (CDs) 5 years 30% 100% A
Money Market Mutual Funds N/A 15% None None
Trust Indenture N/A None None None
Investments with fiscal agents represent investments held by the bond trustee. The City and its investment advisor select the investments under the terms of the applicable trust agreement, directs the bond trustee to acquire the investments, and the bond trustee then holds the investments on behalf of the City and/or its component units. Proceeds of bonds administered by bond trustees are also generally covered under the City Treasurer’s investment policy; however, specific provisions of each issuance are usually used in managing such investments.

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 and its component units’ investments to market rate fluctuations is provided in the table above that shows the 12 Months 13 to 24 25 to 60
Investment Type or Less Months Months Fair Value
Local Agency Investment Fund 15,074,406 $ - $ - $ 15,074,406 $ Negotiable Certificates of Deposit 113,311 - - 113,311
CSJVRMA Investment Pool 2,328,520 - - 2,328,520
Total 17,516,237 $ - $ - $ 17,516,237 $
.

Remaining Maturity (in Months)
48 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
distribution by maturity. The City’s investment policy generally complies with the State Government Code with respect to allowable investment instruments as a means of managing its fair value losses arising from changing interest rates. Guaranteed investment contracts are investments held by fiscal agents (bond trustees) and are restricted for construction projects and debt service.

Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations 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 Standard and Poor’s rating as of year-end for each investment type.

Concentration of Credit Risk
Concentration of credit risk is the increased risk of loss if the City has a significant amount of investments with a single issuer. In accordance with the Investment Policy of the City, none of the investments categories listed exceeded the maximum allowable percentage of its portfolio. The City’s investment policy contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There were no investments in any one issuer (other than U.S. Treasury securities, mutual funds, and external investment pools) that represent 5% of more of total City investments in any of the major funds.

Custodial Credit Risk
For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Custodial credit risk for LAIF is not determinable.

Fair Value
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles.

The hierarchy is based on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

Total Minimum Not Required
Investment Type Investments Legal Rating AAA to be Rated Unrated Local Agency Investment Fund 15,074,406 $ N/A $ - $ 15,074,406 - $ Negotiable Certificates of Deposit 113,311 N/A - 113,311 - CSJVRMA Investment Pool 2,328,520 N/A - 2,328,520 -
Total $ 17,516,237 $ - $ 17,516,237 - $
Rating as of Year End
49 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
The City has the following recurring fair value measurements as of June 30, 2021:

Negotiable Certificates of Deposit of $113,311 are valued using a matrix pricing model (Level 2 inputs).

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.

Investment in CSJVRMA Investment Pool
The City is a voluntary participant in the Central San Joaquin Valley Risk Management Authority Investment Pool (CSJVRMA) that is regulated by California State Code section CGC 53601. The fair value of the City’s investment is based on the City’s pro-rata share of the fair value of the entire portfolio. The balance available for withdrawal is based on the records maintained by CSJVRMA, which is recorded on an amortized cost basis.

B) Receivables
Receivables as of year-end for the City’s individual major funds and nonmajor funds in the aggregate, including the applicable allowances for uncollectible accounts, are as follows:

Street Other
General Projects Governmental
Governmental Activities Fund Fund Funds Total
Taxes 903,642 $ - $ 48,694 $ 952,336 $
Grants 1,556,254 594,982 367,086 2,518,322
Interest 11,551 - 11,551 -
Others 83,509 - 217 83,726
Total $ 2,554,956 $ 594,982 $ 415,997 $ 3,565,935
Nonmajor
Water Sewer Airport Refuse Transit
Business-type Activities Fund Fund Fund Fund Fund Total Service Fees 380,451 $ $ 261,501 $ 191,057 - $ $ 833,009 - $ Grants and Other 36,346 73 38,157 - 198,450 273,026
Total $ 416,797 $ 261,574 $ 38,157 $ 191,057 $ 198,450 $ 1,106,035 50 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
C) Capital Assets Detail
* The net balance of Machinery and Equipment in the Governmental Activities unit was increased by $250,095 to account for equipment that was removed from operations in prior years.

Beginning Ending
Governmental Activities: Balance Additions Deletions Balance Capital Assets, Not Depreciated:

Land $ 1,384,613 $ - $ 1,384,613 - $
Construction in Progress 1,641,011 2,396,948 (621,055) 3,416,904 Total Capital Assets, Not Depreciated 3,025,624 2,396,948 (621,055) 4,801,517 Capital Assets Being Depreciated:

Buildings and Improvements 8,990,343 - 8,990,343 -
Machinery and Equipment * 3,558,726 483,844 (339,481) 3,703,089 Improvements other than Buildings 41,909,242 621,055 42,530,297 - Parks 277,862 - 277,862 -
Total Capital Assets, Depreciated 54,736,173 1,104,899 (339,481) 55,501,591 Less Accumulated Depreciation:

Buildings and Improvements (3,468,478) (272,777) (3,741,255) - Machinery and Equipment * (2,671,402) (236,756) 336,068 (2,572,090) Improvements other than Buildings (12,534,589) (1,618,636) (14,153,225) - Parks (83,347) (6,948) (90,295) -
Total Accumulated Depreciation (18,757,816) (2,135,117) 336,068 (20,556,865) Net Capital Assets, Depreciated 35,978,357 (1,030,218) (3,413) 34,944,726 Governmental Activities Capital Assets $ 39,003,981 $ 1,366,730 $ (624,468) $ 39,746,243 Beginning Ending
Business-type Activities: Balance Additions Deletions Balance Capital Assets, Not Depreciated
Land 740,469 $ - $ - $ 740,469 $
Water Rights 1,275,084 483,690 1,758,774 -
Construction in Progress 293,173 94,058 387,231 -
Total Capital Assets, Not Depreciated 2,308,726 577,748 2,886,474 - Capital Assets Being Depreciated:

Buildings and Improvements 16,933,829 30,000 (342,911) 16,620,918 Machinery and Equipment 1,722,518 77,212 (191,660) 1,608,070 Improvements other than Buildings 13,025,504 62,104 (253,899) 12,833,709 Total Capital Assets, Depreciated 31,681,851 169,316 (788,470) 31,062,697 Less Accumulated Depreciation:

Buildings and Improvements (10,637,117) (230,618) 342,910 (10,524,825) Machinery and Equipment (1,157,731) (95,385) 175,441 (1,077,675) Improvements other than Buildings (6,638,839) (376,557) 253,899 (6,761,497) Total Accumulated Depreciation (18,433,687) (702,560) 772,250 (18,363,997) Net Capital Assets, Depreciated 13,248,164 (533,244) (16,220) 12,698,700 Business-type Activities Capital Assets $ 15,556,890 $ 44,504 $ (16,220) $ 15,585,174 51 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
Depreciation was charged to functions/programs of the primary government as follows:

D) Interfund Receivables, Payables and Transfers
The composition of amounts due to/from other funds at June 30, 2021 is as follows:

The General Fund has loaned monies to the other funds listed above to cover operating cash deficits.

These amounts are expected to be paid back in the following fiscal year.

Advances to/from consist of the following at June 30, 2021:

The General Fund and Sewer Fund have advanced $2,000,000 and $1,031,765, respectively, to the Facility Impact Fee fund to construct the City’s new police facility. These advances are expected to be repaid over the span of many years as the City collects future facility impact fees.

The Advances to Fiduciary Funds of $216,916 in the General Fund represents amounts due from Custodial Funds, resulting from deficits in those funds. It is the opinion of management that these advances will be not be repaid within the next fiscal year and, accordingly, are reported as long-term advances.

Interfund transfers made between various funds for project costs and to cover operating deficits for the year ended June 30, 2021 are as follows:

Governmental Activities:

General Government $ 2,135,117
Business-type Activities:

Water 262,206
Sewer 299,927
Airport 140,427
Total $ 702,560
Receivable Payable
Fund Fund
General Fund 844,676 $ - $
Roads and Pedestrian Safety Fund - 5,447
Street Projects Fund 466,852 -
Non-major Governmental Funds 297,806 -
Non-major Transit Enterprise Fund - 74,571
Total $ 844,676 $ 844,676
Receivable Payable
Fund Fund
General Fund $ 2,000,000 $ -
Sewer Fund 1,031,765 -
Facility Impact Fee Fund 3,031,765 -
Total $ 3,031,765 $ 3,031,765
52 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
E) Other Assets
Other Assets reported in Custodial Funds at June 30, 2021 consist of $355,557 in foreclosure receivables.

The City has provided infrastructure improvements to various property owners in exchange for special taxes on those properties. Non-payment of these taxes has occurred on selected properties and the City has taken steps toward foreclosure. Funds have been expended during the foreclosure process that are expected to be received at completion of the foreclosure action. The date on which the City will receive reimbursement is currently uncertain.

F) Long-term Debt
Long-term liability activity for the year ended June 30, 2021, was as follows:

The General Fund is typically responsible for the compensated absences and net pension liability.

Roads and Street Other Airport
Pedestrian Projects Governmental Enterprise
Transfers Out Safety Fund Fund Funds Fund Total
General Fund - $ 2,336 $ 174,457 $ 173,027 $ 349,820 $
Traffic Mitigation - 8,820 - - 8,820
Non-major Governmental Fund 380,257 1,735 - - 381,992
Total $ 1,735 $ 391,413 $ 174,457 $ 173,027 $ 740,632
Transfers In
Beginning Ending Due Within
Balance Additions Deletions Balance One Year
Governmental Activities:

Loans from direct borrowing and
direct placements:

Capital Leases $ 1,119,571 $ 191,309 - $ $ 928,262 $ 197,902 Net Pension Liability 3,373,687 377,772 3,751,459 - -
Compensated Absences 272,275 282,493 281,265 273,503 83,176 Total Governmental Activities $ 4,765,533 $ 660,265 $ 472,574 $ 4,953,224 $ 281,078 Business-type Activities:
2004 Revenue Refunding Bonds $ 605,000 $ 605,000 - $ $ - $ - 1998 Sewer and Water COP 191,600 7,100 - 184,500 7,400
Less: Issuance Discounts (3,950) (3,950) - - -
Total Bonds Payable 792,650 608,150 - 184,500 7,400
Loans from direct borrowings and
direct placements:

Water Resources Control Board Loan - 1,391,462 100,294 1,291,168 102,902 Capital Leases 246,315 - 34,414 211,901 36,134
Total direct 1,637,777 - 134,708 1,503,069 139,036
Net Pension Liability 1,494,225 149,679 - 1,643,904 -
Compensated Absences 184,897 218,958 163,305 240,550 84,683 Total Business-type Activities $ 368,637 4,109,549 $ 906,163 $ 3,572,023 $ 231,119 $ 53 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
Capital Leases
The City, at various occasions, enters into lease agreements that qualify as capital leases for accounting purposes and, therefore, have been recorded at the present value of their future minimum lease payments as of the inception date. The assets acquired through capital leases are as follows:

The future minimum lease obligations and the net present value of these minimum lease payments as of June 30, 2021, were as follows:

1998 Sewer & Water COPs
In July 1998, the City obtained loans from the USDA Rural Development totaling $289,900. The Sewer Fund received $103,000 and Water Fund received $186,900. The loans were made by purchase of Certificates of Participation (COP), which were issued by the Tehachapi City Financing Corp. (Financing Corp.) with an interest rate of 4.5%, to finance the building of a new sewer line to connect to the recently annexed Ashe tract.

The loan is a direct borrowing from the USDA. The COPs are secured by installments payments due from the City. The annual debt service requirements to maturity for the 1998 Sewer and Water COPs are as follows:

Governmental Business-type
Asset Description Activities Activities
Goodrick Drive 955,571 $ 195,719 $
Police Department Parking Lot and Improvements 474,384 - Vehicles and Equipment 191,685 190,683
Dispatch Center 428,895 -
Less: Accumulated Depreciation (1,245,195) (230,896)
Total 805,340 $ 155,506 $
Fiscal Year Ending Governmental Business-type
June 30, Activities Activities Total
2022 228,227 44,745 272,972
2023 188,746 44,741 233,487
2024 149,263 44,737 194,000
2025 143,145 38,646 181,791
2026 48,450 9,923 58,373
2027 48,430 9,919 58,349
2028 48,409 9,915 58,324
2029 48,387 9,912 58,299
2030 48,365 9,906 58,271
2031 48,342 9,902 58,244
2032 48,317 9,897 58,214
Totals $ 1,048,081 $ 242,243 $ 1,290,324
Less: Interest (119,819) (30,342) (150,161)
Present Value $ 928,262 $ 211,901 $ 1,140,163
54 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
Water Resources Control Board Loan
In September 2011, the City received a loan from the California State Water Resources Control Board for up to $2,121,030 to be used for the Wastewater Treatment Plant Expansion Project. The loan matures over 20 years with an interest rate of 2.6%.

The debt service payments are payable solely from net revenues of the Sewer Enterprise Fund. The loan is a direct borrowing from the State Water Resources Control Board. The annual debt service requirements to maturity are as follows:

Fiscal Year Ending
June 30, Principal Interest Total
2022 7,400 $ $ 8,303 $ 15,703
2023 7,800 7,969 15,769
2024 8,100 7,619 15,719
2025 8,500 7,254 15,754
2026 9,100 6,871 15,971
2027 9,300 6,462 15,762
2028 9,700 6,044 15,744
2029 10,100 5,607 15,707
2030 10,600 5,152 15,752
2031 11,000 4,676 15,676
2032 11,600 4,181 15,781
2033 12,100 3,658 15,758
2034 12,700 3,114 15,814
2035 13,200 2,543 15,743
2036 13,800 1,948 15,748
2037 14,400 1,327 15,727
2038 15,100 680 15,780
Totals 184,500 $ 83,408 $ 267,908 $
Fiscal Year Ending
June 30, Principal Interest Total
2022 $ 102,902 $ 33,570 $ 136,472
2023 105,577 30,895 136,472
2024 108,322 28,150 136,472
2025 111,139 25,334 136,473
2026 114,028 22,444 136,472
2027 116,993 19,479 136,472
2028 120,035 16,437 136,472
2029 123,156 13,316 136,472
2030 126,358 10,114 136,472
2031 129,643 6,829 136,472
2032 133,015 3,458 136,473
Totals $ 1,291,168 $ 210,026 $ 1,501,194
55 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
Long-term Liabilities - Fiduciary Funds
The following is a schedule of changes in long-term debt of the Successor Agency for the fiscal year ended June 30, 2021.

In June 2017, the Successor Agency to the Tehachapi Redevelopment Agency issued $5,387,000 and $5,892,000 of Tax Allocation Refunding Bonds, Series 2017A and 2017B, to refund the 2005 and 2007 Tax Allocation Bonds of the former Tehachapi Redevelopment Agency. As a result, the 2005 and 2007 bonds are considered defeased and the liability has been removed from these financial statements.

The 2017 Series A Bonds mature in amounts ranging from $151,000 to $377,000 annually through 2036, with interest payments of 3.34%, payable semi-annually on June 1 and December 1. The 2017 Series B Bonds mature in amounts ranging from $122,000 to $386,000 annually through 2038, with interest payments of 3.36%, payable semi-annually on June 1 and December 1. The Bonds are payable as to principal and interest exclusively from the pledged tax revenues of the Successor Agency. Future debt service requirements on the 2017A and 2017B Tax Allocation Refunding Bonds are as follows:

Beginning Ending Due Within
Successor Agency Debt: Balance Additions Deletions Balance One Year 2017 Tax Allocation Bonds $ 10,146,000 $ 458,000 - $ $ 9,688,000 $ 469,000 Total Successor Agency Debt $ 10,146,000 $ 458,000 - $ $ 9,688,000 $ 469,000 Fiscal Year Ending
June 30, Principal Interest Total
2022 $ 469,000 $ 316,748 $ 785,748
2023 484,000 300,787 784,787
2024 498,000 284,340 782,340
2025 521,000 267,274 788,274
2026 534,000 249,604 783,604
2027 550,000 231,448 781,448
2028 565,000 212,773 777,773
2029 587,000 193,478 780,478
2030 608,000 173,462 781,462
2031 628,000 152,761 780,761
2032 652,000 131,323 783,323
2033 675,000 109,097 784,097
2034 690,000 86,234 776,234
2035 723,000 62,568 785,568
2036 740,000 38,065 778,065
2037 378,000 19,320 397,320
2038 386,000 6,485 392,485
Totals $ 9,688,000 $ 2,835,767 $ 12,523,767
56 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
2) DETAILED NOTES ON ALL FUNDS – Continued
No-Commitment Debt
The City issued Assessment District limited obligation bonds to finance the construction of infrastructure improvements within the City through the use of Special Assessment Districts. The repayment of the bonds are payable from special assessments levied each year, or from foreclosure proceeds. The bonds do not constitute indebtedness of the City, and the City is in no way obligated for their repayment and is only acting on behalf of bondholders and initiating foreclosure proceedings, if necessary. Accordingly, these special assessments and special tax bonds payable have been excluded from the accompanying primary government financial statements.

Due to delinquent annual assessments, limited obligation bonds (Assessment Districts 89-2 and 89-3) amounting to $2,180,000 (principal only) are in default at June 30, 2021.

G) Fund Balances
The details of the fund balances as of June 30, 2021 are presented below:
3) OTHER INFORMATION
A) Risk Management
The City participates with other public entities in a joint venture under a joint powers agreement which established the Central San Joaquin Valley Risk Management Authority (CSJVRMA).

The City is covered for the first $1,000,000 of each general liability claim and $500,000 of each workers’ compensation claim through the CSJVRMA. The Authority will pay up to the coverage limit less the retained amount. The liability and workers’ compensation programs each have a $25,000 retained limit. The City’s share of estimated claims payable at June 30, 2020 and 2019 amounted to $0. The CSJVRMA participates in an excess pool which provides general liability coverage from $1,000,000 to $29,000,000. The CSJVRMA participates in an excess pool which provides workers’ compensation coverage from $500,000 to $5,000,000 and purchases excess insurance above the $5,000,000 to the statutory limit.

Facility Traffic Roads and Street Other
General Impact Fee Mitigation Pedestrian Projects Governmental Fund Fund Fund Safety Fund Fund Funds Total
Nonspendable:

Prepaids 148,269 $ - $ - $ - $ - $ - $ 148,269 $
Advances to Other Funds 2,000,000 - - - - - 2,000,000
Advances to Fiduciary Funds 216,916 - - - - - 216,916
Restricted:

Lighting District - - - - - 335,425 335,425
Transportation - - 2,521,154 58,928 - 573,269 3,153,351 Recycling - - - - - 17,835 17,835
Technology - - - - - 58,672 58,672
Parks and Recreation - - - - - 90,307 90,307
Committed
Emergency Contingency 1,158,946 - - - - - 1,158,946
Unassigned (3,031,765) 10,103,854 - - (599,542) - 6,472,547 Total Fund Balance 13,627,985 $ (3,031,765) $ 2,521,154 $ 58,928 $ (599,542) $ 1,075,508 $ 13,652,268 $ 57 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
3) OTHER INFORMATION – Continued
The CSJVRMA is a consortium of 54 cities in San Joaquin Valley, California. It was established under the provisions of California Government Code Section 6500 et seq. The CSJVRMA is governed by a Board of Directors, which meets 3 times per year, consisting of one board member and an alternate member appointed by each member city. The day-to-day business is handled by a management group employed by the CSJVRMA. At 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. Financial statements of CSJVRMA can be obtained from the Authority located at 1750 Creekside Oaks Drive, Suite 200, Sacramento, CA 95833.

The City is exposed to various risks of losses related to torts; thefts of, damage to, and destruction of assets; errors and omissions; and natural disasters. The City purchases insurance as described above. There are no significant reductions in insurance coverage from prior years and also there have been no settlements exceeding the insurance coverage for each of the past three fiscal years.

B) City Employee Retirement Plan
General Information about the Defined Benefit Pension Plan Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-Sharing Multiple-Employer Defined Benefit Pension Plan (Plan) administered by the California Public Employees’ Retirement System (CalPERS.) The Plan consists of individual rate plans (benefit tiers) within a safety risk pool (police and fire) and a miscellaneous risk pool. Plan assets may be used to pay benefits for any employer rate plan of the safety and miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans under GASB Statement No. 68.

Individual employers may sponsor more than one rate plan in the miscellaneous or safety risk pools. The City sponsors seven rate plans (three miscellaneous and four safety). Benefit provisions under the Plan are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Benefits Provided – The Plan is a cost-sharing multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (CalPERS). A full description of the pension plan benefit provisions, assumptions for funding purposes but not accounting purposes, and membership information is listed in the June 30, 2019 Annual Actuarial Valuation Report. Details of the benefits provided can be obtained in Appendix B of the June 30, 2019 actuarial valuation report. This report is a publicly available valuation report that can be obtained at CalPERS’ website under Forms and Publications. The rate plan provisions and benefits in effect at June 30, 2021, are summarized as follows:

Miscellaneous Miscellaneous
Miscellaneous Tier II PEPRA
Prior to After After
Hire date November 26, 2012 November 26, 2012 January 1, 2013 Benefit formula 2% @ 55 2% @ 60 2% @ 62
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 55 60 62
Monthly benefits, as a % of eligible compensation 2% 2% 2% Required employee contribution rates 7% 7% 6.75%
Required employer contribution rates 10.484% + $233,923 8.794% + $3,929 7.732% + $6,928 58 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
3) OTHER INFORMATION – Continued
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.

Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by CalPERS.

The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

Beginning in fiscal year 2016, CalPERS collects employer contributions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates above and as a dollar amount for contributions toward the unfunded liability. The dollar amounts are billed on a monthly basis. The City’s required contribution for the unfunded liability was $366,835 in fiscal year 2021. The City’s contributions to the plan for the year ended June 30, 2021 were $904,041.

Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows Related to Pensions As of June 30, 2021, the City reported a liability of $5,395,363 for its proportionate share of the net pension liability. The City’s net pension liability for the Plan is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2020, and the total pension liability for each Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2019 rolled forward to June 30, 2020 using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative to the projected contributions of all participating employers, actuarially determined.

The City’s proportionate share of the net pension liability as of June 30, 2019 and 2020 was as follows:

For the year ended June 30, 2021, the City recognized pension expense of $1,261,453. At June 30, 2021, the City reported deferred outflows and deferred inflows related to pensions from the following sources:

Safety Police Safety Police Safety Police Safety Fire
Tier I Tier II PEPRA Tier I
Prior to After After Prior to
Hire date November 26, 2012 November 26, 2012 January 1, 2013 November 26, 2012 Benefit formula 3% @ 50 2% @ 50 2.7% @ 57 2.0% @ 55
Benefit vesting schedule 5 years service 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life monthly for life Retirement age 50 50 57 50
Monthly benefits, as a % of eligible compensation 3% 2% 2.7% 2% Required employee contribution rates 9% 9% 13% 0%
Required employer contribution rates 23.674% + $103,987 18.152% + $1,920 13.044% + $9,193 0% + $6,955 Proportion - June 30, 2019 0.04751%
Proportion - June 30, 2020 0.04959%
Change - Increase (Decrease) 0.00208%
59 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
3) OTHER INFORMATION – Continued
$904,041 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2022. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Actuarial Assumptions – The total pension liabilities in the June 30, 2019 actuarial valuations were determined using the following actuarial assumptions:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 904,041 $ - $ Differences between actual and expected experience 325,423 - Changes in assumptions - 31,557
Change in employer's proportion 285,776 -
Differences between the employer's contributions and
the employer's proportionate share of contributions 24,383 43,788 Net differences between projected and actual
earnings on plan investments 145,755 -
Total $ 1,685,378 $ 75,345
Year Ending
June 30,
2022 217,575 $
2023 252,293
2024 165,369
2025 70,755
2026 -
Thereafter -
Valuation date June 30, 2019
Measurement date June 30, 2020
Actuarial cost method entry-age normal
Actuarial assumptions:

Discount rate 7.15%
Inflation 2.50%
Payroll growth 3.00%
Projected salary increase (1)
Investment rate of return 7.15
Mortality (2)
(1) Depending on age, service and type of employment
(2) Derived using CalPERS’ Membership Data for all Funds. 60 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
3) OTHER INFORMATION – Continued
The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Postretirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.

Long-term Expected Rate of Return 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 shortterm (first 10 years) and the long-term (11+ 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 expected real rates of return by asset class are as followed:

Discount Rate – The discount rate used to measure the total pension liability was 7.15%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Assumed
Asset Real Return Real Return
Asset Class Allocation Years 1 - 10 (1) Years 11+ (2)
Global Equity 50% 4.80% 5.98%
Global Fixed Income 28% 1.00% 2.62%
Inflation Assets 0.77% 1.81% -
Private Equity 8% 6.30% 7.23%
Real Estate 13% 3.75% 4.93%
Liquidity 1% -0.92% -
(1) An expected inflation of 2.0% used for this period. (2) An expected inflation of 2.92% used for this period. 61 City of Tehachapi
Notes to Financial Statements
Year Ended June 30, 2021
3) OTHER INFORMATION – Continued
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability for Plan, calculated using the discount rate for the Plan, as well as what the City’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

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

Payable to the Pension Plan – At June 30, 2021, the City reported a payable of $0 for the outstanding amount of contributions to the pension plan required for the year ended June 30, 2021.

C) Commitments and Contingencies
The City has received Federal and State funds for specific purposes that are subject to review by the grantor agencies. These programs are subject to audit by the grantor agencies and upon further examination by the grantors, certain costs could be disallowed. The City expects any such amounts to be immaterial.

Construction commitments at year-end were $740,995.

1% Decrease 6.15%
Net Pension Liability 8,424,730 $
Current Discount Rate 7.15%
Net Pension Liability 5,395,363 $
1% Increase 8.15%
Net Pension Liability 2,897,945 $
62 REQUIRED SUPPLEMENTARY INFORMATION
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Taxes 6,357,910 $ 7,649,710 $ 8,716,837 $ 1,067,127 $
Licenses, Permits, and Fines 491,500 528,227 409,306 (118,921) Intergovernmental 153,000 1,124,042 2,677,691 1,553,649 Charges for Services 698,800 557,638 745,376 187,738
Investment Earnings 30,000 62,166 38,604 (23,562)
Miscellaneous Revenues 28,700 73,087 109,836 36,749
Total Revenues 7,759,910 9,994,870 12,697,650 2,702,780

EXPENDITURES
Current:

General Government:

General Government 646,403 820,861 788,697 32,164
Finance 322,551 288,064 278,526 9,538
IT 246,767 247,969 211,789 36,180
Council 19,282 17,725 16,297 1,428
City Clerk 69,106 59,656 52,592 7,064
Treasurer 2,622 2,145 2,058 87
Public Works:

Public Works 914,183 1,045,994 1,099,538 (53,544)
Economic Development 150,398 162,499 137,244 25,255
Public Safety (Police/Fire) 3,720,829 5,024,960 4,934,643 90,317 Community Development:

Development Services 1,231,360 1,286,890 1,158,064 128,826 Capital Outlay - 206,352 206,352 -
Debt Service:

Interest 17,675 19,113 20,453 (1,340)
Principal 146,972 150,552 154,232 (3,680)
Total Expenditures 7,488,148 9,332,780 9,060,485 272,295 Excess (Deficiency) of Revenues
over Expenditures 271,762 662,090 3,637,165 2,975,075

OTHER FINANCING SOURCES (USES)
Transfers In - - - -
Transfers Out (171,093) (788,956) (349,820) 439,136
Total Other Financing Sources (Uses) (171,093) (788,956) (349,820) 439,136 Net Change in Fund Balances 100,669 (126,866) 3,287,345 3,414,211 Fund Balance, Beginning of Year 10,340,640 10,340,640 10,340,640 - Fund Balance, End of Year $ 10,213,774 10,441,309 $ 13,627,985 $ 3,414,211 $ Budgeted Amounts
City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - General Fund
Year Ended June 30, 2021
63 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Charges for Services 312,704 $ 312,704 $ 81,061 $ (231,643) $ Total Revenues 312,704 312,704 81,061 (231,643)

EXPENDITURES
Current:

Public Works - 4,308 9,826 (5,518)
Debt Service
Interest 5,183 - 5,488 (5,488)
Principal 307,521 312,704 312,704 -
Total Expenditures 312,704 317,012 15,314 301,698
Excess (Deficiency) of Revenues
Over Expenditures (4,308) - 65,747 70,055
Fund Balance, Beginning of Year (3,097,512) (3,097,512) (3,097,512) - Fund Balance, End of Year $ (3,101,820) (3,097,512) $ (3,031,765) $ 70,055 $ City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Facility Impact Fee Special Revenue Fund Year Ended June 30, 2021
Budgeted Amounts
64 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Charges for Services 442,632 $ 442,632 $ 148,010 $ (294,622) $ Investment Earnings 9,000 9,000 9,596 596
Total Revenues 451,632 451,632 157,606 (294,026)

EXPENDITURES
Current:

Public Works - - - -
Capital Outlay - 470,730 3,960 466,770
Total Expenditures - 470,730 3,960 466,770
Excess (Deficiency) of Revenues
Over Expenditures 451,632 (19,098) 153,646 172,744

OTHER FINANCING SOURCES (USES)
Transfers In - - - -
Transfers Out (8,820) (8,820) (8,820) -
Total Other Financing Sources (Uses) (8,820) (8,820) (8,820) - Net Change in Fund Balance 442,812 (27,918) 144,826 172,744 Fund Balance, Beginning of Year 2,376,328 2,376,328 2,376,328 - Fund Balance, End of Year $ 2,348,410 2,819,140 $ 2,521,154 $ 172,744 $ City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Traffic Mitigation Special Revenue Fund Year Ended June 30, 2021
Budgeted Amounts
65 City of Tehachapi
Required Supplementary Information
Year Ended June 30, 2021
Notes to the Schedule of the City’s Proportionate Share of the Net Pension Liability Benefit Changes: none
Changes in Assumptions: In 2017, the accounting discount rate changed from 7.65% to 7.15%. *Fiscal year 2015 was the first year of implementation; therefore, 10 years of information are not yet available.

Proportionate Plan Fiduciary
Proportion of Proportionate Share of the Net Net Position as the Net Pension Share of Net Covered Pension Liability a % of the Total Measurement Date Liability Pension Liability Payroll as a % of Payroll Pension Liability 2020 0.04959% 5,395,363 $ 4,837,713 $ 111.53% 75.17%
2019 0.04751% 4,867,912 4,452,030 109.34% 76.93%
2018 0.04550% 4,384,873 4,353,690 100.72% 78.56%
2017 0.04470% 4,432,819 4,000,120 110.82% 76.94%
2016 0.04311% 3,729,998 3,696,441 100.91% 77.67%
2015 0.04121% 2,828,329 3,484,251 81.17% 81.73%
2014 0.04338% 2,699,104 3,667,218 73.60% 81.13%
Schedule of the City's Proportionate Share of the Net Pension Liability Last 10 Years*
66 City of Tehachapi
Required Supplementary Information
Year Ended June 30, 2021
Notes to the Schedule of Plan Contributions
Valuation Date: 6/30/2019, 6/30/2018, 6/30/2017, 6/30/2016, 6/30/2015, 6/30/2014, 6/30/2013 *Fiscal year 2015 was the first year of implementation; therefore, 10 years of information are not yet available.

Contributions in
Relation to the Contributions
Contractually Actuarially Contribution as a % of
Required Determined Deficiency/ Covered Covered
Fiscal Year Contributions Contributions (Excess) Payroll Payroll 2021 904,041 $ (904,041) $ - $ 5,019,980 $ 18.01%
2020 799,226 (799,226) 4,837,713 - 16.52%
2019 685,806 (685,806) 4,452,030 - 15.40%
2018 572,035 (572,035) 4,353,690 - 13.14%
2017 536,117 (536,117) 4,000,120 - 13.40%
2016 440,933 (440,933) 3,696,441 - 11.93%
2015 636,364 (636,364) 3,484,251 - 18.26%
Schedule of Pension Plan Contributions
Last 10 Years*
67 City of Tehachapi
Notes to Required Supplementary Information
Year Ended June 30, 2021
Budgetary Accounting
Budgetary comparison schedules are presented as part of the Required Supplementary Information for major Special Revenue Funds as provided for by GASB Statement No. 34. The City budget is adopted on a basis consistent with accounting principles generally accepted in United States of America. The City Manager is required to prepare and submit to the City Council the annual budget of the City and administer it after the adoption. City Council approval is required for budget revisions that affect the total appropriations of the City. The City Manager is authorized to approve transfers within individual fund budgets without the approval of City Council; however, total appropriations may not be exceeded at the department level for the General Fund and the fund level for all other funds. 68 SUPPLEMENTARY INFORMATION
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental 657,200 $ 2,284,624 $ 1,713,156 $ (571,468) $ Charges for Services - 24,013 24,013 -
Total Revenues 657,200 2,308,637 1,737,169 (571,468)

EXPENDITURES
Capital Outlay 1,165,000 1,367,564 1,392,559 (24,995)
Total Expenditures 1,165,000 1,367,564 1,392,559 (24,995) Excess (Deficiency) of Revenues
Over Expenditures (507,800) 941,073 344,610 (596,463)

OTHER FINANCING SOURCES (USES)
Transfers In 7,183 - 1,735 (5,448)
Transfers Out - - - -
Total Other Financing Sources (Uses) - 7,183 1,735 (5,448) Net Change in Fund Balance (507,800) 948,256 346,345 (601,911) Fund Balance, Beginning of Year (287,417) (287,417) (287,417) - Fund Balance, End of Year (795,217) $ 660,839 $ 58,928 $ (601,911) $ City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Roads and Pedestrian Safety Capital Projects Fund Year Ended June 30, 2021
Budgeted Amounts
69 Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)

REVENUES
Intergovernmental 2,085,731 $ 1,841,352 $ 705,277 $ (1,136,075) $ Charges for Services - 25 25 -
Total Revenues 2,085,731 1,841,377 705,302 (1,136,075)

EXPENDITURES
Capital Outlay 2,751,386 2,602,590 1,245,658 1,356,932
Total Expenditures 2,751,386 2,602,590 1,245,658 1,356,932 Excess (Deficiency) of Revenues
Over Expenditures (665,655) (761,213) (540,356) 220,857

OTHER FINANCING SOURCES (USES)
Transfers In 145,405 934,903 391,413 (543,490)
Transfers Out - - - -
Total Other Financing Sources (Uses) 145,405 934,903 391,413 (543,490) Net Change in Fund Balance (520,250) 173,690 (148,943) (322,633) Fund Balance, Beginning of Year (450,599) (450,599) (450,599) - Fund Balance, End of Year $ (970,849) $ (276,909) $ (599,542) $ (322,633) City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Street Projects Capital Projects Fund Year Ended June 30, 2021
Budgeted Amounts
70 Special Capital
Revenue Projects Total
ASSETS
Cash and Investments $ 877,466 $ 148,979 $ 1,026,445
Receivables 415,997 415,997 -
Total Assets $ 1,293,463 $ 148,979 $ 1,442,442

LIABILITIES
Accounts Payable $ 60,477 $ - $ 60,477
Accrued Liabilities 8,651 - 8,651
Due to Other Funds 297,806 297,806 -
Total Liabilities 366,934 366,934 -

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - -
Total Deferred Inflows of Resources - - -

FUND BALANCES
Restricted 926,529 148,979 1,075,508
Assigned - - -
Unassigned - - -
Total Fund Balances 926,529 148,979 1,075,508
Total Liabilities, Deferred Inflows of
Resources and Fund Balances 1,293,463 $ $ 148,979 $ 1,442,442 City of Tehachapi
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2021
71 Special Capital
Revenue Projects Total

REVENUES
Taxes 655,873 $ 37,896 $ 693,769 $
Intergovernmental 637,301 - 637,301
Charges for Services - 13,655 13,655
Investment Earnings 4,072 520 4,592
Miscellaneous Revenues 3,341 - 3,341
Total Revenues 1,300,587 52,071 1,352,658

EXPENDITURES
Current:

General Government 38,326 - 38,326
Public Works 984,960 9,828 994,788
Capital Outlay - - -
Debt Service:

Interest 14,949 - 14,949
Principal 33,594 - 33,594
Total Expenditures 1,071,829 9,828 1,081,657
Excess (Deficiency) of Revenues Over Expenditures 228,758 42,243 271,001

OTHER FINANCING SOURCES (USES)
Transfers In 174,457 174,457 -
Transfers Out (381,992) (381,992) -
Total Other Financing Sources (Uses) (207,535) (207,535) - Net Change in Fund Balances 21,223 42,243 63,466
Fund Balances, Beginning of Year 905,306 106,736 1,012,042 Fund Balances, End of Year $ 926,529 $ 148,979 $ 1,075,508 City of Tehachapi
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
Year Ended June 30, 2021
72 Beverage
TDA 3 Oil Recycling Container Lighting
Bike Safety Grant Fund Recycling District
ASSETS
Cash and Investments $ - $ 277 $ 17,558 $ 365,509
Receivables - - - -
Total Assets $ - $ 277 $ 17,558 $ 365,509

LIABILITIES
Accounts Payable $ - $ - $ 25,968 - $
Accrued Liabilities - - - 4,116
Due to Other Funds - - - -
Advances From Other Funds - - - -
Total Liabilities - - 30,084 -

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - - -
Total Deferred Inflows of Resources - - - -

FUND BALANCES
Restricted - 277 17,558 335,425
Assigned - - - -
Unassigned - - - -
Total Fund Balances - 277 17,558 335,425
Total Liabilities, Deferred Inflows of
Resources and Fund Balances $ - $ 277 $ 17,558 $ 365,509 June 30, 2021
Non-major Special Revenue Funds
Combining Balance Sheet
City of Tehachapi
73 Streets
and Roads Gas Tax Total
$ 494,122 - $ 877,466 $
48,694 367,303 415,997
$ 542,816 367,303 $ 1,293,463 $
$ 477 $ 34,032 $ 60,477
4,535 - 8,651
297,806 297,806 -
- - -
302,818 34,032 366,934
- - -
- - -
64,485 508,784 926,529
- - -
- - -
64,485 508,784 926,529
$ 367,303 $ 542,816 $ 1,293,463
74 Beverage
TDA 3 Oil Recycling Container Lighting
Bike Safety Grant Fund Recycling District

REVENUES
Taxes - $ - $ 349,982 $
Intergovernmental 3,000 - - -
Investment Earnings - - 68 1,338
Miscellaneous Revenues - - - -
Total Revenues 3,000 - 68 351,320

EXPENDITURES
Current:

General Government - - - 38,326
Public Works 3,000 - - 495,880
Capital Outlay - - - -
Debt Service:

Principal - - - -
Interest - - - -
Total Expenditures 3,000 - - 534,206
Excess (Deficiency) of Revenues
Over Expenditures - - 68 (182,886)

OTHER FINANCING SOURCES (USES)
Transfers In - - 174,457 -
Transfers Out - - - -
Total Other Financing Sources (Uses) - - 174,457 -
Net Change in Fund Balances - - 68 (8,429)
Fund Balances, Beginning of Year - 277 17,490 343,854
Fund Balances, End of Year $ - $ 277 $ 17,558 $ 335,425 City of Tehachapi
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Special Revenue Funds
Year Ended June 30, 2021
75 Streets
and Roads Gas Tax Total
$ 305,891 - $ 655,873 $
267,215 367,086 637,301
2,666 - 4,072
- 3,341 3,341
575,772 370,427 1,300,587
- - 38,326
238,642 247,438 984,960
- - -
14,949 14,949 -
33,594 33,594 -
287,185 247,438 1,071,829
83,242 328,334 228,758
- 174,457 -
(8,106) (373,886) (381,992)
(8,106) (373,886) (207,535)
75,136 (45,552) 21,223
(10,651) 554,336 905,306
$ 64,485 $ 508,784 $ 926,529
76 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Intergovernmental 5,000 $ 3,000 $ (2,000) $
Total Revenues 5,000 3,000 (2,000)

EXPENDITURES
Current:

Public Works 5,000 3,000 2,000
Capital Outlay - - -
Total Expenditures 5,000 3,000 2,000
Excess (Deficiency) of Revenues
over Expenditures - - -

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - -
Net Change in Fund Balances - - -
Fund Balance, Beginning of Year - - -
Fund Balance, End of Year $ - $ - $ -
City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - TDA 3 Bike Safety Special Revenue Fund Year Ended June 30, 2021
77 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Investment Earnings - $ - $ - $
Total Revenues - - -

EXPENDITURES
Current:

Public Works - - -
Total Expenditures - - -
Excess (Deficiency) of Revenues
over Expenditures - - -
Fund Balance, Beginning of Year 277 277 -
Fund Balance, End of Year $ 277 277 $ - $
City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Oil Recycling Grant Special Revenue Fund Year Ended June 30, 2021
78 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Taxes 306,518 $ 349,982 $ 43,464 $
Investment Earnings 6,993 1,338 (5,655)
Total Revenues 313,511 351,320 37,809

EXPENDITURES
Current:

General Government 37,851 38,326 (475)
Public Works 488,861 495,880 (7,019)
Total Expenditures 526,712 534,206 (7,494)
Excess (Deficiency) of Revenues
over Expenditures (213,201) (182,886) 30,315

OTHER FINANCING SOURCES (USES)
Transfers In 195,864 174,457 (21,407)
Transfers Out - - -
Total Other Financing Sources (Uses) 195,864 174,457 (21,407) Net Change in Fund Balances (17,337) (8,429) 8,908
Fund Balance, Beginning of Year 343,854 343,854 -
Fund Balance, End of Year $ 326,517 $ 335,425 $ 8,908
City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Lighting District Special Revenue Fund Year Ended June 30, 2021
79 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Investment Earnings 106 $ 68 $ (38) $
Total Revenues 106 68 (38)

EXPENDITURES
Current:

Public Works - - -
Total Expenditures - - -
Excess (Deficiency) of Revenues
over Expenditures 106 68 (38)
Fund Balance, Beginning of Year 17,490 17,490 -
Fund Balance, End of Year $ 17,596 $ 17,558 $ (38)
City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Beverage Container Recycling Special Revenue Fund Year Ended June 30, 2021
80 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Intergovernmental 350,000 $ 367,086 $ 17,086 $
Miscellaneous Revenues 1,553 3,341 1,788
Total Revenues 351,553 370,427 18,874

EXPENDITURES
Current:

Public Works 257,137 238,642 18,495
Capital Outlay - - -
Debt Service:

Interest 14,949 14,949 -
Principal 33,594 33,594 -
Total Expenditures 305,680 287,185 18,495
Excess (Deficiency) of Revenues
Over Expenditures 45,873 83,242 37,369

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out (50,756) (8,106) 42,650
Total Other Financing Sources (Uses) (50,756) (8,106) 42,650 Net Change in Fund Balance (4,883) 75,136 80,019
Fund Balance, Beginning of Year (10,651) (10,651) -
Fund Balance, End of Year $ 64,485 (15,534) $ 80,019 $
City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Streets and Roads Special Revenue Fund Year Ended June 30, 2021
81 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Taxes 350,500 $ 305,891 $ (44,609) $
Intergovernmental 238,600 267,215 28,615
Investment Earnings 3,826 2,666 (1,160)
Total Revenues 592,926 575,772 (17,154)

EXPENDITURES
Current:

Public Works 283,380 247,438 35,942
Capital Outlay - - -
Total Expenditures 283,380 247,438 35,942
Excess (Deficiency) of Revenues
Over Expenditures 309,546 328,334 18,788

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out (507,510) (373,886) 133,624
Total Other Financing Sources (Uses) (507,510) (373,886) 133,624 Net Change in Fund Balance (197,964) (45,552) 152,412
Fund Balance, Beginning of Year 554,336 554,336 -
Fund Balance, End of Year $ 508,784 356,372 $ 152,412 $ City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Gas Tax Special Revenue Fund
Year Ended June 30, 2021
82 Parks & Rec.

Building and Capital
Planning Project Total
ASSETS
Cash and Investments $ 58,672 $ 90,307 $ 148,979
Receivables - - -
Total Assets $ 58,672 $ 90,307 $ 148,979

LIABILITIES
Liabilities:

Accounts Payable $ - $ - -
Due to Other Funds - - -
Total Liabilities - - -

DEFERRED INFLOWS OF RESOURCES
Unavailable Revenues - Grants - - -
Total Deferred Inflows of Resources - - -

FUND BALANCES
Restricted 58,672 90,307 148,979
Assigned - - -
Unassigned - - -
Total Fund Balances 58,672 90,307 148,979
Total Liabilities and Fund Balances $ 58,672 $ 90,307 $ 148,979 City of Tehachapi
Combining Balance Sheet
Non-major Capital Project Funds
June 30, 2021
83 Parks & Rec.

Building and Capital
Planning Project Total

REVENUES
Licenses, Permits, and Fines $ 37,896 - $ $ 37,896
Intergovernmental - - -
Charges for Services 13,655 13,655 -
Miscellaneous Revenue - - -
Investment Earnings 195 325 520
Total Revenues 13,850 38,221 52,071

EXPENDITURES
Current:

Public Works - 9,828 9,828
Community Development - - -
Capital Outlay - - -
Total Expenditures - 9,828 9,828
Excess (Deficiency) of Revenues
Over Expenditures 13,850 28,393 42,243

OTHER FINANCING SOURCES (USES)
Transfers In - - -
Transfers Out - - -
Total Other Financing Sources (Uses) - - -
Net Change in Fund Balances 13,850 28,393 42,243
Fund Balances, Beginning of Year 44,822 61,914 106,736
Fund Balances, End of Year $ 58,672 $ 90,307 $ 148,979
City of Tehachapi
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Non-Major Capital Project Funds
Year Ended June 30, 2021
84 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Charges for Services 16,739 $ 13,655 $ (3,084) $
Investment Earnings 288 195 (93)
Total Revenues 17,027 13,850 (3,177)

EXPENDITURES
Current:

Public Works - - -
Capital Outlay - - -
Total Expenditures - - -
Excess (Deficiency) of Revenues
over Expenditures 17,027 13,850 (3,177)
Fund Balance, Beginning of Year 44,822 44,822 -
Fund Balance, End of Year $ 61,849 $ 58,672 $ (3,177)
City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Building and Planning Capital Projects Fund Year Ended June 30, 2021
85 Variance with
Final Budget
Final Actual Positive
Budget Amounts (Negative)

REVENUES
Licenses, Permits, and Fines 106,850 $ 37,896 $ (68,954) $ Investment Earnings 494 325 (169)
Total Revenues 107,344 38,221 (69,123)

EXPENDITURES
Current:

Public Works 4,308 9,828 (5,520)
Capital Outlay - - -
Total Expenditures 4,308 9,828 (5,520)
Excess (Deficiency) of Revenues
over Expenditures 103,036 28,393 (74,643)
Fund Balance, Beginning of Year 61,914 61,914 -
Fund Balance, End of Year $ 164,950 $ 90,307 $ (74,643) City of Tehachapi
Schedule of Revenues, Expenditures and Changes in Fund Balances Budget and Actual - Parks and Recreation Capital Projects Fund Year Ended June 30, 2021
86 East Tehachapi Capital Total
Tehachapi Blvd. Summit Meadows Hills Custodial
Project 89-3 89-2 90-1 89-1 Funds
ASSETS
Cash and Investments $ - $ - $ 40,499 $ 44,778 $ 85,277 Other Assets 26,077 329,480 - 355,557 -
Total Assets $ 26,077 $ 329,480 $ 40,499 $ 44,778 $ 440,834

LIABILITIES
Accounts Payable - 6,455 - - 6,455
Advances From City of Tehachapi 30,572 186,343 - 216,915 - Total Liabilities 30,572 192,798 - 223,370 -

NET POSITION
Restricted:

Held for the Benefit of Others (4,495) 136,682 40,499 44,778 217,464 Total Net Position $ (4,495) $ 136,682 $ 40,499 $ 44,778 $ 217,464 City of Tehachapi
Combining Statement of Fiduciary Net Position
Custodial Funds
June 30, 2021
87 East Tehachapi Capital Total
Tehachapi Blvd. Summit Meadows Hills Custodial
Project 89-3 89-2 90-1 89-1 Funds

ADDITIONS
Investment Earnings:

Interest Income $ - $ - $ 158 $ 174 $ 332
Total Additions - - 158 174 332

DEDUCTIONS
General and Administrative 1,060 7,547 - - 8,607
Total Deductions 1,060 7,547 - - 8,607
Net Increase (decrease) in net position (1,060) (7,547) 158 174 (8,275) Net Position, beginning of the year (3,435) 144,229 40,341 44,604 225,739 Net Position, end of the year $ (4,495) $ 136,682 $ 40,499 $ 44,778 $ 217,464 City of Tehachapi
Statements of Changes in Fiduciary Net Position
Custodial Funds
June 30, 2021
88 THIS PAGE INTENTIONALLY LEFT BLANK
City of Tehachapi
Description of Statistical Section Contents
June 30, 2021
This part of the City of Tehachapi's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information say about the government's overall financial health.

Contents: Pages

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

92 Revenue Capacity - These schedules contain information to help the reader assess the City's most significant local revenue source, the property tax

102

Debt Capacity - These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future

109

Demographic and Economic Information - These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place

116

Operating Information - These schedules contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs

119
89 CITY OF TEHACHAPI

NET POSITION BY COMPONENT
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15
Governmental Activities
Net Investment in Capital Assets 25,196,028 $ 27,522,736 $ 29,619,903 $ 31,447,535 $ Restricted 1,062,353 1,750,367 1,408,183 3,990,455
Unrestricted 9,527,877 8,595,560 3,928,546 2,372,775
Total Governmental Activities Net Position 35,786,258 37,868,663 34,956,632 37,810,765 Business-type Activities
Net Investment in Capital Assets 15,183,910 13,647,243 13,592,847 13,175,794 Restricted 1,851,225 3,371,136 3,333,432 3,333,432
Unrestricted (1,111,906) (401,236) (20,928) (1,010,853) Total Business-type Activities Net Position 15,923,229 16,617,143 16,905,351 15,498,373 Primary Government
Net Investment in Capital Assets 40,379,938 41,169,979 43,212,750 44,623,329 Restricted 2,913,578 5,121,503 4,741,615 7,323,887
Unrestricted 8,415,971 8,194,324 3,907,618 1,361,922
Total Primary Government Activities Net Position 51,709,487 $ $ 54,485,806 $ 51,861,983 $ 53,309,138 Source: Audited Financial Statements
90 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
$ 35,786,732 33,659,005 $ 36,282,617 $ 36,771,604 $ 37,634,315 $ 38,817,981 $ 2,987,070 3,573,241 2,414,590 3,168,630 4,714,742 3,895,674 2,027,591 2,625,919 2,938,892 4,308,161 3,881,590 7,254,879 40,801,393 39,858,165 41,636,099 44,248,395 46,230,647 49,968,534 13,300,237 14,211,405 13,298,672 12,865,566 13,126,463 13,897,605 1,016,832 1,016,832 1,629,927 3,040,310 3,095,393 2,577,750 3,135,577 312,118 2,879,006 2,341,438 2,476,233 2,287,966 17,452,646 15,540,355 17,807,605 18,247,314 18,698,089 18,763,321 49,086,969 47,870,410 49,581,289 49,637,170 50,760,778 52,715,586 4,003,902 4,590,073 4,044,517 6,208,940 7,810,135 6,473,424 5,163,168 2,938,037 5,817,898 6,649,599 6,357,823 9,542,845 $ 58,254,039 55,398,520 $ 59,443,704 $ 62,495,709 $ 64,928,736 $ 68,731,855 $ 91 CITY OF TEHACHAPI

CHANGES IN NET POSITION
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15
Expenses
Governmental Activities
General Government 2,237,365 $ 619,917 $ 2,709,575 $ 2,763,073 $ Public Works 1,087,338 1,487,071 1,834,154 2,165,018
Public Safety 2,631,886 2,824,312 3,181,899 2,658,659
Community Development 1,318,910 2,756,359 1,521,265 776,844 Pass-throughs 188,475 - - -
Interest 522,209 22,572 21,721 20,843
Total Governmental Expenses 7,986,183 7,710,231 9,268,614 8,384,437 Business-type Activities
Water 1,809,932 1,870,875 2,129,184 2,130,275
Sewer 2,052,393 1,893,294 2,032,645 2,109,038
Airport 1,007,579 979,657 1,039,794 925,376
Refuse 1,000,826 1,025,326 1,168,082 1,248,408
Transit 161,590 171,642 183,382 197,247
Motocross Event Center - - - 629
Total Business-type Expenses 6,032,320 5,940,794 6,553,087 6,610,973 Total Primary Government Expenses 14,018,503 13,651,025 15,821,701 14,995,410 Program Revenues
Governmental Activities
Charges for Services
General Government 279,444 729,692 598,282 726,782
Public Works 386,568 339,310 263,888 195,463
Public Safety 46,254 301,264 84,159 31,626
Community Development - - - -
Operating Grants and Contributions 426,773 726,682 606,281 864,473 Capital Grants and Contributions 887,355 1,495,913 1,311,289 5,156,087 Total Governmental Activities Program Revenues 2,026,394 3,592,861 2,863,899 6,974,431 Business-type Activities
Charges for Services
Water 1,931,096 2,347,414 2,374,272 1,928,714
Sewer 1,805,210 2,287,292 1,953,530 1,908,726
Airport 667,005 645,437 714,825 672,209
Refuse 993,607 1,054,088 1,179,008 1,255,069
Transit 4,272 4,302 4,964 5,737
Operating Grants and Contributions 268,865 151,973 440,453 362,894 Capital Grants and Contributions 1,950,554 200,409 33,290 - Total Business-type Activities Program Revenues 7,620,609 6,690,915 6,700,342 6,133,349 Total Primary Government Program Revenues 9,647,003 $ $ 10,283,776 $ 9,564,241 $ 13,107,780 92 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
$ 2,960,419 2,591,137 $ 2,956,947 $ 3,463,063 $ 3,754,511 $ 3,772,260 $ 1,521,625 2,363,375 2,025,544 1,791,044 2,158,019 2,212,546 2,676,047 3,256,884 3,252,153 3,437,651 3,701,640 4,934,643 1,080,050 742,409 987,520 1,094,456 1,286,798 1,158,064 - - - - - -
32,756 19,937 39,372 51,448 46,407 40,890
8,270,897 8,973,742 9,261,536 9,837,662 10,947,375 12,118,403 2,047,429 2,122,629 2,263,348 2,674,527 2,509,423 2,882,279 2,039,152 2,313,166 2,108,924 2,254,391 2,479,478 2,469,560 671,769 665,664 798,286 827,525 902,729 926,700
1,321,542 1,523,881 1,320,605 1,381,515 1,417,141 1,456,930 224,557 203,452 262,565 273,718 260,754 305,301
- - - 608,304 - -
6,304,449 6,828,792 6,753,728 8,019,980 7,569,525 8,040,770 14,575,346 15,802,534 16,015,264 17,857,642 18,516,900 20,159,173 592,856 555,366 734,697 879,341 735,831 765,604
199,809 128,766 11,336 388,860 622,579 416,734
64,157 131,329 89,707 404,830 159,252 102,124
- - - 21,753 - 32,838
697,728 933,565 227,410 215,358 648,183 2,402,243
3,011,463 2,632,154 2,223,780 2,965,430 3,035,468 2,483,627 4,566,013 4,381,180 3,286,930 4,853,819 5,223,066 6,203,170 1,852,062 2,428,198 2,409,876 3,082,721 2,670,582 2,857,982 2,026,441 2,387,112 2,196,898 2,760,849 2,598,401 2,384,184 543,020 531,110 570,956 602,418 645,781 649,898
1,273,557 1,304,499 1,338,818 1,379,802 1,420,155 1,457,637 4,783 5,068 7,064 6,387 5,288 4,236
222,494 181,162 389,258 221,858 320,217 470,547
533,828 - - - - -
6,456,185 6,837,149 6,912,870 8,054,035 7,660,424 7,824,484 $ 11,022,198 $ 11,218,329 $ 10,199,800 $ 12,907,854 $ 12,883,490 $ 14,027,654 93 CITY OF TEHACHAPI

CHANGES IN NET POSITION
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15
Net Revenues (Expenses)
Governmental Activities (5,959,789) $ (4,117,370) $ (6,404,715) $ (1,410,006) $ Business-type Activities 1,588,289 750,121 147,255 (477,624) Total Net Revenues (Expenses) (4,371,500) (3,367,249) (6,257,460) (1,887,630) General Revenues and Other Changes in Net Position
Governmental Activities
Property Taxes 2,155,857 1,266,510 1,187,822 1,184,100
Sales and Use Taxes 1,814,353 1,842,393 1,986,771 1,957,100 Property Tax in Lieu 550,529 618,866 622,826 672,331
Transient Occupancy Tax 567,461 540,619 830,251 683,826 Licenses and Permits 1,073,177 1,191,288 1,204,395 1,237,753 Franchise Tax 183,638 179,058 196,623 210,647
Other Taxes 191,623 198,141 234,870 190,190
Miscellaneous Revenues 22,586 436,300 238,008 45,508
Investment Earnings 85,362 41,022 37,005 34,077
Loss on Disposal - - (189,709) -
Transfers In (Out) 1,308,588 (114,422) (3,143) 4,839
Transfer to Fiduciary Fund - - (1,406,525) -
Total Governmental Activities 7,953,174 6,199,775 4,939,194 6,220,371 Business-type Activities
Miscellaneous Revenues 64,717 73,881 118,296 106,104
Investment Earnings 37,346 18,800 19,514 15,426
Loss on Disposal - (13,527) - (122,722)
Transfers (1,308,588) 114,422 3,143 (4,839)
Total Business-type Activities (1,206,525) 193,576 140,953 (6,031) Total Primary Government 6,746,649 6,393,351 5,080,147 6,214,340 Extraordinary Items
Governmental Activities 12,037,735 - - -
Business-type Activities - - - -
Total Primary Government 12,037,735 - - -
Changes in Net Position
Governmental Activities 14,031,120 2,082,405 (1,465,521) 4,810,365 Business-type Activities 381,764 943,697 288,208 (483,655) Total Primary Government $ 14,412,884 $ 3,026,102 $ (1,177,313) $ 4,326,710 Source: Audited Financial Statements
94 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
$ (3,889,717) (4,407,729) $ (5,974,606) $ (4,983,843) $ (5,724,309) $ (5,915,233) $ 532,700 (372,607) 159,142 34,055 90,899 (216,286)
(3,357,017) (4,780,336) (5,815,464) (4,949,788) (5,633,410) (6,131,519) 1,266,903 1,209,741 1,349,341 1,474,140 1,709,886 2,599,168 2,453,186 2,083,650 2,698,641 3,262,346 3,078,646 3,693,947 1,199,959 429,281 1,298,550 1,324,876 1,430,560 1,543,538 705,197 641,191 759,381 801,444 648,225 842,473
127,112 1,286,961 189,437 202,440 261,244 289,184
178,493 200,726 204,634 221,053 225,834 240,569
222,329 259,181 219,497 218,386 202,590 209,725
153,309 23,912 32,869 39,192 62,374 104,657
29,176 76,980 81,190 210,812 234,164 52,791
- - - - - -
(1,502,719) (1,200) (24,228) (158,550) (146,962) (173,027) - - - - - -
6,210,423 4,832,945 6,809,312 7,596,139 7,706,561 9,403,025 405,354 432,926 127,495 97,497 77,460 58,527
9,917 37,177 44,552 147,125 130,005 34,183
(1,882) (593,231) (458) 2,482 5,449 15,781
1,200 1,502,719 24,228 158,550 146,962 173,027
414,589 1,379,591 195,817 405,654 359,876 281,518
6,625,012 6,212,536 7,005,129 8,001,793 8,066,437 9,684,543 - - - - - -
- - - - - -
- - - - - -
1,802,694 943,228 834,706 2,612,296 1,982,252 3,487,792 41,982 1,912,291 354,959 439,709 450,775 65,232
$ 1,844,676 $ 2,855,519 $ 1,189,665 $ 3,052,005 $ 2,433,027 $ 3,553,024 95 CITY OF TEHACHAPI

FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15
General Fund
Nonspendable 1,379,408 $ 2,102,611 $ 5,311,956 $ 3,787,406 $ Restricted - - - -
Committed 757,662 809,629 887,757 997,993
Assigned - - - -
Unassigned 4,748,898 5,252,576 1,438,840 3,427,941
Total General Fund 6,885,968 8,164,816 7,638,553 8,213,340 All Other Governmental Funds
Nonspendable - - - -
Restricted 1,695,074 1,738,887 1,511,574 4,311,304
Committed - - - -
Assigned 2,638,916 674,793 100,859 -
Unassigned (957,035) (371,807) (4,466,245) (4,399,243)
Total All Other Governmental Funds 3,376,955 $ 2,041,873 $ (2,853,812) $ (87,939) $ Note: The City of Tehachapi implemented GASB 54 starting with fiscal year ended June 30, 2011 Source: Audited Financial Statements
96 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
$ 4,568,444 $ 2,768,871 $ 2,320,850 $ 2,314,383 $ 2,236,527 $ 2,365,185 212,068 42,463 524,063 141,128 - -
963,561 1,009,610 927,351 951,319 1,061,215 1,158,946
- - - - - -
2,863,138 3,475,310 4,525,391 6,174,235 7,042,898 10,103,854 8,607,211 7,296,254 8,297,655 9,581,065 10,340,640 13,627,985 - - - - - -
3,509,814 2,947,084 2,764,787 3,217,526 3,399,021 3,655,590 - - - - - -
- - - - - -
(4,116,912) (4,297,996) (3,798,062) (3,239,148) (3,846,179) (3,631,307) $ (607,098) $ (1,350,912) $ (1,033,275) $ (21,622) $ (447,158) $ 24,283 97 CITY OF TEHACHAPI

CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15
Revenues
Property Taxes 2,706,386 $ 1,885,376 $ 1,810,648 $ 1,856,431 $ Sales Taxes 1,814,353 1,842,393 1,986,771 1,957,100
Other Taxes 2,357,362 2,221,617 2,667,913 2,457,485
Licenses and Permits 50,646 90,551 71,965 72,610
Grants - - - -
Charges for Services 454,973 1,110,878 615,637 478,874
Interest 85,364 41,023 37,005 34,077
Other Sources of Funds 776,774 2,762,921 1,483,326 5,792,420 Miscellaneous 110,729 416,277 320,514 874,727
Total Revenues 8,356,587 10,371,036 8,993,779 13,523,724 Expenditures
Current
General Government 1,185,010 1,344,421 1,503,377 1,407,646 Public Works 1,474,952 1,532,865 1,617,273 2,165,018
Public Safety 2,631,886 2,824,312 3,181,899 3,159,926
Community Development 1,318,910 2,756,359 1,521,265 776,844 Pass-throughs 188,475 - - -
Capital Outlay 1,466,347 1,513,179 5,133,596 2,629,834
Debt Service
Interest Expense 439,982 22,572 21,721 20,843
Principal 375,279 26,090 26,928 27,792
Total Expenditures 9,080,841 10,019,798 13,006,059 10,187,903 Excess of Revenues Over Expenditures (724,254) 351,238 (4,012,280) 3,335,821 Other Financing Source (Uses)
Transfers In 3,109,077 1,023,238 708,278 535,808
Transfers Out (1,800,489) (1,137,660) (2,117,946) (530,969) Proceeds from Capital Lease - - - -
Total Other Financing Sources (Uses) 1,308,588 (114,422) (1,409,668) 4,839 Extraordinary Items
RDA Dissolution (6,199,494) - - -
Developer Settlement 2,425,635 - - -
Total Other Financing Sources (Uses) (3,773,859) - - -
Net Change in Fund Balances $ (3,189,525) $ 236,816 $ (5,421,948) $ 3,340,660 Capitalized Outlay Amount $ 1,853,961 $ 3,435,652 $ 4,916,715 $ 3,111,820 Debt service as a percentage of noncapital
expenditures 11.3% 0.7% 0.6% 0.7%
Source: Audited Financial Statements
98 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
$ 1,639,022 $ 2,466,862 $ 2,647,891 $ 2,799,016 $ 3,140,446 $ 4,142,706 2,083,650 2,453,186 2,698,641 3,262,346 3,078,646 3,693,947 2,464,448 1,293,138 1,396,552 1,448,320 1,349,364 1,573,953 139,894 158,347 286,062 424,901 609,201 409,306
- 3,208,395 - 3,086,873 2,430,645 5,733,425
344,800 291,853 581,969 1,149,809 1,044,044 1,012,140
78,117 29,175 81,188 210,810 234,162 52,792
3,821,298 2,877,046 - - - -
385,755 446,437 20,630 151,647 56,292 113,177
10,956,984 10,016,044 10,921,328 12,533,722 11,942,800 16,731,446 1,185,451 1,236,541 1,276,431 1,233,731 1,293,556 1,388,285 3,366,282 3,064,968 4,159,918 4,086,366 2,208,147 2,241,396 3,738,870 2,844,104 3,084,772 3,437,651 3,700,682 4,934,643 742,409 1,080,050 987,520 1,094,456 1,286,798 1,158,064 - - - - - -
2,614,335 2,113,490 411,481 6,729 2,808,631 2,848,529
19,937 32,756 39,372 51,448 46,407 40,890
221,122 196,187 146,693 169,728 189,254 187,826
11,888,406 10,568,096 10,106,187 10,080,109 11,533,475 12,799,633 (931,422) (552,052) 815,141 2,453,613 409,325 3,931,813 5,773,563 1,128,417 1,883,697 570,811 678,095 567,605
(5,774,763) (2,631,136) (1,907,925) (729,361) (825,057) (740,632) 807,334 528,125 - 71,676 - -
806,134 (1,502,719) 503,897 (158,550) (75,286) (173,027) - - - - - -
- - - - - -
- - - - - -
$ (125,288) $ (2,054,771) $ 1,319,038 $ 2,295,063 $ 334,039 $ 3,758,786 $ 4,099,228 $ 3,656,833 $ 2,545,855 $ 2,357,831 $ 2,858,759 $ 2,880,792

3.1% 3.3% 2.5% 2.9% 2.7% 2.3%
99 CITY OF TEHACHAPI
ASSESSED VALUE OF TAXABLE PROPERTY (Net Taxable)
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15
Residential 329,963,987 $ 328,136,156 $ 338,902,809 $ 359,605,809 $ Commercial 143,337,921 139,246,596 137,475,266 139,595,833 Industrial 24,251,165 25,544,372 25,440,568 30,835,636
Government Owned 26,242 26,361 26,481 26,508
Institutional 257,993 247,568 252,517 338,662
Irrigated 934,615 1,321,754 1,348,186 1,354,301
Recreational 1,836,685 1,868,329 1,417,952 1,422,445
Vacant 52,352,302 43,474,715 40,524,147 41,173,555
SBE Nonunitary 395,680 395,680 395,680 395,680
Unsecured 30,654,643 30,414,623 26,325,736 26,310,333
Total 584,011,233 $ 570,676,154 $ 572,109,342 $ 601,058,762 $ Total Direct Rate 0.40802 0.39167 0.16162 0.16116
Tax Exempt (1,144,946) $ (1,144,946) $ (1,508,760) $ (1,398,730) $ Notes: In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1%, based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum 2%). With few exceptions, property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation date shown above represents the only date currently available with respect to the actual market value of taxable property and is subject to the limitations described above.

Source: Kern County Assessor 2011/12 ‐ 2020/21 combined Tax Rolls via HdL, Coren & Cone This report is not to be used in support of debt issuance or continuing disclosure statements without the written consent of HdL, Coren & Cone
100
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
$ 399,422,704 380,664,403 $ 428,954,661 $ 460,071,380 $ 504,175,793 $ 532,035,616 $ 153,166,923 144,701,721 166,465,568 174,168,100 186,722,185 199,770,649 32,287,375 33,725,848 34,610,139 34,874,684 35,940,915 36,158,769 8,766 7,170 5,321 8,020 8,179 8,341
535,961 544,130 4,788,656 566,105 840,583 588,968
1,381,356 1,402,417 1,430,459 1,074,823 1,096,315 1,370,087 1,452,435 793,833 540,829 546,325 482,000 491,640
44,669,511 41,998,586 40,213,440 40,682,524 36,089,584 37,021,550 395,680 988,898 988,898 604,699 604,699 843,322
25,511,087 24,690,697 50,321,244 29,185,900 33,772,445 37,990,514 $ 631,608,295 $ 656,741,206 $ 728,319,215 $ 741,782,560 $ 799,732,698 $ 846,381,664

0.16098 0.16098 0.15920 0.16019 0.16001 0.16721
$ (3,080,187) $ (37,818,187) $ (47,657,485) $ (47,747,124) $ (47,729,486) $ (48,033,396) 101

CITY OF TEHACHAPI

DIRECT AND OVERLAPPING PROPERTY TAX RATES
Last Ten Fiscal Years
Rate per $100 of taxable value
2011/12 2012/13 2013/14 2014/15
Agency
Basic Levy 1.00000 1.00000 1.00000 1.00000
Kern Community College 0.00906 0.00850 0.01264 0.01045
Kern County Water Agency 0.01480 0.01032 0.01071 0.01126 Tehachapi Cummings Water State Payment 0.04286 0.03844 0.04290 0.03875 Tehachapi Health Bond 0.02903 0.02628 0.08477 0.07348
Tehachapi Unified School District 0.04875 0.05741 0.04353 0.06396 Total Direct & Overlapping Tax Rates 1.14450 1.14095 1.19456 1.19790 City's Share of 1% Levy Per Prop 13 0.18899 0.18899 0.18729 0.18729 Redevelopment Rate 1.01480
Total Direct Rate 0.40802 0.39167 0.16162 0.16116
Notes:
1In 1978, California voters passed Proposition 13 which set the property tax rate at 1.00%. This 1.00% is shared by all taxing agencies within which the subject property resides. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. 2Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all city property owners.
3The City's share of the 1.00% levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. ERAF general fund tax shifts may not be included in tax ratio figures. 4Redevelopment Rate is based on the largest RDA tax rate area and only includes rate(s) from indebtedness adopted prior to 1989 per California State statute. RDA direct and overlapping rates are applied only to the incremental property values. The approval of ABX126 eliminated Redevelopment from the State of California for the fiscal year 2012/23 and years thereafter.
5Total Direct Rate is the weighted average of all individual direct rates applied by the City/Agency preparing the statistical section information and excludes revenues derived from aircraft. Beginning in 2013/14 the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognized enforceable obligations are assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue.

Source: Kern County Assessor Tax Rate Tables
102
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

1.00000 1.00000 1.00000 1.00000 1.00000 1.00000

0.01357 0.01318 0.03625 0.03367 0.03303 0.03385

0.01357 0.01532 0.01784 0.01658 0.01895 0.01771

0.03787 0.06940 0.05665 0.05678 0.05133 0.05005

0.07811 0.08002 0.08067 0.07111 0.07990 0.06737

0.04454 0.05349 0.05000 0.04048 0.05641 0.04659

1.18765 1.23140 1.24142 1.21861 1.23961 1.21556

0.18729 0.18729 0.18729 0.18729 0.18729 0.18729

0.16098 0.16098 0.15920 0.16019 0.16001 0.16721
103

CITY OF TEHACHAPI

PRINCIPAL PROPERTY TAX PAYERS
Current and Nine Years Ago
Owner Value % of Net
AV Owner Value % of Net AV
Tehachapi Investment LLC $ 2.41 20,400,000 Home Depot USA Inc $ 2.37 13,857,834 CFT NV Developments LLC 2.20 18,592,920 Chuck and Hyon K Yoo 1.98 11,576,479 Yoo Hyon Kil 2.18 18,409,476 New Albertson's Inc 1.82 10,641,481 Evergreen Hospitality Inc 1.43 12,121,232 Loves County Stores of CA 1.49 8,721,522 Loves County Stores of CA 1.27 10,744,548 Emster XIII LLC 1.34 7,848,661 Pilot Travel Centers 1.22 10,288,570 Yu Family Trust 1.30 7,578,276 Home Depot USA Inc 1.10 9,326,333 NWK2 Inc 1.19 6,951,316 Tehachapi Tucker Road LLC 1.07 9,020,263 Mel & Beverly Rubin Trust 1.04 6,044,710 Chemtool Inc 1.04 8,766,626 Nomar Properties LLC 0.95 5,536,316 Albertsons Retail LLC 0.97 8,200,000 Subhash & Hashumati Patel 5,498,986 0.94 Top Ten Total 14.87 125,869,968 Top Ten Total 14.43 84,255,581 Total Taxable Year 100% 846,381,664 Total Taxable Year 100% 584,011,233 Source: Kern County Assessor Combined Tax Rolls, The SBE Non Unitary Tax Roll and The HdL Companies

FISCAL YEAR END
2021 2012
104

CITY OF TEHACHAPI

PROPERTY TAX LEVIES & COLLECTIONS
Last Ten Fiscal Years
Fiscal Year End Tax Levied Amount Percent of Levy Amount Percent of Levy 2012 $ 830,881 $ 830,881 100% $ 830,881 100%
2013 897,262 897,262 100% 897,262 100%
2014 824,977 824,977 100% 824,977 100%
2015 848,056 848,056 100% 848,056 100%
2016 858,997 858,997 100% 858,997 100%
2017 911,928 911,928 100% 911,928 100%
2018 1,000,380 1,000,380 100% 1,000,380 100%
2019 1,118,556 1,118,556 100% 1,118,556 100%
2020 1,240,785 1,240,785 100% 1,240,785 100%
2021 1,392,651 1,392,651 100% 1,392,651 100%
Notes: Kern County utilizes the Teeter Plan for levy and distribution which means that the City receives full payment for taxes levied each year while the County retains all penalty, interest and delinquent taxes, when collected. This method guarantees distribution of 100% of the assessments levied to the taxing entity.

Source: Kern County Auditor Controller's Office
Collected within FY of Levy Total Collections to Date
105

CITY OF TEHACHAPI

RATIOS OF OUTSTANDING DEBT BY TYPE
Last Ten Fiscal Years
Governmental
Activities
Fiscal
Year End Capital Leases Capital Leases Department of Transportation State
Revolving
Fund
USDA Loan
Revenue
Bonds (net of
Discount)
2011 741,510 $ $ 336,025 $ 70,590 $ 554,375 $ 243,300 $ 2,934,432 2012 716,231 146,697 61,150 763,565 238,500 2,884,449
2013 690,140 141,354 51,226 2,216,133 233,500 2,763,399 2014 663,212 135,839 40,818 1,942,053 228,200 2,632,349 2015 635,420 130,146 29,926 1,856,074 222,800 2,496,299 2016 1,221,632 124,271 18,550 1,767,860 217,100 2,355,249 2017 1,025,445 118,207 6,690 1,677,352 211,100 2,209,199 2018 1,406,877 233,824 1,584,491 204,900 1,718,149 -
2019 1,237,150 211,712 1,489,215 198,400 1,167,099 -
2020 1,119,571 246,315 1,391,462 191,600 605,000 -
2021 928,262 211,900 1,291,168 184,500 - -
Business Type Activities
Source: City of Tehachapi
106
Total Primary
Government
Percentage of
Personal
Income
Per
Capita
$ 4,880,232 2.99% 351
4,810,592 4.75% 347
6,095,752 3.66% 458
5,642,471 3.89% 423
5,370,665 4.17% 404
5,704,662 4.02% 467
5,247,993 3.59% 427
5,148,241 4.12% 419
4,303,576 5.20% 315
3,553,948 6.78% 279
2,615,830 9.74% 218
107

CITY OF TEHACHAPI

RATIO OF GENERAL BONDED DEBT OUTSTANDING
Last Ten Fiscal Years
Outstanding General Bonded Debt
Fiscal Year
End Tax Allocation Bond
2012 No General Bonded Debt
2013 No General Bonded Debt
2014 No General Bonded Debt
2015 No General Bonded Debt
2016 No General Bonded Debt
2017 No General Bonded Debt
2018 No General Bonded Debt
2019 No General Bonded Debt
2020 No General Bonded Debt
2021 No General Bonded Debt
Source: City of Tehachapi
108

CITY OF TEHACHAPI

DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
Last Ten Fiscal Years
2020-21 Assessed Valuation: $846,381,664
Total Debt
6/30/21
Percentage
Applicable(1)
City’s Share of
Debt 6/30/21
Overlapping Tax and Assessment Debt
Kern Community College District Safety, Repair and Improvement District $ 106,761,081 0.882% $ 941,633 Kern Community College District School Facilities Imprvmt District No. 1 109,353,183 0.877% 959,027 Tehachapi Unified School District 4,252,000 16.363% 695,755 Tehachapi Valley Healthcare District 56,974,979 16.104% 9,175,251 City of Tehachapi 1915 Act Bonds 2,180,000 100.000% 2,180,000 (2) Total Overlapping Tax and Assessment Debt 13,951,666
Direct and Overlapping General Fund Debt
Kern County General Fund Obligations 90,388,021 0.858% 775,529 Kern County Pension Obligation Bonds 150,461,668 0.858% 1,290,961 Kern County Board of Education Certificates of Participation 33,835,000 0.858% 290,304 Kern Community College District General Fund Obligations 26,208,000 0.791% 207,305 Kern Community College District Benefit Obligation 75,640,000 0.791% 598,312 Tehachapi Valley Recreation and Park District General Fund Obligations 440,279 21.341% 93,960 City of Tehachapi Capital Lease Obligations 928,262 100.000% 928,262 Total Direct and Overlapping General Fund Debt 4,184,633 Overlapping Tax Increment Debt (Successor Agency) 9,688,000 100.000% 9,688,000 0 Total Overlapping Debt 27,824,299
Combined Total Debt $ 27,824,299 (4)
Ratios to 2020-21 Assessed Valuation
Total Overlapping Tax and Assessment Debt 1.65%
Total Direct Debt ($928,262) 0.11%
Combined Total Debt 3.29%
Total Overlapping Tax Increment Debt 3.54%
Total Direct Debt(3)
Ratios to Redevelopment Successor Agency Incremental Valuation ($273,983,040) Notes: (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. (2) Defaulted principal amount. (3) The City of Tehachapi does not have general obligation debts supported by property tax. Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non‐bonded capital lease obligations.

Source: California Municipal Statistics; HdL
109

CITY OF TEHACHAPI

LEGAL DEBT MARGIN INFORMATION
Last Ten Fiscal Years
2011/12 2012/13 2013/14 2014/15
Assessed Valuation 584,011,233 $ 570,676,154 $ 572,109,342 $ 601,058,762 $ Debt Limit Percentage* 15% 15% 15% 15%
Debt Limit 87,601,685 85,601,423 85,816,401 90,158,814
Total Debt Applicable to Limit
General Obligation Bonds - - - -
Legal Debt Margin 87,601,685 $ 85,601,423 $ 85,816,401 $ 90,158,814 $ Total debt applicable to limit as a
percentage of debt limit 0% 0% 0% 0%
Notes: Section 4305 of the California Government Code provides that: "A city shall not incur an indebtedness for public improvements which exceeds in the aggregate 15% of the assessed value of all real and personal property of the city. Within the meaning of this section 'indebtedness' means bonded indebtedness of the city payable from the proceeds of taxes upon taxable property in the city." Source: HdL, Coren & Cone
110
2015/16 2016/17 2017/18 2018/19 2019/20 2020/21
$ 656,741,206 631,608,295 $ 728,319,215 $ 741,782,560 $ 799,732,698 $ 846,381,664 $ 15% 15% 15% 15% 15% 15%
94,741,244 98,511,181 109,247,882 111,267,384 119,959,905 126,957,250 - - - - - -
$ 94,741,244 $ 98,511,181 $ 109,247,882 $ 111,267,384 $ 119,959,905 $ 126,957,250 0% 0% 0% 0% 0% 0%
111

CITY OF TEHACHAPI

PLEDGED REVENUE COVERAGE
Last Ten Fiscal Years
Net
Fiscal Revenue Operating Available Debt Coverage
Year End Expenses Revenue Service Ratio
2012 5,774,788 $ 4,054,395 $ $ 1,720,393 $ 454,381 3.79 2013 5,009,096 2,869,698 2,139,398 586,931 3.65
2014 4,497,279 3,205,881 1,291,398 592,612 2.18
2015 3,952,522 3,432,627 519,895 396,585 1.31
2016 4,393,052 3,629,991 763,061 396,387 1.93
2017 5,287,544 3,758,052 1,529,492 395,711 3.87
2018 4,777,736 3,627,074 1,150,662 727,741 1.58
2019 6,086,790 4,233,930 1,852,860 766,762 2.42
2020 5,460,958 4,340,538 1,120,420 758,913 1.48
2021 5,337,415 4,724,072 613,343 152,195 4.03
Water and Wastewater Fund Revenue Pledged Debt
Source: City of Tehachapi
112

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CITY OF TEHACHAPI

DEMOGRAPHIC AND ECONOMIC STATISTICS
Last Ten Fiscal Years
Fiscal Year Personal Per Capita
Ended Income Personal Unemployment Median
June 30 Population (1) (in Thousands) (2) Income (3) Rate (4) Age (5) 2011 13,872 $ 16,476 228,555 $ 9.5% 35.0
2012 13,313 223,153 16,762 7.6% 35.9
2013 13,346 219,315 16,433 7.1% 35.5
2014 13,286 224,029 16,862 8.0% 34.9
2015 12,217 229,557 18,789 7.8% 35.7
2016 12,280 188,549 15,354 7.9% 37.7
2017 12,299 212,293 17,260 6.7% 37.7
2018 13,668 223,930 16,383 4.8% 38.2
2019 12,758 241,077 18,896 5.1% 37.6
2020 12,008 254,868 21,224 9.5% 37.4
(1) Population:  California State Department of Finance (2) (3) (5) (6) & (7) Income, Age and Education Data: US Census Bureau, most recent American Community Survey
(4) Unemployment Data:  California Employment Development Department
Sources:  HdL, Coren & Cone
113
% of Population % of Population
Age 25+ with Age 25+ with
High School Degree (6) Bachelor's Degree (7)

69.8% 9.0%

73.8% 8.8%

72.9% 9.1%

73.8% 9.2%

74.1% 9.3%

75.6% 8.8%

75.1% 9.5%

75.5% 10.1%

78.3% 12.4%

77.2% 12.8%
114

CITY OF TEHACHAPI

PRINCIPAL EMPLOYERS
Current and Nine Years Ago
Employer
Number of
Employees Rank
Percentage of
Top 10
Employment
Number of
Employees Rank
Percentage of
Top 10
Employment
California Correctional Institution 1535 1 38%
World Wind and Solar 954 2 24%
Tehachapi Unified School District 454 3 11%
Adventist Health Tehachapi Valley 260 4 6%
Walmart 240 5 6%
Home Depot 150 6 4%
Albertson's 120 7 3%
Chemtool 115 8 3%
GE Energy 89 9 2%
Savemart 85 10 2%
Total Top 10 Employers 4002

FISCAL YEAR END
2021 2012
No data is available for the year
2012
Note: The total employment number in 2011/12 is not available.

Source: Unemployment Insurance Wage Records, The Office of Personnel Management, The Quarterly Census for Employment and Wages
115

CITY OF TEHACHAPI

FULL AND PART-TIME CITY EMPLOYEES FUNDED BY FUNCTION
Last Ten Fiscal Years
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Full-time / Function
Airport 2220000000
Comm Development 1222110111
Development Services 357767777 6.84
Fire 0000000000
General Government 10 10 11 11 11 11 11 12 11 12
Police 15 17 17 18 25 25 25 24 25 26.78
Public Works 11 10 11 11 10 10 10 13 14 10.48
Wastewater 3 5 4.5 4 3.5 3.5 3.5 3 3 3
Water 4 3 2.5 3 4.5 3.5 4.5 4 4 4
Full-time Total 49 54 57 56 61 61 61 64 65 64.1
Part-time / Function
Airport 0 0 0 0 0.4 0 0 0 0 0.92
Comm Development 1100000000
General Government 132224479 6.12
Police 2320001200
Public Works 2 6 0 0.68 2.24 4367 4.44
Wastewater 1.5 0 0 0.66 0.63 00000
Water 1.5 0 0 0.66 0.73 00000
Part-Time Total 9 13 4 4 6 8 8 15 16 11.48
GRAND TOTAL 58 67 61 60 67 69 69 79 81 75.58
Source: City of Tehachapi

FISCAL YEAR END
116

CITY OF TEHACHAPI

OPERATING INDICATORS BY FUNCTION
Last Ten Fiscal Years
2012 2013 2014 2015
Police
Calls for Service 6,714 6,793 6,711 7,026
Felony Arrests 512 297 232 173
Misdemeanor Arrests 455 682 602 524
Property Loss 492,766 $ 589,000 $ 466,302 $ 384,994 $
Property Recovered 146,093 $ 226,800 $ 116,570 $ 148,698 $ Traffic Citations 164 428 282 109
Traffic Accidents 102 116 111 94
Parking Citations 108 109 51 52
Wastewater
Max. Capacity Million Gallons per Day 1 1.25 1.25 1.25
Daily Avg Treated Wastewater Million Glns 0.86 0.94 0.86 0.83 Transit Dial-A-Ride
Ridership 5,401 5,929 5,663 7,057
Mileage 25,480 25,139 26,375 27,027
Days of Service 257 254 287 308
Cost per Rider 24.16 $ 22.71 $ 32.38 $ 27.95 $
Subsidized Cost per Rider 23.41 $ 21.95 $ 31.59 $ 27.14 $ Water
Water Pumping Capacity Acre-feet 2,355 2,369 2,247 1,911 Water Pumped Acre-feet 2,206 2,339 2,201 1,671
Water Sold Acre-Feet 1,780 1,806 1,724 1,495
Source: City of Tehachapi

FISCAL YEAR END
117
2016 2017 2018 2019 2020 2021
6,445 6,321 6,916 7,415 8,782 7,494
170 302 181 243 221 282
491 441 439 549 413 496
$ 531,857 $ 513,316 $ 358,163 $ 650,688 404,772 $ 588,101 $ $ 184,211 $ 137,815 $ 113,831 $ 178,232 $ 198,463 $ 108,287 161 167 170 175 86 92
50 102 83 116 111 104
36 123 107 260 264 128

1.25 1.25 1.25 1.25 1.25 1.25

0.81 0.80 0.78 0.75 0.73 0.66
5,243 4,637 6,368 5,730 4,385 3,338
24,999 22,921 18,331 18,867 15,007 11,862
297 305 307 304 308 302
$ 46.72 38.81 $ 41.23 $ 47.77 $ 59.47 $ 91.46 $
$ 45.62 37.90 $ 40.13 $ 46.66 $ 58.27 $ 90.19 $
1,995 1,945 1891 1847 1879 1993
1,692 1,855 1935 1842 1888 2050
1,264 1,568 1,664 1,664 1,648 1,835

FISCAL YEAR END
118

CITY OF TEHACHAPI

CAPITAL ASSETS BY FUNCTION
Last Ten Fiscal Years
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Water
Wells 7777777777
Storage Tanks 5555555555
Booster Pumps 3333333333
Transmission Lines (miles) 50 50 50 50 50 50 50 50 50 50 Fire Hydrants 512 512 512 512 512 512 512 512 512 512
Wastewater
Wastewater Treatment Plant 1111111111
Sewer Lift Station 1111111111
Recycled Water Pump Station 11111
Sanitary Sewer Lines (miles) 40 40 40 40 40 40 40 40 40 40 Airport
Runway (feet) 4035 4035 4035 4035 4035 4035 4035 4035 4035 4035 Fuel Station 1111111111
City-Owned Hangars 5555667889
Parks
Parks 7777777777
Public Works
Streets (lane miles) 159 159 159 162 162 162 162 162 162 162 Traffic Signals 2222234455
Police
Station 1111111111
General Government
City Hall 1111111111
Development Services Building 1111111
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Source: City of Tehachapi

FISCAL YEAR END
119
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 City Council
City of Tehachapi
Tehachapi, 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, business-type activities, each major fund and the aggregate remaining fund information of the City of Tehachapi (the “City”), as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 28, 2021.

Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) to determine the 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 the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the 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 or other matters that are required to be reported under Government Auditing Standards.

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

December 28, 2021
INDEPENDENT ACCOUNTANT’S REPORT ON AGREED-UPON PROCEDURES

APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
City Council
City of Tehachapi
Tehachapi, California
We have performed procedures enumerated below to be the accompanying Appropriations Limit worksheet of the City of Tehachapi, for the year ended June 30, 2021. These procedures, which were agreed to by the City of Tehachapi and the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIIIB of the California Constitution), were performed solely to assist the City in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. The City’s management is responsible for the Appropriations Limit worksheet. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of the procedures is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose.

The procedures performed and our findings were as follows:

1. We obtained the completed worksheets and compared the limit and annual adjustment factors included in those worksheets to the limit and annual adjustment factors that were adopted by resolution of the City Council. We also compared the population and inflation options included in the aforementioned documents to those that were selected by a recorded vote of the City Council.

Finding: No exceptions were noted as a result of our procedures.

2. For the accompanying Appropriations Limit worksheet, we added last year’s limit to total adjustments and agreed the resulting amount to this year’s limit.

Finding: No exceptions were noted as a result of our procedures.

3. We agreed the current year information presented in the accompanying Appropriations Limit worksheet to the other documents referenced in #1 above.

Finding: No exceptions were noted as a result of our procedures.

4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit worksheet to the prior year appropriations limit adopted by the City Council during the prior year.

Finding: No exceptions were noted as a result of our procedures.

We were not engaged to, and did not, perform an examination, the objective of which would be the expression of an opinion on the accompanying Appropriations Limit worksheet. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. No procedures have been performed with respect to the determination of the appropriations limit for the base year, as defined by the League publication entitled Article XIIIB of the California Constitution.

This report is intended solely for the use of the City Council and management of the City of Tehachapi and is not intended to be and should not be used by anyone other than these specified parties. However, this report is a matter of public record and its distribution is not limited.

December 28, 2021

CITY OF TEHACHAPI

APPROPRIATIONS LIMIT COMPUTATION
2020 - 2021
2020 - 2021
Change in Per Capita Personal Income 3.73%
Population Change
City Population Growth 1.27%
A. Change in Per Capita Personal Income Converted to a Ratio 1.0373 B. Population Growth Converted to a Ratio 1.0127
Calculation of Growth Factor (A x B) 1.05047
2019 - 2020 Appropriations Limit 13,568,415 $
2020 - 2021 Appropriations Limit
($13,568,415 x 1.05047) 14,253,213 $
December 28, 2021
City Council
City of Tehachapi
Tehachapi, CA
We have audited the financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Tehachapi for the year ended June 30, 2021. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated May 24, 2021. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements.

No new accounting policies were adopted and the application of existing policies was not changed during the fiscal year ended June 30, 2021. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the financial statements were:

Management’s estimate of the fair value of investments is based on information provided by financial institutions. We evaluated the key factors and assumptions used to develop the fair value of investments in determining that it is reasonable in relation to the financial statements as a whole.

Management’s estimate of capital assets depreciation is based on historical estimates of each capitalized item’s useful life. We evaluated key factors and assumptions used to develop the estimated useful lives in determining that they are reasonable in relation to the financial statements as a whole.

Management’s estimate of the net pension liability is based on actuarial information provided by the California Public Employee Retirement System’s (CalPERS) actuarial office. We evaluated the key factors and assumptions to develop the net pension liability in determining that it is reasonable in relation to the financial statements as a whole.

Certain financial statement disclosures are particularly sensitive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:

The disclosure of the fair value of investments in Note 2 A to the financial statements represents amounts susceptible to market fluctuation.

The disclosure of accumulated depreciation in Note 2 C to the financial statements is based on estimated useful lives which could differ from actual useful lives of each capitalized item.

The disclosure of the net pension liability in Note 3 B to the financial statements is based on the City’s proportionate share of the total pension liability of the pool and includes assumptions for discount rates, which could differ from actual discount rates. Note 3 B discloses the differences in the net pension liability assuming different discount rates.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are 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 December 28, 2021.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to management’s discussion and analysis and the schedules listed as required supplementary information in the table of contents, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on the supplementary information as listed in the table of contents, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.

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

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

Very truly yours,

CITY OF
TE HAC HAP!

CALIFORNIA

COUNCIL REPORTS
MEETING DATE: JANUARY T8,2022 AGENDA SECTION: DEVELOPMENT SERVICES

APPROVED

CITY MANAGER

DEPARTMENT
TO: HONORABLE MAYOR SMITH AND COUNCIL MEMBERS

FROM JAY SCHLOSSER, PE, DEVELOPMENT SERVICES DIRECTOR
DATE: JANUARY Lt,2022
SUBJECT TANDSCAPTNG AND TIGHTING ASSESSMENT DISTRICT NO. 1, ANNEXATTON NO. 16. TRACT 6668

BACKGROUND
This action by the City Council orders the levy of assessments within the Landscaping and Lighting District No. 1, Annexation 15 for fiscal year 2022/2023 subject to the results of the public hearing and protest ballot processes.

At the November L5,2021City Council meeting, the City Council adopted Resolution Numbers 50-21 and 51- 21 initiating proceedings, approving the preliminary Engineer's Report, and declaring its intention to levy assessments within the City of Tehachapi Landscaping and Lighting District No. 1, Annexation 16. This action set the time and place for the public hearing on this issue to January 18,2022 at 6:00 pm.

The total annual maintenance and administration costs to the District are 56,429.81. Annual District costs are funded through the assessments placed on the property tax bills.

RECOMMENDATION
ADOPT TWO RESOTUTIONS OF THE CITY COUNCIL OF THE CIW OF TEHACHAP!, SUBJECT TO THE RESULTS OF THE PUBLIC HEARING AND PROTEST BATLOT PROCEEDINGS: (11 DECIARING THE RESULTS OF THE PROPERil OWNER PROTEST BALLOT PROCEEDING AND; (21 AMENDING AND/OR APPROVING THE FINAL ENGINEER'S REPORT FOR TANDSCAPING AND LIGHTING DTSTR|CT NO. 1, ANNEXATTON 16 (TRACT 56681AND ORDERTNG THE IEVY AND COLLECTION OF ASSESSMENTS WITHTN THE D|STRICT FOR FTSCAL YEAR 202212023.

RESOLUTION NO.

RESOLUTION OF THE CITY COUNGIL OF THE CITY OF TEHACHAPI,

CALIFORNIA, DECLARING THE RESULTS OF THE PROPERTY OWNER PROTEST

BALLOT PROCEEDINGS CONDUCTED FOR THE PROPOSED LEVY OF

ASSESSMENTS RELATED TO THE ANNEXATION OF TERRITORY TO THE TEHACHAPI LANDSCAPING AND LIGHTING DISTRICT NO. 1, COMMENCING IN FtscAL YEAR 2022t2023
WHEREAS, the City Council of the City of Tehachapi (the "City") pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Part2, Division 15 of the California Streets and Highways Code, commencing with Section 22500 (hereafter referred to as the "Act"), did by previous resolutions, initiate proceedings for the for the annexation of territory to the Landscape and Lighting District (the "District") consisting of Assessor Parcel Number book 416, page 120, parcels 2 and 3, Tract Map 6668 to the newly established Zone 16 of the District (hereinafter referred to as the "Annexation Territory") and declared its intention to conduct a protest balloting for the levy of new assessments within the Annexation Territory commencing in Fiscal Year 202212023 for the special benefits received by properties therein for the operation, maintenance and servicing of landscaping and lighting improvements, and a!! appurtenant facilities related thereto; and, WHEREAS, in accordance with the provisions of the California Constitution, Article XlllD, the City Council has caused and conducted a property owner protest ballot proceeding for the proposed new assessments to be levied on properties within the Annexation Territory; and,
WHEREAS, the assessment presented to the property owner of record within the Annexation Territory reflects the special benefit and financial obligation for the costs and expenses related to the maintenance, servicing and operation of local landscaping and lighting improvements therein as authorized by the Act and the provisions of the California Constitution and the ballot presented clearly identified the tota! amount balloted on the property, the proposed assessment rate, the property's annual amount commencing with Fiscal Year 202212023 and the inflationary adjustment applicable to future assessments; and
WHEREAS, upon the close of the Public Hearing held on January 18, 2022, the protest ballots returned by the landowner of record within the Annexation Territory, was opened and tabulated, the results of which are illustrated below:

Page 1 ends

Zone 16
Tract Map 6668
Yes
No

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEHACHAPI DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS:

Section 1: The above recitals are true and correct.

Section 2: The protest proceedings were conducted with the notices and ballots of the proposed new assessments presented to the qualified property owners within the Annexation Territory as required by law, with a required receipt of the returned ballots to the City Clerk prior to the close of the Public Hearing on January 18, 2022.

Section 3: The canvass of the protest ballot cast for the proposed assessment and Annexation Territory, received prior to the close of the public hearing and weighted according to the proportional financial obligation of the affected properties is hereby approved and confirmed.

Section 4 The City Clerk is hereby directed to enter this Resolution on the minutes of this meeting, which shall constitute the official declaration of the result of such proper$ owner protest ballot proceeding.

Section 5: This Resolution shall become effective immediately upon its adoption and the City Clerk shall certify the adoption of this Resolution.

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PASSED, APPROVED, AND ADOPTED this day of ,2022
Mayor
City of Tehachapi
City Clerk
City of Tehachapi
(STATE OF CALTFORNTA)
(couNTY oF KERN)
(crTY oF TEHACHAPT)
SS
, City Clerk of the City of Tehachapi,
County of Kern, State of California do hereby certify that the foregoing Resolution No was regularly adopted by the City Council of said City of Tehachapi at a regular meeting of said council held on the
2022 by the following vote:
day of
AYES:

NOES:

ABSENT:

ABSTAINED
City Clerk
City of Tehachapi

Page 3 ends

RESOLUTION NO

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEHACHAPI, CALIFORNIA

CONFIRMING THE ENGINEER'S REPORT REGARDING THE ANNEXATION OF TERRITORY TO THE TEHACHAPI LANDSCAPING AND LIGHTING DISTRICT NO. 1; THE LEVY OF ANNUAL ASSESSMENTS DESGRIBED THEREIN; THE ASSESSMENT DIAGRAM CONNECTED THEREWITH; AND ORDERING THE LEVY

AND COLLECTION OF ASSESSMENTS COMMENCING IN FISCAL YEAR 202212023 FOR SAID ANNEXATION
WHEREAS, the City Council of the City of Tehachapi (the 'City') pursuant to the provisions of the Landscaping and Lighting Act of 1972, being Paft2, Division 15 of the California Streets and Highways Code, commencing with Section 22500 (hereafter referred to as the "Act"), did by previous resolutions, initiate proceedings for the annexation of territory to Landscaping and Lighting District No. 1 (the "District") consisting of Assessor Parcel Number book 416, page 120, parcels 2 and 3, Tentative Tract Map 6668 to the newly established Zone 16 of the District (hereinafter referred to as the "Annexation Territory") and declared its intention to conduct a protest balloting for the levy of new assessments within the Annexation Territory commencing in Fiscal Year 202212023 for the special benefits received by properties therein for the operation, maintenance and servicing of landscaping and lighting improvements, and all appurtenant facilities related thereto in accordance with the provisions of the California Constitution Article X!!lD (the "Constitution"); and,
WHEREAS, an Engineer's Report containing an Assessment Diagram has been prepared, filed and presented to the City Council in connection with the proceedings for the annexation of the property within the Annexation Territory and the annual levy of assessments related thereto commencing on Fiscal Year 202212023 as required by the Act and the Constitution; and,
WHEREAS, the City Council has duly held a public hearing regarding these matters and has conducted a property owner protest ballot proceeding for the proposed new assessments related thereto, the results of which have been presented and confirmed by this City Council; and,
WHEREAS, the City Council desires to levy and collect an assessment against the parcel of land within the Annexation Territory for the fiscal year commencing July 1, 2022 and ending June 30, 2023 (Fiscal Year 202212023), to pay the costs and expenses of the ongoing operation, maintenance, and servicing of local landscaping and lighting improvements, appurtenant facilities; and the incidental expenses related thereto that have been determined to be of special benefit to the property and the development of property within the Annexation Territory, as described in the Engineer's Report.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TEHACHAPI DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS:

Page 1 ends

Section 1: The above recitals are true and correct
Section 2: Based on testimony given, the results of the property owner protest ballot proceedings and the documents and discussion presented, the City Council has directed and confirmed any necessary modifications or amendments to the Engineer's Report previously presented and filed based on the tabulation of the property owner protest ballots, and said modifications or amendments so reflected by the minutes of this meeting shall by reference be incorporated into the approved Engineer's Report.

Section 3: The Engineer's Report and Assessment Diagram connected therewith as approved, shall constitute the territory and properties within the Annexation Territory, and confirm and establish the method of apportionment and the maximum assessment rate including the assessment range formula as presented to the property owners of record in the ballot proceeding. Said assessments as described in the Engineer's Report as submitted or amended, including the assessment range formula described therein, are hereby confirmed and adopted by the City Council.

Sections 4: Based upon its review (and amendments, as applicable) of the Engineer's Report, which has been filed with the City Clerk, the City Council hereby finds and determines that:
4a) The land within the Annexation Territory as approved will receive special benefit from the operation, maintenance and servicing of landscaping and lighting improvements and all appurtenant facilities related thereto, to be provided by the District as described in the approved Engineer's Report. 4b) The Annexation Territory as defined by the Assessment Diagrams in the approved Engineer's Report includes allthe lands receiving such special benefit. 4c) The net amount to be assessed upon the land within the Annexation Territory as approved has been applied based on the formula and method which fairly applies the net amount on the parcel based on the special benefit to be received by the parcel from the improvements and services to be provided commencing with Fiscal Year 202212023.

Section 5: The City Council hereby orders the proposed improvements as described within the approved Engineer's Report to be made. The improvements so described generally include, but are not limited to, the maintenance, operation and servicing of the local landscaping and lighting improvements established or installed in connection with the development of properties within the approved Annexation Territory or directly associated with the properties within those Annexation Territories and shall be maintained by the City for the special benefit of the properties therein pursuant to the Act.

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Tehachapi City CouncilJanuary 18, 2022

Tehachapi City Council
January 18, 2022