Agenda, special meeting — Wasco City Council, December 20, 2022

City of Wasco City Council Special Meeting Agenda, December 20, 2022

This is a special meeting , and only comments or statements concerning the Agenda items listed below are allowed (GC54954.3a). Public comments may be made in person or via email to [email protected] no later than 4:00 p.m. December 20, 2022.

Every effort will be made to read your comment into the record; however, they are limited to two (2) minutes. If a comment is received after the specific time mentioned above but before the meeting is adjourned, the comment will still be included as a part of the record of the meeting but will not be read into the record.

SPECIAL MEETING – 5:30 pm

1) CALL TO ORDER: Mayor Reyna

2) ROLL CALL: Mayor Reyna, Mayor Pro Tem Pallares, Council Members: Garcia, Lynch, Martinez

3) FLAG SALUTE: by Mayor Reyna

4) NEW BUSINESS:
a. Receive and file the City of Wasco Financial Statements for the Year Ended June 30, 2022, and the City of Wasco Measure X Financial Statements for the Year Ended June 30, 2022. (Perez-Hernandez)

5) ADJOURNMENT:

This is to certify that this agenda was posted at Wasco City Hall on December 19, 2022, on/or before 5:30 p.m. The agenda is also available on the City website at www.cityofwasco.org.

______________________________________
Maria O. Martinez, City Clerk

The agenda is available for public review on the city website www.cityofwasco.org . The agenda items can be reviewed in the office of the City Clerk of the City of Wasco, 746 8 th Street, Wasco, CA 93280 , during regular business hours, 8:00 am – 4: 30 pm Monday through Thursday and 8 –4:30 pm Friday (closed alternate Friday 's), following the posting of the agenda. Any supporting documentation related to an agenda item for an open session of any regular meeting that is distributed after the agenda is posted and before the meeting will also be available for review at the same location and the meeting. Please remember to turn off all cell phones, pagers, or electronic devices during Council meetings.

AGENDA
Special City Council Meeting,
Successor Agency to the
Former Redevelopment Agency and the
Wasco Public Finance Authority

Tuesday, December 20, 2022 – 5:30 pm.

Council Chambers
746 8th Street, Wasco, CA 93280
www.cityofwasco.org

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City of Wasco City Council Special Meeting Agenda, December 20, 2022

The City of Wasco does not discriminate on the basis of disability in the access to, provision of, or employment in its programs and activities pursuant to 29 United States Code Section 12132 and California Civil Code Section 54.

Information regarding the rights provided under the Americans with Disabilities Act (ADA) may be obtained from the City Clerk's Office.

If you need special assistance to participate in this meeting, please contact the City Clerk's Office at (661) 758- 7215 to make reasonable arrangements to ensure accessibility to this meeting. Telephone (661) 758- 7215.

Requests for assistance should be made at least two (2) days in advance whenever possible. 2of 130
.

STAFF REPORT
City of Wasco

TO: Honorable Mayor and Council Members

FROM: M. Sco tt Hurlbert, City Manager
Isarel Perez-Hernandez, Finance Director

DATE: December 20, 2022

SUBJECT: Receive and file the City of Wasco Financial Statements for the Year Ended June 30, 2022, and the City of Wasco Measure X Financial Statements for the Year Ended June 30, 2022.

Recommendation
Staff recommends the City Council receive and file the City of Wasco Financial Statements for the Year Ended June 30, 2022, and the City of Wasco Measure X Financial Statements for the Year Ended June 30, 2022.

Background
The City is required to prepare and have audited the financial statements for all financial transactions of all funds of the City on an annual basis. The audited financial statements are prepared to communicate the financial health of the City with those charged with governance, state/federal oversight agencies, investors and the general public.

The Government Finance Officers Association (GFOA) , is an organization that was established to assist in the professional management of governments by developing and identifying financial policies and best practices through education, training, facilitation of member leadership, and networking. The objectives of the GFOA are to offer expert knowledge, education, training, leadership development, strategic use of technology, and raise public awareness of sound financial policy and practice. They do this by being a leading source of information in public financial management from research, practice and policy development, and information distribution. They improve the expertise and professionalism of financial managers and leaders and provide recognition for their achievements.

GFOA released a publication on financial reporting best practices where it states that f
inancial reporting should be issued within six months of the fiscal year -end in order for the information to be considered timely and useful by readers to make informed decisions.

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In addition to the GFOA’s best practices for timely financial reporting’s, t he Governmental Accounting Standards Board ( GASB) establishes accounting and financial reporting standards for states and local governments . The Governmental Accounting Standards Board (GASB) states that “ Financial reporting helps fulfill the government‘s duty to be publicly accountable. Financial reporting also helps to satisfy the needs of users who have limited authority, ability, or resources to obtain information and who therefore rely on the reports as an important source of information. For that purpose, financial reporting objectives should consider the needs of users and the decisions they make.”

Audit Opinions
Auditors have the option of choosing among four different types of auditor opinion reports. An auditor opinion report is a letter that auditors attach to the statutory audit report that reflects their opinion of the audit. The four types of auditor opinions ar e:

Unmodified – the opinion that is expressed when the auditor concludes that the financial statements are presented fairly, in all material respects, in accordance with the applicable financial reporting framework.

Qualified – the opinion that is expressed when the auditor either (a) having obtained sufficient appropriate audit evidence, concludes that misstatements, individually or in the aggregate, are material but not pervasive to the financial statements; or (b) is unable to obtain sufficient appropriate audit evidence on which to base the opinion, but concludes that the possible effects on the financial statements of undetected misstatements, if any, could be material but not pervasive.

Adverse – the opinion that is expressed when the auditor, having obtained sufficient appropriate audit evidence, concl udes that misstatements, individually or in the aggregate, are both material and pervasive to the financial statements.

Disclaimer – the opinion that is expressed when the auditor is unable to obtain sufficient appropriate audit evidence on which to base the opinion, and the auditor concludes that the possible effects on the financial statements of undetected misstatements, if any, could be both material and pervasive.

The type of opinion that all local auditees should strive to achieve is an unmodified opinion (clean opinion).

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Discussion
The City of Wasco’s F inancial Statements (Attachment 1) have been audited by the independent certified public accounting firm of Badawi and Associates. The goal of the independent audit was to provide reasonable assurance that the financial statements of the City of Wasco for the fiscal year ended June 30, 2022, are free of material misstatements. The audit involved examining, on a test basis, the evidence supporting the amounts and disclosures in the financial statements , assessing the accounting principles used and estimates made by management , and evaluating the overall presentation of financial statements.

The independent auditors concluded, based upon the audit, that there was a reasonable basis for rendering an unmodified opinion that the City of Wasco’s financial statements for the fiscal year ended June 30, 2022, are fairly presented in conformity with generally accepted accounting principles (“GAAP”).

Badawi and Associates have completed the Audited Financial Statements and Supplemental Information for the City of Wasco for the year ended June 30, 2022. Badawi and Associates have issued the following audit opinion:

“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 Wasco. California, as of June 30, 2022, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance wit h accounting principles generally accepted in the United States of America.”

The City of Wasco Measure X Financial Statements (attachment 2) have been audited by Badawi and Associates and the auditors also issued an unmodified (clean) opinion on these financial statements.

Staff is currently working on producing an annual comprehensive financial report. The last time the city provide this type of financial statement was in 2013.

An Annual Comprehensive Financial Report is a set of financial statements for a state, municipality or other governmental entity that comply with the accounting requirements established by the Governmental Accounting Standards Board (GASB). It must be audited by an independent auditor using generally accepted government auditing standards.

The Annual Comprehensive Financial Report consists of three sections: Introductory, Financial and Statistical.

The Introductory section orients and guides the reader through the report. The Financial section presents the entity’s basic financial statements as well as notes to the statements and the independent auditors’ report. The Statistical section provides additional financial and statistical data, including data about financial trends that may better inform the reader about the government’s activities. The statistical section is divided into five categories:
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• Financial Trends Information.
• Revenue Capacity Information.
• Debt Capacity Information.
• Demographic and Economic Information.
• Operating Information.

Fiscal Impact:

None
Attachments:

1. City of Wasco Financial Statements for the year ended June 30, 2022.

2. City of Wasco Measure X Financial Statements for the year ended June 30, 2022.

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City of
Wasco
Wasco, California
Basic Financial Statements
For the year ended June 30, 2022
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City of Wasco
Basic Financial Statements
For the year ended June 30, 2022
Table of Contents
Page

FINANCIAL SECTION
Independent Auditor's Report................................................................................................................................... 1 Basic Financial Statements:

Government-Wide Financial Statements
Statement of Net Position ...................................................................................................................................... 9 Statement of Activities ......................................................................................................................................... 10 Fund Financial Statements
Governmental Funds:

Balance Sheet...................................................................................................................................................... 16 Reconciliation of the Fund Balances of Governmental Funds to the Net Position of Governmental Activities in the
Statement of Net Position.............................................................................................................................. 18 Statement of Revenues, Expenditures and Changes
in Fund Balances (Deficits) – Governmental Funds.................................................................................. 20 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds
to the Statement of Activities........................................................................................................................ 22 Proprietary Funds
Statement of Net Position.............................................................................................................................. 25 Statement of Revenues, Expenses, and Changes in Fund Net Position ................................................. 26 Statement of Cash Flows ............................................................................................................................... 27 Fiduciary Funds:

Statement of Fiduciary Net Position......................................................................................................... 31 Statement of Changes in Fiduciary Net Position.................................................................................... 32 Notes to the Basic Financial Statements................................................................................................................ 35 Required Supplementary Information
Defined Benefit Pension Plan:

Schedule of the City’s Proportionate Share of the Net Pension Liability.................................................. 67 Schedule of City Contributions ....................................................................................................................... 68 8of 130
City of Wasco
Basic Financial Statements
For the year ended June 30, 2022
Table of Contents
Page
FINANCIAL SECTION, Continued
Required Supplementary Information, Continued
Budgetary Comparison Schedules
General Fund......................................................................................................................................................... 71 Streets Fund .......................................................................................................................................................... 72 TDA Grants............................................................................................................................................................ 73 CDBG RLA............................................................................................................................................................. 74 CalHOME Reuse................................................................................................................................................... 75 2005 HCD ............................................................................................................................................................... 76 RDA Low Income Housing ................................................................................................................................. 77 Park Impact Fund ................................................................................................................................................. 78 Other Supplementary Information
Non-Major Governmental Funds:

Combining Balance Sheet – Non-major Special Revenue Funds................................................................... 84 Combining Statement of Revenues, Expenditures and Changes in Fund Balances – Non-major Special Revenue Funds............................................................................... 90 Supplemental Schedules of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual::

Lighting & Landscape Fund................................................................................................................................ 95 Emergency Response Fund ................................................................................................................................. 96 Sewer Lift Station Fund........................................................................................................................................ 97 Community Facilities District ............................................................................................................................. 98 Gas Tax Fund......................................................................................................................................................... 99 Traffic Safety Fund.............................................................................................................................................. 100 Traffic Impact Fund............................................................................................................................................ 101 COPS Grant Fund ............................................................................................................................................... 102 2004 CalHome Grant Fund................................................................................................................................ 103 BEGIN Grant Reuse............................................................................................................................................ 104 HOME Grant Reuse............................................................................................................................................ 104 Public Financing Authority Fund..................................................................................................................... 105 ARPA Grant Fund .............................................................................................................................................. 105 9of 130
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Wasco
Wasco, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Wasco, California (City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

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

Responsibility of Management’s 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.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 10of 130
To the Honorable Mayor and Members of the City Council
of the City of Wasco
Wasco, California

Page 2 ends

Auditor’s Responsibility for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements
In performing an audit in accordance with GAAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

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

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison information, and pension required supplementary information on pages 67-78, 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.
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To the Honorable Mayor and Members of the City Council
of the City of Wasco
Wasco, California

Page 3 ends

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

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The combining and individual nonmajor fund financial statements, budgetary comparison schedules on pages 84-105 are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements, and the budgetary comparison schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements, and the budgetary comparison schedules on pages 84-105 are fairly stated in all material respects in relation to the basic financial statements as a whole.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December XX, 2022, 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 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.

Badawi & Associates, CPAs
Berkeley, California
December XX, 2022
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BASIC

FINANCIAL STATEMENTS
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GOVERNMENT-WIDE

FINANCIAL STATEMENTS
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City of Wasco
Statement of Net Position
June 30, 2022
Governmental Business-type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 30,748,703 $ 22,202,215 $ 52,950,918 $ Receivables, net 1,450,489 1,591,736 3,042,225 Internal balances (563,649) 563,649 - Total current assets 31,635,543 24,357,600 55,993,143 Noncurrent assets:

Notes receivable 5,103,247 - 5,103,247 Capital assets:

Non-depreciable 4,292,347 1,520,166 5,812,513 Depreciable 45,976,476 56,869,105 102,845,581 Less accumulated depreciation (17,587,368) (29,061,376) (46,648,744) Total capital assets 32,681,455 29,327,895 62,009,350 Total noncurrent assets 37,784,702 29,327,895 67,112,597 Total assets 69,420,245 53,685,495 123,105,740

DEFERRED OUTFLOWS OF RESOURCES
Deferred pension related items 959,616 1,040,001 1,999,617 Total deferred outflows of resources 959,616 1,040,001 1,999,617

LIABILITIES
Current liabilities:

Accounts payable 1,440,623 251,174 1,691,797 Accrued liabilities 192,976 37,103 230,079 Deposits payable 279,059 141,915 420,974 Unearned revenue 2,491,670 260,032 2,751,702 Compensated absences - current 46,348 49,651 95,999 Total current liabilities 4,450,676 739,875 5,190,551 Noncurrent liabilities:

Compensated absences 72,495 77,194 149,689 Net pension liability 1,585,433 1,718,240 3,303,673 Total noncurrent liabilities 1,657,928 1,795,434 3,453,362 Total liabilities 6,108,604 2,535,309 8,643,913

DEFERRED INFLOWS OF RESOURCES
Deferred inflows of resources - pension 1,476,663 1 ,600,360 3 ,077,023 Total deferred inflows of resources 1,476,663 1 ,600,360 3 ,077,023

NET POSITION
Net investment in capital assets 32,681,455 29,327,895 62,009,350 Restricted for:

Streets and roads 3,416,928 - 3,416,928 Community development 6,706,310 - 6,706,310 Public safety 225,526 - 225,526 Capital projects - 1,735,824 1,735,824 Total restricted 10,348,764 1,735,824 12,084,588 Unrestricted 19,764,375 19,526,108 39,290,483 Total net position 62,794,594$ 50,589,827 $ 113,384,421 $ Primary Government
See accompanying notes to the basic financial statements. 9 18of 130
City of Wasco
Statement of Activities
For the year ended June 30, 2022
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Total Governmental activities:

General government 180,649$ 88,334$ 186,358$ 1,904,924$ 2,179,616$ Public safety 5,528,345 103,097 106,944 - 210,041 Public works 2,219,035 1,265,096 - 44,508 1,309,604 Community development 1,345,290 690 - - 690 Total governmental activities 9,273,319 1,457,217 293,302 1,949,432 3,699,951 Business-type Activities:

Water reclamation and sewer 2,188,738 2,824,967 - - 2,824,967 Water utility 2,788,270 3,626,140 - 57,399 3,683,539 Refuse collection and disposal 3,022,144 3,280,755 - 43,096 3,323,851 Public transportation 349,447 6,326 93,317 343,738 443,381 CNG Fueling station 161,406 108,345 - - 108,345 Total Business-Type activities 8,510,005 9,846,533 93,317 444,233 10,384,083 Total primary government 17,783,324$ 11,303,750$ 386,619$ 2,393,665$ 14,084,034$ General Revenues:

Taxes:

Property tax
Sales tax
Franchise tax
State allocation of gas tax
Other Taxes
Intergovernmental, unrestricted:

Motor vehicle in-lieu tax
Total taxes
Unrestricted investment earnings
Miscellaneous revenue
Transfers
Total general revenues and transfers
Change in net position
Net position - beginning of year
Net position - end of year
Program Revenues
See accompanying notes to the basic financial statements. 10 19of 130
Governmental Business-Type
Activities Activities Total
1,998,967$ -$ 1,998,967$
(5,318,304) - (5,318,304)
(909,431) - (909,431)
(1,344,600) - (1,344,600)
(5,573,368) - (5,573,368)
- 636,229 636,229
- 895,269 895,269
- 301,707 301,707
- 93,934 93,934
- (53,061) (53,061)
- 1,874,078 1,874,078
(5,573,368) 1,874,078 (3,699,290)
1,150,633 - 1,150,633
5,523,630 - 5,523,630
400,756 - 400,756
1,108,116 - 1,108,116
304,031 - 304,031
3,335,911 - 3,335,911
11,823,077 - 11,823,077
(540,589) 96,853 (443,736)
458,510 - 458,510
(100,143) 100,143 -
11,640,855 196,996 11,837,851
6,067,487 2,071,074 8,138,561
56,727,107 48,518,753 105,245,860
62,794,594$ 50,589,827$ 113,384,421$
and Changes in Net Position
Net (Expense) Revenue
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FUND

FINANCIAL STATEMENTS
Governmental Fund Financial Statements
Proprietary Fund Financial Statements
Fiduciary Fund Financial Statements
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Governmental Fund Financial Statements
The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The revenues of the General Fund consist mostly of property tax, sales tax, motor vehicle tax, and franchise fees.

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

The TDA Fund accounts for revenues allocated by the Kern Council of Governments under the Transportation Development Act (TDA). Revenues received are held in this fund and transferred to the Public Transportation Fund and Streets Fund when actual costs of transportations, repairs to streets or replacement of streets are incurred.

The CDBG RLA Fund accounts for several rounds of funding from Community Development Block Grants for low interest housing rehabilitation loans. As these funds pay back, they are counted as program income for the CDBG Revolving Loan Fund. Funds accumulated within this fund are loaned back out for additional low interest housing rehabilitation loans in accordance with the City’s agreement with the State Department for Housing and Community Development (HCD). These funds are also used in conjunction with CalHome funds in order to fund larger rehabilitation and reconstruction needs.

The CalHOME Reuse Fund accounts for the several rounds of funding received from the CalHOME Program and as loans are repaid the money is placed inthe CalHOME Reuse Fund.

The CalHOME Reuse money is available to continue funding eligible activities.

The 2005 HCD Fund accounts for $950,000 awarded from the California Department of Housing and Community Development to assist in the construction of Poso Place Senior Apartments. The money was lent to F & Poso Street Investors, a California limited partnership.

The RDA Low & Moderate Income Housing Fund is a special revenue fund type that accounts for the required 20% set-aside of tax revenues specifically to be used toward low and moderate income housing projects as required by State law.

The Park Impact Fund is a special revenue fund type that accounts for park impact fees collected from new residential developments within the city. These fees are used by the City to provide park and recreational facilities that reasonably serve the new development. 15 24of 130
City of Wasco
Balance Sheet
Governmental Funds
June 30, 2022
CDBG CalHOME
General TDA RLA Reuse
ASSETS
Cash and investments 21,938,192$ -$ 534,777$ 1,192,915$ Receivables, net 1,254,618 186,358 - - Prepaid expenses - - - - Due from other funds 193,645 - - - Notes receivable - - 1,113,152 1,450,935 Total assets 23,386,455 186,358 1,647,929 2,643,850

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 1,353,231 - - - Accrued liabilities 192,068 - - - Deposits payable 279,059 - - - Due to other funds - 186,358 - - Advances from other funds 563,649 - - - Unearned revenue 71,970 - - - Total liabilities 2,459,977 186,358 - - Deferred Inflows of Resources
Unavailable revenues - 186,358 - - Total deferred inflows of resources - 186,358 - - Fund Balances:

Nonspendable - - - - Restricted for:

Community development - - 1,647,929 2,643,850 Streets and transportation - - - - Low and moderate income housing - - - - Public safety - - - - Other purposes - - - - Assigned:

General reserve 9,300,000 - - - Community development - - - - Unassigned 11,626,478 (186,358) - - Total fund balances 20,926,478 (186,358) 1,647,929 2,643,850 Total liabilities, deferred inflows of
resources and fund balances 23,386,455$ 186,358$ 1,647,929$ 2,643,850$ See accompanying notes to the basic financial statements. 16 25of 130
Nonmajor Total
2005 RDA Low Park Governmental Governmental
HCD Fund Income Housing Impact Funds Funds
-$ 65,533$ 710,399$ 6,306,887$ 30,748,703$ - 9,513 - - 1,450,489 - - - - - - - - - 193,645 950,000 1,000,000 - 589,160 5,103,247 950,000 1,075,046 710,399 6,896,047 37,496,084 - - - 87,392 1,440,623 - - - 908 192,976 - - - - 279,059 - - - 7,287 193,645 - - - - 563,649 - - 702,536 1,717,164 2,491,670 - - 702,536 1,812,751 5,161,622 - - - - 186,358 - - - - 186,358 - - - - - 950,000 - - 1,339,485 6,581,264 - - - 3,114,720 3,114,720 - 1,075,046 - - 1,075,046 - - - 225,526 225,526 - - 7,863 294,345 302,208 - - - - 9,300,000 - - - 116,507 116,507 - - - (7,287) 11,432,833 950,000 1,075,046 7,863 5,083,296 32,148,104 950,000$ 1,075,046$ 710,399$ 6,896,047$ 37,496,084$ 17 26of 130
Total Fund Balances - Total Governmental Funds 32,148,104$ Capital assets used in governmental activities were not current financial resources.

Therefore, they were not reported in the Governmental Funds Balance Sheet. The capital assets were adjusted as follows:

No depreciable 4,292,347
Depreciable, net 28,389,108
Interest payable on long-term debt did not require current financial resources.

Therefore, interest payable was not reported as a liability in the Governmental Funds Balance Sheet. -
Unavailable revenues recorded i
n the fund financial statements resultin g from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 186,358
In the Government-Wide Financial Statements, deferred employer contributions for pension, certain differences between actuarial estimates and actual results, and other adjustments resulting from changes in assumptions and benefits are deferred in the current year.

Deferred outflows of resources related to pension 959,616 Deferred inflows of resources related to pension (1,476,663) Lon
g-term liabilities were not due an d payablei n the current perio d.T herefore, t hey were not reported in the Governmental Funds Balance Sheet.

Compensated absences - current (46,348)
Compensated absences - noncurrent (72,495)
Net pension liability (1,585,433)
Net Position of Governmental Activities 62,794,594$
City of Wasco
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2022
Amounts reported for governmental activities in the statement of net position are different b See accompanying notes to the basic financial statements. 18 27of 130
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19 28of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the year ended June 30, 2022
CDBG Cal HOME
General TDA RLA Reuse
REVENUES:

Taxes 10,654,353$ -$ -$ -$ Licenses and permits 477,280 - - - Intergovernmental 239,572 - - - Charges for services 234,038 - - - Fines, forfeitures and assessments 50,863 - - - Use of money and property (631,259) - - 7,717 Miscellaneous 458,042 - - - Total revenues 11,482,889 - - 7,717 EXPENDITURES:

Current:

General government
298,005 - - - Public safety 5,562,236 - - - Public works 856,736 - - - Community development 1,554,158 - 8,558 148 Non-departmental 21,179 - - - Capital outlay:

General capital outlay 2,149,332 - - - Street improvements - - - - Total expenditures 10,441,646 - 8,558 148

REVENUES OVER (UNDER)
EXPENDITURES 1,041,243 - (8,558) 7,569 OTHER FINANCING SOURCES (USES):

Transfers in
2,276,868 - - 45,976 Transfers out (135,045) (1,591) - - Sale of capital assets - - - - Total other financing sources (uses) 2,141,823 (1,591) - 45,976 Special item - - - - Net change in fund balances 3,183,066 (1,591) (8,558) 53,545 FUND BALANCES:

Beginning of year
17,743,412 (184,767) 1,656,487 2,590,305 End of year 20,926,478$ (186,358)$ 1,647,929$ 2,643,850$ See accompanying notes to the basic financial statements. 20 29of 130
Nonmajor Total
2005 RDA Low Park Governmental Governmental
HCD Fund Income Housing Impact Funds Funds
-$ -$ -$ 1,461,017$ 12,115,370$ - - - 73,712 550,992 - - - 1,978,089 2,217,661 - - 136,443 20,231 390,712 - - - 11,073 61,936 - - 3,821 79,135 (540,586) - - - 464 458,506 - - 140,264 3,623,721 15,254,591 - - - - 298,005 - - - - 5,562,236 - - - 631,457 1,488,193 - - - 15,137 1,578,001 - - - - 21,179 - - 136,443 - 2,285,775 - - - - - - - 136,443 646,594 11,233,389 - - 3,821 2,977,127 4,021,202 - - - - 2,322,844 - - - (2,286,351) (2,422,987) - - - - - - - - (2,286,351) (100,143) - - - - - - - 3,821 690,776 3,921,059 950,000 1,075,046 4,042 4,392,520 28,227,045 950,000$ 1,075,046$ 7,863$ 5,083,296$ 32,148,104$ 21 30of 130
City of Wasco
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities For the year ended June 30, 2022
Net Change in Fund Balances - Total Governmental Funds 3,921,059$ Governmental funds reported capital outlay as expenditures. However, in the Government-Wide Statement of Activities, the cost of those assets was allocated over their estimated lives as depreciation expense.

Capital outlay and other capitalized expenditures are added back to fund balance 2,219,731 Capital assets adjustments 92,763
Statement of Activities, but did not require the use of current financial resources.

Therefore, depreciation expense was not reported as expenditures in the governmental funds. (1,043,172)
Accrued compensated leave payments were reported as expenditures in the governmental funds, however expense is recognized in the Government-Wide Statement of Activities based on earned leave accruals. (12,430) Unavailable revenues recorded in the fund financial statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 186,358
Current year employer pension contributions are recorded as expenditures in the governmental funds, however, these amounts are reported as a deferred outflow of resources in the Government-Wide Statement of Net Position. 755,636 Pension expense/(income) is reported in the Government-Wide Statement of Activities does not require the use of current financial resources, and therefore is not reported as expenditures in governmental funds. (52,458)
Change in Net Position of Governmental Activities 6,067,487$ Amounts reported for governmental activities in the Government-Wide Statement of Activities were different because:

See accompanying notes to the basic financial statements. 22 31of 130
Proprietary Fund Financial Statements
The Water Reclamation and Sewer Fund is used to account for the provisions of sewer service to the residents of the City. All activities necessary to provide such service are accounted for in this fund.

The Water Utility Fund is used to account for the provisions of water service to residents of the City. All activities necessary to provide such service are accounted for in this fund.

The Refuse Collection and Disposal Fund is used to account for the collection and disposal of refuse within the City. All activities necessary to provide such service are accounted for in this fund.

The Public Transportation Fund accounts for the operations of a Dial-A-Ride system for general transportation of all citizens and a Social Services System which transports seniors and handicapped.

The Compressed Natural Gas (CNG) Fueling Station Fund accounts for two fill pumps available to the City of Wasco, Local School Districts, and the general public. 23 32of 130
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24 33of 130
City of Wasco
Statement of Net Position
Proprietary Funds
June 30, 2022
Water Refuse Total
Reclamation Water Collection and Public CNG Fueling Proprietary and Sewer Utility Disposal Transportation Station Funds ASSETS
Current Assets:

Cash and investments 6,463,818$ 11,333,990$ 4,153,490$ 11,753$ 239,164$ 22,202,215$ Receivables, net 248,144 621,437 660,261 65,574 (3,680) 1,591,736 Total current assets 6,711,962 11,955,427 4,813,751 77,327 235,484 23,793,951 Noncurrent:

Advances to other funds - 563,649 - - - 563,649 Capital assets:

Nondepreciable 213,349 1,245,017 30,900 30,900 - 1,520,166 Depreciable 29,218,733 19,741,552 4,732,188 1,814,628 1,362,004 56,869,105 Less accumulated depreciation (15,931,897) (7,719,112) (4,017,251) (1,012,883) (380,233) (29,061,376) Net capital assets 13,500,185 13,267,457 745,837 832,645 981,771 29,327,895 Total noncurrent assets 13,500,185 13,831,106 745,837 832,645 981,771 29,891,544 Total assets 20,212,147 25,786,533 5,559,588 909,972 1,217,255 53,685,495

DEFERRED OUTFLOWS OF RESOURCES

Deferred pension related items 236,955 262,550 484,107 52,990 3,399 1,040,001 Total deferred outflows of resources 236,955 262,550 484,107 52,990 3,399 1,040,001

LIABILITIES

Current liabilities:

Accounts payable 23,904 118,214 76,378 24,748 7,930 251,174 Deposits payable (1,620) 144,654 (1,119) - - 141,915 Accrued liabilities 11,599 9,178 13,683 2,601 42 37,103 Unearned revenue - - - 260,032 - 260,032 Compensated absences - current 8,161 11,748 26,535 3,134 73 49,651 Total current liabilities 42,044 283,794 115,477 290,515 8,045 739,875 Noncurrent liabilities:

Compensated absences 14,025 18,973 38,645 5,497 54 77,194 Net pension liability 391,485 433,772 799,819 87,547 5,617 1,718,240 Total noncurrent liabilities 405,510 452,745 838,464 93,044 5,671 1,795,434 Total liabilities 447,554 736,539 953,941 383,559 13,716 2,535,309

DEFERRED INFLOWS OF RESOURCES

Deferred pension related items 364,627 404,013 744,948 81,541 5,231 1,600,360 Total deferred inflows of resources 364,627 404,013 744,948 81,541 5,231 1,600,360

NET POSITION
Net investment in capital assets 13,500,185 13,267,457 745,837 832,645 981,771 29,327,895 Restricted for capital projects 1,735,824 - - - - 1,735,824 Unrestricted 4,400,912 11,641,074 3,598,969 (334,783) 219,936 19,526,108 Total net position 19,636,921$ 24,908,531$ 4,344,806$ 497,862$ 1,201,707$ 50,589,827$ Business-Type Activities - Enterprise Funds
See accompanying notes to the basic financial statements. 25 34of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Net Position Proprietary Funds
For the year ended June 30, 2022
Water Refuse Total
Reclamation Water Collection and Public CNG Fueling Proprietary and Sewer Utility Disposal Transportation Station Funds OPERATING REVENUES:

Charges for services 2,353,298$ 3,368,210$ 3,258,298$ 6,326$ 108,345$ 9,094,477$ Rental income 141,597 - - - - 141,597 Cost recoveries - 257,930 22,457 - - 280,387 Miscellaneous - - - - - - Total operating revenues 2,494,895 3,626,140 3,280,755 6,326 108,345 9,516,461 OPERATING EXPENSES:

Wages and benefits
516,168 477,255 1,348,462 155,518 13,980 2,511,383 Administration 876,427 996,956 1,384,563 142,643 22,891 3,423,480 Materials and supplies 21,669 14,980 39,998 - - 76,647 Maintenance and repairs 53,084 115,310 108 - 18,047 186,549 Utilities 90,520 690,608 11,899 - 79,248 872,275 Depreciation 630,870 493,161 237,114 51,286 27,240 1,439,671 Total operating expenses 2,188,738 2,788,270 3,022,144 349,447 161,406 8,510,005 Operating income (loss) 306,157 837,870 258,611 (343,121) (53,061) 1,006,456 NONOPERATING REVENUES (EXPENSES):

Interest income 28,199 48,330 19,122 - 1,202 96,853 Local transportation funding - - - 93,317 - 93,317 Grants - 57,399 43,096 343,738 - 444,233 Connection fees 330,072 - - - - 330,072 Interest expense - - - - - - Gain on sale of capital assets - - - - - - Total nonoperating revenues (expenses) 358,271 105,729 62,218 437,055 1,202 964,475 Income before contributions and transfers 664,428 943,599 320,829 93,934 (51,859) 1,970,931 CONTRIBUTIONS AND TRANSFERS:

Transfers in - 135,045 - - - 135,045 Transfers out (2,154) (22,571) (10,177) - - (34,902) Total contributions and transfers (2,154) 112,474 (10,177) - - 100,143 Change in net position 662,274 1,056,073 310,652 93,934 (51,859) 2,071,074 NET POSITION:

Beginning of year 18,974,647 23,852,458 4,034,154 403,928 1,253,566 48,518,753 End of year 19,636,921$ 24,908,531$ 4,344,806$ 497,862$ 1,201,707$ 50,589,827$ Business-Type Activities - Enterprise Funds
See accompanying notes to the basic financial statements. 26 35of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Net Position Proprietary Funds
For the year ended June 30, 2022
Water Refuse CNG
Reclamation Water Collection and Public Fueling
and Sewer Utility Disposal Transportation Station Totals CASH FLOWS FROM OPERATING ACTIVITIES:

Cash received from customers, including cash deposits 2,308,194$ 3,385,559$ 3,014,467$ 36,306$ 110,131$ 8,854,657$ Cash received from rental activities 141,597 - - - - 141,597 Cash received from reimbursements and cost recoveries - 257,930 22,457 - - 280,387 Cash paid to suppliers (1,498,492) (1,820,960) (1,380,078) (119,449) (112,404) (4,931,383) Cash paid to employees (787,214) (814,846) (1,469,979) (194,368) (11,930) (3,278,337) Net cash provided by (used in) operating activities 164,085 1,007,683 186,867 (277,511) (14,203) 1,066,921 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Cash transferred from other funds - 135,045 - - - 135,045 Cash transferred to other funds (2,154) (22,571) (10,177) - - (34,902) Interfund borrowings - 563,649 - (147,792) - 415,857 Connection fees 330,072 - - - - 330,072 Subsidy from TDA revenues - - - 93,317 - 93,317 Subsidy from grants - 57,399 43,096 343,738 - 444,233 Net cash provided by (used in)
noncapital financing activities 327,918 733,522 32,919 289,263 - 1,383,622 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES:

Purchase of capital assets (237,921) (264,166) (9,050) 1 - (511,136) Proceeds from sale of capital assets - - - - - - Net cash provided by (used in)
capital and related financing activities (237,921) (264,166) (9,050) 1 - (511,136) CASH FLOWS FROM INVESTING ACTIVITIES:

Interest received 28,199 48,330 19,122 - 1,202 96,853 Net cash provided by (used in) investing activities 28,199 48,330 19,122 - 1,202 96,853 Net cash flows 282,281 1,525,369 229,858 11,753 (13,001) 2,036,260 CASH AND INVESTMENTS - Beginning of year 6,181,537 9,808,621 3,923,632 - 252,165 20,165,955 CASH AND INVESTMENTS - End of year 6,463,818$ 11,333,990$ 4,153,490$ 11,753$ 239,164$ 22,202,215$

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:

Operating income (loss) 306,157$ 837,870$ 258,611$ (343,121)$ (53,061)$ 1,006,456 Adjustments to reconcile operating income (loss) to
net cash provided by (used in) operating activities:

Depreciation 630,870 493,161 237,114 51,286 27,240 1,439,671 (Increase) decrease in accounts receivable (43,644) 17,513 (242,350) (65,925) 1,786 (332,620) (Increase) decrease in prepaid expense - - - - - - Increase (decrease) in accounts payable (458,540) (4,325) 52,390 22,718 7,790 (379,967) Increase (decrease) in accrued liabilities 1,748 1,219 4,100 476 (8) 7,535 Increase (decrease) in unearned revenues - - - 95,905 - 95,905 Increase (decrease) in deposits payable (1,460) (164) (1,481) - - (3,105) Increase (decrease) in compensated absences (9,914) (11,820) (80) 2,509 (150) (19,455) Increase (decrease) in net pension liability (560,205) (665,152) (641,941) (104,498) (785) (1,972,581) Increase (decrease) in deferred inflows of resources 297,017 325,943 642,522 67,898 4,776 1,338,156 Increase (decrease) in deferred outflows of resources 2,056 13,438 (122,018) (4,759) (1,791) (113,074) Net cash provided by (used in) operating activities 164,085$ 1,007,683$ 186,867$ (277,511)$ (14,203)$ 1,066,921$ Business-Type Activities - Enterprise Funds
See accompanying notes to the basic financial statements. 27 36of 130
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Fiduciary Fund Financial Statements
The RDA Successor Agency Private Purpose Trust Fund accounts for monies received from the Kern County Auditor Controller for the repayment of the enforceable obligations of the former Wasco Redevelopment Agency. These funds are restricted for the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule (ROPS).

The Wasco Public Financing Authority Custodial Fund is used to account for assets held by the City of Wasco Public Financing Authority as an agent for various local governments and other entities.
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City of Wasco
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2022
RDA Wasco Public
Successor Agency Financing
Private Purpose Authority
Trust Fund Custodial Fund
ASSETS
Cash and investments
572,525$ 545,908$
Investments with fiscal agents - restricted - 410,226 Receivables, net 75,300 337
Total assets 647,825 956,471

LIABILITIES
Accounts payable - 75,782
Due to County of Kern 647,825 -
Total liabilities 647,825 75,782

NET POSITION
Held in trust for Wasco Public Financing Authority - 880,689 Total Net Position -$ 880,689$ See accompanying notes to the basic financial statements. 31 40of 130
City of Wasco
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the year ended June 30, 2022
RDA Wasco Public
Successor Agency Financing
Private Purpose Authority
Trust Fund Custodial Fund
ADDITIONS:

Property taxes -$ 125,052$
Investment earnings - (3,233) Total additions - 121,819 DEDUCTIONS:

Administration fees - 20,231 Interest expense - 10,413 Bank fees - 134
Debt service principal payment - 65,000 Total deductions - 95,778 Change in net position - 26,041 NET POSITION:

Beginning of year, as restated - 854,648 End of year -$ 880,689$
See accompanying notes to the basic financial statements. 32 41of 130

NOTES TO BASIC

FINANCIAL STATEMENTS
33 42of 130
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34 43of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the City of Wasco (the "City") have been prepared in conformity with U.S. generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB). The following summary of the City’s more significant accounting policies is presented to assist the reader in interpreting the basic financial statements and other data in this report.

These policies should be viewed as an integral part of the accompanying basic financial statements.

A. Reporting Entity
The City of Wasco, California was incorporated on December 17, 1945. The City is a full-service city and operates under a Council - Manager form of government, providing the following services: general government; public safety; public works; and development and conservation. The City is located in Kern County approximately 25 miles northwest of Bakersfield, the County government seat.

The City has defined its reporting entity in accordance with accounting principles generally accepted in the United States of America which provide guidance for determining which governmental activities, organizations, and functions should be included in the reporting entity. The Basic Financial Statements present information on the activities of the reporting entity, including all of the fund types of the City (the primary government) and its component units.

Accounting principles generally accepted in the United States of America require that the component units be separated into blended or discretely presented units for reporting purposes. Although legally separate entities, blended component units are, in substance, part of the City’s operations. Therefore, they are reported as part of the primary government. Discretely presented component units are reported in a separate column in the basic financial statements to emphasize that they are legally separate from the City.

The City has no discretely presented component units.

Blended Component Units
On March 6, 1989, the City and the former Wasco Redevelopment Agency entered into a Joint Exercise of Powers Agreement establishing the Wasco Public Financing Authority (the "Authority") for the purpose of issuing its bonds to be used to provide financial assistance to the City, the Agency or any other public entity of the State of California. The funds of this component unit are reported in the Special Revenue Funds and the Custodial Fund. Separate financial statements are not available for the Authority. The City Council of Wasco is the governing body for the Authority.

B. Basis of Presentation
Government-Wide Financial Statements
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.

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. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. 35 44of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued
For the most part, the effect of interfund activity has been removed from the government-wide financial statements. Exceptions to this general rule are payments-in-lieu of taxes where the amounts are reasonably equivalent in value to the interfund services provided and other charges between the City’s sewer, water and refuse function and various other functions of the government. Eliminations of these charges would distort the direct costs and program revenues reported for the various functions concerned.

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 those that are clearly identifiable with a specific function or segment. Indirect expenses have been allocated to major functions in order to present a more accurate and complete picture of the cost of services. 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 fiduciary funds 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.

Fund Financial Statements
The accounting system of the City is organized and operated on the basis of separate funds, each ofwhich is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self- balancing accounts that constitute its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues, and expenditures/expenses. Funds are organized into three major categories: governmental, proprietary, and fiduciary. An emphasis is placed on major funds within the governmental and proprietary categories. A fund is considered major if it is the primary operation fund of the City or meets the following criteria:
a. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of that individual governmental or enterprise fund are at least 10 percent of the corresponding total for all funds of that category or type; and b. Total assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/expenses of the individual governmental fund or enterprise fund are at least 5 percent of the corresponding total for all governmental and enterprise funds combined. c. The government has determined that a fund is important to the financial statement user. 36 45of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued
The major funds are as follows:

Governmental Funds
The General Fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The revenues of the General Fund consist mostly of property tax, sales tax, motor vehicle tax, and franchise fees.

The CalHOME Reuse Fund accounts for the several rounds of funding received from the CalHOME Program and as loans are repaid the money is placed in the CalHOME Reuse Fund. The CalHOME Reuse money is available to continue funding eligible activities.

The RDA Low & Moderate Income Housing fund is a special revenue fund type that accounts for the required 20% set-aside of tax revenues specifically to be used toward low and moderate income housing projects as required by State law.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued B. Basis of Presentation, Continued
Fund Financial Statements, Continued
Proprietary Funds
The Water Reclamation and Sewer Fund is used to account for the provisions of sewer service to the residents of the City. All activities necessary to provide such service are accounted for in this fund.

The Water Utility Fund is used to account for the provisions of water service to residents of the City. All activities necessary to provide such service are accounted for in this fund.

The Refuse Collection and Disposal Fund is used to account for the collection and disposal of refuse within the City. All activities necessary to provide such service are accounted for in this fund.

The Public Transportation Fund accounts for the operations of a Dial-A- Ride system for general transportation of all citizens and a Social Services System which transports seniors and handicapped.

The Compressed Natural Gas (CNG) Fueling Station Fund accounts for two fill pumps available to the City of Wasco, Local School Districts, and the general public.

Fiduciary Fund
The RDA Successor Agency Private Purpose Trust Fund accounts for monies received from the Kern County Auditor Controller for the repayment of the enforceable obligations of the former Wasco Redevelopment Agency. These funds are restricted for the sole purpose of payment of items on an approved Recognized Payment Obligation Schedule (ROPS).

The Wasco Public Financing Authority Custodial Fund is used to account for assets held by the City of Wasco Public Financing Authority as an agent for various local governments and other entities.

C. Measurement Focus and Basis of Accounting
Measurement focus is a term used to describe “which” transactions are recorded within the various financial statements. Basis of accounting refers to “when” transactions are recorded regardless of the measurement focus applied.

Measurement Focus
On the government-wide Statement of Net Position and the Statement of Activities, both governmental and business-like activities are presented using the economic resources measurement focus. The accounting objectives of the economic measurement focus are the determination of operating income, changes in net position (or cost recovery), financial position, and cash flows. All assets and liabilities (whether current or noncurrent) associated with their activities are reported. 38 47of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting, Continued Measurement Focus
In the fund financial statements, the “current financial resources” measurement focus or the “economic resources” measurement focus is used as appropriate:

1. All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets and liabilities are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.

2. The proprietary fund, and the fiduciary funds utilizes an “economic resources” measurement focus.

It Equity is classified as net position.

Basis of Accounting
In the government-wide Statement of Net Position and Statement of Activities, both governmental and business-like activities are presented using the accrual basis of accounting. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used. Revenues, expenses, gains, losses, assets, and liabilities resulting from exchange and exchange-like transactions are recognized when the exchange takes place.

In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable and available”. Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. Revenues which are susceptible to accrual include property taxes and special assessments that are levied for and due for the fiscal year and collected within 60 days after year-end. Licenses, permits, fines, forfeits, charges for services and miscellaneous revenues are recorded as governmental fund type revenues when received in cash because they are not generally measurable until actually received. Revenue from taxpayer assessed taxes, such as sales taxes, are recognized in the accounting period in which they became both measurable and available to finance expenditures of the fiscal period. Grant funds and reimbursements of expenses under contractual agreements are reported in governmental fund types and are recorded as a receivable when earned rather than when susceptible to accrual. Generally, this occurs when authorized expenditures are made under the grant program or contractual agreement. Expenditures are recognized when the fund liability is incurred, if measurable, except for unmatured interest on long-term debt, which is recognized when due.

The accrual basis of accounting is followed by the proprietary fund and fiduciary funds. Under the accrual basis of accounting, revenues are recognized when earned and expenses are recorded when the liability is incurred or economic asset used.

Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses generally result from providing goods and services in connection with a proprietary fund’s principal ongoing operations. 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 nonoperating revenues and expenses. 39 48of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, Net Position or Equity, and Other Financial Statement Items Cash and Investments
Cash and investment balances of each of the City’s funds, except for funds required to be held by outside fiscal agents under the provisions of bond indentures, are pooled in order to take advantage of an effective investment strategy. Income earned from pooled investments is allocated to each of the funds based on average pooled cash balances during the year. Deficit cash balances are classified as due to other funds and funded by the General Fund or related operating fund.

Statues authorize investments in obligations of the United States Treasury, agencies and instrumentalities, commercial paper, bakers’ acceptances, repurchase agreements, money market funds, and investment pools. Investments are primarily comprised of holdings in investment pools, certificates of deposit, corporate bonds, muni bonds, and mutual funds. Investments are stated at fair value.

Investment of debt proceeds held by bond trustees are governed by the provisions of the Agency’s debt agreement rather than the general provisions of the California Government Code.

For purposes of the Combined Statement of Cash Flows for the Proprietary fund types, cash and cash equivalents includes all pooled cash investments, non-pooled restricted cash and restricted investments with an original maturity of three months or less. The City considers the investments held in LAIF, CSJVRMA, and CalTRUST to be demand deposit accounts where funds may be withdrawn and deposited at any time without prior notice or penalty.

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 interfund receivables/interfund payables (i.e., the current portion of interfund loans) or advances to/from other funds (the noncurrent portion) of interfund loans. All other outstanding balances between funds are reported as interfund receivables/interfund payables. Any residual balances outstanding between the governmental activities and the 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 fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade and tax receivables are shown net of an allowance for uncollectible accounts and estimated refunds due.
40 49of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, Net Position or Equity, and Other Financial Statement Items, Continued Property Taxes
Secured property taxes are levied during September of each year for the fiscal year beginning with the preceding July 1 and ending the following June 30. They become a lien on real property on January 1 preceding the fiscal year for which taxes are levied. The Kern County Assessor establishes the value of the property on January 1. Taxes are payable in two installments on November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. In 1978, a state constitutional amendment (Proposition 13) provided that the tax rate be limited to 1% of market value, levied only by the County and shared with all other jurisdictions. Such limitation on the rate may only be increased through voter approval. The County collects property taxes and distributes them to taxing jurisdictions on the basis of the taxing jurisdiction’s assessed valuations and on the tax rate for voter-approved debt.

Prepaid Items
Certain payments to vendors applicable to future accounting periods are reported as prepaid items using the consumption method of accounting. Prepaid items do not reflect current appropriable resources and, thus, an equivalent portion of fund balance is reported as nonspendable in governments funds.

Capital Assets and Depreciation
Capital assets, which include property, plant, equipment and infrastructure assets (e.g., roads, traffic signals, drainage systems and similar items), are reported in the applicable governmental or business type activities column in the government-wide financial statements. Capital assets are defined by the City as assets with an initial cost of more than $5,000 ($50,000 for infrastructure) and an estimated life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed.

Donated capital assets are recorded at acquisition value at the date of donation.

The cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized.

Property, plant and equipment of the primary government as well as the component units, are depreciated using the straight-line method over the following estimated useful lives:

Assets Years
Buildings 40
Improvements other than buildings 20
Machinery and Equipment 5 - 8
Infrastructure 20 - 75
41 50of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, Net Position or Equity, and Other Financial Statement Items, Continued Compensated Absences
It is the City’s policy to permit employees to accumulate earned but unused vacation, comp time, and sick pay benefits. Accumulated sick leave is available for illness or personal use but not paid out to employees.

Vacation and comp time pay liabilities are calculated at full value based on the employee’s current rate of pay. All compensated absence pay is accrued when incurred in the government-wide, proprietary, and fiduciary fund 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 and retirements.

Pensions
The City implemented GASB Statements No. 68 “Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27” and No. 71 “Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment to GASB Statement No. 68”.

In government-wide and proprietary financial statements, retirement plans (pensions) are required to be recognized and disclosed using the accrual basis of accounting, regardless of the amount recognized as pension expenditures on the governmental fund statements, which use the modified accrual basis of accounting.

In general, the City recognizes a net pension liability that represents the City’s proportionate share of the excess of the total pension liability over the fiduciary net position of the pension reflected in the actuarial reports provided by CalPERS. The net pension liability is measured as of the City’s prior fiscal year-end.

Changes in the net pension liability are recorded in the period incurred as pension expense or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The change in net pension liability that are recorded as deferred inflows of resources or deferred outflows of resources (that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience) are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits as of the beginning of the measurement period and are recorded as a component of pension expense.

For purposes of measuring the net pension liability and deferred outflows/inflows or resources relating to pension and pension expense, information about the fiduciary net position of the City’s pension plan with CalPERS and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms.

Investments are reported at fair value.Projected earnings on pension investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and amortized as a component of pension expense on a closed basis over a five-year period. 42 51of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, Net Position or Equity, and Other Financial Statement Items, Continued 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. Initial-issue bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. The difference between the reacquisition price of refunding bonds and the net carrying amount of refunded debt (deferred amount on refunding) is amortized over the shorter of the lives of the refunding debt or remaining life of the refunded debt. Bonds payables are reported net of the unamortized portion of applicable premium, discount or deferred amount on refunding. Amortization of bond premiums or discounts, and deferred amounts on refunding are included in interest expense. Bond issuance costs, except for prepaid bond insurance are expenses in the year of issuance. Prepaid bond insurance is deferred and amortized over the life of the bond.

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

Deferred Outflows and Inflows of Resources
Pursuant to GASB Statement No. 63, “Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position,” and GASB Statement No. 65, “Items Previously Reported as Assets and Liabilities,” the City recognizes deferred outflows and inflows of resources.

In addition to assets, the Statement of Financial Position will sometimes report a separate section for deferred outflows of resources. A deferred outflow of resources is defined as a consumption of net assets that applies to a future reporting period and so will not be recognized as an expense or expenditure until then.

In addition to liabilities, the Statement of Financial Position will sometimes report a separate section for deferred inflows of resources. A deferred inflows of resources is defined as an acquisition of net assets that applies to a future reporting period and so will not be recognized as revenue until then. 43 52of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, Net Position or Equity, and Other Financial Statement Items, Continued Net Position
The government-wide and business-type activities fund financial statements utilize a net position presentation. Net position is categorized as follows:

Net Investment In Capital Assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce the balance in this category.

Restricted Net Position – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. The government-wide statement of net position reports $
12,001,871 of restricted net position, of which $10,266,047 is restricted externally by grantors, creditors, or laws or regulations of other governments and $1,735,824 is restricted by enabling legislation.

Unrestricted Net Position – This category represents net position of the City, not restricted for any project or other purpose.

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

Fund Balance – Government Funds
Fund balances of the governmental funds are presented in the financial statements based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent.

Fund balances are classified as follows:

Nonspendable – Amounts that cannot be spent either because they are not in a spendable form or because they are legally or contractually required to be maintained intact.

Restricted – Amounts restricted by external sources (creditors, laws of other governments, etc.) or by constitutional provision or enabling legislation.

Committed – Amounts that are obligated to a specific purpose which are internally imposed by the government through formal action (Ordinances and Resolutions) at the highest level of decision making authority (City Council). These commitments can only be overturned by a like action.

Assigned – Amounts that are intended to be used for specific purposes that are considered neither restricted nor committed. Undesignated excess Fund Balances may be assigned by the City Council, City Manager, or Finance Director for specific purposes through the budget process or agenda items. The assigned designation may be reversed by the City Council at any public meeting. 44 53of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, Net Position or Equity, and Other Financial Statement Items, Continued Net Position, Continued
Unassigned – Residual positive fund balances within the General Fund, which have not been classified within the other above mentioned categories. Unassigned Fund Balances may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes.

When expenditures are incurred for purposes for which all restricted, committed, assigned, and unassigned fund balances are available, the City’s policy is to apply in the following order, except for instances wherein an ordinance specifies the fund balance: Restricted, Committed, Assigned, and Unassigned.

The City does not have a formal minimum fund balance requirement.

Appropriated Budget and Budgetary Control
The City Council is required to adopt an annual budget resolution by July 1 of each fiscal year for the General, Special Revenue, Debt Service and Capital Projects funds. The budgets are presented for reporting purposes on a budgetary basis consistent with accounting principles generally accepted in the United States of America. The City of Wasco Public Financing Authority does not adopt a budget for itsgeneral fund.

The appropriated budget is prepared by fund, function, and department. The City Manager may make transfers of appropriations within a department. Transfers of appropriations between departments requires the approval of the council. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the department level. Unexpended or unencumbered appropriations lapse at the end of the fiscal year. Encumbered appropriations are reappropriated in the ensuing year’s budget.

The City Council adopts budgets for the Enterprise. However, all Proprietary fund types are accounted for on a cost of service (net income), or “capital maintenance” measurement focus. As a result, budget comparisons are impractical. Additionally, the City is not legally mandated to report the results of operations for these Proprietary fund types on a budget comparison basis; therefore, budgetary data related to these funds has not been presented.

Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions 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/expenses during the reporting period.

Actual results could differ from those estimates.
45 54of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued D. Assets, Liabilities, Net Position or Equity, and Other Financial Statement Items, Continued Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with the Internal Revenue Code Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseeable emergency.

The laws governing deferred compensation plan assets require plan assets to be held in a Trust for the exclusive benefit of plan participants and their beneficiaries. The assets, all property and rights purchased with such amounts and all income attributable to such amounts, are held in trust for the exclusive benefit of the participants and the beneficiaries. The plan is administered by independent plan administrators through administrative service agreements and hence they have been excluded from these financial statements.

In the year 2021, The City has evaluated the requirements of GASB Statement No. 84, Fiduciary Activities and GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans and determined that plan didn’t meet the criteria to be reported as a fiduciary activity, as required by the above Statements. Moreover, the plan is classified as other employee benefit plan for financial reporting purposes per GASB 97 requirements.

2. CASH AND INVESTMENTS
The City pools all of its cash and investments except those funds required to be held by outside fiscal agents under the provisions of bond indentures.

The following is a summary of the City’s cash and investments as classified in the accompanying financial statements:

Pooled Cash and Investments - Governmental Funds 30,748,703$ Pooled Cash and Investments - Business-type Funds 22,202,215 Fiduciary Funds:

Cash and Investments - WPFA 545,908
Restricted Investments - WPFA 410,226
Cash and Investments - RDA Successor Private Purpose Trust 572,525 Total 54,479,577$
46 55of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
Cash and investments on June 30, 2022 consist of the following:

A. Deposits:

The carrying amount of the City’s cash deposit was $5,886,786 on June 30, 2022. Balance before reconciling amounts were a positive amount of $5,976,737 on June 30, 2022. The City has waived collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. The remaining amount was collateralized with securities pledged by the pledging financial Institution as permitted by the California Government Code.

The California Government Code requires that a financial institution secure deposit 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 market value of the pledged securities in the collateral pool must equal at least 110% of the total amount d eposited by the public agencies. California law also allows financial institutions to secure public agency deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. As of June 30, 2022, all of the City’s deposits with financial institutions in excess of federal depository insurance limits were held in fully collateralized accounts, as permitted by the California Government Code.

Under Government Code Section 53655, the placement of securities by a bank or savings and loan association with an Agent of Depository has the effect of perfecting the security interest in the name of the local governmental agency.

Cash on hand 2,477$
Deposits with financial institutions 5,886,786
Total Cash on hand and deposits 5,889,263
Money Market 1,534,588
Central San Joaquin Valley RMA Pool (CSJVRMA) 2,182,913 Local Agency Investment Funds (LAIF) 39,701,140
CalTrust 4,761,447
Cash and investments with fiscal agents 410,226
Total investments 48,590,314
Total cash and investments 54,479,577$
47 56of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
B. Investment Valuation
The City categorizes the fair value measurements of its investments based on the hierarchy established by Generally Accepted Accounting Principles (GAAP). The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. All the City’s investments are valued using Level 1 inputs based on quoted market prices. The City had the following investments on June 30, 2022:

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 City’s investments with LAIF on June 30, 2022, include a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments include the following:

Structured Notes – are debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or have embedded forwards or options.

Asset-Backed Securities – the bulk of which are mortgage-backed securities, entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (such as Collateralized Mortgage Obligations) or credit card receivables.

As of June 30, 2022, the City had $39,701,140 invested in LAIF, which had invested 1.88% of the pool investment funds in Structured Notes and Asset-Backed Securities as compared to 2.31% in the previous year. The LAIF fair value factor of 0.987125 was used to calculate the fair value of the investments in LAIF.

Total Fair
Investment Type Value Level 1 Inputs Level 2 Inputs Level 3 Inputs Investments -$ -$ -$ -$ Total - -$ -$ -$ Investments not subject to leveling:

Money Market 1,534,588
Central San Joaquin Valley RMA Pool (CSJVRMA) 2,182,913 Local Agency Investment Funds (LAIF) 39,701,140
CalTrust 4,761,447
Cash and investments with fiscal agents 410,226
Total 48,590,314$
Fair Value Measurements Using
48 57of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
B. Investment Valuation, Continued
The City is a member of CSJVRMA for the purpose of pooling insurance coverage. The CSJVRMA maintains an investment pool which is available to its members. The City invested cash in this pool which is highly liquid. Deposits can be converted to cash within 24 hours without loss of interest. Included in the pool’s investment portfolio are securities that are within the statutory limits imposed by government code.

The pool’s and the City’s exposure to credit, market, or legal risk is not available. The fair value of the City’s position in the pool is the same as the value of the pool shares. CSJVRMA is regulated by the California Government Code.

CalTRUST is a Joint Powers Authority created by public agencies in 2005 to provide a convenient method for public agencies to pool their assets for investment purposes. It is governed by a Board of Trustees made up of experienced local agency treasurers and investment officers. The Board sets overall policies for the program and selects and supervises the activities of the investment manager and other agents. Any California public agency that is authorized to join a Joint Powers Authority can participate in CalTRUST.

The specific sections of the California Government Code that govern participation in CalTRUST areSections 6500 and 6509.7, which offers four account options – Government Fund, Money Market Fund, Short-Term Fund and Medium-Term Fund with varying interest rates and terms of length of deposit and withdrawals.

C. 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. One of the ways that the City's interest rate risk is mitigated is by purchasing a combination of shorter term and longer-term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.

The sensitivity of the fair values of the City's investments (including investments held by bond trustees) to market rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity as of June 30, 2022:
12 Months Total Fair
Investment Type or less 1 - 5 years Value
Money Market 1,534,588$ -$ 1,534,588$ Central San Joaquin Valley RMA Pool (CSJVRMA) 2,182,913 - 2,182,913 Local Agency Investment Funds (LAIF) 39,701,140 - 39,701,140 CalTrust 4,761,447 - 4,761,447
Cash and investments with fiscal agents 410,226 - 410,226 Total 48,590,314$ -$ 48,590,314$
Remaining Maturity
49 58of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS, Continued
D. Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The actual ratings as of June 30, 2022, were as follows:

Concentration of credit risk – The City is required to disclose any investment in any one issuer that represents 5% or more of total investments. Investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments are excluded from this requirement. As such, the City has no concentration of credit risk that exceeds 5% as June 30, 2022.

Custodial credit risk – For an investment, this is the risk that, in the event of the failure of a depository financial institution, 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. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities through the use of mutual funds or government investment pools (such as LAIF).

Total Fair
Investment Type Value S&P Moody's N/A
Money Market 1,534,588$ Not rated
Central San Joaquin Valley RMA Pool (CSJVRMA) 2,182,913 Not rated Local Agency Investment Funds (LAIF) 39,701,140 Not rated CalTrust 4,761,447 Not rated
Cash and investments with fiscal agents 410,226 Not rated Total 48,590,314$
Rating as of Fiscal Year-End
50 59of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

3. RECEIVABLES
Receivables on June 30, 2022 consist of the following:

4. INTERFUND RECEIVABLES, PAYABLES, ADVANCES AND TRANSFERS Due to/from Other Funds - Thesebalances represent short-term loans between funds for cash shortages or expenditures and are expected to be reimbursed within one year. The composition of due to/from balances at June 30, 2022 consisted of the following:

RDA Low Non-Major
General Income Governmental Total
Governmental Activities Funds TDA Housing Funds Governmental Taxes receivable 1,116,640$ -$ -$ -$ 1,116,640$ Due from governments 49,508 186,358 9,513 - 245,379 Miscellaneous Receivable 100,397 - - - 100,397 Allowance for doubtful accounts (11,927) - - - (11,927) Total 1,254,618$ 186,358$ 9,513$ -$ 1,450,489$ Water Refuse
Reclamation Water Collection Public CNG Fueling Total
Business- Type Activities And Sewer Utility And Disposal Transportation Station Business-Type Accounts receivable 267,137$ 647,883$ 643,266$ -$ -$ 1,558,286$ Due from governments - 38,820 - - 38,820 Miscellaneous Receivable - 1,597 - 65,574 (3,680) 63,491 Allowance for doubtful accounts (18,993) (28,043) (21,825) - - (68,861) Total 248,144$ 621,437$ 660,261$ 65,574$ (3,680)$ 1,591,736$ Due From Due To
Fund Other Funds Other Funds
Governmental Activities
General Fund 193,645$ -$
TDA - 186,358
Non-Major Funds - 7,287
Total Due From/To 193,645$ 193,645$
51 60of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

4. INTERFUND RECEIVABLES, PAYABLES, ADVANCES AND TRANSFERS, Continued Advances to/from other Funds - On June 30, 2022 advances to/from other funds were as follows:
$563,649 advance from Water Utility to Streets fund was for a commercial infrastructure project to be paid back over seven years from assessment collections. During FY2021 Streets fund has been rolled over to the general fund and therefore the advance amount is reported in the general fund.

Transfers Between Funds – With the Council approval, resources may be transferred from one City fund to another. Transfers between funds during the fiscal year ended June 30, 2022, were as follows:

General Fund transfers in of $2,276,868 consist of $2,240,375 from Non-Major Funds to be applied to street operations and various street capital projects, as well as ARPA grant’s related expenditures, $$1,591 from TDA Fund of State allocation of TDA revenue, and $2,154 from Water Reclamation & Sewer Fund, $22,571 from Water Utility Fund & $10,177 from Refuse Collection & Disposal Fund for Munis software upgrades.

The transfers into Water Utility, of $135,045, are from the General fund for CARES Act related expenditures.

Fund
Advanced
From
Advanced
To
Governmental Funds
General Fund 563,649$ -$
Total Governmental Funds 563,649 -
Proprietary Funds
Water Utility - 563,649
Total Proprietary Funds - 563,649
Total Advances 563,649$ 563,649$
Transfers Out
General
Fund
CDBG
RLA
Water
Reclamation
and Sewer
Water
Utility
Refuse
Collection
and Disposal
Public
Transportation
Total
Transfers
out
Governmental Funds
General Fund -$ -$ -$ 135,045$ -$ -$ 135,045$ TDA 1,591 - - - - - 1,591 Non-Major Fund 2,240,375 45,976 - - - - 2,286,351 Proprietary Funds
Water Reclamation and Sewer 2,154 - - - - - 2,154 Water Utility 22,571 - - - - - 22,571 Refuse Collection and Disposal 10,177 - - - - - 10,177 Total Transfers In 2,276,868$ 45,976$ -$ 135,045$ -$ -$ 2,457,889$ Transfers In
52 61of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

5. CAPITAL ASSETS
Governmental Activities Capital asset for the year ended June 30, 2022, was as follows:

Depreciation expense for capital assets was charged to functions as follows:

Balance Deletions/ Balance
Governmental Activities June 30, 2021 Additions Adjustment Transfers June 30, 2022 Capital Assets Not Being Depreciated
Land 2,150,866$ 1,409,688$ -$ -$ 3,560,554$ Construction in Progress 1,119,201 559,682 (16,118) (930,972) 731,793 Total Capital Assets Not Being Depreciated 3,270,067 1,969,370 (16,118) (930,972) 4,292,347 Capital Assets Being Depreciated
Land Improvements 9,096,825 - 2,686 - 9,099,511 Construction 3,734,175 109,757 49,765 930,972 4,824,669 Infrastructure 28,109,918 36,104 - - 28,146,022 Machinery and Other 2,313,189 104,500 58,793 - 2,476,482 Vehicles 1,429,792 - - - 1,429,792 Total Capital Assets Being Depreciated 44,683,899 250,361 111,244 930,972 45,976,476 Less Accumulated Depreciation For
Land Improvements 5,768,074 452,003 - - 6,220,077 Construction 1,032,123 73,487 664 - 1,106,274 Infrastructure 7,071,503 365,290 - - 7,436,793 Machinery and Other 1,521,000 92,135 1,699 - 1,614,834 Vehicles 1,149,133 60,257 - - 1,209,390 Total Accumulated Depreciation 16,541,833 1,043,172 2,363 - 17,587,368 Total Capital Assets Being Depreciated, Net 28,142,066 (792,811) 108,881 930,972 28,389,108 Governmental Activities Capital Assets, net 31,412,133$ 1,176,559$ 92,763$ -$ 32,681,455$ Depreciation expense for capital assets was charged to functions as follows:

General government 136,686$
Public safety 2,321
Public works 904,165
1,043,172$
53 62of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

5. CAPITAL ASSETS, Continued
Business-Type Activities’ Capital Assets for the year ended June 30, 2022, was as follows:

Depreciation expense for Business-Type Activities were as follows:

Balance Balance
Business-Type Activities June 30, 2021 Additions Deletions Transfers June 30, 2022 Capital Assets Not Being Depreciated
Land 767,323$ 141,214$ -$ -$ 908,537$ Construction in Progress 3,886,449 15,953 - (3,290,773) 611, 629 Total Capital Assets Not Being Depreciated 4,653,772 157,167 - (3,290,773) 1,520,166 Capital Assets Being Depreciated
Land Improvements 7,210,841 - - - 7,210,841 Construction 21,108,481 9,049 - - 21,117,530 Infrastructure 8,383,104 192,399 - 3,283,259 11,858,762 Machinery and Other 12,011,222 152,523 - 7,514 12,171,259 Vehicles 4,510,713 - - - 4,510,713 Total Capital Assets Being Depreciated 53,224,361 353,971 - 3,290,773 56,869,105 Less Accumulated Depreciation For
Land Improvements 6,364,905 119,044 - - 6,483,949 Construction 8,274,964 419,131 - - 8,694,095 Infrastructure 3,386,601 149,349 - - 3,535,950 Machinery and Other 6,324,905 447,669 - - 6,772,574 Vehicles 3,270,330 304,478 - - 3,574,808 Total Accumulated Depreciation 27,621,705 1,439,671 - - 29,061,376 Total Capital Assets Being Depreciated, Net 25,602,656 (1,085,700) - 3,290,773 27,807,729 Business-Type Activities Capital Assets, net 30,256,428$ (928,533)$ -$ -$ 29,327,895$ Depreciation expense for Business-Type Activities were as follows:

Water Reclamation and Sewer 630,870$
Water Utility 493,161
Refuse Collection and Disposal 237,114
Public Transportation 51,286
CNG Fueling Station 27,240
1,439,671$
54 63of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

6. ACCRUED LIABILITIES
Accrued Liabilities on June 30, 2022, as reported on the Statement of Net Position are detailed as follows:

7. LONG-TERM LIABILITIES

The compensated absences for business- t y p e a c t i v i t i e s w i l l b e p a i d b y the respective funds in which the expense was accrued. Compensated absences for gove rnmental activities are typically paid from the General Fund.

General Fund
Governmental Activities
Accrued Payroll 35,673$
Employee Withholdings 94,020
Other Liabilities 63,283
Total 192,976$
Water Refuse
Reclamation Water Collection Public CNG Fueling Total
And Sewer Utility and Disposal Transportation Station Business-Type Business-Type Activities
Accrued Payroll 8,327$ 9,178 $ 13,683$ 2,601$ 42$ 33,831$ Accrued Interest Payable 3,272 - - - 3,272 Total 11,599$ 9,178$ 13,683$ 2,601$ 42$ 37,103$ Balance Balance Due Within
June 30, 2021 Additions Reductions June 30, 2022 One Year Governmental Activities
Compensated Absences 106,413$ 130,794$ (118,364)$ 118,843$ 46,348 Total Governmental Activities 106,413 130,794 (118,364) 118,843 46,348 Business-Type Activities
Compensated Absences 146,300 140,899 (160,354) 126,845 49,651 Total Business-Type Activities 146,300 140,899 (160,354) 126,845 49,651 Total Statement of Net Position 252,713$ 271,693$ (278,718)$ 245,688$ 95,999$ 55 64of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

8. UNEARNED REVENUE
Unearned Revenue consists of moneys received where the City has not yet incurred the qualifying expenditures as follows:

9. PUBLIC ENTITY RISK POOLS
The City maintains self-insurance programs for workers’ compensation, general public liability, auto liability and property coverage through its membership in the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The CSJVRMA is comprised of 55 member cities and special districts and is organized under a Joint Powers Agreement pursuant to the California Government Code. The purpose of the CSJVRMA is to arrange and administer programs of insurance for the pooling of self-insured losses and to purchase excess insurance coverage. Each member has a representative on the Board of Directors with officers of the CSJVRMA being elected annually by the Board Members.

Liability Program: The program provides $54 million of coverage per occurrence for general & automobile liability and public officials errors & omission coverage. CSJVRMA members self-fund the first $1 million of exposure; l osses above $1 million to $54 million are covered through CSJVRMA’s participation in the California Affiliated Risk Management Authority’s (CARMA) excess pool. The California Affiliated Risk Management Authority (CARMA) is comprised of six member Joint Power Authorities and is organized under a Joint Powers Agreement pursuant to the California Government Code. Losses exceeding $1 million up to $54 million are covered through reinsurance. Within CSJVRMA’s $1 million retention, the City of Wasco selected a self-insured retention of $25,000. The pool shares all losses exceeding a member’s self- insured retention.

Employment Practices Liability (EPL): This program from CSJVRMA covers the EPL exposures through the Employment Risk Management Authority (ERMA). ERMA is comprised of eight members Joint Power Authorities and is organized under a Joint Powers Agreement pursuant to the California Government Code. ERMA covers $2 million for each occurrence less the members’ retained limit of $1 million.

Workers' Compensation: The program is a risk sharing pool. The City self-insures for the first $500,000 of liability. Losses in excess of $500,000, up to $5 million are covered through CSJVRMA’s participation in the Local Agency Workers’ Compensation Excess JPA (LAWCX) which is comprised of 32 different Joint Power Authorities. For excess coverage, LAWCX is a member of the California State Association of Counties Excess Insurance Authority which provides coverage up to the statutory limit.

Property Insurance: The City, through its membership in CSJVRMA participates in a pooled program.

CSJVRMA members self-fund the first $25,000 of loss; losses above $25,000 to $1,000,000,000 are covered through excess property and boiler & machinery policies. The City of Wasco’s deductible is $5,000 or $10,000 per loss.

Governmental Business-Type Fiduciary
Activities Activities Fund
General Grant 71,970 -$ -$ Emergency Response 21,879 - - Park Impact Fees 702,536 - - APRA Grant 1,695,285 - - TDA - 260,032 - Total 2,491,670$ 260,032$ -$
56 65of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

9. PUBLIC ENTITY RISK POOLS, Continued
The latest audited financial information available from CSJVRMA is for the year ended June 30, 2022 as follows:

10. RETIREMENT PLAN
A. General Information about the Pension Plans
Plan Description. The City contributes to the Miscellaneous Plan and the Safety Plan, which are both cost sharing multiple employers defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS). CalPERS acts as a common investment and administrative agent for participating public employers within the State of California. Benefit provisions are established by state statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through board resolution. CalPERS issues a separate comprehensive annual financial report which is publicly available and can be obtained at CalPERS’ website under Forms and Publications.

Benefits Provided and Employees Covered. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and plan beneficiaries. The Miscellaneous Plan has three Tiers of benefits. Tier I – Applicable to employees hired prior to January 1, 2013, with a formula of 3% at age 60. Tier II – Also applicable to employees hired prior to January 1, 2013, with a formula of 2.5% at age 55. Tier III – Applicable to new CalPERS members hired on or after January 1, 2013, as a result of Public Employees’ Pension Reform Act of 2013 (PEPRA) with a formula of 2% at age 62. The Safety Plan with a formula of 2% at age 55 is for the City’s inactive police department and therefore has no active employees.

As of the June 30, 2021 measurement date, the City had the following employees covered by benefit term:

Total Assets 150,837, 823$
Total Liabilities 118,663, 929
Total Net Position 32,173,894$
Total Revenue 66,885,024$
Total Expenses 55,557,907
Change in Net Position 11,327,117$
Safety
Tier I Tier II Tier III Plan
Active 21 5 35 -
Transferred 23 2 11 -
Separated 10 2 17 -
Retired 60 4 - 14
Miscellaneous Plan
57 66of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. RETIREMENT PLAN, Continued
A. General Information about the Pension Plans, Continued Contributions. Active plan members are required to contribute 10% of their annual covered salary for Miscellaneous Plan Tier I and Tier II and 6.25% for Miscellaneous Plan Tier III. The City makes the contributions required of City’s contract employees on their behalf and for their account for Tier 1 and Tier II. The City is also required to contribute the actuarially determined annual required contributions necessary to fund the plans. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The average required employer contribution rate for the fiscal year 2020-21 was 15.445% (Tier I) and 11.742% (Tier II) and 7.732% (Tier III) and 0% (Safety) of annual covered salary. The contribution requirements of the plan members are established by State statute and the employer contribution rate is established and may be amended by CalPERS.

On June 30, 2022, the City reported net pension liability of $3,303,673 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 was measured as of June 30, 2021, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using the standard update procedure. 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 entities, actuarially determined.

The City's proportionate share of the net pension liability for the Plan as of June 30, 2020 and 2021 was as follows:

B. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources
For the year ended June 30, 2022, the City recognized pension income of $83,469. On June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:

Proportion - June 30, 2020 0.06537%
Proportion - June 30, 2021 0.06109%
Change - Increase (Decrease) -0.00428%
Deferred Outflows Deferred Inflows
of Resources of Resources
Difference between Expected and Actual Experience 393,938$ -$ Difference between Projected and Actual Investment Earnings - 2,772,910 Differences between Employer's Contributions and - 151,537 Proportionate Share of Contributions
Changes in Employer's Proportion 31,110 152,576 Pension Contributions Made Subsequent to Measurement Date 1,574,569 - Total 1,999,617$ 3,077,023$
58 67of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. RETIREMENT PLAN, Continued
B. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources, Continued
$1,574,569 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pension will be recognized as pension expense as follows:

Actuarial Methods and Assumptions. The total pension liability for the June 30, 2021 measurement period was determined by an actuarial valuation as of June 30, 2020, rolled forward to June 30, 2021 using standard update procedures. The total pension liability for the measurement date June 30, 2021 were determined using the following actuarial assumptions:
*The mortality table used was developed based on CalPERS-specific data. The table includes 15 years of mortality improvements using Society of Actuaries Scale 90% of scale MP 2016. For more details on this table, please refer to the December 2017 experience study report (based on CalPERS demographic data from 1997 to 2015) that can be found on the CalPERS website.

Changes in Assumption. There were no changes of assumptions during the measurement period June 30, 2021. Deferred inflows of resources for changes in assumptions presented in the deferred outflows/inflows table above represents the portion of the changes of assumptions related to prior measurement periods.

Fiscal Year Ending
June 30,
2023 (679,030)$
2024 (581,190)
2025 (625,741)
2026 (766,014)
Actuarial Cost Method Entry Age Normal in accordance with the requirements of GASB Statement No. 68
Actuarial Assumptions
Discount Rate 7.15%
Inflation 2.50% 2.50%
Salary Increases Varies by Entry Age and Service
Mortality Rate Table * Derived using CalPERS' Membership Data for all Funds Post Retirement Benefit Increase Contract COLA up to 2.50% until Purchasing Power Protection Allowance Floor on Purchasing Power applies, 59 68of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. RETIREMENT PLAN, Continued
B. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources, Continued
Discount Rate. The discount rate used to measure the total pension liability was 7.15 percent. To determine whether the municipal bond rate should be used in the calculation of a discount rate for each plan, CalPERS stress tested plans that would most likely result in a discount rate that would be different from the actuarially assumed discount rate. The tests revealed the assets would not run out.

Therefore, the current 7.15 percent discount rate is appropriate, and the use of the municipal bond rate calculation is not deemed necessary. The long term expected discount rate of 7.15 percent will be applied to all plans in the Public Employees' Retirement Fund (PERF). The cash flows used in the testing were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. The stress test results are presented in a detailed report called "GASB Crossover Testing Report” that can be obtained at CalPERS website under the GASB 68 section.

The long-term expected rate of return on pension plan investments was determined using a building block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

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

The table on the next page reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These rates of return are net of administrative expenses. 60 69of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

10. RETIREMENT PLAN, Continued
B. Pension Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources, Continued
Sensitivity of the Net Pension Liability to Changes in the Discount Rate. The following presents the net pension liability calculated using a discount rate of 7.15%, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (6.15%) or 1 percentage-point higher (8.15%) than the current rate:

Plan Fiduciary Net Position. Detailed information about the Plan’s fiduciary net position is available in the separately issued CalPERS financial report. The plan fiduciary net position may differ from the plan assets reported in the actuarial valuation report due to several reasons. First, for the accounting valuations, CalPERS must keep items such as deficiency reserves, fiduciary self-insurance and OPEB expense included in fiduciary net position. These amounts are excluded for rate setting purposes in the funding actuarial valuation.

Payable to the Pension Plan. On June 30, 2022, the City reported a payable of $0 for outstanding amount of contributions to the pension plan required for the year ended June 30, 2022.

Assumed
Asset Real Return Real Return
Asset Class
(1) Allocation Years 1 - 10
(2)(4)
Years 11+
(3)(4)
Global equity 50.00% 4.80% 5.98%
Fixed income 28.00% 1.00% 2.62%
Inflation assets 0.00% 0.77% 1.81%
Private equity 8.00% 6.30% 7.23%
Real assets 13.00% 3.75% 4.93%
Liquidity 1.00% 0.00% -0.92%
Total 100%
(1)
In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-Term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities. (4)
Figures are based on previous ALM of 2017
(3)
An expected inflation of 2.92% used for this period.
(2)
An expected inflation of 2.00% used for this period.
1% Decrease 6.15%
Net Pension Liability $ 7,597,696
Current Discount Rate 7.15%
Net Pension Liability $ 3,303,673
1% Increase 8.15%
Net Pension Liability $ (245,550)
61 70of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

11. CONDUIT DEBT OBLIGATIONS
In addition to the Long-Term Liabilities discussed in Note 7, Long-Term Liabilities have been issued in the name of the Wasco Public Financing Authority. Neither the City, nor the Authority, is obligated in any manner for the repayment of these obligations. The Authority acts as an agent to property owners for the collection and repayment of Special Assessment Debt.

These bonds were issued for the purpose of enabling the Authority to acquire qualified obligations and were issued under the authority of the Marks-Roos Local Bond Pooling Act of 1985. The purchased obligations are generally repaid by a special assessment against real estate and were used to finance the construction of necessary infrastructure, including but not limited to curbs, gutters, sidewalks, waterlines, and sanitary sewer facilities. The special assessment obligations serve as security for the bonds issued by the Authority. The bonds payable and special assessments outstanding are detailed as follows:

The "Remaining Collections" represents the sum of the remaining principal and interest for each active parcel after 2021/22 debt service has been billed.

12. DEFICIT FUND BALANCES AND NET POSITION
As of June 30, 2022 the following funds had a fund deficit:

The above deficits are a result of expenditures prior to grant reimbursement.

13. EXCESS OF EXPENDITURES OVER APPROPRIATIONS
For the year ended June 30, 2022, the General Fund and other Major Funds had the following expenditures in excess of its budget:

Sufficient resources were available within the funds to finance these overages.

Remaining Outstanding
Assessment Districts Collections Debt Service
91-2B Summerfield 8,073$ 10,850$
93-1 Southside - Childress 51,466 89,775 Total 59,539$ 100,625$
Governmental Funds
TDA (186,358)$
Total Governmental Funds (186,358)$
Amount
Exceeded
Funds Budget
General Fund:

Public works -code compliance (14,437)$
CDBG RLA:

Community development (8,558)
CalHOME Reuse:

Community development (148)
62 71of 130
City of Wasco
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

14. CONTINGENCIES AND COMMITMENTS
Grant Awards - The City participates in certain Federal, and State assisted grant programs. These programs are subject to program compliance audits by the grantors or their representatives.

An audit of the City’s Caltrans projects by the California Department of Transportation (Caltrans), determined that a violation of Caltrans regulations existed. Consequently, Caltrans determined that $224,699 potentially be disallowed and required that the City reimburse this amount to Caltrans. During fiscal year 2021/2022 the City paid Caltrans a sum of $224,699 to resolve the dispute.

15. PRIOR PERIOD ADJUSTMENT
The City recorded prior period adjustment to correct net position balance of the Custodial Fund as of June 30, 2021, because bond payable was wrongly reported as part of its liabilities. The adjustments were as follows:

Net Position, as Net Position, as
Previously Reported Restated at
at June 30, 2021 Liabilities June 30, 2021
Fiduciary Funds - Custodial Fund
Wasco Public Financing Authority 754,648$ 100,000$ 854,648$ Prior Period Adjustments
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REQUIRED

SUPPLEMENTARY INFORMATION
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66 75of 130
City of Wasco
Required Supplementary Information
Cost Sharing Defined Benefit Pension Plan
For the year ended June 30, 2022
Schedule of the City's Proportionate Share of the Net Pension Liability and Related Ratios as of the Measurement Date
Fiscal year 2022 2021 2020 2019
Measurement date: 6/30/2021 6/30/2020 6/30/2019 6/30/2018 Proportion share of the net pension liability 0.06109% 0.06537% 0.06518% 0.07044% Proportionate share of the net pension liability 3,303,673$ 7,112,777$ 6,679,161$ 6,787,909$ Covered payroll 3,607,271$ 3,159,408$ 3,061,133$ 2,823,120$ Proportionate share of the net pension liability / (asset) as a percentage of its covered payroll 91.58% 225.13% 218.19% 240.44% Proportionate share of the fiduciary net position as a
percentage of the City's net pension liability 88.29% 75.10% 75.26% 75.26% Fiscal year 2018 2017 2016 2015
Measurement date: 6/30/2017 6/30/2016 6/30/2015 6/30/2014 Proportion share of the net pension liability 0.07368% 0.07712% 0.08293% 0.09319% Proportionate share of the net pension liability 7,307,480$ 6,673,668$ 5,692,558$ 5,450,478$ Covered payroll 3,187,601$ 2,976,881$ 3,004,620$ 2,525,280$ Proportionate share of the net pension liability / (asset) as a percentage of its covered payroll 229.25% 224.18% 189.46% 215.84% Proportionate share of the fiduciary net position as a
percentage of the City's net pension liability 73.31% 74.06% 78.40% 79.82% Notes to Schedule
*Fiscal year 2015 was the 1st year of implementation, therefore only seven years are shown.

Assumption Changes : The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016, and then decreased from 7.65% to 7.15% in fiscal year 2018. CalPERS mortality assumptions were adjusted in fiscal year 2019.
67 76of 130
City of Wasco
Required Supplementary Information
Cost Sharing Defined Benefit Pension Plan
For the year ended June 30, 2022
Schedule of City Contributions
Fiscal Year 6/30/2022 6/30/2021 6/30/2020 6/30/2019
Actuarially determined contribution 1,574,569 $ 1,137,987 $ 846,598 $ 1,031,256 $ Contributions in relation to actuarially determined contributi (1,574,569) (1,137,987) (846,598) (1,031,256) Contribution deficiency (excess) - $ - $ - $ - $ Covered payroll 3,434,650 $ 3,607,271 $ 3,159,408 $ 3,061,133 $ Contributions as a percentage of covered payroll 45.84% 31.55% 26.80% 33.69% Fiscal Year 6/30/2018 6/30/2017 6/30/2016 6/30/2015
Actuarially determined contribution 934,521 $ 915,447 $ 861,299 $ 650,046 $ Contributions in relation to actuarially deemed contributions (934,521) (915,447) (861,299) (650,046) Contribution deficiency (excess) - $ - $ - $ - $ Covered employee-payroll 2,823,120 $ 3,187,601 $ 2,976,881 $ 3,004,620 $ Contributions as a percentage of covered payroll 33.10% 28.72% 28.93% 21.63% Notes to the Schedule:

Methods and assumptions used to determine contribution rates:

Valuation date June 30, 2019
Actuarial cost method Entry Age Normal, cost method
Amortization method Varies by date established and source Remaining amortization period Differs by employer rate plan but not more than 29 years Assets valuation method Market value of assets
Inflation 2.50%
Salary increases Depending on age, service and type of employment Investment rate of return 7% (net of administrative expenses) Mortality Derived using CalPERS’ Membership Data for all Funds. The post-retirement mortality. The post-retirement mortality rates include 15 years of projected on- going mortality improvement using 90 percent of Scale MP 2016 published by *Fiscal year 2015 was the 1st year of implementation, therefore only seven years are shown 68 77of 130
City of Wasco
Required Supplementary Information
For the Year Ended June 30, 2022

1. BUDGET AND BUDGETARY ACCOUNTING
Budgeting Procedures
The City’s fiscal year runs from July 1 through June 30. Each year, the Finance Director prepares the Proposed Operating Budget and Capital Improvement Program which are adopted in June. The budget process is as follows:
 In January, the City Council meets to set the goals and priorities for the upcoming fiscal year.  In February, the department supervisors, superintendents, and deputy directors meet with the department directors to review the budget requests.
 In February and March, the department directors meet with the Finance Director and Accounting Manager to review the budget requests.
 In April, each department director meets with the City Manager, Finance Director and Accounting Manager to review the budget requests.
 In May and June, the City Council holds special budget workshop meetings. At these meetings, the public is invited to comment on the Proposed Operating Budget and Capital Improvement Program and the Council makes a number of important policy decisions regarding the budget.  In June, the Proposed Operating Budget and Capital Improvement Program, and any changes made to them during the budget workshops, are adopted by resolution. 69 78of 130
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70 79of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual General Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes 8,675,230$ 8,808,930$ 10,654,353$ 1,845,423$ Licenses and permits 430,855 473,355 477,280 3,925 Intergovernmental - - 239,572 239,572 Charges for services 170,448 121,070 234,038 112,968 Fines, forfeitures and assessments 32,500 32,500 50,863 18,363 Use of money and property 123,000 123,000 (631,259) (754,259) Miscellaneous 27,114 27,114 458,042 430,928 Total revenues 9,459,147 9,585,969 11,482,889 1,896,920 EXPENDITURES:

Current:

General government
City Council 286,823 106,835 82,377 24,458 City Manager 444,901 39,394 28,547 10,847 City clerk 23,830 33,330 2,187 31,143 Finance and accounting 89,990 89,990 20,381 69,609 Human resources and risk management 43,587 43,587 5,521 38,066 City attorney 250,000 250,000 158,992 91,008 Total general government 1,139,131 563,136 298,005 265,131 Public safety
Sheriff 4,561,076 4,963,356 4,691,768 271,588 Animal control 338,139 351,839 330,223 21,616 Fire 1,037,300 634,820 540,245 94,575 Total public safety 5,936,515 5,950,015 5,562,236 387,779 Public works 1,089,290 1,083,967 856,736 227,231 Community development
Planning 498,623 478,899 438,311 40,588 Engineering 625,407 625,211 262,241 362,970 Building inspection 515,202 515,202 461,724 53,478 Code compliance 374,325 377,445 391,882 (14,437) Total community development 2,013,557 1,996,757 1,554,158 442,599 Non-departmental 95,541 36,080 21,179 14,901 Capital outlay:

General capital outlay 8,685,420 8,685,420 2,149,332 6,536,088 Total expenditures 18,959,454 18,315,375 10,441,646 7,873,729

REVENUES OVER (UNDER)
EXPENDITURES (9,500,307) (8,729,406) 1,041,243 9,770,649 OTHER FINANCING SOURCES (USES):

Transfers in 3,192,487 3,192,487 2,276,868 (915,619) Transfers out (4,302,767) (5,950,759) (135,045) 5,815,714 Total other financing sources (uses) (1,110,280) (2,758,272) 2,141,823 4,900,095 Net change in fund balances (10,610,587)$ (11,487,678)$ 3,183,066 14,670,744$ FUND BALANCES:

Beginning of year 17,743,412
End of year 20,926,478$
Budget Amounts
71 80of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual TDA Grant
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 1,006,831$ 1,006,831$ -$ (1,006,831)$ Total revenues 1,006,831 1,006,831 - (1,006,831) EXPENDITURES:

Current:

Community development
- - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 1,006,831 1,006,831 - (1,006,831) OTHER FINANCING SOURCES (USES):

Transfers out (1,260,892) (1,260,892) (1,591) 1,259,301 Total other financing sources (uses) (1,260,892) (1,260,892) (1,591) 1,259,301 Net change in fund balances (254,061)$ (254,061)$ (1,591) 252,470$ FUND BALANCES:

Beginning of year (184,767)
End of year (186,358)$
Budget Amounts
72 81of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual

CDBG RLA
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes -$ -$ -$ -$ Total revenues - - - - EXPENDITURES:

Current:

Community development
- - 8,558 (8,558) Total expenditures - - 8,558 (8,558) Net change in fund balances -$ -$ (8,558) (8,558)$ FUND BALANCES:

Beginning of year
1,656,487
End of year 1,647,929$
Budget Amounts
73 82of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual CalHOME Reuse
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property -$ -$ 7,717$ 7,717$ Total revenues - - 7,717 7,717 EXPENDITURES:

Current:

Community development - - 148 (148) Total expenditures - - 148 (148)

REVENUES OVER (UNDER)
EXPENDITURES - - 7,569 7,865 OTHER FINANCING SOURCES (USES):

Transfers in
- - 45,976 45,976 Total other financing sources (uses) - - 45,976 45,976 Net change in fund balances -$ -$ 53,545 53,841$ FUND BALANCES:

Beginning of year
2,590,305
End of year 2,643,850$
Budget Amounts
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City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 2005 HCD Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property -$ -$ -$ -$ Total revenues - - - - EXPENDITURES:

Current:

Community development - - - - Total expenditures - - - -

REVENUES OVER (UNDER)

EXPENDITURES - - - - Net change in fund balances -$ -$ - -$ FUND BALANCES:

Beginning of year
950,000
End of year 950,000$
Budget Amounts
75 84of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual RDA Low Income Housing
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property -$ -$ -$ -$ Total revenues - - - - EXPENDITURES:

Current:

Community development - - - - Total expenditures - - - - Net change in fund balances -$ -$ - -$ FUND BALANCES:

Beginning of year
1,075,046
End of year 1,075,046$
Budget Amounts
76 85of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Park Impact Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services -$ -$ 136,443$ 136,443$ Use of money and property 3,000 3,000 3,821 821 Total revenues 3,000 3,000 140,264 137,264 EXPENDITURES:

Capital outlay:

General capital outlay 175,000 175,000 136,443 38,557 Total expenditures 175,000 175,000 136,443 38,557 Net change in fund balances (172,000)$ (172,000)$ 3,821 98,707$ FUND BALANCES:

Beginning of year 4,042
End of year 7,863$
Budget Amounts
77 86of 130
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78 87of 130

SUPPLEMENTARY INFORMATION
79 88of 130
Nonmajor Governmental Funds
Nonmajor Special Revenue Funds
Lighting & Landscape Fund – Accounts for revenues receivedfor maintenance and operation of the majority of the streetlights and parkways in the City. Revenues are derived from benefit assessments to properties within the City’s three maintenance districts. Expenditures include the direct costs of labor, supplies and equipment to maintain the districts and parks.

Emergency Response – Accounts for the activities of the emergency response team. The emergency response team will work in close cooperation with the State and County standardized emergency management system and their associates.

Sewer Lift Station Fund – Accounts for funds collected from a special assessment district created around properties benefiting from the lift station. The funds collected are used to operate and maintain the sewer lift station.

Community Facilities District – Accounts for revenues receivedpursuant to Resolution 2017- 3211 and Ordinance 2017-688 for the purpose of providing public safety, street maintenance, landscape maintenance in the public right-of-way and other services within the district.

Gas Tax Fund – Accounts for revenues apportioned under the Street and Highway Code of the State of California. These funds can be used for any street-related purpose.

Traffic Safety Fund – Accounts for revenues derived from vehicle fines paid on violations issued by the Kern County Sheriff’s Department within the City limits. These revenues are used for traffic striping and marking the City streets.

Traffic Impact Fund – Accounts for revenues charged to new businesses as they move into the City. These fees are used to install traffic lights, widen streets and any other traffic control in the area that is impacted by the traffic created by the new business.

COPS Grant Fund – Accounts for revenues that the State of California issues to the County of Kern funds for front line law enforcement services. These funds are distributed to local Municipalities by an internal formula. The funds are utilized by the Sheriff for anti-gang and community crime prevention programs in the City.
80 89of 130
Nonmajor Governmental Funds, Continued
Nonmajor Special Revenue Funds, Continued
2002 CalHome Grant Fund – Accounts for all grant funds awarded to the City for low and moderate income rehabilitations. This fund also utilizes available funds from the CDBG reuse money and the Redevelopment Agency’s 20% low and moderate housing set-a-side funds. 2003 CDBG Grant Fund – Accounts for the Community Development Block Grant (CDBG) received in 2003. The grant funds are disbursed to homeowners who meet low and moderate income guidelines and qualify for the CDBG program as deferred loans, grants or below market interest rate loans. The revenue collected year to year as loan payments or loan payoffs is used to fund the City’s local portion of CDBG projects and helps enhance the programs offered by the Special Programs Financing Department.
2003 CalHome Grant Fund – The City was awarded $500,000 in funding through the 2004 CalHome Program funding. These funds will be used for the City’s housing rehabilitation program toward more owner-occupied housing rehabilitation. This fundingwill allow the City to continue to meet the rehabilitation needs of the low and moderate income homeowners in Wasco through making 3% interest 20 year deferred loans for the purpose of housing rehabilitation. This fund also utilizes available funds from the CDBG reuse money and the Redevelopment Agency’s 20% low and moderate housing set-aside funds. 2004 CDBG Grant Fund – The City applied for $500,000 in funding through the 2004 Community Development Block Grant (CDBG) Program. These funds will be used by the City’s housing rehabilitation department. Most of this grant will be spent on housing rehabilitation loans, however, $46,250 of this grant will be spent on infill sidewalks for Census Track 44 through the 10% set-aside component of the CDBG grant. 2004 CalHome Grant Fund – The City was awarded $500,000 in funding through the 2004 CalHome Program funding. These funds will be used for the City’s housing rehabilitation program toward more owner-occupied housing rehabilitation. This fundingwill allow the City to continue to meet the rehabilitation needs of the low and moderate income homeowners in Wasco through making 3% interest 20 year deferred loans for the purpose of housing rehabilitation. This fund also utilizes available funds from the CDBG reuse money and the Redevelopment Agency’s 20% low and moderate housing set-aside funds. 81 90of 130
Nonmajor Governmental Funds, Continued
Nonmajor Special Revenue Funds, Continued
2005 CalHome Grant Fund – The City was awarded $500,000 in funding through the 2005 CalHome Program funding. These funds will be used for the City’s housing rehabilitation program toward more owner-occupied housing rehabilitation. This fundingwill allow the City to continue to meet the rehabilitation needs of the low and moderate income homeowners in Wasco through making 3% interest 20 year deferred loans for the purpose of housing rehabilitation. This fund also utilizes available funds from the CDBG reuse money and the Redevelopment Agency’s 20% low and moderate housing set-aside funds. 2006 CalHome Grant Fund – The City was awarded $500,000 in funding through the 2006 CalHome Program funding. These funds will be used for the City’s housing rehabilitation program toward more owner-occupied housing rehabilitation. This fundingwill allow the City to continue to meet the rehabilitation needs of the low and moderate income homeowners in Wasco through making 3% interest 20 year deferred loans for the purpose of housing rehabilitation. This fund also utilizes available funds from the CDBG reuse money and the Redevelopment Agency’s 20% low and moderate housing set-aside funds.

BEGIN Grant Reuse Fund – Accounts for program income from the City’s BEGIN grant program. In accordance with the BEGIN program guidelines, all program income must be accounted for and kept in a reuse fund where it can then be accumulated and lent back out on BEGIN eligible activities.
2009 CDBG Grant Fund – The City was awarded $800,000 from CDBG for a housing combo grant to assist citizens with First Time Homebuyer Down Payment Assistance and Housing Rehabilitation Loans. This money is currently being lent to qualified low income applicants at 1% interest.

HOME Grant Reuse Fund – Accounts for program income from the City’s HOME grant program. In accordance with the HOME program guidelines, all program income must be accounted for and kept in a reuse fund where it can then be accumulated and lent back out on HOME eligible activities.
82 91of 130
Nonmajor Governmental Funds, Continued
Nonmajor Special Revenue Funds, Continued
2008 CDBG Grant Fund – The City was awarded $300,000 in funding through the 2008 CDBG Economic Development Grant. These funds are to be used to provide business assistance loans to qualified local businesses in the form of below market interest rate loans. This grant will be expiring in December 2012.

Public Finance Authority (component unit) – Accounts for the general fund the Wasco Public Finance Authority (a component unit of the City). The Wasco Public Finance Authority was created for the purpose of issuing its bonds to be used to provide financial assistance to the City, the Agency or any other public entity of the State of California. 2010 HOME Grant Fund – The City was awarded $800,000 in HOME funds to assist citizens with the purchase of their first home. This money is currently being lent out to qualified low income recipients as a "silent-second" at 1% interest.

ARPA Grant Fund – Accounts for the American Rescue Plan Act Funding and related expenditures
Illegal Dumping Resources Fund – Accounts account for these prop 218 tax fund that will be used to combat illegal dumping.
83 92of 130
City of Wasco
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2022
Lighting &
Landscape
Emergency
Response
Sewer Lift
Station
Community
Facilities
District
ASSETS
Cash and investments 27,481$ 23,446$ 211,805$ 90,848$ Notes receivable - - - - Total assets 27,481 23,446 211,805 90,848

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable 5,032 - 177 22 Accrued liabilities 908 - - - Due to other funds - - - - Unearned revenue - 21,879 - - Total liabilities 5,940 21,879 177 22 Deferred Inflows of Resources
Unavailable revenues - - - - Total deferred inflows of resources - - - - Fund Balances:

Nonspendable - - - - Restricted for:

Community development - - - 90,826 Streets and transportation 21,541 - - - Public safety - 1,567 - - Other purposes - - 211,628 - Assigned:

Community development - - - - Unassigned - - - - Total fund balances 21,541 1,567 211,628 90,826 Total liabilities, deferred inflows of
resources and fund balances 27,481$ 23,446$ 211,805$ 90,848$ Special Revenue Funds
84 93of 130
Gas Tax
Traffic
Safety
Traffic
Impact
COPS
Grant
Fund
923,848$ -$ 2,169,331$ 223,959$ - - - - 923,848 - 2,169,331 223,959 - - - - - - - - - 7,287 - - - - - - - 7,287 - - - - - - - - - - - - - - - - - - 923,848 - 2,169,331 - - - - 223,959 - - - - - - - - - (7,287) - - 923,848 (7,287) 2,169,331 223,959 923,848$ -$ 2,169,331$ 223,959$ Special Revenue Funds
85 94of 130
City of Wasco
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2022
2004
CalHome Grant
Fund
BEGIN
Grant Reuse
HOME
Grant Reuse
ASSETS
Cash and investments -$ 11,423$ 648,076$ Notes receivable - 86,447 502,713 Total assets - 97,870 1,150,789

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES AND FUND BALANCES
Liabilities:

Accounts payable - - - Accrued liabilities - - - Due to other funds - - - Unearned revenue - - - Total liabilities - - - Deferred Inflows of Resources
Unavailable revenues - - - Total deferred inflows of resources - - - Fund Balances:

Nonspendable - - - Restricted for:

Community development - 97,870 1,150,789 Streets and transportation - - - Public safety - - - Other purposes - - - Assigned:

Community development - - - Unassigned - - - Total fund balances - 97,870 1,150,789 Total liabilities, deferred inflows of
resources and fund balances -$ 97,870$ 1,150,789$ Special Revenue Funds
86 95of 130
Public
Financing
Authority
ARPA Grant
Fund
Illegal
Dumping
Resources Fund
Total Nonmajor
Governmental
Funds
110,389$ 1,783,564$ 82,717$ 6,306,887$ - - - 589,160 110,389 1,783,564 82,717 6,896,047 9,252 72,909 - 87,392 - - - 908 - - - 7,287 - 1,695,285 - 1,717,164 9,252 1,768,194 - 1,812,751 - - - - - - - - - - - - - - - 1,339,485 - - - 3,114,720 - - - 225,526 - - 82,717 294,345 101,137 15,370 - 116,507 - - - (7,287) 101,137 15,370 82,717 5,083,296 110,389$ 1,783,564$ 82,717$ 6,896,047$ Special Revenue Funds
87 96of 130
City of Wasco
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2022
Lighting &
Landscape
Emergency
Response
Sewer Lift
Station
Community
Facilities
District
REVENUES:

Taxes 177,731$ -$ 11,583$ 80,870$ Licenses and permits - - - - Intergovernmental - - - - Charges for services - - - - Fines, forfeitures and assessments - - - - Use of money and property 58 - 762 87 Miscellaneous 464 - - - Total revenues 178,253 - 12,345 80,957 EXPENDITURES:

Current:

Public works
180,045 - 6,837 298 Community development - - - - Total expenditures 180,045 - 6,837 298

REVENUES OVER (UNDER)
EXPENDITURES (1,792) - 5,508 80,659 OTHER FINANCING SOURCES (USES):

Transfers out - - - (80,000) Total other financing sources (uses) - - - (80,000) Net change in fund balances (1,792) - 5,508 659 FUND BALANCES:

Beginning of year, as restated 23,333 1,567 206,120 90,167 End of year 21,541$ 1,567$ 211,628$ 90,826$ Special Revenue Funds
88 97of 130
Gas Tax
Traffic
Safety
Traffic
Impact
COPS
Grant
Fund
1,108,116$ -$ -$ -$ - - 73,712 - - - - 161,285 - - - - - 11,073 - - 3,020 - 9,975 - - - - - 1,111,136 11,073 83,687 161,285 - 14,999 - - - - - - - 14,999 - - 1,111,136 (3,926) 83,687 161,285 (596,926) - - (150,000) (596,926) - - (150,000) 514,210 (3,926) 83,687 11,285 409,638 (3,361) 2,085,644 212,674 923,848$ (7,287)$ 2,169,331$ 223,959$ Special Revenue Funds
89 98of 130
City of Wasco
Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds
For the year ended June 30, 2022
2004
CalHome Grant
Fund
BEGIN
Grant Reuse
HOME
Grant Reuse
REVENUES:

Taxes -$ -$ -$ Licenses and permits - - - Intergovernmental - - - Charges for services - - - Fines, forfeitures and assessments - - - Use of money and property 45,976 42 32,011 Miscellaneous - - - Total revenues 45,976 42 32,011 EXPENDITURES:

Current:

Public works
- - 25,923 Community development - - - Total expenditures - - 25,923

REVENUES OVER (UNDER)
EXPENDITURES 45,976 42 6,088 OTHER FINANCING SOURCES (USES):

Transfers out (45,976) - - Total other financing sources (uses) (45,976) - - Net change in fund balances - 42 6,088 FUND BALANCES:

Beginning of year - 97,828 1,144,701 End of year -$ 97,870$ 1,150,789$ Special Revenue Funds
90 99of 130
Public
Financing
Authority
ARPA Grant
Fund
Illegal
Dumping
Resources Fund
Total Nonmajor
Governmental
Funds
-$ -$ 82,717$ 1,461,017$ - - - 73,712 - 1,816,804 - 1,978,089 20,231 - - 20,231 - - - 11,073 (28,166) 15,370 - 79,135 - - - 464 (7,935) 1,832,174 82,717 3,623,721 - 403,355 - 631,457 15,137 - - 15,137 15,137 403,355 - 646,594 (23,072) 1,428,819 82,717 2,977,127 - (1,413,449) - (2,286,351) - (1,413,449) - (2,286,351) (23,072) 15,370 82,717 690,776 124,209 - - 4,392,520 101,137$ 15,370$ 82,717$ 5,083,296$ Special Revenue Funds
91 100of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Lighting & Landscape Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes 168,184$ 168,184$ 177,731$ 9,547$ Use of money and property 105 105 58 (47) Miscellaneous 980 980 464 (516) Total revenues 169,269 169,269 178,253 8,984 EXPENDITURES:

Current:

Public works 200,383$ 200,383$ 180,045$ 20,338$ Total expenditures 200,383 200,383 180,045 20,338

REVENUES OVER (UNDER)
EXPENDITURES (31,114) (31,114) (1,792) 29,322 Net change in fund balances (31,114)$ (31,114)$ (1,792) 29,322$ FUND BALANCES:

Beginning of year
23,333
End of year 21,541$
Budget Amounts
92 101of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Emergency Response
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental -$ -$ -$ -$ Total revenues - - - - EXPENDITURES:

Current:

General government
- - - - Total expenditures - - - -

REVENUES OVER (UNDER)

EXPENDITURES - - - - Net change in fund balances -$ -$ - -$ FUND BALANCES:

Beginning of year
1,567
End of year 1,567$
Budget Amounts
93 102of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Sewer Lift Station Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes 11,750 $ 11,750 $ 11,583 $ (167) $ Use of money and property - - 762 762 Total revenues 11,750 11,750 12,345 595 EXPENDITURES:

Current:

Public works 7,250$ 7,250$ 6,837$ 413$ Total expenditures 7,250 7,250 6,837 413 Net change in fund balances 4,500$ 4,500$ 5,508 1,008$ FUND BALANCES:

Beginning of year 206,120
End of year 211,628$
Bud
get Amounts
94 103of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Community Facilities District
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes 80,000$ 80,000$ 80,870$ 870$ Use of money and property - - 87 87 Total revenues 80,000 80,000 80,957 957 EXPENDITURES:

Current:

Public works
375 375 298 77 Total expenditures 375 375 298 77

REVENUES OVER (UNDER)
EXPENDITURES 79,625 79,625 80,659 1,034 OTHER FINANCING SOURCES (USES):

Transfers out (80,000) (80,000) (80,000) - Total other financing sources (uses) (80,000) (80,000) (80,000) - Net change in fund balances (375)$ (375)$ 659 1,034$ FUND BALANCES:

Beginning of year 90,167
End of year 90,826$
Budget Amounts
95 104of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Gas Tax Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes 1,092,030$ 1,092,030$ 1,108,116$ 16,086$ Use of money and property - - 3,020 3,020 Total revenues 1,092,030 1,092,030 1,111,136 19,106 EXPENDITURES:

Current:

General government - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 1,092,030 1,092,030 1,111,136 19,106 OTHER FINANCING SOURCES (USES):

Transfers out (1,121,635) (1,121,635) (596,926) 524,709 Total other financing sources (uses) (1,121,635) (1,121,635) (596,926) 524,709 Net change in fund balances (29,605)$ (29,605)$ 514,210 543,815$ FUND BALANCES:

Beginning of year 409,638
End of year 923,848$
Budget Amounts
96 105of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Traffic Safety Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Fines, forfeitures and assessments 20,000 $ 20,000 $ 11,073 $ (8,927) $ Total revenues 20,000 20,000 11,073 (8,927) EXPENDITURES:

Current:

Public works 15,000 15,000 14,999 1 Total expenditures 15,000 15,000 14,999 1 Net change in fund balances 5,000$ 5,000$ (3,926) (8,926)$ FUND BALANCES:

Beginning of year (3,361)
End of year (7,287)$
Bud
get Amounts
97 106of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Traffic Impact Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Licenses and permits 95,000$ 95,000$ 73,712$ (21,288)$ Use of money and property - - 9,975 9,975 Total revenues 95,000 95,000 83,687 (11,313) EXPENDITURES:

Current:

Public works - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 95,000 95,000 83,687 (11,313) OTHER FINANCING SOURCES (USES):

Transfers out (459,473) (459,473) - 459,473 Total other financing sources (uses) (459,473) (459,473) - 459,473 Net change in fund balances (364,473)$ (364,473)$ 83,687 448,160$ FUND BALANCES:

Beginning of year 2,085,644
End of year 2,169,331$
Budget Amounts
98 107of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual COPS Grant Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 150,000$ 150,000$ 161,285$ 11,285$ Total revenues 150,000 150,000 161,285 11,285 EXPENDITURES:

Current:

General government - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES 150,000 150,000 161,285 11,285 OTHER FINANCING SOURCES (USES):

Transfers out (150,000) (150,000) (150,000) - Total other financing sources (uses) (150,000) (150,000) (150,000) - Special item - - - - Net change in fund balances -$ -$ 11,285 11,285$ FUND BALANCES:

Beginning of year 212,674
End of year 223,959$
Budget Amounts
99 108of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual 2004 CalHOME Grant Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property -$ -$ 45,976$ 45,976$ Total revenues - - 45,976 45,976 EXPENDITURES:

Current:

General government - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES - - 45,976 45,976 OTHER FINANCING SOURCES (USES):

Transfers out - - (45,976) (45,976) Total other financing sources (uses) - - (45,976) (45,976) Net change in fund balances -$ -$ - -$ FUND BALANCES:

Beginning of year -
End of year -$
Budget Amounts
100
109of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual BEGIN Grant Reuse
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property -$ -$ 42$ 42$ Total revenues - - 42 42 EXPENDITURES:

Current:

General government - - - - Total expenditures - - - -

REVENUES OVER (UNDER)
EXPENDITURES - - 42 42 Net change in fund balances -$ -$ 42 42$ FUND BALANCES:

Beginning of year 97,828
End of year 97,870$
Budget Amounts
101
110of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual HOME Grant Reuse
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Use of money and property -$ -$ 32,011$ 32,011$ Total revenues - - 32,011 32,011 EXPENDITURES:

Current:

Public works - - 25,923 (25,923) Total expenditures - - 25,923 (25,923)

REVENUES OVER (UNDER)
EXPENDITURES - - 6,088 6,088 Net change in fund balances -$ -$ 6,088 6,088$ FUND BALANCES:

Beginning of year 1,144,701
End of year 1,150,789$
Budget Amounts
102
111of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Public Financing Authority
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Charges for services -$ -$ 20,231$ 20,231$ Use of money and property - - (28,166) (28,166) Total revenues - - (7,935) (7,935) EXPENDITURES:

Current:

Community development - - 15,137 (15,137) Total expenditures - - 15,137 (15,137)

REVENUES OVER (UNDER)
EXPENDITURES - - (23,072) 7,202 Net change in fund balances -$ -$ (23,072) 7,202$ FUND BALANCES:

Beginning of year
124,209
End of year 101,137$
Budget Amounts
103
112of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual ARPA Grant Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Intergovernmental 1,498,857$ 1,498,857$ 1,816,804$ 317,947$ Use of money and property - - 15,370 15,370 Total revenues 1,498,857 1,498,857 1,832,174 333,317 EXPENDITURES:

Current:

Public works 508,672 508,672 403,355 105,317 Total expenditures 508,672 508,672 403,355 105,317

REVENUES OVER (UNDER)
EXPENDITURES 990,185 990,185 1,428,819 438,634 OTHER FINANCING SOURCES (USES):

Transfers out (140,204) (140,204) (1,413,449) (1,273,245) Total other financing sources (uses) (140,204) (140,204) (1,413,449) (1,273,245) Net change in fund balances 849,981$ 849,981$ 15,370 (834,611)$ FUND BALANCES:

Beginning of year -
End of year 15,370$
Budget Amounts
104
113of 130
City of Wasco
Statement of Revenues, Expenditures and Changes in Fund Balances - Budget and Actual Illegal Dumping Resources Fund
For the year ended June 30, 2022
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVENUES:

Taxes -$ -$ 82,717$ 82,717$ Total revenues - - 82,717 82,717 EXPENDITURES:

Current:

General government - - - - Total expenditures - - - - Net change in fund balances -$ -$ 82,717 82,717$ FUND BALANCES:

Beginning of year
-
End of year 82,717$
Budget Amounts
105
114of 130
City of Wasco
Measure X
Wasco, California
Basic Financial Statements
and Independent Auditors’ Reports
For the year ended June 30, 2022
115of 130
116of 130
City of Wasco, Measure X
Table of Contents
June 30, 2022
i
Page
Independent Auditors’ Report................................................................................................................................ 1 Basic Financial Statements
Balance Sheet – Measure X................................................................................................................................ 3 Statement of Revenues, Expenditures, and Changes in Fund Balance – Measure X................................ 4 Notes to Basic Financial Statements................................................................................................................. 5 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.............................................................. 9 117of 130
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118of 130
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
of the City of Wasco
Wasco, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the Measure X of the City of Wasco, California (City) as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s Measure X’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of Measure X of the City as of June 30, 2022, and the respective changes in financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter
As discussed in Note 1, these financial statements present only Measure X and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2022 , or the changes in its financial position for the year then ended, in conformity with accounting principles generally accepted in the United States of America.

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

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

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Measure X of the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. 1 119of 130
To the Honorable Mayor and Members of the City Council
of the City of Wasco
Wasco, California

Page 2 ends

Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with GAAS, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
 Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of [Entity Name]’s internal control. Accordingly, no such opinion is expressed.5  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
 Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about [Entity Name]’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control– related
matters that we identified during the audit.
2 120of 130
To the Honorable Mayor and Members of the City Council
of the City of Wasco
Wasco, California

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Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December XX, 2022, 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 relating to Measure X and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance relating to Measure X.

Badawi and Associates, CPAs
Berkeley, California
December XX, 2022
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City of Wasco Measure X
Balance Sheeet
June 30, 2022
2022
ASSETS
Cash and investments 5,494,574$
Total assets 5,494,574$

LIABILITIES
Accounts payable -$
Total current liabilities . -

FUND BALANCE
Restricted - Essencial city services 5,494,574
Total fund balance 5,494,574
Total liabilities and fund balance 5,494,574$
See accompanying Notes to Basic Financial Statements.
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City of Wasco Measure X
Statement of Revenues, Expenditures, and Changes in Fund Balance For the fiscal year ended June 30, 2022
2022
OPERATING REVENUES:

Measure X Sales Tax 3,333,089$
Total operating revenues 3,333,089
OPERATING EXPENSES:

Street and Road Construction and Maintenance:

Road Rehabilitation - 16th Street 68
Palm Avenue Rehab 1,587
Palm Avenue Shoulder Paving 1,824
Street Lighting Post Top Concersion 65,792
Street Lighting Installation - Citywide 1,768
Street Maitenance of Effort 210,043
General and Administrative 11,310
Public Safety:

Police Services 1,555,518
Fire Services 600,000
Neighborhood Camera Rebate Program 150
Legal CalPERS Public Safety UAL Payoff 402,480
Animal Control:

Construct New Animal Shelter 2,064
Total expenditures 2,852,604
Net Change in Fund Balance 480,485
FUND BALANCE:

Beginning of year 5,014,089
End of year 5,494,574$
See accompan
ying Notes to Basic Financial Statements.
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City of Wasco – Measure X
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Reporting Entity
Measure X – On November 8, 2016, Measure X was approved by the citizens of the City of Wasco.

Measure X created an ordinance establishing a new 1% sales tax. This ordinance stipulated that the additional sales tax proceeds were to provide funding for basic City services which were defined as essential general services, including but not limited to police, fire, streets, parks and recreation as well as other general fund services.

The financial statements of Measure X of the City of Wasco (the "City") have been prepared in conformity with U.S. generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB). The following summary of the City’s more significant accounting policies is presented to assist the reader in interpreting the basic financial statements and other data in this report.

The financial statements are intended to reflect the financial position, results of operation, and compliance of the City with the laws, rules, and regulations of Measure X. They do not present fairly the financial position and results of operations of the City in conformity with accounting principles generally accepted in the United States of America.

B. Basis of Presentation
Fund Financial Statements
The accounting system of the City is organized and operated on the basis of separate funds, each of which is considered to be a separate accounting entity. Each fund is accounted for by providing a separate set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditures/expenses. Government resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. The various funds are grouped, in the financial statements in this report, into one generic fund type and one broad fund category as follows:

Governmental Funds
Special Revenue Funds are used to account for the proceeds of specific revenue sources (other than expendable trusts or major capital projects) that are legally restricted to expenditures for specified purposes. Measure X is a Special Revenue Fund.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued C. Measurement Focus and Basis of Accounting, Continued Measurement Focus – All governmental funds utilize a “current financial resources” measurement focus. Only current financial assets and liabilities are generally included on their balance sheets. Their operating statements present sources and uses of available spendable financial resources during a given period. These funds use fund balance as their measure of available spendable financial resources at the end of the period.

Basis of Accounting – In the fund financial statements, governmental funds are presented on the modified accrual basis of accounting. Under this modified accrual basis of accounting, revenues are recognized when “measurable and available”. Measurable means knowing or being able to reasonably estimate the amount. Available means collectible within the current period or soon enough thereafter to pay current liabilities. Revenues which are susceptible to accrual include property taxes and special assessments that are levied for and due for the fiscal year and collected within 60 days after year-end.

Licenses, permits, fines, forfeits, charges for services and miscellaneous revenues are recorded as governmental fund type revenues when received in cash because they are not generally measurable until actually received. Revenue from taxpayer assessed taxes, such as sales taxes, are recognized in the accounting period in which they became both measurable and available to finance expenditures of the fiscal period. Grant funds and reimbursements of expenses under contractual agreements are reported in governmental fund types and are recorded as a receivable when earned rather than when susceptible to accrual. Generally, this occurs when authorized expenditures are made under the grant program or contractual agreement. Expenditures are recognized when the fund liability is incurred, if measurable, except for unmatured interest on long-term debt, which is recognized when due.

D. Cash and Investments
Cash and investment balances of each of the City’s funds, except for funds required to be held by outside fiscal agents under the provisions of bond indentures, are pooled in order to take advantage of an effective investment strategy. Income earned from pooled investments is allocated to each of the funds based on a
verage pooled cash balances during the year. Deficit cash balances are classified as due to other funds and funded by the General Fund or related operating fund.

E. Receivables
All trade and tax receivables are shown net of an allowance for uncollectible accounts and estimated refunds due.
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City of Wasco – Measure X
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued F. Fund Balance - Governmental Funds
Fund balances of the governmental funds are presented in the financial statements based on classifications that comprise a hierarchy that is based primarily on the extent to which the City is bound to honor constraints on the specific purposes for which amounts in the respective governmental funds can be spent. Fund balances are classified as follows:

Nonspendable – Amounts that cannot be spent either because they are not in a spendable form or because they are legally or contractually required to be maintained intact.

Restricted – Amounts restricted by external sources (creditors, laws of other governments, etc.) or by constitutional provision or enabling legislation.

The assigned designation may be reversed by the City Council at any public meeting.

Unassigned – Residual positive fund balances within the General Fund, which have not been classified within the other above mentioned categories. Unassigned Fund Balances may also include negative balances for any governmental fund if expenditures exceed amounts restricted, committed, or assigned for those specific purposes.

G. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions 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/expenses during the reporting period. Actual results could differ from those estimates. 9 127of 130
City of Wasco – Measure X
Notes to Basic Financial Statements
For the Year Ended June 30, 2022

2. CASH AND INVESTMENTS
Cash balances of the City’s Measure X are pooled with those of other funds and invested by the City to maximize investment opportunities and yields. Income earned from pooled investments is allocated to each of the funds based on average pooled cash balances during the year. Deficit cash balances are classified as due to other funds and funded by the General Fund or related operating fund. Further information regarding the City’s cash and cash equivalents pool may be found in the City’s financial statements.

Cash and investments of the Measure X at June 30, 2022 consisted of the following:

Cash in the City of Wasco pooled cash $5,494,574
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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
Independent Auditor’s Report
To the Honorable Mayor and Members of the city Council
of the City of Wasco
Wasco, 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 Measure X of the City of Wasco, (City), as of and for the year ended June 30, 2022, and the related notes to the financial statements, which collectively comprise the City’s Measure X’s basic financial statements and have issued our report thereon dated December XX, 2022.

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 opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that have not been identified. 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.
11 129of 130
To the Honorable Mayor and Members of the City Council
of the City of Wasco
Wasco, California

Page 2 ends

Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Measure X 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 entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Badawi and Associates, CPA’s
Berkeley, California
December XX, 2022
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Wasco City CouncilDecember 20, 2022

Wasco City Council
December 20, 2022