HomeMy WebLinkAbout02/27/2019
B A K E R S F I E L D
Staff: Committee Members:
Chris Huot, Assistant City Manager Councilmember, Andrae Gonzales – Chair
Councilmember, Willie Rivera
Councilmember, Ken Weir
SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE
of the City Council - City of Bakersfield
Wednesday, February 27, 2019
12:00 p.m.
City Hall North
1600 Truxtun Avenue, Bakersfield, CA 93301
First Floor, Conference Room A
AGENDA
1. ROLL CALL
2. ADOPT MAY 30, 2017 AGENDA SUMMARY REPORT
3. PUBLIC STATEMENTS
4. NEW BUSINESS
A. Discussion and Committee Recommendation Regarding Annual Audit
Reports ending FY 2018 – McKeegan
B. Discussion and Committee Recommendation Regarding FY 2019-20
CDBG, HOME, ESG Action Plan – Tandy / Kitchen
C. Discussion and Committee Recommendation Regarding Adoption of the
2019 Committee Meeting Schedule – Huot
5. COMMITTEE COMMENTS
6. ADJOURNMENT
B A K E R S F I E L D
Committee Members
Staff: Chris Huot Councilmember, Andrae Gonzales – Chair
Assistant City Manager Councilmember, Willie Rivera
Councilmember, Ken Weir
SPECIAL MEETING OF THE BUDGET AND FINANCE COMMITTEE
Tuesday, May 30, 2017
10:30 a.m.
City Hall North – Conference Room A
1600 Truxtun Avenue, Bakersfield, CA 93301
The meeting was called to order at 10:30 a.m.
1. ROLL CALL
Committee members Present:
Councilmember, Andrae Gonzales, Chair
Councilmember, Ken Weir
Councilmember, Willie Riviera
City Staff Present:
Alan Tandy, City Manager
Chris Huot Assistant City Manager
Caleb Blaschke, Management Assistant – City Manager’s Office
Joshua Rudnick, Deputy City Attorney
Nelson Smith, Finance Director
Randy McKeegan, Finance Supervisor
Additional Attendees Present:
Members of the Bakersfield Association of Realtors
Members of the PACE Program
Members of the Media
Members of the Public
2. ADOPT APRIL 27, 2017 AGENDA SUMMARY REPORT
The Report was adopted as submitted.
3. PUBLIC STATEMENTS
There were a total of 7 public speakers who spoke in opposition to the Property Assessed Clean
Energy (PACE) Program. They were: Sherry Anthis, Bakersfield Association of Realtors; Michael
Turnipseed; Nick Ortiz; Margaret Smith; Melissa Domeny; Scott Dick; and Gary Crabtree.
/s/ Chris Huot
____________________________________________
Budget and Finance Committee Meeting
Agenda Summary Report – May 30, 2017
Page 2
There were a total of 14 public speakers who spoke in support to the PACE Program. They were:
Ray Mathers; Sharon Dickey; Kevin Harbor; Ken Greer; Mathew Martin; Lyn Rincon; Ben
Dominguez; Chris Morgan; Paul Vince; Laura Booker; Bert Alton; Jose Augilar; Brian McCardy;
and Fred Thomas.
During a rebuttal period, additional statements were provided by: Sherri Anthis,
Bakersfield Association of Realtors and Glen Porter who spoke in opposition to the
PACE Program; followed by Jeremy Human; George Ygrene; and Dustin Reilich who
spoke in support of the PACE Program.
4. NEW BUSINESS
A. Discussion and Committee Recommendation Regarding the PACE Program–
Tandy
City Manager Tandy provided a brief summarization of the PACE Program by
means of a PowerPoint presentation. City Manager Tandy provided details
regarding the history and recent developments related to the program. There
was no staff recommendation presented to the Committee.
Committee member Rivera expressed his appreciation to everyone who
provided testimony regarding the PACE Program. He stated that the program
was considered a great incentive for the community; in particular those who
would not be able to otherwise afford energy efficient home improvements and
a reason the City chose to allow it within city limits. He asked if research had
been compiled regarding the effectiveness of the participation agreement in
other jurisdictions and if it would address the issues being experienced locally.
City Manager Tandy stated that the city authorized the program to be used
locally through a joint powers agreement and that the program is regulated by
the State. The City has no enforcement and compliance tools to monitor the
program.
City Attorney Gennaro agreed with City Manager Tandy’s comments. In addition
she stated that she was unaware of any amendments being made to the joint
powers agreement. The PACE Participation Agreement is only a sample
agreement between the PACE provider and the property owner; without being
physically present during the execution of the agreement there is no way to
know exactly what is said or what takes place.
Committee member Rivera asked if the City could withdraw from the joint
powers agreement and cancel the PACE Program.
City Attorney Gennaro stated that the Council could withdraw from the joint
powers agreement by passage of a resolution. The termination would only have
an effect on future consumer agreements; those previously signed would remain
in place.
____________________________________________
Budget and Finance Committee Meeting
Agenda Summary Report – May 30, 2017
Page 3
Committee member Rivera requested staff reach out to the City of Los Angeles,
find out what changes they have made to make the program work in their
jurisdiction. He also acknowledge the comments written by Mr. John Lifquist, Kern
County Assessor, and stated it did not sway his current position.
Committee member Weir also thanked those present for providing testimony and
expressed concern regarding several statements made. He stated that the
example participation agreement included in the packet only jeopardized the
city further into responsibility. Committee member Weir stated the question
regarding the matter being poor public policy needs to be address by the full
City Council. He made a motion to direct the matter without a recommendation
back to the full City Council on for discussion at an appropriate date.
Committee Chair Gonzales reiterated and agreed with the comments made by
Committee members Rivera and Weir. Given the program has been in effect
since 2010 and there being over 2,700 projects completed to date, he requested
staff gather additional information regarding the 26 cases provided by the Board
of Realtors in order to have a better understanding of the current circumstances
5. COMMITTEE COMMENTS
There were no Committee comments.
6. ADJOURNMENT
The meeting adjourned at 12:27 p.m.
ADMINISTRATIVE REPORT
MEETING DATE: 1/9/2019Consent – Miscellaneous af.
TO:Honorable Mayor and City Council
FROM:Nelson K. Smith, Finance Director
DATE:12/20/2018
WARD:
SUBJECT:Audit Reports to be Referred to Budget and Finance Committee:
1.Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2018.
2.Agreed Upon Conditions Report for the fiscal year ended June 30, 2018.
3.Auditor Communication with Those Charged with Governance (SAS 114 Letter) for fiscal
year ended June 30, 2018.
4.Independent Auditors Report – Compliance with Contractual Requirements relative to the
Bakersfield Subregional Wastewater Management Plan for the year ended June 30, 2018.
5.Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of
Bakersfield for the fiscal year ended June 30, 2018.
6.Independent Auditors Report – Rabobank Arena, Theater, Convention Center, Bakersfield
Ice Sports Center & Brighthouse Networks Amphitheatre for the fiscal year ended June 30,
2018.
7.Single Audit Report for the fiscal year ended June 30, 2018
STAFF RECOMMENDATION:
Staff recommends referral to the Budget and Finance Committee.
BACKGROUND:
1. The City’s Comprehensive Annual Financial Report (CAFR), commonly referred to as the Annual Audit Report, for the fiscal year
ended June 30, 2018 is attached. A hard copy of the report will also be on file in the City Clerk’s office for public review. The CAFR
represents the City’s financial statements as of June 30, 2018, which are audited by the accounting firm of Brown Armstrong
Accountancy Corporation. The current year audit opinion issued by the outside auditors was “unqualified,” which indicates that the
City complied, in all material respects, with accounting principals generally accepted in the United States of America.
2. The Agreed Upon Conditions Report is designed to increase efficiency, internal controls and/or financial reporting and includes
any reportable conditions noted during the Audit. A summary of reported conditions (if any) are included in the report. The report
also addresses conditions identified in the prior year which have all been resolved to the auditors’ satisfaction.
3. The SAS 114 Letter provides information about our auditors’ responsibilities under auditing standards generally accepted in the
United States of America, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the
planned scope and timing of the audit.
4. Contract requirements contained in City of Bakersfield Agreement 76-153 as amended by Agreements 76-153(5), 76-153(4), 77-
44, 85-197 and 92-106 apply to operations of the Bakersfield Subregional Wastewater Management Plan. The City’s compliance
with contract requirements is audited on an annual basis.
5. The Appropriations Limit Worksheet is prepared by the City in accordance with Section 1.5 of Article XIIIB of the California
Constitution (GANN Limit). This annual review is performed by the auditors as part of their contract to provide auditing services to
the City of Bakersfield. The agreed upon review procedures are substantially less in scope than an audit and therefore no audit
opinion is expressed regarding the calculation. The letter from the auditors regarding this item is attached.
6. Attached is the independent audit report for the Rabobank Arena, Theater, Convention Center, Bakersfield Ice Sports Center &
Sprectrum Amphitheatre, for the fiscal year ended June 30, 2018. This audit report presents the financial statements for this
operational unit as of June 30, 2018. The management company (AEG) is required to submit an independent audit report of their
operations to the City after the end of each fiscal year. This audit report was prepared by the accounting firm of Barbich, Hooper,
King, Dill & Hoffman.
7. Attached is the Single Audit Report for the fiscal ended June 30, 2018. This audit report tests the City’s compliance for each
major program and on internal control over compliance and report on the schedule of expenditures of federal awards required by
the uniform guidance. The current audit report, issued by outside auditors, finds that the City has complied, in all material respects,
with the compliance requirements that could have a direct and material effect on each of its major federal programs for the year
ended June 30, 2018.
Staff is recommending these reports be received and referred to the Budget and Finance Committee for review and discussion.
The reports will come back to the full Council for acceptance at a future meeting after the Committee review process is completed.
ATTACHMENTS:
DescriptionType
2017-18 CAFR Backup Material
Agreed Upon Conditions Report Backup Material
SAS 114 Letter Backup Material
Wastewater AUP Report Backup Material
GANN Report Backup Material
Arena Financial Statements Backup Material
Single Audit Report Backup Material
B A K E R S F I E L D
Community Development Department
Jacquelyn R. Kitchen, Community Development Director
MEMORANDUM
February 22, 2019
TO: Alan Tandy, City Manager
FROM: Jacquelyn R. Kitchen, Community Development Director
SUBJECT: Non-Profit & For-Profit Applications for HUD FY 2019/20 Funding
Background. The United States Department of Housing and Urban Development (HUD) has designated the City
of Bakersfield as an Entitlement City. Therefore, HUD provides annual funding to improve low-income
neighborhoods in the City pursuant to the federal programs noted below. The entitlements from FY 2018/19 are
also noted for reference.
Federal Program FY 2019/20 Allocation
Community Development Block Grant (CDBG) $3,646,234
Home Investment Partnership (HOME) $1,594,389
Emergency Solutions Grant (ESG) $293,680
Housing Opportunities for Persons with AIDS (HOPWA) $496,350
Total $6,030,653*
* Includes an additional $8,000 in program income for CDBG and $100,000 for HOME
Available Funds (FY 2019/20). As of the preparation of this Memo, HUD has not yet released the entitlement
amount for FY 2019/20; however, there is an expectation that Congress will maintain previous year funding
levels for all programs, with the exception HOME, which will experience a small decrease. The amount of
decrease is unknown, therefore, Staff is using last year’s entitlement as our current projection.
Applications Received. The deadline for the submission of CDBG, HOME, and ESG applications for FY 2019/20
funding was November 2, 2018. This year, the City received 13 applications from non-profit and private entities
totaling $2,447,503, and 11 applications from City Departments totaling $4,844,345. The requested projects are
intended to improve the quality of life and infrastructure for low- income persons and neighborhoods.
Recommendation. Pursuant to federal requirements, Staff conducted a comprehensive review and evaluation
of all applications for funding. Staff has prepared the attached Memorandum and recommended budget for
consideration by the Budget and Finance Committee.
Staff anticipates that the FY 2019/20 HUD Action Plan will be considered by the City Council on April 10, 2018.
This is the fifth and final funding year of the Consolidated Plan 2015-2020.
Attachments
1. Proposed CDBG Budget (FY 19/20)
2. Proposed HOME/ESG/HOPWA Budget (FY 19/20)
3. Memo – Overview of Applications Received
S:\EDCD_Shared\ACTION PLANS\Action Plan 2019-20\ Funding Request Non Profit Memo.Docx
Description FY 19/20
Requested
FY 19/20
Proposed
FY 18/19
Budget
FY 17/18
Budget Ward
CDBG Entitlement 3,638,234 3,638,234 3,638,234 3,262,290
Program Income (Projected for FY 18/19)8,000 8,000 7,000 7,000
Total Available Resources 3,646,234 3,646,234 3,645,234 3,269,290
Administration (not to exceed 20% or $729,047)729,047 729,047 729,047 653,858
Section 108 Loan Payment on $4.1M 301,383 301,383 292,758 282,692
Section 108 Loan Payment on $800K 55,922 55,922 54,711 53,244
Total Admin and Debt Payment 1,086,352 1,086,352 1,076,516 989,794
Total Resources minus Admin and Debt Payments 2,559,882 2,559,882 2,568,718 2,279,496
Fair Housing Program Services 100,000 100,000 100,000 100,000 1
Bakersfield Senior Center 115,000 90,000 85,000 85,000 1
FY 18/19: Homeless Outreach Serivces (One Time Funds)0 0 71,072
Bakersfield Police Department (Community Relations Officers)400,000 322,785 290,713 305,394 1,2,7
Mission at Kern (Operations at new Facilities expaned by HEAP Grant)60,000 34,000 2
Total Public Service Projects 675,000 546,785 546,785 490,394
Home Access Rehabilitation 40,000 40,000 40,000 40,000
Union Brundage: Curb, Gutter, Sidewalk, Drainage 726,300 600,000 1La France Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv.300,000 0 0 273,441 1
Oleander Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv.500,000 350,000 153,989 301,212 2Wilson Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv.500,000 350,000 0 1
Madison Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv.300,000 0 0 1Castro Area: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv.300,000 200,000 7
FY 17/18: Union-Brundage: Curb, Gutter, Sidewalk, Drainage 0 0 602,027 1FY 18/19: East Terrace: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv.0 300,000 0 1
Old Town Kern/Beale: Street Reconstruction 300,000 150,000 300,000 301,212 2FY 18/19: East California: Curb, Gutter, Sidewalk, Drainage, Accessibility Imprv 0 153,989 0 1
Beale Park Lighting Upgrade 419,750 323,097 2FY 18/19: Baker Street Neighborhood LED Lighting Improvements 0 61,000 0 2
FY 18/19: Oleander Neighborhood Street Lights Upgrade 0 179,955 0 2Beale Park Restrooom Replacement 450,000 350,000 2
McMurtrey Aquatic Center Improvements 450,000 316,000 0 2FY 17/18: Lowell Park Improvements 0 0 132,000 1
FY 17/18: Stiern Park Improvements 0 0 139,210 7
Boys and Girls Club 100,000 2
CAPK Food Bank Expansion 458,295 0 0 1
FY 18/19: BARC Tire Recycling Program 0 0 167,000 0 1
Total Public Facilities 4,844,345 2,013,097 1,854,933 1,789,102
Total Requests for Public Services + Projects 5,519,345 2,559,882 2,401,718 2,279,496
Total Available Resources Remaining -2,959,463 0 $167,000 $0
Note: Remainder of funds for Castro Area project will come from savings from other CDBG projects.
DRAFT PROPOSED CDBG BUDGET FY 19-20
RESOURCES
ADMINISTRATION AND DEBT SERVICE
PUBLIC SERVICES (MAX. 15% or $546,785)
PROJECTS
DRAFT PROPOSED HOME BUDGET FY 2019-20
HOME Entitlement 1,494,389$ 1,494,389$ 1,494,389$
Program Income (Projected for FY 19/20)100,000$ 100,000$ 30,000$
Total Available Resources 1,594,389$ 1,594,389$ 1,524,389$
Administration (not to exceed 10%)159,439$ 159,439$ 152,439$
Total Resources minus Admin 1,434,950$ 1,434,950$ 1,371,950$
CHDO Set Aside (15%)224,158$ 224,158$ 224,158$
Acquisition/Construction/Rehabiltation -$ 1,210,792$ -$
HACK - Eye St. Affordable Housing (Site Not Aquired)1,500,000$ -$ 147,792$
FY 18/19: HACK-Residences at East Hills -$ -$ 1,000,000$
Total (All Requests)1,724,158$ 1,434,950$ 1,371,950$
Total Available Resources Remaining (289,208)$ (0)$ -$
PROPOSED ESG BUDGET FY 2019-20
ESG Entitlement (Projected for FY 19/20)293,680$ 293,680$ 293,680$
Administration (not to exceed 7.5%)22,026$ 22,026$ 22,026$
Total Resources minus Admin 271,654$ 271,654$ 271,654$
Flood Ministries - Street Outreach 22,500$ 22,500$ 22,982$
Bakersfield Homeless Center - Shelter 144,208$ 64,550$ 63,363$
Bakersfield Homeless Center - Rapid Rehousing 95,000$ 95,454$ 95,446$
The Mission at Kern County - Shelter 80,500$ 62,650$ 63,363$
Alliance Against Family Violence - Shelter 32,000$ 26,500$ 26,500$
Total (All Requests)374,208$ 271,654$ 271,654$
Total Available Resources Remaining (102,554)$ -$ -$
PROPOSED HOPWA BUDGET FY 2019-20
HOPWA Entitlement (Projected for FY 19/20)496,350$ 496,350$ 438,169$
Administration (not to exceed 3%)14,891$ 14,891$ 13,145$
Total Resources minus Admin 481,460$ 481,460$ 425,024$
Kern County Public Health 481,460$ 481,460$ 425,024$
Total (All Requests)481,460$ 481,460$ 425,024$
Total Available Resources Remaining (1)$ (1)$ -$
PROJECTS
Description FY 19/20
Requested
FY 19/20
Proposed
FY 18/19
Budget
RESOURCES
ADMINISTRATION AND DEBT SERVICE
Description FY 19/20
Requested
FY 19/20
Recommended
FY 18/19
Budget
RESOURCES
RESOURCES
ADMINISTRATION AND DEBT SERVICE
HOPWA SPONSOR/PROVIDER
ADMINISTRATION
PROJECTS
Description FY 19/20
Requested
FY 19/20
Recommended
FY 18/19
Budget
Overall HUD Project Applications for FY 2019/20 Funding
FY 2019/20 HOME APPLICATIONS
HUD
Category Applicant Ward Proposal Total Cost FY 18/19
Request
HUD
Eligible
Staff
Rating
CD Recommendation and
Notes
Proposed for
Budget
HOME
Affordable
Housing New
Construction
HACK
Eye Street
Affordable
Housing
2 60-unit affordable
multi-family
development at 21st
and Eye Streets
$22,970,875 $1,500,000 Yes 26 Qualified; however, staff was
informed that the site is no
longer available for the
proposed project.
$0
HOME
Affordable
Housing/New
Construction
TBD NA NA NA TBD TBD Staff will budget full HOME
allocation for a future project
to be determined.
$1,371,950 E
$224,158 CH
Projected HOME Funding: $1,596,108 Requested Funding: $1.5 million Recommended Funding: $0
FY 2019/20 ESG APPLICATIONS
HUD
Category Applicant Ward Proposal Total Cost FY 18/19
Request
HUD
Eligible
Staff
Rating
CD Recommendation and
Notes
Proposed for
Budget
Emergency
Shelter
Alliance
Against Family
Violence
All Operating expenses
for emergency
shelter
$32,000 Yes Staff recommends approval $26,500
Rapid
Rehousing
Bakersfield
Homeless
Center
All Expenses to house
homeless families
and individuals.
$95,000 Yes Staff recommends approval $95,454
Emergency
Shelter
Bakersfield
Homeless
Center
All Operating expenses
for emergency
shelter
$144,208 Yes Staff recommends approval $64,550
Emergency
Shelter
Mission of
Kern County
All Operating expenses
for emergency
shelter
$80,500 Yes Staff recommends approval $62,650
Outreach Flood
Ministries
All Expenses to operate
outreach efforts to
homeless persons.
$22,500 Yes Staff recommends approval $22,500
Projected ESG Funding: $293,680 Requested Funding: $374,208 Recommended Funding: $271,654
FY 2019/20 CDBG Applications – Public Services & Facilities
HUD
Category Applicant Ward Proposal Total
Cost
FY 18/19
Request
HUD
Eligible
Staff
Rating
CD Recommendation and
Notes
Proposed
for Budget
CDBG
Fair Housing
GBLA All Fair housing services to low
income persons throughout
city limits.
$100,000 $100,000 Yes 30 Approve. $100,000
CDBG
BPD Officers
City - BPD 1, 2
3, 7
Three officers to increase
police presence, expand service
area to include Wards 1, 2, 3,
and 7.
$400,000 $400,000 Yes 30 Approve $322,785
CDBG
Senior
services
Bakersfield
Senior
Center
1 Services for low income
seniors; add diabetes screening
and language translation
services.
$150,000 $115,000 Yes Approve partial funding.
Customary $85,000 and
one-time $5,000 to
implement language
translation services.
$90,000
CDBG
Homeless
Services
Mission at
Kern
2 Funds for operations costs to
the homeless.
$60,000 $60,000 Yes 30 Approve 56.67% of request,
Mission to provide
remainder by fundraising.
$34,000
CDBG
Section 108
City Na Annual Debt service for
infrastructure loan.
$301,383 $301,383 Yes 30 Approve. Annual Debt
service infrastructure loan.
$301,383
CDBG
Section 108
City Na Annual Debt service for
infrastructure loan.
$55,922 $55,922 Yes 30 Approve. Annual Debt
service infrastructure loan.
$55,922
CDBG
Home Access
City - DS All Provide implements to assist
with mobility in homes of low
income disabled individuals.
$40,000 $40,000 Yes 30 Approve at current funding
level.
$40,000
CDBG
Economic
Development
Boys and
Girls Club
2 Construct 2,160-sq.ft. facility
for Workforce Development
and ELS on parcels owned by
Boys and Girls club.
$486,150 $100,000 Yes 22 Not recommended.
Application withdrawn by
applicant.
$0
CDBG
Facility
Expansion
CAPK 1 Expand food bank facility from
20K-s.f. to 40K-s.f.
$1.5
million
$458,925 Yes 28 Not recommended.
Full funding from other
sources uncertain. C.O.B.
recently participated in
their solar roof project.
$0
CDBG Funds Requested: $1,631,238 Recommended Funding: $944,090
FY 2019/20 CDBG Applications – Public Works & Recreation & Parks Departments
HUD
Category Applicant Ward Proposal Total
Cost
FY 18/19
Request
HUD
Eligible
Staff
Rating
CD Recommendation and
Notes
Proposed
for Budget
CDBG
CG&S
City
PWKS
1 Union-Brundage: curb , gutter,
sidewalk, improvement
$726,300 $726,300 Yes 25 Approve; completion of
multi-year project.
$600,000
CDBG
CG&S
City
PWKS
1 Wilson area: curb, gutter and
sidewalk, accessibility
improvement.
$500,000 $500,000 Yes 23 Not Recommended. Funded
in FY18/19
$0
CDBG
CG&S
City
PWKS
2 Beale Park: lighting upgrade of
poles, wiring, conduit.
$419,750 $419,750 Yes 23 Approve $323,097
CDBG
CG&S
City
PWKS
1 La France Area curb, gutter
and sidewalk, accessibility
improvement.
$300,000 $300,000 Yes 23 Not recommended per PW
priority ranking.
-0-
CDBG
CG&S
City
PWKS
7 Castro Area
Curb, gutter, sidewalk
$300,000 $300,000 Yes 23 Approve: make up the
remainder with project
savings from prior years.
$200,000
CDBG
CG&S
City
PWKS
2 Old Town Kern/Beale
Asphalt
$150,000 $150,000 Yes 23 Approve $150,000
CDBG
CG&S
City
PWKS
1 Madison area: curb, gutter
and sidewalk, accessibility
improvement.
$300,000 $300,000 Yes 23 Not recommended per PW
priority ranking.
-0-
CDBG
CG&S
City
PWKS
2 Oleander area: curb, gutter &
sidewalk, accessibility
improvement.
$500,000 $500,000 Yes 25 Approve $350,000
CDBG
Rec & Parks
City
Rec &
Parks
2 Beale Park
Restroom Replacement
$450,000 $450,000 Yes NA Added 10% to past project
estimate. Staff recommends
$350,000 funding level.
$350,000
CDBG
Rec & Parks
City Rec &
Parks
2 McMurtrey Aquatic Center
Pool Filter Replacement
$450,000 $450,000 Yes NA Insufficient information for a
funding recommendation.
-0-
Capital Improvement Projects Funding Requested: $4,096,050 Funding Recommended: $1,973,097
Notes: Projected HOPWA Funding: $496,350 Requested Funding: $496,350 Recommended Funding: $496,350
Projected CDBG Available for Funding: $2,917,187 Requested Funding: $5,577,288 Recommended Funding: $2,917,187
(Recommended funding amount is less 20% CDBG Admin. The amount includes Section 108 Loan /repayments*)
All meetings will be held at City Hall North, First Floor, Conference Room A
Approved: DRAFT
Budget & Finance Committee Meetings
12:00 p.m.3:30 p.m. Closed Session 5:15 p.m. Public Session
Budget Hearing on 06/05, Budget Adoption on 6/28
Holidays - City Hall Closed
12:00 p.m.
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League of California Cities Mayors and Council Members Executive Forum - June 19 - 21, 2019
League of California Cities Annual Conference - October 16 - 18, 2019
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Documents
Presented At The
Budget and Finance
Committee
February 27, 2019
Meeting
CITY OF BAKERSFIELD
CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Fiscal Year Ended June 30, 2018
Prepared by the Department of Finance
Nelson K. Smith, Finance Director
On the Cover
City of Bakersfield Sign
Photo by Gilbert Vega
CITY OF BAKERSFIELD
Comprehensive Annual Financial Report
Year Ended June 30, 2018
Table of Contents
INTRODUCTORY SECTION Page
Table of Contents................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................i
Letter of Transmittal................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................iv
GFOA Certificate of Achievement................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................viii
Organizational Chart................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ix
Elected and Administrative Officers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................x
FINANCIAL SECTION
Independent Auditor's Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1
Management's Discussion and Analysis (Required Supplementary Information)................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................3
Basic Financial Statements
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20
Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22
Governmental Funds:
Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................28
Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30
Reconciliation of the Governmental Funds Statement
of Revenues, Expenditures and Changes in Fund Balances
to the Government-Wide Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32
Proprietary Funds:
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34
Statement of Revenues, Expenses and Changes in Fund Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................36
Statements of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................38
Fiduciary Funds:
Statement of Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................44
Statement of Changes in Fiduciary Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................45
Notes to the Basic Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................47
i
CITY OF BAKERSFIELD
Comprehensive Annual Financial Report
Year Ended June 30, 2018
Table of Contents
Required Supplementary Information:
Budgetary Information ................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................103
Budgetary Comparison Schedule for the General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................104
Budgetary Comparison Schedule for the Transient Occupancy Taxes Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................105
Budgetary Comparison Schedule for the Community Development Block Grant Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................105
Budgetary Comparison Schedule for the Gas Tax & Road Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................106
Defined Pension Plan - Schedules of Changes in Net Pension Liability and Related Ratios &
Schedules of Plan Contributions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................107
Other Post-Employment Benefits (OPEB) Plan - Schedule of Changes in City's
Net OPEB Liability and Related Ratios................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................110
Supplementary Information:
Balance Sheet - General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................116
Schedule of Revenues by Function - General Fund - Budget & Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................117
Schedule of Expenditures by Division - General Fund - Budget & Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................118
Special Revenue Funds:
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances
-Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................120
Debt Service Fund:
Schedule of Revenues, Expenditures and Changes in Fund Balance
-Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................126
Capital Projects Fund:
Combining Schedule of Revenues, Expenditures and Changes in Fund Balance
-Budget and Actual................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................128
Internal Service Funds:
Combining Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................131
Combining Statement of Activities and Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................132
Combining Statement of Cash Flows................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................133
Fiduciary Funds:
Statement of Changes in Assets and Liabilities - Agency Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................134
Combining Statement of Fiduciary Net Position
-Private Purpose Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................135
Combining Statement of Fiduciary Net Position
-Pension & Other Employee Benefit Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................136
Combining Statement of Changes in Fiduciary Net Position
-Private Purpose Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................137
Combining Statement of Changes in Fiduciary Net Position
-Pension & Other Employee Benefit Trust Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................138
Non-Major Governmental Funds:
Combining Balance Sheet................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................140
Combining Statement of Revenues, Expenditures and Changes in Fund Balances................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................142
Long-term Debt Recorded in Private Purpose Trust Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................144
ii
CITY OF BAKERSFIELD
Comprehensive Annual Financial Report
Year Ended June 30, 2018
Table of Contents
STATISTICAL SECTION
Net Position by Component - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................148
Change in Net Position - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................150
Fund Balances of Governmental Funds - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................154
Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................156
Governmental Activities Tax Revenues By Source - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................158
Principal Property Taxpayers - Current Year and Nine Years Ago................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................159
Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................160
Property Tax Rates/Direct and Overlapping Governments - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................162
Property Taxes Levies and Collections - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................164
Direct and Overlapping Sales Tax Rates - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................165
Taxable Sales by Market Groups - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................166
Sales Tax Revenue Payers By Industry -2017 and Nine Years Ago................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................168
Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................170
Ratio of Outstanding Debt by Type - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................172
Direct and Overlapping Debt as of June 30, 2018................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................174
Computation of Legal Debt Margin................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................175
Pledged-Revenue Coverage - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................176
Demographic and Economic Statistics - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................177
Principal Employers - Current Year and Nine Years Ago................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................178
Full-time Equivalent City Government Employees by Function - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................180
Property Value, Construction and Bank Deposits - Last Ten Calendar Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................182
Operating Indicators by Function - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................184
Capital Asset Statistics by Function - Last Ten Fiscal Years................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................186
Schedule of Insurance in Force................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................188
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December 18, 2018
Honorable Mayor, City Council, City Manager and Citizens of Bakersfield:
I am pleased to submit the City's Comprehensive Annual Financial Report (CAFR) for the year ended June
30, 2018 in accordance with the requirements of our Municipal Code which states that a complete
financial statement and report be prepared at the end of each fiscal year (Section 2.08.020F). This report
was prepared by the City's Finance Department, which assumes responsibility for both the accuracy of
the data and the completeness and fairness of the presentation, including all disclosures. Because the
cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable,
rather than absolute assurance that the financial statements are free of any material misstatements. To
the best of my knowledge and belief, the enclosed data is accurate in all material aspects and is
reported in a manner that presents fairly the financial position and results of operations of the City.
The accompanying financial statements of the City of Bakersfield (the “City”) have been prepared in
conformity with U.S. generally accepted accounting principles (GAAP) as prescribed by the
Governmental Accounting Standards Board (GASB).
Brown Armstrong, a firm of licensed certified public accountants, performed the annual independent
audit. The goal of the audit was to provide reasonable assurance that the basic financial statements of
the City are free of material misstatement. The independent auditor concluded, based upon the audit,
that the City’s financial statements for the fiscal year ended June 30, 2018, are fairly stated in
accordance with GAAP.
The independent audit of the financial statements of the City was part of a broader, federally mandated
Single Audit designed to meet the special needs of federal grantor agencies. The standards governing
Single Audit engagements require the independent auditor to report not only on the fair representation
of the financial statements, but also on the audited government’s internal controls and compliance with
legal requirements, with special emphasis on internal controls and legal requirements involving the
administration of federal awards. These reports are available in the City’s separately issued Single Audit
Report and may be obtained from the City’s website.
GAAP requires that management provide a narrative introduction, overview, and analysis to accompany
the basic financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of
transmittal is designed to complement the MD&A and should be read in conjunction with it. The City of
Bakersfield’s MD&A can be found immediately following the report of the independent auditors, which
begins at page 1 of the financial section.
GENERAL BACKGROUND
The City of Bakersfield is located approximately one hundred miles north of Los Angeles in the southern
San Joaquin Valley. The City maintains an incorporated area of 151 square miles and has an estimated
iv
population of 386,839 as of January 1, 2018.
The City of Bakersfield is a Charter City that offers a full range of City services including:
• Fire and Police Protection
• Streets and Infrastructure Maintenance
• Planning and Community Development
• Parks and Recreation Services
• Agricultural and Domestic Water Services
• Municipal Airpark - General Aviation
• Refuse Collection
• Wastewater Treatment
As such, this report includes the financial activities of the City of Bakersfield and the Bakersfield Successor
Agency. A more detailed discussion of the reporting entity is provided in the notes to the financial
statements.
MAJOR INITIATIVES
The transportation projects associated with Thomas Roads Improvement Program (TRIP) continue to
progress through the various phases of environmental, design, land acquisition and construction. The TRIP
program uses a combination of local funds, Transportation Impact Fees, and State and Federal road
funds, which includes approximately $570 million of Federal earmark funds approved by Congress in 2005.
The 2017-18 capital budget included over $41 million of funding for the TRIP projects as outlined below:
Centennial Corridor
(Construction)$ 35,356,000
Truxtun Widening
(Right of Way)$ 3,355,000
The City had three major TRIP projects under construction during the fiscal year, including the Beltway
Operational Improvements to State Routes 58 & 99, Kern River Bridge Improvements (Centennial Corridor
Phase 1), and the Truxtun Avenue Operational Improvements project. There has been a significant
amount of supplemental grant awards at both the State and Federal level which has resulted in the
remaining projects planned to be constructed in the TRIP program to be fully funded, requiring no
additional financing or borrowing.
FACTORS AFFECTING FINANCIAL CONDITION
Local Economy and Local Budget Issues - The local economy for the City of Bakersfield continues to show
positive signs of recovery in various areas, including the oil industry, but questions still remain on if that
recovery can be sustained. General Fund property tax revenues grew by 2.4% in fiscal year 2017-18 and
are estimated to increase by an additional 2.7% in fiscal year 2018-19. Fluctuations in oil prices and
associated oil drilling activity had a positive effect on sales tax revenue this year which resulted in actual
growth in that revenue source after multiple down years. Sales tax revenues increased by 10.7% in fiscal
year 2017-18 and are expected to show a slight increase of 2.0% in the 2018-19 fiscal year. While these
positive trends point to a recovery, it again needs to be emphasized that there still is a level of
uncertainty in the local economy.
The City Council (t he Council) continues to support a conservative approach in adopting our budget for
2018-19. The Council has maintained a $13,110,000 cash basis reserve fund along with a $3,010,000
facilities reserve fund to provide a level of protection for the City. The Council continued to fund the
City’s Other Post-Employment Benefits (OPEB) costs for retiree medical benefits, maintaining the City of
v
Bakersfield’s position as one of the few entities in California that are making serious progress toward fully
funding this long-term obligation.
Retirement costs continue to escalate for all employee groups and over the next several years are
expected to increase by 67% ($28.9 million) by fiscal year 2024-25. This dramatic rise is a result of
California Public Employees’ Retirement System’s (CalPERS) changes to its actuarial methodology and its
lower than projected earnings in previous years. CalPERS approved a multi-year smoothing method to
spread the rate increases associated with moving from a rolling 30-year amortization period to a fixed 30-
year amortization period. In December 2016 CalPERS changed the rate of return on projected earnings
on its portfolio of investments from 7.50% to 7.0% per year with a three-year phase-in starting with the 2016
actuarial reports. These methodology changes and resulting rate increases will have a significant impact
on retirement costs for the City. Actual CalPERS earnings over the past four years have been 2.4%, 0.6%,
11.2% and 8.6% respectively. While the recent improvement in returns is a positive sign, the effects of
annual investment increases are smoothed over a 30-year period so significant reductions in costs are not
expected in the near-term. CalPERS estimates the impact of the changes and returns will increase our
annual retirement benefit costs by approximately $3.0 million to $5.0 million per year for the next six years.
Long-Term Financial Planning - The City of Bakersfield continues to look forward in meeting our long-term
financial and operating needs. The increasing costs of retirement are of particular concern and continue
to be closely examined by the City. As the City grows both in population and in geographic area, there
will be a continued need to evaluate opportunities to become more efficient and effective in our efforts
to serve our community.
Accounting System and Internal Controls - The City's accounting system is organized and operated on a
fund basis with each fund treated as a distinct self-balancing accounting entity. Various funds utilized by
the City of Bakersfield are fully described in Note 1 of the Notes to the Basic Financial Statements. The
City's accounting records for general governmental operations are maintained on a modified accrual
basis of accounting, whereby revenues are recognized when measurable and available and
expenditures are recognized when materials and services are received. Accounting records for the
enterprise and internal service funds are recorded on an accrual basis of accounting, whereby revenues
are recognized when earned and expenses are recognized when incurred.
In developing and evaluating the City's accounting system, consideration is given to the adequacy of
internal accounting controls. Internal accounting controls are designed to provide reasonable, but not
absolute, assurance regarding: (1) the safeguarding of assets against loss from unauthorized use or
disposition and (2) the reliability of financial records for preparing financial statements and maintaining
accountability for assets. The concept of reasonable assurance recognizes that: (a) the cost of a control
should not exceed the benefits likely to be derived and (b ) the evaluation of costs and benefits requires
estimates and judgments by management.
Al l internal control evaluations occur within the framework described previously. The City Finance
department believes that these internal accounting controls adequately safeguard assets and provide
reasonable assurance of proper recording of financial transactions. However, the City recognizes that
even sound internal controls have inherent limitations. Internal controls must be reviewed to ensure that
the City’s operating policies and procedures are being adhered to and that the controls are adequate
to assure accurate and reliable financial reporting and to safeguard the City’s assets.
Budgetary Controls - The objective of these budgetary controls is to ensure compliance with legal
provisions embodied in the annual appropriated budget approved by the City Council. Project length
financial plans are adopted for the capital projects funds. The level of budgetary control is established at
the fund level. The City also maintains an encumbrance accounting system as one technique of
accomplishing budgetary control. Unencumbered amounts lapse at year-end. However, encumbrances
and certain capital projects are re-appropriated as part of the following year's budget. The 2017-18 City
vi
of Bakersfield appropriation limit established as required by state statute was $388,695,397.
Cash Management - The City maintains a cash and investment pool that is available for use by all funds,
except the Fire Pension Trust Fund. Each fund type's portion of this pool is displayed on the combined
balance sheet as cash and short-term investments. The deposits and investments of the Fire Pension Trust
Fund are held separately from other City funds.
The City Council has adopted an investment policy in accordance with California Government Code
Sections 53607 and 53646, with a goal to minimize credit and market risks while maintaining a competitive
yield on its portfolio. The City is also governed by State statutes authorizing the City to invest in bonds or
other evidences of indebtedness of the U.S. Government or any of its agencies and instrumentalities,
repurchase agreements and bankers’ acceptances. The pension trust investments are administered
separately under Municipal Code Section 2.92, which is within state guidelines.
OTHER INFORMATION
Independent Audit - The City Charter requires an annual audit by independent certified public
accountants. The City Council also adopted a policy regarding auditor rotation that encourages
competitive bidding on a five-year cycle. The accounting firm of Brown Armstrong Ac countancy
Corporation was selected by the City Council in 2017 to perform the annual audit for the 2016-17 fiscal
year. This audit year (2017-18) is the second year of the five-year agreement with this firm.
Awards - The Government Finance Officers As sociation of the United States and Canada (GFOA)
awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Bakersfield for
its Comprehensive An nual Financial Report for the fiscal year ended June 30, 2017, marking the thirty-
seventh consecutive year Bakersfield has received the GFOA certificate. The Certificate of Achievement
is a prestigious national award recognizing conformance with the highest standards for preparation of
state and local government financial reports.
A Certificate of Achievement is valid for a period of one year only. We believe our current report
continues to conform to Certificate of Achievement Program requirements and we are submitting it to
GFOA to determine its eligibility for another certificate.
Additionally, the City received the Distinguished Budget Presentation Award for the fiscal year beginning
July 1, 2017 from the GFOA. The Distinguished Budget Presentation Aw ard judges a government's budget
document for compliance with the guidelines established by the National Advisory Council on State and
Local Budgeting and best practices of the GFOA.
Acknowledgments - The preparation of this report on a timely basis could not be accomplished without
the efficient services of the entire staff of the Finance Department. I should like to express my
appreciation to all members of the Department who assisted and contributed to its preparation. I should
also like to thank the Mayor, City Council and the City Manager for their interest and support in planning
and conducting the financial operations of the City in a responsible and progressive manner.
Respectfully,
Nelson K. Smith
Finance Director
vii
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ix
CITY OF BAKERSFIELD
June 30, 2018
City Council
Karen K. Goh .......................................................................................................................Mayor
Willie Rivera ........................................................................................................Member/Ward 1
Andrae Gonzales ...................................................................................................Member/Ward 2
Ken Weir .............................................................................................................Member/Ward 3
Bob Smith ......................................................................................................Vice Mayor/Ward 4
Bruce Freeman ....................................................................................................Member/Ward 5
Jacquie Sullivan ....................................................................................................Member/Ward 6
Chris Parlier ..........................................................................................................Member/Ward 7
Administrative Personnel
Alan Tandy ............................................................................................................City Manager
Virginia Gennaro ...................................................................................................City Attorney
Jacquelyn Kitchen .................................................................... Development Services Director
Nelson K. Smith ...............................................................................................Finance Director
Anthony Galagaza........................................................................................................Fire Chief
Lyle Martin ..............................................................................................................Police Chief
Nick Fidler ..............................................................................................Public Works Director
Dianne Hoover ...............................................................................Director Recreation & Parks
Art Chianello ....................................................................................Water Resources Manager
x
1
INDEPENDENT AUDITOR’S REPORT
To the Honorable Mayor and
Members of the City Council
Bakersfield, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities, the
business-type activities, each major fund, and the aggregate remaining fund information of the
City of Bakersfield, California, (the City) as of and for the year ended June 30, 2018, and the
related notes to the financial statements, which collectively comprise the City’s basic financial
statements as listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant
to the preparation and fair presentation of financial statements that are free from material
misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the City’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the City’s internal control.
Accordingly, we express no such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects,
the respective financial position of the governmental activities, the business-type activities,
each major fund, and the aggregate remaining fund information of the City, as of June 30,
2018, and the respective changes in financial position and, where applicable, cash flows for
the year then ended in accordance with accounting principles generally accepted in the United
States of America.
2
Emphasis of Matter
As disclosed in the Note 1 to the financial statements, the City implemented Governmental Accounting Standards
Board (GASB) Statement No. No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than
Pension Plans; GASB Statement No. 81, Irrevocable Split-Interest Agreements; GASB Statement No. 85, Omnibus
2017; and GASB Statement No. 86, Certain Debt Extinguishment Issues, during the fiscal year ended June 30, 2018.
Our opinion is not modified with respect to the matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion
and analysis and budgetary comparison information on pages 3 through 18 and 104 through 106, the City’s
Retirement Plans’ Schedule of Changes in the Net Pension Liability and Related Ratios and the Schedule of Pension
Contributions on pages 107 through 109, and the Other Postemployment Benefit (OPEB) Plan’s Schedules of
Changes in the City’s Net OPEB Liability and Related Ratios as well as its Schedule of Contributions on pages 110
and 111 be presented to supplement the basic financial statements. Such information, although not a part of the
basic financial statements, is required by GASB, who considers it to be an essential part of financial reporting for
placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied
certain limited procedures to the required supplementary information in accordance with auditing standards generally
accepted in the United States of America, which consisted of inquiries of management about the methods of
preparing the information and comparing the information for consistency with management’s responses to our
inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the limited
procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise
the City’s basic financial statements. The introductory section, combining and individual major and nonmajor fund
financial statements and schedules, schedules of long-term debt recorded in private purpose trust fund on pages 116
through 145, and statistical section are presented for purposes of additional analysis and are not a required part of
the basic financial statements.
The combining and individual major and nonmajor fund financial statements and schedules as well as schedules of
long-term debt recorded in private purpose trust fund on pages 116 through 145 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 major and nonmajor fund financial
statements and schedules as well as schedules of long-term debt recorded in private purpose trust fund on pages
116 through 145 are fairly stated in all material respects in relation to the basic financial statements as a whole.
The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the
basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated December 18, 2018, 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.
BROWN ARMSTRONG
ACCOUNTANCY CORPORATION
Bakersfield, California
December 18, 2018
CITY OF BAKERSFIELD
Management's Discussion and Analysis
This discussion and analysis of the City of Bakersfield’s (City) financial performance provides an overview of the City’s
financial activities for the fiscal year ended June 30, 2018. We encourage readers to consider the information presented here in
conjunction with the accompanying letter of transmittal, the basic financial statements, and the accompanying notes to those
financial statements.
FINANCIAL HIGHLIGHTS
The assets and deferred outflows of resources of the City exceeded its liabilities and deferred inflows of resources at
the close of the most recent fiscal year by $2.0 billion (net position).
The City’s total net position decreased by $43.4 million over the prior fiscal year. This decrease is attributable to a
$0.1 million increase in restricted net position and a $69.4 million decrease in unrestricted net position, offset by a
$26.0 million increase in capital assets investment. Prior year information presented in this section does not take into
account restatements made to fiscal year 2016-17 balances for prior period adjustments (see Note 23).
As of the close of the current fiscal year, the City's Governmental Funds reported combined ending fund balances of
$175.9 million, a decrease of $2.1 million in comparison with the prior year. Amounts available for spending
include restricted, committed, assigned and unassigned fund balances. Of this amount, $20.8 million is restricted by
law or externally imposed requirements, $97.6 million is committed for specific purposes, $49.2 million is assigned
and $7.1 million is unassigned and available.
Available fund balance for the General Fund increased $0.3 million to $39.5 million, which equates to 19.9% of total
General Fund expenditures for the year.
The City's long-term debt showed a decrease of $11.3 million during the current fiscal year.
3
CITY OF BAKERSFIELD
Management's Discussion and Analysis
OVERVIEW OF THE FINANCIAL STATEMENTS
The City's basic financial statements are comprised of three components: 1) government-wide financial statements, 2) fund
financial statements, and 3) notes to the financial statements. This report also contains other supplementary information in
addition to the basic financial statements themselves.
GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a
manner similar to a private-sector business. The statements present the financial picture of the City from the economic
resources measurement focus using the accrual basis of accounting. They present governmental activities and business-type
activities separately. Additionally, certain eliminations have occurred as prescribed by the Governmental Accounting Standards
Board (GASB) statements in regards to interfund activity, payables and receivables.
The Statement of Net Position and the Statement of Activities provide information about the City as a whole and its activities
through the fiscal year. These statements include all assets, deferred outflows of resoruces, liabilities, and deferred inflows of
resources of the City using the accrual basis of accounting, which is similar to the accounting used by most private-sector
companies. All of the current year's revenues and expenses are taken into account, regardless of when cash is received or paid.
These two statements report the City's net position and changes in it. Net position is the difference between assets deferred
outflows of resources, liabilities, and deferred inflows of resources providing a measurement of the City's financial health. Over
time, increases or decreases in the City's net position can be an indicator of whether its overall financial health is improving or
deteriorating. Other factors to consider are changes in the City's property tax base and sales tax base. The government-wide
financial statements do not include the fiduciary funds, which comprise the private purpose trust funds, pension trust funds, and
agency funds. Resources in the fiduciary funds are generally not available to support the City’s own programs.
In the Statement of Net Position and the Statement of Activities, we separate the City activities as follows:
Governmental activities - Most of the City's basic services are reported in this category, including the General Government,
Police, Fire, Public Works, Recreation & Parks and Development Services. These activities are generally financed by property
and sales taxes, user fees, interest income, franchise fees, and state and federal shared revenues and grants.
Business-Type activities - The City charges a fee to customers to cover all or most of the cost of certain services it provides.
The City's Water, Wastewater, and Refuse Collection systems along with the Municipal Airport and Offstreet Parking activities
are reported in this category.
4
CITY OF BAKERSFIELD
Management's Discussion and Analysis
FUND FINANCIAL STATEMENTS
A fund is a specific grouping of related accounts that is used to maintain control over resources that have been segregated for
specific activities and objectives. The fund financial statements provide detailed information about the most significant funds,
not the City as a whole. Some funds are required to be established by State law and by bond covenants. Management establishes
many other funds to help control and manage financial resources for particular purposes, or to show that the City is meeting
legal responsibilities when using certain taxes, grants, and other revenue.
These financial statements include statements for each of the three categories of activities – governmental, proprietary and
fiduciary. The governmental activities are prepared using the current financial resources measurement focus and modified
accrual basis of accounting. The proprietary activities are prepared using the economic resources measurement focus and the
accrual basis of accounting. The fiduciary activities are agency funds that also use the economic resources measurement focus
but only report a balance sheet. Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements
are provided to explain the differences created by the integrated approach.
Governmental Funds - Most of the City's basic services are reported in governmental funds, which focus on the flow of
resources into and out of those funds with the balances remaining at year-end available for appropriation. These funds are
reported using the modified accrual basis of accounting, which measures cash and all other financial assets that can readily be
converted to cash. The Governmental Fund financial statements focus on near-term inflow and outflow of spendable resources,
as well as on balances of spendable resources available at the end of the fiscal year. Such information may be useful in
evaluating a government’s near-term financial requirements. To facilitate comparisons, the differences of results in the
Governmental Fund financial statements to those in the Government-Wide financial statements are explained in a reconciliation
schedule following the Governmental Fund financial statement.
Proprietary Funds - Proprietary Funds are used to report services the City charges for, whether to external customers or units
within the City. Proprietary Funds are reported in the same way that all activities are reported in the Statement of Net Position
and the Statement of Activities. The City's Enterprise Funds report the same functions as the business-type activities reported in
the Government-Wide financial statements, but provide mo re detail and additional information, such as cash flows. The City
uses Internal Service Funds (the second component of Proprietary Funds) to report activities that provide supplies and services
for the City's other programs and activities. This includes the City's Self-Insurance and Equipment Management Funds. These
services primarily benefit governmental rather that business-type functions so a majority of the related operation costs are
included with the governmental activities in the Government-Wide financial statements.
Fiduciary Funds - The City is the trustee, or fiduciary, for certain funds held on behalf of various third parties. The City's
fiduciary activities are reported in separate Statements of Fiduciary Net Position. These activities are excluded from the City's
other financial statements because these resources are not available to support he City's programs or operations. The City is
responsible for ensuring that the assets reported in these funds are used for their intended purposes.
NOTES TO THE FINANCIAL STATEMENTS
The notes to the financial statements provide additional information that is essential to a full understanding of the data provided
in the Government-Wide and Fund financial statements. The notes can be found starting on page 47 of this report.
OTHER INFORMATION
In addition to the basic financial statements and accompanying notes, this report also presents certain “Required Supplementary
Information” concerning the City's progress in funding its obligation to provide pension benefits and other post-employment
benefits (OPEB) to its employees and budgetary comparison schedules for the General Fund and Special Revenue Major Funds.
This information can be found starting on page 103 of this report.
5
CITY OF BAKERSFIELD
Management's Discussion and Analysis
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As previously noted, net position may serve over time as a useful indicator of a government’s financial position. In the current
year, the City's assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $2.0 billion
at the close of the reporting period, which is a $6.7 million decrease, or 0.3% decrease, in comparison with the prior year.
The largest portion of the City’s net position (98.9% of the total) relates to its net investment in capital assets of $2.0 billion
(e.g., land, buildings, machinery, infrastructure and equipment), less any related debt used to acquire those assets that is still
outstanding. These capital assets are used to provide services to citizens; as such, these assets are not available for future
expenditures. The City’s net investment in capital assets is reported net of related debt, though it should be noted that the
resources needed to repay this debt must be provided from other sources as the capital assets themselves cannot be used to
service this debt.
A small portion of the City’s net position, $40.8 million (2.0% of the total), represents resources that are subject to external
restrictions on how they may be used.
As in the prior year, the City is able to report positive balances in both categories of net position, whether for the City as a
whole or for its separate Governmental and Business-type activities.
The following table presents the components of the government-wide Statement of Net Position for at the end of the fiscal year
for both 2017 and 2018. The governmental and business-type activities columns reflect amounts that have been restated in this
financial report. Note 23 explains any prior period adjustments that changed net position.
City of Bakersfield - Net Position
(in thousands)
Governmental Activities Business-Type Activities Total
2017 2018 2017 2018 2017 2018
Assets
Current and other assets $303,581 $308,835 $153,314 $190,148 $456,895 $498,983
Capital assets (net)1,322,138 1,315,194 856,679 878,477 2,178,817 2,193,671
Total assets 1,625,719 1,624,029 1,009,993 1,068,625 2,635,712 2,692,654
Deferred Outflows of Resources 104,926 112,429 20,536 20,589 125,462 133,018
Liabilities
Long-term liabilities
outstanding 433,799 544,274 233,962 238,059 667,761 782,333
Other liabilities 41,258 44,493 16,484 19,666 57,742 64,159
Total liabilities 475,057 588,767 250,446 257,725 725,503 846,492
Deferred Inflows of Resources 38,331 26,311 3,920 2,809 42,251 29,120
Net Position
Net investment in capital assets 1,305,415 1,301,335 670,724 700,725 1,976,139 2,002,060
Restricted 20,626 20,760 20,200 20,200 40,826 40,960
Unrestricted (108,784)(200,715)85,239 107,755 (23,545)(92,960)
Total Net Position $1,217,257 $1,121,380 $776,163 $828,680 $1,993,420 $1,950,060
6
CITY OF BAKERSFIELD
Management's Discussion and Analysis
Governmental Activities – Total assets for governmental activities decreased by $1.7 million, with current and other assets in
governmental activities increasing by $5.3 million and a capital assets decline of $6.9 million. Total liabilities increased by
$113.7 million, with other liabilities increasing by $3.2 million and long-term liabilities increasing by $110.5 million.
Of the $95.9 million decrease in governmental activities total net position, unrestricted net position decreased by $91.9 million,
net investment in capital assets increased by $4.1 million and restricted net position increased by $0.1 million. The decrease in
unrestricted net position stems primarily from the continued rise is pension liabilities as well as the addition of the other post-
employment benefit liability as required by a new accounting pronouncement.
Business-Type Activities – Total assets for business-type activities increased by $58.6 million, with current and other assets
increasing by $36.8 million and a $21.8 million increase in capital assets. Total liabilities increased by $7.3 million, with other
liabilities increasing by $3.2 million and long-term liabilities also increasing by $4.1 million. Total net position for business-
type activities increased by $52.5 million. Of that amount, net investment in capital assets increased by $30.0 million.
Restricted net position remained constant and unrestricted net position increased by $22.5 million. The overall increase in
unrestricted net position is due to positive results in operations in the Wastewater, Refuse and Agriculture Water funds offset by
the continued increases in pension related liabilities and the recording of other post-employment benefit liabilities.
Change in Net Position of the City
The following table presents the government-wide changes in net position for both 2017 and 2018. The City’s total revenues
of $467.2 million were less than expenses of $480.4 million for a decrease in net position before transfers & other items of
$13.2 million. The governmental and business-type activities columns reflect amounts that have been restated in this financial
report. Note 23 explains any prior period adjustments that changed net position.
City of Bakersfield - Changes in Net Position
(in thousands)
Governmental Activities Business-Type Activities Total
2017 2018 2017 2018 2017 2018
Revenues:
Program revenues
Charges for service $55,251 $55,401 $112,957 $119,148 $168,208 $174,549
Operating grants and
contributions 12,641 9,166 7,173 9,047 19,814 18,213
Capital grants and
contributions 100,956 85,533 9,742 4,914 110,698 90,447
Total program revenues 168,848 150,100 129,872 133,109 298,720 283,209
General revenues:
Taxes:
Property taxes 77,680 79,774 --77,680 79,774
Sales taxes 65,349 72,322 --65,349 72,322
Other taxes 1,212 1,309 --1,212 1,309
Intergovernmental:
Intergovt, unrestricted 170 202 --170 202
Grants and contributions not
restricted to specific programs 24,828 25,141 --24,828 25,141
Investment earnings 284 1,296 1,113 1,879 1,397 3,175
Miscellaneous 1,708 1,754 --1,708 1,754
Gain/(loss) on sale of property 273 249 16 20 289 269
Total Revenues 340,352 332,147 131,001 135,008 471,353 467,155
7
CITY OF BAKERSFIELD
Management's Discussion and Analysis
City of Bakersfield - Changes in Net Position
(in thousands)
Governmental Activities Business-Type Activities Total
2017 2018 2017 2018 2017 2018
Expenses:
Governmental
General government 26,395 29,731 --26,395 29,731
Public safety - Police 95,723 105,006 --95,723 105,006
Public safety - Fire 41,365 44,561 --41,365 44,561
Public works 171,912 145,530 --171,912 145,530
Recreation and parks 26,889 22,614 --26,889 22,614
Development Services 12,160 8,534 --12,160 8,534
Interest on long-term debt 33 25 --33 25
Subtotal - Governmental 374,477 356,001 --374,477 356,001
Business-Type:
Wastewater treatment --41,008 42,104 41,008 42,104
Refuse collection --46,301 47,971 46,301 47,971
Agricultural water --4,305 4,198 4,305 4,198
Domestic water --27,067 29,205 27,067 29,205
General aviation --813 671 813 671
Offstreet parking --227 234 227 234
Subtotal - Business-Type --119,721 124,383 119,721 124,383
Total expenses 374,477 356,001 119,721 124,383 494,198 480,384
Change in net position before
transfers & other items (34,125)(23,854)11,280 10,625 (22,845)(13,229)
Transfers 152 2,033 (152)(2,033)--
Extraordinary gain from litigation
settlement ---54,231 -54,231
Changes in net position (33,973)(21,821)11,128 62,823 (22,845)41,002
Net Position - Beginning of
Year (as restated)1,251,231 1,143,201 765,034 765,857 2,016,265 1,909,058
Net Position - End of Year $1,217,258 $1,121,380 $776,162 $828,680 $1,993,420 $1,950,060
Governmental Activities – The results in governmental activities caused a decrease in the City’s net position by $21.8 million
during the year. In the table below, the difference between the program revenue and expenses by activity illustrates the amount
each respective activity is supported by program revenues. Public Safety and Recreation and Parks service delivery costs
exceeded program revenues by $135.0 million and $4.1 million, respectively. Public Safety programs rely heavily on taxes to
support their operations whereas Recreation and Parks relies on both taxes and charges for services to support their operations.
This fiscal year Public Works service delivery costs exceeded program revenues by $43.6 million because the majority of its
services are also tax supported.
8
CITY OF BAKERSFIELD
Management's Discussion and Analysis
Total expenses in Governmental Activities had a net decrease of $18.5 million from the previous fiscal year for an overall
(4.9)%decrease. The largest increases were in Public Safety – Police and Fire increased by $9.3 million and $3.2 million,
respectively, and in General Government with an increase of $3.3 million. These increases are primarily connected to the new
requirement to record the other post-employment liability and related expenses. The increases were also related to California
Public Employees' Retirement System (CalPERS) rate increases in the current year. These changes were offset by a decrease of
$26.4 million in Public Works which is primarily due to less expenditures incurred from capital improvement projects.
9
CITY OF BAKERSFIELD
Management's Discussion and Analysis
The taxes category is the largest revenue source for governmental activities, amounting to $153.4 million or 46.2% of total
revenues. Capital grants and contributions is also a significant revenue source for the City’s governmental activities, amounting
to $85.5 million or 25.8% of total revenues. The third most significant sources of revenue is charges for services, amounting to
$55.4 million or 16.7% of total revenues.
Governmental Activities Revenue decreased $8.2 million which is a 2.4% decrease compared to the previous fiscal year. This
decrease is due primarily to a 6.1%, or $10.5 million, increase in General Revenues, offset by a 11.1%, or $18.7 million,
decrease in Program Revenues.
General Revenues - Sales tax revenues increased by 10.7%, or $7.0 million, while property taxes increased by 2.7%, or $2.1
million. There has been a slight recovery in sales tax revenue related to recent improvements in the oil industry and its related
impacts on the local economy.
Program Revenues - Capital Grants and Contributions decreased by $15.4 million due to a reduction in special projects funded
in Public Works compared to the prior year. The most significant reduction is related to the TRIP projects which included less
activity related to construction and property acquisition when compared to the previous year. Operating Grants and
Contributions decreased $3.5 million with the majority of the decrease due to less entitlement funds received from the
Department of Housing and Urban Development in the current year
10
CITY OF BAKERSFIELD
Management's Discussion and Analysis
Business-Type Activities – The City operates six Enterprise Funds that offer wastewater services, refuse collection,
agricultural water, domestic water to City residents, downtown parking and a municipal airport.
Business-type activities increased the City’s net position by $62.8 million during the current year. The chart above compares
total program revenues and expenses.
Program revenues exceeded program expenses in Wastewater Treatment by $3.1 million, Refuse Collection by only $35
thousand and Agriculture Water by $2.8 million. These increases were offset by program expenses exceeding program
revenues in Domestic Water by $0.9 million.
Total expenses increased by $4.7 million (3.9%) over the prior year.
The following chart illustrates the distribution of business-type revenues by category. The City’s business-type activities rely
heavily on charges for services to fund their operations, making up 88.3% of total revenues. Capital grants and contributions is
the second largest revenue source at 3.6% of total revenues.
11
CITY OF BAKERSFIELD
Management's Discussion and Analysis
Business-Type activities program revenues increased by $3.2 million, 2.5%, over the prior year. The majority of this can be
attributed to an increase in Refuse Collection of $1.4 million or 2.8% which was due to rate increases and additional residential
service customers. There were also increases in revenue in the Domestic Water fund of $1.6 million. which was also connected
to an increase in rates. These increases were offset by a decrease of capital contributions of $4.8 million from the prior year
which was due to less development in the area and consequently less related infrastructure added in the current year.
FINANCIAL ANALYSIS OF THE CITY’S FUNDS
As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements.
A fund is created and segregated for the purpose of carrying out specific activities or attaining specific objectives in accordance
with special regulations, restrictions, or limitations. Activity not required to be reported in a separate fund is included in the
General Fund.
Governmental Funds - The focus of the City’s Governmental Funds is to provide information on near-term inflows, outflows,
and balances of spendable resources. Such information is useful in assessing the City's financing requirements. In particular,
unassigned fund balance may serve as a useful measure of the City’s available resources as it represents the portion of fund
balance which is not limited to use for a particular purpose by an external party, City management or City Council.
As of the end of the current fiscal year, the City’s Governmental Funds reported combined ending fund balances of $175.9
million, a decrease of $2.1 million in comparison with the prior year. The components of total fund balance are as follows (for
more information see Note 14 – Fund Balances):
Nonspendable fund balance, $1.2 million are amounts that are not spendable in form, or are legally or contractually
12
CITY OF BAKERSFIELD
Management's Discussion and Analysis
required to be maintained intact, and are made up of prepaid expenses and deposits.
Restricted fund balance, $20.8 million, consists of amounts with constraints put on their use by external creditors,
grantors, contributions, laws, regulations or enabling legislation. Examples of restrictions on funds are those for (1)
$15.2 million for the purpose of the fund (i.e., Gas Tax and Road projects), (2) $1.8 million from the Redevelopment
Successor Agency Housing Fund for projects and (3) $2.9 million for traffic safety projects.
Committed fund balance, $97.6 million, are amounts for specific purposes determined by the Bakersfield City
Council, such as funds collected from fees paid to mitigate the traffic impacts to the regional circulation system of
$52.4 million and $15.9 million for appropriations for next year’s budget.
Assigned fund balance, $49.2 million, for funds set aside by management for specific purposes. Amounts include
$44.5 million set aside for capital projects and $1.9 million for the fund purposes related to transient occupancy fees.
Unassigned fund balance, $7.1 million, represents the residual classification for the City’s General Fund.
General Fund: The General Fund is the chief operating fund of the City. At the end of the current fiscal year, the General
Fund’s total fund balance increased by 0.6%, or $0.3 million from $39.2 million to $39.5 million. While this is a slight change
in fund balance for the year, the following detail of changes from the prior year is provided:
Total operating revenues increased by $11.3 million (6.1%). Property Tax revenue increased by $1.7 million due to
continuation of higher assessed values within the City limits. Sales Tax revenue revealed that there was some level of
recovery to the local economy after successive years of declines. Revenue from sales taxes increased by $6.7 million.
All other revenue sources within the General Fund remained fairly consistent compared to the previous fiscal year.
Total expenditures increased by $8.3 million (a 4.4% increase). This was due to increases in the Public Safety costs
in both Police and Fire expenditures related to filling vacancies ($3.3 million and $1.7, million respectively). There
was also an increase of $1.3 million in Recreation and Park is also related to filling staffing vacancies. Overall
personnel expenditures also increased throughout all General Fund departments due to increases in pension costs.
Other governmental funds: As compared with the prior year, the total fund balances of the remaining governmental funds
increased by 1.4%, or $1.8 million, to $136.4 million with the following significant changes:
The Gas Tax and Road Fund decreased by $0.8 million from $16.0 million to $15.2 million. Amounts in this fund
are restricted by state and federal statute. The decrease is due to multiyear projects winding down and others in
various stages of completion.
The Capital Outlay Fund increased by $0.1 million from $56.0 million to $56.1 million. Of this amount, $6.6
million is committed for contractual obligations and $3.8 million is committed for facility replacement. The
remaining amount of $44.5 million is assigned and available for use at management’s discretion. The resulting
decrease shows that expenditures were in line with projected revenues.
The Park Improvement Fund decreased by $2.1 million. Of this amount, $5.3 million is committed for contractual
obligations. The decrease in fund balance is from increases in expenditures for phase III of the Sports Village
Complex upgrades.
The Transportation Development Fund increased by $3.7 million from $48.6 million to $52.4 million. The entire
amount of $52.4 million is committed for contractual obligations and/or current projects. This change is the result of
a decrease in expenditures on road construction projects. The amounts expended in the prior years were for
acquisition and demolition costs which did not take place in the current year. As the projects move into the
construction phases in the subsequent years, these capital costs are expected to increase.
13
CITY OF BAKERSFIELD
Management's Discussion and Analysis
Proprietary Funds - The City’s Proprietary Funds are shown in their entirety in the government-wide financial statements. All
funds are being reported as major funds, so there is no need to report additional detail elsewhere in the document.
The Wastewater Treatment Fund has total net position of $524.2 million at the end of the current year, an increase of $4.1
million over the prior year. Total net position includes $460.7 million net investment in capital assets and $20.2 million of
restricted assets which are not available to cover current expenses. The remaining net position of $43.3 million is unrestricted
and available to cover current operating and capital needs (including plant and equipment replacement) of the fund. The
majority of the increase resulted from more development completed to infrastructure in the current year which was reflected in a
$7.0 million addition in Capital Contributions.
The Refuse Collection Fund has total net position of $1.0 million at the end of the current year, a decrease of $1.5 million from
the prior year. The decrease is due to less revenue collected from residential services/rates than is necessary to cover the
operating costs of the division. Further review of the rates charged to customers will occur to establish a rate sufficient to cover
these costs in future years and to address the deficit in net position.
The Agricultural Water Fund has total net position of $24.1 million at the end of the current year, an increase of $2.6 million
over the prior year. Total net position includes $17.6 million net investment in capital assets, which is not available to cover
current expenses. The remaining net position of $6.5 million is unrestricted and available to cover current operating and capital
needs of the fund. As in the prior year, revenues were more than sufficient to cover the fund costs resulting in this continued
increase in net position.
The Domestic Water Fund has total net position of $265.0 million at the end of the current year, an increase of $53.5 million
over the prior year. Total net position includes $206.7 million net investment in capital assets, which is not available to cover
current expenses. The remaining net position of $58.2 million is unrestricted and available to cover current operating and
capital needs of the fund. This increase in net position is connected to a litigation settlement for pollution remediation - see
further explanation in Note 24.
The General Aviation Fund has total net position of $11.5 million at the end of the current year, an increase of $475,540
compared to the prior year. Total net position includes $10.8 million net investment in capital assets, which is not available to
cover current expenses. The remaining net position is unrestricted and available to cover current operating and capital needs of
the fund.
The Offstreet Parking Fund has total net position of $1.2 million at the end of the current year, a decrease of $110,942
compared to the prior year. Total net position includes $1.0 million net investment in capital assets, which is not available to
cover current expenses. The remaining net position is unrestricted and available to cover current operating and capital needs of
the fund.
14
CITY OF BAKERSFIELD
Management's Discussion and Analysis
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets - The City’s investment in capital assets for its governmental and business-type activities as of June 30 of the
current fiscal year amounts to $2.2 billion (net of accumulated depreciation). This investment in capital assets includes land,
buildings and systems, improvements, machinery and equipment, park facilities, roads, highways, bridges and construction in
progress. The total increase in the City’s investment in capital assets for the current fiscal year was $14.9 million. Of this
amount, a $6.9 million decrease relates to Governmental Activities which offsets a $21.8 million increase that relates to
Business-Type Activities. Depreciation expense of $91 million exceeded additions to capital assets by this amount.
These financial statements include infrastructure assets constructed or acquired through fiscal year 2017-17.
Major capital asset events during the current fiscal year included the following:
A variety of street construction projects and rehabilitation of major arterial streets. Construction in progress for
governmental activities as of the end of the current fiscal year is $104.7 million. This figure includes over $99.9
million towards major street construction, traffic signals, and resurfacing projects throughout the City.
The City added over $24.8 million in new streets and roads primarily due to new residential developments completed
in the current year. These newly constructed right of ways are transferred over to the City by the various developers
when the work is finalized.
City of Bakersfield - Capital Assets
(in thousands)
Governmental Activities Business-Type Activities Total
2017 2018 2017 2018 2017 2018
Land and water storage rights $444,525 $448,510 $23,621 $23,621 $468,146 $472,131
Depreciable buildings, property,
equipment and infrastructure, net 776,239 761,971 794,872 779,943 1,571,111 1,541,914
Construction in progress 101,374 104,713 6,709 43,436 108,083 148,149
Non-amortizable intangible assets --31,477 31,477 31,477 31,477
Total Capital Assets $1,322,138 $1,315,194 $856,679 $878,477 $2,178,817 $2,193,671
15
CITY OF BAKERSFIELD
Management's Discussion and Analysis
City of Bakersfield - Outstanding Debt
Balance Incurred Satisfied Balance
June 30, 2017 or Issued or Matured June 30, 2018
Governmental Activities
Loans payable $2,938,462 $173,910 $(528,132)$2,584,240
Certificates of Participation*13,785,000 -(2,510,000)11,275,000
Total governmental activities $16,723,462 $173,910 $(3,038,132)$13,859,240
Business-Type Activities
Revenue Bonds Payable $174,647,913 $23,075,000 $(30,724,701)$166,998,212
Loans Payable 3,008,504 -(752,126)2,256,378
Total business-type activities $177,656,417 $23,075,000 $(31,476,827)$169,254,590
Total Debt $194,379,879 $23,248,910 $(34,514,959)$183,113,830
* Certificates of Participation in governmental activities are debt of the former Redevelopment Agency that is now reported as City debt.
Long-Term Debt - At the end of the current fiscal year, the City had a total debt outstanding of $183.1 million. The
City’s total debt decreased by a net amount of $11.3 million during the current fiscal year. This amount is the result
of normal debt maturities.
Certificates of Participation issued by the City via the former Redevelopment Agency in 2006 carry a Reserve Fund Surety from
Ambac Assurance Company (Ambac). Moody’s Investor’s Service (Moody’s) rating on Ambac is currently “Baa1”. The
current underlying rating on the Certificates of Participation has not been revised (currently “A1”). This rating on the
Certificates of Participation reflects only the view of Moody’s, and any desired explanation of the significance of such rating
should be obtained from Moody’s. There is no assurance that such rating will continue for any given period of time or that such
rating will not be revised or withdrawn by Moody’s if, in the judgment of Moody’s, circumstances so warrant.
The 2015 Wastewater Revenue Bonds – Series A issued by the City in 2015, which redeemed a majority of the 2007
Wastewater Revenue Bonds – Series A, has an “Aa2” rating from Moody’s and an "AA" rating from Standard & Poors. There
is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised or withdrawn
by the rating agencies if, in their judgment, circumstances so warrant.
More detailed information regarding capital asset and long-term debt activity can be found in the related notes to the financial
statements. See Note 5 for capital assets, and Note 11 for long-term debt.
16
CITY OF BAKERSFIELD
Management's Discussion and Analysis
GENERAL FUND BUDGETARY HIGHLIGHTS
Differences between the original budget and the final amended budget reflect an increase in resources of $5.1 million and an
increase in appropriations of $6.7 million. Significant budgetary amendments (changes) are summarized as follows:
$0.6 million increase in various resources and appropriations due to revenues associated with open purchase orders
at the end of the previous fiscal year. Also, $0.7 million increase in various resources due to revenues associated
with prior year appropriations not spent and carried forward to this fiscal year.
$1.4 million increase in resources and appropriations for reimbursement of personnel and equipment costs on state-
wide master mutual aid assignments in the Fire Department.
$1.1 million increase in resources and appropriations for grant related projects in the Police Department.
The final amended revenue estimate budget figures in the General Fund were lower than actual revenue by $3.0 million and
appropriations were higher than actual expenditures by $10.7 million. Significant differences between budget and actual
amounts are as follows:
$2.3 million positive variance in tax revenue. This is the result of an increase in property tax revenue offset by
decreases in sales and use tax revenue. The City has continued to have uncertainty as to the level of revenues from
sales taxes because of the impact of the oil industry on the local economy which resulted in $1.4 million less revenue
than budgeted. This shortage was offset by higher property tax revenue than initially estimated. Projections for this
revenue source we re conservative in nature and the actual revenue received was approximately $3.8 million more
than projected due to higher assessed values than estimated.
$1.5 million less than budgeted in intergovernmental revenue which is due primarily to this source of funds being
based on reimbursement of expenditures incurred. Some of the project activity for these awards had not moved
forward resulting in less revenue being recognized.
$6.7 million variance of appropriations over actual expenditures in Public Safety. The savings are due primarily to
salary and benefit savings from unfilled positions plus some grant funded projects that were budgeted but not started.
$3.9 million variance of appropriations over actual expenditures in Departments other than Police are also due
primarily to salary and benefit savings from unfilled positions.
17
CITY OF BAKERSFIELD
Management's Discussion and Analysis
ECONOMIC FACTORS AND NEXT YEAR'S BUDGETS AND RATES
The key assumptions in the General Fund revenue forecast for fiscal year 2018-19 were:
1.Property tax revenue is projected to grow at 4% compared to last year’s estimate of 5% as projected by Kern County.
2.Sales and use tax revenue is projected to show a slight increase of 2% in fiscal year 2018-19, which is higher than
the estimate made for fiscal year 2017-18 which estimated zero growth in this revenue source. Sales and use tax
revenues are difficult to project this year because for the past 3 years oil prices have remained depressed, both
locally and globally, resulting in industry-wide layoffs, reduced spending and less industry related travel.
3.California Public Employees’ Retirement System (CalPERS) approved new policies last year which have raised rates
approximately 10% for next fiscal year. Similar increases are projected for the next five fiscal years.
New items specifically addressed in the 2018-19 budget include the following:
Police Department – The Police Department’s operating budget has increased from fiscal year 2017-18 by 5.1%, totaling $4.6
million. This increase is primarily attributable to increased rates for CalPERS, callback pay, and workers compensation costs.
Fire Department – The Fire Department's operating budget had a 5.2% increase from fiscal year 2017-18 totaling $2.0 million.
This increase is primarily due to the 10% increase in CalPERS rates resulting in higher benefit costs. The budget also included
funding for one new position funded through special revenue sources.
Public Works - The Public Works Department operating budget increased by $8.4 million, or 7.2%, from fiscal year 2017-18.
The increase was also due to the CalPERS rate escalations as we ll as an increases in staffing in areas covered by non-General
fund revenue, specifically in operations for refuse and fleet services. In addition there was a significant need for specific
equipment to be replaced for non-General fund services that were well beyond their normal life cycle.
Development Services – The Development Services Department’s operating budget has increased from fiscal year 2017-18 by
2.7%, totaling $0.2 million. CalPERS rates were again the cause of this increase and there are no staffing changes proposed.
Recreation and Parks – The Recreation and Parks Department’s operating budget has increased from fiscal year 2017-18 by
14.7%, totaling $4.0 million. This increase is due to the 10% increase in CalPERS rates resulting in higher benefit costs and
increases in water costs necessary in part to the full use of the City's spray park facilities.
CONTACTING THE CITY'S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, customers, investors and creditors with a general overview
of the City's finances and to show the City's accountability for the mo ney it receives. Questions concerning any of the
information provided in this report or requests for additional financial information can be sent via e-mail to:
finance@bakersfieldcity.us. Formal written requests should be addressed to: City of Bakersfield, Attn: Finance Department,
1600 Truxtun Avenue, Bakersfield, CA 93301.
18
Government-Wide Financial Statements
19
Statement of Net Position
June 30, 2018
Governmental
Activities
Business-Type
Activities Total
Assets:
Current assets:
Cash and investments $211,850,387 $180,486,624 $392,337,011
Accounts receivable, net 23,631,901 5,278,725 28,910,626
Interest receivable 622,377 514,887 1,137,264
Notes/loans receivable - current 700,343 -700,343
Due from other governmental agencies 43,100,901 1,434,354 44,535,255
Internal balances (1,767,293)1,767,293 -
Prepayments and inventories 2,318,351 -2,318,351
Total current assets 280,456,967 189,481,883 469,938,850
Noncurrent assets:
Capital assets:
Land 448,509,830 23,620,851 472,130,681
Depreciable capital assets, net 761,971,498 779,943,383 1,541,914,881
Construction in progress 104,712,586 43,435,606 148,148,192
Non-amortizable intangible assets -31,476,906 31,476,906
Land held for resale 1,266,016 -1,266,016
Notes/loans receivable 27,111,671 665,995 27,777,666
Total noncurrent assets 1,343,571,601 879,142,741 2,222,714,342
Total assets 1,624,028,568 1,068,624,624 2,692,653,192
Deferred Outflows of Resources:
Deferred pensions (See Note 16)106,014,683 9,657,704 115,672,387
Deferred OPEB (See Note 17)6,413,948 1,113,500 7,527,448
Debt issuance -9,818,471 9,818,471
Total deferred outflows of resources 112,428,631 20,589,675 133,018,306
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities 19,390,408 13,884,202 33,274,610
Customers' deposits -5,055,401 5,055,401
Advances from grantors and third parties 25,102,447 726,886 25,829,333
Total current liabilities 44,492,855 19,666,489 64,159,344
Noncurrent liabilities:
Due within one year:
Long-term debt 3,189,649 7,951,827 11,141,476
Capital leases payable -643,995 643,995
Kern River Levee District/Buena Vista -368,746 368,746
Claims and judgments payable 13,428,651 -13,428,651
Compensated absences payable 2,724,434 488,138 3,212,572
Due in more than one year:
Long-term debt 10,669,591 161,302,763 171,972,354
Capital leases -17,671,298 17,671,298
Claims and judgments payable 34,136,000 -34,136,000
Net other post-employment benefits liability 69,307,834 9,100,508 78,408,342
Compensated absences payable 12,376,893 1,462,596 13,839,489
Net pension liability 398,440,673 39,068,738 437,509,411
Total noncurrent liabilities 544,273,725 238,058,609 782,332,334
Total liabilities 588,766,580 257,725,098 846,491,678
Deferred Inflows of Resources:
Deferred pensions (See Note 16)18,328,487 1,760,427 20,088,914
Deferred OPEB (See Note 17)7,982,265 1,048,116 9,030,381
Total deferred inflows of resources 26,310,752 2,808,543 29,119,295
Net Position:
Net investment in capital assets 1,301,334,674 700,725,335 2,002,060,009
Restricted: Capital improvements 20,759,775 20,200,000 40,959,775
Unrestricted (200,714,582)107,755,323 (92,959,259)
Total net position $1,121,379,867 $828,680,658 $1,950,060,525
The accompanying notes are an integral part of these financial statements.
20
21
CITY OF BAKERSFIELD
Statement of Activities
For the Fiscal Year Ended June 30, 2018
Program Revenues
Functions/Programs Expenses Charges for
Services
Operating
Grants and
Contributions
Capital
Grants and
Contributions Total
Primary Government:
Governmental activities:
General government $29,731,416 $5,618,886 $676,123 $-$6,295,009
Public safety - Police 105,006,154 2,989,023 2,411,545 -5,400,568
Public safety - Fire 44,560,720 7,242,490 1,966,228 -9,208,718
Public works 145,529,290 17,159,857 1,266,514 83,459,843 101,886,214
Recreation & parks 22,613,830 16,481,750 43,565 2,011,649 18,536,964
Development services 8,533,656 5,909,456 2,801,618 61,818 8,772,892
Interest on long-term debt 25,060 ----
Total governmental activities 356,000,126 55,401,462 9,165,593 85,533,310 150,100,365
Business-type activities:
Wastewater treatment 42,103,648 34,036,372 7,352,420 3,843,153 45,231,945
Refuse collection 47,971,215 51,119,909 200,441 -51,320,350
Agricultural water 4,198,037 7,039,283 -1,002 7,040,285
Domestic water 29,205,225 26,491,151 1,233,297 538,429 28,262,877
General aviation 671,124 347,315 260,969 530,956 1,139,240
Offstreet parking 233,746 114,261 --114,261
Total business-type activities 124,382,995 119,148,291 9,047,127 4,913,540 133,108,958
Total primary government $480,383,121 $174,549,753 $18,212,720 $90,446,850 $283,209,323
General Revenues:
Taxes:
Property taxes
Sales and use tax
Other taxes
Intergovernmental, unrestricted
Unrestricted grants and contributions
Investment earnings
Miscellaneous
Gain on sale of property
Transfers
Total general revenues and transfers
Change in net position before extraordinary gain
Extraordinary gain on litigation settlement
Change in net position
Net Position - Beginning of Year, as restated
Net Position - End of Year
The accompanying notes are an integral part of these financial statements.
22
Net (Expense) Revenue
and Changes in Net Position
Governmental
Activities
Business-Type
Activities Total
$(23,436,407)$-$(23,436,407)
(99,605,586)-(99,605,586)
(35,352,002)-(35,352,002)
(43,643,076)-(43,643,076)
(4,076,866)-(4,076,866)
239,236 -239,236
(25,060)-(25,060)
(205,899,761)-(205,899,761)
-3,128,297 3,128,297
-3,349,135 3,349,135
-2,842,248 2,842,248
-(942,348)(942,348)
-468,116 468,116
-(119,485)(119,485)
-8,725,963 8,725,963
(205,899,761)8,725,963 (197,173,798)
79,774,412 -79,774,412
72,322,068 -72,322,068
1,308,842 -1,308,842
201,875 -201,875
25,140,642 -25,140,642
1,295,749 1,878,973 3,174,722
1,754,210 -1,754,210
248,579 20,370 268,949
2,032,654 (2,032,654)-
184,079,031 (133,311)183,945,720
(21,820,730)8,592,652 (13,228,078)
-54,231,181 54,231,181
(21,820,730)62,823,833 41,003,103
1,143,200,597 765,856,825 1,909,057,422
$1,121,379,867 $828,680,658 $1,950,060,525
23
24
Governmental Fund Financial Statements
25
CITY OF BAKERSFIELD
Balance Sheet
Governmental Funds
June 30, 2018
General
Fund
Transient
Occupancy
Taxes
Community
Development
Block Grant
Gas Tax
& Road Fund
Assets:
Cash and investments $28,189,169 $1,195,523 $54,840 $-
Accounts receivable, net 1,117,928 677,591 14,754,567 22,031
Interest receivable 125,338 11,930 -50,419
Due from other governmental agencies 14,223,087 -1,216,773 27,042,763
Due from other funds 6,495,939 ---
Notes/loans receivable --3,908,892 -
Prepaid items 16,876 ---
Total assets $50,168,337 $1,885,044 $19,935,072 $27,115,213
Liabilities, Deferred Inflows of Resources and Fund
Balances:
Liabilities:
Accounts payable $4,859,631 $22,389 $365,272 $5,823,805
Due to other governmental agencies 569,298 ---
Due to other funds --402,450 6,081,535
Advances from grantors and third parties 1,992,091 ---
Total liabilities 7,421,020 22,389 767,722 11,905,340
Deferred Inflows of Resources:
Deferred revenue 3,248,829 -18,638,255 22,031
Fund Balances:
Nonspendable 1,025 ---
Restricted --529,095 15,187,842
Committed 29,505,463 7,078 --
Assigned 2,914,844 1,855,577 --
Unassigned 7,077,156 ---
Total fund balances 39,498,488 1,862,655 529,095 15,187,842
Total liabilities, deferred inflows of
resources, and fund balances $50,168,337 $1,885,044 $19,935,072 $27,115,213
The accompanying notes are an integral part of these financial statements.
26
Capital
Outlay
Park
Improvement
Transportation
Development
Other
Governmental
Funds
Total
Governmental
Funds
$55,973,197 $8,589,241 $53,727,053 $5,087,685 $152,816,708
143,984 --6,903,789 23,619,890
63,620 27,997 155,806 13,104 448,214
38,786 --540,015 43,061,424
----6,495,939
---22,791,933 26,700,825
1,212,183 ---1,229,059
$57,431,770 $8,617,238 $53,882,859 $35,336,526 $254,372,059
$1,293,042 $3,334,627 $1,525,246 $372,504 $17,596,516
----569,298
---11,954 6,495,939
---23,110,356 25,102,447
1,293,042 3,334,627 1,525,246 23,494,814 49,764,200
46,606 --6,798,874 28,754,595
1,212,183 ---1,213,208
---5,042,838 20,759,775
10,419,247 5,282,611 52,357,613 -97,572,012
44,460,692 ---49,231,113
----7,077,156
56,092,122 5,282,611 52,357,613 5,042,838 175,853,264
$57,431,770 $8,617,238 $53,882,859 $35,336,526 $254,372,059
27
CITY OF BAKERSFIELD
Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position
June 30, 2018
Total Fund Balances - Total Governmental Funds $175,853,264
Amounts reported for Governmental Activities in the Statement of Net Position are different
because:
Capital assets used in governmental activities are not current financial resources and therefore are
not reported in the Governmental Funds Balance Sheet. Capital assets allocated from Internal
Service Funds are included in the Internal Service Funds adjustment below.
Capital assets $2,470,583,271
Ending accumulated depreciation (1,155,389,357)1,315,193,914
Land held for resale is not a current financial resource and is not
reported in the Governmental Funds.1,266,016
Deferred outflows of resources related to pensions are not a current financial resource and are not
reported in the Governmental Funds 106,014,683
Deferred outflows of resources related to other post-employment benefits are not a current
financial resource and are not reported in the Governmental Funds 6,413,948
Deferred inflows of resources related to pensions are not a current financial resource and are not
reported in the Governmental Funds (18,328,487)
Deferred inflows of resources related to other post-employment benefits are not a current financial
resource and are not reported in the Governmental Funds (7,982,265)
Interest payable on long-term debt does not require current financial resources. Therefore, interest
payable is not reported as a liability in the Governmental Funds Balance Sheet.(147,498)
Unearned revenue and other resources not available to liquidate liabilities of the current period
are not recognized in the Governmental Funds.28,754,595
Internal Service Funds are used by management to charge the costs of certain activities, such as
insurance and fleet management, to individual funds. The assets and liabilities of the Internal
Service Funds are included in governmental activities in the Government-Wide Statement of Net
Position.10,472,564
Long-term liabilities are not due and payable in the current period and therefore they are not
reported in the Governmental Funds Balance Sheet. Noncurrent liabilities allocated from Internal
Service Funds are included in the Internal Service Funds adjustment above.
Notes/Contracts/Loans payable (13,859,240)
Compensated absences payable (14,523,120)
Unfunded post-employment benefits (69,307,834)
Unfunded pension benefits (398,440,673)(496,130,867)
Net Position of Governmental Activities $1,121,379,867
The accompanying notes are an integral part of these financial statements.
28
29
CITY OF BAKERSFIELD
Statement of Revenues, Expenditures and Changes in Fund Balances
Governmental Funds
For the Fiscal Year Ended June 30, 2018
General
Fund
Transient
Occupancy
Taxes
Community
Development
Block Grant
Gas Tax
& Road Fund
Revenues:
Taxes $162,701,286 $9,570,855 $-$-
Licenses and permits 2,928,031 ---
Intergovernmental 4,385,389 -3,127,264 81,940,188
Charges for services 24,787,096 7,496,900 --
Fines, forfeitures and assessments 667,440 --74,046
Interest income 938,990 43,161 235 148,727
Loan payments --213,804 -
Contributions and donations 110,386 1,206,786 --
Other income 1,574,230 353,468 91,185 307
Total revenues 198,092,848 18,671,170 3,432,488 82,163,268
Expenditures:
Current:
General government 12,553,412 9,041,424 --
Public safety - Police 87,424,862 ---
Public safety - Fire 38,021,932 ---
Public works 24,658,307 --25,951
Recreation and parks 20,195,330 ---
Development services 7,074,648 -1,907,534 -
Non-departmental 8,291,680 3,132,400 --
Capital outlay --887,725 82,904,215
Debt service:
Principal retirement ----
Interest and fiscal charges ----
Total expenditures 198,220,171 12,173,824 2,795,259 82,930,166
Excess (deficiency) of revenues
over (under) expenditures (127,323)6,497,346 637,229 (766,898)
Other financing sources (uses):
Transfers in 550,000 ---
Transfers out (168,377)(6,547,980)(500,324)-
Total other financing sources (uses)381,623 (6,547,980)(500,324)-
Net change in fund balances 254,300 (50,634)136,905 (766,898)
Fund balances - beginning, as restated 39,244,188 1,913,289 392,190 15,954,740
Fund balances - ending $39,498,488 $1,862,655 $529,095 $15,187,842
The accompanying notes are an integral part of these financial statements.
30
Capital
Outlay
Park
Improvement
Transportation
Development
Other
Governmental
Funds
Total
Governmental
Funds
$5,707,943 $-$-$248,510 $178,228,594
---340,103 3,268,134
267,943 --3,477,657 93,198,441
580,145 -121,465 1,418,771 34,404,377
52,907 1,970,565 14,534,290 1,588,082 18,887,330
76,687 48,753 499,973 35,454 1,791,980
---46,128 259,932
----1,317,172
250,799 -(238,152)993,065 3,024,902
6,936,424 2,019,318 14,917,576 8,147,770 334,380,862
--289,112 -21,883,948
---1,784,257 89,209,119
---1,277,573 39,299,505
--747,169 367,359 25,798,786
---20,368 20,215,698
---436,924 9,419,106
275,867 ---11,699,947
12,959,242 4,098,068 10,155,495 2,947,964 113,952,709
---502,352 502,352
---59,324 59,324
13,235,109 4,098,068 11,191,776 7,396,121 332,040,494
(6,298,685)(2,078,750)3,725,800 751,649 2,340,368
6,580,000 --561,676 7,691,676
(190,000)--(550,000)(7,956,681)
6,390,000 --11,676 (265,005)
91,315 (2,078,750)3,725,800 763,325 2,075,363
56,000,807 7,361,361 48,631,813 4,279,513 173,777,901
$56,092,122 $5,282,611 $52,357,613 $5,042,838 $175,853,264
31
CITY OF BAKERSFIELD
Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and
Changes in Fund Balances to the Government-Wide Statement of Activities
For the Fiscal Year Ended June 30, 2018
Net Change in Fund Balances - Total Governmental Funds $2,075,363
Amounts reported for Governmental Activities in the Statement of Activities are different
because:
Governmental Funds report capital outlay as expenditures. However, in the Government-Wide
Statement of Activities the cost of those assets is allocated over their estimated useful lives and
reported as depreciation expense.
Capital outlay expenditures are added back to fund balance.$9,071,670
Depreciation expense is deducted from fund balance (net of Internal Service Fund depreciation of
$6,462,655 which has already been allocated to serviced funds).(59,668,838)
Contributions of infrastructure and improvements by developers are capitalized in the Statement of
Activities, but are not recorded in the Governmental Fund Financial Statements because no cash
changed hands.40,244,018 (10,353,150)
Certain expenses are reported in the Government-Wide Statement of Activities, but they do not
require the use of current financial resources. Therefore, these expenses are not reported as
expenditures in Governmental Funds.
Net change in long-term compensated absences 57,029
Interest expense on long-term debt 34,264
Net pension liability (20,675,373)
Other post-employment benefits 6,679,122 (13,904,958)
Bond & loan proceeds provide current financial resources to Governmental Funds, but issuing
debt increases long-term liabilities in the Government-Wide Statement of Net Position.
Repayment of bond principal is an expenditure in Governmental Funds, but the repayment
reduces long-term liabilities in the Government-Wide Statement of Net Position.2,815,222
Unearned revenue and other resources not available to liquidate liabilities of the current period
are not recognized in Governmental Funds. Revenue in the Statement of Activities is not limited
by availability, so certain revenues need to be reduced by the amounts that were unavailable at
the end of the year. This adjustment records a net decrease in revenues - unavailable revenues at
the beginning of the year exceed ending unavailable revenues by this amount.(820,209)
Internal Service Funds are used by management to charge the costs of certain activities, such as
insurance and fleet management, to individual funds. The net revenue of the Internal Service
Funds is reported with Governmental Activities.(994,284)
Loss on disposal of governmental capital assets is not recorded in fund activity
but is included in Governmental Activities.(638,714)
Change in Net Position of Governmental Activities $(21,820,730)
The accompanying notes are an integral part of these financial statements.
32
Proprietary Fund Financial Statements
These funds account for operations (a) that are financed and operated in a manner similar to private business enterprises where
the intent of the governing body is that the costs (including depreciation) of providing goods or services to the general public on
a continuing basis be financed or recovered primarily through user charges; or (b) where the governing body has decided that
periodic determination of net income is appropriate for accountability purposes.
Wastewater Treatment Fund is used to account for the provision of sewer service to the residents of the City and some
residents of Kern County. This fund also accounts for the activities related to the debt issuance which provided for the
Wastewater Treatment Facilities.
Refuse Collection Fund is used to account for the collection and disposal of refuse within the City. All activities necessary to
provide such services are accounted for in this fund.
Agricultural Water Fund is used to account for the provision of water service restricted primarily for agricultural purposes to
users within the City and some users within Kern County (some Kern River water is exchanged for State Aqueduct water for
domestic water purposes). All activities necessary to provide such services are accounted for in this fund.
Domestic Water Fund is used to account for the provision of water service to some residents of the City and Kern County. All
activities necessary to provide such service are accounted for in this fund.
General Aviation Fund is used to account for the acquisition and operation of the Bakersfield Airpark. The majority of
acquisition and improvement financing for the airport facility was provided by a grant from the Federal Aviation
Administration.
Offstreet Parking Fund is used to account for the operations of the parking garage at 18th and Eye Streets and various
offstreet surface parking lots within the City. The parking garage was financed by the former Redevelopment Agency and the
related debt was retired in August 1994. Subsequently, the title was transferred to the City.
Internal Service Funds are used to provide goods and services by one department or agency to other departments or agencies
of the City on a cost reimbursement basis.
33
CITY OF BAKERSFIELD
Statement of Net Position
Proprietary Funds
June 30, 2018
Wastewater
Treatment
Refuse
Collection
Agricultural
Water
Current assets:
Cash and investments $80,941,694 $19,530,163 $10,447,051
Accounts receivable, net 1,064,089 1,132,604 526,040
Interest receivable 232,140 54,976 29,286
Notes/loans receivable ---
Due from other governmental agencies 106,172 1,328,182 -
Prepayments and inventories ---
Total current assets 82,344,095 22,045,925 11,002,377
Noncurrent assets:
Capital assets:
Land 10,238,095 2,785,456 2,175,944
Depreciable buildings, property,
equipment and infrastructure, net 598,790,408 974,754 7,371,835
Construction in progress 11,141,793 58,352 -
Non-amortizable intangible assets --8,032,678
Notes/loans receivable ---
Other long-term receivable 476,867 -33,450
Total noncurrent assets 620,647,163 3,818,562 17,613,907
Total assets 702,991,258 25,864,487 28,616,284
Deferred outflows of resources:
Deferred pensions 2,859,414 5,288,345 735,632
Deferred other post-employment benefits 346,700 630,000 92,800
Debt issuance 9,818,471 --
Total deferred outflows of resources 13,024,585 5,918,345 828,432
Current liabilities:
Accounts payable and accrued liabilities 4,301,287 837,998 69,871
Claims payable ---
Workers' compensation claims ---
Compensated absences payable 144,474 261,349 27,567
Long-term debt - due within one year 7,951,827 --
Capital leases payable - due within one year ---
Advances from grantors and third parties 476,867 130,695 -
Total current liabilities 12,874,455 1,230,042 97,438
Noncurrent liabilities:
Long-term debt - due in more than one year 161,302,763 --
Capital leases payable - due in more than one year ---
Kern River Levee District/Buena Vista --368,746
Customers' deposits 2,481,830 453,855 -
Workers' compensation claims ---
Compensated absences payable 448,274 723,170 133,016
Net pension liability 11,903,460 21,184,698 3,265,191
Net other post-employment benefits liability 2,056,612 5,552,853 1,233,967
Total noncurrent liabilities 178,192,939 27,914,576 5,000,920
Total liabilities 191,067,394 29,144,618 5,098,358
Deferred inflows of resources:
Deferred pensions 470,296 985,688 151,686
Deferred other post-employment benefits 236,862 639,529 142,117
Total deferred inflows of resources 707,158 1,625,217 293,803
Net position:
Net investment in capital assets 460,734,177 3,818,562 17,580,457
Restricted for:
Capital improvements 20,200,000 --
Unrestricted 43,307,114 (2,805,565)6,472,098
Total net position $524,241,291 $1,012,997 $24,052,555
Adjustments to reflect the consolidation of internal service fund
activities related to proprietary funds
Net position of business-type activities
The accompanying notes are an integral part of these financial statements.
34
Domestic
Water
General
Aviation
Offstreet
Parking Totals
Governmental Activities
Internal Service Funds
$68,643,482 $837,647 $86,587 $180,486,624 $59,033,679
2,561,395 (5,973)570 5,278,725 12,011
196,270 1,888 327 514,887 174,162
----700,343
---1,434,354 39,477
----1,089,292
71,401,147 833,562 87,484 187,714,590 61,048,964
547,102 7,464,254 410,000 23,620,851 -
169,502,063 2,665,602 638,721 779,943,383 37,442,456
31,558,343 677,118 -43,435,606 -
23,444,228 --31,476,906 -
----410,846
119,324 -36,354 665,995 -
225,171,060 10,806,974 1,085,075 879,142,741 37,853,302
296,572,207 11,640,536 1,172,559 1,066,857,331 98,902,266
739,062 35,251 -9,657,704 2,468,778
44,000 --1,113,500 292,900
---9,818,471 -
783,062 35,251 -20,589,675 2,761,678
8,626,512 38,694 9,840 13,884,202 1,077,095
----6,555,651
----6,873,000
54,748 --488,138 161,824
---7,951,827 -
643,995 --643,995 -
119,324 --726,886 -
9,444,579 38,694 9,840 23,695,048 14,667,570
---161,302,763 -
17,671,298 --17,671,298 -
---368,746 -
2,119,716 --5,055,401 -
----34,136,000
157,752 384 -1,462,596 416,383
2,574,160 141,229 -39,068,738 10,376,239
257,076 --9,100,508 2,622,181
22,780,002 141,613 -234,030,050 47,550,803
32,224,581 180,307 9,840 257,725,098 62,218,373
145,104 7,653 -1,760,427 505,281
29,608 --1,048,116 302,000
174,712 7,653 -2,808,543 807,281
206,736,443 10,806,975 1,048,721 700,725,335 37,442,456
---20,200,000 -
58,219,533 680,852 113,998 105,988,030 1,195,834
$264,955,976 $11,487,827 $1,162,719 826,913,365 $38,638,290
1,767,293
$828,680,658
35
CITY OF BAKERSFIELD
Statement of Revenues, Expenses and Changes in Fund Net Position
Proprietary Funds
For the Fiscal Year Ended June 30, 2018
Wastewater
Treatment
Refuse
Collection
Agricultural
Water
Operating revenues:
Intergovernmental $-$200,441 $87,113
Charges for services 32,900,439 46,107,058 5,297,116
Cost recoveries 42,024 4,543,794 522,650
Rental income 377,469 -90,550
Other sales or services 304 62,749 1,041,853
Miscellaneous 716,135 406,309 -
Total operating revenues 34,036,371 51,320,351 7,039,282
Operating expenses:
General and administrative 15,726,245 48,222,115 3,772,934
Transmission and distribution 12,868 483,845 5,158
Workers' compensation payments ---
Claims paid ---
Depreciation and amortization 19,779,890 74,594 400,693
Compensated absences -13,751 12,510
Total operating expenses 35,519,003 48,794,305 4,191,295
Operating income (loss)(1,482,632)2,526,046 2,847,987
Nonoperating revenues (expenses):
Interest income 967,700 361,890 63,067
Connection fees 7,352,420 --
Interest expense (6,420,932)--
Gain/(loss) on sale of capital assets (1,032)14,686 -
Total nonoperating revenues (expenses)1,898,156 376,576 63,067
Income (loss) before transfers
and capital contributions 415,524 2,902,621 2,911,054
Capital contributions 3,843,153 -1,002
Transfers in ---
Transfers out (132,310)(1,360,615)(278,614)
Income (loss) before extraordinary item 4,126,367 1,542,006 2,633,442
Extraordinary item:
Litigation Settlement ---
Change in net position 4,126,367 1,542,006 2,633,442
Total Net Position -
Beginning of Year - as restated 520,114,924 (529,009)21,419,113
Total Net Position-End of Year $524,241,291 $1,012,997 $24,052,555
Adjustment to reflect the consolidation of internal
service activity related to proprietary funds
Change in net position of business-type activities
The accompanying notes are an integral part of these financial statements.
36
Domestic
Water
General
Aviation
Offstreet
Parking Totals
Governmental
Activities
Internal Service
Funds
$18,027 $260,969 $-$566,550 $-
24,273,969 324,425 114,261 109,017,268 35,413,796
25,786 1,270 -5,135,524 847,694
---468,019 -
2,167,170 --3,272,076 -
6,200 21,620 -1,150,264 63,334
26,491,152 608,284 114,261 119,609,701 36,324,824
22,178,681 204,110 137,829 90,241,914 26,694,805
727,803 237,216 -1,466,890 -
----3,136,046
----3,540,685
4,648,806 226,550 90,628 25,221,161 6,462,655
---26,261 3,384
27,555,290 667,876 228,457 116,956,226 39,837,575
(1,064,138)(59,592)(114,196)2,653,475 (3,512,751)
478,887 4,176 3,253 1,878,973 496,231
1,233,297 --8,585,717 -
(1,652,857)--(8,073,789)-
6,716 --20,370 278,968
66,043 4,176 3,253 2,411,271 775,199
(998,095)(55,416)(110,942)5,064,746 (2,737,552)
538,429 530,956 -4,913,540 92,629
----2,540,403
(261,115)--(2,032,654)(242,744)
(720,781)475,540 (110,942)7,945,632 (347,264)
54,231,181 --54,231,181 -
53,510,400 475,540 (110,942)62,176,813 (347,264)
211,445,576 11,012,287 1,273,661 38,985,554
$264,955,976 $11,487,827 $1,162,719 $38,638,290
647,020
$62,823,833
37
CITY OF BAKERSFIELD
Statement of Cash Flows
Proprietary Funds
For the Fiscal Year Ended June 30, 2018
Wastewater
Treatment
Refuse
Collection
Cash flows from operating activities:
Cash received from:
Customers, including cash deposits $31,871,874 $51,048,694
Prior year reimbursements and cost recoveries 42,024 -
Cash paid to:
Suppliers (8,401,929)(38,407,409)
Employees (6,373,717)(11,427,088)
Cash deposits returned to customers --
Net cash provided (used) by operating activities 17,138,252 1,214,197
Cash flows from noncapital financing activities:
Cash transferred from other funds --
Cash transferred to other funds (132,310)(1,360,615)
Litigation settlement (see Note 24)--
County/developer project share --
Connection fees 7,352,420 -
Net cash provided (used) by noncapital financing activities 7,220,110 (1,360,615)
Cash flows from capital and related financing activities:
Principal payments:
Notes/Loans/Bonds (6,727,126)-
Capital lease payments --
Capital contributions --
Interest paid (7,564,866)-
Purchase of capital assets --
Proceeds from sale of capital assets -14,686
Construction in progress (10,575,050)-
Net cash provided (used) by capital and related financing activities (24,867,042)14,686
Cash flows from investing activities:
Interest received 1,147,753 404,464
Net increase (decrease) in the fair value of investments (279,024)(67,644)
Net cash provided by investing activities 868,729 336,820
Net increase (decrease) in cash and investments 360,049 205,088
Cash and investments - Beginning of year 80,581,645 19,325,075
Cash and investments - End of year $80,941,694 $19,530,163
The accompanying notes are an integral part of these financial statements.
38
Agriculture
Water
Domestic
Water
General
Aviation
Offstreet
Parking Totals
Governmental
Activities
Internal Service
Funds
$10,757,110 $26,111,454 $754,221 $118,351 $120,661,704 $36,192,558
--22,490 -64,514 847,694
(2,507,785)(14,012,590)(417,927)(134,075)(63,881,715)(22,415,858)
(1,389,196)(1,494,452)--(20,684,453)(8,208,236)
-(137,878)--(137,878)-
6,860,129 10,466,534 358,784 (15,724)36,022,172 6,416,158
-----2,540,403
(278,614)(261,115)--(2,032,654)(242,744)
-54,231,181 --54,231,181 -
1,002 ---1,002 -
-973,720 --8,326,140 -
(277,612)54,943,786 --60,525,669 2,297,659
----(6,727,126)-
-(415,185)--(415,185)-
--530,956 -530,956 -
-(1,652,857)--(9,217,723)-
--(614,443)(38,140)(652,583)(7,863,254)
-6,716 -11,313 32,715 323,425
-(31,503,200)--(42,078,250)-
-(33,564,526)(83,487)(26,827)(58,527,196)(7,539,829)
96,386 661,013 7,020 3,385 2,320,021 636,194
(54,523)(320,250)(3,660)(185)(725,286)(206,403)
41,863 340,763 3,360 3,200 1,594,735 429,791
6,624,380 32,186,557 278,657 (39,351)39,615,380 1,603,779
3,822,671 36,456,925 558,990 125,938 140,871,244 57,429,900
$10,447,051 $68,643,482 $837,647 $86,587 $180,486,624 $59,033,679
39
CITY OF BAKERSFIELD
Statement of Cash Flows (concluded)
Proprietary Funds
For the Fiscal Year Ended June 30, 2018
Wastewater
Treatment
Refuse
Collection
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating Activities:
Operating income (loss)$(1,482,632)$2,526,046
Adjustments to reconcile operating income (loss) to net
cash provided (used) by operating activities:
Depreciation expense 19,779,890 74,594
(Increase) decrease in accounts receivable (217,817)(263,366)
(Increase) decrease in inventories --
(Increase) decrease in prepaid items --
Increase (decrease) in accounts payable 552,521 (1,506,513)
Increase in workers' compensation claims --
Increase (decrease) in unearned revenue -(1,764)
Increase (decrease) in customers' deposits (1,904,656)(6,527)
Increase (decrease) in compensated absences (17,419)(58,997)
Increase (decrease) in net pension liability 1,231,625 2,102,406
Increase (decrease) in deferred outflows/inflows of resources for pensions (516,964)(903,713)
Increase (decrease) in net other post-employment benefits liability (176,458)(757,498)
Increase (decrease) in deferred outflows/inflows of resources for OPEB (109,838)9,529
Net cash provided (used) by operating activities $17,138,252 $1,214,197
Noncash investing capital and financing activities:
Contribution of equipment from other departments $-$-
Contributions of infrastructure and improvements
by developers $3,843,153 $-
The accompanying notes are an integral part of these financial statements.
40
Agriculture
Water
Domestic
Water
General
Aviation
Offstreet
Parking Totals
Governmental
Activities
Internal Service
Funds
$2,847,987 $(1,064,138)$(59,592)$(114,196)$2,653,475 $(3,512,751)
400,693 4,648,806 226,550 90,628 25,221,161 6,462,655
3,668,481 (577,345)168,427 4,090 2,782,470 715,428
-----(35,423)
-----8,669
(18,145)7,283,727 32,801 3,754 6,348,145 (150,399)
-----2,940,259
----(1,764)-
49,347 59,769 --(1,802,067)-
(695)(18,832)(21,220)-(117,163)(75,552)
263,177 270,188 14,176 -3,881,572 907,796
(186,473)(104,288)(2,358)-(1,713,796)(522,849)
(213,560)(16,421)--(1,163,937)(330,775)
49,317 (14,932)--(65,924)9,100
$6,860,129 $10,466,534 $358,784 $(15,724)$36,022,172 $6,416,158
$-$538,429 $-$-$538,429 $92,629
$-$-$-$-$3,843,153 $-
41
42
Fiduciary Fund Financial Statements
Fiduciary funds account for assets held by the City in a trustee capacity or as an agent for individual private organizations, other
governmental units and/or other funds. Detailed combining statements for Fiduciary Funds are located in the Supplementary
Information section. Below are descriptions of the generic fund types within this category and specific funds within each fund
type.
Private Purpose Trust Funds
Redevelopment Successor Agency - The Bakersfield Redevelopment Agency ceased activities in February 2012. All non-
housing related assets, liabilities and activities have been transferred to the City and are accounted for in a trust fund.
Planning Habitat Trust Fund - This fund is used to account for monies collected from developers to be used to purchase suitable
land to provide habitat for endangered species. After the land is purchased it is transferred to the State Fish and Game
Department for maintenance.
Pension and Other Employee Benefit Trust Funds
Fire Relief and Pension Trust Fund - This fund is used to account for the accumulation of resources to be used for retirement
annuity payments at appropriate amounts and times in the future for Fire Department personnel who retired prior to June 2,
1972.
Other Post-Employment Benefits (OPEB) Irrevocable Trust Fund - This fund is used to account for the City's postretirement
medical benefit plan. The City provides medical insurance coverage through contributions to eligible retirees' insurance
premiums.
Agency Funds
Special Deposits Fund - This fund is used to account for the collection by the City as agent for organizations operated under the
auspices of the Recreation Division, security deposits for utility franchises, temporary deposits for construction permits and bid
deposits. This fund is also used for the collection of police seized property, local Law Enforcement Block Grants, and other
revenues held in trust pending disposition of contingencies.
Improvement Districts Fund - This fund is used to account for the collection of liens for improvements benefiting private
properties and payments to the holders of bonds issued pursuant to the Improvement Act of 1913 and the Improvement Bond
Act of 1915. The City is in no way liable for the payment of bonded indebtedness, but the City serves as agent to collect the
principal and interest installments from the owners of the benefited properties. A trustee administers the periodic payment to the
bondholders. In addition, Community Service Districts created for the West Ming and Old River Ranch developments are
accounted for in this section. These funds are collected to be used to pay for public safety costs in the applicable communities.
43
CITY OF BAKERSFIELD
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2018
Private Purpose
Trust Funds
Pension and Other
Employee Benefit
Trust Funds
Agency
Funds
Assets:
Current assets:
Cash and investments $18,027,386 $66,511,576 $34,788,915
Retirement system investments -684,201 -
Accounts receivable --84,752
Interest receivable 47,678 4,564 16,980
Due from other governmental agencies --184,145
Total current assets 18,075,064 67,200,341 35,074,792
Noncurrent assets:
Land held for resale 414,092 --
Total noncurrent assets 414,092 --
Total assets 18,489,156 67,200,341 35,074,792
Liabilities:
Payables:
Advances from grantors and third parties 3,772,803 --
Deposits --29,224,609
Accrued bond interest --775,183
Bonds 2,525,000 -5,075,000
Notes 17,883,643 --
Total liabilities 24,181,446 -35,074,792
Net Position:
Restricted for:
Individuals, organizations and other governments (5,692,290)--
Pensions & other post-employment benefits -67,200,341 -
$(5,692,290)$67,200,341 $-
The accompanying notes are an integral part of these financial statements.
44
CITY OF BAKERSFIELD
Statement of Changes in Fiduciary Net Position
Fiduciary Funds
For the Fiscal Year Ended June 30, 2018
Private Purpose
Trust Funds
Pension and Other
Employee Benefit
Trust Funds
Additions
Contributions to pooled investments $-$7,527,447
Developer fees 1,454,598 -
Successor agency property tax deposits 3,528,124 -
Charges for services/capital lease revenue 3,132,400 -
Other income 3,589 -
Interest income 133,383 2,058,530
Total additions 8,252,094 9,585,977
Deductions:
Benefits -4,605,284
Purchase of uninhabited land 613,889 -
Obligation retirement 3,826,700 -
Administrative expenses -188,705
Total deductions 4,440,589 4,793,989
Change in net position 3,811,505 4,791,988
Net position - beginning of year (9,503,795)62,408,353
Net position - end of year $(5,692,290)$67,200,341
The accompanying notes are an integral part of these financial statements.
45
46
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements of the City of Bakersfield (the “City”) have been prepared in conformity with generally
accepted accounting principles in the United States of America (GAAP) as prescribed by the Governmental Accounting
Standards Board (GASB). The following summary of the City’s 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.Description of Reporting Entity
The City of Bakersfield, California, is a California Charter City, incorporated on January 11, 1898, and serves as the county
seat of the County of Kern, California (the “County”). The City is a full-service city and operates under a Council - Manager
form of government, providing the following services as authorized by its Charter: General government; public safety; public
wo rks; and development and conservation.
As required by GAAP, these basic financial statements present the government and its component units, entities for which the
government is considered to be financially accountable. Blended component units, although legally separate entities, are, in
substance, part of the government's operations and so data from these units are combined with data of the primary government.
Each blended and discretely presented component unit has a June 30 year-end.
B.Basis of Presentation
Government-Wide Financial Statements
The Government-Wide financial statements (the statement of net position and the statement of activities) report information of
all of the non-fiduciary activities of the primary government and its component units. For the most part, eliminations have been
made to minimize the double counting on internal activities. Internal activities for services provided and used that are not
eliminated include water, solid waste and sewer services provided to various other functions of the government. These
statements distinguish between the governmental and business-type activities of the City. Governmental activities, which
normally are supported by taxes and inter-governmental revenues, are reported separately from business-type activities, which
rely to a significant extent on fees charged to external parties.
The statement of activities presents a comparison between direct expenses and program revenues for each segment of the
business-type activities of the City and for each function of the City’s governmental activities. Direct expenses are those that
are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Some
functions include expenses that are, in essence, indirect expenses of other functions resulting from charges among funds or
programs for centralized services. Program revenues include: 1) charges paid by the recipients of goods or services offered by
the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular
program. Revenues that are not classified as program revenues, including all taxes, are presented instead as general revenues.
Net position is restricted when constraints placed on it are either externally imposed or are imposed by constitutional provisions
or enabling legislation. Internally imposed designations of resources are not presented as restricted net position. When both
restricted and unrestricted resources are available for use, generally it is the City’s policy to use restricted resources first, then
unrestricted resources as they are needed.
47
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
B.Basis of Presentation (continued)
Governmental Fund Financial Statements
The governmental fund financial statements provide information about the City’s funds, including fiduciary funds and the
blended component unit. Separate statements for each fund category - governmental, proprietary and fiduciary - are presented.
The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column.
All remaining governmental and enterprise funds are separately aggregated and reported as non-major funds.
Proprietary fund operating revenues, such as charges for services, result from exchange transactions associated with the
principal activity of the fund. Exchange transactions are those in which each party receives and gives up essentially equal
values. Nonoperating revenues, such as subsidies and investment earnings, result from nonexchange transactions or ancillary
activities. Operating expenses for enterprise funds include cost of sales and services, administrative expenses, and depreciation
of capital assets. As used in this section, the term depreciation can include amortization of intangible assets. All expenses not
meeting this definition are reported as nonoperating expenses.
The City reports the following major governmental funds:
General Fund - The General Fund is the principal operating fund of the City. It is used to account for all financial resources
except those required to be accounted for in another fund. For the City, the General Fund includes basic governmental
activities, such as general government, public safety, public works, and community services.
Transient Occupancy Taxes Fund - The Transient Occupancy Taxes Fund is used to account for transient occupancy tax
revenues (hotel tax) and expenditures funded by this revenue source. The Rabobank Arena and Convention Center and the
Bakersfield Ice Sports Center operating revenues and expenditures are recorded in this fund. This fund is also used to account
for the operations of the Visit Bakersfield division of the City.
Community Development Block Grant Fund – The Community Development Block Grant Fund is used to account for resources
provided by the Federal Housing and Community Development Act of 1974 for the elimination of slums and blight, housing
conservation and improvements of community services.
Gas Tax & Road Fund - The Gas Tax & Road Fund is used to account for the City’s share, based upon population, of state
gasoline taxes. State law requires these gasoline taxes to be used to maintain streets or for major street construction. This fund
also accounts for other State and Federal grant revenues related to street maintenance or construction, including the Federal
earmark Thomas Roads funds.
Capital Outlay Fund - The Capital Outlay Fund is used to account for the cost of capital projects financed by local revenues and
various grant/loan proceeds for capital expenditures. This fund also accounts for the special Utility Franchise/Surcharge Fund
created by the City Council to account for the specified local road project costs funded by the selected electricity and gas
franchise surcharge fees. In addition, funds contributed by the County to be used to cover a portion of the costs of the local
match needed for the Thomas Roads projects are accounted for in this fund.
Park Improvement Fund - The Park Improvement Fund is used to account for funds collected for residential park development
(Ordinance No. 3646). Fees are collected based on the development’s share of the cost to develop, improve, construct, or
enhance a neighborhood park (Ordinance No. 3327).
Transportation Development Fund - The Transportation Development Fund is used to account for funds collected from fees
paid to mitigate the traffic impacts to the regional circulation system caused by a development project. The fees are paid when
a building permit for the development project is obtained, and are based upon the amount of traffic the development will
generate. The fee schedule wa s adopted with Ordinance No. 3513 and will be periodically evaluated by the City Council and
revised to reflect updated costs and growth projections.
48
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
B.Basis of Presentation (continued)
The City reports the following major proprietary (enterprise) funds:
Wastewater Treatment Fund - The Wastewater Treatment Fund is used to account for the provision of sewer service to the
residents of the City and some residents of the County. This fund also accounts for the activities related to the debt issuance,
which provided for the Wastewater Treatment Facilities.
Refuse Collection Fund - The Refuse Collection Fund is used to account for the collection and disposal of refuse within the
City. All activities necessary to provide such services are accounted for in this fund.
Agricultural Water Fund - The Agricultural Water Fund is used to account for the provision of water service restricted primarily
for agricultural purposes to users within the City and some users within the County (some Kern River water is exchanged for
State Aqueduct water for domestic wa ter purposes). All activities necessary to provide such services are accounted for in this
fund.
Domestic Water Fund - The Domestic Water Fund is used to account for the provision of water service to some residents of the
City and County. All activities necessary to provide such services are accounted for in this fund.
General Aviation Fund - The General Aviation Fund is used to account for the acquisition and operation of the Bakersfield
Airpark. The majority of acquisition and improvement financing for the airport facility was provided by a grant from the
Federal Aviation Administration.
Offstreet Parking Fund - The Offstreet Parking Fund is used to account for the operations of the parking garage at 18th and Eye
Streets and various offstreet surface parking lots within the City. The parking garage was financed by the former
Redevelopment Agency and the related debt was retired in August 1994, and subsequently, the title was transferred to the City.
The City reports the following additional fund types:
Internal Service Funds - The Internal Service Funds are used to account for the financing of goods or services provided by one
department or agency to other departments or agencies of the governmental unit on a cost-reimbursement basis. The City
accounts for its self-insurance and equipment management activities as internal service funds.
Private Purpose Trust Fund - The Planning Habitat Trust Fund is used to account for mo nies collected from developers to be
used to purchase suitable land to provide habitat for endangered species. After the land is purchased, it is transferred to the
State Fish and Game Department for maintenance. The City also records the assets, liabilities, and activities of the
Redevelopment Successor Agency in a separate trust fund.
Pension and Other Employee Benefit Trust Funds - The Fire Relief and Pension Trust Fund is used to account for the
accumulation of resources to be used for retirement annuity payments at appropriate amounts and times in the future for Fire
Department personnel who retired prior to June 26, 1972. The Other Post-Employment Benefits (OPEB) Irrevocable Trust
Fund is used to account for the City’s postretirement medical benefit plan in which the City provides medical insurance
coverage through contributions to eligible retirees’ insurance premium.
Agency Funds - The Agency Funds account for assets held by the City as an agent for various local governments or other
entities. The Special Deposits Fund is used to account for the collection by the City as agent for organizations operated under
the auspices of the Recreation Division, security deposits for utility franchises, temporary deposits for construction permits and
bid deposits. This fund is also used for the collection of police seized property, local Law Enforcement Block Grants and other
revenues held in trust pending disposition of contingencies. The Improvement Districts Fund is used to account for the
collection of liens for improvements benefiting private properties and payments to the holders of bonds issued pursuant to the
Improvement Bond Act of 1913 and the Improvement Bond Act of 1915. The City is in no way liable for the payment of
bonded indebtedness, but the City serves as agent to collect the principal and interest installments from the owners of the
benefited properties. A trustee provides the periodic payment to the bondholders. This fund also accounts for the special
assessments and taxes collected within the boundaries of Community Service Districts within the City.
49
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
C.Basis of Accounting
The government-wide, proprietary, private purpose trust, and pension and other employee benefit trust funds are reported using
the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and
expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place. Nonexchange
transactions, in which the City gives (or receives) value without directly receiving (or giving) equal value in exchange, include
property and sales taxes, grants, entitlements, and donations. On an accrual basis of accounting, revenue from property taxes is
recognized in the fiscal year for which the taxes are levied. Revenues from sales tax are recognized when the underlying
transactions take place. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligible
requirements have been satisfied. The agency funds utilize the accrual basis of accounting to report assets and liabilities but
technically have no measurement focus.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of
accounting. Under this method, revenues are recognized when measurable and available. Property and sales taxes, interest,
certain State and Federal grants and charges for services are accrued when their receipt occurs within sixty days after the end of
the accounting period so as to be both measurable and available. Expenditures are generally recorded when a liability is
incurred, as under the accrual basis of accounting. However, debt service expenditures, as well as expenditures related to
compensated absences and claims and judgments are recorded only when payment is due. General capital assets acquisitions
are reported as expenditures in governmental funds. Proceeds of general long-term debt and capital leases are reported as other
financing sources.
Proprietary funds distinguish operating revenues and expenses from nonoperating items. Operating revenues and expenses
generally result from providing services and producing and delivering goods in connection with a proprietary funds' principal
ongoing operations. Revenues and expenses not meeting this definition are reported as nonoperating.
D.Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items
Cash and Investments
Cash balances of each of the City's funds, except for certain Trust and Agency Funds, are pooled and invested by the City.
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.
The City applies GASB Statement No. 31, Accounting and Financial Reporting for Certain Investments and for External
Investment Pools. This statement generally requires that investments be reported at their fair value and that all changes in fair
value be reflected as income of the period in which they occur.
Statutes authorize the City to invest in obligations of the United States Treasury, agencies and instrumentalities, commercial
paper, bankers' acceptances, repurchase agreements, money market funds, and the State Treasurer's investment pool. The City's
Pension Trust Fund is also authorized to invest in corporate bonds rated A or better by a national rating system generally
recognized and used by banks and investment brokers in the United States.
Investments are comprised of obligations of the United States Treasury, agencies and instrumentalities, cash, time certificates of
deposit, mutual funds, bankers' acceptances, money market accounts, deposits in the State of California Local Agency
Investment Fund (LAIF), and California Asset Management Program (CAMP). Investments are stated at fair value.
50
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
D.Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued)
Interfund Transactions
Interfund transactions are reflected as either loans, services provided, reimbursements or transfers. Loans are reported as
receivables and payables as appropriate, are subject to elimination upon consolidation and are referred to as either “due to/from
other funds” (i.e., the current portion of interfund loans) or “advances to/from other funds” (i.e., the noncurrent portion of
interfund loans). Any residual balances outstanding between the governmental activities and the business-type activities are
reported in the government-wide financial statement 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 available financial resources.
Services provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses.
Reimbursements are when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a
reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds
are netted as part of the reconciliation to the government-wide presentation.
Receivables
All trade and property tax receivables are shown net of an allowance for uncollectible accounts. Trade accounts receivable in
excess of 180 days comprise the trade accounts receivable allowance for uncollectible accounts.
Inventory and Prepaid Items
Inventory is valued at average cost applied on a first-in, first-out (FIFO) basis. The reserve for prepaid expenses relates to
certain payments to vendors for costs applicable to future accounting periods. The cost of both inventories and prepaid items
are recorded as expenditures/expenses when consumed rather than when purchased.
Capital Assets
Capital outlays are recorded as expenditures of the General, Special Revenue, and Capital Projects Funds and as assets in the
government-wide financial statements to the extent the City’s capitalization thresholds are met.
Capital assets, which include property, plant, equipment, infrastructure assets (e.g., roads, bridges, sidewalks, and similar
items), and intangible water rights are reported in the applicable governmental or business-type activities columns in the
government-wide financial statements. Capital assets are defined by the government as assets with an estimated useful life in
excess of one year and an initial individual cost of more than $50,000 for infrastructure and $5,000 for all other capital assets.
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 in the majority of instances. When assets are donated in relation to a
service concession arrangement they are reported at acquisition cost.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets' lives are not
capitalized. Betterments and major improvements which significantly increase values, change capacities or extend useful lives
are capitalized. Upon sale or retirement of capital assets, the cost and related accumulated depreciation are removed from the
respective accounts and any resulting gain or loss is included in the results of operations.
51
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
D.Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued)
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the
construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets
constructed.
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:
Infrastructure 10 to 70 years
Buildings, structures and improvements 5 to 40 years
Transmission and distribution equipment 5 to 50 years
Rolling equipment 2 to 30 years
Office equipment 3 to 10 years
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. Debt principal payments of both governmental and business-type activities are
reported as decreases in the balance of the liability on the Statement of Net Position. Bond premiums and discounts are
deferred and amortized over the life of the bonds using the effective interest method.
In the fund financial statements, however, debt principal payments of governmental funds are recognized as expenditures when
paid. Governmental fund types recognize bond premiums and discounts, as we ll as bond issuance costs, during the current
period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are
reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs,
whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures.
Deferred Outflows and Inflows of Resources
As required by GASB Statements No. 63 and No. 65, the City recognized applicable deferred outflows and inflows of resources
in the government-wide, govenmental, and proprietary fund type financial statements.
The Statements of Net Position and Balance Sheets will sometimes report a separate section for deferred outflows of resources,
as defined as a consumption of net position or fund balance by the City that is applicable to a future funding period, or deferred
inflows of resources, as defined as an acquisition of net position or fund balance by the City that is applicable to a future
funding period. The City has items that qualify for reporting in these categories and are detailed in a separate note disclosure.
52
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
D.Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued)
Net Position/Fund Balance
The government-wide and proprietary fund financial statements utilize a net position presentation. Net position is categorized
as net investment in capital assets, restricted and unrestricted.
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, laws, or
regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.
Unrestricted Net Position - This category represents net position of the City, not restricted for any project or other
purpose.
As of June 30, 2018, net position is as follows:
Governmental
Activities
Business-Type
Activities Total
Net investment in capital assets $1,301,334,674 $700,725,335 $2,002,060,009
Restricted 20,759,775 20,200,000 40,959,775
Unrestricted (200,714,582)107,755,323 (92,959,259)
Total net position $1,121,379,867 $828,680,658 $1,950,060,525
Fund balances of the governmental funds are report using a hierarchy based primarily on the extent to which a government is
bound to observe constraints imposed upon the use of the resources reported. Fund balances for governmental funds are
segregated as follows:
Nonspendable Fund Balance – includes net resources that cannot be spent because of their form or because of legal or
contractual limitations, and therefore must remain intact.
Restricted Fund Balance – includes net resources that have externally enforceable limitations on their use. These
limitations can be established by creditors, grantors, or by laws and regulations.
Committed Fund Balance – includes amounts with self-imposed limitations and are set in place prior to the end of the
fiscal year. Commitments are set forth by the formal action of the City’s highest level of decision-making authority, the
City Council, and the limitations require that same level of authority to be removed.
Assigned Fund Balance – includes amounts for which the intended use results in limitations but do not meet the
requirements for either the “Restricted” or “Committed” classifications. Intended use can be established by the City
Council, a governing committee or board, or by a City official designated as having that authority.
Unassigned Fund Balance – is the residual balance of the General Fund not included in the other classifications.
53
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
D.Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued)
The City Council establishes, modifies or rescinds fund balance commitments though approval of contracts for services and
supplies that require City Council authorization through resolution. Fund balance assignments are made by agreements entered
into by department heads, and their designees, for specific purposes. The City Council also establishes fund balance
assignments through the adoption of the budget and subsequent budget amendments. Assignments are generally temporary and
as such, additional action is not usually needed for assignments to be removed. The City Council approved, through resolution,
a Fund Balance policy that established these rules for fund balance commitments and assignments in the General Fund. It was
not deemed necessary to include a policy to achieve and maintain a specific level of unrestricted fund balance in the General
Fund.
Fund Balance Flow Assumptions
The City will sometimes fund outlays for a specific purpose from restricted and unrestricted resources (committed, assigned,
and unassigned fund balance). A flow assumption must be made about the order of how these resources are will be applied to
properly calculate the amounts reported as restricted, committed, assigned, and unassigned. It is the City’s policy to consider
restricted fund balance to be used completely before any components of unrestricted fund balance. When the components of
unrestricted fund balance are used for the same purpose, the amount classified as committed is used first, followed by assigned,
and unassigned is applied last.
Property Taxes
In 1978, a state constitutional amendment (Proposition 13) provided that the property tax rate is limited to 1% of market value.
This property tax rate limitation may only be increased through voter approval. The County is the sole agency responsible for
levying and collecting the property taxes and distributing them to taxing jurisdictions. Taxes are allocated and distributed
based upon each taxing jurisdiction's assessed valuations and upon any voter-approved debt override on the tax rate.
The property tax calendar for the City is as follows:
Valuation date January 1
Lien date March 1
Levy dates July 1 through June 30
Due dates November 1; February 1
Collection dates December 10; April 10
54
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
D.Assets, Liabilities, Net Position or Fund Balances, and Other Financial Statement Items (continued)
Pension Plan
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension
expense, information about the fiduciary net position of the City's California Public Employee's Retirement System (CalPERS)
plans (Plans) and additions to/deductions from the Plans' fiduciary net position have been determined on the same basis as they
are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized
when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Other Post-Employment Benefits (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to
OPEB, and OPEB expense, information about the fiduciary net position of the City's OPEB Plan (OPEB Plan) and additions
to/deductions from the OPEB Plan's fiduciary net position have been determined on the same basis as they are reported by
California Public Employees' Retirement System (CalPERS). For this purpose, the OPEB Plan recognizes benefit payments
when due and payable in accordance with the benefit terms. Investments and participating interest-earning investment contracts
that have a maturity at the time of purchase of one year or less, which are reported at cost.
Cash Flow Statements
For purposes of reporting cash flows, cash and cash equivalents include cash on hand, deposits, short-term investments and cash
and investments with fiscal agents. Cash equivalents are defined as short-term, highly liquid investments that are both readily
convertible to known amounts of cash, and so near their maturity that they present insignificant risk of changes in value because
of changes in interest rates. Generally, only investments with original maturities of three months or less meet this definition.
Use of Estimates
The preparation of financial statements in conformity with GAAP 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.
E.Stewardship, Compliance, and Accountability
Budgets and Budgetary Accounting
The procedures established by the City Council in adopting the budgetary data reflected in the financial statements are as
follows:
1.Prior to June 1, the City Manager submits to the City Council a proposed operating budget for the fiscal year commencing
the following July 1. The operating budget includes proposed expenditures and the means of financing them.
2.Public hearings are conducted to obtain taxpayer comments.
3.The City Council legally enacts the budget by resolution before July 1.
The City Manager is authorized to transfer budgeted amounts between departments within any fund and approve reductions of
budgeted amounts. Since expenditures may not exceed budgeted appropriations at the fund level, any revisions that alter the
total appropriations of any fund are to be approved by the City Council. Projects budgeted within the current fiscal year but not
yet completed can be re-appropriated the following fiscal year with City Manager approval. All other unencumbered
appropriations lapse at year-end. Encumbered amounts are re-appropriated in the ensuing fiscal year budget.
55
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
E.Stewardship, Compliance, and Accountability (continued)
Budgets are adopted for all governmental fund types and are prepared on a basis consistent with GAAP. Budgeted amounts are
as originally adopted, or as amended by the City Council. During the fiscal year ended June 30, 2018, the City Council
approved $80,194,478 of increases to the originally adopted budget, excluding carryovers of prior year encumbered balances
and selected capital appropriations.
Deficit Net Position
The Self-Insurance Internal Service Fund reported a deficit in net position of $20,941,992 at the close of the fiscal year. The
deficit was partially the result of a $2,100,000 increase in open claims payable. This liability reserve amount is an estimate of
the City's open claims at the end of the fiscal year and can vary year to year. Additionally, the deficit was the result of a
significant increase in the workers' compensation liability calculated in the City’s most recent actuarial study. Workers'
compensation charges can fluctuate significantly from year to year and staff will continue to adjust departmental rates
accordingly to maintain sufficient funding levels.
Reclassification and Eliminations
Interfund balances must generally be eliminated in the government-wide financial statements, except for net residual amounts
due between governmental activities. Amounts involving fiduciary funds should be reported as external transactions. Any
allocations must reduce the expenses of the function from which the expenses are being allocated, so that expenses are reported
only once, in the function in which they are allocated.
Excess of Expenditures Over Appropriations
For the fiscal year ended June 30, 2018, expenditures exceeded appropriations in the Transient Occupancy Taxes Fund by
$559,111. These over-expenditures relate to incorrect budget estimates related to anticipated costs for events in the Rabobank
Arena and Convention Center facilities. These are technically considered budgetary violations and management will take steps
to review periodic budget reports to ensure compliance in the future.
F.New Accounting Pronouncements
During the fiscal year ending June 30, 2018 the City implemented the following standards:
GASB issued Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The
objective of this statement is to improve accounting and financial reporting by state and local governments for post-employment
benefits other than pensions. See Note 17 for this statement's effects on the City's accounting and financial reporting.
GASB issued Statement No. 81, Irrevocable Split-Interest Agreements. This statement is to improve accounting and financial
reporting for irrevocable split-interest agreements by providing recognition and measurement guidance for situations in which a
government is a beneficiary of the agreement. Upon implementation, there was no effect on the City's accounting or financial
reporting.
GASB issued Statement No. 85, Omnibus 2017. The objective of this statement is to address practice issues that have been
identified during implementation and application of certain GASB Statements. This statement addresses a variety of topics
including issues related to blending component units, goodwill, fair value measurement and application, and post-employment
benefits. Upon implementation, there was no effect on the City's accounting or financial reporting.
GASB issued Statement No. 86, Certain Debt Extinguishment Issues. The primary objective of this statement is to improve
consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions in
which cash and other mo netary assets acquired with only existing resources—resources other than the proceeds of refunding
debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. Upon implementation, there was no effect on
the City's accounting or financial reporting.
56
Notes to the Financial Statements
NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
F.New Accounting Pronouncements (continued)
Recently released standards by GASB affecting future years are as follows:
In November 2016, GASB issued Statement No. 83, Certain Asset Retirement Obligations. This statement addresses
accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a legally enforceable liability
associated with the retirement of a tangible capital asset. A government that has legal obligations to perform future asset
retirement activities related to its tangible capital assets should recognize a liability based on the guidance in this statement.
The City has elected not to early implement GASB Statement No. 83 and has not determined its effects on the City’s financial
statements.
In January 2017, GASB issued Statement No. 84, Fiduciary Activities. The objective of this statement is to improve guidance
regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities
should be reported. The City has elected not to early implement GASB Statement No. 84 and has not determined its effects on
the City’s financial statements.
In June 2017, GASB issued Statement No. 87, Leases.The objective of this statement is to better meet the information needs of
financial statement users by improving accounting and financial reporting for leases by governments. This statement increases
the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that
previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the
payment provisions of the contract. It establishes a single model for lease accounting based on the foundational principle that
leases are financings of the right to use an underlying asset. The City has elected not to early implement GASB Statement No.
87 and has not determined its effects on the City’s financial statements.
In April 2018, GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct
Placements. The primary objective of this statement is to improve the information that is disclosed in notes to government
financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities
governments should include when disclosing information related to debt. The City has elected not to early implement GASB
Statement No. 88 and has not determined its effects on the City's financial statements.
In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred Before the End of a Construction Period.
The objectives of this statement are to enhance the relevance and comparability of information about capital assets and the cost
of borrowing for a reporting period and to simplify accounting for interest cost incurred before the end of a construction period.
The City has elected not to early implement GASB Statement No. 89 and has not determined its effects on the City's financial
statements.
In August 2018, GASB issued Statement No. 90, Majority Equity Interests. The objectives of this statement are to improve the
consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to
improve the relevance of financial statement information for certain component units. The City has elected not to early
implement GASB Statement No. 90 and has not determined its effects on the City's financial statements.
57
Notes to the Financial Statements
NOTE 2 -CASH AND INVESTMENTS
Cash and investments as of June 30, 2018, are classified in the accompanying financial statements as follows:
Statement of net position:
Cash and investments $392,337,011
Fiduciary funds:
Cash and investments 119,327,877
Retirement system investments 684,201
$512,349,089
Cash and investments as of June 30, 2018, consist of the following:
Cash on hand $1,864,369
Deposits with financial institutions 1,552,884
Investments 511,691,965
GASB Stmt. No. 31 Market Value Adjustment (2,760,129)
$512,349,089
Investment Authorized by the California Government Code and the City’s Investment Policy
The table below identifies the investment types that are authorized for the City by the California Government Code, or the
City’s investment policy, where more restrictive. The table also identifies the mo re restrictive provision of the California
Government Code or the City’s investment policy that address interest rate risk, credit risk, and concentration of credit risk.
This table does not address investment of any debt proceeds held by bond trustee that are governed by the provisions of the
City’s debt agreements, rather than the general provisions of either the California Government Code or the City’s investment
policy.
Maximum
Percentage Maximum
Authorized Investment Types of Portfolio Maturity
U.S. Treasury Bills, Notes and Bonds 0 to 100%5 Years
U.S. Government Agency Obligations 20% per agency 5 Years
Bankers' Acceptances 40%180 Days
Commercial Paper 25%270 Days
Repurchase Agreements 30%90 Days
Local Agency Investment Fund 40%N/A
Time Certificates of Deposit 40%5 Years
Public Agency Demand Accounts 30%N/A
Mutual Funds 20%N/A
58
Notes to the Financial Statements
NOTE 2 -CASH AND INVESTMENTS (continued)
Investment Authorized by Debt Agreements
The City and its component units have $362,435 in investments held by bond trustees pledged to the payment or security of
certain debt issues. These investments are held in direct obligations of, or obligations that are fully guaranteed as to principal
and interest by, the United States Government or an agency thereof. The California Government Code provides that monies
held by a bond trustee pledged to the payment or security of debt issues, in absence of specific statutory provisions governing
the issuance of the debt, may be invested in accordance with the ordinances, resolutions, or indentures specifying the types of
investments the respective bond issue’s trustee may make. The obligations described above are authorized per the investment
agreements with the bond trustees and include, but are not limited to, Federal Land Bank Bonds, Federal Home Loan Bank
notes and bonds, Export-Import Bank notes and guaranteed participation certificates, obligations of or fully guaranteed by the
Government National Mortgage Association, Federal National Mortgage Association notes, debentures and guaranteed
certificates of participation, obligations of the International Bank of Reconstruction and Development and Federal Home Loan
Mortgage Corporation notes, debentures and guaranteed certificates of participation.
Interest Rate Risk
Interest rate risk is the risk that changes in the 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. As part of the City’s investment policy, one of the ways that the City manages its exposure to interest rate risk 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 maturing evenly over time as necessary to provide the cash flow and
liquidity needed for operations.
Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided by
the following table that shows the distribution of the City’s investments by maturity:
Remaining Maturity (In Months)
Investment Type
Fair
Value Cost
12 Months
Or Less
13 - 24
Months
25-60
Months
More Than
60 Months
U.S. Government Agency Obligations:
Federal Farm Credit Bank $54,634,240 $55,486,040 $2,997,840 $-$52,488,200 $-
Federal Home Loan Bank 42,278,395 42,972,900 1,999,500 -40,973,400 -
Federal Home Loan Mortgage Corp.58,643,878 59,209,545 -8,000,000 51,209,545 -
Federal National Mortgage Assn.47,314,721 47,905,679 -13,000,000 34,905,679 -
PEFCO 678,402 678,402 --678,402 -
Commercial Paper ------
Bankers' Acceptances ------
Time Certificates of Deposit 19,942,800 20,000,000 20,000,000 ---
U.S. Treasury Bills, Notes, and Bonds ------
Local Agency Investment Fund 117,006,480 117,006,480 117,006,480 ---
CAMP 83,438,680 83,438,680 83,438,680 ---
Mutual Funds (1)84,631,804 84,631,804 84,631,804 ---
Investment Contracts 362,435 362,435 ---362,435
Total $508,931,835 $511,691,965 $310,074,304 $21,000,000 $180,255,226 $362,435
(1) See Note 17 for Other Post-Employment Benefits
59
Notes to the Financial Statements
NOTE 2 -CASH AND INVESTMENTS (continued)
Investments with Fair Values Highly Sensitive to Interest Rate Fluctuations
Except as inherent by their nature as disclosed above, the City’s investments (including those held by a bond trustee) are not
highly sensitive to interest rate fluctuations.
Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligations to the holder of the investment.
This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the
minimum rating required by the California Government Code, the City’s investment policy, or debt agreements, and the actual
rating as of year end for each investment type. On August 5, 2011, the rating agency of Standard & Poors (S&P) assigned a
negative outlook to the credit rating of the United States government. On August 8, 2011, S&P then downgraded that credit
rating to AA+ from AAA.
Remaining as of the Year-End
Investment Type
Minimum
Legal
Rating AAA AA+
Not
Rated
U.S. Government Agency Obligations:
Federal Farm Credit Bank $55,486,040 $-$55,486,040 $-
Federal Home Loan Bank 42,972,900 -42,972,900 -
Federal Home Loan Mortgage Corp.59,209,545 -59,209,545 -
Federal National Mortgage Assn.47,905,679 -47,905,679 -
PEFCO 678,402 -678,402 -
Commercial Paper ----
Bankers' Acceptances ----
Time Certificates of Deposit 20,000,000 --20,000,000
U.S. Treasury Bills, Notes, and Bonds ----
Local Agency Investment Fund 117,006,480 --117,006,480
CAMP 83,438,680 --83,438,680
Mutual Funds (1)84,631,804 84,631,804 --
Investment Contracts 362,435 --362,435
Total $511,691,965 $84,631,804 $206,252,566 $220,807,595
(1) See Note 17 for Other Post-Employment Benefits
Concentration of Credit Risk
The City’s investment policy does not limit the amount that can be invested in any one issuer beyond the limitations stipulated
by the California Government Code. Investments in any one issuer (other than United States Treasury securities, mutual funds
and external investment pools) that represent 5% or more of the City’s total investments are as follows.
Issuer Investment Type Reported Amount Percentage
Federal Farm Credit Bank Federal Agency Securities $55,486,040 11%
Federal Home Loan Bank Federal Agency Securities 42,972,900 8%
Federal Home Loan Mortgage Corp.Federal Agency Securities 59,209,545 12%
Federal National Mortgage Assn.Federal Agency Securities 47,905,679 9%
60
Notes to the Financial Statements
NOTE 2 -CASH AND INVESTMENTS (continued)
Custodial Credit Risk
Custodial credit risk for deposits is the risk that the City will not be able to recover its deposits or will not be able to recover
collateral securities in the possession of an outside party if a depository institution fails. The custodial credit risk for
investments is the risk that the City will not be able to recover the value of its investment or collateral securities held by another
party if the counterparty (e.g., broker-dealer) to a transaction fails. The California Government Code and City’s investment
policy do not contain legal or policy requirements that would limit exposure to custodial credit risk for deposits or investments,
other than the following provision applicable to deposits: The California Government Code requires that a financial institution
secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a
depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in
the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows
financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured
public deposits.
As of June 30, 2018, 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. As of June 30, 2018, all of the City’s
investments were held by the City itself or by a broker-dealer (counterparty) other than the broker-dealer used by the City to
purchase the securities in the City’s name.
Investment in State Investment Pool
Investments are stated at fair value. Fair value is established quarterly based on quoted market prices received from the
securities custodian. Fair value of investments held fluctuates with interest rates. The fair value of participants’ position in the
pool is the same as the value of the pool shares. The value of participants’ equity withdrawn is based on the book value of the
participants’ percentage participation at the date of such withdrawal.
The California State Treasurer’s Office operates the Local Agency Investment Fund (LAIF). The LAIF is available for
investment of funds administered by California local governments and special districts and is not registered with the Securities
and Exchange Commission (SEC) as an investment company. The enabling legislation for the LAIF is Section 16429.1 et seq.
of the California Government Code. California Asset Management Program (CAMP) is a California Joint Powers Authority
established in 1989 to provide California public agencies with professional investment services. The CAMP Pool is a permitted
investment for all local agencies under California Government Code Section 53601(p).
The LAIF and CAMP operate and report to participants on an amortized cost basis. For both the LAIF and CAMP, the income,
gains, and losses, net of administration fees, are allocated based upon the participant’s average daily balance. Deposits in the
LAIF and CAMP are not insured or otherwise guaranteed by the State of California, and participants share proportionally in any
realized gains or losses on investments. The fair value of the LAIF and CAMP investment pools are approximately equal to the
value of the pool shares.
Fair Value Measurement
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting
principles. The hierarchy used to measure the fair value of the asset is based on the following:
Level 1 - unadjusted price quotations in active markets/exchanges for identical assets or liabilities, that each fund has the ability
to access.
Level 2 - other observable inputs (including, but not limited to, quoted prices for similar assets or liabilities in markets that are
active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices
that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, loss severities, credit risks and
default rates) or other market-corroborated inputs).
Level 3 - unobservable inputs based on the best information available in the circumstances, to the extent observable inputs are
not available (including each fund's own assumptions used in determining the fair value of investments).
The City has a reported fair value of investments of $508,931,835, of which $226,252,566 are valued using Level 1 inputs.
These include all of the U.S Government Agency Obligations and Time Certificates of Deposit. The remaining investments are
recorded at amortized costs.
61
Notes to the Financial Statements
NOTE 3 -COMPOSITION OF ACCOUNTS RECEIVABLE AND PAYABLE BALANCES
Accounts receivable at June 30, 2018 of the City's major individual funds and non-major and internal service funds in the
aggregate, including the applicable allowance for uncollectible accounts, are as follows:
Accounts Receivable -
Governmental Funds:
General
Fund
Transient
Occupancy
Taxes
Fund
Community
Development
Block Grant
Fund
Gas Tax
& Road
Fund
Capital
Outlay
Transportation
Development
Non-Major
Governmental
Funds
Internal
Service
Funds
Total
Governmental
Activities
Taxes $-$677,591 $-$-$-$-$-$-$677,591
Accounts 1,117,928 -14,754,567 22,031 143,984 -6,903,789 166,079 23,108,378
Gross Receivables 1,117,928 677,591 14,754,567 22,031 143,984 -6,903,789 166,079 23,785,969
Less: Allowance
for Uncollectible -------(154,068)(154,068)
Total Accounts
Receivable -
Net $1,117,928 $677,591 $14,754,567 $22,031 $143,984 $-$6,903,789 $12,011 $23,631,901
Accounts Receivable -
Proprietary Funds:
Wastewater
Treatment
Fund
Refuse
Collection
Fund
Agricultural
Water
Fund
Domestic
Water
Fund
General
Aviation
Fund
Offstreet
Parking
Fund
Total
Business-Type
Activities
Accounts $1,064,089 $1,132,604 $526,040 $2,561,395 $(5,973)$570 $5,278,725
Gross Receivables 1,064,089 1,132,604 526,040 2,561,395 (5,973)570 5,278,725
Total Accounts
Receivable - Net $1,064,089 $1,132,604 $526,040 $2,561,395 $(5,973)$570 $5,278,725
Accounts payable and accrued liabilities at June 30, 2018, are composed of the following:
Accounts Payable and
Accrued Liabilities General
Transient
Occupancy
Taxes
Community
Development
Block Grant
Gas Tax
& Road
Capital
Outlay
Park
Improvement
Transportation
Development
Governmental Activities:Fund Fund Fund Fund Fund Fund Fund
Accounts payable $4,859,631 $22,389 $365,272 $5,823,805 $1,293,042 $3,334,627 $1,525,246
Due to other governments 569,298 ------
Total Accounts Payable
and Accrued Liabilities $5,428,929 $22,389 $365,272 $5,823,805 $1,293,042 $3,334,627 $1,525,246
Accounts Payable and
Accrued Liabilities
Non-Major
Governmental
Internal
Service
Total
Governmental
Governmental Activities:Funds Funds Activities
Accounts payable $372,504 $1,077,095 $18,673,611
Due to other governments --569,298
Total Accounts Payable
and Accrued Liabilities $372,504 $1,077,095 $19,242,909
62
Notes to the Financial Statements
NOTE 3 -COMPOSITION OF ACCOUNTS RECEIVABLE AND PAYABLE BALANCES (continued)
Accounts Payable and
Accrued Liabilities -
Wastewater
Treatment
Refuse
Collection
Agricultural
Water
Domestic
Water
General
Aviation
Offstreet
Parking
Total
Business-Type
Business-Type Activities:Fund Fund Fund Fund Fund Fund Activities
Accounts payable $2,138,996 $837,998 $69,871 $8,626,512 $38,694 $9,840 $11,721,911
Accrued interest 2,162,291 -----2,162,291
Total Accounts Payable
and Accrued Liabilities $4,301,287 $837,998 $69,871 $8,626,512 $38,694 $9,840 $13,884,202
NOTE 4 -DUE FROM OTHER GOVERNMENTS
Amounts due from other governments at June 30, 2018 are comprised of the following:
Federal
Government
State of
California
County/City
Agencies
Total
Governmental
Activities
Business-Type
Activities
Total
Reporting
Entity
Senate Bill (SB) 90 Claims $-$3,042,454 $-$3,042,454 $-$3,042,454
Sales Tax -11,175,771 -11,175,771 -11,175,771
Property Tax ----182,479 182,479
Public Employee Retirement System -39,477 -39,477 -39,477
SB 1 - Road Maint & Rehab -812,849 -812,849 -812,849
High Speed Rail -16,815 -16,815 -16,815
Department of Fish & Game -38,786 -38,786 -38,786
Department of Transportation 26,229,914 --26,229,914 -26,229,914
Economic & Community Development 1,216,773 --1,216,773 -1,216,773
City of Shafter ----39,505 39,505
Kern Council of Governments --528,062 528,062 -528,062
Kern County Waste Management ----1,212,370 1,212,370
Totals $27,446,687 $15,126,152 $528,062 $43,100,901 $1,434,354 $44,535,255
63
Notes to the Financial Statements
NOTE 5 -CAPITAL ASSETS
Capital asset activities for the year ended June 30, 2018, were as follows:
Balance Balance
June 30, 2017 Adjustments Additions Retirements June 30, 2018
Governmental Activities
Capital assets, not being depreciated
Land $444,524,880 $-$3,984,950 $-$448,509,830
Construction in progress 101,373,988 1,616,195 27,405,372 25,682,969 104,712,586
Total capital assets, not being depreciated 545,898,868 1,616,195 31,390,322 25,682,969 553,222,416
Capital assets, being depreciated
Buildings, structures and improvements 144,292,480 5,651 620,627 -144,918,758
Infrastructure 1,616,548,175 204,359 41,819,003 -1,658,571,537
Rolling equipment 86,217,949 -7,140,140 2,887,888 90,470,201
Furniture and other equipment 21,490,871 311,554 1,850,957 253,018 23,400,364
Total capital assets, being depreciated 1,868,549,475 521,564 51,430,727 3,140,906 1,917,360,860
Less accumulated depreciation for
Buildings, structures and improvements (72,236,138)-(3,625,537)-(75,861,675)
Infrastructure (953,905,465)-(55,359,771)-(1,009,265,236)
Rolling equipment (51,172,574)-(6,310,432)(2,849,393)(54,633,613)
Furniture and other equipment (14,996,093)83,602 (835,752)(119,405)(15,628,838)
Total accumulated depreciation (1,092,310,270)83,602 (66,131,492)(2,968,798)(1,155,389,362)
Total capital assets, being depreciated, net 776,239,205 605,166 (14,700,765)172,108 761,971,498
Governmental activities capital assets, net $1,322,138,073 $2,221,361 $16,689,557 $25,855,077 $1,315,193,914
Business-Type Activities
Capital assets, not being depreciated
Land $23,620,851 $-$-$-$23,620,851
Water rights 31,476,906 ---31,476,906
Construction in progress 6,709,078 -38,825,288 2,098,760 43,435,606
Total capital assets, not being depreciated 61,806,835 -38,825,288 2,098,760 98,533,363
Capital assets, being depreciated
Buildings, structures and improvements 324,861,912 -591,745 -325,453,657
Infrastructure 804,126,125 -7,536,632 -811,662,757
Equipment 76,004,803 -2,165,159 328,947 77,841,015
Total capital assets being depreciated 1,204,992,840 -10,293,536 328,947 1,214,957,429
Less accumulated depreciation for
Buildings, structures and improvements (113,000,845)-(8,561,869)-(121,562,714)
Infrastructure (264,520,632)-(12,563,097)-(277,083,729)
Equipment (32,599,241)-(4,096,194)(327,832)(36,367,603)
Total accumulated depreciation (410,120,718)-(25,221,160)(327,832)(435,014,046)
Total capital assets, being depreciated, net 794,872,122 -(14,927,624)1,115 779,943,383
Business-type activities capital assets, net $856,678,957 $-$23,897,664 $2,099,875 $878,476,746
64
Notes to the Financial Statements
NOTE 5 -CAPITAL ASSETS (continued)
Depreciation and amortization expense was charged in the following functions in the Statement of Activities:
Governmental functions:Depreciation
General government $1,379,927
Public safety - Police 390,491
Public safety - Fire 762,285
Public works 61,099,573
Recreation and parks 2,138,073
Development services 361,143
Total $66,131,492
Business-type functions:
Wastewater treatment $19,779,890
Refuse collection 74,594
Agricultural water 400,694
Domestic water 4,648,805
General aviation 226,550
Offstreet parking 90,627
Total $25,221,160
NOTE 6 -LAND HELD FOR RESALE
The City, as the Redevelopment Successor Agency, has been transferred real property to be held for a limited period that will
be used for future development. The inventory for land held for resale is presented at the lower of cost or net realizable value
though it is initially recorded at historical costs. Subsequently, the land could be adjusted to net realizable value if and when the
City enters into agreements for development or sale of the property for less than its historical cost, when a property is impaired
or when property value decreases due to market conditions.
Balance at Balance at
Redevelopment Successor Agency - Housing June 30, 2017 Additions Deletions June 30, 2018
Land Held for Resale $1,779,201 $-$513,185 $1,266,016
$1,779,201 $-$513,185 $1,266,016
65
Notes to the Financial Statements
NOTE 7 -OTHER LONG-TERM RECEIVABLES
Other long-term receivables consist of the following:
Governmental Activities
Loans receivable in the internal service funds due from the Bakersfield
Redevelopment Agency's Southeast Project Area from the Mill Creek South
mixed use development project. This loan has an interest rate tied to the LAIF rate
(currently at .244% and an eight year payment period per Agreement 06-124).$1,111,189
Deferred loans receivable associated with the low and moderate
income housing project. These loans bear 0-3% interest and
are not due until ten years after the loan agreement date (also
see deferred revenue at Note 9).3,908,892
Mercy Housing, Madison Place Apartments, 55 year term, with 1/55 to be forgiven
each year of compliance to agreement.270,420
Amcal Santa Fe Apartments, 55 year term, repayment begins from residual
receipts following the date that the housing project is put in service.134,691
Down payment assistance loans.1,966,496
19th Street Senior Plaza, LLC, a 55 year loan term upon recordation of
Certificate of Completion.1,688,375
Park 20th Apartments, a 55 year loan term beginning upon recordation of the Certificate
of Completion with an interest rate of 3.0%.2,732,783
Chelsea Investment Corp. - Mill Creek Village. 19th Street Senior Housing and Parking
Structure. A 55 year loan term beginning upon recordation of the Certificate of
Completion with an interest rate of 3.0%.6,506,184
Chelsea Investment Corp. - Mill Creek Village. 19th Street Senior Housing and Parking
Structure. A 55 year loan term beginning upon recordation of the Certificate of
Completion with an interest rate of 2.0%.4,487,149
CalHOME Downpayment Assistance for a grant from the State which provided
downpayment and closing cost assistance to seventeen (17) families within the
Metropolitan Bakersfield area. The assistance was provided to those families
whose incomes were at or below 120% of area median income. The loans of up to
$40,000 are forgiven at 1/15th per year.378,480
Golden Empire Housing, Park Place Apartments, 55 year loan term
beginning July 12, 1999, ending on July 12, 2054, with the interest payment
being deferred for first ten years, until year 2010, with an interest rate of 1.5%.807,355
Capital Vision Equities, City Center Senior Housing, 35 year loan term beginning
on March 28, 2001, ending March 28, 2036, with an interest rate of 5.85%.990,000
Canyon Hills Assembly of God, Senior Housing Project 30 year loan term
beginning July 30, 2001 ending July 30, 2031, with an interest rate of 0%.310,000
66
Notes to the Financial Statements
NOTE 7 -OTHER LONG-TERM RECEIVABLES (continued)
Mill Creek Courtyard CIC - SEPA - Senior Housing Project. A 55 year loan term
beginning from the date of execution by the developer.2,520,000
Face value of loans $27,812,014
Current portion $700,343
Long-term portion 27,111,671
Total governmental activities receivable $27,812,014
Business-Type Activities
Notes receivable in the Agricultural Water Fund are for the
amounts due from various customers/vendors.
These loans are non-interest bearing.$33,450
Long-term receivable under agreement 87-153(5) between the City
and Dreyer's Grand Ice Cream Inc. for additional flow and
and treatment capacity in Wastewater Treatment Plant #3.476,867
Long-term receivable under agreement 14-042 between the City and a
local citizen to purchase surplus land adjacent to their business. Property
was held in the Offstreet Parking Fund.36,354
Various long-term receivables in the Domestic Water Fund relate to
contracts under which the City has agreed to provide future water
services to properties to be developed and the land owners have agreed
to pay the receivable amounts upon filing of the tract maps. The amounts
due are liens against the respective properties upon execution of the
agreements. The revenues related to these contracts are deferred.119,324
Total business-type noncurrent receivables $665,995
67
Notes to the Financial Statements
NOTE 8 -INTERFUND TRANSACTIONS
Interfund transactions are comprised of loans, services provided, reimbursements, or transfers. Loans are reported as amounts
“due to/due from” other funds or as “advances,” as appropriate, and are subject to elimination upon consolidation. Services
provided, deemed to be at market or near market rates, are treated as revenues and expenditures/expenses. Reimbursements
occur when one fund incurs a cost, charges the appropriate benefiting fund, and reduces its related cost as a reimbursement. All
other interfund transactions are treated as transfers. Transfers between governmental activities and business-type activities are
netted as part of the consolidation required to produce the government-wide financial statements.
Interfund receivable and payable balances at June 30, 2018 were:
Fund
Due from
Other Funds
Due to
Other Funds
Governmental Funds:
Major Funds:
General Fund $6,495,939 $-
Community Development Block Grant Fund -402,450
Gas Tax & Road Fund -6,081,535
Non-Major Fund:
High Speed Rail Fund -11,954
$6,495,939 $6,495,939
These balances are a result of expenditures incurred prior to the receipt of the related special revenue source.
Interfund transfers at June 30, 2018 consisted of the following:
Transfers In Transfers Out
Governmental Funds:
Major Funds:
General Fund $550,000 $168,377
Transient Occupancy Taxes Fund -6,547,980
Community Development Block Grant Fund -500,324
Capital Outlay Fund 6,580,000 190,000
Non-Major Funds:
Traffic Safety Fund -550,000
General Obligation Debt Fund 561,676 -
Proprietary Funds:
Major Funds:
Wastewater Treatment Fund -132,310
Refuse Collection Fund -1,360,615
Agricultural Water Fund -278,614
Domestic Water Fund -261,115
Internal Service Funds:
Self-Insurance Fund -152,744
Equipment Management Fund 2,540,403 90,000
$10,232,079 $10,232,079
Additional details regarding transfers in and out of various funds are provided below:
The $550,000 transfer in to the General Fund is from the Traffic Safety Fund that subsidized the cost of the traffic division
of the police department for parking fine violations.
68
Notes to the Financial Statements
NOTE 8 -INTERFUND TRANSACTIONS (continued)
The $168,377 transfer from the General Fund includes a transfer to the Municipal Debt Fund of $45,877 for the
repayment of a loan from PG&E for lighting improvement projects downtown as well as $122,500 to the Equipment Fund
for equipment purchases related to additional staffing in Recreation and Parks.
The $6,547,980 transfers from the Transient Occupancy Taxes Fund include: $6,300,000 transferred to the Capital Outlay
Fund to fund a number of capital projects, $15,475 to the General Obligation Debt Fund for the repayment of a loan from
PG&E for an energy efficiency retrofit at Rabobank Arena.
The $500,324 transfer from the Community Development Block Grant (CDBG) Fund to the General Obligation Debt
Fund is for the repayment of a Section 108 loan.
There were additional transfers to the Equipment Management Fund to purchase additional equipment for operations
which include; the General Fund ($122,500), the Transient Occupancy Tax Fund ($232,505), the Sewer Fund ($132,310),
the Refuse Fund ($1,360,615), the Domestic Water Fund ($261,115), the Agricultural Water Fund ($278,614) and the
Self-Insurance Fund ($152,744).
NOTE 9 -ADVANCES FROM GRANTORS AND THIRD PARTIES
The government-wide Statement of Net Position as well as governmental and enterprise funds defer revenue recognition in
connection with resources that have been received as of year-end but not yet earned because under both the accrual and
modified accrual basis of accounting revenue may be recognized only when earned. Assets recognized in connection with a
transaction before the earnings process is complete are offset by a corresponding liability for advances from grantors and third
parties.
The following table summarizes Advances from Grantors and third parties for the City at June 30, 2018:
Balance at
June 30, 2018
Governmental Activities:
General Fund
Dog License $93,366
Business License 1,898,725
General Fund Total 1,992,091
Non-Major Funds:
State Transportation - Grants Advanced 318,423
Redevelopment Successor Agency - Housing 22,791,933
Total Governmental Activities $25,102,447
Business-Type Activities:
Wastewater Treatment $476,867
Refuse Collection 130,695
Domestic Water 119,324
Total Business-Type Activities $726,886
69
Notes to the Financial Statements
NOTE 10 -CAPITAL LEASE
The City entered into a long-term lease agreement in September 2005 for the acquisition of water rights with the Kern County
Water Agency (KCWA). The agreement entitles the City to receive 6,500 acre feet of water per year in exchange for annual
payments tied to KCWA’s Water Revenue certificates of participation from 2006 and 2008, which were used for the expansion
of its wa ter treatment facility. On March 1, 2016, KCWA issued Water Revenue Refunding Bonds. These new bonds refunded
the previous debt that the City's lease payments were based upon. The City’s lease payments coincide with the amortization
schedule for the related KCWA debt with the value of the related water rights at $18,315,293. The total lease obligation for the
term of this agreement is as follows:
Business-Type Activities
Year ending Lease Interest Total
2019 $643,995 $703,637 $1,347,632
2020 670,701 679,306 1,350,007
2021 695,722 653,095 1,348,817
2022 678,991 668,624 1,347,615
2023 712,201 636,691 1,348,892
2024-2028 4,112,796 2,634,658 6,747,454
2029-2033 5,166,710 1,580,053 6,746,763
2034-2038 5,634,177 615,369 6,249,546
Totals $18,315,293 $8,171,433 $26,486,726
Balance at
June 30, 2017 Additions
Principal
Retirement
Balance at
June 30, 2018
Business-Type Activities
Capital Leases:
Water rights $18,730,478 $-$415,185 $18,315,293
$18,730,478 $-$415,185 $18,315,293
70
Notes to the Financial Statements
NOTE 11 -LONG-TERM DEBT
Long-term debt transactions for the fiscal year ending June 30, 2018 are summarized below:
Business-Type Activities
Governmental
Activities
General
Obligations
Revenue
Obligations Total
Total
Government
Payable at June 30, 2017:
Bonds $-$-$174,647,913 $174,647,913 $174,647,913
Certificates of Participation 13,785,000 ---13,785,000
Notes 2,938,462 3,008,504 -3,008,504 5,946,966
Contracts/Loans -319,400 -319,400 319,400
Claims and Judgments Payable 39,275,392 ---39,275,392
Compensated Absences 15,233,907 2,067,899 -2,067,899 17,301,806
Subtotal 71,232,761 5,395,803 174,647,913 180,043,716 251,276,477
New debt incurred:
Bonds --23,075,000 23,075,000 23,075,000
Notes 173,910 ---173,910
Contracts/Loans -49,346 -49,346 49,346
Claims and Judgments Payable 8,289,259 ---8,289,259
Compensated Absences 9,647,846 1,146,240 -1,146,240 10,794,086
Subtotal 18,111,015 1,195,586 23,075,000 24,270,586 42,381,601
Principal reductions:
Bonds --30,724,701 30,724,701 30,724,701
Certificates of Participation 2,510,000 ---2,510,000
Notes 528,132 752,126 -752,126 1,280,258
Compensated Absences 9,780,428 1,263,402 -1,263,402 11,043,830
Subtotal 12,818,560 2,015,528 30,724,701 32,740,229 45,558,789
Payable at June 30, 2018:
Bonds --166,998,212 166,998,212 166,998,212
Certificates of Participation 11,275,000 ---11,275,000
Notes 2,584,240 2,256,378 -2,256,378 4,840,618
Contracts/Loans -368,746 -368,746 368,746
Claims and Judgments Payable 47,564,651 ---47,564,651
Compensated Absences 15,101,325 1,950,737 -1,950,737 17,052,062
Total Payables $76,525,216 $4,575,861 $166,998,212 $171,574,073 $248,099,289
71
Notes to the Financial Statements
NOTE 11 -LONG-TERM DEBT (continued)
Business-Type Activities
Governmental
Activities
General
Obligations
Revenue
Obligations Total
Total
Government
Due Within One Year:
Bonds $-$-$7,199,701 $7,199,701 $7,199,701
Certificates of Participation 2,640,000 ---2,640,000
Notes 549,649 752,126 -752,126 1,301,775
Total Long-term Debt 3,189,649 752,126 7,199,701 7,951,827 11,141,476
Contracts/Loans -368,746 -368,746 368,746
Claims and Judgments Payable 13,428,651 ---13,428,651
Compensated Absences 2,724,434 488,138 -488,138 3,212,572
Total Due Within One Year $19,342,734 $1,609,010 $7,199,701 $8,808,711 $28,151,445
Due in More Than One Year:
Bonds $-$-$159,798,511 $159,798,511 $159,798,511
Certificates of Participation 8,635,000 ---8,635,000
Notes 2,034,591 1,504,252 -1,504,252 3,538,843
Total Long-term Debt 10,669,591 1,504,252 159,798,511 161,302,763 171,972,354
Claims and Judgments Payable 34,136,000 ---34,136,000
Compensated Absences 12,376,891 1,462,599 -1,462,599 13,839,490
Total Due in More Than One Year $57,182,482 $2,966,851 $159,798,511 $162,765,362 $219,947,844
The liability for pension-related debt, OPEB debt, and compensated absences for governmental activities is primarily liquidated
by the General Fund with smaller portions charged to other funds in an amount proportional to the personnel costs incurred.
The pension related debt and compensated absences for business-type activities will be paid by the respective proprietary funds.
Long-term debt payable at June 30, 2018, was comprised of the following individual issues:
Bonds
General obligation bonds serviced by business-type activities:
$145,500,000 Wastewater Revenue Bonds 2015 Series A - the 2007 Series A bonds were
refunded in 2015 with a partial call of the outstanding principal amount of $156,750,000 as
well as payment of the issuance costs. The proceeds of the original Series 2007A refunded
bonds were used to finance a portion of certain capital improvements at the City's
wastewater and sewage collection treatment and disposal system; interest rate of 5.00%.
(This issue is serviced by the Wastewater Treatment Fund.)$145,500,000
Unamortized Bond Premium on Wastewater Revenue Bonds 21,498,212
Total Bonds $166,998,212
Certificates of Participation:
Certificates of participation serviced by Transient Occupancy tax revenue via lease
payments from the City to the Redevelopment Successor Agency:
$25,335,000 - 2006 Refunding Certificates of Participation Series A assumed by
the City as the successor agency of the former redevelopment agency. Certificates are
due in annual principal installments of $900,000 to $2,170,000 commencing
October 1, 2006 through 2022; interest ranging from 4.00% to 4.25%.$8,190,000
72
Notes to the Financial Statements
NOTE 11 -LONG-TERM DEBT (continued)
$9,470,000 - 2006 Refunding Certificates of Participation Series B assumed by
the City as the successor agency of the former redevelopment agency. Certificates are
due in annual principal installments of $345,000 to $830,000 commencing
October 1, 2006 through 2022; interest ranging from 4.00% to 5.00%.3,085,000
Total Certificates of Participation $11,275,000
Notes/Loans:
General obligation note serviced by Community Development Block Grant Fund
(via the Municipal Debt Service Fund with Community Development Block Grant
Entitlement): $4,100,000 Housing & Urban Development (HUD) Section 108 Loan 2003 -
Due in annual principal installments of $137,000 to $320,000 commencing
August 1, 2004 through August 2022; interest ranging from 1.75% to 4.76%.$1,459,000
General obligation note serviced by Community Development Block Grant Fund
(via the Municipal Debt Service Fund with Community Development Block Grant
Entitlement): $800,000 HUD Section 108 Loan 2003 - due in annual principal
installments of $24,000 to $61,000 commencing August 1, 2005 through August
2023; interest ranging from 1.61% to 4.76%.324,000
General obligation note serviced by Community Development Block Grant Fund
(via the Municipal Debt Service Fund with Community Development Block Grant
Entitlement}, $1,800,000 HUD Section 108 Loan 009 - due in annual principal
installments of $140,000 to $230,000 commencing August 2010 through August
2021; interest ranging from 0.56% to 3.73%.569,000
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund):
$237,033 PG&E loan used for an energy efficient lighting upgrade at in the Downtown area
of the City. The payments will be made on PG&E bills starting March 2015. This loan
contains no interest charges.84,109
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund):
$47,636 PG&E loan used for an energy efficient lighting upgrade at Police Headquarters.
The payments will be made starting September 13, 2017 in 29 monthly payments of
$1,642.62. This loan contains no interest charges.31,210
General obligation loan serviced by General Fund (via the Municipal Debt Service Fund):
$126,274 PG&E loan used for an energy efficient lighting upgrade at Rabobank Theater.
The payments will be made starting March 12, 2018 in 54 monthly payments of $2,338.40.
This loan contains no interest charges.
116,921
General obligation notes serviced by Business-Type Activities:
$14,263,555 note payable to California State Water Resources Control Board -
Original advances of $14,954,054 payable without interest in twenty annual
installments beginning in fiscal year 2004-05 by the Wastewater Treatment Fund.2,256,378
Total general obligation notes/loans payable $4,840,618
73
Notes to the Financial Statements
NOTE 11 -LONG-TERM DEBT (continued)
Compensated Absences:
Government Activities $15,101,325
Business-Type Activities 1,950,737
Total Compensated Absences $17,052,062
A summary of the City's debt service requirements outstanding at June 30, 2018, is as follows:
Total
Government
Principal:
Governmental Activities $76,525,216
Business-Type Activities:
General Obligations 4,575,861
Revenue Obligations 166,998,211
Subtotal - Principal 248,099,288
Less: Claims and Judgments Payable included
above that bear no interest and have
no schedule of repayment terms 47,564,651
Less: Kern River Levee District Payable
included above that bears no interest and
has no schedule of repayment terms 368,746
Less: Unamortized premium for Wastewater
revenue bond 21,498,211
Less: Compensated Absences included above that bear
no interest and have no schedule of repayment terms 17,052,062
Total Principal with Scheduled
Repayment Terms 161,615,618
Interest on Obligations 65,165,153
Total Debt Service Requirements $226,780,771
74
Notes to the Financial Statements
NOTE 11 -LONG-TERM DEBT (continued)
The annual requirement to amortize the principal and interest on long-term debt at June 30, 2018 is as follows:
Government-Type Activities
Year ending Principal Interest
Bonds/COP Notes/Loans Total Bonds Notes/Loans Total
2019 $2,640,000 $549,649 $3,189,649 $496,900 $51,546 $548,446
2020 2,760,000 548,791 3,308,791 374,526 41,791 416,317
2021 2,875,000 514,062 3,389,062 256,625 30,500 287,125
2022 3,000,000 528,062 3,528,062 133,724 17,811 151,535
2023 -443,676 443,676 -7,193 7,193
Totals $11,275,000 $2,584,240 $13,859,240 $1,261,775 $148,841 $1,410,616
Business-Type Activities
Year ending Principal Interest
Bonds/COP Notes/Loans Total Bonds Notes/Loans Total
2019 $5,525,000 $752,126 $6,277,126 $7,136,875 $150,429 $7,287,304
2020 5,955,000 752,126 6,707,126 6,849,875 150,429 7,000,304
2021 7,245,000 752,126 7,997,126 6,519,875 150,429 6,670,304
2022 7,670,000 -7,670,000 6,147,000 -6,147,000
2023 7,995,000 -7,995,000 5,755,375 -5,755,375
2024-2028 47,025,000 -47,025,000 22,143,125 -22,143,125
2029-2033 61,335,000 -61,335,000 8,682,375 -8,682,375
2034-2038 2,750,000 -2,750,000 68,750 -68,750
Totals $145,500,000 $2,256,378 $147,756,378 $63,303,250 $451,287 $63,754,537
Total Reporting Entity
Year Ending Principal Interest
Bonds/COP Notes/Loans Total Bonds/COP Notes/Loans Total
2019 $8,165,000 $1,301,775 $9,466,775 $7,633,775 $201,975 $7,835,750
2020 8,715,000 1,300,917 10,015,917 7,224,401 192,220 7,416,621
2021 10,120,000 1,266,188 11,386,188 6,776,500 180,929 6,957,429
2022 10,670,000 528,062 11,198,062 6,280,724 17,811 6,298,535
2023 7,995,000 443,676 8,438,676 5,755,375 7,193 5,762,568
2024-2028 47,025,000 -47,025,000 22,143,125 -22,143,125
2029-2033 61,335,000 -61,335,000 8,682,375 -8,682,375
2034-2038 2,750,000 -2,750,000 68,750 -68,750
Totals $156,775,000 $4,840,618 $161,615,618 $64,565,025 $600,128 $65,165,153
75
Notes to the Financial Statements
NOTE 12 -PLEDGED REVENUES
The City has pledged net revenues generated by the Wastewater Enterprise Fund to repay a total of $151.5 million in
wastewater revenue bonds series 2007A and 2015A issued to finance a portion of the expansion and improvement of the City's
wastewater and sewage collection and disposal system.
Each fiscal year, net revenues means all revenues of the enterprise fund received during the fiscal year less operation and
maintenance costs for that fiscal year. The pledge of net revenues does not constitute a lien upon any property of the City.
Proceeds of the bonds provided financing for expansion and upgrade of Wastewater Treatment Plant #3, and improvements to
Wastewater Treatment Plant #2. The bonds are payable through 2018 for 2007A bonds, 2017 and 2034 for 2015A bonds. The
covenants of the ordinances authorizing the bonds include, among other things, an obligation of the City to fix, prescribe,
revise, and collect rates, fees, and charges for the services and facilities of the system and revise the same whenever necessary,
which will provide gross revenues in each fiscal year sufficient to pay the cost of operation and maintenance of the system; one
hundred twenty five percent (125%) of the bond service requirement becoming due in such fiscal year on the outstanding
bonds; plus one hundred percent (100%) of all reserve and other payments required to be made pursuant to the ordinances
authorizing the bonds.
NOTE 13 -DEFERRED 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 recognized
deferred inflows of resources in the governmental fund financial statements. These items are an acquisition of net fund balance
by the City that is applicable to a future reporting period. Previous financial reporting standards do not include guidance for
reporting those financial statement elements, which are distinct from assets and liabilities. Under the modified accrual basis of
accounting, it is not enough that revenue has been earned if it is to be recognized in the current period. Revenue must also be
susceptible to accrual (i.e., measurable and available to finance expenditures of the current period). Governmental funds report
deferred revenues in connection with receivables for revenues not susceptible to accrual, as deferred inflows of resources.
Deferred inflows of resources balances for the year ended June 30, 2018 were as follows:
Balance at
June 30, 2018
General Fund
California Water Receivable $200,245
Code Enforcement Receivable 6,130
State Agencies (SB90)3,042,454
General Fund Total 3,248,829
CDBG - Deferred Loans 18,638,255
Gas Tax & Road Fund 22,031
Capital Outlay Fund 46,606
Non-Major Funds
Neighborhood Stabilization 6,798,874
Total Governmental Funds $28,754,595
76
Notes to the Financial Statements
NOTE 14 -FUND BALANCES
Fund balances for all major and non-major governmental funds as of June 30, 2018 are as follows (see Note 1 for description of
the categories used):
General
Fund
Transient
Occupancy
Taxes Fund
Community
Development
Block Grant
Fund
Gas Tax
& Road
Fund
Capital
Outlay
Fund
Park
Improvement
Fund
Transportation
Development
Fund
Non-Major
Governmental
Funds Total
Prepaids/Deposits $1,025 $-$-$-$1,212,183 $-$-$-$1,213,208
Subtotal 1,025 ---1,212,183 ---1,213,208
Development services grants --529,095 ----325,888 854,983
Community redevelopment
projects -------1,817,384 1,817,384
Police services grants -------1,650,763 1,650,763
Fire services grants -------1,248,803 1,248,803
Assessment district projects ---------
Public works grants ---15,187,842 ----15,187,842
Subtotal --529,095 15,187,842 ---5,042,838 20,759,775
Legal & Professional services 66,742 ---80,443 ---147,185
City facility construction &
refurbishment projects ----6,040,325 ---6,040,325
Police service contracts 478,595 -------478,595
Fire service contracts ----17,388 ---17,388
Civil Engineering/Land
Survey contracts 3,000 -------3,000
Public works
improvement contracts ----445,519 -52,357,613 -52,803,132
Park improvement contracts -----5,282,611 --5,282,611
Tourism and promotional
contracts -7,078 ------7,078
Community development
contracts 2,400 -------2,400
Cash basis reserve 13,104,726 -------13,104,726
Facility replacement reserve ----3,835,573 ---3,835,573
Appropriation for next
year's budget 15,850,000 -------15,850,000
Subtotal 29,505,463 7,078 --10,419,248 5,282,611 52,357,613 -97,572,013
77
Notes to the Financial Statements
NOTE 14 -FUND BALANCES (continued)
General
Fund
Transient
Occupancy
Taxes Fund
Community
Development
Block Grant
Fund
Gas Tax
& Road
Fund
Capital
Outlay
Fund
Park
Improvement
Fund
Transportation
Development
Fund
Non-Major
Governmental
Funds Total
Legal & Professional services 74,188 -------74,188
Police operations 108,855 -------108,855
Fire operations 98,106 -------98,106
Public works - General
Services department 49,494 -------49,494
Facility improvements ----5,122,655 ---5,122,655
Highway and road projects ----39,338,037 ---39,338,037
Tourism and promotional
contracts 26,033 1,855,577 ------1,881,610
Park development projects 8,163 -------8,163
Community development
projects 18,221 -------18,221
Other miscellaneous
agreements 11,804 -------11,804
Petty Cash accounts 27,170 -------27,170
Compensated absences 2,492,809 -------2,492,809
Subtotal 2,914,843 1,855,577 --44,460,692 ---49,231,112
7,126,339 -------7,126,339
$39,547,670 $1,862,655 $529,095 $15,187,842 $56,092,123 $5,282,611 $52,357,613 $5,042,838 $175,902,447
NOTE 15 -REIMBURSABLE DEVELOPER COSTS
Reimbursable developer costs of $2,024,679 at June 30, 2018 are included in customer deposits in the Domestic Water Fund
which represent amounts due to developers for construction of water mainline extensions and certain other water facilities. For
mainline extensions transferred to the City after June 30, 1982, the developers are to be reimbursed based on revenues
generated from the water sales associated with these mainline extensions. The City is required to reimburse 2.5% of the cost of
the extension on a yearly basis with the total amount to be reimbursed within 40 years.
78
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS
General
The City of Bakersfield provides pension benefits to eligible full-time employees in three separate plans: the Miscellaneous
Plan, the Safety Fire Plan, and the Safety Police Plan, all of which are included in the Public Agency portion of the California
Public Employees’ Retirement System (CalPERS).
Miscellaneous Plan
Plan Description
The City’s Miscellaneous Plan is a defined benefit pension plan that provides retirement and disability benefits, annual cost-of-
living adjustments (COLA), and death benefits to plan members and beneficiaries. The Miscellaneous Plan is an agent
multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for
participating public employers within the State of California. A menu of benefit provisions as well as other requirements is
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 local ordinance. CalPERS issues a separate
comprehensive annual financial report. Copies of the CalPERS' annual financial report may be obtained from their Executive
Office - 400 P Street – Sacramento, CA 95814.
Benefits Provided
The benefits provided through the CalPERS Miscellaneous Plan include retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members and beneficiaries. The City has three tiers through CalPERS under the
Miscellaneous employee plan. Tier I is applicable to all employees hired before August 20, 2008 with a formula of 3% at age
60. Earliest retirement age is 50 with final compensation based on 12 months at the highest rate of pay received. Tier II is
applicable to employees hired after August 20, 2008 and before January 1, 2013 with a formula of 2.7% at age 55. Earliest
retirement age is 50 with final compensation based on 36 months at the highest rate of pay received. Tier III is applicable to
employees hired after January 1, 2013 with a formula of 2% at age 62 which is a result of the Public Employees' Pension
Reform Act of 2013 (PEPRA). PEPRA also lowered the final compensation and contribution requirements. Earliest retirement
age is 52 with final compensation, subject to the PEPRA limit of $145,666, based on 36 months at the highest rate of pay
received.
Contributions and Employees Covered
Active plan members in the CalPERS Miscellaneous Plan may be required to contribute a particular percent of their annual pay
depending on the applicable plan they fall under. Tier I and Tier II employees will pay 8% of their salary while those
employees under PEPRA (Tier III) will pay 6.25% of their salary. In addition, employees in Tier I and Tier II have 7.5% of
their contribution picked-up by the City after five years of service.
Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for
all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a
change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The
actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the
year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference
between the actuarially determined rate and the contribution rate of employees. It is the responsibility of the employer to make
necessary accounting adjustments to reflect the impact due to any Employer Paid Member Contributions or situations where
members are paying a portion of the employer contribution.
As of June 30, 2017 (the measurement date), there are 920 active employees and 872 inactive employees or beneficiaries
receiving benefits. For the fiscal year ended June 30, 2018, the employee contribution rate was 7.678 percent of annual pay, and
the employer’s minimum contribution rate was 22.869 percent of annual payroll. Employer contribution rates may change if
plan contracts are amended.
79
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Actuarial Methods and Assumptions
For the measurement period ended June 30, 2017 (the measurement date), the total pension liability was determined by rolling
forward the June 30, 2016 total pension liability. The June 30, 2016 and the June 30, 2017 total pension liabilities were based
on the following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal
Asset Valuation Method
Market Value Assets. For details, see
June 30, 2014 Funding Valuation
Report
Inflation Rate 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Investment Rate of Return 7.50% [a]
Mortality [b]
[a] Net of Pension Plan Investment and Administrative Expenses; included inflation.
[b] Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvements using Society of Actuaries Scale BB. For more details on this table, please
refer to the 2014 experience study report.
All other actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study
dated January 2014 which was derived from data collected for the period from 1997 to 2011, including updates to salary
increase, mo rtality and retirement rates. The 2014 Experience Study report can be obtained at CalPERS’ website under Forms
and Publications.
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. Based on the testing, none of the tested plans
run out of assets. Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate
calculation is not necessary. The long-term expected discount rate of 7.15 percent is applied to all plans in the Public
Employees Retirement Fund. 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 Statement No. 68 section.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which
best-estimate ranges of 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, staff took into account both short-term and long-term market return
expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and
employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the
funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-
term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the
present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent
expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and
long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and
rounded down to the nearest one quarter of one percent.
80
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital
market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the
CalPERS' Board effective on July 1, 2015.
Asset Class
Current Target
Allocation
Real Return
Years 1-10 [a]
Real Return
Years 11+ [b]
Global Equity 47.0%4.90%5.38%
Global Fixed Income 19.0%0.80%2.27%
Inflation Sensitive 6.0%0.60%1.39%
Private Equity 12.0%6.60%6.63%
Real Estate 11.0%2.80%5.21%
Infrastructure and Forestland 3.0%3.90%5.36%
Liquidity 2.0%(0.40%)(0.90%)
[a]An expected inflation of 2.5% used for this period.
[b]An expected inflation of 3.0% used for this period.
Changes in Net Pension Liability
The change in the Net Pension Liability recognized over the measurement period is as follows:
Increase (Decrease)
MISCELLANEOUS PLAN
Total Pension
Liability
[1]
Plan Fiduciary
Net Position
[2]
Net Pension
Liability/(Asset)
[3]=[1] - [2]
Balance at June 30, 2016 [a]$506,658,167 $353,671,812 $152,986,355
Changes Recognized for the
Measurement Period:
-Service Cost 10,121,201 -10,121,201
-Interest on the Total
Pension Liability 37,355,571 -37,355,571
-Changes of Benefit Terms ---
- Differences between Expected
and Actual Experience (8,386,592)-(8,386,592)
-Changes of Assumptions 31,112,110 -31,112,110
-Plan to Plan Movement ---
- Contributions - Employer -11,107,872 (11,107,872)
-Contributions - Employees -4,188,806 (4,188,806)
-Net Investment Income -39,138,502 (39,138,502)
-Benefit Payments Including
Refund of Employee Contributions (23,977,515)(23,977,515)-
- Administrative Expenses -(522,173)522,173
Net Changes during 2016-17 46,224,775 29,935,492 16,289,283
Balance at June 30, 2017 [a]$552,882,942 $383,607,304 $169,275,638
[a]The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary, self-insurance and OPEB expense. This may
be different from the plan assets reported in the funding actuarial valuation report.
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
MISCELLANEOUS PLAN
Discount Rate - 1%
(6.15%)
Current Discount
Rate (7.15 %)
Discount Rate +
1%
(8.15%)
Plan Net Pension
Liability/(Asset)$244,466,989 $169,275,638 $107,191,756
81
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Recognition of Gains and Losses
Under GASB Statement No. 68, gains and losses related to changes in total pension liability and fiduciary net position are
recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are
categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future
pension expense.
The amortization period differs depending on the source of the gain or loss. The difference between projected and actual
earnings is a five year straight-line amortization. All other amounts are amortized using straight-line amortization over the
average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the
beginning of the measurement period.
The expected average remaining service lifetime (EARSL) for the plan for the June 30, 2017 measurement date is 3.5 years,
which is obtained by dividing the total service years of 9,224 (the sum of remaining lifetimes of active employees) by 2,631
(the total number of participants: active, inactive, and retired). Note that inactive employees and retirees have remaining service
lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event
other than receiving a cash refund.
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2016), the net pension liability/(asset) is $152,986,355. For the measurement
period ending June 30, 2017 (the measurement date), the City incurred a pension expense/(income) of $22,224,792 for the plan.
Note that no adjustments have been made for contributions subsequent to the measurement date. Adequate treatment of any
contributions made after the measurement date is the responsibility of the employer.
As of June 30, 2018, the City had deferred outflows of resources related to pensions of $16,345,282 for contributions made
subsequent to the measurement date, $22,222,935 for changes of assumptions, and $5,209,586 for the net difference between
projected and actual earnings on pension plan investments. Deferred inflows of resources related to pensions we re $1,798,233
for changes in assumptions and $7,143,587 for differences between expected and actual experiences.
Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in future pension
revenue and expense amortized annually as follows:
Measurement Periods
Ended June 30:
Deferred Outflows/ (Inflows)
of Resources
2018 $3,790,711
2019 $12,112,063
2020 $5,437,517
2021 $(2,849,590)
Remaining $0
82
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Safety Fire Plan
Plan Description
The City’s Safety Fire Plan is a defined benefit pension plan that provides retirement and disability benefits, annual cost-of-
living adjustments, and death benefits to plan members and beneficiaries. The Safety Fire Plan is an agent multiple-employer
plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers
within the State of California. A menu of benefit provisions as well as other requirements is 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 local ordinance. CalPERS issues a separate comprehensive annual financial report.
Copies of the CalPERS' annual financial report may be obtained from their Executive Office - 400 P Street – Sacramento, CA
95814.
Benefits Provided
The benefits provided through the CalPERS Safety Fire Plan include retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members and beneficiaries. The City has three tiers through CalPERS under the Safety
Fire employee plan. Tier I is applicable to all employees hired before January 1, 2011 with a formula of 3% at age 50. Earliest
retirement age is 50 with final compensation based on 12 mo nths at the highest rate of pay received. Tier II is applicable to
employees hired after January 1, 2011 and before January 1, 2013 with a formula of 2.0% at age 50. Earliest retirement age is
50 with final compensation based on 36 months at the highest rate of pay received. Tier III is applicable to employees hired
after January 1, 2013 with a formula of 2% at age 57 which is a result of PEPRA. PEPRA also lowered the final compensation
and contribution requirements. Earliest retirement age is 50 with final compensation, subject to the PEPRA limit of $145,666,
based on 36 months at the highest rate of pay received.
Contributions and Employees Covered
Active plan members in the CalPERS Safety Fire Plan may be required to contribute a particular percent of their annual pay
depending on the applicable plan they fall under. Tier I and Tier II employees will pay 9% of their salary while those
employees under PEPRA (Tier III) will pay 11.25% of their salary. In addition, employees in Tier I have 8% of their
contribution picked-up by the City after five years of service.
Section 20814(c) of the California PERL requires that the employer contribution rates for all public employers be determined
on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan
contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the
estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to
finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined
rate and the contribution rate of employees. It is the responsibility of the employer to make necessary accounting adjustments to
reflect the impact due to any Employer Paid Member Contributions or situations where members are paying a portion of the
employer contribution.
As of June 30, 2017 (the measurement date), there are 171 active employees and 216 inactive employees or beneficiaries
receiving benefits. For the fiscal year ended June 30, 2018, the employee contribution rate was 9.161 percent of annual pay, and
the employer’s minimum contribution rate was 37.221 percent of annual payroll. Employer contribution rates may change if
plan contracts are amended.
83
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Actuarial Methods and Assumptions
For the measurement period ended June 30, 2017 (the measurement date), the total pension liability was determined by rolling
forward the June 30, 2016 total pension liability. The June 30, 2016 and the June 30, 2017 total pension liabilities were based
on the following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal
Asset Valuation Method
Market Value of Assets. For details, see
June 30, 2014 Funding Valuation
Report.
Inflation Rate 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Investment Rate of Return 7.50%[a]
Mortality [b]
[a] Net of Pension Plan Investment and Administrative Expenses; includes inflation.
[b]Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvements using Society of Actuaries Scale BB. For more details on this table, please
refer to the 2014 experience study report.
All other actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study
dated January 2014 which was derived from data collected for the period from 1997 to 2011, including updates to salary
increase, mo rtality and retirement rates. The 2014 Experience Study report can be obtained at CalPERS’ website under Forms
and Publications.
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. Based on the testing, none of the tested plans
run out of assets. Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate
calculation is not necessary. The long-term expected discount rate of 7.15 percent is applied to all plans in the Public
Employees Retirement Fund. 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 Statement No. 68 section.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which
best-estimate ranges of 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, staff took into account both short-term and long-term market return
expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and
employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the
funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-
term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the
present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent
expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and
long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and
rounded down to the nearest one quarter of one percent.
84
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital
market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the
CalPERS Board effective on July 1, 2015.
Asset Class
Current Target
Allocation
Real Return
Years 1-10 [a]
Real Return
Years 11+ [b]
Global Equity 47.0%4.90%5.38%
Global Fixed Income 19.0%0.80%2.27%
Inflation Sensitive 6.0%0.60%1.39%
Private Equity 12.0%6.60%6.63%
Real Estate 11.0%2.80%5.21%
Infrastructure & Forestland 3.0%3.90%5.36%
Liquidity 2.0%(0.40%)(0.90%)
[a]An expected inflation of 2.5% used for this period.
[b]An expected inflation of 3.0% used for this period.
Changes in Net Pension Liability
The change in the Net Pension Liability recognized over the measurement period is as follows:
Increase (Decrease)
SAFETY FIRE PLAN
Total Pension
Liability
[1]
Plan Fiduciary
Net Position
[2]
Net Pension
Liability/(Asset)
[3]=[1] - [2]
Balance at June 30, 2016 [a]$261,361,174 $186,380,856 $74,980,318
Changes Recognized for the
Measurement Period:
-Service Cost 4,691,377 -4,691,377
-Interest on the Total
Pension Liability 19,273,519 -19,273,519
-Changes of Benefit Terms ---
- Differences between Expected
and Actual Experience (3,292,736)-(3,292,736)
-Changes of Assumptions 16,102,827 -16,102,827
-Plan to Plan Resource Movement ---
- Contributions - Employer -5,766,115 (5,766,115)
-Contributions - Employees -1,585,475 (1,585,475)
-Net Investment Income -20,512,737 (20,512,737)
-Benefit Payments Including
Refund of Employee Contributions (13,914,493)(13,914,493)-
- Administrative Expenses -(275,179)275,179
Net Changes during 2016-17 22,860,494 13,674,655 9,185,839
Balance at June 30, 2017 [a]$284,221,668 $200,055,511 $84,166,157
[a]The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary, self-insurance and OPEB expense. This may
be different from the plan assets reported in the funding actuarial valuation report.
85
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
SAFETY FIRE PLAN
Discount Rate - 1%
(6.15%)
Current Discount
Rate (7.15%)
Discount Rate +
1%
(8.15%)
Plan Net Pension
Liability/(Asset)$123,020,148 $84,166,157 $52,311,780
Recognition of Gains and Losses
Under GASB Statement No. 68, gains and losses related to changes in total pension liability and fiduciary net position are
recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are
categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future
pension expense.
The amortization period differs depending on the source of the gain or loss. The difference between projected and actual
earnings is a five year straight-line amortization. All other amounts are amortized using straight-line amortization over the
average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the
beginning of the measurement period.
The expected average remaining service lifetime (EARSL) for the plan for the June 30, 2017 measurement date is 5.4 years,
which is obtained by dividing the total service years of 2,307 (the sum of remaining lifetimes of active employees) by 424 (the
total number of participants: active, inactive, and retired). Note that inactive employees and retirees have remaining service
lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event
other than receiving a cash refund.
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2016), the net pension liability/(asset) is $74,980,318. For the measurement
period ending June 30, 2017 (the measurement date), the City incurred a pension expense/(income) of $11,127,453 for the plan.
Note that no adjustments have been made for contributions subsequent to the measurement date. Adequate treatment of any
contributions made after the measurement date is the responsibility of the employer.
As of June 30, 2018, the City had deferred outflows of resources related to pensions of $7,504,238 for contributions made
subsequent to the measurement date, $13,120,822 for changes of assumptions, $577,065 for the differences between expected
and actual experiences and $2,892,687 for the net difference between projected and actual earnings on pension plan
investments. Deferred inflows of resources related to pensions were $1,964,144 for changes in assumptions and $2,842,034 for
differences between expected and actual experiences.
Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in future pension
revenue and expense amortized annually as follows:
Measurement Periods
Ended June 30:
Deferred Outflows/ (Inflows)
of Resources
2018 $1,547,524
2019 $4,897,225
2020 $3,384,637
2021 $1,006,114
2022 $948,896
Remaining $0
86
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Safety Police Plan
Plan Description
The City’s Safety Police Plan, is a defined benefit pension plan that provides retirement and disability benefits, annual cost-of-
living adjustments, and death benefits to plan members and beneficiaries. The Safety Police Plan is an agent multiple-employer
plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers
within the State of California. A menu of benefit provisions as well as other requirements is 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 local ordinance. CalPERS issues a separate comprehensive annual financial report.
Copies of the CalPERS' annual financial report may be obtained from their Executive Office - 400 P Street – Sacramento, CA
95814.
Benefits Provided
The benefits provided through the CalPERS Safety Police Plan include retirement and disability benefits, annual cost-of-living
adjustments, and death benefits to plan members and beneficiaries. The City has three tiers through CalPERS under the Safety
Police employee plan. Tier I is applicable to all employees hired before January 1, 2011 with a formula of 3% at age 50.
Earliest retirement age is 50 with final compensation based on 12 months at the highest rate of pay received. Tier II is
applicable to employees hired after January 1, 2011 and before January 1, 2013 with a formula of 2.0% at age 50. Earliest
retirement age is 50 with final compensation based on 36 months at the highest rate of pay received. Tier III is applicable to
employees hired after January 1, 2013 with a formula of 2% at age 57 which is a result of the PEPRA. PEPRA also lowered the
final compensation and contribution requirements. Earliest retirement age is 50 with final compensation, subject to the PEPRA
limit of $145,666, based on 36 months at the highest rate of pay received.
Contributions and Employees Covered
Active plan members in the CalPERS Safety Police Plan may be required to contribute a particular percent of their annual pay
depending on the applicable plan they fall under. Tier I and Tier II employees will pay 9% of their salary while those
employees under PEPRA (Tier III) will pay 12.75% of their salary. In addition, employees in Tier I have 8% their contribution
picked-up by the City after five years of service.
Section 20814(c) of the California PERL requires that the employer contribution rates for all public employers be determined
on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan
contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the
estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to
finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined
rate and the contribution rate of employees.
As of June 30, 2017 (the measurement date), there are 370 active employees and 423 inactive employees or beneficiaries
receiving benefits. For the fiscal year ended June 30, 2018, the employee contribution rate was 9.565 percent of annual pay, and
the employer’s minimum contribution rate was 42.176 percent of annual payroll. Employer contribution rates may change if
plan contracts are amended.
87
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Actuarial Methods and Assumptions
For the measurement period ended June 30, 2017 (the measurement date), the total pension liability was determined by rolling
forward the June 30, 2016 total pension liability. The June 30, 2016 and the June 30, 2017 total pension liabilities were based
on the following actuarial methods and assumptions:
Actuarial Cost Method Entry Age Normal
Asset Valuation Method
Market Value Assets. For details, see
June 30, 2014 Funding Valuation
Report.
Inflation Rate 2.75%
Salary Increases Varies by Entry Age and Service
Payroll Growth 3.00%
Investment Rate of Return 7.50%[a]
Mortality [b]
[a] Net of Pension Plan Investment and Administrative Expenses; includes inflation.
[b] Pre-retirement and Post-retirement mortality rates include 20 years of projected mortality improvements using Society of Actuaries Scale BB. For more details on this table, please
refer to the 2014 experience study report.
All other actuarial assumptions used in the June 30, 2017 valuation were based on the results of an actuarial experience study
dated January 2014 which was derived from data collected for the period from 1997 to 2011, including updates to salary
increase, mo rtality and retirement rates. The 2014 Experience Study report can be obtained at CalPERS’ website under Forms
and Publications.
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. Based on the testing, none of the tested plans
run out of assets. Therefore, the current 7.15 percent discount rate is adequate and the use of the municipal bond rate
calculation is not necessary. The long-term expected discount rate of 7.15 percent is applied to all plans in the Public
Employees Retirement Fund. 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 Statement No. 68 section.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which
best-estimate ranges of 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, staff took into account both short-term and long-term market return
expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and
employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the
funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-
term (11-60 years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the
present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent
expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and
long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and
rounded down to the nearest one quarter of one percent.
88
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital
market assumptions applied to determine the discount rate and asset allocation. The target allocation shown was adopted by the
CalPERS Board effective on July 1, 2016.
Asset Class
New Strategic
Allocation
Real Return
Years 1-10 [a]
Real Return
Years 11+ [b]
Global Equity 47.0%4.9%5.38%
Global Fixed Income 19.0%0.80%2.27%
Inflation Sensitive 6.0%0.60%1.39%
Private Equity 12.0%6.60%6.63%
Real Estate 11.0%2.80%5.21%
Infrastructure & Forestland 3.0%3.90%5.36%
Liquidity 2.0%(0.40%)(0.90%)
[a] An expected inflation of 2.5% used for this period.
[b] An expected inflation of 3.0% used for this period.
Changes in Net Pension Liability
The change in the Net Pension Liability recognized over the measurement period is as follows:
Increase (Decrease)
SAFETY POLICE PLAN
Total Pension
Liability
[1]
Plan Fiduciary
Net Position
[2]
Net Pension
Liability/(Asset)
[3]=[1] - [2]
Balance at June 30, 2016 [a]$437,981,244 $274,471,222 $163,510,022
Changes Recognized for the
Measurement Period:
- Service Cost 10,633,847 -10,633,847
- Interest on the Total
Pension Liability 32,733,299 -32,733,299
- Changes of Benefit Terms ---
- Differences between Expected
and Actual Experience (3,619,242)-(3,619,242)
- Changes in Assumptions 29,167,825 -29,167,825
- Plan to Plan Resource Movement ---
- Contributions - Employer -14,646,334 (14,646,334)
- Contributions -Employees -3,426,099 (3,426,099)
- Net Investment Income -30,690,940 (30,690,940)
- Benefit Payments Including
Refunds of Employee Contributions (22,076,716)(22,076,716)-
- Administrative Expenses -(405,238)405,238
Net Changes during 2016-17 46,839,013 26,281,419 20,557,594
Balance at June 30, 2017 [a]$484,820,257 $300,752,641 $184,067,616
[a] The fiduciary net position includes receivables for employee service buybacks, deficiency reserves, fiduciary self-insurance and OPEB expense. This may
be different from the plan assets reported in the funding actuarial valuation report.
89
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Sensitivity of the Net Pension Liability to Changes in the Discount Rate
SAFETY POLICE PLAN
Discount Rate - 1%
(6.15%)
Current Discount
Rate (7.15 %)
Discount Rate +
1%
(8.15%)
Plan Net Pension
Liability/(Asset)$255,773,253 $ 184,067,616 $126,031,637
Recognition of Gains and Losses
Under GASB Statement No. 68, gains and losses related to changes in total pension liability and fiduciary net position are
recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are
categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future
pension expense.
The amortization period differs depending on the source of the gain or loss. The difference between projected and actual
earnings is a five year straight-line amortization. All other amounts are amortized using straight-line amortization over the
average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the
beginning of the measurement period.
The expected average remaining service lifetime (EARSL) for the plan for the June 30, 2017 measurement date is 5.6 years,
which is obtained by dividing the total service years of 5,005 (the sum of remaining lifetimes of active employees) by 891 (the
total number of participants: active, inactive, and retired). Note that inactive employees and retirees have remaining service
lifetimes equal to 0. Also note that total future service is based on the members’ probability of decrementing due to an event
other than receiving a cash refund.
Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of the start of the measurement period (July 1, 2016), the net pension liability/(asset) is $163,510,022. For the measurement
period ending June 30, 2017 (the measurement date), the City incurred a pension expense/(income) of $24,723,191 for the plan.
Note that no adjustments have been made for contributions subsequent to the measurement date. Adequate treatment of any
contributions made after the measurement date is the responsibility of the employer.
As of June 30, 2018, the City had deferred outflows of resources related to pensions of $16,917,316 for contributions made
subsequent to the measurement date, $23,959,284 for changes of assumptions, $3,073,481 for differences between expected
and actual experiences and $3,849,691 for the net difference between projected and actual earnings on pension plan
investments. Deferred inflows of resources related to pensions were $3,367,966 for changes in assumptions and $2,972,950 for
differences between expected and actual experiences.
90
Notes to the Financial Statements
NOTE 16 -EMPLOYEE RETIREMENT BENEFITS (continued)
Amounts reported as deferred outflows and inflows of resources related to pensions will be recognized in future pension
revenue and expense amortized annually as follows:
Measurement Periods
Ended June 30:
Deferred Outflows/ (Inflows)
of Resources
2018 $3,799,017
2019 $8,523,068
2020 $6,499,872
2021 $2,982,235
2022 $2,737,348
Remaining $0
CITYWIDE PENSION PLAN TOTALS Miscellaneous
Plan
Safety Fire
Plan
Safety Police
Plan
Citywide
Total
Net Pension Liability $169,275,638 $84,166,157 $184,067,616 $437,509,411
Deferred Outflows of Resources
Contributions Made Subsequent to Measurement Date 16,345,282 7,504,238 16,917,316 40,766,836
Differences Between Expected and
Actual Experiences -577,065 3,073,481 3,650,546
Differences Between Projected and
Actual Earnings 5,209,586 2,892,687 3,849,691 11,951,964
Changes of Assumptions 22,222,935 13,120,822 23,959,284 59,303,041
Total Deferred Outflows of Resources $43,777,803 $24,094,812 $47,799,772 $115,672,387
Deferred Inflows of Resources
Differences Between Expected and
Actual Experience 7,143,587 2,842,034 -9,985,621
Differences Between Projected and
Actual Earnings --2,972,950 2,972,950
Changes of Assumptions 1,798,233 1,964,144 3,367,966 7,130,343
Total Deferred Inflows of Resources $8,941,820 $4,806,178 $6,340,916 $20,088,914
91
Notes to the Financial Statements
NOTE 17 -OTHER POST-EMPLOYMENT BENEFITS (OPEB)
Single Employer OPEB
Plan description: In addition to the employee retirement benefits described in Note 16, the City provides a single-employer
Post-Employment Retiree Medical Benefit Plan in accordance with a resolution approved by City Council. Two primary plans
exist. All employees with a retirement date prior to January 1, 1985 were eligible for benefits upon retirement. Post-1985
employees must retire with fifteen years accumulated service upon retirement to participate. The service requirement is waived
for safety employees who retire with a job-related disability.
Employees hired after the dates listed below will not participate in either of the retiree health subsidy programs mentioned:
Miscellaneous Employees February 22, 2006
Management and Supervisory March 22, 2006
Fire Safety May 5, 2006
Police Safety May 24, 2006
Benefits provided: For employees hired prior to the dates listed above, the City provides lifetime postretirement medical
benefits for eligible retirees and qualified dependents with a choice of three medical options: Blue Shield PPO, Kaiser High
Deductible Health Plan, and Kaiser Permanente HMO. Mental Health benefits are carved out and provided through Optum
Behavioral Health. After reaching eligibility for Medicare, retirees are offered a choice of Blue Shield PPO, Blue Shield
Medicare Advantage HMO or Kaiser Senior Advantage HMO. Retirees may also elect dental coverage but must self-pay the
premiums for such coverage. Vision coverage is not offered to retirees. Retiree rates are unblended from employee rates.
Employees covered by benefit terms: At June 30, 2018 the following employees were covered by the benefit terms:
Inactive employees or beneficiaries currently
receiving benefit payments 754
Active employees 594
1,348
Contributions. The City contributes 3% of the lowest single-party rate per year of service to a maximum of 90%. If the dollar
amount is greater than the premium for a retiree covered under one of the Medicare Advantage plans, the retiree receives a cash
reimbursement of the difference to a maximum of $42.50 per month. The City also contributes 42% of the Blue Shield PPO for
all retirees who elect the Blue Shield PPO plan, excluding Miscellaneous employees hired after April 1, 1996 and Safety
employees hired after April 1, 1998. The City has approximately 594 active employees who are eligible for the same level of
post-employment benefits and 754 retirees (and/or dependents) currently receiving benefits as of the actuarial dated June 30,
2018. There is not a separate, audited GAAP-basis pension report available for the Post-Employment Retiree Medical Benefit
Plan.
92
Notes to the Financial Statements
NOTE 17 -OTHER POST-EMPLOYMENT BENEFITS (OPEB) (continued)
Net OPEB Liability
The City's net OPEB liability was measured as of June 30, 2017, and the total OPEB liability used to calculate the net OPEB
liability was determined by an actuarial valuation as of that date.
Actuarial assumptions. The total OPEB liability in the June 30, 2017 actuarial valuation was determined using the following
actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified:
Inflation N/A
Salary increases
Ranges from 11.55% to 3.75% based on years of
service, including inflation
Investment rate of return
5.00%, net of OPEB Plan investment expense, including
inflation
Other Assumptions Same as those used in June 30, 2017 actuarial valuation
Healthcare cost trend rates
City "Years of Service" Formula: 7.00% graded to
4.50% over 10 years; Special 42% Contribution Non-
Medicare: 7.00% graded to 4.50% over 10 years;
Special 42% Contribution Medicare: 6.50% graded to
7.50% over 8 years
The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which
expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for
each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected
future real rates of return by the target asset allocation percentage, and by adding expected inflation and subtracting expected
investment expenses and a risk margin. The target allocation and projected arithmetic real rates of return, after deducting
inflation, but before deducting investment expenses, used in the derivation of the long-term expected rate of return assumption
are summarized in the following table:
Asset Class
Target
Allocation
Long-Term
(Arithmetic)
Expected Real
Rate of Return
Domestic Equity 22.00%6.40%
Developed International Equity 5.38 7.40
Emerging Markets Equity 2.02 9.80
Core Fixed Income 65.96 1.75
Real Estate 1.36 5.10
Short Term Money Market 3.45 1.10
Total 100
93
Notes to the Financial Statements
NOTE 17 -OTHER POST-EMPLOYMENT BENEFITS (OPEB) (continued)
Net OPEB Liability (continued)
Discount rate. The discount rate used to measure the total OPEB liability was 5.00% as of June 30, 2017 and 5.00% as of June
30, 2016. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be
made at the current contribution rate and that City contributions will be made at the rates equal to the actuarially determined
contribution rates. For this purpose, only City contributions that are intended to fund benefits of current plan members and their
beneficiaries are included. Projected City contributions that are intended to fund the service costs of future plan members and
their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions,
the OPEB plan's assets wa s projected to be sufficient to make all projected OPEB payments for current plan members.
Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit
payments to determine the total OPEB liability as of both June 30, 2017 and June 30, 2016.
Changes in the Net OPEB
Increase (Decrease)
Total OPEB
Liability
Plan Fiduciary
Net Position
Net OPEB
Liability
(a)(b)(a) - (b)
Beginning balances $146,958,802 $58,775,465 $88,183,337
Changes for the year::
Service cost 2,149,804 -2,149,804
Interest 7,329,180 -7,329,180
Differences between expected and actual experience (6,042,345)-(6,042,345)
Changes of assumptions and methods (5,330,662)-(5,330,662)
Employer contributions -5,050,000 (5,050,000)
Net investment income -3,011,528 (3,011,528)
Benefit payments (5,050,000)(5,050,000)-
Administrative expense -(180,556)180,556
Net changes (6,944,023)2,830,972 (9,774,995)
Ending balance $140,014,779 $61,606,437 $78,408,342
Sensitivity of the net OPEB liability to changes in the discount rate. The following presents the net OPEB liability of the City
as of June 30, 2017, calculated using the discount rate of 5.00%, as well as what the City's net OPEB liability would be if it
were calculated using a discount rate that is 1-percentage-point lower (4.0 percent) or 1-percentage point higher (6.0 percent)
than the current discount rate:
1% Decrease
(4.0%)
Discount Rate
(5.0%)
1% Increase
(6.0%)
Net OPEB liability (asset) as of June 30, 2017 $101,607,924 $78,408,343 $59,906,105
Sensitivity of the net OPEB liability to changes in the healthcare cost trend rates. The following presents the net OPEB liability
of the City as of June 30, 2017, calculated using the current healthcare cost trend rates as well as what the City's net OPEB
liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point
higher than the current healthcare cost trend rates:
1% Decrease*
Healthcare Cost
Trend Rates*1% Increase*
Net OPEB liability (asset) as of June 30, 2017 $59,226,573 $78,408,343 $102,519,787
94
Notes to the Financial Statements
NOTE 17 -OTHER POST-EMPLOYMENT BENEFITS (OPEB) (continued)
Changes in the Net OPEB (continued)
*Current trend rates: 7.00% graded to 4.50% over 10 year for City "Years of Service" Formula subsidy, 7.00% graded to
4.50% over 10 years for Special 42% Contribution Non-Medicare subsidy, and 6.50% graded to 4.50% over 8 years for Special
42% Contribution Medicare subsidy.
OPEB plan fiduciary net position. Detailed information about the OPEB plan's fiduciary net position is available in the
separately issued actuarial report.
OPEB Expense and Deferred of Resources and Deferred Inflows of Resources Related to OPEB
For the year ended June 30, 2018, the City recognized OPEB expense of $4,305,386. At June 30, 2018, the City reported
deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Governmental activities Business-type activities
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Changes of assumptions $-$3,715,770 $-$487,902
Net difference between
projected and actual
earnings on OPEB
plan investments -4,266,494 -560,215
City contributions
subsequent to the
measurement date 6,413,948 -1,113,500 -
Total $6,413,948 $7,982,264 $1,113,500 $1,048,117
The amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB are recognized in
OPEB expenses as follows:
Fiscal Year ended:
Governmental
activities
Amount
Business-type
activities
Amount
2019 $(2,139,028)$(280,867)
2020 (2,139,028)(280,867)
2021 (2,139,028)(280,867)
2022 (1,565,179)(205,517)
Thereafter $-$-
95
Notes to the Financial Statements
NOTE 18 -SPECIAL ASSESSMENT DISTRICTS
In addition to the Long-Term Obligations discussed in Note 11, the following Long-Term Obligations have been issued in the
name of Special Assessment Districts or Agencies of the City. Neither the City, nor its Agencies, are obligated in any manner
for the repayment of these obligations. The City acts as an agent to property owners for the collection and repayment of Special
Assessment Debt.
Outstanding at
June 30, 2018
Assessment District 98-1*(Brimhall IV/Stockdale Commercial/Gosford Industrial)$570,000
Assessment District 99-1*(Polo Greens/River Oaks)350,000
Assessment District 99-2*(Seven Oaks West)645,000
Assessment District 01-1*(Ming at Allen/Mountain Vista; Hampton Place)535,000
Assessment District 01-2*(Seven Oaks West II/Riverwalk/Southern Oaks)1,990,000
Assessment District 01-3*(Mountain Vista/San Lauren)1,430,000
Assessment District 02-1*(Avalon/Belsera/Montara/The Woods)560,000
Assessment District 03-1*(Brighton Place/Silver Creek II)1,095,000
Assessment District 03-2*(Buena Vista Ranch/Belsera II/Monstera II/Olive Park II)955,000
Assessment District 03-3*(Seven Oaks West III/Brighton Place)2,445,000
Assessment District 04-1**(Countryside/The Homestead)1,555,000
Assessment District 04-2**(BL/BV/ST@Allen Com)1,905,000
Assessment District 04-3**(Solera/Rio Vista)1,390,000
Assessment District 05-1 (City in the Hills)7,485,000
Assessment District 05-3**(Liberty II/Village Green/Tesoro/Encanto)3,460,000
Assessment District 06-1**(Etcheverry/Lin II/University Park)2,840,000
Assessment District 07-2 (Sydney Harbour)1,350,000
$30,560,000
*Note: These ten districts were refinanced into a consolidated district (12-01) with the California Statewide Communities Development Authority (CSCDA). The
City continues to account for the underlying obligation of each district to properly monitor the individual principal balances and various maturity dates.
**Note: These five districts were refinanced into a consolidated district (15-01). The City continues to account for the underlying obligation of each district to
properly monitor the individual principal balances and various maturity dates.
96
Notes to the Financial Statements
NOTE 19 -RISK MANAGEMENT
Self-Insurance
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions;
injuries to employees; and natural disasters. The City established a Self-Insurance Fund (an internal service fund) to account for
and finance its uninsured risks of loss. Under this program, the Self-Insurance Fund provides coverage for up to $500,000 for
each workers’ compensation claim and $1,000,000 for each liability claim. The City participates in a joint powers authority for
workers’ compensation claims in excess of coverage provided by the fund up to statutory limits and participates in a joint
powers authority for any excess liability claims. All funds of the City participate in the program and are charged for their share
of claim expenditures. The claims liability of $47,564,651 at June 30, 2018 is based on the requirements of GASB Statement
No. 10, which requires that a liability for claims be reported if information prior to the issuance of the financial statements
indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss
can be reasonably estimated. An estimate of incurred but not reported claims has been included in the liability based on the
various percentages of loss reserves.
Changes in the fund's claims liability over the last three fiscal years is shown below:
Liability
at Beginning
of Year
Current Year
Claims and
Changes in
Estimates
Claims
Payments
Liability
at End
of Year
2015-2016 $34,679,231 $15,022,472 $10,210,169 $39,491,534
2016-2017 39,491,534 15,750,392 10,617,534 44,624,392
2017-2018 44,624,392 14,674,483 11,734,224 47,564,651
Joint Powers Authority
The City has obtained excess liability coverage through the Authority for California Cities Excess Liability (ACCEL), a joint
powers authority of medium-size California municipalities. ACCEL pools catastrophic general liability, automobile liability
and public officials' errors and omissions losses, or purchases excess insurance, depending on market conditions. Each
member's share of pooled costs will depend on the catastrophic losses of all the members. In addition, the cost to a member city
will also depend on that member's own loss experience. Entities with a consistent record of costly claims will pay more than
entities with a consistent record of less serious claims activity.
In order to provide funds to pay claims, or purchase excess insurance, ACCEL collects a deposit from each member. The
deposits will be credited with investment income at the rate earned on ACCEL's investments. Based on information received
from ACCEL as of June 30, 2018, the City had $543,415 on deposit with ACCEL out of a total of approximately $6,723,862.
The following municipalities are also members of ACCEL: Palo Alto, Santa Barbara, Visalia, Modesto, Ontario, Santa
Monica, Anaheim, Santa Cruz, Mountain View, Burbank, Monterey, and Gardena. A representative from each member city,
appointed to the position by their respective city councils, serves on the Board of Directors (Board) of ACCEL. The Board is
responsible for deciding the risks ACCEL will underwrite, monitoring the costs of large claims and arranging financial
programs. Each member of the Board has an equal vote in matters concerning ACCEL.
As of June 30, 2018, ACCEL had no long-term debt. Included in total liabilities is an estimated retrospectively rated refund of
$17,816,017. Complete financial statements of ACCEL can be obtained at the City’s Finance Department at 1600 Truxtun
Avenue, Bakersfield, CA 93301.
97
Notes to the Financial Statements
NOTE 19 -RISK MANAGEMENT (continued)
A summary of the financial information for ACCEL at June 30, 2018 is as follows:
Total assets $50,376,318
Total liabilities 46,085,770
Total members' net position $4,290,548
Total revenues $15,347,092
Total expenses 12,348,328
Net change in members' net position $2,998,764
NOTE 20 -COMMITMENTS AND CONTINGENCIES
Several claims and suits have been filed against the City in the normal course of business. In the opinion of management and
the City Attorney, the potential liability of the City for such claims will not have a material adverse effect on the financial
statements of the City. Also, the City has certain commitments under long-term construction projects which will be funded out
of future revenues.
The entire capacity of the former sanitary landfill has been used. The State has required environmental closure and capping of
the City's former sanitary landfill and remediation of the adjacent burn dump. Although these two waste disposal areas are
adjacent to each other, the City completed the remediation of the burn dump separately, through the State's Expedited Remedial
Action Program, in 1998. The cost of remediation for the burn dump of $1.8 million was funded by the City's Refuse Service
Fund and was expensed in prior fiscal years. The landfill closure was completed in May 2013 at a cost of $4.8 million. The
City’s net share of this joint City/County project was approximately $3 million. Kern County reimbursed the City for the
remaining $1.8 million.
The City will be required to perform post-closure monitoring and maintenance of the landfill after it is closed and capped. This
will result in an ongoing annual cost of approximately $150,000. The City will be responsible for about $125,000 of these
annual charges because mo st of these costs will be for the landfill gas management system, which is the City's responsibility.
Kern County will be responsible for reimbursing the City for the remainder. City management anticipates all closure and post-
closure costs being covered by annual Refuse Service Fund revenues. These estimates of cost are subject to future adjustment
for inflation or deflation, technology, or applicable laws or regulations.
98
Notes to the Financial Statements
NOTE 21 -ENCUMBRANCES
Under encumbrance accounting, purchase orders, contracts and other commitments for the expenditure of monies are recorded
as encumbrances in order to reserve that portion of the applicable appropriation. Encumbrances outstanding as of June 30, 2018
consisted of the following:
Governmental Funds:
Major Funds:
General Fund $945,602
Transient Occupancy Taxes Fund 7,078
Community Development Block Grant Fund 757,372
Gas Tax & Road Fund 47,799,752
Capital Outlay Fund 7,055,562
Park Improvement Fund 2,692,001
Transportation Development Fund 9,535,095
Non-Major Funds:
High Speed Rail Fund -
State (TDA) Transportation Fund 464,560
State Safety Fund 226,284
Proprietary Funds:
Major Funds:
Wastewater Treatment Fund 5,332,263
Refuse Collection Fund 8,441
Agriculture Water Fund 332,103
Domestic Water Fund 17,234,376
General Aviation Fund 11,136
Offstreet Parking Fund 6,730
Internal Service Funds:
Self-Insurance Fund 465,474
Equipment Management Fund 6,171,089
Fiduciary Funds:
Private Purpose Trust Funds:
Redevelopment Successor Agency Fund -
$99,044,917
99
Notes to the Financial Statements
NOTE 22 -CONDUIT DEBT OBLIGATIONS
The City has been associated with the issuance of various health care, residential care, mortgage, commercial and industrial
development debt issues. These debt obligations were issued under provisions of State and Federal laws that explicitly state
that they do not constitute any indebtedness of the City. The City’s sole involvement with these bonds was their issuance under
the City’s name or the City Council’s authorization. As such, the following conduit debt obligations are not reflected in the
accompanying basic financial statements:
Authorized and
Issued
Current Outstanding at
June 30, 2018
City of Bakersfield - Cottonwood Village Housing Bond,
Series 2004 $5,000,000 $5,000,000
City of Bakersfield - Cottonwood Court Housing Bond,
Series 2004 1,950,000 1,950,000
City of Bakersfield - St. John Manor Housing Bond,
Series 2006 3,867,794 2,773,002
City of Bakersfield - Coventry Apartments Housing Bond,
Series 2007M 5,300,000 3,512,215
City of Bakersfield - Catholic Healthcare West 501(c)(3)
Nonprofit Bond, Series A thru L 676,250,000 240,000,000
City of Bakersfield - Descanso Place Housing Bond,
Series TT 13,000,000 1,400,000
City of Bakersfield - Bakersfield Family Apartments Housing
Bond, Series 2008R 10,971,000 1,097,152
City of Bakersfield - Camellia Place Housing Bond,
Series 2009R 619,138 619,118
City of Bakersfield - Eucalyptus Village I Housing Bond,
Series 2012-E1 1,295,000 1,295,000
City of Bakersfield - Eucalyptus Village II Housing Bond,
Series 2012-E2 4,275,000 4,275,000
City of Bakersfield - American Baptist Homes of The West
501(c)(3) Nonprofit Bond, Series 2015 52,080,000 52,080,000
TOTAL $314,001,487
100
Notes to the Financial Statements
NOTE 23 - PRIOR PERIOD ADJUSTMENTS
During the fiscal year ended June 30, 2018, the City made the following prior period adjustments to restate the net position for
governmental activities and related fund balance for: 1) Net Position for Governmental Activities was adjusted after review of
capital assets by City departments, 2) Net Position for Governmental and Business-Type Activities were adjusted to reflect the
prior period costs related to the implementation of GASB Statement No. 75 Accounting and Financial Reporting for
Postemployment Benefits Other Than Pensions, 3) Correction of Fund Balance in Transient Occupancy Fund for expenses
incurred by the prior arena management company that were not recorded and carried over from previous years, and 4)
Correction of fund balance in Transportation Development Fund to adjust prior year expenses that were determined to be
allowable using federal funding. See corresponding changes in statements on p. 22, p.30, and p. 36.
Net Position Accounts
Activity
July 1, 2017
as previously
reported Adjustment
July 1, 2017,
as
restated
Net Position - Governmental Activities $1,217,257,293$(74,056,696)$1,143,200,597
Net Position - Business-Type Activities
Wastewater Treatment Fund$522,430,967$(2,316,043)$520,114,924
Refuse Collection Fund$5,724,307$(6,253,316)$(529,009)
Agricultural Water Fund $22,866,640$(1,447,527)$21,419,113
Domestic Water Fund $211,735,081$(289,505)$211,445,576
Equipment Fund $57,676,887$(2,779,252)$54,897,635
Self-Insurance Fund $(15,738,378)$(173,703)$(15,912,081)
Fund Balance Accounts
July 1, 2017
as previously
reported Adjustment
July 1, 2017,
as
restated
Transient Occupancy Taxes Fund $2,336,386$(423,097)$1,913,289
Transportation Development Fund $47,450,417$1,181,396$48,631,813
NOTE 24 -EXTRAORDINARY ITEM
Litigation Settlement
In December 2017, monetary damages in the amount of $54,231,181 were awarded to the City of Bakersfield in connection
with litigation proceedings initiated by the City and California Water Service Company against Dow Chemical Co. and Shell
Oil Company for contamination of water wells within the City's domestic water service area. In February 2018, the proceeds of
this settlement were used to defease the 2017 Domestic Water Revenue Bonds Series 2017A in the amount of $23,075,000 that
had been issued to cover the cost of remediation of the contaminated wells. The remaining amount of the settlement will be
used for the continued operation and maintenance of the affected wells.
101
102
CITY OF BAKERSFIELD
Required Supplementary Information
BUDGETARY INFORMATION
Through the budget process, the City Council sets the direction of the City, allocates its resources and establishes its priorities.
The Annual Budget assures the efficient and effective use of the City's economic resources, as well as establishing that the
highest priority objectives are accomplished. Budgets are adopted for all governmental fund types and are prepared on a basis
consistent with accounting principles generally accepted in the United States of America.
The Annual Budget serves from July 1 to June 30, and is a vehicle that accurately and openly communicates these priorities to
the community, businesses, vendors, employees and other public agencies. Additionally, it establishes the foundation of
effective financial planning by providing resource planning, performance measures and controls that permit the evaluation and
adjustment of the City's performance.
The City's budget is prepared and based on four expenditure categories: personnel, supplies and services, minor capital outlay
and capital improvement programs. The first three listed are considered operational in nature and known as recurring costs.
Capital improvement projects are asset acquisitions, facilities systems, and infrastructure improvements typically over $50,000,
and/or those items "outside" of the normal operational budget. These are known as one-time costs.
The City collects and records revenue and expenditures within the following categories:
Governmental Activities
Business-Type Activities
The Governmental Funds include the General Fund, Special Revenue, Debt Service and Capital Projects funds. All funding
sources are kept separate for both reporting and use of the money. The General Fund is where most City services are funded
that are not required to be segregated.
The budget process begins as a team effort in January of each year, starting with an annual strategic planning meeting. Then the
individual departments use projected revenue assumptions to prioritize and recommend the next fiscal year's objectives. The
City Manager's Office and the Finance Department review all budget proposals and revenues assumptions, as well as all current
financial obligations before preparing the document that is proposed to the City Council. The City Council reviews the
Proposed Budget through a series of workshops, and the final adoption of the budget is normally scheduled for the second City
Council meeting each June.
At the beginning of each fiscal year, certain appropriations are "carried forward" from the prior budget year. These items
generally relate to either open encumbrances that exist at June 30, or capital projects that were budgeted in the prior fiscal year
that did not progress to the encumbrance stage as of June 30. The City Manager's Office approves all carryovers that are not
encumbered as of June 30 of each year.
The amounts carried forward from fiscal year ended June 30, 2017 to fiscal year ended June 30, 2018 totaled $352,596,396.
103
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
BUDGETARY INFORMATION (continued)
These following schedules represent budgetary comparisons for the General Fund and all major special revenue funds within
the City.
Budgetary Comparison Schedule, General Fund
For the Fiscal Year Ended June 30, 2018
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Fund Balance, July 1 $39,244,188 $39,244,188 $39,244,188 $-
Revenues:
Taxes 152,341,600 152,341,600 162,701,286 10,359,686
Licenses and permits 3,181,560 3,181,560 2,928,031 (253,529)
Intergovernmental 1,507,190 6,360,788 4,385,389 (1,975,399)
Charges for services 22,758,095 22,758,095 24,787,096 2,029,001
Fines, forfeitures and assessments 796,000 796,000 667,440 (128,560)
Interest income 202,500 202,500 938,990 736,490
Contributions and donations 45,000 216,269 110,386 (105,883)
Other 963,055 1,013,055 1,574,230 561,175
Transfers from other funds 550,000 550,000 550,000 -
Amount available for appropriation $182,345,000 $187,419,867 $198,642,848 $11,222,981
Expenditures:
General government $13,343,826 $13,405,641 $12,553,412 $852,229
Public safety - Police 87,681,092 90,350,132 87,424,862 2,925,270
Public safety - Fire 37,531,526 39,644,052 38,021,932 1,622,120
Public works 26,401,419 26,703,981 24,658,307 2,045,674
Recreation and parks 19,030,677 19,839,238 20,195,330 (356,092)
Development services 7,530,437 8,086,023 7,074,648 1,011,375
Non-departmental 9,855,146 9,927,546 8,291,680 1,635,866
Contingency 25,000 15,000 -15,000
Transfers to other funds 45,877 168,377 168,377 -
Total charges to appropriations 201,445,000 208,139,990 198,388,548 9,751,442
Amount of resources over (under)
charges to appropriations (19,100,000)(20,720,123)254,300 20,974,423
Fund balance, June 30 $20,144,188 $18,524,065 $39,498,488 $20,974,423
104
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
BUDGETARY INFORMATION (continued)
Budgetary Comparison Schedule, Transient Occupancy Taxes Fund
For the Fiscal Year Ended June 30, 2018
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Fund Balance, July 1 - as restated $1,913,289 $1,913,289 $1,913,289 $-
Revenues:
Taxes 9,000,000 9,000,000 9,570,855 570,855
Charges for services 7,130,000 7,130,000 7,496,900 366,900
Interest income 20,000 20,000 43,161 23,161
Contributions and donations 1,200,000 1,200,000 1,206,786 6,786
Other income --353,468 353,468
Amount available for appropriation $17,350,000 $17,350,000 $18,671,170 $1,321,170
Expenditures:
General government $8,348,589 $8,482,313 $9,041,424 $(559,111)
Non-departmental 3,132,400 3,132,400 3,132,400 -
Transfers to other funds 6,547,980 6,547,980 6,547,980 -
Total charges to appropriations 18,028,969 18,162,693 18,721,804 (559,111)
Amount of resources over (under)
charges to appropriations (678,969)(812,693)(50,634)762,059
Fund balance, June 30 $1,234,320 $1,100,596 $1,862,655 $762,059
Budgetary Comparison Schedule, Community Development Block Grant Fund
For the Fiscal Year Ended June 30, 2018
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Fund Balance, July 1 $392,190 $392,190 $392,190 $-
Revenues:
Intergovernmental 5,012,729 9,083,905 3,127,264 (5,956,641)
Interest income --235 235
Loan payments 205,868 205,868 213,804 7,936
Other income --91,185 91,185
Amount available for appropriation $5,218,597 $9,289,773 $3,432,488 $(5,857,285)
Expenditures:
Community development $2,969,540 $5,328,308 $1,907,534 $3,420,774
Capital outlay 1,755,690 2,530,053 887,725 1,642,328
Transfers to other funds 500,324 500,324 500,324 -
Total charges to appropriations 5,225,554 8,358,685 3,295,583 5,063,102
Amount of resources over (under)
charges to appropriations (6,957)931,088 136,905 (794,183)
Fund balance, June 30 $385,233 $1,323,278 $529,095 $(794,183)
105
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
BUDGETARY INFORMATION (continued)
Budgetary Comparison Schedule, Gas Tax & Road Fund
For the Fiscal Year Ended June 30, 2018
Budgeted Amounts Actual Variance with
Original Final Amounts Final Budget
Fund Balance, July 1 $15,954,740 $15,954,740 $15,954,740 $-
Revenues:
Intergovernmental 33,474,296 228,176,632 81,940,188 (146,236,444)
Fines, forfeitures and assessments 15,000 15,000 74,046 59,046
Interest income 50,000 50,000 148,727 98,727
Other income --307 307
Amount available for appropriation $33,539,296 $228,241,632 $82,163,268 $(146,078,364)
Expenditures:
Public works $-$-$25,951 $(25,951)
Capital outlay 33,552,261 244,196,372 82,904,215 161,292,157
Total charges to appropriations 33,552,261 244,196,372 82,930,166 161,266,206
Amount of resources over (under)
charges to appropriations (12,965)(15,954,740)(766,898)15,187,842
Fund balance, June 30 $15,941,775 $-$15,187,842 $15,187,842
106
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
DEFINED PENSION PLAN
The Schedules of Changes in Net Pension Liability and related ratios as of the Measurement Period ending June 30, 2017 are
below:
MISCELLANEOUS PLAN [a]
Measurement Period 2017 2016 2015 2014
Total Pension Liability
Service Costs $10,121,201 $9,229,271 $9,371,317 $9,394,857
Interest on Total Pension Liability 37,355,571 36,457,017 34,880,653 33,174,032
Changes of Benefit Terms ----
Changes in Assumptions 31,112,110 -(8,541,600)-
Difference Between Expected and Actual
Experience (8,386,592)(2,271,125)(682,929)-
Benefit Payments [b](23,977,515)(21,951,615)(20,655,868)(18,737,652)
Net Change in Total Pension Liability $46,224,775 $21,463,548 $14,371,573 $23,831,237
Total Pension Liability - Beginning 506,658,167 485,194,619 470,823,046 446,991,809
Total Pension Liability - Ending [1]$552,882,942 $506,658,167 $485,194,619 $470,823,046
Plan Fiduciary Net Position
Contributions - Employer 11,107,872 10,734,470 10,017,697 9,220,181
Contributions - Employee 4,188,806 4,400,305 4,653,169 4,566,671
Net Investment Income 39,138,504 1,891,631 7,966,951 53,513,763
Other Miscellaneous Income ----
Benefit Payments [b](23,977,515)(21,951,615)(20,655,868)(18,737,652)
Plan to Resource Movement -(40,308)--
Administrative Expense (522,173)(218,704)(403,815)-
Net Change in Plan Fiduciary Net Position $29,935,494 $(5,184,221)$1,578,134 $48,562,963
Plan Fiduciary Net Position - Beginning $353,671,812 $358,856,033 $357,277,899 $308,714,936
Plan Fiduciary Net Position - Ending [2]383,607,306 353,671,812 358,856,033 357,277,899
Plan Net Pension Liability / (Asset) - [1]-[2]$169,275,636 $152,986,355 $126,338,586 $113,545,147
Plan Fiduciary Net Position as a Percentage
of Covered Employee Payroll %69.38 %69.80 %73.96 %75.88
Covered Employee Payroll 56,388,660 56,837,487 57,065,633 53,054,308
Plan Net Pension Liability / (Asset) as a
Percentage
of Covered Employee Payroll %300.19 %269.16 %221.39 %214.02
Schedules of Plan Contributions
Fiscal Year End 2018 2017 2016 2015 2014
Actuarially Determined Contribution [c]$11,028,673 $11,107,872 $10,734,470 $10,017,697 $9,220,181
Contributions in Relation to the Actuarially
Determined Contribution [c]$(11,028,673)$(11,107,872)$(10,734,470)$(10,017,697)$(9,220,181)
Contribution Deficiency (Excess)$0 $0 $0 $0 $0
Covered Employee Payroll [d]56,621,447 56,388,660 56,837,487 57,065,623 53,054,308
Contributions as a Percentage of Covered Employee
Payroll %19.48 %19.70 %18.89 %17.55 %17.38
[a] Historical information is required only for measurement periods for which GASB Statement No. 68 is applicable. These schedules are presented to illustrate the requirement to show
that information.
[b] Includes refunds of employee contributions.
[c] Employers are assumed to make contributions equal to the actuarially determined contribution. However, some employers may choose to make additional contributions towards their
unfunded liability. Employer contributions for such plans exceed the actuarially determined contribution.
[d] Payroll from prior year was assumed to increase by the 3.00 percent payroll growth assumption.
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2015 valuation date. This applies for
voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an
adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported
were based on the 7.5 percent discount rate.
107
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
DEFINED PENSION PLAN (continued)
SAFETY FIRE PLAN [a]
Measurement Period 2017 2016 2015 2014
Total Pension Liability
Service Costs $4,691,377 $3,982,592 $4,038,459 $4,022,753
Interest on Total Pension Liability 19,273,519 18,906,125 18,125,192 17,409,125
Changes of Benefit Terms ----
Changes in Assumptions 16,102,827 -(4,419,326)-
Difference Between Expected and Actual
Experience (3,292,736)880,783 (357,892)-
Benefit Payments [b](13,914,493)(13,350,272)(12,266,190)(11,440,930)
Net Change in Total Pension Liability $22,860,494 $10,419,228 $5,120,243 $9,990,948
Total Pension Liability - Beginning 261,361,174 250,941,946 245,821,703 235,830,755
Total Pension Liability - Ending [1]$284,221,668 $261,361,174 $250,941,946 $245,821,703
Plan Fiduciary Net Position
Contributions - Employer 5,766,115 5,299,399 4,717,136 4,243,095
Contributions - Employee 1,585,475 1,575,291 1,496,855 1,485,484
Net Investment Income 20,512,738 920,604 4,369,856 29,300,590
Other Miscellaneous Income ----
Benefit Payments [b](13,914,493)(13,350,272)(12,266,190)(11,440,930)
Plan to Resource Movement --(13)-
Administrative Expense (275,179)(117,046)(216,134)-
Net Change in Plan Fiduciary Net Position $13,674,656 $(5,672,024)$(1,898,490)$23,588,239
Plan Fiduciary Net Position - Beginning $186,380,856 $192,052,880 $193,951,370 $170,363,131
Plan Fiduciary Net Position - Ending [2]200,055,512 186,380,856 192,052,880 193,951,370
Plan Net Pension Liability / (Asset) - [1]-[2]$84,166,156 $74,980,318 $58,889,066 $51,870,333
Plan Fiduciary Net Position as a Percentage
of Covered Employee Payroll %70.39 %71.31 %76.53 %78.90
Covered Employee Payroll 17,071,347 16,365,695 16,338,791 15,554,085
Plan Net Pension Liability / (Asset) as a
Percentage
of Covered Employee Payroll %493.03 %458.16 %360.42 %333.48
Schedules of Plan Contributions
Fiscal Year End 2018 2017 2016 2015 2014
Actuarially Determined Contribution [c]$5,732,613 $5,766,115 $5,299,399 $4,717,136 $4,243,095
Contributions in Relation to the Actuarially
Determined Contribution [c]$(5,732,613)$(5,766,115)$(5,299,399)$(4,717,136)$(4,243,095)
Contribution Deficiency (Excess)$0 $0 $0 $0 $0
Covered Employee Payroll [d]17,572,659 17,071,347 16,365,695 16,338,791 15,554,085
Contributions as a Percentage of Covered Employee
Payroll %32.62 %33.78 %32.38 %28.87 %27.28
[a] Historical information is required only for measurement periods for which GASB Statement No. 68 is applicable. These schedules are presented to illustrate the requirement to show
that information.
[b] Includes refunds of employee contributions.
[c] Employers are assumed to make contributions equal to the actuarially determined contribution. However, some employers may choose to make additional contributions towards their
unfunded liability. Employer contributions for such plans exceed the actuarially determined contribution.
[d] Payroll from prior year was assumed to increase by the 3.00 percent payroll growth assumption.
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2015 valuation date. This applies for
voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an
adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported
were based on the 7.5 percent discount rate.
108
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
DEFINED PENSION PLAN (continued)
SAFETY POLICE PLAN [a]
Measurement Period 2017 2016 2015 2014
Total Pension Liability
Service Costs $10,633,847 $9,484,234 $8,534,322 $8,823,744
Interest on Total Pension Liability 32,733,299 31,506,218 29,736,286 28,279,962
Changes of Benefit Terms ----
Changes in Assumptions 29,167,825 -(7,760,962)-
Difference Between Expected and Actual
Experience (3,619,242)4,042,528 872,107 -
Benefit Payments [b](22,076,716)(20,226,151)(19,077,307)(17,776,028)
Net Change in Total Pension Liability $46,839,013 $24,806,829 $12,304,446 $19,327,678
Total Pension Liability - Beginning 437,981,244 413,174,415 400,869,969 381,542,291
Total Pension Liability - Ending [1]$484,820,257 $437,981,244 $413,174,415 $400,869,969
Plan Fiduciary Net Position
Contributions - Employer 14,646,334 13,792,487 12,287,267 10,750,572
Contributions - Employee 3,426,099 3,794,305 3,238,371 2,920,326
Net Investment Income 30,690,942 1,419,472 6,082,288 41,170,702
Other Miscellaneous Income ----
Benefit Payments [b](22,076,716)(20,226,151)(19,077,307)(17,776,028)
Plan to Resource Movement -40,308 --
Administrative Expense (405,238)(168,097)(313,848)-
Net Change in Plan Fiduciary Net Position $26,281,421 $(1,347,676)$2,216,771 $37,065,572
Plan Fiduciary Net Position - Beginning $274,471,222 $275,818,898 $273,602,127 $236,536,555
Plan Fiduciary Net Position - Ending [2]300,752,643 274,471,222 275,818,898 273,602,127
Plan Net Pension Liability / (Asset) - [1]-[2]$184,067,614 $163,510,022 $137,355,517 $127,267,842
Plan Fiduciary Net Position as a Percentage
of Covered Employee Payroll %62.00 %62.67 %66.76 %68.25
Covered Employee Payroll 35,225,410 35,046,314 30,842,116 30,496,107
Plan Net Pension Liability / (Asset) as a
Percentage
of Covered Employee Payroll %522.54 %466.55 %445.35 %417.32
Schedules of Plan Contributions
Fiscal Year End 2018 2017 2016 2015 2014
Actuarially Determined Contribution [c]$12,694,273 $14,646,334 $13,792,487 $12,287,267 $10,750,572
Contributions in Relation to the Actuarially
Determined Contribution [c]$(12,694,273)$(14,646,334)$(13,792,487)$(12,287,267)$(10,750,572)
Contribution Deficiency (Excess)$0 $0 $0 $0 $0
Covered Employee Payroll [d]37,266,749 35,255,410 35,046,314 30,842,116 30,496,107
Contributions as a Percentage of Covered Employee
Payroll %34.06 %41.54 %39.36 %39.84 %35.25
[a] Historical information is required only for measurement periods for which GASB Statement No. 68 is applicable. These schedules are presented to illustrate the requirement to show
that information.
[b] Includes refunds of employee contributions.
[c] Employers are assumed to make contributions equal to the actuarially determined contribution. However, some employers may choose to make additional contributions towards their
unfunded liability. Employer contributions for such plans exceed the actuarially determined contribution.
[d] Payroll from prior year was assumed to increase by the 3.00 percent payroll growth assumption.
Notes to Schedule of Changes in Net Pension Liability and Related Ratios:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2015 valuation date. This applies for
voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: In 2017, the accounting discount rate reduced from 7.65 percent to 7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an
adjustment of the discount rate from 7.5 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported
were based on the 7.5 percent discount rate.
109
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
OTHER POST-EMPLOYMENT BENEFITS (OPEB) PLAN - SCHEDULE OF CHANGES IN THE CITY'S NET
OPEB LIABILITY AND RELATED RATIOS
Total OPEB liability 2018
Service Cost $2,149,804
Interest 7,329,180
Difference between expected and actual experience (6,042,345)
Changes of assumptions and methods (5,330,662)
Benefit payments (5,050,000)
Net Change in Total OPEB Liability (6,944,023)
Total OPEB Liability - beginning 146,958,802
Total OPEB Liability - ending (a)140,014,779
Plan Fiduciary Net Position
Contributions - employer 5,050,000
Net investment income 3,011,528
Benefit payments (5,050,000)
Administrative expense (180,556)
Net change in Plan Fiduciary Net Position 2,830,972
Plan Fiduciary Net Position - beginning 58,775,464
Plan Fiduciary Net Position - ending (b)61,606,436
Plan's Net OPEB Liability - ending (a)-(b)78,408,343
Plan Fiduciary Net Position as a percentage of the Total OPEB Liability 44.00%
Covered employee payroll $44,930,761
Plan Net OPEB Liability as percentage of covered employee payroll 174.51%
110
CITY OF BAKERSFIELD
Required Supplementary Information (continued)
SCHEDULE OF OPEB CONTRIBUTIONS
Last Ten Fiscal Years
Year Ended
June 30
Actuarially
Determined
Contributions in
Relation
Contribution
Deficiency Covered
Contributions
As a Percentage
of Covered
Date Contributions (ADC)To ADC (Excess)Payroll Payroll
2017 7,530,031 5,050,000 2,480,031 44,930,761 11.24%
Notes to the Schedule of OPEB Contributions
Methods and assumptions used to establish "actuarially determined
contribution" (ADC) rates:
Valuation date
ADC rates are calculated as of June 30,
two years prior to the end of the fiscal
year in which contributions are
reported
Actuarial cost method Projected Unit Credit
Amortization method 30-year closed, level dollar payment
Remaining amortization period 20 years as of June 30, 2017
Asset valuation method Market value
Actuarial assumptions:
June 30, 2015 (for the year ended June
30, 2017)
Investment rate of return 5.75%
Inflation rate N/A
Projected salary increases
Ranges from 11.55% to 3.75% based
on years of service
Other assumptions
Same as those used in the June 30,
2015 funding actuarial valuation
111
112
Supplementary Information
Contents Pages(s)
General Fund
Balance Sheet 116
Schedule of Revenues by Function 117
Schedule of Expenditures by Division 118
Special Revenue Funds
Combining Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual 120
Debt Service Fund
Schedule of Revenues, Expenditures, and Changes in
Fund Balance - Budget and Actual 126
Capital Projects Funds
Combining Schedule of Revenues, Expenditures, and Changes in
Fund Balances - Budget and Actual 128
Internal Service Funds
Combining Statement of Net Position 131
Combining Statement of Activities and Changes in Net Position 132
Combining Statement of Cash Flows 133
Fiduciary Funds
Statement of Changes in Assets and Liabilities - Fiduciary Funds (Agency)134
Combining Statements of Fiduciary Net Position 135
Combining Statements of Changes in Fiduciary Net Position 137
Non-Major Governmental Funds
Combining Balance Sheet 140
Combining Statement of Revenues, Expenditures, and Changes in
Fund Balances 142
Redevelopment Successor Agency Long-term Debt 144
113
114
General Fund
This fund was established to account for the revenues and expenditures to carry out basic governmental activities of the City of
Bakersfield such as general government, public safety, public works and community services.
Revenues are recorded by source, i.e., taxes, licenses and permits, etc. Expenditures are made primarily on current day-to-day
operations and are recorded by major functional classifications and by operating departments.
This fund accounts for all financial transactions not accounted for in another fund.
115
CITY OF BAKERSFIELD
Balance Sheet
General Fund
June 30, 2018
General Fund
Assets:
Cash and investments $28,189,169
Accounts receivable, net 1,117,928
Interest receivable 125,338
Due from other governmental agencies 14,223,087
Due from other funds 6,495,939
Prepaid items 16,876
Total assets $50,168,337
Liabilities, Deferred Inflows of Resources and Fund Balance:
Liabilities:
Accounts payable $4,859,631
Due to other governmental agencies 569,298
Advances from grantors and third parties 1,992,091
Total liabilities 7,421,020
Deferred Inflows of Resources:
Deferred revenue 3,248,829
Fund Balance:
Nonspendable 1,025
Committed
Cash basis reserve 13,104,726
Contractual obligations 550,737
Appropriations for new year budget 15,850,000
Assigned
Petty cash 27,170
Non-contractual encumbrances 394,865
Compensated absences 2,492,809
Unassigned 7,077,156
Total fund balance 39,498,488
Total liabilities, deferred inflows of resources and fund balance $50,168,337
116
CITY OF BAKERSFIELD
Schedule of Revenues by Function - General Fund
Budget and Actual
For the Fiscal Year Ended June 30, 2018
Budget Actual
Variance with
Final Budget
Revenues:
Taxes:
Property taxes $77,483,500 $79,525,902 $2,042,402
Sales and use taxes 63,708,100 72,322,068 8,613,968
Property transfer tax 900,000 1,308,842 408,842
Utility franchise tax 6,150,000 5,717,956 (432,044)
Business license tax 4,100,000 3,826,518 (273,482)
Total taxes 152,341,600 162,701,286 10,359,686
Licenses and permits:
Building permits 1,854,000 1,704,714 (149,286)
Planning permits 101,480 67,545 (33,935)
Public works permits 613,500 675,725 62,225
Police permits 411,450 296,852 (114,598)
Other licenses and permits 201,130 183,195 (17,935)
Total licenses and permits 3,181,560 2,928,031 (253,529)
Intergovernmental:
Federal grants 3,192,520 1,770,122 (1,422,398)
State of California 2,444,073 2,283,694 (160,379)
Other grants 724,195 331,573 (392,622)
Total intergovernmental 6,360,788 4,385,389 (1,975,399)
Charges for services:
Building 3,381,500 3,161,567 (219,933)
Planning 435,755 418,575 (17,180)
Public works 810,600 1,761,900 951,300
Police 716,040 816,001 99,961
Fire 5,800,000 5,825,157 25,157
Recreation and parks 807,200 952,768 145,568
Interfund charges 10,640,000 11,579,402 939,402
Other charges 167,000 271,726 104,726
Total charges for services 22,758,095 24,787,096 2,029,001
Fines, forfeitures, and assessments 796,000 667,440 (128,560)
Miscellaneous:
Interest income 202,500 1,233,749 1,031,249
Net increase (decrease) in the fair value of investments -(294,759)(294,759)
Contributions and donations 216,269 110,386 (105,883)
Other income 1,013,055 1,574,230 561,175
Total miscellaneous 1,431,824 2,623,606 1,191,782
Total revenues $186,869,867 $198,092,848 $11,222,981
117
CITY OF BAKERSFIELD
Schedule of Expenditures by Division - General Fund
Budget and Actual
For the Fiscal Year Ended June 30, 2018
Budget Actual
Variance with
Final Budget
General Government:
Mayor & City council $419,171 $374,313 $44,858
City manager 1,119,314 1,044,506 74,808
City clerk 832,960 746,365 86,595
Human resources 1,285,606 1,240,882 44,724
Information technology 4,749,849 4,480,404 269,445
Financial services 2,968,614 2,920,512 48,102
City attorney 2,030,127 1,746,430 283,697
Total general government 13,405,641 12,553,412 852,229
Public Safety:
Public safety - Police 90,350,132 87,424,862 2,925,270
Public safety - Fire 39,644,052 38,021,932 1,622,120
Total public safety 129,994,184 125,446,794 4,547,390
Public Works:
Administration 520,677 512,027 8,650
Engineering 5,654,392 5,388,222 266,170
General services 12,402,861 12,008,944 393,917
Streets and roads 8,126,051 6,749,114 1,376,937
Total public works 26,703,981 24,658,307 2,045,674
Recreation and Parks:
Administration 1,084,937 1,099,087 (14,150)
Recreation 2,969,248 2,859,494 109,754
Parks 15,785,053 16,236,749 (451,696)
Total recreation and parks 19,839,238 20,195,330 (356,092)
Development Services:
Planning 2,423,023 1,800,248 622,775
Building 5,663,000 5,274,400 388,600
Total development services 8,086,023 7,074,648 1,011,375
Non-departmental 9,927,546 8,291,680 1,635,866
Contingency 15,000 -15,000
Total General Fund Expenditures $207,971,613 $198,220,171 $9,751,442
118
Special Revenue Funds
These funds account for the proceeds of specific revenue sources that are legally restricted to expenditures for specific
purposes.
Transient Occupancy Taxes Fund is used to account for Transient Occupancy Tax Revenues (Hotel Tax) and expenditures
funded by this revenue source. The Rabobank Arena and Convention Center and Bakersfield Ice Sports Center operating
revenues and expenditures are recorded in this fund. This fund is also used to account for duties performed by Visit Bakersfield.
Community Development Block Grant Fund is used to account for resources provided by the Federal Housing and
Community Development Act of 1974 for the elimination of slums and blight, housing conservation and improvements of
community services.
Neighborhood Stabilization Fund is used to account for resources provided by the Federal Housing and Economic Recovery
Act of 2008 to address congressionally identified needs of abandoned and foreclosed homes in the City. These funds are used
for down payment assistance, acquisition of Real Estate Owned (REO) lender assets properties that have been foreclosed upon
for redevelopment, rehabilitation of acquired residential structures, and demolition of blighted structures.
High Speed Rail Fund is used to account for resources provided by the California High Speed Rail Authority to enable the
City to develop a Station Area Plan. These plans are intended to address planning, infrastructure, and economic development
issues related to the selection of a high speed rail station in Bakersfield which will allow the City to take advantage of the
benefits of this statewide transportation system once it is completed.
Gas Tax & Road Fund is used to account for the City's share, based upon population, of state gasoline taxes. State law
requires these gasoline taxes be used to maintain streets or for major street construction. This fund also accounts for the
resources provided by the Moving Ahead for Progress in the 21st Century Act (MAP21). Congestion Mitigation and Air
Quality (CMAQ) funds are used in the metropolitan Bakersfield area to fund transportation projects in the Transportation
Improvement Program. The Regional Surface Transportation Program (STP) is funded by Federal aid functionally classified
higher than local road or rural minor collector routes. The Transportation Enhancement Activities (TEA) Program projects have
a direct relationship to the intermodal transportation system by function, proximity, or impact. Lastly, the Highway Bridge
Replacement and Rehabilitation Program (HBRR) allows each local agency two bridge replacement projects and two
miscellaneous projects per year.
State (TDA) Transportation Fund is used to account for three Transportation Development Act (TDA) funding sources.
Article 3 funds must be used to construct facilities that specifically benefit pedestrians and/or bicyclists. Article 4 funds are
Local Transportation and State Transit Assistance Funds. These resources are used to cover the City's maintenance and
operation costs of the Bakersfield Amtrak Railway Station. The City is the owner of the station and leases the facility to
Amtrak, who operates the transit service. Article 4 funds may also be used for various improvements at bus stops throughout the
City. Article 8 funds represent the City's allocation of the 1/4% of sales tax authorized by Senate Bill (SB) 325. State law
requires these sales tax dollars be used for street purposes. These funds are received and expended by the City as lead agency
servicing the local road network. All three revenue resources are accounted for individually as required by the State of
California but are combined for financial reporting purposes. The City currently receives only Article 3 and Article 4 money.
State Safety Fund is used to account for specific revenue received for certain Police and Fire related programs. The City
Police Department has a share of traffic fine resources which are transferred to the General Fund to assist in funding the cost of
traffic safety and control devices and State of California monies from the Supplemental Law Enforcement Services grant. The
Fire Department operates a local Certified Unified Program Agency (CUPA) which is required for state and federal
environmental regulation. These revenue sources are accounted for individually as required by the State, but combined for
financial reporting purposes.
Redevelopment Successor Agency Housing Fund was created on February 1, 2012, pursuant to the provisions of the
Redevelopment Restructuring Act. The City has chosen to assume the housing functions and take over the housing assets of the
former Redevelopment Agency.
119
CITY OF BAKERSFIELD
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - All Special Revenue Funds
Year Ended June 30, 2018
Transient Occupancy Taxes
Budget Actual
Variance with
Final Budget
Revenues
Taxes $9,000,000 $9,570,855 $570,855
Licenses and permits ---
Intergovernmental ---
Charges for services 7,130,000 7,496,900 366,900
Fines, forfeitures, and assessments ---
Interest income 20,000 43,161 23,161
Loan payments ---
Contributions and donations 1,200,000 1,206,786 6,786
Other income -353,468 353,468
Total revenues 17,350,000 18,671,170 1,321,170
Expenditures
Current:
General government 8,482,313 9,041,424 (559,111)
Public safety - Police ---
Public safety - Fire ---
Public works ---
Recreation and parks ---
Development services ---
Non-departmental 3,132,400 3,132,400 -
Capital outlay:
Transportation:
Traffic control ---
Streets / Freeways ---
Bridges ---
Curbs, gutters and sidewalks ---
Public facilities:
Other improvements ---
Total expenditures 11,614,713 12,173,824 (559,111)
Excess (deficiency) of revenues over (under) expenditures 5,735,287 6,497,346 762,059
Other financing sources (uses):
Transfers out (6,547,980)(6,547,980)-
Total other financing sources (uses)(6,547,980)(6,547,980)-
Net change in fund balances (812,693)(50,634)762,059
Fund balances - beginning 1,913,289 1,913,289 -
Fund balances - ending $1,100,596 $1,862,655 $762,059
120
Community Development Block Grant Neighborhood Stabilization
Budget Actual
Variance with
Final Budget Budget Actual
Variance with
Final Budget
$-$-$-$-$-$-
------
9,083,905 3,127,264 (5,956,641)141,352 -(141,352)
------
------
-235 235 ---
205,868 213,804 7,936 -46,128 46,128
------
-91,185 91,185 ---
9,289,773 3,432,488 (5,857,285)141,352 46,128 (95,224)
------
------
------
------
------
5,328,308 1,907,534 3,420,774 141,352 -141,352
------
------
------
------
2,041,553 741,160 1,300,393 ---
488,500 146,565 341,935 ---
7,858,361 2,795,259 5,063,102 141,352 -141,352
1,431,412 637,229 (794,183)-46,128 46,128
(500,324)(500,324)----
(500,324)(500,324)----
931,088 136,905 (794,183)-46,128 46,128
392,190 392,190 -279,760 279,760 -
$1,323,278 $529,095 $(794,183)$279,760 $325,888 $46,128
121
CITY OF BAKERSFIELD
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (continued)
Budget and Actual - All Special Revenue Funds
Year Ended June 30, 2018
High Speed Rail
Budget Actual
Variance with
Final Budget
Revenues
Taxes $-$-$-
Licenses and permits ---
Intergovernmental 148,615 148,615 -
Charges for services ---
Fines, forfeitures, and assessments ---
Interest income ---
Loan payments ---
Contributions and donations ---
Other income ---
Total revenues 148,615 148,615 -
Expenditures
Current:
General government ---
Public safety - Police ---
Public safety - Fire ---
Public works ---
Recreation and parks ---
Development services 148,615 148,615 -
Non-departmental ---
Capital outlay:
Transportation:
Traffic control ---
Streets / Freeways ---
Bridges ---
Curbs, gutters and sidewalks ---
Public facilities:
Other improvements ---
Total expenditures 148,615 148,615 -
Excess (deficiency) of revenues over (under) expenditures ---
Other financing sources (uses):
Transfers out ---
Total other financing sources (uses)---
Net change in fund balances ---
Fund balances - beginning ---
Fund balances - ending $-$-$-
122
Gas Tax & Road Fund State (TDA) Transportation
Budget Actual
Variance with
Final Budget Budget Actual
Variance with
Final Budget
$-$-$-$-$-$-
------
228,176,632 81,940,188 (146,236,444)3,830,391 2,504,687 (1,325,704)
------
15,000 74,046 59,046 ---
50,000 148,727 98,727 1,000 3,126 2,126
------
------
-307 307 ---
228,241,632 82,163,268 (146,078,364)3,831,391 2,507,813 (1,323,578)
------
------
------
-25,951 (25,951)522,468 367,358 155,110
---38,400 20,368 18,032
------
------
2,835,320 1,483,684 1,351,636 ---
231,892,709 81,315,883 150,576,826 ---
9,448,343 89,059 9,359,284 ---
20,000 15,589 4,411 125,000 -125,000
---3,135,523 2,120,088 1,015,435
244,196,372 82,930,166 161,266,206 3,821,391 2,507,814 1,313,577
(15,954,740)(766,898)15,187,842 10,000 (1)(10,001)
------
------
(15,954,740)(766,898)15,187,842 10,000 (1)(10,001)
15,954,740 15,954,740 ----
$-$15,187,842 $15,187,842 $10,000 $(1)$(10,001)
123
CITY OF BAKERSFIELD
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (continued)
Budget and Actual - All Special Revenue Funds
Year Ended June 30, 2018
State Safety Fund
Budget Actual
Variance with
Final Budget
Revenues
Taxes $-$-$-
Licenses and permits 324,340 340,103 15,763
Intergovernmental 819,656 824,355 4,699
Charges for services 1,243,500 1,235,920 (7,580)
Fines, forfeitures, and assessments 1,200,000 1,588,082 388,082
Interest income 11,800 21,886 10,086
Loan payments ---
Contributions and donations ---
Other income ---
Total revenues 3,599,296 4,010,346 411,050
Expenditures
Current:
General government ---
Public safety - Police 1,912,255 1,784,256 127,999
Public safety - Fire 1,426,008 1,277,573 148,435
Public works ---
Recreation and parks ---
Development services ---
Non-departmental ---
Capital outlay:
Transportation:
Traffic control ---
Streets / Freeways ---
Bridges ---
Curbs, gutters and sidewalks ---
Public facilities:
Other improvements ---
Total expenditures 3,338,263 3,061,829 276,434
Excess (deficiency) of revenues over (under) expenditures 261,033 948,517 687,484
Other financing sources (uses):
Transfers out (550,000)(550,000)-
Total other financing sources (uses)(550,000)(550,000)-
Net change in fund balances (288,967)398,517 687,484
Fund balances - beginning 2,501,050 2,501,050 -
Fund balances - ending $2,212,083 $2,899,567 $687,484
124
Redevelopment Successor Agency - Housing Totals
Budget Actual
Variance with
Final Budget Budget Actual
Variance with
Final Budget
$430,517 $248,510 $(182,007)$9,430,517 $9,819,365 $388,848
---324,340 340,103 15,763
---242,200,551 88,545,109 (153,655,442)
-182,851 182,851 8,373,500 8,915,671 542,171
---1,215,000 1,662,128 447,128
-10,440 10,440 82,800 227,575 144,775
---205,868 259,932 54,064
---1,200,000 1,206,786 6,786
-993,065 993,065 -1,438,025 1,438,025
430,517 1,434,866 1,004,349 263,032,576 112,414,694 (150,617,882)
---8,482,313 9,041,424 (559,111)
---1,912,255 1,784,256 127,999
---1,426,008 1,277,573 148,435
---522,468 393,309 129,159
---38,400 20,368 18,032
716,604 288,311 428,293 6,334,879 2,344,460 3,990,419
---3,132,400 3,132,400 -
---2,835,320 1,483,684 1,351,636
---231,892,709 81,315,883 150,576,826
---9,448,343 89,059 9,359,284
---2,186,553 756,749 1,429,804
1,100,070 827,875 272,195 4,724,093 3,094,528 1,629,565
1,816,674 1,116,186 700,488 272,935,741 104,733,693 168,202,048
(1,386,157)318,680 1,704,837 (9,903,165)7,681,001 17,584,166
---(7,598,304)(7,598,304)-
---(7,598,304)(7,598,304)-
(1,386,157)318,680 1,704,837 (17,501,469)82,697 17,584,166
2,288,701 2,288,701 -23,329,730 23,329,730 -
$902,544 $2,607,381 $1,704,837 $5,828,261 $23,412,427 $17,584,166
125
CITY OF BAKERSFIELD
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - Debt Service Fund
For the Fiscal Year Ended June 30, 2018
General Obligation Debt
Budget Actual
Variance with
Final Budget
Revenues:
Interest income $-$-$-
Total revenues ---
Expenditures:
Debt service:
Principal retirement 560,352 502,352 58,000
Interest and fiscal charges 84,704 59,324 25,380
Total expenditures 645,056 561,676 83,380
Deficiency of revenues under expenditures (645,056)(561,676)83,380
Other financing sources:
Transfers in 561,676 561,676 -
Total other financing sources 561,676 561,676 -
Net change in fund balance (83,380)-83,380
Fund balance - beginning (313,979)-313,979
Fund balance - ending $(397,359)$-$397,359
126
Capital Projects Funds
These funds account for financial resources to be used for the acquisition or construction of major capital facilities other than
those financed by Proprietary Funds and Trust Funds.
Capital Outlay Fund is used to account for the cost of capital projects financed by general revenues and grant/loan proceeds
for recreational facilities.
Park Improvement Fund is used to account for funds collected for residential park development (Ordinance No. 3646). Fees
are collected based on the development's share of the cost to develop, improve, construct or enhance a neighborhood park
(Ordinance No. 3327).
Transportation Development Fund is used to account for funds collected from fees paid to mitigate the traffic impacts to the
regional circulation system caused by a development project. The fees are paid when a building permit for the development
project is obtained, and are based upon the amount of traffic the development will generate. With these fees, the City constructs
projects that have been identified as necessary to maintain the level of services required by the 2010 General Plan for the
regional transportation network. This is a joint City and Kern County program which affects the entire metropolitan area. Fees
are collected with the building permit and are based on the relative impact each land use has on the transportation network. The
fee schedule was adopted with Ordinance No. 3513 and will be periodically evaluated by the City Council and revised to reflect
updated costs and growth projections. Revenue from fees collected may also be used to service bonded debt incurred in Capital
Improvement Construction.
127
CITY OF BAKERSFIELD
Combining Schedule of Revenues, Expenditures and Changes in Fund Balances
Budget and Actual - All Capital Projects Funds
For the Fiscal Year Ended June 30, 2018
Capital Outlay Park Improvement Fund
Budget Actual
Variance with
Final Budget Budget Actual
Variance with
Final Budget
Revenues:
Taxes $5,550,000 $5,707,943 $157,943 $-$-$-
Intergovernmental 945,587 267,943 (677,644)---
Charges for services -580,145 580,145 ---
Fines, forfeitures, and
assessments 400,000 52,907 (347,093)1,525,000 1,970,565 445,565
Interest income 39,000 76,687 37,687 50,000 48,753 (1,247)
Other income 860,509 250,799 (609,710)---
Total revenues 7,795,096 6,936,424 (858,672)1,575,000 2,019,318 444,318
Expenditures:
Current:
General government ------
Public works ------
Non-departmental 2,001,410 275,867 1,725,543 ---
Capital outlay:
Transportation:
Traffic control ------
Streets 5,056,362 1,774,329 3,282,033 ---
Streets / Freeways 51,376,987 8,056,276 43,320,711 ---
Public facilities:
Buildings 4,065,904 1,086,007 2,979,897 ---
Parks and landscaping 1,682,712 1,518,194 164,518 6,657,727 4,006,999 2,650,728
Land acquisition ---1,660,825 -1,660,825
Other improvements 1,774,135 515,431 1,258,704 185,385 91,069 94,316
Equipment:
Computers 22,528 -22,528 ---
Non-automotive 9,641 9,005 636 ---
Total expenditures 65,989,679 13,235,109 52,754,570 8,503,937 4,098,068 4,405,869
Excess (deficiency) of revenues
over (under) expenditures (58,194,583)(6,298,685)51,895,898 (6,928,937)(2,078,750)4,850,187
Other financing sources
(uses):
Transfers in 6,580,000 6,580,000 ----
Transfers out (190,000)(190,000)----
Total other financing sources
(uses)6,390,000 6,390,000 ----
Net change in fund balances (51,804,583)91,315 51,895,898 (6,928,937)(2,078,750)4,850,187
Fund balances - beginning 56,000,807 56,000,807 -7,361,361 7,361,361 -
Fund balances - ending $4,196,224 $56,092,122 $51,895,898 $432,424 $5,282,611 $4,850,187
128
Transportation Development Totals
Budget Actual
Variance with
Final Budget Budget Actual
Variance with
Final Budget
$-$-$-$5,550,000 $5,707,943 $157,943
---945,587 267,943 (677,644)
-121,465 121,465 -701,610 701,610
13,000,000 14,534,290 1,534,290 14,925,000 16,557,762 1,632,762
140,200 499,973 359,773 229,200 625,413 396,213
23,474 (238,152)(261,626)883,983 12,647 (871,336)
13,163,674 14,917,576 1,753,902 22,533,770 23,873,318 1,339,548
291,500 289,115 2,385 291,500 289,115 2,385
836,000 747,169 88,831 836,000 747,169 88,831
52,342 -52,342 2,053,752 275,867 1,777,885
714,636 63,425 651,211 714,636 63,425 651,211
8,916,835 996,010 7,920,825 13,973,197 2,770,339 11,202,858
48,268,614 9,096,060 39,172,554 99,645,601 17,152,336 82,493,265
---4,065,904 1,086,007 2,979,897
---8,340,439 5,525,193 2,815,246
---1,660,825 -1,660,825
---1,959,520 606,500 1,353,020
---22,528 -22,528
---9,641 9,005 636
59,079,927 11,191,779 47,888,148 133,573,543 28,524,956 105,048,587
(45,916,253)3,725,797 49,642,050 (111,039,773)(4,651,638)106,388,135
13,061,905 -(13,061,905)19,641,905 6,580,000 (13,061,905)
(13,061,905)-13,061,905 (13,251,905)(190,000)13,061,905
---6,390,000 6,390,000 -
(45,916,253)3,725,797 49,642,050 (104,649,773)1,738,362 106,388,135
48,631,813 48,631,813 -111,993,981 111,993,981 -
$2,715,560 $52,357,610 $49,642,050 $7,344,208 $113,732,343 $106,388,135
129
Internal Service Funds
These funds are used to account for the financing of goods or services provided by one department or agency to other
departments or agencies of the City on a cost-reimbursement basis.
Self-Insurance Fund is used to account for the cost of operating a self-insurance program as follows:
With regard to wo rkers' compensation, the City is self-insured for the first $500,000 of each injury or occurrence and is a
member of California Public Entity Insurance Authority (CPEIA) which provides $5,000,000 of excess coverage to protect
against catastrophic type losses. Funding for this program is provided by interdepartmental charges varying by employee
classification and their industrial injury loss experience.
With regard to general and auto liability, the City is self-insured for the first $1,000,000 of each accident or occurrence and
is a member of the Authority for California Cities Excess Liability (ACCEL) which provides excess commercial insurance
in the amount of $10,000,000. Funding for this program is provided by interdepartmental charges.
Equipment Management Fund is used to account for the cost of operating and maintaining a maintenance facility for
vehicular, telecommunications and computer equipment used by other City departments. Such costs are billed to other
departments via established rates which are based upon actual cost. Actual costs include maintenance, repair, and replacement
cost of shop and automotive equipment.
130
CITY OF BAKERSFIELD
Combining Statement of Net Position
All Internal Service Funds
June 30, 2018
Self-
Insurance
Equipment
Management Total
Assets:
Current assets:
Cash and investments $27,089,093 $31,944,586 $59,033,679
Accounts receivable, net 820 11,191 12,011
Interest receivable 80,778 93,384 174,162
Notes/loans receivable 218,071 482,272 700,343
Due from other governmental agencies 39,477 -39,477
Prepayments and inventories 5,245 1,084,047 1,089,292
Total current assets 27,433,484 33,615,480 61,048,964
Noncurrent assets:
Capital assets:
Depreciable buildings, property, equipment and
infrastructure, net -37,442,456 37,442,456
Notes/loans receivable 117,684 293,162 410,846
Total noncurrent assets 117,684 37,735,618 37,853,302
Total assets 27,551,168 71,351,098 98,902,266
Deferred Outflows of Resources:
Deferred pensions 160,520 2,308,258 2,468,778
Deferred other post-employment benefits 14,600 278,300 292,900
Total deferred outflows of resources 175,120 2,586,558 2,761,678
Liabilities:
Current liabilities:
Accounts payable and accrued liabilities 274,439 802,656 1,077,095
Claims payable 6,555,651 -6,555,651
Workers' compensation claims 6,873,000 -6,873,000
Compensated absences payable -161,824 161,824
Total current liabilities 13,703,090 964,480 14,667,570
Noncurrent liabilities:
Workers' compensation claims 34,136,000 -34,136,000
Compensated absences payable 47,572 368,811 416,383
Net pension liability 578,031 9,798,208 10,376,239
Net other post-employment benefits liability 154,246 2,467,935 2,622,181
Total noncurrent liabilities 34,915,849 12,634,954 47,550,803
Total liabilities 48,618,939 13,599,434 62,218,373
Deferred Inflows of Resources:
Deferred pensions 31,576 473,705 505,281
Deferred other post-employment benefits 17,765 284,235 302,000
Total deferred inflows of resources 49,341 757,940 807,281
Net Position:
Net investment in capital assets -37,442,456 37,442,456
Unrestricted (20,941,992)22,137,826 1,195,834
Total net position $(20,941,992)$59,580,282 $38,638,290
131
CITY OF BAKERSFIELD
Combining Statement of Activities and Changes in Net Position
All Internal Service Funds
For the Fiscal Year Ended June 30, 2018
Self-
Insurance
Equipment
Management Totals
Operating revenues:
Intergovernmental $-$-$-
Charges for services 10,034,718 25,379,078 35,413,796
Cost recoveries 732,485 115,209 847,694
Miscellaneous 49,771 13,563 63,334
Total operating revenues 10,816,974 25,507,850 36,324,824
Operating expenses:
General and administrative 9,252,055 17,442,750 26,694,805
Workers' compensation payments 3,136,046 -3,136,046
Claims paid 3,540,685 -3,540,685
Depreciation and amortization -6,462,655 6,462,655
Compensated absences 3,384 -3,384
Total operating expenses 15,932,170 23,905,405 39,837,575
Operating income (loss)(5,115,196)1,602,445 (3,512,751)
Nonoperating revenues (expenses):
Interest income 238,029 258,202 496,231
Gain/(loss) on sale of capital assets -278,968 278,968
Income (loss) before transfers
and capital contributions (4,877,167)2,139,615 (2,737,552)
Capital contributions -92,629 92,629
Transfers in -2,540,403 2,540,403
Transfers out (152,744)(90,000)(242,744)
Change in net position (5,029,911)4,682,647 (347,264)
Total Net Position -
Beginning of Year - as Restated (15,912,081)54,897,635 38,985,554
Total Net Position - End of Year $(20,941,992)$59,580,282 $38,638,290
132
CITY OF BAKERSFIELD
Combining Statement of Cash Flows
All Internal Service Funds
For the Fiscal Year Ended June 30, 2018
Self-
Insurance
Equipment
Management Totals
Cash flows from operating activities:
Cash received from:
Customers $10,279,130 $25,913,428 $36,192,558
Prior year reimbursements and cost recoveries 732,485 115,209 847,694
Cash paid to:
Suppliers (9,556,583)(12,859,275)(22,415,858)
Employees (3,471,823)(4,736,413)(8,208,236)
Net cash provided (used) by operating activities (2,016,791)8,432,949 6,416,158
Cash flows from noncapital financing activities:
Cash transferred from other funds -2,540,403 2,540,403
Cash transferred to other funds (152,744)(90,000)(242,744)
Net cash provided (used) by noncapital financing activities (152,744)2,450,403 2,297,659
Cash flows from capital and related financing activities:
Purchase of capital assets -(7,863,254)(7,863,254)
Proceeds from sale of capital assets -323,425 323,425
Net cash (used) by capital and related financing activities -(7,539,829)(7,539,829)
Cash flows from investing activities:
Interest received 299,405 336,789 636,194
Net increase (decrease) in the fair value of investments (87,469)(118,934)(206,403)
Net cash provided (used) by investing activities 211,936 217,855 429,791
Net increase (decrease) in cash and investments (1,957,599)3,561,378 1,603,779
Cash and investments - Beginning of year 29,046,692 28,383,208 57,429,900
Cash and investments - End of year $27,089,093 $31,944,586 $59,033,679
Reconciliation of Operating Income (Loss) to Net Cash Provided (Used) by Operating
Activities:
Operating income (loss)$(5,115,196)$1,602,445 $(3,512,751)
Adjustments to reconcile operating income (loss) to net
cash provided (used) by operating activities:
Depreciation expense -6,462,655 6,462,655
(Increase) decrease in accounts receivable 194,641 520,787 715,428
(Increase) decrease in inventories -(35,423)(35,423)
Decrease in prepaid items 8,669 -8,669
Increase (decrease) in accounts payable (61,465)(88,934)(150,399)
Increase (decrease) in workers' compensation claims 2,940,259 -2,940,259
Increase (decrease) in compensated absences 3,384 (78,936)(75,552)
Increase (decrease) in net pension liability 58,912 848,884 907,796
Increase (decrease) in deferred outflows/inflows of resources for pensions (29,700)(493,149)(522,849)
Increase (decrease) in other post-employment benefits liability (19,460)(311,315)(330,775)
Increase (decrease) in deferred outflows/inflows of resources for OPEB 3,165 5,935 9,100
Net cash provided (used) by operating activities $(2,016,791)$8,432,949 $6,416,158
Noncash investing, capital, and financing activities:
Contribution of equipment from other departments $-$92,629 $92,629
133
CITY OF BAKERSFIELD
Statement of Changes in Assets and Liabilities
Fiduciary Funds (Agency)
For the Fiscal Year Ended June 30, 2018
Balance
July 01, 2017AdditionsDeletions
Balance
June 30, 2018
Special Deposits Fund
Assets:
Cash and investments $21,034,594 $103,916,059 $101,193,942 $23,756,711
Interest receivable 4,040 1,896 4,040 1,896
Accounts receivable -4,025,004 3,940,252 84,752
Due from other governmental agencies 11,222 435,437 270,872 175,787
Total assets $21,049,856 $108,378,396 $105,409,106 $24,019,146
Liabilities:
Payables:
Deposits $21,049,856 $108,378,396 $105,409,105 $24,019,147
Total liabilities $21,049,856 $108,378,396 $105,409,105 $24,019,147
Improvement Districts Fund
Assets:
Cash and investments $11,055,453 $386,531 $409,780 $11,032,204
Interest receivable 6,185 9,049 150 15,084
Due from other governmental agencies 7,421 4,121 3,184 8,358
Total assets $11,069,059 $399,701 $413,114 $11,055,646
Liabilities:
Payables:
Deposits 6,206,871 462,943 1,464,352 5,205,462
Accrued bond interest 852,188 775,183 852,188 775,183
Bonds 4,010,000 5,075,000 4,010,000 5,075,000
Total liabilities $11,069,059 $6,313,126 $6,326,540 $11,055,645
Total - All Agency Funds
Assets:
Cash and investments $32,090,047 $104,302,590 $101,603,722 $34,788,915
Interest receivable 10,225 10,945 4,190 16,980
Accounts Receivable -4,025,004 3,940,252 84,752
Due from other governmental agencies 18,643 439,558 274,056 184,145
Total assets $32,118,915 $108,778,097 $105,822,220 $35,074,792
Liabilities:
Payables:
Deposits 27,256,727 108,841,339 106,873,457 29,224,609
Accrued bond interest 852,188 775,183 852,188 775,183
Bonds 4,010,000 5,075,000 4,010,000 5,075,000
Total liabilities $32,118,915 $114,691,522 $111,735,645 $35,074,792
134
CITY OF BAKERSFIELD
Combining Statement of Fiduciary Net Position
Private Purpose Trust Funds
June 30, 2018
Redevelopment
Successor
Agency - Trust
Planning Habitat
Trust
Total
Private Purpose
Trust Funds
Assets:
Current assets:
Cash and investments $4,128,252 $13,899,134 $18,027,386
Interest receivable 6,987 40,691 47,678
Total current assets 4,135,239 13,939,825 18,075,064
Noncurrent assets:
Land held for resale 414,092 -414,092
Total noncurrent assets 414,092 -414,092
Total assets 4,549,331 13,939,825 18,489,156
Liabilities:
Payables:
Advances from grantors and third parties 3,772,803 -3,772,803
Bonds 2,525,000 -2,525,000
Notes 17,883,643 -17,883,643
Total liabilities 24,181,446 -24,181,446
Net Position:
Held in trust for:
Individuals, organizations, and other governments (19,632,115)13,939,825 (5,692,290)
Total Net Position $(19,632,115)$13,939,825 $(5,692,290)
135
CITY OF BAKERSFIELD
Combining Statement of Fiduciary Net Position
Pension and Other Employee Benefit Trust Funds
June 30, 2018
OPEB
Irrevocable Trust
Fire Relief and
Pension Trust
Total
Pension and Other
Employee Benefit
Trust Funds
Assets:
Cash and investments $66,455,251 $56,325 $66,511,576
Retirement system investments -
Federal agency coupons -684,201 684,201
Interest receivable -4,564 4,564
Total assets 66,455,251 745,090 67,200,341
Net Position:
Held in trust for -
Pension/other post-employment benefits 66,455,251 745,090 67,200,341
Total Net Position $66,455,251 $745,090 $67,200,341
136
CITY OF BAKERSFIELD
Combining Statement of Changes in Fiduciary Net Position
Private Purpose Trust Funds
For the Fiscal Year Ended June 30, 2018
Redevelopment
Successor
Agency - Trust
Planning Habitat
Trust
Total
Private Purpose
Trust Funds
Additions:
Developer fees $-$1,454,597 $1,454,597
Successor agency property tax deposits 3,528,124 -3,528,124
Intergovernmental ---
Charges for services 3,132,400 -3,132,400
Contribution from Successor Housing Agency ---
Other income 3,590 -3,590
Interest income -133,383 133,383
Total additions 6,664,114 1,587,980 8,252,094
Deductions:
Purchase of uninhabited land -613,889 613,889
Obligation retirement 3,826,700 -3,826,700
Total deductions 3,826,700 613,889 4,440,589
Change in net position 2,837,414 974,091 3,811,505
Net position - beginning of year (22,469,529)12,965,734 (9,503,795)
Net position - end of year $(19,632,115)$13,939,825 $(5,692,290)
137
CITY OF BAKERSFIELD
Combining Statement of Changes in Fiduciary Net Position
Pension and Other Employee Benefit Trust Funds
For the Fiscal Year Ended June 30, 2018
OPEB
Irrevocable Trust
Fire Relief and
Pension Trust
Total
Pension and Other
Employee Benefit
Trust Funds
Additions:
Contributions to pooled investments $7,527,447 $-$7,527,447
Interest income 2,017,934 40,596 2,058,530
Total additions 9,545,381 40,596 9,585,977
Deductions:
Benefits 4,507,862 97,422 4,605,284
Administrative expenses 188,705 -188,705
Total deductions 4,696,567 97,422 4,793,989
Change in net position 4,848,814 (56,826)4,791,988
Beginning of year 61,606,436 801,917 62,408,353
End of year $66,455,250 $745,091 $67,200,341
138
139
CITY OF BAKERSFIELD
Combining Balance Sheet
Non-Major Governmental Funds
June 30, 2018
Special Revenue Funds
Neighborhood
Stabilization High Speed Rail
State (TDA)
Transportation
Assets:
Cash and investments $325,888 $-$39,188
Accounts receivable, net 6,798,874 --
Interest receivable --1,197
Due from other governmental agencies -11,954 528,061
Notes/loans receivable ---
Total assets $7,124,762 $11,954 $568,446
Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable $-$-$250,023
Due to other funds -11,954 -
Advances from grantors and third parties --318,423
Total liabilities -11,954 568,446
Deferred Inflows of Resources:
Deferred revenue 6,798,874 --
Fund Balances:
Restricted 325,888 --
Total liabilities, deferred inflows
of resources, and fund balances $7,124,762 $11,954 $568,446
140
Special Revenue Funds
Debt
Service Fund
State Safety
Redevelopment
Successor Agency
- Housing
General
Obligation Debt
Total
Non-Major
Governmental
Funds
$2,908,430 $1,814,179 $-$5,087,685
104,708 207 -6,903,789
8,182 3,725 -13,104
---540,015
-22,791,933 -22,791,933
$3,021,320 $24,610,044 $-$35,336,526
$121,754 $727 $-$372,504
---11,954
-22,791,933 -23,110,356
121,754 22,792,660 -23,494,814
---6,798,874
2,899,566 1,817,384 -5,042,838
$3,021,320 $24,610,044 $-$35,336,526
141
CITY OF BAKERSFIELD
Combining Statement of Revenues, Expenditures and Changes in Fund Balances
Non-Major Governmental Funds
For the Fiscal Year Ended June 30, 2018
Special Revenue Funds
Neighborhood
Stabilization
High Speed
Rail
State (TDA)
Transportation
Revenues:
Taxes $-$-$-
Licenses and permits ---
Intergovernmental -148,615 2,504,687
Charges for services ---
Fines, forfeitures and assessments ---
Interest income --3,127
Loan payments 46,128 --
Other income ---
Total revenues 46,128 148,615 2,507,814
Expenditures
Current:
Public safety - Police ---
Public safety - Fire ---
Public works --367,359
Recreation and parks --20,368
Development services -148,615 -
Capital outlay --2,120,087
Debt service:
Principal retirement ---
Interest and fiscal charges ---
Total expenditures -148,615 2,507,814
Excess (deficiency) of revenues
over (under) expenditures 46,128 --
Other financing sources (uses):
Transfers in ---
Transfers out ---
Total other financing sources (uses)---
Net change in fund balances 46,128 --
Fund balances - beginning - as restated 279,760 --
Fund balances - ending $325,888 $-$-
142
Special Revenue Funds
Debt
Service Fund
State
Safety
Redevelopment
Successor Agency
- Housing
General Obligation
Debt
Total
Non-Major
Governmental
Funds
$-$248,510 $-$248,510
340,103 --340,103
824,355 --3,477,657
1,235,920 182,851 -1,418,771
1,588,082 --1,588,082
21,886 10,441 -35,454
---46,128
-993,065 -993,065
4,010,346 1,434,867 -8,147,770
1,784,257 --1,784,257
1,277,573 --1,277,573
---367,359
---20,368
-288,309 -436,924
-827,877 -2,947,964
--502,352 502,352
--59,324 59,324
3,061,830 1,116,186 561,676 7,396,121
948,516 318,681 (561,676)751,649
--561,676 561,676
(550,000)--(550,000)
(550,000)-561,676 11,676
398,516 318,681 -763,325
2,501,050 1,498,703 -4,279,513
$2,899,566 $1,817,384 $-$5,042,838
143
CITY OF BAKERSFIELD
Long-term debt recorded in Private Purpose Trust Fund
REDEVELOPMENT SUCCESSOR AGENCY
$2,090,000 Tax Allocation Bond to be used for construction of public
improvements for new developments on 18th and 19th Streets, and improvements to
the Mill Creek Linear Park. The funds were dispersed in July 2009. The interest rate
is 7.5%, with payments commencing August 2010 through August 2029.$1,585,000
$1,240,000 Tax Allocation Bond to be used for infrastructure improvements for
the Mill Creek Linear Park Canal at South Millcreek. The funds were dispersed in
July 2009. The interest rate is 7.25%, with payments commencing August 2010
through August 2029.940,000
Total Bonds $2,525,000
Loans/Contracts:
$1,000,000 HUD Section 108 Loan, 2003 (Agency Agreement #RA 03-016) - due
in annual principal installments of $27,000 to $82,000 commencing August 1,
2004; interest ranging from 1.61% to 4.76%.$429,000
$1,600,000 HUD Section 108 Loan, 2005 (Agency Agreement #RA 06-020) for
construction of Fire Station No. 5 - due in annual principal installments of
$58,000 to $137,000 commencing August 1, 2009; interest ranging from 4.96% to 5.77%.984,000
$3,750,000 HUD Section 108 Loan, 2007 (Agency Agreement # RA 06-022)
Loan proceeds are dedicated to the Mill Creek South Mixed-Use project and will
go toward the acquisition and clean-up of a six acre parcel. Due in annual principal
installments of $136,000 to $321,000 commencing August 1, 2008; interest
ranging from 2.62% to 5.42%.2,500,000
$10,000,000 Bakersfield Redevelopment Agency Loan with I-bank to help finance
the Mill Creek Linear Park and Canal Refurbishment Project. Only $6,933,445 of the loan
was dispersed through fiscal year 2009. Annual principal installments of $217,383 to $512,446
commencing on August 1, 2009 through August 2037; interest rate at 3.11%.7,781,656
$2,000,000 Loan with the City of Bakersfield Equipment Fund to provide
construction assistance required for the 19th Street Senior Plaza Development.
Funds were disbursed June 2009. The loan has a 5% interest rate and a seven year
payment period commencing July 2013.635,356
$950,000 Loan with the City of Bakersfield Equipment Fund to pre-purchase an
easement to facilitate the development of the Chelsea Housing project and the
Southeast Mill Creek commercial area. The loan has a 3% interest rate and a five
year payment period commencing July 2013.333,936
144
CITY OF BAKERSFIELD
Long-term debt recorded in Private Purpose Trust Fund
$1,500,000 Loan with the City of Bakersfield Self-Insurance Fund to provide
construction assistance required for the Courtyard Family Apartments located west
of S Street, between 13th and 14th Streets at S. Mill Creek. Funds were disbursed in
September 2009. The loan has a 5% interest rate and seven year payment period commencing July 2013.419,694
$17,000,000 Reimbursement to the City for (a) refunding of 1993 Tax Allocation
Bonds, (b) 1987 COP Convention Improvement Project, and (c) the
construction, equipping and furnishing of a multipurpose area (the Arena Project)
per Agreement #97-2. Agreement is for two payments of $850,000 each year,
from March 1997 to June 2022.4,800,000
Total Loans/Contracts Payable $17,883,642
Total Successor Agency $20,408,642
Annual requirements to amortize the principal and interest on long-term debt of Redevelopment Successor Agency at June 30,
2018 is as follows:
Redevelopment Successor Agency (Private Purpose Trust Fund)
Year ending Principal Interest
Bonds Loans/Contracts Total Bonds Loans/Contracts Total
2019 $135,000 $2,701,803 $2,836,803 $182,024 $449,801 $631,825
2020 145,000 2,366,837 2,511,837 171,656 421,739 593,395
2021 160,000 1,882,463 2,042,463 160,363 391,977 552,340
2022 170,000 1,914,932 2,084,932 148,144 361,478 509,622
2023 1,075,000 3,837,326 4,912,326 521,313 1,318,808 1,840,121
2024-2028 840,000 2,328,333 3,168,333 96,300 673,491 769,791
2029-2033 -2,339,502 2,339,502 -337,700 337,700
2034-2038 -512,446 512,446 -31,633 31,633
Totals $2,525,000 $17,883,642 $20,408,642 $1,279,800 $3,986,627 $5,266,427
145
146
Statistical Section
City of Bakersfield
Statistical Section
For the year ended June 30, 2018
The statistical section of the City of Bakersfield's (City) comprehensive annual financial report presents detailed
information as a context for understanding what the information presented in the financial statements, note
disclosures and required supplementary information says about the City's overall financial health. Where less
than 10 years of data is presented, the information was not available.
Contents Pages
Financial Trends
These schedules contain trend information to help the reader understand
how the City's financial performance measures have changed over time 148 - 157
Revenue Capacity
These schedules contain information to help the reader assess the factors
affecting the City's ability to generate its property and sales tax revenues.158 - 169
Debt Capacity
These schedules present information to help the reader assess the affordability
of the City's current level of outstanding debt and the City's ability to issue
additional debt in the future.170 - 176
Demographic and Economic Information
These schedules offer demographic and economic indicators to help the
reader understand the environment within which the City's financial
activities take place.177 - 183
Operating Information
These schedules contain service and infrastructure data to help the reader
understand how the information in the City's financial report relates to the
services the City provides and the activities it performs. 184 - 189
147
CITY OF BAKERSFIELD
Net Position by Component (1)
Last Ten Fiscal Years
Fiscal Year
2009 (2)2010 2011(2) 2012
Governmental Activities:
Net investment in capital assets $1,412,593,899 $1,403,412,018 $1,307,753,604 $1,259,429,698
Restricted for:
Current projects 4,646,968 ---
Capital improvements 56,379,296 39,139,625 19,778,178 23,252,930
Unrestricted 127,843,285 135,621,596 155,889,382 165,661,544
Total governmental activities
net position:1,601,463,448 1,578,173,239 1,483,421,164 1,448,344,172
% change from prior year 2.0 -1.0 -6.0 -2.0
Business-type Activities:
Net investment in capital assets 588,467,081 634,479,891 632,719,226 650,440,273
Restricted for:
Capital improvements 83,715,993 29,803,093 19,571,180 20,237,839
Sanitation districts 5,167,516 4,926,779 4,008,890 2,645,932
Unrestricted 73,947,580 104,096,319 115,321,423 100,529,044
Total business-type activities
net position 751,298,170 773,306,082 771,620,719 773,853,088
% change from prior year 3.0 3.0 -0.2 0.3
Primary Government:
Net investment in capital assets 2,001,060,980 2,037,891,909 1,940,472,830 1,909,869,971
Restricted for:
Current projects 4,646,968 ---
Capital improvements 140,095,289 68,942,718 39,348,358 43,490,769
Sanitation districts 5,167,516 4,926,779 4,008,890 2,645,932
Unrestricted 201,790,865 239,717,915 271,210,805 266,190,588
Total primary government
net position $2,352,761,618 $2,351,479,321 $2,255,040,883 $2,222,197,260
Total primary government
% change from prior year 2.0 -0.1 -4.0 -1.0
Notes:
(1) This schedule reports using the accrual basis of accounting.
(2) There was a prior period adjustment in Governmental and/or Business-type Activities for the 2008-09 and 2010-2011 fiscal years.
Numbers have been changed to reflect the restatement.
(3) There was a prior period adjustment in Governmental and/or Business-type Activities for the fiscal year. Numbers
have been changed to reflect the restatement.
Source: City Finance Department
148
Fiscal Year
2013 2014(3)2015(3)2016(3)2017 (3)2018 (3)
$1,233,782,805 $1,279,657,792 $1,285,115,869 $1,304,906,456 $1,305,414,611 $1,301,334,674
------
16,246,571 21,015,837 22,112,200 21,988,624 20,626,443 20,759,775
172,822,236 213,670,245 (70,066,811)(86,460,007)(108,783,761)(200,714,582)
1,422,851,612 1,514,343,874 1,237,161,258 1,240,435,073 1,217,257,293 1,121,379,867
-2.0 6.0 -18.0 0.3 -1.9 -7.9%
642,190,608 647,105,639 648,359,633 665,588,574 670,724,189 700,725,335
20,216,599 20,209,227 20,201,556 20,201,947 20,200,000 20,200,000
------
107,431,948 109,292,512 78,904,795 79,243,784 85,239,027 107,755,323
769,839,155 776,607,378 747,465,984 765,034,305 776,163,216 828,680,658
-0.5 0.8 -4.0 2.0 1.5 6.8%
1,875,973,416 1,926,763,431 1,933,475,502 1,970,495,030 1,976,138,800 2,002,060,009
------
36,463,170 41,225,064 42,313,756 42,190,571 40,826,443 40,959,775
------
280,254,187 322,962,757 8,837,984 (7,216,223)(23,544,734)(92,959,259)
$2,192,690,773 $2,290,951,252 $1,984,627,242 $2,005,469,378 $1,993,420,509 $1,950,060,525
-1.0 4.0 -13.0 1.0 -0.6 -2.2%
149
CITY OF BAKERSFIELD
Change in Net Position (1)
Last Ten Fiscal Years
Fiscal Year
2009 2010 2011 2012
Expenses
Governmental activities:
General government $15,624,497 $13,169,300 $12,110,455 $12,388,099
Public safety:
Police 68,830,802 66,819,611 70,381,783 72,574,972
Fire 32,844,159 32,901,818 31,657,823 33,319,982
Public works 98,187,688 138,345,249 137,057,195 142,228,353
Recreation & parks 31,186,962 32,640,571 34,682,672 31,737,121
Development services 10,111,034 8,231,893 6,862,213 5,856,850
Economic/Community development (2)6,930,730 12,935,695 9,303,951 28,228,468
Interest on long-term debt 252,743 201,442 233,606 215,411
Total governmental activities expenses 263,968,615 305,245,579 302,289,698 326,549,256
Business-type activities:
Wastewater treatment 32,009,889 31,978,755 42,333,794 41,550,942
Refuse collection 37,590,048 35,237,306 38,469,544 39,340,795
Agricultural water 5,014,733 4,901,463 4,603,236 5,727,962
Domestic water 20,089,704 21,951,835 22,068,640 22,157,529
General aviation 296,653 372,089 407,687 404,648
Offstreet parking 192,011 177,485 165,935 128,070
Total business-type activities expenses 95,193,038 94,618,933 108,048,836 109,309,946
Total primary government expenses 359,161,653 399,864,512 410,338,534 435,859,202
Program Revenues
Governmental activities:
Charges for services:
General government 4,534,243 4,451,944 5,406,095 5,392,724
Public safety:
Police 4,411,906 3,347,806 3,210,604 2,649,133
Fire 3,230,597 4,601,976 4,577,004 4,866,355
Public works 16,598,877 10,561,651 8,462,168 11,651,452
Recreation & parks 13,423,547 13,530,535 13,172,982 14,153,899
Development services 5,245,507 3,492,359 2,621,537 2,907,300
Economic/Community development (2)(76,449)85,180 1,101 870
Operating grants and contributions 18,940,149 26,063,320 22,993,743 20,178,085
Capital grants and contributions 75,921,404 76,021,617 82,831,043 68,415,443
Total governmental activities
program revenues $142,229,781 $142,156,388 $143,276,277 $130,215,261
Notes:
(1) This schedule reports using the accrual basis of accounting.
(2) Economic/Community Development became a part of Development Services.
150
Fiscal Year
2013 2014 2015 2016 2017 2018
$12,919,972 $10,274,285 $21,956,276 $24,203,337 $26,395,470 $29,731,416
76,310,840 80,192,752 82,573,675 87,314,992 95,723,028 105,006,154
35,105,188 36,086,851 35,577,067 37,257,146 41,364,912 44,560,720
162,423,856 104,347,771 158,958,537 176,573,017 171,911,928 145,529,290
32,619,041 34,641,180 22,743,488 24,993,400 26,888,569 22,613,830
11,192,757 9,940,984 9,895,523 10,018,548 12,159,620 8,533,656
------
467,848 166,472 164,046 39,729 33,429 25,060
331,039,502 275,650,295 331,868,612 360,400,169 374,476,956 356,000,126
40,456,986 41,979,698 41,602,539 38,038,376 41,008,233 42,103,648
44,364,406 45,336,786 42,860,924 44,067,358 46,300,746 47,971,215
5,245,266 5,051,433 4,751,158 4,395,517 4,304,663 4,198,037
21,131,546 25,613,917 25,455,862 25,756,437 27,066,771 29,205,225
430,697 462,690 527,279 480,754 812,527 671,124
162,094 160,613 163,840 112,986 226,999 233,746
111,790,995 118,605,137 115,361,602 112,851,428 119,719,939 124,382,995
442,830,497 394,255,432 447,230,214 473,251,597 494,196,895 480,383,121
4,984,767 5,019,511 3,051,375 6,178,924 4,609,597 5,618,886
2,110,160 2,938,734 2,737,294 3,138,617 4,797,619 2,989,023
5,361,766 4,937,490 5,784,964 6,375,758 6,903,928 7,242,490
19,404,900 23,780,578 20,958,923 18,625,200 17,116,439 17,159,857
14,324,137 14,348,050 14,336,209 15,665,544 16,103,058 16,481,750
4,147,598 5,221,585 5,620,567 6,076,072 5,719,860 5,909,456
------
19,508,063 11,633,792 12,963,571 11,217,162 12,640,678 9,165,593
76,471,205 104,071,622 101,313,136 120,303,934 100,956,230 85,533,310
$146,312,596 $171,951,362 $166,766,039 $187,581,211 $168,847,409 $150,100,365
151
CITY OF BAKERSFIELD
Change in Net Position (1) continued
Last Ten Fiscal Years
Fiscal Year
2009 2010 2011 2012
Business-type activities:
Charges for services
Wastewater treatment $26,836,539 $29,617,486 $30,752,515 $30,743,840
Refuse collection 39,814,200 39,533,488 39,568,011 41,198,715
Agricultural water 6,619,487 5,206,010 6,891,203 4,162,253
Domestic water 21,160,388 21,773,880 22,223,640 23,140,865
General aviation 243,923 258,353 253,868 285,461
Offstreet parking 77,122 63,383 63,120 72,094
Operating grants and contributions 5,228,837 7,121,598 4,018,963 4,935,165
Capital grants and contributions 12,174,540 10,189,981 1,599,202 5,011,908
Total business-type activities
program revenues 112,155,036 113,764,179 105,370,522 109,550,301
Total primary government
program revenues 254,384,817 255,920,567 248,646,799 239,765,562
Net (Expenses) Revenues
Governmental activities (121,738,834)(163,089,191)(159,013,421)(196,333,995)
Business-type activities 16,961,998 19,145,246 (2,678,314)240,355
Total primary government
Net (Expenses) Revenues (104,776,836)(143,943,945)(161,691,735)(196,093,640)
General Revenues and Other Changes in Net Position
Governmental activities:
Taxes:
Property taxes 70,869,285 63,923,865 62,889,341 60,717,716
Sales and use taxes 56,615,428 50,664,334 55,281,897 67,642,794
Other taxes 3,136,193 1,910,719 728,715 889,373
Intergovernmental, unrestricted 962,870 1,026,116 1,144,659 876,617
Unrestricted grants and contributions 16,767,713 19,229,234 20,701,642 21,793,292
Investment earnings (loss)2,879,700 1,103,532 73,834 282,170
Miscellaneous 1,408,497 1,776,536 1,567,489 4,223,807
Gain (loss) on sale of property 58,726 14,646 17,300 132,666
Transfers (3)47,000 150,000 1,998,260 34,000
Total Governmental Activities 152,745,412 139,798,982 144,403,137 156,592,435
Business-type activities:
Investment earnings 3,757,651 3,012,666 2,136,427 1,988,022
Gain (loss) on sale of property ---38,992
Transfers (47,000)(150,000)(1,998,260)(34,000)
Total business-type activities 3,710,651 2,862,666 138,167 1,993,014
Total primary government 156,456,063 142,661,648 144,541,304 158,585,449
Extraordinary gain (loss)---4,664,568
Change in Net Position
Governmental activities 31,006,578 (23,290,209)(14,610,284)(39,741,560)
Business-type activities 20,672,649 22,007,912 (2,540,147)2,233,369
Total primary government $51,679,227 $(1,282,297)$(17,150,431)$(37,508,191)
152
Fiscal Year
2013 2014 2015 2016 2017 2018
$30,825,384 $31,148,327 $31,437,669 $32,809,778 $33,037,996 $34,036,372
41,812,177 42,100,981 43,447,351 45,865,520 49,502,386 51,119,909
3,645,065 4,233,197 3,640,671 2,863,750 6,712,871 7,039,283
23,944,333 24,423,144 22,478,013 20,275,368 23,232,757 26,491,151
304,357 303,223 315,351 327,491 325,116 347,315
54,420 67,150 78,807 134,404 146,250 114,261
6,243,441 8,601,559 8,749,741 7,283,587 7,173,227 9,047,127
982,577 17,276,815 7,402,621 16,428,109 9,741,991 4,913,540
107,811,754 128,154,396 117,550,224 125,988,007 129,872,594 133,108,958
254,124,350 300,105,758 284,316,263 313,569,218 298,720,003 283,209,323
(184,726,906)(103,698,933)(165,102,573)(172,818,958)(205,629,547)(205,899,761)
(3,979,241)9,549,259 2,188,622 13,136,579 10,152,655 8,725,963
(188,706,147)(94,149,674)(162,913,951)(159,682,379)(195,476,892)(197,173,798)
58,958,525 66,614,853 71,382,809 74,342,784 77,680,416 79,774,412
70,418,028 72,442,177 70,366,255 70,786,792 65,348,910 72,322,068
926,701 988,423 1,177,810 1,176,713 1,212,122 1,308,842
181,713 152,400 150,529 149,089 169,836 201,875
22,725,966 23,829,193 25,497,714 25,381,927 24,827,775 25,140,642
(99,546)948,629 487,532 2,295,536 283,544 1,295,749
5,187,294 1,683,631 2,173,532 1,613,591 1,707,873 1,754,210
192,354 36,039 (8,511,599)826,990 273,364 248,579
840,000 1,489,500 3,584,925 1,352,562 152,000 2,032,654
159,331,035 168,184,845 166,309,507 177,925,984 171,655,840 184,079,031
778,444 2,424,676 1,968,113 1,728,927 1,112,586 1,878,973
26,866 (4,439,038)390,791 17,545 15,670 20,370
(840,000)(1,489,500)(3,584,925)(1,352,562)(152,000)(2,032,654)
(34,690)(3,503,862)(1,226,021)393,910 976,256 (133,311)
159,296,345 164,680,983 165,083,486 178,319,894 172,632,096 183,945,720
-(936,660)---54,231,181
(25,395,871)64,485,912 1,206,934 5,107,026 (33,973,707)(21,820,730)
(4,013,931)6,045,397 962,601 13,530,489 11,128,911 8,592,652
$(29,409,802)$70,531,309 $2,169,535 $18,637,515 $(22,844,796)$(13,228,078)
153
CITY OF BAKERSFIELD
Fund Balances of Governmental Funds
Last Ten Fiscal Years (1)
Fiscal Year
2009
General Fund
Reserved
Inventory $22,620
Encumbrances 923,381
Cash basis 12,001,989
Unreserved
Designated for current projects / contingency 4,646,968
Designated for compensated absences 6,714,368
Undesignated 26,765,142
Total general fund $51,074,468
All other governmental funds
Reserved 81,360,385
Unreserved, reported in:
Special revenue funds (52,326,452)
Capital projects funds 30,294,286
Permanent funds 56,430,221
Total all other government funds $115,758,440
2010 2011 2012
General Fund (2)
Nonspendable $-$-$13,000 $11,975
Restricted ----
Committed -28,408,926 36,613,273 37,639,359
Assigned -6,902,114 6,891,881 7,281,790
Unassigned -10,637,121 9,131,275 10,476,517
Subtotal general fund -45,948,161 52,649,429 55,409,641
All Other Governmental Funds
Nonspendable ----
Restricted -8,253,366 10,051,183 23,252,930
Committed -61,058,527 58,304,744 57,014,597
Assigned -26,469,632 18,649,279 11,091,749
Unassigned ----
Subtotal all other governmental funds -95,781,525 87,005,206 91,359,276
Total governmental fund balance $-$141,729,686 $139,654,635 $146,768,917
Notes:
(1) Includes all governmental funds as shown in the Fund Financial Statements.
(2) In FY 2010-11, the City implemented GASB Statement No. 54 under which governmental fund balances are reported as nonspendable,
restricted, committed, assigned, and unassigned. FY 2009-10 fund balances have been recharacterized to comply with GASB Statement
No. 54 in order to facilitate year-to-year comparisons.
Source: City Finance Department
154
2013 2014 2015
Fiscal Year
2016 2017 2018
$3,372,390 $3,181 $1,000 $1,000 $1,025 $1,025
------
39,972,694 13,464,704 33,140,376 28,995,204 32,559,429 29,505,463
7,694,831 34,586,157 7,254,726 4,042,766 3,567,936 2,914,844
10,865,979 6,502,852 383,987 8,783,314 3,115,798 7,077,156
61,905,894 54,556,894 40,780,089 41,822,284 39,244,188 39,498,488
--944,356 44,508 7,675,326 1,212,183
16,246,571 21,015,837 22,112,200 21,988,624 20,626,443 20,759,775
56,799,759 62,344,103 80,565,806 64,661,547 67,725,705 68,066,549
15,840,236 58,935,265 51,017,356 51,026,114 37,747,940 46,316,269
------
88,886,566 142,295,205 154,639,718 137,720,793 133,775,414 136,354,776
$150,792,460 $196,852,099 $195,419,807 $179,543,077 $173,019,602 $175,853,264
155
CITY OF BAKERSFIELD
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
Fiscal Year
2009 2010 2011 2012 2013
Revenues
Taxes $147,153,335 $128,716,315 $139,250,878 $150,761,990 $159,530,114
Licenses and permits 2,576,755 2,192,594 1,757,045 2,321,093 2,757,307
Intergovernmental 82,994,989 90,926,017 87,577,120 83,597,649 85,698,254
Charges for services 26,850,501 24,488,013 23,982,350 34,518,514 26,237,278
Fines, forfeitures &
assessments 18,207,527 13,601,153 14,359,150 4,034,565 20,697,866
Interest income 3,455,207 2,193,269 804,910 865,071 (266,411)
Contributions and donations ----1,543,041
Miscellaneous 4,097,040 5,830,575 4,662,521 7,346,225 8,383,499
Total Revenues 285,335,354 267,947,936 272,393,974 283,445,107 304,580,948
Expenditures
General government 11,509,310 11,070,305 9,944,217 10,383,512 11,186,274
Police 65,824,506 63,789,358 65,985,764 68,489,176 72,745,830
Fire 31,338,492 30,921,380 29,450,014 31,390,736 33,528,360
Public works 27,594,508 24,023,808 21,967,831 25,849,496 25,274,629
Recreation and parks 23,702,177 22,281,910 22,620,636 23,599,669 25,277,659
Development services 9,619,973 7,811,683 6,486,573 6,229,936 11,994,604
Economic/Community development(1)5,567,930 11,322,095 8,147,683 3,646,144 -
Non-departmental 11,111,355 17,103,372 12,517,816 20,283,121 13,338,729
Capital outlay 104,472,583 107,556,933 97,915,227 94,567,093 105,808,610
Debt service
Principal 3,509,000 203,000 444,000 366,000 378,000
Interest and fiscal charges 324,862 204,673 221,920 219,865 208,424
Total Expenditures 294,574,696 296,288,517 275,701,681 285,024,748 299,741,119
Excess (deficiency) of revenues over
(under) expenditures (9,239,342)(28,340,581)(3,307,707)(1,579,641)4,839,829
Other financing sources (uses)
Notes/certificate proceeds -1,800,000 ---
Transfers in 12,740,413 8,813,765 9,580,944 11,587,495 18,164,310
Transfers out (12,752,513)(813,765)(8,358,944)(12,704,555)(18,898,910)
Reserve transfer to agency funds --10,656 --
Extraordinary gain ---4,664,568 -
Total other financing
sources (uses)(12,100)9,800,000 1,232,656 3,547,508 (734,600)
Net change in fund balances $(9,251,442)$(18,540,581)$(2,075,051)$1,967,867 $4,105,229
Debt service as a percentage of
non-capital expenditures 1.8%0.2%0.2%0.2%0.2%
Notes:
(1) Economic/Community Development became a part of Development Services.
Source: City Finance Department
156
Fiscal Year
2014 2015 2016 2017 2018
$163,369,374 $168,047,259 $171,344,057 $168,758,632 $178,228,594
3,644,027 3,297,396 3,216,872 3,321,133 3,268,134
112,509,497 113,170,797 129,091,459 111,232,933 93,198,441
28,308,972 29,643,496 31,225,288 31,530,433 34,404,377
25,732,782 21,984,077 20,337,463 21,325,888 18,887,330
1,604,668 1,470,902 2,823,200 591,514 1,791,980
251,775 10,390 153,607 294,156 259,932
4,710,359 9,100,338 6,377,099 3,789,687 4,342,074
340,131,454 346,724,655 364,569,045 340,844,376 334,380,862
11,888,465 19,254,079 21,404,144 21,483,266 21,883,948
77,504,268 83,484,871 85,469,207 85,303,925 89,209,119
34,895,073 36,224,449 36,956,928 37,694,398 39,299,505
25,744,355 26,828,323 26,936,064 25,826,378 25,798,786
26,309,603 18,833,884 18,145,518 18,881,782 20,215,698
11,321,294 12,231,555 12,068,546 11,861,982 9,419,106
-----
10,726,379 12,736,007 13,348,200 10,724,880 11,699,947
94,992,545 134,748,520 164,583,100 134,231,542 113,952,709
443,124 454,964 489,828 503,828 502,352
195,434 252,300 57,115 65,870 59,324
294,020,540 345,048,952 379,458,650 346,577,851 332,040,494
46,110,914 1,675,703 (14,889,605)(5,733,475)2,340,368
-----
16,069,190 15,963,966 10,049,932 7,686,698 7,691,676
(16,334,090)(17,860,400)(10,158,904)(7,686,698)(7,956,681)
-----
-----
(264,900)(1,896,434)(108,972)-(265,005)
$45,846,014 $(220,731)$(14,998,577)$(5,733,475)$2,075,363
0.2%0.2%0.2%0.2%0.2%
157
CITY OF BAKERSFIELD
Governmental Activities Tax Revenues By Source
Last Ten Fiscal Years (1)
Fiscal
Year
General
Property
Taxes
Sales and
Use Taxes
Transient
Occupancy
Taxes
Business
License
Taxes
Utility
Franchise
Taxes
In-Lieu
and
Other
Taxes Total Taxes
2009 $70,869,285 (2)$56,615,428 $7,144,718 $3,899,841 $5,487,871 $3,136,192 $147,153,335
2010 57,185,433 (2)50,664,333 6,493,702 3,173,514 9,288,614 (3)1,910,719 128,716,315
2011 62,889,341 (2)55,281,897 6,851,869 3,415,351 10,083,705 (3)728,715 139,250,878
2012 60,717,717 (2)67,642,795 7,827,792 3,312,485 10,371,830 (3)889,373 150,761,992
2013 65,696,957 (2)70,418,028 8,274,240 3,372,972 10,733,798 (3)1,034,119 159,530,114
2014 66,614,853 (2)72,442,178 8,826,003 3,607,558 10,890,359 (3)988,423 163,369,374
2015 71,382,809 (2)70,366,255 9,487,984 3,730,720 11,901,681 (3)1,177,810 168,047,259
2016 74,342,784 (2)70,786,793 9,450,710 3,904,569 11,682,488 (3)1,176,713 171,344,057
2017 77,680,416 (2)65,348,909 9,577,898 3,875,410 11,063,877 (3)1,212,122 168,758,632
2018 79,774,412 (2)72,322,068 9,570,855 3,826,518 11,425,899 (3)1,308,842 178,228,594
Notes:
(1) Includes all governmental funds as shown in the Fund Financial Statements.
(2) Includes Vehicle License Fee in Lieu revenue.
(3) Includes additional taxes and Utility Surcharge revenues designated by ordinance for road purposes.
Source: City Finance Department
158
CITY OF BAKERSFIELD
Principal Property Taxpayers
Current Year and Nine Years Ago
2009 2018
Taxpayer
Taxable
Assessed Value Rank
Percentage
of
Total
Taxable
Assessed
Value
Taxable
Assessed Value Rank
Percentage of
Total Taxable
Assessed
Value
Nestle Dreyers Ice Cream Company
(formerly Nestle Holdings, Inc in 2009)$206,288,619 1 0.86%$161,892,465 2 0.58%
Valley Plaza Mall LP
(formerly Bakersfield Mall LLC in 2009)155,367,163 2 0.65%132,936,127 3 0.48%
Chevron USA Inc.133,485,948 3 0.56%171,042,754 1 0.61%
California Water Service Company 81,945,522 4 0.34%105,738,072 4 0.38%
DS Properties 18 (formerly Donahue Schriber Realty
Group LLP in 2009)80,039,167 5 0.33%76,410,816 8 0.27%
WalMart Stores Inc/Sam's Club --%85,853,754 6 0.31%
Castle & Cook CA Inc. 60,135,054 7 0.25%107,154,819 5 0.39%
State Farm Insurance Company 57,700,000 8 0.24%--%
Kaiser Foundation Health Plan Inc.54,127,855 9 0.23%71,843,359 7 0.26%
GSF Edgewater Investors LP (formerly GSF Springs
I Investors LP in 2009)--%67,852,803 9 0.24%
Lennar Home of Cal INC 53,791,789 10 0.22%--%
BLC Glenwood Gardens SNF LP 77,832,187 6 0.32%--%
California RSRCS R and E Ventures --%57,618,184 10 0.21%
Total taxable assessed value of
ten (10) largest taxpayers 960,713,304 4.00%1,038,343,153 %3.73
Total taxable assessed value of other taxpayers 23,072,670,456 96.00%26,816,191,280 %96.27
Total taxable assessed value of all taxpayers $24,033,383,760 100.00%$27,854,534,433 %100.00
Note:
Related parties grouped together on the original source document (County's list of assessed valuations) are included in the total assessed valuation amount
for each taxpayer cited. Unitary and operating nonunitary are excluded as valuation by parcel is no longer available.
Source: HDL Coren & Cone, Kern County Assessor 2017-18 Combined Tax Rolls
159
CITY OF BAKERSFIELD
Assessed Value and Estimated Actual Value of Taxable Property
Last Ten Fiscal Years
Amounts expressed in thousands
Fiscal
Year Secured Less:
Ended
June 30
Residential
Property
Commercial
Property Other Unsecured
Tax Exempt
Real Property
2009 $17,705,933 $3,785,022 $3,495,239 $751,790 $957,674
2010 15,577,372 4,030,198 3,311,171 878,216 1,080,957
2011 14,950,744 4,053,184 3,134,829 834,158 1,063,302
2012 14,521,636 3,832,880 3,245,619 850,899 1,104,081
2013 14,698,137 3,904,832 3,268,227 912,300 1,097,928
2014 15,592,995 4,010,392 3,575,805 791,531 1,186,061
2015 17,297,625 4,111,192 3,607,361 819,306 1,230,972
2016 18,495,838 4,238,653 3,749,127 835,424 1,321,877
2017 19,571,365 4,497,923 3,971,042 801,607 1,414,164
2018 20,569,686 4,650,981 4,085,221 767,598 1,451,354
(1) In 1978 the voters of the State of California passed Proposition 13 which limited taxes to a total maximum rate of 1% based upon the assessed value of the
property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum of 2%). With few exceptions,
property is only reassessed as a result of new construction activity or at the time it is sold to a new owner. At that point, the property is reassessed based upon
the added value of the construction or at the purchase price (market value) or economic value of the property sold. The assessed valuation data shown above
represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above.
Source: HDL Coren & Cone, Kern County Assessor 2017-18 Combined Tax Rolls.
160
Total Taxable Total
Estimated
Actual
Assessed
Value
Direct
Rate
Taxable
Value (1)
$24,780,310 0.1961 Unavailable
22,716,000 0.1981 Unavailable
21,909,613 0.1969 Unavailable
21,346,953 0.1956 Unavailable
21,685,568 0.1924 Unavailable
22,784,662 0.1619 Unavailable
24,604,512 0.1623 Unavailable
25,997,165 0.1616 Unavailable
27,427,773 0.1613 Unavailable
28,622,132 0.1609 Unavailable
161
CITY OF BAKERSFIELD
Property Tax Rates
Direct and Overlapping Governments
Last Ten Fiscal Years
2009 2010 2011 2012
Basic County-Wide Levy (1)1.0000 1.0000 1.0000 1.0000
Overlapping Debt
Bakersfield School 0.0568 0.0676 0.0663 0.0710
Beardsley School 0.0485 0.0548 0.0574 0.0599
Edison School Bond --0.0720 0.0664
Fairfax School 0.0296 0.0330 0.0401 0.0688
Fruitvale School Bonds 0.0537 0.0610 0.0695 0.0759
Greenfield School 0.0615 0.0835 0.0783 0.0804
Kern Community College District 0.0091 0.0094 0.0101 0.0091
Kern County Water Agency 0.0495 0.0601 0.0553 0.0748
Kern High School District 0.0358 0.0431 0.0447 0.0363
Lakeside School -0.0216 0.0188 0.0224
Lamont School 0.0466 0.0652 0.0694 0.0693
Norris School 0.0250 0.0330 0.0298 0.0327
Panama Buena Vista School 0.0088 0.0099 0.0116 0.0115
Rio Bravo-Greeley 0.0681 0.0690 0.0741 0.0737
Rosedale 0.0025 0.0046 --
Standard Bond ----
Standard Bond 2006A 0.0240 0.0258 0.0206 0.0191
Vineland School 07-A 0.0397 0.0424 0.0414 0.0423
Total Direct & Overlapping Tax Rates (2)1.5592 1.6840 1.7594 1.8136
City Share of 1% Levy (3)0.1847 0.1846 0.1852 0.1851
Total Direct Rate (4)0.1961 0.1981 0.1969 0.1956
(1) In 1978 the voters of the State of California passed Proposition 13 which set the property tax rate at a 1.00% fixed amount.
This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed
amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved
bonds.
(2) Overlapping rates are those of local and county governments that apply to property owners within the City. Not all
overlapping rates apply to all City property owners.
(3) City's share of 1.00% Levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. Educational
Revenue Augmentation Fund (ERAF) general fund tax shifts are not included in tax ratio figures. The effective City rate after ERAF is 9.9%.
(4) Total Direct Rate is the weighted average of all individual direct rates applied by the City of Bakersfield.
Source: HDL Coren & Cone (Kern County Auditor-Controller's Office)
162
2013 2014 2015 2016 2017 2018
1.0000 1.0000 1.0000 1.0000 1.0000 1.0000
0.0681 0.0360 0.0186 0.0339 0.0204 0.0522
0.0499 0.0486 0.0406 0.0480 0.0723 0.0638
0.0694 0.0687 0.0678 0.0716 0.0706 0.0755
0.0686 0.0607 0.0692 0.0712 0.0631 0.1075
0.0614 0.0678 0.0595 0.0591 0.0516 0.0534
0.0826 0.0843 0.0544 0.0445 0.0438 0.0419
0.0085 0.0126 0.0105 0.0136 0.0132 0.0363
0.0540 0.0569 0.0525 0.0537 0.0585 0.0785
0.0437 0.0392 0.0361 0.0324 0.0260 0.0533
0.0227 0.0283 0.0254 0.0267 0.0236 0.0264
0.0615 0.0681 0.0630 0.0657 0.0681 0.0682
0.0580 0.0500 0.0489 0.0498 0.0565 0.0579
-0.0194 0.0294 0.0330 0.0243 0.0224
0.0535 0.0769 0.0649 0.0581 0.0629 0.0687
------
-0.0208 0.0219 0.0403 0.0770
0.0185 0.0152 0.0110 0.0140 --
0.0437 0.0418 0.0431 0.0456 0.0441 0.0453
1.7641 1.7745 1.7157 1.7428 1.7393 1.9283
0.1851 0.1839 0.1839 0.1839 0.1839 0.0184
0.1924 0.1619 0.1623 0.1616 0.1613 0.1609
163
CITY OF BAKERSFIELD
Property Tax Levies and Collections
Last Ten Fiscal Years (1)
Collected within the
Fiscal Year of the Levy Total Collections to Date
Fiscal Year
Ended
June 30
Tax Levied
for the
Fiscal Year Amount
Percentage
of Levy
Collections
in Subsequent
Years (2)Amount
Percentage
of Levy (3)
2009 $42,390,737 $41,627,252 98.20%$1,626,519 $43,253,771 102.04%
2010 37,878,353 36,683,727 96.85%2,308,846 38,992,573 102.94%
2011 38,752,737 38,136,143 98.41%437,340 38,573,483 99.54%
2012 37,333,785 36,574,775 97.97%417,383 36,992,158 99.08%
2013 38,448,465 37,544,318 97.65%159,495 37,703,813 98.06%
2014 39,887,750 39,344,783 98.64%375,679 39,720,462 99.58%
2015 42,153,405 41,301,939 97.98%166,794 41,468,733 98.38%
2016 44,309,063 43,455,549 98.07%254,923 43,710,472 98.65%
2017 47,433,693 46,803,045 98.67%4,914 46,807,959 98.68%
2018 47,385,467 46,768,741 98.70%345,147 47,113,888 99.43%
Notes:
(1) Excludes Redevelopment property tax increment.
(2) Delinquent tax collections do not include interest or penalties.
(3) Total collections to date may exceed 100% of annual levy. Delinquent tax collections are
recorded in the current levy year as the County of Kern does not give detail as to the levy
year for delinquent tax collections. This was confirmed with the County of Kern in 2014.
Source: City Finance Department
164
CITY OF BAKERSFIELD
Direct and Overlapping Sales Tax Rates
Last Ten Fiscal Years
Year
State of
California
Total
Rate
2009 %8.25 %8.00
2010 %8.25 %8.25
2011 %8.25 %8.25
2012 %7.25 %7.25
2013 %7.50 %7.50
2014 %7.50 %7.50
2015 %7.50 %7.50
2016 %7.50 %7.50
2017 %7.25 %7.25
2018 %7.25 %7.25
Note: The City's sales tax rate may be changed with voter approval.
Source: California State Board of Equalization
165
CITY OF BAKERSFIELD
Taxable Sales By Market Groups
Last Ten Fiscal Years
2008 2009 2010 2011 2012
Retail Trade Groups $40,426,683 $34,939,803 $36,129,898 $40,605,395 $44,051,820
Non-Store Retailers 991,106 728,190 714,709 922,257 961,178
Service Groups 3,149,366 2,809,311 3,279,903 4,056,208 4,396,783
Construction Contractor Groups 1,615,488 628,808 612,563 807,930 813,201
Producers, Manufacturers and Wholesalers
Group 7,713,486 5,682,497 6,119,199 8,620,630 9,155,110
Total $53,896,129 $44,788,609 $46,856,272 $55,012,420 $59,378,092
Note: 2017 data is the most recent information available.
Source: California State Board of Equalization
166
2013 2014 2015 2016 2017
$45,612,755 $47,515,688 $46,963,710 $46,705,531 $48,673,472
1,067,613 1,083,860 1,107,792 1,133,093 1,125,033
4,479,230 4,472,838 3,254,284 3,598,424 3,511,840
1,060,112 1,536,343 2,838,481 155,159 1,520,316
8,817,193 8,221,851 6,475,824 5,484,889 6,746,698
$61,036,903 $62,830,580 $60,640,091 $57,077,096 $61,577,359
167
CITY OF BAKERSFIELD
Sales Tax Revenue Payers By Industry
2017 and Ten Years Ago
2007
Number of
Filers
Percent of
Total
Tax
Liability Paid
Percent of
Total $
New Car Dealers 23 %0.34 $8,633,934 %15.47
Department Stores 22 %0.33 6,142,323 %11.01
Service Stations 81 %1.20 3,838,334 %6.88
Eating/Drinking Places without Alcohol 438 %6.51 2,631,706 %4.72
Petroleum, Petrol Products, Oil Well Rfg & Serv Stn
Equip 63 %0.94 2,567,128 %4.60
Building Material 35 %0.52 2,440,542 %4.37
General Stores 17 %0.25 1,887,652 %3.38
Contractors & Mfgs & Wholesalers of Building
Material 195 %2.90 1,839,151 %3.30
Full Time Specialty Stores 1020 %15.16 1,530,523 %2.74
Eating/Drinking Place with General On-Sale Lic 193 %2.87 1,513,997 %2.70
Family Apparel -%--%-
Grocery Stores with General Liquor Lic -%--%-
Electronic & Electrical Equipment -%--%-
All Other 4,641 %68.98 22,785,875 %40.83
Total 6,728 %100.00 $55,811,165 %100.00
Note: Due to confidentially issues, the names of the ten largest revenue payers are not available. The categories
presented are intended to provide alternative information regarding the souces of the City's revenue. The amounts shown are gross collections prior to refunds
and collections of amounts due from prior year.
Source: California State Board of Equalization
168
2017
Number of
Filers
Percent of
Total
Tax
Liability Paid
Percent of
Total $
26 %0.35 $10,106,611 %16.41
49 %0.66 8,658,763 %14.06
97 %1.31 4,491,745 %7.30
422 %5.69 4,068,611 %6.61
-%--%-
14 %0.19 2,309,023 %3.75
-%--%-
-%--%-
874 %11.79 1,770,300 %2.87
374 %5.04 3,614,637 %5.87
368 %4.96 2,203,816 %3.58
92 %1.24 1,837,616 %2.99
26 %0.35 1,233,085 %2.00
5,073 %68.42 21,283,153 %34.56
7,415 %100.00 $61,577,360 %100.00
169
CITY OF BAKERSFIELD
Ratio of General Bonded Debt Outstanding
Last Ten Fiscal Years
Fiscal
Year
General
Obligations
Bonds
Net
Bonded Debt Total
Ratio of Net
Bonded Debt to
Assessed
Value
Population
(1)
Total
Debt
Per
Capita
2009 $-$-$-%-327,650 $-
2010 ----333,847 0.00
2011 ----338,952 0.00
2012 ----354,480 0.00
2013 ----359,221 0.00
2014 ----367,315 0.00
2015 ----365,504 0.00
2016 ----379,110 0.00
2017 ----383,512 0.00
2018 ----386,839 0.00
Notes:
Includes all long-term general obligation bonded debt.
(1) State Department of Finance
Source: City Finance Department
170
171
CITY OF BAKERSFIELD
Ratio of Outstanding Debt by Type
Last Ten Fiscal Years
Governmental Activities Business-Type Activities
Revenue Bonds Notes
Certificates of
Participation
Total
Governmental
Activities (3)Revenue Bonds Bonds
2009 $-$4,014,000 $30,230,000 $34,244,000 $242,701,570 $-
2010 -5,611,000 28,465,000 34,076,000 241,270,507 -
2011 -5,167,000 26,620,000 31,787,000 238,994,444 -
2012 -4,801,000 24,710,000 29,511,000 217,003,381 -
2013 -4,423,000 22,725,000 27,148,000 201,875,000 -
2014 -4,150,049 20,640,000 24,790,049 200,236,254 -
2015 -3,932,118 18,460,000 22,392,118 190,545,190 -
2016 -3,442,290 16,175,000 19,617,290 187,377,613 -
2017 -2,938,462 13,785,000 16,723,462 174,647,913 -
2018 -2,584,240 11,275,000 13,859,240 166,998,212 -
Notes:
Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.
(1) U.S. Department of Commerce Bureau of Economic Analysis. As available, figures and estimates should be used for general purposes only. Estimates are
revised periodically to include data that may not have been available at the time. Personal income was used for the base of this calculation. Details can be
found in the Demographic and Economic Statistics.
(2) State Department of Finance. Estimates are revised periodically to include data that may not have been available at the time. Population was used for the
base of this calculation. Details can be found in the Demographic and Economic Statistics.
(3) Total Governmental Activities and Total Primary Government totals do not include Compensated Absences.
(4) As restated.
Source: City Finance Department
172
Business-Type Activities
Deferred
Bond
Premium Notes
Contracts/
Loans
Capital
Leases (4)
Total
Business-Type
Activities
Total Primary
Government
Percentage
of Personal
Income (1)
(4)
Per
Capita (2)
(4)
$8,276,570 $10,614,878 $-$-$261,593,018 $295,837,018 %1.10 $796
7,945,507 8,991,701 --258,207,715 292,283,715 %1.06 778
7,614,444 7,521,262 -22,138,054 276,268,204 308,055,204 %4.02 801
7,283,381 6,769,136 -21,664,941 252,720,839 282,231,839 %3.69 796
6,621,255 6,017,009 -21,174,195 235,687,459 262,835,459 %3.34 732
-5,264,884 -20,664,937 226,166,075 250,956,124 %3.11 683
-4,512,759 246,131 20,135,757 215,439,837 237,831,955 %2.89 651
-3,760,631 292,503 19,091,567 210,522,314 230,139,604 %2.70 607
-3,008,504 319,400 18,730,478 196,706,295 213,429,757 %2.45 557
-2,256,378 368,746 18,315,293 187,938,629 201,797,869 %2.25 522
173
CITY OF BAKERSFIELD
Direct and Overlapping Debt (1)
As of June 30, 2018
2017 - 18 Assessed Valuation $28,614,218,773
Adjusted Assessed Valuation $28,614,218,773
Debt
Outstanding (2)
Estimated
Percentage
Applicable (3)
Estimated Share
of Overlapping
Debt
Overlapping Tax and Assessment Debt
Kern Community College District Safety
Repair and Improvement District $128,956,081 33.840%$43,638,738
Kern Community College District School
Facilities Improvement District No. 1 40,225,000 33.634 13,529,277
Kern High School District 322,926,209 52.626 169,943,147
Bakersfield City School District 94,756,619 72.789 68,972,395
Beardsley School District 19,572,057 21.175 4,144,383
Edison School District 4,649,942 0.021 976
Fairfax School District 9,595,245 23.741 2,278,007
Fruitvale School District 25,539,942 78.173 19,965,339
Greenfield Union School District 11,258,406 86.007 9,683,017
Lakeside Union School District 12,593,307 39.507 4,975,238
Lamont School District 1,744,775 0.020 349
Norris School District 26,584,412 62.434 16,597,712
Panama-Buena Vista Union School District 64,375,000 97.112 62,515,850
Rio Bravo-Greeley Union School District 9,937,494 1.443 143,398
Standard School District 28,740,000 1.027 295,160
Vineland School District 3,914,574 0.0004 16
Kern Delta Water District 390,000 77.922 303,896
Greenfield Union School District CFD No. 1 & No. 3 6,880,025 100.000 6,880,025
RNR School Financing Authority 106,825,000 87.645 93,626,771
Overlapping Tax and Assessment Debt $919,464,088 $517,493,694
Overlapping General Fund Debt
Kern County Certificates of Participation $99,645,710 32.607 $32,491,477
Kern County Pension Obligations 231,489,315 32.607 75,481,721
Certificates of Participation:
Kern County Board of Education 37,190,000 32.607 12,126,543
Kern County Community College District 30,115,000 30.414 9,159,176
Kern County Community College District Benefit 78,805,000 30.414 23,967,753
Kern High School District 99,665,000 52.626 52,449,703
Panama-Buena Vista Union School District 54,470,000 97.112 52,896,906
Fairfax School District General Fund Obligations 2,227,771 23.741 528,895
Rio Bravo-Greeley Union School District General Fund Obligations 490,000 1.443 7,071
Rosedale Union School District General Fund Obligations 9,995,000 56.349 5,632,083
Overlapping Tax Increment Debt (Successor Agency)2,525,000 100.000 2,525,000
Overlapping General Fund Debt $646,617,796 $267,266,328
Total Overlapping Debt $1,566,081,884 $784,760,022
Direct Debt
City of Bakersfield
City of Bakersfield General Fund Obligations $11,275,000
Long-term notes payable $2,584,240
Total Direct and Overlapping Debt $798,619,262
Notes:
(1)Excluded from this schedule are: (a) all bonds which are not general obligation bonds of the City and (b) general obligation bonds issued for water utility
purposes which are payable from Water Fund revenues.
(2) Direct debt is reported net of debt service monies available. Overlapping debt is reported at gross values.
(3) Percentage of overlapping agency's assessed valuation located within boundaries of the City.
Source: California Municipal Statistics, Inc. and City Finance Department
174
CITY OF BAKERSFIELD
Computation of Legal Debt Margin
June 30, 2018
Legislation does not mandate a debt limit for the City of Bakersfield.
175
CITY OF BAKERSFIELD
Pledged - Revenue Coverage
Last Ten Fiscal Years
Wastewater Revenue Bonds
Fiscal
Sewer Charges
and Other
Less:
Operating
Net
Available Debt Service (3)
Year Revenue (1)Expenses (2)Revenue Principal Interest Coverage (4)
2008-2009 $33,776,649 $11,447,963 $22,328,686 $-$10,361,705 2.15
2009-2010 38,115,751 11,928,571 26,187,180 1,100,000 9,597,489 2.45
2010-2011 36,073,819 14,144,051 21,929,768 1,945,000 9,597,489 1.90
2011-2012(5)36,769,858 12,913,038 23,856,820 2,930,000 (6)9,597,489 1.90
2012-2013 37,901,401 13,156,437 24,744,964 2,845,000 (7)9,451,151 2.01
2013- 2014 39,610,854 14,265,421 25,345,433 3,260,000 (7)9,959,591 1.92
2014-2015 40,386,623 14,195,887 26,190,736 4,360,000 (7)8,744,990 2.00
2015-2016(8)39,111,557 14,768,141 24,343,416 5,475,000 (7)3,694,732 2.65
2016-2017 39,078,787 14,796,170 24,282,617 6,055,000 (7)6,557,105 1.93
2017-2018 42,356,491 12,868 42,343,623 5,975,000 6,270,503 3.46
Notes:
Details regarding the City's outstanding debt can be found in the notes to the basic financial statements.
Operating expenses do not include interest or depreciation expenses.
(1) Includes amounts for connection fees, interest funded in bond issue and principal portion of lease revenues.
(2) Does not include the General Obligation Bonds reported in Enterprise Funds. Operating expenses exclude depreciation expense.
(3) Issued Sewer Revenue Bonds, Series 2007A and 2007B in August of 2007.
(4) Minimum coverage requirement on the Wastewater Revenue bonds is 1.25.
(5) Previous report included arbitrage expenses. Revenue has been corrected.
(6) In addition to the normal debt service amount referenced above, there was a partial bond call of $18,730,000 approved by the City Council to reduce the
principal balance of the 2007B bond down to $25 million. Sewer revenue bonds 2007B were refunded in January 2012 (Series 2012A) to change the liquidity
provider from Dexia to JP Morgan Chase.
(7) In addition to the normal debt service referenced above, City Council approved partial bond calls of $5 million each year to reduce the principal
balance of Sewer Revenue Bonds Series 2012A.
(8) Partial refunding of Sewer Revenue Bonds Series 2007A in July 2015 (Series 2015A).
Source: City Finance Department
176
CITY OF BAKERSFIELD
Demographic and Economic Statistics
Last Ten Fiscal Years
Fiscal Year
Population
(1)
Personal
Income (2)
(millions)
Per Capita
Personal
Income (2)
Median
Age (3)
Education Level
as a % of
Population
having
Formal
Schooling (3)
(4)
Elementary
School
Enrollment
Estimated
Unemploymen
t
Rate (%) (5)
2008-2009 327,650 $7,085 $21,624 30.3 71.5 27,263 14.70%
2009-2010 333,847 7,034 21,071 30.8 78.1 27,267 15.80%
2010-2011 338,952 7,007 20,675 29.5 77.8 27,590 15.30%
2011-2012 354,480 7,640 21,553 29.5 78.1 21,411 10.50%
2012-2013 359,221 7,862 21,887 29.8 77.8 23,422 8.40%
2013-2014 367,315 8,074 21,980 30.0 78.2 24,012 7.90%
2014-2015 365,504 8,228 22,512 30.1 78.5 24,232 9.30%
2015-2016 379,110 8,532 22,505 30.2 79.7 24,267 9.10%
2016-2017 383,512 8,713 22,718 30.4 79.6 24,299 9.20%
2017-2018 386,839 8,965 23,175 30.4 79.6 24,375 7.80%
Notes:
(1) State Department of Finance. Estimates are revised periodically to include data that may not have been available at the time.
(2) U.S. Department of Commerce Bureau of Economic Analysis. As available, figures and estimates should be used for general purposes only. Estimates are
revised periodically to include data that may not have been available at the time. Information is for Bakersfield Metropolitan area. Effective 2008-2009
information now includes Delano area.
(3) U.S. Census Bureau estimates as available for Bakersfield Metropolitan area.
(4) This column shows the percent of the City population 25 years and older who are high school graduates or higher.
(5) State of California Employment Development Department (Data shown is for Kern County).
177
CITY OF BAKERSFIELD
Principal Employers (1)
Current Year and Nine Years Ago
2009 2018
Employer Employees Rank
Percent
of Total City
Employment Employees Rank
Percent
of Total City
Employment
County of Kern (1)N/A -7,457 1 %4.53
Kern High School District (1)4,321 2 %2.63
Bakersfield City School District 3,917 3 %2.38
Dignity Health 3,417 4 %2.08
Panama-Buena Vista Union School
District 2,388 5 %1.45
Bolthouse Farms 2,034 6 %1.24
Adventist Health Bakersfield 1,982 7 %1.20
Kern Medical Center 1,608 8 %0.98
Kern County Superintendent of
Schools 1,546 9 %0.94
City of Bakersfield 1,470 10 %0.89
Others 134,360 %81.68
Total N/A -164,500 %100.00
(1) Not all employees are employed within the Bakersfield City Limits.
Source: City Finance Department.
Total number of employed persons in Bakersfield provided by EDD Labor Force Data.
Note: Only current data is available.
178
179
CITY OF BAKERSFIELD
Full-time Equivalent City Government Employees by Function
Last Ten Fiscal Years
2009 2010 2011 2012 2013 2014
Function
Governmental activities:
General government 88 98 106 109 110 119
Public safety
Police
Officers 344 358 380 385 389 394
Civilians 127 127 123 131 137 143
Fire
Firefighters and officers 181 179 176 177 177 177
Civilians 19 19 19 19 21 22
Public works 248 244 244 247 250 254
Community services 155 147 151 153 153 150
Community development ----65 63
Development services 91 69 57 55 --
Economic/Community dev.22 20 12 11 --
Business-type activities:
Wastewater treatment 49 55 54 56 57 59
Refuse collection 102 102 102 103 106 107
Domestic/Agricultural water 26 28 28 28 28 28
General aviation ------
Offstreet parking ------
Total 1,452 1,446 1,452 1,474 1,493 1,516
Source: City Finance Department
180
2015 2016 2017 2018
126 123 123 124
404 404 407 407
148 148 148 151
177 177 177 177
22 22 22 23
248 244 243 247
150 146 146 148
65 63 63 63
----
----
59 59 59 61
107 107 108 109
28 28 29 29
----
----
1,534 1,521 1,525 1,539
181
CITY OF BAKERSFIELD
Property Value, Construction and Bank Deposits (1)
Last Ten Calendar Years
Commercial
Construction
Residential
Construction
Other
Construction
No. of
Units Value
No. of
Units Value Value
2008 95 $60,840 1,090 $237,091 $93,314
2009 83 62,088 1,097 232,275 86,668
2010 40 13,425 848 197,380 98,057
2011 40 41,482 422 92,313 81,984
2012 49 20,807 1,122 259,851 108,877
2013 69 15,710 1,336 312,569 157,024
2014 89 56,320 1,435 389,715 203,722
2015 70 49,806 1,391 384,819 377,510
2016 115 63,714 1,387 370,956 338,559
2017 59 61,034 1,132 332,652 312,316
Notes:
(1) Property value and bank deposits reported in thousands.
(2) Federal Deposit Insurance Corporation
(3) Construction units and values are based on a 12 month calendar year. June 30, 2018 data reflects the 2017 calendar year.
Source: City Finance Department
182
Total
Construction
No. of
Units Value
Bank
Deposits (2)
1,185 $391,245 $4,485,261
1,180 381,031 4,728,745
888 308,862 5,172,880
462 215,779 5,280,515
1,171 389,535 5,626,755
1,405 485,303 6,069,764
1,524 649,757 6,421,302
1,461 812,135 6,759,961
1,502 773,229 7,141,426
1,191 706,002 7,515,635
183
CITY OF BAKERSFIELD
Operating Indicators by Function
Last Ten Fiscal Years
Fiscal Year
2009 2010 2011 2012
Function
Public safety - Police
Physical arrests 18,531 17,023 22,028 29,623
Parking violations 7,985 5,522 5,433 4,708
Traffic violations 11,365 12,018 10,043 9,172
Public safety - Fire
Number of calls answered 28,605 26,885 27,392 28,870
Inspections 2,444 2,896 3,355 3,276
Public works
Street resurfacing (lane miles)84 49 83 129
Refuse collection
Refuse collected (tons/day)100,750 112,000 111,500 108,200
Recyclables collected (tons/day)39,200 42,000 47,000 48,215
Recreation & parks
Athletic field permits issued 6,849 6,219 5,685 10,156
Community center,
aquatics/sports admissions 323,661 379,286 440,101 473,530
Domestic/agricultural water
New connections 1,293 954 493 301
Water main breaks 14 5 7 10
Average daily consumption 41,542 39,370 27,008 27,568
(thousands of gallons)
Wastewater treatment
Average daily sewage treatment 31.49 MGD 31.49 MGD 32.3 MGD 31.28 MGD
(millions of gallons)
Source: City Finance Department
184
Fiscal Year
2013 2014 2015 2016 2017 2018
32,158 37,246 24,254 19,965 13,008 9,502
6,620 10,499 6,183 4,083 3,843 2,238
11,528 15,065 24,154 26,934 24,190 16,548
31,164 32,898 35,117 35,747 38,823 40,945
3,660 4,195 4,978 5,684 6,859 5,649
127 116 119 79 70 75
111,420 110,125 102,500 102,800 103,100 102,200
53,350 55,500 78,500 79,100 79,500 82,700
9,297 9,625 9,046 8,054 7,788 8,224
475,619 502,994 527,617 553,831 518,432 534,959
701 1,123 1,033 945 968 500
14 4 5 4 4 3
36,730 39,712 34,973 29,812 33,378 36,128
32.13 MGD 30.0 MGD 29.9 MGD 28.7 MGD 29.0 MGD 29.6 MGD
185
CITY OF BAKERSFIELD
Capital Asset Statistics by Function
Last Ten Fiscal Years
Fiscal Year
2009 2010 2011 2012
Function
Land (1)
Area (2)143.46 144.40 149.75 149.80
Public safety
Police stations/substations 4 4 4 4
Fire stations 13 14 14 14
Refuse collection
Collection trucks 57 57 57 53
Public works
Streets (miles) (3)1,242 1,379 1,394 1,409
Streetlights 15,809 15,923 16,092 16,160
Traffic signals 343 359 394 394
Recreation & parks
Parks acreage 484 494 595 595
Parks 55 55 59 59
Swimming pools 6 4 4 4
Tennis courts 11 11 11 12
Community centers 3 3 3 3
Domestic/Agricultural water
Water mains (miles) (3)491 493 501 502
Fire hydrants (3)10,041 10,220 10,301 10,441
Wastewater treatment
Sanitary sewers (miles)1,059 1,059 1,061 1,061
Storm sewers (miles)261 262 263 263
Maximum daily treatment capacity 41 MGD 57 MGD 57 MGD 57 MGD
(millions of gallons)
Notes:
(1) Reported in square miles.
(2) Corrected number for 2008 for more accurate information provided.
(3) Corrected numbers for all years with more accurate information provided.
Source: City Finance Department
186
Fiscal Year
2013 2014 2015 2016 2017 2018
150.01 150.18 150.18 150.97 151.10 151.10
4 3 3 3 3 3
14 14 14 14 14 14
55 57 57 57 57 57
1,424 1,441 1,441 1,553 1,596 1,505
16,602 16,388 16,486 16,781 17,042 18,632
402 410 419 420 426 428
595 623 769 769 776 810
59 59 59 59 59 59
4 4 4 4 4 4
12 12 12 12 12 12
3 3 3 3 3 3
503 505 515 525 535 589
10,581 10,723 10,853 11,117 11,130 11,396
1,061 1,063 1,072 1,076 1,077 1,077
263 265 268 269 270 270
57 MGD 57 MGD 57 MGD 57 MGD 57 MGD 57 MGD
187
CITY OF BAKERSFIELD
Schedule of Insurance in Force
June 30, 2018
Excess Workers' Compensation Statutory Limit with a $500,000 self-insured retention.
Excess Liability $75,000,000 Limit with a $1,000,000 self-insured retention.
Combination Crime $3,000,000 Coverage limit, $25,000 deductible.
Airport Operations $10,000,000 Coverage limit.
Aircraft $10,000,000 Coverage limit.
Fiduciary Liability $5,000,000
Physical Loss:
All Risk Property and Boiler $600,000,000
Coverage on buildings and contents subject to $5,000
deductible with various sublimits.
Machinery
Auto-Physical Damage
Coverage for high value vehicles over $100,000 subject to a
$10,000 deductible.
Life and Medical:
Life and Accident $2,000
Supervisory & Management employees. Each employee
(basic coverage) and additional insurance equal to annual
salary to nearest $1,000.
$12,000 Safety employees, each employee (basic coverage).
$30,000 Miscellaneous employees, each employee (basic coverage).
Medical and Dental Basic coverage plus (no lifetime maximum)
extended benefits of 90% after $750
deductible for medical (Blue Shield)
or Group dental ($50 deductible for United Concordia).
Source: Liability and Physical Loss coverage is provided by the City's Risk Management.
Department. Life and Medical coverage is provided by the City's Human Resource Department.
188
Insurance Company Policy Number
Expiration
Date Annual Premium
CSAC-EIA WC1718 06/30/19 $907,331
ACCEL 06/30/19 980,069
National Union Fire 016060820 07/01/19 11,713
Pik West AAPN14413352001 07/01/19 3,175
Pik West NAC6009141 07/01/19 14,595
Hudson SFD31211205 10/01/19 11,583
CSAC PROPERTY1819 03/31/19 361,239
Voya Financial 0067794-4 12/31/19
$3.00 per thousand dollar of salary,
management & supervisory $2,000 plus annual
salary maximum benefit $100,000.
Voya Financial 0067794-9 12/31/19
Safety-$27.30 each permanent employee for
$12,000 coverage.
Voya Financial 0067794-9 12/31/19
Blue/White Collar Units: $68.38 each
permanent employee for $30,000 coverage.
Blue Shield PPO Health W0054380 12/31/19 Bi-weekly rate range from $154.51
Blue Shield HMO Health W0054380 to $826.62 per employee for medical
Blue Shield Trio Health W0054380 based upon individual's plan coverage
Kaiser Permanente
HMO 132733-1003 and plan combination and $9.58 to
Kaiser Permanente
DHMO 132733-0010 $56.90 for dental. $1.59 to $5.84
United Concordia
DPPO Dental 920318-000 12/31/19 $1.59 to $5.84 per employee for
United Concordia
DHMO Dental 920318-001 vision coverage.
Medical Eye Service
HMO Vision 16269 12/31/19
Medical Eye Service
PPO Vision 16270
189
190
Rabobank Arena, Theater,Convention Center,
Valley Children’sIce Centerof Bakersfield
andSpectrumAmphitheatre
ConsolidatedFinancial Statements
June 30, 2018
C O N T E N T S
Page(s)
Independent Auditors’Report 1-2
Management’s Discussion and Analysis (Required Supplementary Information)3-8
Consolidated Financial Statements
Consolidated statement of net position 9
Consolidated statement of revenues, expensesand change in net position 10
Consolidated statement of cash flows 11-12
Notes to consolidated financial statements 13-19
Supplementary Information
Consolidated schedule of operating expenses 20
Independent Auditors’ Report on Internal Control overFinancial Reporting
and on Compliance and Other Matters Based on an Audit of Financial
Statements Performed inAccordance withGovernment Auditing Standards 21-22
Rabobank Arena, Theater, Convention Center,
Valley Children’sIce Center of Bakersfield
and SpectrumAmphitheatre
Management’s Discussion and Analysis
-3 -
JULY 2017TO JUNE 2018
RABOBANK ARENA, THEATER, CONVENTION CENTER, VALLEY CHILDREN’SICE
CENTEROF BAKERSFIELD AND SPECTRUMAMPHITHEATREMANAGEMENT
DISCUSSION AND ANALYSIS
This section of Rabobank Arena, Theater, Convention Center, Valley Children’sIce Center of Bakersfield
and Spectrum Amphitheatre’s(the Facilities)annual financial report presents our discussion and
analysis of the Facilities’financial performance during thefiscal year ended June 30, 2018. Please
read it in conjunction with the Facilities’consolidated financial statements, which follow this section.
FINANCIAL HIGHLIGHTS
!In FY 2017-2018 our top eight events were as follows:
o Disney on Ice, Feld Entertainment, Net Income of $125K
o CIF State Wrestling Championship, CIF, Net Income of $95K
o Kevin Hart, Live Nation, Net Income of $81K
o Monster Trucks, APEX Motorsports, Net Income of $60K
o WWE, Event Services, Net Income of $52K
o Gloria Trevi, Monterrey Promotions, Net Income of $42K
o Banda MS, Monterrey Promotions, Net Income of $42k
o Paw Patrol, VStar, Net Income of $42k
!The Rabobank Arena was host for three rehearsals this fiscal year. One of the rehearsals
resulted in a pop up show. The rehearsals resulted in net income ofmore than $71k.
!The Broadway in Bakersfield Theater Series produced by JamTheatricals from Chicago held
their 13th season of shows at Rabobank Theater with good results. There were four shows in
the series, which resulted in a net income of $27K.
!The Condors did not make the playoffs in 2017-2018, but their net income of over $260K was
an improvement over the previous fiscal year.
OVERVIEW OF THE FINANCIAL STATEMENTS
The annual report includes this management’s discussion and analysis report, the independent auditors'
report and the basic consolidated financial statements of the Facilities.
REQUIRED FINANCIAL STATEMENTS
The financial statements of the Facilitiesreport information using accounting methods similar to those
used by private sector companies. These statements offer short and long term financial information
about its activities. The Statement of Net Positionincludes all of the Facilities’assets and liabilities
and provides information about the nature and amounts of investments in resources (assets) and the
Rabobank Arena, Theater, Convention Center,
Valley Children’sIce Center of Bakersfield
and SpectrumAmphitheatre
Management’s Discussion and Analysis
-4 -
obligations to the Facilities’creditors (liabilities). It also provides the basis for evaluating the
Facilities’ capital structure as well asassessing the liquidity and financial flexibility of the Facilities.
All of the current year’s revenues and expenses are accounted for in the Statement of Revenues,
Expenses and Changein Net Position. This statement measures the success of the Facilities’
operations over the past year and can be used to determine whether the Facilitieshas successfully
recovered all its costs through its user fees and other charges,profitability and credit worthiness.
The final required financial statement is the Statement of Cash Flows. This statement reports cash
receipts, cash payments, and net changes in cash resulting from operations, investing, and financing
activities and provides answers to such questions as where did cash come from, what was cash used
for, and what was the change in the cash balance during the reporting period.
FINANCIAL ANALYSIS OF THE FACILITIES
One of the most important questions asked about the Facilities’finances is, “Arethe Facilitiesas a
whole better off or worse off as a result of this year’s activities?” The Statement of Net Position, and
the Statement of Revenues, Expenses and Changes in Net Position report information about the
Facilities’activities in a way that will help answer this question. These two statements report the net
position of the Facilitiesand the changes in net position. One can think of the Facilities’net position -
the difference between assets and liabilities -as one way to measure financial health or financial
position. Over time, increases or decreases in the Facilities’net position is one indicator of whether its
financial health is improving or deteriorating. However, one will need to consider other non-financial
factors such as changes in economic conditions, population growth, and new or changed government
legislation.
Rabobank Arena, Theater, Convention Center,
Valley Children’sIce Center of Bakersfield
and SpectrumAmphitheatre
Management’s Discussion and Analysis
-5 -
Below is a summary of the Consolidated Statements of Net Position, Table A-1:
$%
20182017ChangeChange
Current assets2,790,631$ 3,074,106$ (283,475)$ -9%
Noncurrent capital assets 5,446 6,703 (1,257) -19%
2,796,077$ 3,080,809$ (284,732)$ -9%
Current liabilities 2,546,077$ 2,830,809$ (284,732)$ -10%
Other liabilities 250,000 250,000 - 0%
Total liabilities 2,796,077 3,080,809 (284,732) -9%
Invested in capital assets 5,446 6,703 (1,257) -19%
Unrestricted (5,446) (6,703) 1,257 -19%
Total net position - - - 0%
2,796,077$ 3,080,809$ (284,732)$ -9%
Table A-1
Condensed Consolidated Statements of Net Position
Asset and liability balances for both years are very consistent. The slight change in current assets can
be attributed to a lower receivables balance and the decrease in liabilities can be attributed to events
that were on sale at the end of 2018 versus 2017.
Rabobank Arena, Theater, Convention Center,
Valley Children’sIce Center of Bakersfield
and SpectrumAmphitheatre
Management’s Discussion and Analysis
-6 -
$%
20182017ChangeChange
Operating revenues7,741,942$ 7,621,593$ 120,349$ 2%
Less direct event expenses4,419,379 4,614,108 (194,729) -4%
Gross profit3,322,563 3,007,485 315,078 10%
Operating expenses4,091,749 3,856,239 235,510 6%
Operating loss(769,186) (848,754) 79,568 -9%
Nonoperating income353,468 433,036 (79,568) -18%
Change in net position(415,718) (415,718) - 0%
Net position, beginning of year- - - 0%
Contributions 415,718 415,718 - 0%
Net position, end of year-$ -$ -$ 0%
Table A-2
Condensed Consolidated Statements of Revenues, Expenses and Changes in Net Position
Results from operations were $79k better than the prior year. Gross profit on the events this fiscal year
improved over the prior year. The expenses for each event were scrutinized and staffing levels were
controlled in order to keep the costs in line with the attendance levels.
Rabobank Arena, Theater, Convention Center,
Valley Children’sIce Center of Bakersfield
and SpectrumAmphitheatre
Management’s Discussion and Analysis
-7 -
Over (Under)%
Actual Budget Budgetof Budget
Operating revenues7,741,942$ 8,435,413$ (693,471)$ -8%
Less direct event expenses4,419,379 4,947,448 (528,069) -11%
Gross profit 3,322,563 3,487,965 (165,402) -5%
Operating expenses 4,091,749 4,162,541 (70,792) -2%
Operating loss (769,186) (674,576) (94,610) 14%
Nonoperating income 353,468 - 353,468 100%
Change in net position(415,718)$ (674,576)$ 258,858$ -38%
Year Ended June 30, 2018
Table A-3
Change in Net Position, Actual to Budget
Gross operating revenue and direct event expenses for the year wereless than budgeted;this can be
attributed to budgeted concerts that did not occur. Decreases were found across revenues in rent,
parking, ticket rebates, facility fees and merchandise revenue.
Operating expenses came in under budget overall, the mainfactor wasoverhead departments watching
costs associated with their departments.
$%
June 30, 2018 June 30, 2017ChangeChange
Small Equipment18,896$ 18,896$ -$ 0%
Less accumulated depreciation13,45012,1931,257 10%
Net property and equipment5,446$ 6,703$ (1,257)$ -19%
Table A-4
Capital Assets
Rabobank Arena, Theater, Convention Center,
Valley Children’sIce Center of Bakersfield
and SpectrumAmphitheatre
Management’s Discussion and Analysis
-8 -
ECONOMIC FACTORS AND NEXT FISCAL YEAR
Several key factors are expected to affect next fiscal year:
!The economic climate in Bakersfield and Kern County continues to play a large part in the
financial performance ofthe Facilities. The oil prices have stabilized, but have not bounced
back to the levels they once were and the agriculture industry is still trying to bounce back after
the drought years Kern County has had. We are still exploring different markets to combat the
loss in the sponsorship revenues and suite lease agreements. We are continuing to actively seek
new and different ways to advertise events, package new items into sponsorship entitlements,
and are finding new ways to increase suite revenues. Additional growth in sponsorship
revenues is expected, as we continue to pursue new relationships with sponsors.
!In FY 2018-2019, the Condors will be playing their fourth season as the AHL affiliate to the
Edmonton Oilers NHL hockey team. The higher caliber ofplay in the AHL is expected to
continue to bring in higher attendance, which will result in higher ancillary revenues across the
board.
!We continue to work closely with Aramark management and staff to strive to maximize food
and beverage commission revenues at every opportunity.
!At the Valley Children’s Ice Center, the youth hockey program continues to grow with great
success. A new club team at Cal State University Bakersfield has formed which will contribute
to additional ice time rentals.
!The event calendar for the first six months of the fiscal year is fairly full with a wide variety of
events. The concert calendar is fuller at this time than previous years with eight concerts
already confirmed for 18/19. The booking department continues to work hard in trying to
secure additional events for the Facilities overall.
CONTACTING RABOBANK ARENA
This financial report is designed to provide a general overview of the finances and accountability of
Rabobank Arena, Theater, Convention Center, Valley Children’sIce Center of Bakersfield and Spectrum
Amphitheatre. If you have questions about this report contact Rabobank Arena, Theater, Convention
Center, Valley Children’sIce Center of Bakersfield and Spectrum Amphitheatre, 1001 Truxtun Avenue,
Bakersfield,California 93301, Attention Director of Finance.
-9 -
ASSETS
Current Assets
Cash 2,188,737$
Accounts receivable, net 239,753
Accounts receivable, other27,479
Net receivable from the City of Bakersfield294,445
Prepaid expenses40,217
2,790,631
Capital Assets , at cost 18,896
Less accumulated depreciation13,450
5,446
2,796,077$
LIABILITIES AND NET POSITION
Current Liabilities
Accounts payable, trade223,896$
Accounts payable, related party155,040
Accrued expenses426,251
Deferred revenues1,740,890
2,546,077
Other Liabilities 250,000
Net Position
Invested in capital assets, net of related debt5,446
Unrestricted(5,446)
-
2,796,077$
See Notes to Consolidated Financial Statements.
Rabobank Arena, Theater, Convention Center,
June 30, 2018
Consolidated Statement of Net Position
and Spectrum Amphitheatre
Valley Children's Ice Center of Bakersfield
-10 -
Rabobank Arena, Theater, Convention Center,
Valley Children's Ice Center of Bakersfield
and Spectrum Amphitheatre
Consolidated Statement of Revenues, Expenses and Change in Net Position
For the Year Ended June 30, 2018
Net revenues:
Facilities rent1,289,167$
Suites 1,371,190
Signage and advertising994,427
Concession commissions804,400
Ice Sports Center, general admissions400,079
Ticketing fees344,297
Parking 269,376
Facility fees1,945,144
Ice Sports Center, other revenue267,327
Merchandise43,758
Other income12,777
7,741,942
Direct event expenses:
Event labor1,162,266
Other direct event expenses3,257,113
4,419,379
Gross profit3,322,563
Operating expenses 4,091,749
Operating loss(769,186)
Nonoperating income:
Management reimbursement of operating loss353,468
Change in net position(415,718)
Net position, beginning of year -
Contributions received from the City of Bakersfield 415,718
Net position, end of year -$
See Notes to Consolidated Financial Statements.
-11 -
Rabobank Arena, Theater, Convention Center,
Valley Children's Ice Center of Bakersfield
and Spectrum Amphitheatre
Consolidated Statement of Cash Flows
For the Year Ended June 30, 2018
Cash flows from operating activities:
Cash received from customers1,521,762$
Cash received from contracts for services5,944,300
Cash payments to suppliers for goods and services(5,460,665)
Cash payments to employees for services(2,352,891)
Net cash used in operating activities(347,494)
Cash flows from noncapital and related financing activities:
Reimbursement from AEG for current year operating loss353,468
Net increase in cash and cash equivalents 5,974
Cash and cash equivalents, beginning of year 2,182,763
Cash and cash equivalents, end of year 2,188,737$
See Notes to Consolidated Financial Statements.
-12 -
Reconciliation of operating loss to net cash used in
operating activities:
Operating loss(769,186)$
Adjustments to reconcile operating loss to net
cash used in operating activities:
Depreciation1,257
Changes in operating assets and liabilities:
Accounts receivable154,497
Prepaid expenses6,300
Accounts payable, trade14,081
Accounts payable, related party55,628
Advances from the City of Bakersfield502,687
Accrued expenses123,919
Deferred revenues(436,677)
Net cash used in operating activities(347,494)$
Noncash investing and financing activities:
Contribution to unrestricted net position of advances
from the City of Bakersfield415,718$
Rabobank Arena, Theater, Convention Center,
Valley Children’sIce Center of Bakersfield
and Spectrum Amphitheatre
Notes to Consolidated Financial Statements
-13 -
Note 1.Nature of Business and Significant Accounting Policies
Nature of business:
The City of Bakersfield (the City) owns the Rabobank Arena, Theater,Convention Center,
Valley Children’s Ice Center of Bakersfield and SpectrumAmphitheatre(the Facilities).
The Rabobank Arena was built by the City and began operations in October 1998. It is the
only buildingof its kind in the Bakersfield area.
In December 2003, the City opened the Valley Children’s Ice Center of Bakersfield (Ice
Center). The Ice Center is used for public skating, hockey leagues, figure skating, and
other community events.
In February 2007, the City openedthe SpectrumAmphitheatre (the Amphitheatre), an
outdoor theatre located in Bakersfield.
The activities of the Arena, Theater,Convention Center, Ice Center and Amphitheatre (the
Facilities) are recorded in a special revenue fund of the City’s accounting records. The City
owns all the assets of the Facilities, and accordingly, all amounts related to the operation of
the Facilities belong to the City. The management companyoperating the Facilitieshas a
fiduciary responsibility under the management agreement to maintain and operate the
Facilities in the best interests of the City and the community.
In an agreement dated March 20, 2013, the City contracted with AEG Management
Bakersfield, LLC and AEG Facilities, LLC (the Company or AEG) to begin overseeingthe
operation and management of the Facilities for a term of ten years. The City, atits sole
discretion, may terminate this agreement effective June 30, 2018, if the City provides the
manager with notice of termination no later than six months before June 30, 2018. On
mutual agreement between both parties, the term may be extended one five-year period.
AEG washired by the City for its expertise in the management, operation and marketing of
public assembly facilities.
Principles of consolidation:
The consolidated financial statements of the Facilities include the accounts of the Rabobank
Arena, Theater, Convention Center, Valley Children’s Ice Center of Bakersfield and
SpectrumAmphitheatre after elimination of all significant inter-company accounts and
transactions.
Basis ofaccounting:
The Facilities’ basic financial statements are presented on the full accrual basis of
accounting and conform to accounting principles generally accepted in the United States of
America. The Facilitiesutilize accrual basis accounting in which revenues are recognized
when earned and expenses are recorded when a liability is incurred or economic assets are
used. Proprietary funds distinguish operating revenues and expenses from nonoperating
Notes to Consolidated Financial Statements
-14 -
items. Operating revenues and expenses generally result from providing services and
producing and delivering goods in connection with a proprietary fund’s principal ongoing
operations. Revenues and expenses not meeting this definition are reported as
nonoperating.
Revenue recognition:
Suite contracts
Revenues from suitesare recognized over the contract period per the contract terms.
Contracts are billed throughout theyear. The suite payments are recorded as deferred
revenue until earned andarerecognized over the contract period.
Naming rights, signage and advertising contracts
Revenues from naming rights, signage and advertising contracts are recognized over the
contract period per the contract terms. Contracts are billed according to the contract
terms. Payments are recorded as deferred revenue until earned and recognized over the
contract period.
Ticket sales
The Facilities, through its contract with Outbox AXS, LLC, sells tickets to events as an
agent of the event holder at the on-site box office location and through the telephone
and internet. All proceedsfrom the sale of tickets belong to the event holder. The
ticket sales are recorded as deferred revenue when sold. After the event has occurred,
settlement with the event holder takes place. The net of total ticket sales less event
expenses such as facility rent and reimbursement of direct event expenses is then paid to
or received from the event holder. The event ticket proceedsare removed from the
deferred revenue account in the month the event occurred.
The Facilities earn a ticketing fee on the sale of event tickets that take place through the
telephone andinternet. Revenues from these fees are recorded as deferred revenue at
the time of sale and are recognized in the month the event occurred.
Event revenues
Revenues from the Facilities’ events such as facilities rent, direct event expense
reimbursements, concession commissions, parking and merchandise are recognized in
the month the event occurred.
Net position:
The Facilities utilize a net position presentation in accordance with GASB Statement 34,
Basic Financial Statements -and Management’s Discussion and Analysis -for State and
Local Governments, as amended by GASB 63, Financial Reporting of Deferred Outflows
or Resources, Deferred Inflows ofResources, and Net Position. Net position is categorized
as invested in capital assets, net of related debt, restricted components of net position and
unrestricted components of net position. These categories are defined as follows:
Notes to Consolidated Financial Statements
-15 -
Invested in capital assets, net of related debt -This component of net position consists
of capital assets, including restricted capital assets, net of accumulated depreciation and
reduced by the outstanding balances of any bonds, mortgages, notes, or other
borrowings that are attributable to the acquisition, construction, or improvement of
those assets. If there are significant unspent related debt proceeds at year-end, the
portion of the debt attributable to the unspent proceeds are not included in the
calculation of invested in capital assets, net of related debt. Rather, that portion of the
debt is included in the same net position component as the unspent proceeds.
Restricted components of net position -This component of net position consists of
restricted assets reduced by liabilities and deferred inflows of resources related to those
assets. Generally, a liability relates to restricted assets if the asset results from a
resource flow that also results in the recognition of a liability or if the liability will be
liquidated with the restricted assets reported.
Unrestricted components of net position-This component of net position is the net
amount of assets, deferred outflows of resources, liabilities, and deferred inflows of
resources that are not included in the determination of net investment in capital assets or
the restricted component of net position.
Use of estimates:
The preparation of financialstatements in conformity withaccounting principlesgenerally
accepted in the United States of Americarequires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during thereporting period. Actual results could differ
from those estimates.
Cash and cash equivalents:
For purposes of reporting cash flows, the Facilitiesconsiders highly liquid investments with
an original maturity of three months or less when purchased to becash equivalents. Cash
and cash equivalents also include cash on hand and amounts deposited with banks.
Custodial creditrisk:
The California Government Code and the Facilities’investment policy do not contain legal
or policy requirements that would limit the exposure to custodial credit risk for deposits and
investments, other than the following provision for deposits: The California Government
Code requires that a financial institution secure deposits made by 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 deposited by the public agencies. California law also allows financial
institutions to secure the Facilities’deposits by pledging first trust deed mortgage notes
having a value of 150% of the secured public deposits.
Notes to Consolidated Financial Statements
-16 -
Concentration of credit risk:
Credit is extended, in the form of accounts receivable, to customers located primarily in the
County of Kern, California.
Trade accounts receivable:
Trade accounts receivable are stated at the amount management expects to collect from
outstanding balances. Managementprovides for probable uncollectible amounts through a
charge to earnings and a credit to valuation allowance based on its assessments of the
current status of individual accounts. Balances that are still outstanding after management
has used reasonable collection efforts are written off through a charge to the valuation
allowance and a credit to trade accounts receivable. Based on management’s assessment of
the credit history with customers having outstanding balances and current relationships with
them,it has concluded that realized losses on balances outstanding at June 30, 2018will be
immaterial; accordingly, no allowance for doubtful accounts is required.
Capital assets:
The Facilities’ capital assetsare recorded at cost. Depreciation is computed using the
straight line method overestimated useful lives of 3 -10years.
Maintenance and repairs of capital assetsare charged to operations and major
improvements are capitalized. Upon retirement, sale or other disposition of capital assets,
the cost and accumulated depreciation are eliminated from the accounts and gain or loss is
included in the consolidated statement of revenues and expenses.
The following is a summaryof changes in the Facilities’ capital assetsfor the year ended
June 30, 2018:
Balance Balance
6/30/17Acquisitions Retirements6/30/18
Small equipment18,896$ -$ -$ 18,896$
BalanceDepreciation Balance
6/30/17 Expense Retirements6/30/18
Small equipment12,193$ 1,257$ -$ 13,450$
Assets - At Cost
Accumulated Depreciation
Note 2. Advance from City of Bakersfield
During the normal course of business, the City pays expenses that are allocated to the
operation of the Facilities. These expenses include payroll and related expenses for the
City employees and equipment rent. The amount of the advance fluctuates throughout the
year depending on allocated monthly expenses and additional cash flow needs. The advance
is an intercompany account that is eliminated in the consolidation for the preparation of the
City's financial statements. The amount charged by the City to the Facilities was $502,687,
for the year endedJune 30,2018.
Notes to Consolidated Financial Statements
-17 -
Note 3. Deferred Revenue
Deferred revenue at June 30, 2018consists of the following:
Suite contracts 518,590$
Ticket sales, future events 581,397
Naming rights 269,934
Sponsorship agreements 173,664
Ticket rebates 57,871
Event deposits 139,434
1,740,890$
Note 4. Administrative Services Agreements
AEGprovides administrative services to the City for the Facilities. Compensation for these
services is a base fee of $400,000 for the first year, paid in equal monthly installments. The
base fee will be adjusted annually (up or down) by the Consumer Price Index, but in no
event will any increase or decrease exceed three percent. For the year ended June 30, 2018,
AEG received$430,889in total management fees from the City for the three respective
facilities.
In addition to the base fee, AEGreceives anincentive equal to a percentage of the
difference between the actual net operating profits or net operating losses for each facility
and a benchmark. AEGreceives an incentive of: 1) 25% of the difference between the
actual net operating profit (loss) and a $332,575 loss realized by the Arena, Theater and
Convention Center; 2) 50% of the difference between the actual net operating profit (loss)
and a $20,785 loss realized by the Ice Center and 3) 50% of the difference between the
actual net operating profit (loss) and a $62,358 loss realized by the Amphitheater. The
incentive fee was $-0-for the year ended June 30, 2018.
The management agreement also includes a net loss guarantee whereif the net operating
loss in any given fiscal year for all of the Facilities taken in the aggregate exceedsa base
amount of $415,718, AEGwill reimburse the Facilities in the amount the net operating loss
exceeds$415,718. For the year ended June 30, 2018, AEGreimbursed$353,468to the
Facilities for net operating losses that exceeded the base amount.
Per the management agreement, AEG was to make a one-time contribution of $250,000,
from its own monies, to an event development accountand isto be utilized for future
events. In the event of early termination, AEG is authorized to withdraw any amounts
remaining in the event development account as of the date of the early termination. The
City is entitled to any balance in the account upon the expiration of the management
agreement. The contribution from AEG is included in other liabilities on theconsolidated
statement of net position.
ARAMARK
The Facilitiesis currently operating under a contract with ARAMARK to operate
concession and cateringservicesfor theArena, Theater andConvention Center (the
Facilities),effective through June 30, 2023.On mutual agreement between both parties, the
term may be extended one five-year period.
Notes to Consolidated Financial Statements
-18 -
TheFacilitiesisentitled to receive 35% of the first $500,000 in gross concession receipts
and40% of receipts in excess of $500,000but less than $2,000,000 and 45% of any amount
exceeding $2,000,000annually. For the year ended June 30, 2018, the Facilitiesreceived
$793,543in gross concession and catering receipts from ARAMARK.
Note 5. Commitments
The Facilities have entered into various long-term contracts and leases. At June 30, 2018,
outstanding commitments consist of the following:
Naming rights:
The Cityand AEGhaveentered into licensingand naming rights agreementswith
Rabobank N.A(Bank), Valley Children’s Healthcare (VCH), and Spectrum for the
exclusive naming rights of the Facilities. The agreements callfor the Cityand AEGto use
reasonable efforts to identify the Arena as the “Rabobank Arena, Theater, Convention
Center”, the Ice Center as the “Valley Children’s Ice Centerof Bakersfield”and the
Amphitheatre as the “Spectrum Amphitheatre”in all official documents, press releases,
advertising, announcements, answering of telephones, as well as all promotion and print
material produced or disseminated by or for the account of the Facilities.During the year
ended June 30, 2018, total revenue earnedfrom theseagreements amounted to $434,082.
Ticket sales:
The City and AEGhave entered into a licensed user agreement with Outbox AXS, LLC
(AXS), a related party to AEG through common ownership, to be the exclusive provider for
ticket sales for any eventpresented at the Facilities. Under the agreement,AXShas the
authority to act as an agent for the Facilitiesfor ticket sales to the general public by any and
all means including telephone and internet. AXSearns fees from the ticket sales such as
inside ticket charges, customer convenience charges, credit card charges, handling charges
and ticket sale royalties. AXScollects these fees as tickets are sold and the net amount is
remitted to the Facilities weekly. Thisagreement beganin July2015andis effective
through the date which the AEG management agreement expires.
Hockey lease:
The Cityand AEG haveentered into a lease agreement, which has been assigned to KG
Oilers Corporation,for exclusive use of the Facilities for East Coast Hockey League
(ECHL) games. KG Oilers Corporation has agreed to pay $3,500 for each Preseason home
game played, $6,525 for each Regular Season home game played and $1,525 for each Post
Season home game played. The fees will be subject to change at two-year intervals
beginning on February 1, 2016. The change in payment will be based on the changes in the
Consumer Price Index.No change in pricing was made during the current year.
The KG Oiler Corp. (Tenant) receives $5,370 per luxury suite leased by the Arena or
$145,000 if all twenty-seven suites are leased. In addition to the suite payment, on suite
leases sold or renewed after the effective date, an advertising and promotional inventory
package will be included that will be provided by the Tenant as part of each new sale or
renewal of a suite lease. The suite lease pricing will be adjusted to incorporate the fair
market value of the advertising and promotional inventory, which will be estimated to be
Notes to Consolidated Financial Statements
-19 -
10% of the new suite lease price. Tenant will receive the entire amount of the portion of
the advertising and promotional inventory package for each new sale or renewal of the suite
lease after the effective date. In no case will Tenant receive a sum less than $6,500 when
combining the suite lease payment and suite advertising package payment for each suite
lease sold or renewed after the effective date. The $6,500 threshold will be subject to
change at two-year intervals beginning February 1, 2016. The change in payment is to be
based on the changes in the Consumer Price Index.No change in pricing was made in the
current year. For the year ended June 30, 2018, KG Oiler Corp.received $152,000for the
twenty foursuites leased.
Concession and catering services:
The City and AEGhasentered into an agreement with ESC Enterprises (ESC) to provide
concession and catering services for the Ice Center. The Facilitieswill receive 15% of
gross concession receipts throughout the term of the new contract.This agreement was
renewed in March2016and is effective through June 30, 2019. For the year ended June 30,
2018, the Facilitiesreceived $10,976in concession commissions from ESC.
Note 6. Insurance
The Facility has insurance coverage for general liability, auto, crime and workers’
compensation. The general liability insurance has a $100,000 retentionlevel per occurrence
for all claims with the maximum amount of coverage being $20,000,000. Workers
compensation insurance has a $250,000 retention level per occurrence with the combined
maximum amount of coverage being $1,000,000. The auto liability insurance has a $-0-
retention level per accident for all claims with the maximum amount of coverage being
$1,000,000. The crime insurance has a $250,000 retention level with the maximum amount
of coverage being $10,000,000. The Facility also has an umbrella policywhich has a
$25,000 retention level, which covers all claims up to a maximum amount of coverage of
$25,000,000. All buildings are covered under the City’s insurance as the City owns all
structures within the Facilities.
-20 -
Rabobank Arena, Theater, Convention Center,
Valley Children's Ice Center of Bakersfield
and Spectrum Amphitheatre
Consolidated Schedule of Operating Expenses
For the Year Ended June 30, 2018
Utilities1,239,775$
Salaries and wages947,785
Management fees430,889
General and administrative227,877
Employee benefits204,329
Equipment rental200,142
Hockey premium152,000
Insurance146,284
Supplies 85,364
Miscellaneous70,318
Payroll taxes69,029
Bank fees 46,606
Dues and subscriptions31,113
Professional fees30,000
Repairs and maintenance27,762
Travel 25,493
Marketing23,234
Office supplies 23,060
Computer expenses21,367
Training 20,475
Bad debt expense17,939
Telephone14,773
Security 13,302
Postage 7,738
Meals and entertainment5,071
Uniforms 5,035
Licenses and permits2,355
Depreciation1,257
Other taxes and licenses1,177
Contract labor200
4,091,749$
2019-20
Draft Action Plan
1
•HUD’s Mission: Create strong, sustainable, inclusive communities and quality affordable homes for all.
•Entitlement Community: Participating communities who are eligible to receive money through HUD’s funding formula.
•Metropolitan cities with at least 50,000 people
•Urban counties within MAs and have a population of 200,000 or more
•Funding Sources: The City of Bakersfield receives funding annually through four sources:
•Community Development Block Grant (CDBG)
•HOME Investment Partnership Program (HOME)
•Emergency Solutions Grant (ESG)
•Housing Opportunities for People with AIDS (HOPWA)
Program Overview – Department of
Housing and Urban Development (HUD)
Five-Year Consolidated Plan (2015-2020)
City required to adopt a “Con Plan” to receive federal HUD funds:
CDBG – Community Development Block Grant
HOME – HOME Investment Partnership Program
ESG – Emergency Solutions Grant
H OPWA – Housing Opportunities for Persons with HIV/AIDS
Plan reviews community needs and sets priorities for future funds:
Decent and Affordable Housing
Invest in Economic & Community Development
Provide Infrastructure improvements in low/mod income areas
Provide Public Services & Facilities
New plan every 5 Years; Current Plan Approved by Council in 2014
2
Implementation: Annual Action Plan
Annual Action Plan to Implement the 5 Ye ar Consolidated Plan
Currently in 5th year (FY2019/20) Actions
Estimated FY 19/20 HUD Allocation:
CDBG: $3,638,234
HOME: $1,494,389
ESG: $293,680
HOPWA: $496,350
TOTAL: $5,922,653 (consistent with FY 18/19 allocation)
Milestone Dates:
11/2/18: Application Deadline (23 Applications; $6,951,488 requested)
02/27/19: Budget & Finance Committee
03/08/19: Draft Action Plan Circulation for Review
03/28/19: Action Plan Community Meeting
04/10/19: Draft Action Plan to City Council
05/16/19: Deadline to submit Final Action Plan to HUD
3
4
CDBG: Available Resources
RESOURCES Projected FY19/20 CDBG Entitlement $ 3,638,234 Projected Program Income $ 8,000
Total Available Resources $ 3,646,234
ADMINISTRATION AND DEBT SERVICE Administration (not to exceed 20% or $729,047) $ 729,047 Section 108 Loan Payment on $4.1M $ 301,383 Section 108 Loan Payment on $800K $ 55,922
Total Admin and Debt Payment $ 1,086,352
Total Resources minus Admin and Debt Payments $ 2,559,882
•Admin (20%): Management, Oversight, Coordination $729,047
•Fair Housing Program Services - $100,000
•Section 108 Loan Payments:
o Aquatic Improvements - $301,383
o Southeast Street Improvements - $55,922
5
CDBG: Fixed Allocations
Example: Home Access Ramp
McMurtrey Aquatic Center McMurtrey Aquatic Center
6
CDBG: Proposed Projects
Total Resources minus Admin and Debt Payments $ 2,559,882
PUBLIC SERVICES (MAX. 15% or $546,785) Fair Housing Program Services $ 100,000 Bakersfield Senior Center $ 90,000 Bakersfield Police Department $ 322,785 Mission at Kern (Operations at HEAP Funded Expansion) $ 34,000
Total Public Service Projects $ 546,785
PUBLIC IMPROVEMENT PROJECTS Home Access Rehabilitation $ 40,000 Union Brundage Curb, Gutter, Sidewalk, Drainage $ 600,000 Oleander Area Curb, Gutter, Sidewalk Improvements $ 350,000 Castro Area Curb, Gutter, Sidewalk Improvements $ 200,000 Baker/Old Town Kern Area Street Reconstruction $ 150,000 Beale Park Lighting Upgrades $ 323,097 Beale Park Restroom Replacement $ 350,000
Total Public Facilities Projects $ 2,013,097
Total CDBG Proposed $ 2,559,882
Proposed Projects Map
7
8
CDBG: Applications Not Proposed for Funding
Applicant Summary Amount Community Action Partnership of Kern County Food Bank Warehouse Expansion $ 458,925 Boys and Girls Club Workforce Development and ELS Facility Expansion $ 100,000 Public Works Wilson Are Curb/Gutter/Sidewalk $ 500,000 Public Works Madison Area Curb/Gutter/Sidewalk $ 300,000 Public Works La France Area Curb/Gutter/Sidewalk $ 300,000 Recreation and Parks McMurtrey Aquatic Center Improvements $ 450,000
TOTAL $ 2,108,925
Bakersfield Senior Center (Ward 1) Public Services - $90,000
CDBG: Project Detail
9
11
CDBG: Project Detail
Mission at Kern Operation Funds (Ward 2) - $34,000
10
11
CDBG: Project Detail Home Access: $40,000 (Community-wide)
•Grants up to $3,500 for physically disabled residents for home accessibility improvements
•Program includes: installation of handicap ramps, grab bars, handheld showerheads, handrails, and similar improvements
b CDBG: Project Detail
12
Bakersfield Police Department Impact Team Officers (Ward 1 and 2) Public Services- $322,785
Service Area
Curb, Gutter, Sidewalk and Street Reconstruction Projects
CDBG: Project Detail
Before
13
After
Union Brundage Curb, Gutter, Sidewalk, Drainage - $600,000 (Ward 1)
CDBG: Project Detail
14
Oleander Area Curb, Gutter, Sidewalk - $350,000 (Ward 2) CDBG: Project Detail
15
Castro Area Curb, Gutter, Sidewalk- $200,000 (Ward 7) CDBG: Project Detail
16
CDBG: Project Detail Baker/Old Town Kern Area Street Reconstruction- $150,000 (Ward 2)
17
Beale Park Lighting Improvements–$323,097 (Ward 2)
CDBG: Project Detail
18
20
CDBG: Project Detail Beale Park Lighting Improvements–$323,097 (Ward 2)
19
Beale Park Restroom Replacements–$350,000 (Ward 2)
CDBG: Project Detail
20
HOME Investment Partnership Program
21
RESOURCES Projected FY19/20 HOME Entitlement $ 1,494,389 Projected Program Income $ 100,000 Total Available Resources $ 1,594,389
ADMINISTRATION Administration (10% maximum) $ 159,439
PROJECTS CHDO Set Aside (15% minimum) $ 224,158 New Construction Assistance $ 1,210,792
Proposed Total $ 1,594,989
Emergency Solutions Grant (ESG)
22
RESOURCES
Projected FY19-20 ESG Entitlement $ 293,680
ADMINISTRATION Administration (7.5% maximum) $ 22,026
SHELTER & OUTREACH PROJECTS (MAX. $176,200) Flood Ministries - Street Outreach $ 22,500 Bakersfield Homeless Center - Shelter $ 64,550 Bakersfield Rescue Mission - Shelter $ 62,650 Alliance Against Family Violence - Shelter $ 26,500
HOMELESS PREVENTION & REHOUSING PROJECTS Bakersfield Homeless Center – Re-Housing $ 95,454
Projects Sub-Total $ 271,654
Proposed total $ 293,680
Emergency Solutions Grant
23
Housing Opportunities for Persons with AIDS
(HOPWA)
24
RESOURCES FY18-19 HOPWA Entitlement $ 496,350
ADMINISTRATION Administration (3%) $ 14,891 Total Resources minus Admin $ 481,459
HOPWA SPONSOR/PROVIDER Kern County Public Health* $ 481,459
Proposed Total $ 481,459 * Funds Tenant-Based Rental Assistance, Case Management, and Emergency Rental Assistance for persons with HIV/AIDS
COMMUNITY DEVELOPMENT RESOURCES
25
Proposed Funding
FY 19-20
Total Funding
FY 18-19 CDBG $ 3,646,234 $ 3,646,234 HOME $ 1,594,389 $ 1,524,389 ESG $ 293,680 $ 293,680 HOPWA $ 496,350 $ 496,350
Total Resources $6,030,653 $5,960,653
2019-20
Draft Action Plan
Questions?