City of delano 06 30 12

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COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY OF DELANO, CA

Delano “Feel the Momentum”

INCORPORATED 1915

For Fiscal Year Ended June 30, 2012 Prepared By: Finance Department Under the Direction of Rosa I. Lara Rios, Finance Director


CITY OF DELANO ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2012 TABLE OF CONTENTS Page INTRODUCTORY SECTION Letter of Transmittal Organizational Chart List of Elected and Appointed Officials

2 9 10

FINANCIAL SECTION Independent Auditor’s Report Management Discussion and Analysis Basic Financial Statements: Statement of Net Assets Statement of Activities Fund Financial Statements: Balance Sheet – Governmental Funds Reconciliation of the Balance Sheet of Governmental Funds To the Statement of Net Assets Statement of Revenues, Expenditures, and Changes in Fund Balances – Governmental Funds Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Statement of Net Assets – Proprietary Funds Statement of Revenues, Expenses, and Changes in Fund Net Assets – Proprietary Funds Statement of Cash Flows – Proprietary Funds Statement of Fiduciary Net Assets – Fiduciary Funds Statement of Changes in Fiduciary Net Assets – Fiduciary Funds Notes to the Financial Statements Required Supplementary Information: Statement of Revenues, Expenditures and Changes in Fund Balances, Budget vs. Actual – General Fund Statement of Revenues, Expenditures and Changes in Fund Balances, Budget vs. Actual – Developer Impact Fees Fund Required Supplementary Information – Defined Benefit Pension Trust Required Supplementary Information – Other Postemployment Benefits

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12 14 25 26 28 30 31

33 35 36 37 39 40 42

92 93 94 94


CITY OF DELANO ANNUAL FINANCIAL REPORT For the Fiscal Year Ended June 30, 2012 Page Supplementary Information: Combining statements – Non-Major Funds: Explanation of Non-Major Governmental Funds Combining Balance Sheet – Non-Major Funds - Governmental Funds Combining Statement of Revenue, Expenses, and Changes in Fund BalancesNon-Major Funds – Governmental Funds Combining Balance Sheet – Non-Major Funds – Special Revenue Funds Combining Statement of Revenue, Expenses, and Changes in Fund BalancesNon-Major Funds – Special Revenue Funds Combining Balance Sheet – Non-Major Funds – Debt Service Funds Combining Statement of Revenue, Expenses, and Changes in Fund BalancesNon-Major Funds – Debt Service Funds Combining Balance Sheet – Non-Major Funds – Capital Projects Fund Combining Statement of Revenue, Expenses, and Changes in Fund BalancesNon-Major Funds – Capital Projects Fund Combining Balance Sheet – Trust and Agency Funds Combining Statement of Revenue, Expenses, and Changes in Fund BalancesTrust and Agency Funds STATISTICAL SECTION Net Assets by Component Changes in Net Assets Fund Balances of Governmental Funds General Governmental Tax Revenues by Source Assessed Value and Estimated Actual Value of Taxable Property Principal Property Taxpayers Direct and Overlapping Property Tax Rates Pledged-Revenue Coverage Historical and Overlapping Debt Statement of Direct and Overlapping Debt Demographic and Economic Statistics Principal Employers Full-time Equivalent City Government Employees by Function Operating Indicators by Function Capital Asset Statistics by Function

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96 99 100 101 107 113 114 115 116 117 118

121 122 124 125 126 127 128 129 130 131 132 133 134 135 136


INTRODUCTION SECTION


CITY HALL 1015 ELEVENTH AVENUE POST OFFICE BOX 3010

DELANO, CALIFORNIA 93216-3010 (661) 721-3300 (661) 721-3317 TDD www.cityofdelano.org

COUNCIL MEMBERS Grace Vallejo MAYOR Sam Ramirez MAYOR PRO TEM Liz Morris Joe Aguirre Ricardo Chavez

CITY MANAGER Maribel Reyna

March 26,2013 To the Honorable Mayor, Members of the City Council, and Residents of the City of Delano, California We are pleased to submit the Comprehensive Annual Financial Report (CAFR) for the City of Delano, California (City) for the fiscal year ended June 30, 2012. State Law requires that all general-purpose local governments publish within six months of the close of each fiscal year a complete set of financial statements presented in conformity with generally accepted accounting principles (GAAP) and audited in accordance with generally accepted auditing standards by a firm of licensed certified public accountants. This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of the information contained in this report, based upon a comprehensive internal control framework that is designed both to protect the government’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with GAAP. Because the cost of internal controls should not outweigh their benefits, the objective is to provide reasonable rather than absolute assurance that the financial statements are free of any material misstatements. Mayer Hoffman McCann P.C., a firm of licensed certified public accountants, has issued an unqualified opinion on the City’s financial statements for the year ended June 30, 2012. The independent auditor’s report is located on page 1 in the financial section of this report. Mayer Hoffman McCann P.C. also performed the federally mandated “Single Audit”, the results of which are presented under separate cover. Following the independent auditor’s report is management’s discussion and analysis (MD&A), which provides an overview and analysis of the basic financial statements. The MD&A compliments this letter of transmittal and should be read in conjunction with it. Profile of the City of Delano The City of Delano was incorporated on April 13, 1915, as a general law city, after being recognized as a railroad terminus from the year 1873 to the date of incorporation. Located in the Southern San Joaquin Valley, Delano has a multi-cultural population and workforce, and is known as the “International Community”. It has the distinction as the “Table Grape Capital of

City of Delano








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City of Delano Principal Officials June 30, 2012

ELECTED OFFICIALS

MAYOR

GRACE VALLEJO SAM RAMIREZ LIZ MORRIS RICARDO CHAVEZ JOE AGUIRRE

MAYOR PRO TEM COUNCIL MEMBER COUNCIL MEMBER COUNCIL MEMBER

ADMINISTRATION CITY MANAGER MARIBEL REYNA ALAN PEAKE CITY ATTORNEY CITY CLERK PHYLLIS KRAFT CITY ENGINEER/PUBLIC WORKS DIRECTOR ROMAN DOWLING CHIEF OF POLICE MARK DEROSIA RICHELLE CARINO COMMUNITY DEVELOPMENT DIRECTOR HUMAN RESOURCES/TRANSIT DIRECTOR NOEMI ZAMUDIO DIRECTOR OF FINANCE/TREASURER ROSA I. LARA RIOS

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FINANCIAL SECTION


Mayer Hoffman McCann P.C. An Independent CPA Firm

5060 California Avenue, Suite 800 Bakersfield, CA 93309 PH 661.325.7500 FAX 661.325.7004

INDEPENDENT AUDITORS’ REPORT

To the City Council City of Delano, California We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Delano, California, as of and for the year ended June 30, 2012, which collectively comprise the City’s basic financial statements as listed in the table of contents. These financial statements are the responsibility of the City of Delano, California’s management. 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinions. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Delano, California, as of June 30, 2012, and the respective changes in financial position, and cash flows, where applicable, thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. As further discussed in Note 14, the Delano Community Redevelopment Agency (a blended component unit) was dissolved on February 1, 2012 in accordance with Assembly Bill 1X 26. In accordance with Government Auditing Standards, we have also issued our report dated March 26, 2013, on our consideration of the City of Delano’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 and should be considered in assessing the results of our audit.

Southern California Locations 10474 Santa Monica Blvd. Suite 200  Los Angeles, CA 90025  PH 310.268.2000  FX 310.268.2001 5060 California Ave. Suite 800  Bakersfield, CA 93309  PH 661.325.7500  FX 661.325.7004 300 Esplanade Dr. Suite 250  Oxnard, CA 93036  PH 805.988.3222  FX 805.988.3220 Member of Kreston International - a global network of independent accounting firms

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Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, schedule of funding progress and budgetary comparison information on pages 14-23 and 92-94 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Delano’s basic financial statements. The combining and individual nonmajor fund financial statements are presented for purposes of additional analysis and are not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the combining and individual nonmajor fund financial statements are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections are presented for purposes of additional analysis and are not a required part of the financial statements. Such information has not been subjected to the auditing procedures applied in the audit of basic financial statements and accordingly, we do not express an opinion or provide assurance on them.

Bakersfield, California March 26, 2013

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MANAGEMENT’S DISCUSSION AND ANALYSIS The following discussion and analysis of the financial performance of the City of Delano provides an overview of the City’s financial activities for the fiscal year ended June 30, 2012. Please read it in conjunction with the financial statements identified in the accompanying table of contents. Using the Accompanying Financial Statements This annual report consists of a series of financial statements. The Statement of Net Assets and the Statement of Activities provide information about the activities of the City as a whole and present a longer-term view of the City’s finances. Also included in the accompanying report are fund financial statements. For governmental activities, the fund financial statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the governmentwide statements by providing information about the City’s most significant funds. The remaining statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. OVERVIEW OF THE FINANCIAL STATEMENTS The annual report consists of three parts – management’s discussion and analysis (this section), the basic financial statements, and the required supplementary information. The basic financial statements include two kinds of statements that present different views of the City:  The first two statements are government-wide financial statements that provide both longterm and short-term information about the City’s overall financial status.  The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City’s operation in more detail than the government-wide statements.  The governmental funds statements tell how general government uses services like public safety were financed in the short-term as well as what remains for future spending.  Proprietary fund statements offer short-and long-term financial information about the activities the government operates like businesses, such as the water and sewer system.  Fiduciary fund statements provide information about the fiduciary relationships-like the agency funds of the City-in which the City acts solely as agent or trustee for the benefit of others, to whom the resources in question belong.  Budgetary comparison schedules provide information about the extent to which revenue expectations were reached and the budgetary overruns and savings engendered by actual spending.  Capital assets in the operation of governmental funds provide information as to their source, function and activity and the changes in such functions and activity. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that provided additional financial and budgetary information.

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Figure A-1 summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of the statements. Figure A-1 Major Features of the City’s Government and Fund Financial Statements Fund Statements Government-Wide Statements

Governmental Funds

Proprietary Funds

Fiduciary Funds

Scope

Entire City Government (except Fiduciary Funds) and the City's component

The activities of the City that are not proprietary or fiduciary

Activities the City operates similar to private businesses

Instances in which the City is the trustee or agent for someone else's resources

Required Financial Statements

-Statement of net assets -Statement of Activities

-Balance Sheet -Statement of revenues, expenditures and changes in fund balances

-Statement of net assets -Statement of revenues, expenses and changes in net assets -Statement of cash flows

-Statement of fiduciary net assets -Statement of changes in fiduciary net assets

Accounting Basis and Measurement Focus

Accrual accounting and economic resources focus

Modified accrual accounting and current financial

Accrual accounting and economic resources focus

Accrual accounting and economic resources focus

Type of Asset Liability Information

All assets and liabilities, both financial and capital, and shortterm and long-term

Only assets expected to be used up and liabilities that come due during the year or soon thereafter; no capital assets or long-term debt included

All assets and liabilities, both financial and capital, and short-term and long-term

All assets and liabilities both short-term and longterm; the City's fiduciary funds do not currently contain capital assets, although they can

Type of Inflow/Outflow

All revenues and expenses during year, regardless of when cash is received

Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter

All revenues and expenses during the year, regardless or when cash is received or paid

All revenues and expenses during year, regardless of when cash is received or paid

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Reporting the City as a Whole The accompanying government-wide financial statements include two statements that present financial data for the City as a whole. One of the most important questions asked about the City’s finances is, “Is the City as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Assets and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets and liabilities 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 assets and changes in them. You can think of the City’s net assets – the difference between assets and liabilities-as one way to measure the City’s financial health, or financial position. Over time, (increases and decreases in the City’s net assets are one indicator of whether its financial health is improving or deteriorating. You will need to consider other non-financial factors, however, such as changes in the City’s property tax base and the condition of the City’s roads, to assess the overall health of the City. In the Statement of Net Assets and the Statement of Activities, we divide the City into three kinds of activities:  Governmental activities – Most of the City’s basic services are reported here. Sales taxes, property taxes, state subventions, and other revenue finance most of these activities.  Business-type activities – The City charges a fee to customers to help it cover all or most of the cost of services accounted for in these funds.  Component units – The City includes two separate legal entities in its report – the City Redevelopment Agency and the City Financing Authority. Although legally separate, these “component units” are important because the City is financially accountable for them. Reporting the City’s Most Significant Funds The fund financial statements provide detailed information about the City’s most significant funds – not the City as a whole. Some funds are required to be established by State law or by bond covenants. However, City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting administrative responsibilities for using certain taxes, grants, or other money (like grants received). The City’s two kinds of funds – governmental and proprietary – use different accounting approaches.  Governmental funds – Most of the City’s basic services are reported in governmental funds, which focus on how money flows, into and out of those funds and the balances left at yearend that are available for spending. These funds are reported using an accounting methods called modified accrual accounting, which measures cash and all other current financial assets that readily be converted to cash. The governmental fund statements provided a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. We describe the relationship or differences between governmental activities (reported in the Statement of Net Assets and the Statement of Activities) and governmental funds in reconciliation at the bottom of the fund financial statements.

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 Proprietary funds – When the City charges customers for services it provides – whether to outside customers or to other units of the City – these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Assets and the Statement of Activities. In fact, the City’s enterprise funds (a component of proprietary funds) are the same as business-type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows, for proprietary funds. We use internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City’s other programs and activities. Reporting the City’s Fiduciary Responsibilities The City is an agent for certain assets held for, and under the control of, other organizations and individuals. All of the City’s fiduciary activities are reported in a separate Statement of Fiduciary Assets. We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. GOVERNMENT-WIDE FINANCIAL STATEMENTS A summary of the government-wide statement of net assets follows: Table 1 Net Assets (In Thousands)

Current & other assets Capital assets Total assets

Governmental Activities 2012 2011 $ 51,343 $ 71,425 142,577 147,129 193,920 218,554

Business-Type Activities 2012 2011 $ (1,436) $ 4,431 64,905 59,226 63,469 63,657

Total Primary Government 2012 2011 $ 49,907 $ 75,856 207,482 206,355 257,389 282,211

Long-term debt outstanding Other liabilities Total liabilities

27,549 3,523 31,072

43,210 10,010 53,220

41,820 684 42,504

37,337 5,917 43,254

69,369 4,207 73,576

80,547 15,927 96,474

Net assets Invested in capital assets net of debt Restricted Unrestricted

139,229 14,340 9,279

147,129 13,095 5,110

23,382 (2,417)

21,890 (1,487)

162,611 14,340 6,862

169,019 13,095 3,623

$ 162,848

$ 165,334

$ 183,813

$ 185,737

Total net assets

$ 20,965

$ 20,403

Net assets of the City’s governmental activities decreased by $2.5 million (from $165.3 million in FY11 to $162.8 million in FY12). The decrease in net assets was expected due to primarily the closing of the Delano Community Correctional Facility (CCF). The California Department of Corrections Rehabilitation (CDCR) ended the use of the remaining CCF beds as a result of the 2011 Public Safety Realignment and other actions the department has taken to reduce its inmate population, as ordered by the Three-Judge Court and affirmed by the U.S. Supreme Court. The Delano Community Correctional Facility contract with CDCR expired August 21, 2011. The financial impact faced by the City due to the closing of the CCF in revenues is approximately $10 million dollars decrease. Due to State budget cuts the City also faced decreases in capital grants and other contributions and other revenues compared to the prior year. 17


The net assets for the business-type activities for FY12 increased from prior year by $562 thousand (FY11 was $20,403 and FY12 $20,965). In fiscal year 2011-2012, the City implemented its third year increase of the scheduled five year utility rate increases that were approved in 2009 by City Council. Table 2 Statement of Activities (In Thousands)

Governmental Activities 2012 2011 Revenues Program Revenues Charges for services Capital grants and contributions Operating grants and contributions General revenues: Property taxes Sales & Other taxes Other general revenues Total revenues Program expenses General government Public safety Public works Engineering services Culture & recreation Community development Pass thru Education Long-term debt interest/charges Water/sewer Refuse Non-major enterprise funds (Airport and Transit) Loss on sale of property Total expenses Excess (deficiency) before transfers

Business-Type Activities 2012 2011

Total Primary Government 2012 2011

17,413 1,389 6,055 3,770 10,210 5,879 44,716

15,211 1,841 13,529 5,196 13,840 1,958 51,575 6,561 19,836 10,393 565 2,674 1,895 475 1,708 8,182 2,744 2,333 57,366

6,061 1,389 4,086

5,525 1,841 12,792

11,352 1,969

9,686 737

3,770 10,210 5,797 31,313

5,196 13,840 1,900 41,094

-

-

82 13,403

58 10,481

5,930 13,207 10,609 573 2,423 635 302 1,718 -

6,561 19,836 10,393 565 2,674 1,895 475 1,708 -

9,571 2,634 2,180

8,182 2,744 2,333

35,397

44,107

14,385

13,259

5,930 13,207 10,609 573 2,423 635 302 1,718 9,571 2,634 2,180 49,782

(4,084)

(3,013)

(2,778)

(5,066)

(5,791)

Transfers In and Out

(1,685)

(2,154)

1,544

(141)

(185)

Special item: Extraordinary gain/loss on AB 1X26 Increase (decrease) in assets

3,284 (2,485)

(5,167)

562

3,284 (1,923)

(5,976)

Net assets beginning of year, Net assets end of year

165,333 162,848

170,503 165,336

(982)

20,403 20,965

1,969 (809) 21,212 20,403

185,736 183,813

191,715 185,739

The City is able to report a positive net asset balance as a whole. The decrease from the previous fiscal year 2011 and fiscal year 2012 is $1.9 million or 1%. Expenditures decreased in total by $7.6 million, primarily due to the closing of the Delano Community Correctional Facility (CCF), approximately $8.2 million. Revenues in total decreased by $6.9 million, the outlook for a decrease in net assets city wide was expected, due to State budget cuts and abolishment of the Delano Community Development Agency. The elimination of the Delano Community Redevelopment Agency resulted in an extraordinary gain of $3.3 million in the current year. The City has been implementing expenditure reductions to enable them to operate according to the projected reduction in revenues due to the economic conditions that continue to exist throughout the State. 18


Net assets for the Governmental activities had a decrease of $2.5 million after transfers. The decrease is primarily attributed to the closing of the CCF and continuing to maintain payment of its long term debt obligations. Net assets for the Business-Type activities increased by $562,027 (five hundred sixty-two thousand, and twenty-seven dollars) in net assets. The net increase is contributed to the water fund incurring expenses for the State Mandated Arsenic Mitigation Project, water meter projects, old write-offs for customer water accounts, implementation of scheduled increase in water rates that were approved in 2009. The net assets for the Business-Type activities will increase in the future because the City’s proprietary funds are highly capital intensive, requiring a significant investment in capital equipment and facilities to conduct operations, scheduled increases in rates as approved in 2009. Our analysis below separately considers the operations of governmental and businesstype activities. Governmental Activities Expenses – Governmental Activities 25,000 20,000 15,000 10,000 5,000 2011‐2012 ‐

2010‐2011

Expenses and revenues for the City’s governmental activities both decreased, with a negative difference of $2.4 million. The unreserved (unrestricted) fund balance in the general fund balance decreased by $138,000 thousand compared to a $156,290 thousand last fiscal year. The current year minimal difference was a result of encumbering losses for Golf Course and closing of the Community Correctional Facility. The City has implemented expenditure reductions to enable it to operate according to projected reduction in revenues due to the State economic condition that continues to exist. The Department Heads, City Manager, and the City Council are working diligently to assure that the reserve fund balance in the General Fund is being maintained.

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Revenues by Source – Governmental Activities

Charges for services

19%

Capital grants and contributions

19% 4%

33%

Operating grants and contributions Property taxes

13% 12%

Sales & Other taxes Other general revenues

The City’s major revenue sources in the General Fund comprise from sales and other taxes. The following projects are underway to enable the City to increase tax revenues in the General Fund: Delano Downtown Commercial Center – A commercial retail development on 9 acres, located just east of Highway 99 between 9th and 11th streets. Covering three city blocks, the development will contain a 29,000 sq. ft. bowling center, 46,700 sq. ft. of retail/shopping, 29,500 sq. ft. of office space, and 22,500 sq. ft. of restaurant/dining. Delano Industrial Expansions – Paramount Citrus, an existing employer is undergoing expansion of an additional 10 acres, which will in turn create additional 500 new jobs, opening date August 2012. Railex, a rail distribution facility has plans to add an additional train to their existing route and provide for an additional 100 new jobs. Delano Marketplace Center – The Delano Market Place was planned for construction in 2011, however delayed and began in late 2012 with a tentative opening date of fall 2013. The Center will consist of shopping, retail, commercial, and eateries. The over 244,000 sq. ft. shopping hub will provide over 800 new service jobs. These three projects are predicting to bring in over $2 million dollars in annual revenues. The cost of all governmental activities this year was $35.4 million compared to $44.1 million last year. Business-Type Activities Revenues of the City’s business-type activities (see Table 2) increased by $562 thousand ($10.5 million in 2011 to $13.4 million in 2012) The City is experiencing rapid growth, especially in the area of commercial development as mentioned above. It is estimated that 1,300 new jobs will be created. In addition, it is projected that the City will receive approximately $7 million in developer impact fees are expected to be received for these projects. In addition, the sewer wastewater treatment plant expansion was completed July 2011. The water arsenic mitigation project is estimated to be completed by 2013. 20


MAJOR FUNDS As noted earlier, the City uses fund accounting to provide proper financial management of the City’s resources and to demonstrate compliance with finance-related legal requirements. Major Governmental Funds, the General Fund is the chief operating fund of the City. At the end of the current fiscal year, the unreserved fund balance of the general fund was $6.9 million as compared to last fiscal year’s unreserved fund balance of $7.1 million, while total fund balance reached $7.2 million. As a measure of the general fund’s liquidity, it may be useful to compare both unreserved fund balance and total fund balance to total fund expenditures. Unreserved fund balance represents 44% of total general fund expenditures, while total fund balance represents 45% of that same amount. During the current fiscal year, the City’s general fund balance decreased by $137,838. Revenues increased by $117,162 and expenditures increased by $91,476 from last year. Overall the General Fund performed very well this fiscal year, the City continues to make its debt obligation net transfer out of $2.2 million to the debt service fund for servicing of the principal and interest payment for the Lease Revenue Bond 2010A. The Developer Impact Fees fund became a major fund the unreserved fund balance had an increase of approximately $405,005 thousand as a result of the new commercial development. The Capital Projects 2010A fund became a major fund the restricted fund balance of $22.3 million is set-aside for funding of certain capital improvement projects within the City of Delano, including the Woollomes Avenue Bridge Project and a New Police Station, both projects are tentatively scheduled to be completed in 2013. Major Enterprise Funds. Net assets of all the enterprise funds combined increased by $562,027. Below is a condensed statement of cash flows for the proprietary funds for June 30, 2012, with comparative amounts for 2011. Business-Type Activities

2012

Net Cash provided by operating activities: Net Cash provided by non-capital financing activities: Net Cash used in capital and relating financing activities: Net Cash provided by investing activities: Net increase in cash and cash equivalents: Cash and cash equivalents, beginning of year Cash and cash equivalents, beginning of year

2011

3,215,930 2,305,855 (5,521,785) 352 352

(746,833) 1,969,334 (1,223,916) 1,767 352 352

The Water & Sewer Fund net assets increased by $429,055 or 2.8% ended the fiscal year with total net assets of $15.2 million; revenues increased by $1.6 million or 18.8% operating expenses increased by $968,167 or 11.8% from prior year. Increase in revenue was expected due to the implementation of the scheduled increase rates that were approved in 2009. Higher costs were experienced in 2012 due to higher health care costs in personnel. Cost for repair, supplies and operations were higher than prior year and more depreciation was experienced since capitalization of the expansion in the Waste Water Treatment Plant.

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CAPITAL ASSETS Capital Assets (net of depreciation) (In Thousands) Governmental Activities 2012 2011 Land Buildings Improvements Infrastructure Equipment & Machinery Construction in progress Total

5,058 2,891 12,647 113,441 1,648 6,892 142,577

5,058 3,248 12,851 119,411 2,097 4,464 147,129

Business-Type Activities 2012 2011 3,184 1,364 43,601 2,777 13,979 64,905

3,184 1,488 8,671 3,463 42,420 59,226

Total Primary Government 2012 2011 8,242 4,255 56,248 113,441 4,425 20,871 207,482

8,242 4,736 21,522 119,411 5,560 46,884 206,355

There are no major changes to capital assets under governmental activities during the year ended June 30, 2012. There was a net increase of $5.7 million of assets in all the enterprise funds which consists primarily of the arsenic mitigation project in the water fund. The completion of the waste water treatment plant expansion was reclassified in fiscal year 2012 from construction in progress to improvements showing an increase of $34.9 million in improvements. LONG-TERM DEBT At the end of the current fiscal year, the City had bonded debt outstanding of $40.5 million, debt secured by pledged assets amounts to $69 thousand, and the remaining debt was compensated absences and net OPEB obligation, as shown below. The bonded debt is secured by pledged tax increment revenues. For fiscal year 2012 policies have been implemented throughout the city to reduce the liability for accrued compensated absences. Outstanding Debt (In Thousands) Governmental Activities 2012 2011 Lease Revenue Bond 2010A Tax allocation bonds Notes payable Compensated absences Capital Lease Net OPEB obligation Refuse loans payable Water loans payable Sewer loans payable

25,860 14,640 615 69 887 42,071

26,715 14,890 830 133 642 43,210

Business-Type Activities 2012 2011

Total Primary Government 2012 2011

297 9,718 31,804 41,819

25,860 14,640 912 69 887 9,718 31,804 83,890

365 4,552 32,068 36,985

26,715 14,890 1,195 133 642 4,552 32,068 80,195

During the current fiscal year, the City paid off $1.1 million in general government long-term debt and incurred an additional $6 million of debt in the business-type activities primarily for the Arsenic Mitigation Project. Additional information on the City’s long-term debt can be found in the notes to the accompanying financial statements. 22


GENERAL FUND BUDGET Differences between the original budget expenditures and the final amended budget expenditures of the General Fund were $1.8 million. The original budget for the current fiscal year was $18.7 million and the final budget from budget reduction sessions and other City Council approvals throughout the fiscal year 2012 was $16.9 million.

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 money it receives. If you have questions about this report or need additional financial information, contact the Finance Director’s Office, at 661-721-3310 or at the City of Delano, 1015 – 11th Ave, Delano, CA 93215.

23


BASIC FINANCIAL STATEMENTS


CITY OF DELANO STATEMENT OF NET ASSETS June 30, 2012 Governmental Activities

Business-Type Activities

Totals

ASSETS Cash and investments Cash with fiscal agents Receivables (net of allowance for uncollectibles) Internal balances Inventories Prepaids and other assets Other receivables Bond issuance costs Deposits with insurance company Loans receivable, net Capital assets: Non-depreciable Depreciable, net of accumulated depreciation

18,445,786 24,727,311 2,310,493 4,738,037 167,118 201,224 320,860 429,622 102,076 848,000

352 3,197,301 (4,738,037) 102,878 1,046 -

11,949,946 130,626,825

17,163,174 47,741,914

29,113,120 178,368,739

Total assets

194,867,298

63,468,628

258,335,926

$

18,446,138 24,727,311 5,507,794 269,996 202,270 320,860 429,622 102,076 848,000

LIABILITIES Accounts payable Other accrued expenses Accrued interest payable Unearned revenue Deposits payable Long-term liabilities: Due within one year Due in more than one year

3,366,016 881,356 95,376 1,272 126,206

354,029 195,716 52,669 81,752

3,720,045 1,077,072 95,376 53,941 207,958

1,067,789 26,480,826

1,926,174 39,893,732

2,993,963 66,374,558

Total liabilities

32,018,841

42,504,072

74,522,913

139,229,157

23,381,726

162,610,883

10,318,633 1,638,988 2,382,386 9,279,293

(2,417,170)

10,318,633 1,638,988 2,382,386 6,862,123

NET ASSETS Invested in capital assets, net of related debt Restricted for: Community and economic development Debt service Other purposes Unrestricted Total net assets

$ 162,848,457

$

20,964,556

The notes to the financial statements are an integral part of this statement 25

$ 183,813,013


CITY OF DELANO STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2012

Expenses Functions/Programs Primary Government Governmental activities: General government Public safety Public works Engineering services Culture and recreation Community and economic development Pass thru payments Interest on long-term debt and fiscal charges Total governmental activities Business-type activities: Water and sewer Refuse Non-major enterprise funds Total business-type activities Total primary government

Charges for Services

Program Revenues Operating Grants and Contributions

Capital Grants and Contributions

Net (Expense) Revenue and Change in Net Assets Primary Government Governmental Business-Type Activities Activities Total

5,929,664 13,206,646 10,609,838 572,847 2,422,548 635,101 443,233 1,717,724

3,675,242 92,655 2,148,966 38,614 106,027 -

1,368,987 1,206,409 671,801 481,389 357,453 -

1,299,361 89,548 -

413,926 (11,907,582) (7,699,523) (534,233) (1,835,132) (277,648) (443,233) (1,717,724)

-

413,926 (11,907,582) (7,699,523) (534,233) (1,835,132) (277,648) (443,233) (1,717,724)

35,537,601

6,061,504

4,086,039

1,388,909

(24,001,149)

-

(24,001,149)

9,570,591 2,634,318 2,179,912

8,548,083 2,289,511 514,309

1,969,111

-

-

(1,022,508) (344,807) 303,508

(1,022,508) (344,807) 303,508

14,384,821

11,351,903

1,969,111

-

-

(1,063,807)

(1,063,807)

49,922,422

17,413,407

6,055,150

1,388,909

(24,001,149)

(1,063,807)

(25,064,956)

3,770,269 10,209,586 595,289 237,955 3,337,617 577,263 563,337 339,889 2,062 142,556 (1,543,889)

81,945 1,543,889

3,770,269 10,209,586 595,289 237,955 3,337,617 577,263 563,337 339,889 2,062 224,501 -

3,283,902

-

3,283,902

Total general revenues and transfers

21,515,836

1,625,834

23,141,670

Change in net assets

(2,485,313)

General revenues Property taxes Sales taxes Franchise taxes Motor fuel tax Motor vehicle in lieu tax Other taxes Other revenues Investment earnings Revenues from use of money and property Miscellaneous Transfers in (out) Special Item Extraordinary gain/loss on AB 1X26

562,027

(1,923,286)

Net assets - beginning

165,333,770

20,402,529

185,736,299

Net assets - ending

162,848,457

20,964,556

183,813,013

The notes to the financial statements are an integral part of this statement 26


FUND FINANCIAL STATEMENTS


CITY OF DELANO BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2012

General Fund

CRA Capital Project Fund

Developer Impact Fees Fund

ASSETS Cash and investments Cash with fiscal agents Receivables: Accounts Taxes Intergovernmental Other Due from other funds Inventories Prepaids and other assets Loans receivable, net

-

-

10,314,883 -

297,913 1,332,518 27,508 6,861,747 27,956 201,224 -

-

3,750 -

Total assets

8,748,866

-

10,318,633

856,862 327,746 237,742 47,732 115,836

-

-

Total liabilities

1,585,918

-

-

Fund Balances: Nonspendable Restricted Assigned Unassigned

229,180 6,933,768

-

10,318,633 -

Total fund balances

7,162,948

-

10,318,633

Total liabilities and fund balances

8,748,866

-

10,318,633

LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Deferred revenue Deposits payable

The notes to the financial statements are an integral part of this statement 28


CITY OF DELANO BALANCE SHEET GOVERNMENTAL FUNDS June 30, 2012

Capital Projects 2010A

Other Governmental Funds

Total Governmental Funds

22,580,995

5,851,373 2,146,316

16,166,256 24,727,311

-

562,087 71,768 355,731 78,915 848,000

863,750 1,332,518 71,768 27,508 7,217,478 106,871 201,224 848,000

22,580,995

10,235,050

51,883,544

LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Deferred revenue Deposits payable

59,114 241,907 -

2,401,535 531,275 2,111,562 1,272 10,370

3,317,511 859,021 2,591,211 49,004 126,206

Total liabilities

301,021

5,056,014

6,942,953

ASSETS Cash and investments Cash with fiscal agents Receivables: Accounts Taxes Intergovernmental Other Due from other funds Inventories Prepaids and other assets Loans receivable, net Total assets

Fund Balances: Nonspendable Restricted Assigned Unassigned

22,279,974 -

6,271,743 (1,092,707)

229,180 38,870,350 5,841,061

Total fund balances

22,279,974

5,179,036

44,940,591

Total liabilities and fund balances

22,580,995

10,235,050

51,883,544

The notes to the financial statements are an integral part of this statement 29


CITY OF DELANO RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET ASSETS June 30, 2012

Fund balances of governmental funds

$ 44,940,591

Amounts reported for governmental activities in the statement of net assets are different because: Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Governmental capital assets

141,875,674

Internal service funds were 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 were included in governmental activities in the Government-Wide Statement of Net Assets. Net assets included in governmental activities Adjustment to reflect the consolidation of ISF activities related to enterprise funds included in governmental funds. Long-term debt, including bonds payable, are not due and payable in the current period and therefore are not reported in the funds. Interest on long-term debt is not accrued in the governmental funds, but rather is recognized as an expenditure when due. Compensated absences in governmental funds that accrued on the Government-Wide Statement of Net Assets Accrued Interest in governmental funds that are eliminated in the Government-Wide Statement of Net Assets Deferred revenue recognized in governmental funds that are eliminated in the Government-Wide Statement of Net Assets Total Adjustments Net assets of governmental activities

3,266,522 (95,196)

3,171,326

(26,933,857)

429,622 (587,255)

(95,376)

47,732 117,907,866 $ 162,848,457

The notes to the financial statements are an integral part of this statement 30


CITY OF DELANO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Fiscal Year Ended June 30, 2012 CRA Capital Project Fund

General Fund REVENUES: Property taxes Sales taxes Franchise taxes Motor fuel tax Motor vehicle in lieu tax Other taxes Fees and fines Licenses and permits Revenues from use of money and property Intergovernmental Program income Charges for services Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Public works Engineering services Culture and recreation Community and economic development Pass thru payments Debt service Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources and uses Special Item: Extraordinary loss on AB1X26

$

Net change in fund balances

$

1,726 2,286,796 74,568 -

91,546

2,363,090

3,133,580 10,516,700 244,992 1,789,225 -

89,550 52,092 -

8,479 6,652 4,263 3,237 -

64,250 9,016 26,934

-

-

15,784,697

141,642

22,631

2,053,438

(50,096)

2,340,459

611,700 (2,802,976)

-

(1,935,454)

(2,191,276)

-

(1,935,454)

(7,419,511)

(137,838)

7,162,948

-

(7,469,607)

7,300,786 $

87,988 3,558 -

17,838,135

-

Total fund balances (deficit), beginning Total fund balances (deficit), ending

2,003,152 8,756,971 595,289 3,337,617 575,537 93,779 143,649 2,062 1,936,061 307,819 54,106 32,093

Developer Impact Fees Fund

405,005

7,469,607 $

-

9,913,628 $

10,318,633

The notes to the financial statements are an integral part of this statement 31


CITY OF DELANO STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS For the Fiscal Year Ended June 30, 2012 Capital Projects 2010A REVENUES: Property taxes Sales taxes Franchise taxes Motor fuel tax Motor vehicle in lieu tax Other taxes Fees and fines Licenses and permits Revenues from use of money and property Intergovernmental Program income Charges for services Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Public works Engineering services Culture and recreation Community and economic development Pass thru payments Debt service Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources and uses Special Item: Extraordinary loss on AB1X26

97,443 -

Other Governmental Funds

Total Governmental Funds

$

$

1,767,117 1,452,615 237,955 159,631 4,346,602 56,493 99,607 110,463

3,770,269 10,209,586 595,289 237,955 3,337,617 577,263 253,410 143,649 2,062 6,282,663 56,493 2,682,603 329,282 142,556

97,443

8,230,483

28,620,697

-

1,001,523 2,091,294 1,573,290 248,020 579,588 443,233

4,233,132 12,614,646 1,577,553 244,992 2,040,482 631,680 443,233

1,231,799

1,105,000 1,628,691 2,917,718

1,169,250 1,637,707 4,176,451

1,231,799

11,588,357

28,769,126

(1,134,356)

(3,357,874)

(148,429)

-

4,289,970 (1,264,172)

4,901,670 (6,002,602)

-

3,025,798

(1,100,932)

-

(1,870,220)

(9,289,731)

Net change in fund balances

(1,134,356)

(2,202,296)

(10,539,092)

Total fund balances (deficit), beginning

23,414,330

7,381,332

55,479,683

Total fund balances (deficit), ending

$

22,279,974

$

5,179,036

$

44,940,591

The notes to the financial statements are an integral part of this statement 32


CITY OF DELANO RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2012 Net changes in fund balances - total governmental funds

$ (10,539,092)

Amounts reported for governmental activities in the statement of activities are different because of the items described below: Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimated useful lives as depreciation expense. Governmental capital outlay 4,347,508

4,347,508

Depreciation expense on capital assets is reported in the government-wide statement and changes in net assets, but it does not require the use of current financial resources. Therefore, depreciation expense is not reported as an expenditure on the fund statements. Governmental capital assets Capital assets of internal service funds

(8,685,317) (133,154)

(8,818,471)

Internal service funds were used by management to charge the costs of certain activities, such as insurance and fleet management, to individual funds. The net expenditure of the internal service funds was reported with governmental activities.

(638,816)

Compensated absences reported in the statement of activities that do not require the use of current financial resources are not reported on the fund statements, but are reported as an expense in the government-wide statements. Total governmental long-term debt Internal service fund debt

187,913 27,503

215,416

OPEB obligations reported in the statement of activities that do not require the use of current financial resources are not reported on the fund statements, but are reported as an expense in the government-wide statements.

(362,888)

Repayment of long-term principal is an expenditure in governmental funds, but the repayment reduces long-term liabilities in the government-wide statement of net assets

1,169,250

Bond issuance cost is an expenditure in governmental funds, but the costs are amortized over the term of the debt on the government-wide statement of activities

(23,868)

Accrued interest payable is not reported in the governmental funds.

1,355

Amortization expense on bond issuance costs is reported in the government-wide statement and changes in net assets, but it does not require the use of current financial resources. Therefore, amortization expense is not reported as an expenditure on the fund statements.

(50,318)

Revenues recorded in government-wide statement of activities in prior year recorded as revenues in the governmental funds in the current year.

(244,378)

The extraordinary gain/(loss) from the transfer of capital assets and long-term debt from the Redevelopment Agency to the Successor Agency is not reported in the government-wide statement and is reported in the statement of activities. Therefore, the extraordinary gain is not reported as revenue on the fund statements.

12,458,989

Total Adjustments: Change in net assets of governmental activities

8,053,779 $

(2,485,313)

The notes to the financial statements are an integral part of this statement 33


PROPRIETARY FUNDS


CITY OF DELANO STATEMENT OF NET ASSETS PROPRIETARY FUNDS June 30, 2012 Governmental Activities Internal Service Fund

Business-type Activities - Enterprise Funds Water Non-Major Refuse & Sewer Enterprise Fund Fund Funds Totals ASSETS Cash and investments Receivables: Accounts Other Due from other funds Inventories Prepaids and other assets Deposits with insurance company Capital assets: Non-depreciable Depreciable, net of accumulated depreciation

$

Total assets LIABILITIES Accounts payable Other accrued expenses Due to other funds Unearned revenue Deposits payable Long-term liabilities: Compensated absences Due within one year Due in more than one year Total liabilities NET ASSETS Invested in capital assets, net of related debt Unrestricted (deficit) Refuse Water & Sewer Airport Transit Internal Service Fund Total net assets

$

-

$

202

$

150

$

352

$ 2,279,530

647,945 2,629 -

964,639 46,626 100,335 1,046 -

1,534,908 554 2,543 -

3,147,492 49,809 102,878 1,046 -

14,949 206,966 60,247 102,076

-

16,021,958

1,141,216

17,163,174

-

855,965

44,376,997

2,508,952

47,741,914

701,097

1,506,539

61,511,803

5,188,323

68,206,665

3,364,865

155,850 37,496 250,338 35,729 21,083

175,952 138,152 3,738,861 11,000 60,669

22,227 20,068 844,034 5,940 -

354,029 195,716 4,833,233 52,669 81,752

48,505 22,335 -

83,948 -

192,803 1,905,781 39,617,281

20,093 -

296,844 1,905,781 39,617,281

27,503 -

584,444

45,840,499

912,362

47,337,305

98,343

855,965

18,915,222

3,650,168

23,421,355

701,097

66,130 -

(3,243,918) -

922,095

$

15,671,304

13,532 612,261 -

66,130 (3,243,918) 13,532 612,261 -

$ 4,275,961

$ 20,869,360

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds included in governmental activities.

95,196

Net assets of business-type activities

$ 20,964,556

2,565,425 $ 3,266,522

(95,196) $ 3,171,326

The notes to the financial statements are an integral part of this statement 35


CITY OF DELANO STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET ASSETS PROPRIETARY FUNDS For the Fiscal Year Ended June 30, 2012 Business-type Activities - Enterprise Funds Water Non-Major Refuse & Sewer Enterprise Fund Fund Funds Totals Operating Revenues: Charges for services Miscellaneous

$ 2,289,511 7,790

$ 8,548,083 70,509

514,309 3,646

$ 11,351,903 81,945

$ 2,925,349 -

2,297,301

8,618,592

517,955

11,433,848

2,925,349

Operating Expenses: Personnel Maintenance and operations Depreciation expense Miscellaneous

1,041,369 1,376,978 215,971 -

2,753,711 3,362,001 3,004,902 6,903

790,959 853,616 356,462 169,954

4,586,039 5,592,595 3,577,335 176,857

711,457 2,407,275 133,154 5,897

Total operating expenses

2,634,318

9,127,517

2,170,991

13,932,826

3,257,783

(508,925)

(1,653,036)

(2,498,978)

(332,434)

-

(443,074)

1,969,111 (8,921)

1,969,111 (451,995)

10,607 (7,186)

-

(443,074)

1,960,190

1,517,116

3,421

Transfers in Transfers out

-

1,466,069 (85,015)

166,173 (3,338)

1,632,242 (88,353)

(442,957)

Total transfers

-

1,381,054

162,835

1,543,889

(442,957)

429,055

469,989

562,027

(771,970)

1,259,112

15,242,249

3,805,972

20,307,333

4,038,492

$ 922,095

$ 15,671,304

$ 4,275,961

$ 20,869,360

$ 3,266,522

Total operating revenue

Operating income (loss) Nonoperating revenues (expenses): Intergovernmental Interest income Interest expense Total nonoperating revenues (expenses)

Change in net assets Total net assets, beginning Total net assets (deficit), ending

(337,017)

(337,017)

$

Governmental Activities Internal Service Fund

The notes to the financial statements are an integral part of this statement 36


CITY OF DELANO STATEMENT OF CASH FLOWS PROPRIETARY FUNDS For the Fiscal Year Ended June 30, 2012 Governmental Activities Internal Service Funds

Business-type Activities - Enterprise Funds Water Non-Major Total Refuse & Sewer Proprietary Proprietary Fund Fund Funds Funds CASH FLOWS FROM OPERATING ACTIVITIES Total operating revenues Intergovernmental revenues Payments to employees Maintenance and operations

$

2,122,292 (1,031,724) (1,267,515)

$ 8,410,150 (2,674,170) (2,194,388)

$

(757,984) 1,969,111 (866,481) (493,361)

$

9,774,458 1,969,111 (4,572,375) (3,955,264)

$

2,920,784 (709,110) (2,629,864)

Net cash provided by (used in) operating activities

(176,947)

3,541,592

(148,715)

3,215,930

(418,190)

CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES Operating subsidies and transfer from (to) other funds

176,947

1,966,073

162,835

2,305,855

(538,153)

176,947

1,966,073

162,835

2,305,855

(538,153)

Net cash provided by (used in) noncapital and related financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Purchase of capital assets Interest expense Proceeds from long-term debt Payments on long-term debt Net cash used in capital and related financing activities CASH FLOWS PROVIDED BY INVESTING ACTIVITIES Interest income Net cash provided by investing activities Net increase (decrease) in cash Cash, beginning of year Cash, end of year RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES Operating income (loss) Adjustment to reconcile operating income to net cash provided by operating activities: Depreciation Intergovernmental expenditures (Increase) decrease in: Receivables Due from other funds Inventory Prepaid expenses Increase (decrease) in: Accounts payable Compensated absences Due to other funds Other current liabilities Deposits Unearned revenues Net cash provided by (used in) operating activities

$

$

$

-

(9,251,221) (443,074) 6,060,147 (1,873,517)

(5,199) (8,921) -

(9,256,420) (451,995) 6,060,147 (1,873,517)

17,089 (7,186) -

-

(5,507,665)

(14,120)

(5,521,785)

9,903

-

-

-

-

10,607

-

-

-

-

10,607

-

-

-

-

-

202

150

352

-

(337,017)

$

$

202

(508,925)

$

150

$ (1,653,036)

$

352

$ (2,498,978)

(935,833) 3,215,363 $

$

2,279,530

(332,434)

215,971 -

3,004,902 -

356,462 1,969,111

3,577,335 1,969,111

133,154 -

(192,178) -

(232,249) 1,969,065 10,258 (1,046)

(1,281,879) -

(1,706,306) 1,969,065 10,258 (1,046)

(4,565) (206,966) (13,168) -

9,625 (1,128) 99,838 10,773 2,629 14,540

(75,764) 6,234 (362,332) (292,358) 12,807 11,000

8,139 (72,816) 522,070 (2,706) 5,940

(58,000) (67,710) 259,576 (284,291) 15,436 31,480

5,041 565 (1,599) 1,782 -

(176,947)

$ 3,541,592

$

(148,715)

$

3,215,930

The notes to the financial statements are an integral part of this statement 37

$

(418,190)


FIDUCIARY FUNDS


CITY OF DELANO STATEMENT OF FIDUCIARY NET ASSETS FIDUCIARY FUNDS June 30, 2012

Trust and Agency Funds

Pension Trust ASSETS Cash and investments Cash with fiscal agent Contributions receivable and other receivables Prepaid assets Note receivable, net Deferred charges Land held for resale Capital assets: Depreciable, net of accumulated depreciation Other Total assets LIABILITIES Accounts payable Accrued interest payable Deposits payable CRA pass thru liability Other liabilities Due within one year Due in more than one year

$ 19,078,920 450 108,539 -

$

-

NET ASSETS Held in trust for pension benefits and other purposes

488,414 17,390 -

$

1,434

2,027,953 1,959,869 448,419 2,242,579 5,749,360 42,855 -

$ 19,187,909

$

507,238

$

12,471,035

$

$

1,785 404,306 101,147 -

$

36,272 243,707 320,860 260,000 14,380,000

33,716 3,579 37,295

Total liabilities

Private Purpose Trust Fund CRA Successor Agency

$ 19,150,614

507,238

$

-

15,240,839

$

The notes to the financial statements are an integral part of this statement 39

(2,769,804)


CITY OF DELANO STATEMENT OF CHANGES IN FIDUCIARY NET ASSETS FIDUCIARY FUNDS For the Fiscal Year Ended June 30, 2012

Trust and Agency Funds

Pension Trust Additions: Property Taxes Employer contributions Employee contributions Income from use of money & property Miscellaneous revenues

$

Total additions Deductions: Net depreciation in fair value of investments Investment management expenses Depreciation Benefits Refunds of contributions Administrative expenses Maintenance & operations Debt Services - Interest Others Total deductions Special Item: Extraordinary loss on AB1X26 Change in net assets

Net assets - ending of year

1,372,123 118,217 175,628 587

$

142,652

$

142,652

968,360

278,475 196,803 1,201,187 1,143,055 145,652 -

142,676

1,928 19,482 33,305 399,595 -

2,965,172

142,676

454,310

-

$

(3,283,854)

(24)

(2,769,804)

20,449,231 $

940,909 27,451 -

1,666,555

(1,298,617)

Net assets - beginning of year

Private Purpose Trust Fund CRA Successor Agency

19,150,614

$

The notes to the financial statements are an integral part of this statement 40

(2,769,804)


NOTES TO THE FINANCIAL STATEMENTS


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies A. Reporting Entity The City of Delano (the City) is a municipal corporation operating under a Council/Manager form of government with an elected five member council, the mayor being elected by the members among themselves for a two year term. The accompanying financial statements present the City 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 City’s operations. Blended Component Units. The following component units are included in the accompanying financial statements using the blended method since the governing bodies are substantially the same as the governing body of the City. These component units provide services entirely to the City. Delano Redevelopment Agency - The Delano Community Redevelopment Agency (Agency) was established by the City Council on December 5, 1995, pursuant to California Health and Safety Code Section 33000; the “Community Redevelopment Law.” The Agency exists as a separate legal entity whose purpose is to eliminate blight, to help meet low and moderate income housing needs, and to revitalize property, within the Delano redevelopment project area. The Agency board is comprised solely of the same individuals who comprise the City Council. The Agency’s administrative staff is comprised of City employees. The Agency is reported as a governmental fund. The Agency was dissolved on February 1, 2012 in accordance with Assembly Bill 1X 26 (see note 15). Delano Financing Authority Agency - The Delano Financing Authority Agency was established pursuant to the State of California Non-Profit Benefit Public Law. The Delano Financing Authority Agency’s purpose is to issue certificates of participation to provide funding for the construction of a community correctional facility and tax allocation bonds for the Delano Redevelopment Agency. Delano Housing Authority – (Housing Authority) was established in 2011 by the City. The Housing Authority’s primary purpose is to provide safe and sanitary housing accommodations for persons with very low, low or moderate income. City Council members serve as the Housing Authority’s commissioners and have full accountability for fiscal matters.

42


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) A. Reporting Entity (Continued) Fiduciary Component Unit Successor Agency to the Redevelopment Agency of the City of Delano (Successor Agency) is a separate legal entity, which was formed to hold the assets and liabilities of the former Redevelopment Agency pursuant to City Council actions taken on January 17, 2012 and January 30, 2012. The activity of the Successor Agency is overseen by an Oversight Board comprised of individuals appointed by various government agencies and the City of Riverside as Successor Agency of the former Redevelopment Agency. The nature and significance of the relationship between the City and the Successor Agency is such that it would be misleading to exclude the Successor Agency from the City’s financial statements. The Successor Agency is presented herein in the City’s fiduciary funds as a private-purpose trust fund. Complete unaudited financial statements are prepared for the Successor Agency to the Redevelopment Agency of the City of Delano, which can be obtained from the City's Finance Department, 1015 Eleventh Avenue, Delano, CA 93216 or online at www.cityofdelano.org B. Government-wide and Fund Financial Statements The government-wide financial statements (i.e., the statement of net assets and the statement of activities) report information on all of the non-fiduciary activities of the primary government and its component units. For the most part, the effect of inter-fund activity has been removed from these statements. Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from certain legally separate component units for which the government is financially accountable. The statement of activities demonstrates the degree to which the direct expenses of a given function or segment is offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to consumers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from government-wide financial statements. Major individual governmental funds and major enterprise funds are reported as separate columns in fund financial statements.

43


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund and fiduciary fund financial statements. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of cash flows. Property taxes are recognized as a receivable in the year for which they are levied. Grants and similar items are recognized as soon as eligibility requirements imposed by the provider have been met. Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current period. Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation Property taxes, franchise taxes, licenses, and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal year. All other revenue items are considered to be measurable and available only when cash is received by the government. The City reports the following major governmental funds: The General Fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund. The CRA Capital Projects Fund accounts for administrative costs for the start-up of the Delano Redevelopment Agency and costs of redevelopment. The principal source of revenue is proceeds from issuance of long-term debt and excess tax increment. The Developer Impact Fees Special Revenue Fund accounts for fees collected from individuals and developers building in the City, as required by AB 1600. Fees collected include streets, fire, police, traffic control, and street lights impact fees. The Capital Projects 2010A Fund accounts for administrative costs for construction projects. The principal source of revenue is proceeds from issuance of long-term debt.

44


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) The City reports the following major proprietary funds: The Refuse Fund accounts for the collection and disposal of green-waste, recyclable waste, and garbage within the City, including street sweeping. The Water and Sewer/Wastewater Treatment Fund accounts for the operation of the sewage treatment plant, sewage pumping stations and collection systems, and the water pumping and distribution systems. Additionally, the City reports the following fund types: Internal Service Funds account for the City’s information system, liability insurance and workers compensation, and fleet management services (garage) provided to other departments and agencies of the City on a cost reimbursement basis. Fiduciary Fund Financial Statements - Fiduciary fund financial statements include a Statement of Net Assets and Statement of Change in Net Assets. The City’s fiduciary fund is accounted for according to the nature of the fund. The City has two such funds which are accounted for using “economic resources” measurement focus and the accrual basis of accounting. The Pension Trust Fund accounts for the activities of the City of Delano Employees’ Retirement Plan, which accumulates resources for pension benefit payments to qualified City employees. The RDA Successor Agency accounts for the assets and activities of the dissolved redevelopment agency of the City. Agency Funds are used to account for assets of others for which the City acts as an agent. The one Agency Fund of the City does not use or have a measurement focus. Private-sector standards of accounting and financial reporting issued prior to December 1, 1989, generally are followed in both government-wide and proprietary fund financial statements to the extent those standards do not conflict with, or contradict, guidance of the Governmental Accounting Standards Board. As a general rule, the effect of inter-fund activity has been eliminated from the government-wide statements. Exceptions to this general rule are charges between the City’s water and sewer function and other functions of the City. Elimination of these charges would distort the direct costs and program revenues for the various functions concerned. Amounts reported as program revenues include 1) charges to customers or applicants for services or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments. Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.

45


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) D. Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued) Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the enterprise funds and of the internal service funds are charges to customers for sales and services. The water and sewer enterprise funds also recognize as operating revenue the portion of the tap fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. E. Assets, Liabilities, and Net Assets or Fund Balance Deposits and Investments The City’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short term investments with original maturities of three months or less from the date of acquisition. The City, as well as its component units, applies Governmental Accounting Standards Board (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 in income of the period in which they occur. The reported value of the state pool is the same as the fair value of the pool shares. Receivables and Payables Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as either “due to/from other funds” (that is, the current portion of the inter-fund loans), or “advances to and from other funds” (that is, the non-current portion of inter-fund loans). All other outstanding balances between funds are reported as “due to/from other funds.” Any residual balances outstanding between governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”

46


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Fund Balance (Continued) Receivables and Payables (Continued) Advances between funds, as reported in the fund financial statements, are offset by a fund balance reserve account in applicable governmental funds to indicate that they are not available for appropriation and are not expendable available financial resources. All trade receivables are shown as net of allowance for uncollectible amounts. Property tax receivables are equivalent to the total levy, as the County of Kern, in which the City is located, makes the City whole for any tax delinquency. The delinquency rate for utility accounts receivable such as water, sewer and refuse is minimal. Property taxes are levied as of January 1 of each year. The tax levy is billed twice by the County, on November 1 and February 1 of each year, and is delinquent on December 10 at 5 pm and April 10 at 5 pm. Inter-fund Transactions 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 inter-fund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentations. Inventories and Prepaid Items All inventories are valued at cost using the average cost method. Inventories of governmental funds are first charged to expenditures then the value of the inventory is offset against the expenditure at the end of the fiscal year. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

47


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Fund Balance (Continued) Restricted Assets Certain proceeds of the Delano Financing Authority Agency certificates of participation are classified as cash with fiscal agents in the balance sheet because they are maintained in separate reserve bank accounts as required by the bond covenants. Land Held for Resale Land held for resale is stated at the lower of historical cost or net realizable value, if estimable. Capital Assets Capital assets, which include property, plant, equipment, improvements, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items) are reported in the applicable governmental or business-type activities columns in the governmentwide financial statements. Capital assets, other than infrastructure assets, include assets with an initial, individual cost of more than $5,000 and an estimated life in excess of 3 years. Such assets are recorded at historical cost if purchased or constructed. Donated capital assets are recorded at estimated fair market value at the date of the donation. The cost of normal maintenance and repairs that do not add value to the asset or materially extend lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Capital assets of the primary government, as well as the component units, are depreciated using the straight line method over the following estimated useful lives: Buildings Improvements Infrastructure Machinery & equipment

48

25-29 years 5-30 years 25-29 years 5-30 years


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Fund Balance (Continued) Compensated Absences It is the City’s policy to permit employees to accumulate earned but unused vacation and sick pay benefits. Employees earn 12 days of sick leave per year and can carry forward a maximum of 150 days of earned but unused days in total. Upon separation of employment, employees can be reimbursed for at least 50% of normal pay rate for days greater than 90 days balance. Employees earn 10 to 22 vacations days per year and can carry forward a maximum of 192 to 384 hours, depending on the level of employment. Upon separation of employment, the City is obligated to compensate all employees for all earned but unused vacation time. All vacation pay is accrued when incurred in the government wide, proprietary, and fiduciary fund financial statements. A liability for these amounts is reported in the governmental funds only if they have matured as a result of separation of employment. 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 government activities, business-type activities, or proprietary fund type statement of net assets. Bond premium and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognize bond premium and discounts, as well as bond issuance costs, during the current period. The face amount of the debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds, are reported as debt service expenditures.

49


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Fund Balance (Continued) Net Assets/Fund Balance Fund balances are reported in the fund statements in the following classifications: Nonspendable fund balance – this includes amounts that cannot be spent because they are either not spendable in form (such as inventory) or legally or contractually required to be maintained intact (such as endowments). Restricted fund balance – this includes amounts that can be spent only for specific purposes stipulated by constitution, external resource providers, or through enabling legislation. If the Council action limiting the use of funds is included in the same action (legislation) that created (enables) the funding source, then it is restricted. Committed fund balance – this includes amounts that can be used only for specific purposes pursuant to constraints imposed by formal action of the government’s highest level of decision-making authority. Assigned fund balance – this includes amounts that are constrained by the government’s intent to be used for specific purposes, but are neither restricted nor committed. Unassigned fund balance – this includes all amounts not included in other spendable classifications. In the government-wide financial statements, net assets are classified in the following categories: Invested in capital assets, net of related debt – This category groups all capital assets, including infrastructure, into one component of net assets. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce this category. Restricted net assets – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation. Unrestricted net assets – This resulting category presents the remaining City net assets and this measure of equity is unrestricted, legally or otherwise.

50


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Fund Balance (Continued) Net Assets/Fund Balance (Continued) The City Council as the highest level of decision-making authority, may commit fund balance for specific purposes pursuant to constraints imposed by formal actions taken, such as adoption of an ordinance or resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same type of formal action taken to establish the commitment. City Council action to commit fund balance needs to occur within the fiscal reporting period, however the amount can be determined subsequently. Amounts that are constrained by the City’s intent to be used for specific purposes, but are neither restricted nor committed, should be reported as assigned fund balance. Pursuant to the City’s fund balance policy established by the City Council by resolution; It has delegated the authority to assign amounts to be used for specific purposes to the City Manager or Finance Director for the purpose of reporting these amounts on the annual financial statements. When an expenditure is incurred for purposes for which both restricted and unrestricted fund balance is available, the City considers restricted funds to have been spent first. When an expenditure is incurred for which committed, assigned, or unassigned fund balances are available, the City considers amounts to have been spent first out of committed funds, then assigned funds, and finally unassigned funds, as needed, unless the City Council has provided otherwise in its commitment or assignment actions. Cash Flow Statements For purposes of reporting cash flows, cash and cash equivalents include cash on hand, demand deposits, short-term investments and certain 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 from the date of acquisition meet this definition.

51


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (1)

Summary of Significant Accounting Policies (Continued) E. Assets, Liabilities, and Net Assets or Fund Balance (Continued) Deficit Fund Balances The following funds had a deficit fund balance: Governmental activities: City Capital Projects Fund Special Revenue Grant Fund Asset Seizure Fund

(1,066,316) (24,731) (1,660)

The deficit in the City Capital Projects Fund is expected to be dealt with after the City performs an in-depth analysis to determine if additional draw downs will need to be requested. The City expects to transfer additional funds from the General Fund to the Asset Seizure Fund, as needed. The City expects to transfer additional funds from the General Fund to the Special Revenue Grant Fund, as needed. Classification of Fund Balances A detail of the classification of fund balances is as follows: RDA-CAP Project Fund

General Fund

Fund balances: Nonspendable: Prepaid items $ 229,180 Inventory Restricted for: Capital projects Water and sewer Community and economic development Assigned to: Capital projects Unassigned: 6,933,768 Total fund balances $ 7,162,948

$

$

Developer Impact Service Fund -

$

-

Cap Projects 2010A $

Other Governmental Fund -

-

10,318,633 -

22,279,974 -

-

$ 10,318,633

$ 22,279,974

$

6,245,352

(1,066,316) $ 5,179,036

Total $

229,180 22,279,974 10,318,633 6,245,352

5,867,452 $ 44,940,591

Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount or revenues and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

52


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (2)

Stewardship, Compliance and Accountability Budgetary Information Annual budgets are adopted on a basis consistent with generally accepted accounting principles for all governmental funds except the capital projects funds, which adopt projectlength budgets. All annual appropriations lapse at fiscal year-end. On or before June 1st of each year, the City Manager shall submit to the City Council an annual budget for the ensuing fiscal year. The City Council holds public hearings, and a final budget must be adopted as originally proposed or as amended prior to July 1st. The appropriated budget is prepared by fund, function, and department. The department heads may make transfers of appropriations by line item on the division level. Transfers relating to capital outlays involving $5,000 or more require the approval City Council. Likewise, any new appropriations from the fund balance have to be approved by the City Council. The legal level of budgetary control (that is, the level at which expenditures may not legally exceed appropriations) is by line item. The City Council made several supplementary appropriations throughout the year which were not material.

(3)

Deposits and Investments The City’s cash and investments consist of the following at June 30, 2012: Deposits Cash on hand Investments Cash and investments

$ 5,852,231 1,580 34,187,615 40,041,426

Cash and Investments with Fiscal Agents Total

26,704,570 $ 66,745,996

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

Cash and Investments Cash with Fiscal Agents

Governmental Business Fiduciary Activities Type Activities Funds Total $ 18,445,787 $ 352 $ 21,595,287 $ 40,041,426 24,727,311 1,977,259 26,704,570 $ 43,173,098 $ 352 $ 23,572,546 $ 66,745,996

53


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (3)

Deposits and Investments (Continued) Authorized Investments Under the provisions of the City’s investment policy and in accordance with Section 53601 of the California Government Code, the City may invest in the following types of investments: Certificates of Deposits Local Agency Investment Fund (state pool) Bankers' Acceptances U.S. Treasury Bills and Notes

Federally Sponsored Agency Securities Repurchase Agreements not to Exceed 90 Days Medium Term Corporate Notes and Mutual Funds

The investments listed above are managed by the City Treasurer and Fiscal agents (bond trustees) acting in accordance with bond covenants. Investments managed by the City Treasurer are invested in accordance with investment policy. Investments managed by bond trustees are invested in accordance with the provisions of the respective bond agreements, rather than the general provisions of the California Government Code or the City’s investment policy. The City’s cash and investments by investment manager are as follows: City Treasurer Fiscal Agents (Bond trustees for the City and its component units) Pension fund investment committee Total

$ 20,962,506 26,704,570 19,078,920 $ 66,745,996

The City is a voluntary participant in the Local Agency Investment Fund (LAIF). LAIF is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in the pool is reported in the accompanying financial statements at amounts based upon the City’s prorata share of the fair value provided by LAIF for the entire LAIF portfolio.

54


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (3)

Deposits and Investments (Continued) Authorized Investments (Continued) The City Treasurer has direct oversight over the City’s pooled investment fund which covers cash and cash equivalents of the City’s governmental funds, proprietary funds, and trust and agency funds which are invested in accordance with the City’s investment policy. The investment policy generally complies with California Government Code Section 53601 and its primary detail is as follows: Investment Types Authorized by Section 53601 U.S. Treasury and Agencies Commercial paper Certificates of deposits (CD's) Medium term notes Local Agency Investment Fund

Authorized by Investment Policy

Maximum Maturity (years)

Yes Yes Yes Yes Yes

5 5 5 5 N/A

Maximum Maximum Percentage of Investment in Portfolio One Issuer None None None None None

None None 100K None None

Minimum Ratings None PI/AI A A None

Investments with fiscal agents are investments held by the bond trustee on behalf of the City or its component units. The City and its investment advisor select the investment under the terms of the applicable trust agreement, direct the bond trustee to acquire the investment, and the bond trustee holds the investment on behalf of the City and/or its component units. Proceeds of bonds administered by bond trustees are also generally covered under the City Treasurer’s investment policy; however, specific provisions of each issuance are usually used in managing such investments. Such differences relate to investment of required reserves to be maintained in guaranteed investment contracts that extend over five years. Interest Rate Risk Interest rate risk is that risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. Information about the sensitivity of the fair values of the City and its component units’ investments to market rate fluctuations is provided in the table below that shows the distribution by maturity. The City’s investment policy generally complies with the State Government Code with respect to allowable investment instruments as a means of managing its fair value losses arising from changing interest rates. Guaranteed investment contracts are investments held by fiscal agents (bond trustees) and are restricted for debt service.

55


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (3)

Deposits and Investments (Continued) Interest Rate Risk (Continued) 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:

Government Sponsored Entity Debt GIC Annuity Contracts Held by trustee: California Local Agency Investment Fund

Investment Maturities (in Years) Less than 1 1-5 More than 5 $ 6,503,515 $ $ 2,146,303 1,018,952 33,880,386 $ 40,383,901

$

-

$ 3,165,255

$

$

Total 6,503,515 2,146,303 1,018,952 33,880,386 43,549,156

Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The City’s investment policy generally complies with the State Government Code with respect to allowable investment instruments as a means of managing its risk of loss related to credit risk and concentration of credit risk. The City’s investments subject to credit risk are as follows: Ratings as of Year End Investment Type A+ Government Sponsored Entity Debt Not rated: GIC Annuity Contracts California Local Agency Investment Fund

56

$ 6,503,515

Total $ 6,503,515

2,146,303 1,018,952 33,880,386 $ 43,549,156


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (3)

Deposits and Investments (Continued) Deposits Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The City’s deposit policy requires deposits to be covered by federal deposit insurance and collateral having a market value of 110% of the uninsured deposit. As of June 30, 2012, the City’s bank balance was $4,352,320 (carrying amount of $4,115,025); of the bank balance, $1,584,522 was insured and $2,767,798 was secured by collateral held by the City’s agent in the agent’s name. Investments Custodial Credit Risk The custodial credit risk for investments is the risk that in the event of the failure of the counterparty, the City will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. To minimize custodial credit risk with respect to investments with fiscal agents, the City and its component units require that they meet certain credit ratings from either Standard & Poor’s or Moody’s Investors Service. Of the City’s investments $6,503,515 are securities, which are subject to custodial credit risk. These securities are held by the City’s agents or brokers and they are held in the City’s name. Concentration of Credit Risk The City is required, under GASB 40, to provide information about the concentration of credit risk associated with their investments in any one issuer that represent 5% or more of total investments. Investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments are excluded from this requirement. The City’s investment policy places no limit on the amount that may be invested in any one issuer. During the year there were no investments representing more than 5% of the City’s total investments.

57


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (3)

Deposits and Investments (Continued) Pension Trust The City of Delano reports the City of Delano Employee Pension Plan, the Pension Trust, as a Fiduciary Fund in the Fund Financial Statements. Deposits and investments of the Pension Trust are governed by the Pension Committee of the City of Delano Employee Pension Plan. The information relates to deposits and investments that are reported in the Pension Trust. The City of Delano Pension Plan’s (the Plan) cash and investments consist of the following at June 30, 2012: Deposits Investments

$ 1,735,891 17,343,029

Total

19,078,920

Deposits Custodial Credit Risk Custodial credit risk is the risk that in the event of a bank failure, the City’s deposits may not be returned to it. The Plan’s deposit policy requires deposits to be covered by federal depository insurance and collateral having a market value of 110% of the uninsured deposit. As of June 30, 2012, the Plan has a bank balance of $1,735,891. Of the bank balance, $786,762 was covered by federal depository insurance or collateral held by the Plan’s agent in the Plan or agent’s name. Included in deposits are money market funds totaling $949,129 of which $949,129 was exposed to custodial credit risk.

58


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (3)

Deposits and Investments (Continued) Pension Trust (Continued) Investments At June 30, 2012, the Plan had the following investments: Domestic Stocks Investment Contract International Stocks Annuities Other Investments

$ 10,399,539 3,985,411 2,247,788 702,351 7,940

Total

$ 17,343,029

Authorized Investments The investments listed above are managed by the trustee under the direction of the City of Delano Pension Committee. The Plan has not adopted a formal investment policy. The Plan’s investments are held by various agents consisting of insurance companies, financial institutions, and nationally recognized brokerage firms. The investments may be held in direct form, pooled form, or both. Custodial Credit Risk For an investment held in the form of securities, custodial credit risk is the risk that, in the event of a failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. Of the Plan’s investments, $11,655,267 are securities and subject to custodial credit risk. These securities are held by the Plan’s agents or brokers and they are not held in the Plan’s name. Credit Risk and Interest Rate Risk At June 30, 2012, the Plan’s investments subject to credit risk and interest rate risk consist of the following: Investment Types Investment Contract Other Investments $

Amount Less than 1 3,985,411 2,000,000 7,940 7,940 3,993,351 $ 2,007,940 $

59

1 to 5 1,985,411 1,985,411


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (3)

Deposits and Investments (Continued) Pension Trust (Continued)

Amount Investment Type Investment Contract 3,985,411 Other Investments 7,940 $ 3,993,351

Ratings as of Year End AAA A A-1+ $ - $ - $ -

Not Rated 3,985,411 7,940 $ 3,993,351

Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. Credit risk can be measured by obtaining ratings issued by nationally recognized statistical rating organizations such as Standard & Poor’s or, Moody’s Investors service, to name a few. Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater will be the sensitivity of its fair value to changes in market interest rates. Concentration of Credit Risk The Plan is required, under GASB 40, to provide information about the concentration of credit risk associated with their investments in any one issuer that represent 5% or more of total investments. Investments issued or explicitly guaranteed by the U.S. government and investments in mutual funds, external investment pools, and other pooled investments are excluded from this requirement. The Plan places no limit on the amount the Plan may invest in any one issuer. The following investment represents more than 5% of the Plan’s total investments at June 30, 2012: Issuer Great West Life and Annuity Insurance Company

Type of Investment

Investment Contract

60

Amount

$ 3,985,411


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (4)

Receivables Receivables as of year-end for the City’s individual major funds and non-major, internal service, and fiduciary funds in the aggregate, net of applicable allowances for uncollectible accounts are as follows: Governmental funds: General Fund First Time Home Buyers Fund Developers Impact Fees Fund Other Governmental Funds Total governmental funds

Taxes

Accounts

$ 1,332,518 -

$ 297,913 1,527 3,750 562,087

1,332,518

(5)

$

Other

71,768

$ 27,508 -

865,277

71,768

27,508

-

14,949 3,147,492 450

-

49,809 -

$ 1,332,518

$ 4,028,168

71,768

$ 77,317

Governmental Activities Internal Service Fund Enterprise Funds Fiduciary Funds Total

Intergovernmental

$

Notes/Loans Receivable Notes and loans receivable consist of the following at June 30, 2012: Beginning Balance

Notes Receivable CRA Successor Agency Automobile dealership

Additions

$ 514,042

Deletions

Ending Balance

Allowance for Uncollectible

Net

65,623

448,419 630,000

630,000

218,000

218,000

-

448,419

Housing Authority Limited Partnership Casitas-80 L.P.

Loans Receivable CDBG Fund First Time Homebuyers Housing Fund Other Miscellaneous Fund

630,000 218,000

‐ ‐

‐ ‐

1,362,042

65,623

2,199,097

-

1,296,419

1,296,419

-

2,199,097

2,199,097

-

3,642,795

324,418

-

3,967,213

3,967,213

-

338,863

607,340

-

946,203

946,203

-

-

Total Notes/Loans Receivable

6,180,755

931,758

7,112,513

7,112,513

$ 7,542,797

$ 931,758

$ 65,623

$ 8,408,932

$ 7,112,513

61

$ 1,296,419


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (5)

Notes/Loans Receivable (Continued) A. Notes Receivable CRA Low-Moderate Housing Fund (Transferred to Housing Authority) A note receivable in the amount of $630,000 represents advances to a limited partnership under an agreement dated February 12, 1996 between the limited partnership and the Agency. Under the agreement, the note, which matures on February 12, 2026, will bear an annual rate of interest of 7%, will be secured by a subordinated deed of trust on low and moderate residential rental property, and will be repaid solely from the residual receipts of such property. However the full amount of the loan is due in full at its maturity date or an event occurs requiring the acceleration of payment. A note receivable in the amount of $218,000 represents advances to Casitas-80 L.P., for a senior citizen residential housing project. The note was dated May 27, 1998 and will mature on May 27, 2028, will bear zero interest, will be secured by a second deed of trust on the site of the project, and will be repaid solely from the residual receipts of the project. The first principal payment is due 2013. B. Loans Receivable CDBG Fund Loans receivable in the amount of $2,199,097 represents various housing rehabilitation program loans. Under most agreements, loans are free of interest and that principal payments are deferred for 30 years from the date of each agreements so long as the borrower, or an approved member of the borrower's immediate family maintains continuous residence on the property. Deferred payment of principal shall become immediately due and payable at such time as either (1) the borrower, or upon the death of the borrower, an approved family member who would then be considered the borrower, ceases to maintain continuous residence on the property or (2) title to the properly is transferred. Loans are secured by lien over property and a legally binding documentation approved by the City requiring borrowers to maintain the property in a good state of repair, to insure the property, and to pay all taxes levied on the property. An allowance for uncollectible account has been provided for the full amount as the City does not expect to collect such loans.

62


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (5)

Notes/Loans Receivable (Continued) B. Loans Receivable (Continued) First Time Homebuyer's Housing Fund Loans receivable in the amount of $3,967,213 represents various home buyer assistance program loans. Under most agreements, loans are free of interest and that principal payments are deferred for 30 years from the date of each agreements so long as the borrower, or an approved member of the borrower's immediate family maintains continuous residence on the property. Deferred payment of principal shall become immediately due and payable at such time as either (1) the borrower, or upon the death of the borrower, an approved family member who would then be considered the borrower, ceases to maintain continuous residence on the property or (2) title to the property is transferred. Loans are secured by lien over property and a legally binding documentation approved by the City requiring borrowers to maintain the property in a good state of repair, to insure the property, and to pay all taxes levied on the property. An allowance for uncollectible account has been provided for the full amount as the City does not expect to collect such loans. borrower, ceases to maintain continuous residence on the property or (2) title to the property is transferred. Loans are secured by lien over property and a legally binding documentation approved by the City requiring borrowers to maintain the property in a good state of repair, to insure the property, and to pay all taxes levied on the property. A deferred amount has been recorded in the governmental fund financial statements as the loans do not represent current financial resources. Other Miscellaneous Fund Loans receivable in the amount of $946,203 represents various home buyer assistance and rehabilitation loans under the CALHOME program. Under most agreements, loans are free of interest and principal payments are deferred for 30 years from the date of each agreement so long as the borrower or an approved member of the borrower's immediate family maintains continuous residence on the property. Deferred payment of principal shall become immediately due and payable at such time as either (1) the borrower, or upon the death of the borrower, an approved family member who would then be considered the borrower, ceases to maintain continuous residence on the property or (2) title to the property is transferred. Loans are secured by lien over property and a legally binding documentation approved by the City requiring borrowers to maintain the property in a good state of repair, to insure the property, and to pay all taxes levied on the property.

63


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (5)

Notes/Loans Receivable (Continued) B. Loans Receivable (Continued) CRA Successor Agency (Formally CRA Capital Projects Fund) The agency had a loan receivable from a local automobile dealership in the amount of $800,000, which was payable monthly beginning June 1, 2004 with interest at 5% per annum, and was expected to mature ten-years after the date of the note. On April 20, 2009, the Agency executed another agreement with the dealership which consolidated the old debt with the new debt As a result of the new agreement; the Agency was required to pay the automobile dealership $200,000 for the purpose of obtaining working capital to retain the dealership in the City. In addition, the Agency was obligated to loan the automobile dealership up to $656,223, which includes the existing loan balance already provided. The terms of the loan require the entire balance to be repaid no later than 10 years from the date of final disbursal of new funds to the automobile dealership together with interest at the rate of 5% per year. Principal payments are due commencing on May 1, 2010 in 120 monthly installments of $5,468. The loan is subject to the condition that if the automobile dealership generates sales tax in excess of $192,000 in a 12 month period, the principal will be reduced dollar-for-dollar for the excess amount and for the year ended June 30, 2012, the principal has been reduced $65,623. In addition all interest due in any one year will not be reuired to be paid if the borrower exceeds the required $192,000 .The outstanding balance of the loan as of June 30, 2012 was $448,419. Deferred Revenue Governmental funds report deferred revenues in connection with receivables for revenues that are not considered to be available to liquidate liabilities of the current period and for long-term loans and notes that might not be collectible. As of June 30, 2012, the various components of deferred revenue are as follows: Deferred Revenues: General Fund Other Governmental Funds

$

Total governmental funds Less: deferred revenues recognized in the statement of net assets Total statement of net assets

64

47,732 1,272 49,004 (47,732)

$

1,272


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (6)

Inter-fund Transactions Inter-fund transactions are reported as loans, services provided, reimbursements, or transfers. Loans are reported as inter-fund receivables and payables, 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 inter-fund transactions are treated as transfers. Transfers among governmental or proprietary funds are netted as part of the reconciliation to the government-wide financial statements. Due To / Due From Inter-fund due from/to other funds at June 30, 2012, were as follows: Receivable fund

Payable Fund

General

Capital Projects 2010A First Time Homebuyers Program Fund Inmate Welfare fund Special Revenue Grand I Debt Service fund Refuse fund Water & Sewer fund Transit fund

Amount $ 241,907 283,502 795,656 59,205 648,244 250,338 3,738,861 844,034 $ 6,861,747

First Time Homebuyers Program Fund

Miscellaneous Special Revenue (CalHome)

$ 324,955

Inmate welfare fund

General Fund

30,776

Workers compensation fund General Fund

206,966

$ 7,424,444

The outstanding balances between funds are a result of several factors. First, the lag time between the dates that the interfund goods and services are provided or reimbursable expenditures occur. Secondly, outstanding transactions between funds result from lag time between the dates that transactions are recorded in the accounting system. Finally, outstanding balances between funds result from lag between the dates that payments between funds are made. These balances include the amount of working capital loans made to internal service funds that the general fund expects to collect in the subsequent year.

65


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (6)

Inter-fund Transactions (Continued) A. Transfers In / Out Transfers in/out consist of the following at June 30, 2012

Transfers out General Fund

General Fund $ ‐

Developer Impact Fees Fund Nonmajor governmental funds

184,600

Water and Sewer fund

Transfers In Nonmajor Governmental Water Funds Sewer Fund $ 2,597,996

$ 38,807

672,000

1,263,454

1,935,454

944,974

134,598

1,264,172

75,000

10,015

85,015

3,338

3,338

15,857

442,957

Nonmajor enterprise fund ISF

427,100 $ 611,700

Nonmajor Enterprise funds Total

$ 4,289,970

$ 1,466,069

$ 166,173

$ 166,173

$ 2,802,976

$ 6,533,912

Transfers are due because of the following reasons: First, transfers are used to move revenues from the fun with collection authorization to the debt service fund, as debt service principal and interest payments become due. Secondly, transfers are used to move restricted amounts to funds incurring the expenditures. Finally, transfers are used to move unrestricted general fund revenues to finance various programs that the government must account for in other funds in accordance with budgetary authorizations, including amounts provided as subsidies or matching funds for various programs.

66


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (7)

Capital Assets Capital asset activity for the fiscal year ended June 30, 2012, was as follows: Beginning Balance Governmental Activities: Capital Assets, No Depreciation Land Construction in Progress

$

Total Capital Assets, Not Depreciated

Transfers In/(Out)

5,057,841 4,463,837

$

-

9,521,678

Increases

$

-

Ending Balance

Decreases

3,079,119

$

(650,851)

$

5,057,841 6,892,105

3,079,119

(650,851)

11,949,946

Capital Assets, Being Depreciated Buildings Improvements Equipment and Machinery Infrastructure

14,795,682 24,219,314 7,139,803 149,264,000

(159,427) -

255,000 1,729,378 12,969 -

(77,448) -

15,050,682 25,789,265 7,075,324 149,264,000

Total Capital Assets, Being Depreciated

195,418,799

(159,427)

1,997,347

(77,448)

197,179,271

Less Accumulated Depreciation for: Buildings Improvements Equipment and Machinery Infrastructure

(11,548,077) (11,367,884) (5,042,662) (29,852,800)

114,644 -

(611,848) (1,888,628) (462,079) (5,970,560)

77,448 -

(12,159,925) (13,141,868) (5,427,293) (35,823,360)

Total Accumulated Depreciation

(57,811,423)

114,644

(8,933,115)

77,448

Total Capital Assets, Being Depreciated, Net

137,607,376

(44,783)

(6,935,768)

-

$ 147,129,054

$ (44,783)

$ (3,856,649)

Beginning Balance

Increases

Governmental Activities Capital Assets, Net

Business-Type Activities: Capital Assets, No Depreciation Land Construction in Progress

$ 3,183,749 42,420,363

$

$

(650,851)

$

(37,133,007)

$

(37,133,007)

3,183,749 13,979,425

Total Capital Assets, Not Depreciated

45,604,112

8,692,069

Capital Assets, Being Depreciated Buildings Improvements Equipment and Machinery Infrastructure

5,506,523 21,842,818 15,418,108 -

37,692,159 5,199 -

-

5,506,523 59,534,977 15,423,307 -

Total Capital Assets, Being Depreciated

42,767,449

37,697,358

-

80,464,807

Less Accumulated Depreciation for: Buildings Improvements Equipment and Machinery Infrastructure

(4,019,494) (13,171,488) (11,954,576) -

(123,950) (2,762,028) (691,357) -

-

(4,143,444) (15,933,516) (12,645,933) -

Total Accumulated Depreciation

(32,722,893)

(29,145,558)

(3,577,335)

-

Total Capital Assets, Being Depreciated, Net

13,621,891

34,120,023

-

Business-Type Activities Capital Assets, Net

$ 59,226,003

$ 42,812,092

Beginning Balance

17,163,174

47,741,914

$ (37,133,007)

Transfer In/(Out)

Increases

$ 142,576,771

Ending Balance

Decreases

8,692,069

(66,552,446) 130,626,825

$ 64,905,088 Ending Balance

Decreases

Fiduciary Activities - RDA Successor Agency: Capital Assets, Being Depreciated Improvements

-

159,427

-

-

159,427

Total Capital Assets, Being Depreciated

-

159,427

-

-

159,427

Less Accumulated Depreciation for: Improvements Fiduciary Activities Capital Assets, Net

$

-

(114,644)

-

$ 44,783

67

(1,928) $

(1,928)

$

-

(116,572) $

42,855


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (7)

Capital Assets (Continued) Depreciation was charged to functions/programs of the primary government as follows: Governmental activities: General government Public safety Public works Engineering services Culture, recreation and social services Community and economic development

$

193,792 592,000 7,433,980 327,855 382,066 3,422

$

8,933,115

$

215,971 3,004,903 107,971 248,490

$

3,577,335

Fiduciary Activities - RDA Successor Agency: Community and economic development $

1,928

Total Business-type activities: Refuse Water & Sewer Airport Transit Total

Transfer In/(Out) represents assets transferred to the RDA Successor Agency (See note 14). (8)

Long-term Debt A recap of the long-term debt and their outstanding balances by activity as of June 30, 2012, follows:

Governmental Activities: Bonds payable: Tax allocation refunding bonds series A Tax allocation refunding bonds series B Lease revenue bonds series 2010A Total bonds payable

Beginning Balance

Transfers In/(Out)

$ 12,485,000

$ (12,485,000)

2,405,000

(2,155,000)

26,715,000 41,605,000

Additions

(14,640,000)

$

Ending Balance

Reductions

-

$

-

-

250,000

$

Due Within One Year

-

-

$

-

-

Due Within More Than One Year

$

-

-

-

855,000

25,860,000

920,000

24,940,000

-

1,105,000

25,860,000

920,000

24,940,000

Capital Lease obligation

132,859

-

-

64,249

68,610

68,610

-

Net OPEB obligation

642,359

-

442,067

79,179

1,005,247

79,179

926,068

Compensated absences payable

829,609

-

284,323

499,174

614,758

499,000

115,758

1,747,602

$ 27,548,615

$ 1,566,789

$ 25,981,826

Governmental activities Long-term liability

$ 43,209,827

$ (14,640,000)

68

$ 726,390

$


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (8)

Long-term Debt (Continued) Beginning Balance Business-type Activities: Notes payable LaSalle Bank - Water Chevron Energy Solutions - Water Public Health - Water State of California - Sewer

$

Total notes payable Compensated absences payable Business-type activities Long-term liability

Additions

343,066 2,932,396 1,276,511 32,784,459 37,336,432

6,060,147

1,873,517

41,523,062

1,905,781

39,617,281

364,554

91,748

159,458

296,844

20,393

276,451

6,151,895

$ 2,032,975

$ 41,819,906

$ 1,926,174

$ 39,893,732

Reductions

Ending Balance

Due Within One Year

Fiduciary Activities Long-term liability

$

$

$

Transfers In/(Out)

Additions

-

$ 12,485,000

$

-

$

$

209,657 2,595,764 6,913,210 31,804,431

$

138,466 333,626 1,433,689

Due Within More Than One Year

$ 133,409 336,632 1,403,476

Beginning Balance Fiduciary Activities - RDA Successor Agency: Bonds payable: Tax allocation refunding bonds series A Tax allocation refunding bonds series B Lease revenue series 2010A

Reductions

Due Within One Year

5,636,699 423,448

$ 37,700,986

$

Ending Balance

-

$ 12,485,000

$

$

71,191 2,262,138 6,913,210 30,370,742

Due Within More Than One Year

-

$ 12,485,000

-

2,155,000

-

-

2,155,000

260,000

1,895,000

-

-

-

-

-

-

-

-

$ 14,640,000

-

$ 14,640,000

260,000

$ 14,380,000

$

-

$

$

Transfer In/(Out) represents liabilities transferred to the RDA Successor Agency (See note 14). Tax Allocation Refunding Bonds Tax Allocation Refunding Bond Series A (Issue 2003) - On June 1, 2003, the Agency issued $12,485,000 in tax allocation refunding bonds. All bonds are term bonds. The principal and interest are payable from tax increment revenue received by the Agency and by amounts in certain funds and accounts established under indenture. Interest is 5.5% for $2,065,000, 5.00% for $10,420,000, and payable semi-annually on March 1 and September 1 each year, commencing September 1, 2003. Principal payment is due on September 1 each year beginning September 1, 2016. The outstanding balance as of June 30, 2012, was $12,485,000.

69


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (8)

Long-term Debt (Continued) Debt service requirements to maturity are as follows: Year Ending June 30, 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2032 2033-2037 2038-2039

Principal $

1,170,000 2,420,000 3,085,000 3,945,000 1,865,000

$ 12,485,000

Interest $

634,575 634,575 634,575 634,575 634,575 3,110,725 2,605,775 1,930,250 1,077,250 141,000

$ 12,037,875

Total $

634,575 634,575 634,575 634,575 634,575 4,280,725 5,025,775 5,015,250 5,022,250 2,006,000

$ 24,522,875

Tax Allocation Refunding Bonds Series B (Issue 2003) - On June 1, 2003, the Delano Redevelopment Agency issued $3,880,000 in tax allocation refunding bonds. All the bonds are term bonds. The principal and interest are payable from tax increment revenue received by the Delano Redevelopment Agency and by amounts in certain funds and accounts established under the indenture. Interest is 5.14% for $1,250,000, 5.66% for $1,620,000, and payable semi-annually on March 1 and September 1 each year, commencing September 1, 2003. Principal payment is due on September 1 each year. The outstanding balance as of June 30, 2012, was $2,155,000. Debt service payments to maturity are as follows: Year Ending June 30, 2013 2014 2015 2016 2017 2018-2019

Principal $

Interest

Total

260,000 275,000 290,000 305,000 325,000 700,000

$

119,191 105,827 91,692 75,278 58,015 59,996

$

$ 2,155,000

$

509,999

$ 2,664,999

70

379,191 380,827 381,692 380,278 383,015 759,996


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (8)

Long-term Debt (Continued) Lease Revenue Bonds Lease Revenue Bonds Series 2010A. On November 12, 2010 the Delano Financing Authority, a component unit of the City of Delano, issued bonds in the amount of $26,715,000, to provide funds for the funding of certain capital improvements within the City of Delano, California, including the Woollomes Avenue Bridge Project and a Police station. The principal and interest are payable exclusively from the revenues and other funds as is provided in the Indenture. Interest is 5.0% for $9,225,000 and 5.25% for $17,460,000 and payable semi-annually of the first of June and December of each year, commencing June 01, 2012. Principal payments are due on December first of each year. The outstanding balance as of June 30, 2012 was 25,860,000. Debt service requirements to maturity are as follows: Year Ending June 30, 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2031

Principal

Interest

Total

920,000 940,000 970,000 1,000,000 1,040,000 5,975,000 7,520,000 7,495,000

$ 1,194,513 1,171,212 1,140,138 1,103,162 1,062,363 4,512,656 2,922,500 809,875

$ 2,114,513 2,111,212 2,110,138 2,103,162 2,102,363 10,487,656 10,442,500 8,304,875

$ 25,860,000

$ 13,916,419

$ 39,776,419

$

Capital Lease On November 17, 2009 the City, entered into a four year lease in the amount of $266,292, for eight patrol vehicles for the Police Department. The principal and interest are payable exclusively from the general fund. Annually are due commencing December 20, 2010. The outstanding balance as of June 30, 2012 was $68,609. Notes Payable LaSalle Bank – Water The Water Utility fund owes the LaSalle Bank for a note due to mature on July 25, 2013, at 3.756% per annum for the purchase and installation of a booster pump on Water Plant No. 5. The debt is paid out of operating revenue and the outstanding obligation as of June 30, 2012, was $209,657.

71


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (8)

Long-term Debt (Continued) Debt service amounts to maturity are as follows: Note Payable - LaSalle Bank - Water Year Ending June 30, 2013 2014

Principal

Interest

138,497 71,160 $ 209,657

Total

6,587 1,337 $

145,084 72,497

7,924

$

217,581

Chevron Energy Solutions On December 17, 2007, the City signed a lease-purchase agreement with Chevron Energy Solutions to install energy saving facilities within the City. In connection with this project, the City signed a 20-year lease/purchase agreement with the City Capital Municipal Finance, whereby the payments to the lessor are based on a 10 year term with an interest rate of 4.25%. Principal payments began May 2009. As of June 30, 2012 the outstanding obligation was $2,595,764. Debt service amounts to maturity are as follows: Note Payable - Chevron Energy Solutions Year Ending June 30, 2013 2014 2015 2016 2017 2018-2019

Principal

Interest

333,625 354,084 382,956 413,483 445,750 665,866

107,362 90,610 75,107 58,351 40,270 25,324

$ 2,595,764

$ 397,024

Total $

440,987 444,694 458,063 471,834 486,020 691,190

$ 2,992,788

State of California Department of Public Health The City entered into a project finance agreement with the State of California Department of Public Health to assist in financing construction of a project which will enable the City to meet safe drinking water standards. The City agreed to pay all project funds at an interest rate of 0% per annum, amortized over 20 years. The construction project is expected to be completed by December 2013. At the completion of the project, the City will accumulate $20,709,156 of notes payable to the State of California Department of Public Health. Principal payments start in December 01, 2014. As of June 30, 2012, the outstanding obligation was $6,913,210.

72


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (8)

Long-term Debt (Continued) Debt service amounts to maturity are as follows: Note payable - State of California Department of Public Health Year Ending June 30,

Principal

Interest

Total

2015 2016 2017 2018 2019 2020-2024 2025-2029 2030-2034

$1,035,458 1,035,458 1,035,458 1,035,458 1,035,458 5,177,289 5,177,289 5,177,288

$

-

$1,035,458 1,035,458 1,035,458 1,035,458 1,035,458 5,177,289 5,177,289 5,177,288

$20,709,156

$

-

$20,709,156

California State Water Resource Control Board On October 01, 2008, The City entered a project finance agreement with the State Water Resources Control Board for the expansion of the Wastewater Treatment Plant. In connection with this project, the City agreed to pay all project funds at an interest rate of 1% per annum, amortized over 20 years. Construction project was completed during July, 2012. At the completion of project, the City would accumulate $31,804,431 of notes payable to the State Water Board. Upon completion of the project $2,000,000 of the principal due under the agreement will be forgiven resulting in $29,804431of notes payable to the State Water Board. Principal payments start in January 01, 2013. As of June 30, 2012, the outstanding obligation, including accrued interest, was $31,804,431.

73


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (8)

Long-term Debt (Continued) Debt service amounts to maturity for the final amount of the obligation are as follows: Note payable - California State Water Resource Control Board Year Ending June 30, 2013 2014 2015 2016 2017 2018-2022 2023-2027 2028-2031

(9)

Principal

Interest

Total

1,433,689 1,446,399 1,460,862 1,475,471 1,490,226 7,677,666 8,069,304 6,750,814

296,417 283,707 269,243 254,635 239,880 972,864 581,226 169,610

1,730,106 1,730,106 1,730,105 1,730,106 1,730,106 8,650,530 8,650,530 6,920,424

$29,804,431

$3,067,582

$32,872,013

Risk Management The City participates with other public entities in a joint powers agreement which establishes the Central San Joaquin Valley Risk Management Authority (CSJVRMA). The relationship between the City and CSJVRMA is such that the CSJVRMA is not a component unit of the City for financial reporting purposes. The City carries a self-insured retention of $50,000 for general liability claims and $100,000 for workers’ compensation claims. The City is covered for the first $1,000,000 of each general liability claim and $500,000 of each workers’ compensation claim through the CSJVRMA. The City has the right to receive dividends or the obligation to pay assessments based on a formula, which among other expenses, charges the City’s account for liability losses under $50,000 and workers’ compensation losses under $100,000. The CSJVRMA participates in two excess pools which provide general liability coverage from $1,000,001 to $15,000,000 and workers’ compensation coverage from $500,001 to $50,000,000. The CCF maintains a $25,000 self-insured retention for general liability.

74


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (9)

Risk Management The CSJVRMA is a consortium of fifty-five (55) cities in the San Joaquin Valley, California. It was established under the provisions of California Government Code Section 8500 et seq. A Board of Directors governs the CSJVRMA, which meets 3 times per year, consisting of one member appointed by each member City. A management group employed by the CSJVRMA handles day-to-day business. The financial position and results of operations for the CSJVRMA (unaudited) as of June 30, 2011 (most recent information available), are presented below: Total Assets Total Liabilities

$

101,409,059 87,910,081

Net Assets

$

13,498,978

Total Revenues Total Expenses

$

26,883,955 25,268,901

Change in Net Assets

$

1,615,054

The City’s share of year-end assets, liabilities, or equities has not been calculated by CSJVRMA. Detailed financial information may be obtained from the CSJVRMA. At the termination of the joint powers agreement and after all claims have been settled, any excess or deficit will be divided among the cities in accordance with its governing documents. The following summarizes the changes in the funds held by the CSJVRMA for claims or liabilities for the City of Delano for the last three fiscal years: Fiscal Year Ended June 30, Workers compensation: 2009 2010 2011 Liability and property damage: 2009 2010 2011

Contributed by the City

Assessed (Refunded) to the City

Current Year Provision for Claims

Claim Payments

$ $ $

487,352 566,439 677,520

$ $ $

179,034 49,859 43,478

$ 150,772 $ (250,631) $ (1,987,748)

$ (551,373) $ (522,342) $ 688,416

$ $ $

(229,979) (386,654) (964,988)

$ $ $

368,431 378,954 372,059

$ $ $

(78,030) (29,182) (53,249)

$ $ $

$ $ $

$ $ $

332,055 432,906 376,312

75

(251,516) (209,494) (441,893)

(17,074) (39,427) 66,489

City's Fund Balance


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System A. City of Delano Employees Pension Plan The following description of the City of Delano Employees Pension Plan (the “Plan”) provides only general information. Participants should refer to the Plan agreement for a more complete description of the Plan’s provisions. The Plan was established on June 1, 1967, and is governed by City Ordinance 941 of the City’s Municipal Code. The ordinance assigns authority to establish and amend the benefits provision of the Plan to the City Council. It is administered by the Pension Committee and the Trustees. The Plan is a single employer public employee retirement defined benefit plan. All full-time management, safety, and general employees of the City under 60 are eligible to participate in the Plan. The Plan membership as of June 30, 2012, was comprised as follows: 2012 Active Members Vested (active members 100% vested) Non-vested (active members less than 100% vested) Total Active Members

97 51 148

Terminated Members Entitled to but Not Yet Receiving Benefits Retirees and Beneficiaries of Deceased Retirees Currently Receiving Benefits Total

90 13 51 302

Audited financial statements are available from the City's Finance Department at 1015 Eleventh Avenue, Delano, CA 93216 or at 661-721-3310. Pension Benefits Employees are entitled to monthly retirement benefits beginning at normal retirement age (60). City employees who retire at the normal retirement age receive benefits that are partially integrated with social security and are computed by multiplying the first $833 average monthly compensation by 2% plus the average monthly compensation times 2.4% for amounts in excess of $833 by the number of years of credit service.

76


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System (Continued) The Plan permits early retirement with reduced retirement benefits at any time within five years preceding the participant’s normal retirement date of age 55 for safety employees including management of safety employees and age 60 (age 62 before July 1, 2007) for general employees. An early retiree would have less contributions to the Plan and would be drawing a monthly check for a longer period of time, so that the retiree would receive less benefits per month than an employee who retirees at normal retirement age. Due to disability or retirement, a participant may elect to receive either a lump-sum amount equal to the value of the participant’s interest in his/her account after termination of active service. On termination due to death, benefits to the surviving spouse, lump-sum or otherwise, will depend upon whether the retiree has reached the early retirement age at the time of death which is 55 for general members. For termination of service due to other reasons, a participant may receive the value of the vested interest in his/her account as a lump-sum distribution. Funding Policy The Plan’s funding policy under the City Ordinance 941 provides for periodic employer contributions at actuarially determined rates that, expressed as percentages of annual covered payroll together with certain fixed amounts, are sufficient to accumulate the required assets to pay benefits when due. For the year ended June 30, 2012, the annual required contribution to the Plan by the City was determined at 23.605% of covered payroll. Contributions aggregating $1,490,340 were made in fiscal year 2012, which were over the recommended rate as adopted by the City Council, which is the recommended contribution rate set equal to the greater of the current funding policy or the minimum Annual Required Contribution (ARC) as determined under GASB Statements 25 and 27. Such amounts are determined using the modified entry age normal cost method. Any variance between contributions needed and contributions made is adjusted in the following fiscal year. These minimum contributions are recognized currently in the statement of changes in net assets available for benefits. Any additional contributions by employees are funded and recognized currently through payroll deductions in amounts specified by the employee. Costs of administering the Plan are charged against Plan assets.

77


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System (Continued) Funding Status and Progress As of June 30, 2011, the most recent actuarial valuation date, the Plan was 68.30% funded. The actuarial accrued liability for benefits was $33,978,297 and the actuarial value of assets was $23,208,657, resulting in an unfunded actuarial accrued liability (UAAL) of $10,769,640. The covered payroll as of June 30, 2011 valuation was $8,052,394. The ratio of UAAL to the covered payroll was 133.74%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, inflation, and investment returns. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revisions as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information on page 85 following the notes to financial statements, and also shown below, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.

Fiscal Year Ending June 30,

(1) Actuarial Value of Assets

(2) Actuarial Accrued Liability (AAL) Projected Unit Credit

2011 2010 2009

$ 23,208,657 20,715,515 18,323,795

$ 33,978,297 32,480,826 29,881,644

(3) Funded Rates (%) (1)/(2)

(4) Unfunded AAL (UAAL) (2)-(1)

(5) Annual Covered Payroll

(6) UAAL (%) (4)/(5)

68.30% 63.78% 61.32%

$ 10,769,640 11,765,311 11,557,849

$ 8,052,394 8,552,939 8,128,608

133.74% 137.56% 142.19%

Contributions Pension benefit contributions are based upon a combination of age, years of service, monthly salary, and the option selected by the participant. Death and disability benefits are additionally based upon whether the death occurred before or after retirement. Members’ contributions, including interest, are 100 percent vested at all times. Each employee is credited with one year-vested service for each fiscal year. Employer contributions become 20% vested after 3 years of employment, 40% after 4 years of employment, 60% after 5 years of employment, 80% after 6 years of employment, and after 7 or more years of employment an employee is 100% vested, but are not payable until the member attains the age of 55 for safety members, age 62 for general members before July 1, 2007 and age 60 for general members on or after July 1, 2007.

78


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System (Continued) Contributions are made by the members and the employer at rates recommended by the Plan’s independent actuary and adopted by the City Council. Participant contributions are mandatory as long as the employee is an eligible participant of the Plan. The City makes employer contributions after the 5th year of covered employment for all participants except management employees, the employer contributions are made immediately after being admitted to the Plan. The participant’s accumulated contribution cannot be withdrawn by the participant (except for active police officers, their respective account balances were transferred to CalPERS, effective June 30. 2005) while employed by the City. The participant’s contribution rates, which are a percentage of the participant’s base monthly salary (excluding overtime, educational, incentive and/or longevity), are as follows:

Contribution Rate Management (including police management Safety/Police (prior to July 1, 2005) General

9.0% 7.4% 6.2%

The City makes the above contribution on behalf of its employees based on years of service and job classification, except educational, incentive or longevity, which is not included from the participant’s basic earnings. Participant accounts are credited interest earnings from the investment return of the trust fund. In addition the City contributes a percentage of employee base monthly salary for an actuarially sound pension program based on the actuarial valuation report. Administrative costs of the Plan are financed through investment earnings. Three year trend information for the City's Pension Trust:

Fiscal Year 6/30/2012 6/30/2011 6/30/2010

Annual Required Contribution $ $ $

1,900,778 2,039,716 2,053,861

79

Percentage Contributed 100% 100% 100%

Net Pension Obligation -


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System (Continued) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the type of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in the actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The actuarial methods and significant assumptions used in the valuation year of June 30, 2011, are summarized in this note to conform to the disclosure requirements of GASB No. 50. Valuation date

June 30, 2011

Actuarial cost method

Modified entry age normal cost

Amortization method

Level percent of payroll, open

Remaining amortization period

Actuarial gains/losses are amortized over 18 years, open.

Asset valuation method

Market value

Actuarial assumptions: Investment rate of return *

7.75% per annum compounded annually

Projected salary increases

3.00%

* Includes inflation at

3.00%

Cost of living adjustments

2.00%

Mortality table

1994 Group Annuity Mortality Tables with Scale AA for mortality improvement from 1994 to 1999.

Retirement age

Assumed average retirement age is 62; normal retirement age is 60.

80


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System (Continued) A. CalPERS All active qualified permanent and probationary Police Officers (safety employees) are eligible to participate in a pension plan offered by the California Public Employee Retirement System (CalPERS), an agent multiple employer defined benefit pension plan, which acts as a common investment and administrative agent for its participating member employers. CalPERS provides retirement and disability benefits, annual cost of living adjustments, and death benefits to plan members, who must be public employees and beneficiaries. Benefits provisions under the plan are established by State statute and City resolution. Benefits are based on credited service, equal to one year of full time employment. Funding contributions are determined annually on an actuarial basis as of June 30 by CalPERS. CalPERS determines contribution requirements using a modification of the Entry Age Normal Method. Under this method, the total normal benefit cost for each employee from date of hire to retirement is expressed as a level percentage of the related total payroll cost. Normal benefit cost under this method is the level amount the City must pay annually to fund an employee’s projected retirement benefit. This level percentage method is used to amortize any unfunded actuarial benefits. The actuarial assumptions used to compute contribution requirements are also used to compute the actuarial accrued liability. Funding Policy Active Plan members in the Safety Plan are required to contribute 9% of their annual covered salary. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the CalPERS Board of Administration. The required employer contribution rate for fiscal 2011-12 was 33.363% for police officers. The contribution requirements of the plan members are established by State statue and the employer contribution rate is established and may be amended by CalPERS.

81


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System (Continued) Annual Pension Cost For fiscal year 2011-12, the estimated City’s annual pension cost was $997,786 and the City actually contributed $997,786. The Safety Plans use the aggregate actuarial cost method to determine required contributions. Significant actuarial assumptions used to compute the annual contribution requirements are as follows: Valuation date

6/30/2009

Actuarial cost method

Entry age actuarial cost method

Amortization method

Level percent of payroll

Asset valuation method

15 year smoothed market

Actuarial assumptions Investment rate of return

7.75% (net of administrative expenses)

Projected salary increases

3.55% to 14.45% depending on age, service, and type of employment

Inflation

3.00%

Payroll growth

3.25%

Individual salary growth

A merit scale, varying by duration of employment coupled with an assumed annual inflation growth of 3.00% and an annual production growth of 0.25%.

As of June 30, 2009, the City’s Safety Police Plan membership consists of 45 active, 10 transferred, 2 separated, and 6 retired. Three-Year Trend Information for the City's Safety Plan: Fiscal Year Ending 6/30/2012 6/30/2011 6/30/2010

Annual Pension Cost (APC) $ 997,786 789,495 763,908

82

Percentage of APC Contributed 100.00% 100.00% 100.00%

Net Pension Obligation $ -


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (10) Employees Retirement System (Continued) Funded Status and Funding Progress The funded status of the Risk Pool as of June 30, 2011, the most recent actuarial valuation is as follows:

Actuarial Valuation Date

Actuarial Value of Assets (a)

Actuarial Accrued Liability (AAL) Entry Age (b)

Unfunded AAL (UAAL) (b)-(a)

Funded Ratio (a/b)

Covered Payroll (c)

6/30/11

$ 421,374,728

$ 503,491,275

$ 82,116,547

83.7%

$ 63,392,685

UAAL as Percentage of Covered Payroll ((b-a)/c) 129.5%

The schedules of funding progress, presented as required supplementary information (RSI) following the notes to the financial statements, present multi-year trend information about whether the actuarial values of plan assets are increasing or decreasing over time relative to the actuarial accrued liability for benefits. Audited financial statements and trend information are available from CalPERS at P.O. Box 942709, Sacramento, CA 94229-2709. (11) Other Post Employment Benefits (OPEB) Plan Description On March 17, 1997, the City Council of Delano adopted to continue paying monthly premiums for any City Employee for health and medical coverage offered to other employees provided that the retired employee has been employed by the City of Delano for at least 20 years at his or her normal retirement age as established by the City. Annual OPEB Cost and Net OPEB Obligation The City’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the Annual Required Contribution (ARC) of the employer, an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. For fiscal year 2011-12, the City’s annual OPEB cost was $442,067. The City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the OPEB, and the net OPEB obligation for the year ended June 30, 2012, were as follows:

83


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (11) Other Post Employment Benefits (OPEB) (Continued) Annual required contribution Interest on net OPEB obligation

$

Annual OPEB cost

442,067

Contributions made

(79,179)

Change in net OPEB obligation

362,888

Net OPEB obligation - beginning of year

642,359

Net OPEB obligation - end of year

Year Ended June 30, 2012 2011 2010 2009

422,797 19,270

Annual OPEB Cost $ 442,067 298,607 298,607 165,305

Actual Employer Contributions $ 79,179 53,578 40,900 25,682

Percentage of Annual OPEB Cost Contributed 17.9% 17.9% 13.7% 15.5%

$

1,005,247

Net Ending OPEB Obligation (Asset) $ 1,005,247 642,359 397,330 139,623

Fiscal year 2008-09 was the year of implementation of GASB Statement No. 45 and the City has elected to implement prospectively. The City’s contributions were based on payas-you-go costs. Funding Policy, Funded Status, Funding Progress The City’s required contribution is based on pay-as-you-go financing requirements. For fiscal year 2011-12, the City contributed $79,179 to the OPEB. As of June 30, 2011, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $ 1,809,122, all of which was unfunded. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and probabilities about the occurrence of future events far into the future. Amounts determined regarding the funded status of a plan and the annual required contributions of the City are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

84


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (11) Other Post Employment Benefits (OPEB) (Continued) The schedule of funding progress presented as required supplementary information following the notes to the financial statements, will present multi-year trend information that shows whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. The liability will be paid in future years by the government-wide funds. Actuarial Methods and Assumptions Calculations of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with long-term perspective of the calculations. The actuarial assumptions used in the valuation were an interest assumption of annually compounded 7.75% to reflect the estimated net investment return of a trust fund and an assumed 3% future increase in basic salary levels of active employees. The mortality assumption reflects the 1994 Group Annuity Mortality Tables for male and female lives with Scale AA for mortality improvement from 1994 to 1999. Future increases in basic salary levels of active employees are assumed to be 3% per year. Among general employees, the average annual increases in fiscal years 2005, 2006, 2007, and 2008 has been 3.2%. For valuation purposes, a future medical trend rate of 6% per year was used in the valuation. In view of the current extensive review of health care by Congress, there may be an impact in the next couple of years to review the assumptions of 6.0% future annual increase in health care benefits. The actuarial report therefore provides an alternative medical trend analysis with the rate of 4.0% per year to observe the reduction in the funding requirement from the assumed rate of 6.0% per year.

85


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (12) Contingent Liabilities and Commitments State and Federal Awards and Grants The City participates in several federal and state grant programs. These programs are subject to further examination by grantors, and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial. Assembly Bill 1484 Due Diligence Review of the Successor Agency Trust Assembly Bill 1484 requires the successor agency to remit to the County auditor-controller three payments as determined by the auditor-controller: a) a payment to be made in July 2012 for taxing entities share of the December 2011 property tax distribution to redevelopment agency/successor agency, b) a payment to be made in November 2012 related to Low-Moderate Income Housing Fund Due Diligence Review for unencumbered cash, c) and a payment to be made in April 2013 related to the other Redevelopment Funds for unencumbered cash. The due diligence review resulted in one required payment, the Low-Moderate Income Housing Fund due diligence review for the amount $1,095,281, which has been paid. The Due Diligence Review of other redevelopment funds resulted in no amount due to the County, however, the due diligence review has not been approved by the Department of Finance. Other Contingent Liabilities The City is a defendant in a number of other lawsuits which have arisen in the normal course of business. While damages are alleged in some of these actions, their outcomes cannot be predicted with certainty. In the opinion of the City Attorney, these actions when finally adjudicated will not have a material effect on the financial position of the City.

86


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (13) Conduit Debt Obligations In 1998, the City of Delano issued $43,440,000 of Certificates of Participation to provide financial assistance to the Central California Foundation for Health, a California non-profit public benefit corporation doing business as Delano Regional Medical Center. The proceeds of the sale of the Series 1998 Certificates, together with other funds, were used (i) to advance refund the City’s Certificates of Participation (Central California Foundation for Health, Delano Regional Medical Center). Series 1992A Certificates, delivered in the original principal amount of $27,820,000, was used (ii) to advance refund the City’s Certificates of Participation (Central California Foundation for Health, Delano Regional Medical Center). Series 1992B Certificates, delivered in the original principal amount of $7,000,000, was used (iii) to purchase the Facilities pursuant to the terms of the Lease, (iv) to fund a debt service reserve fund, and (v) to pay certain costs related to the delivery of the Series 1998 Certificates. The amounts currently outstanding for these various series of issues can be obtained from the Central California Foundation for Health, Delano Regional Medical Center at 1401 Garces Highway, Delano, California 93215. In March 8, 2006, City of Delano issued $15,375,000 of Certificates of Participation to provide financial assistance to the Central California Foundation for Health, a California non-profit public benefit corporation doing business as Delano Regional Medical Center. The proceeds of the sale of the Series 2006 Certificates, together with other funds, were used to finance the acquisition, construction, improvement and equipping of certain health facilities owned and operated by the health facility. The Certificates are due to mature on January 1, 2020. The amounts currently outstanding for these various series of issues can be obtained from the Central California Foundation for Health, Delano Regional Medical Center at 1401 Garces Highway, Delano, California 93215. Neither the City, nor any political subdivision thereof is obligated in any manner for installment payments of the Series 1998 and 2006 Certificates. Accordingly, the Certificates are not reported as liabilities in the accompanying financial statements. (14) California Redevelopment Agency Dissolution On July 18, 2011, the California Redevelopment Association (“CRA”) and the League of California Cities (“League”) filed a petition for writ of mandate with the California Supreme Court, requesting the Court to declare unconstitutional two bills that were passed as part of the 2011-12 State Budget, AB 1X 26 and 27 (California Redevelopment Association v. Matosantos). AB1X 26 dissolves redevelopment agencies effective October 1, 2011, AB1X 27 gave redevelopment agencies an option to avoid dissolution if it commits to making defined payments for the benefit of the State, school districts and certain special districts. In 2011-12, these payments amounted to a state-wide total of $1.7 billion. In 2012-13 and subsequent years, the payments totaled $408 million, annually. Each city or county’s share of these payment s was determined based on its proportionate share of state-wide tax increment.

87


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (14) California Redevelopment Agency Dissolution (Continued) On August 17, 2011 the Supreme Court issued a stay of the implementation of AB 1X 26 and 27 which allowed a redevelopment agency to continue if it adopted an AB 1X 27 ordinance. However because of the effect of the stay order, the authority for the Redevelopment Agency to engage in most activities was suspended. The Supreme Court heard oral arguments on November 10, 2011 and on December 29, 2011 announced its decision in California Redevelopment Association v. Matosantos. The court upheld AB 1X 26 which dissolved redevelopment agencies , but invalidated in its entirety AB 1X 27 which allowed redevelopment agencies to continue as long as they made the required payments. AB 1X 26 established deadlines for the process of Redevelopment Agency dissolution and the handling of existing obligations. The full text of AB 1X 26 may be obtained from the California legislative information website maintained by the Legislative Counsel of the State of California at http://www.lefinfo.ca.gov/billinfo.html As of January 31, 2012 the Community Redevelopment Agency of the City of Delano has been dissolved and the City of Delano has elected to become the Successor Agency. In conjunction, the Delano Housing Authority was designated to receive the transfer of all housing assets, obligations and housing functions previously performed by the Agency. The Successor Agency will be responsible for winding down the remaining activities of the dissolved Redevelopment Agency. (15) Successor Agency Trust For Assets of Former Redevelopment Agency On December 29, 2011, the California Supreme Court upheld Assembly Bill 1X 26 (“the Bill”) that provides for the dissolution of all redevelopment agencies in the State of California. This action impacted the reporting entity of the City of Delano that previously had reported a redevelopment agency within the reporting entity of the City as a blended component unit. The Bill provides that upon dissolution of a redevelopment agency, either the city or another unit of local government will agree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and local government. On January 17, 2012, the City Council elected to become the Successor Agency for the former redevelopment agency in accordance with the Bill as part of City resolution number 201203. After enactment of the law, which occurred on June 28, 2011, redevelopment agencies in the State of California cannot enter into new projects, obligations or commitments. Subject to the control of a newly established oversight board, remaining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, successor agencies will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former redevelopment agency until all enforceable obligations of the prior redevelopment agency have been paid in full and all assets have been liquidated.

88


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (15) Successor Agency Trust For Assets of Former Redevelopment Agency (Continued) The Bill directs the State Controller of the State of California to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011. If the public body that received such transfers is not contractually committed to a third party for the expenditure or encumbrance of those assets, the State Controller is required to order the available assets to be transferred to the public body designated as the successor agency by the Bill. Management believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Bill. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. In accordance with the timeline set forth in the Bill (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies in the State of California were dissolved and ceased to operate as a legal entity as of February 1, 2012. Prior to that date, the final seven months of the activity of the redevelopment agency continued to be reported in the governmental funds of the City. After the date of dissolution, the assets and activities of the dissolved redevelopment agency are reported in a fiduciary fund (private-purpose trust fund) in the financial statements of the City as the RDA Successor Agency. The transfer of the assets and liabilities of the former redevelopment agency as of February 1, 2012 (effectively the same date as January 31, 2012) from governmental funds of the City to fiduciary funds was reported in the governmental funds as an extraordinary loss (or gain) in the governmental fund financial statements. The receipt of these assets and liabilities as of January 31, 2012 was reported in the RDA Successor Agency as an extraordinary gain (or loss). Because of the different measurement focus of the governmental funds (current financial resources measurement focus) and the measurement focus of the trust funds (economic resources measurement focus), the extraordinary loss recognized in the governmental funds was not the same amount as the extraordinary gain that was recognized in the fiduciary fund financial statements.

89


CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2012 (15) Successor Agency Trust For Assets of Former Redevelopment Agency (Continued) The difference between the extraordinary loss recognized in the various governmental fund financial statements and the extraordinary gain recognized in the statement of activities is reconciled as follows: Total extraordinary loss reported in governmental funds – increase to net assets of the Successor Agency Trust Fund

$ 9,289,731

Capital assets recorded in the government-wide financial statements – increase to net assets of the Successor Agency Trust Fund

44,783

Accrued bond interest reported in the government-wide financial statements – decrease to net assets of the Successor Agency Trust Fund

(256,936)

Long-term debt reported in the government-wide financial Statements – decrease to net assets of the Successor Agency Trust Fund

(14,640,000)

Unamortized bond issue costs reported in the government-wide financial Statements – increase to net assets of the Successor Agency Trust Fund

2,278,520

Net assets (liabilities) transferred to the Successor Agency Trust Fund (equal to amount of extraordinary gain reported in the government-wide financial statements of the City)

$ (3,283,902)

(16) Subsequent Events Certificates of Participation On December 11, 2012, the City of Delano issued Certificates of Participation, Series 2012, in the amount of $27,695,000. Interest rate ranges from 2.0% to 5% and the Certificates mature on January 1, 2025. The Certificates were issued to provide financing assistance to the Delano Regional Medical Center (See Note 13 Conduit Debt Obligation). Successor Agency Trust On December 5, 2012, the City transferred to the County of Kern's Auditor Controller $1,095,281 of unencumbered cash.

90


REQUIRED SUPPLEMENTARY INFORMATION


CITY OF DELANO SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL GENERAL FUND For the Fiscal Year Ended June 30, 2012 Budgeted Amounts Original REVENUES: Property taxes Sales taxes Franchise taxes Motor vehicle in lieu tax Other taxes Fees and fines Licenses and permits Revenues from use of money and property Intergovemental Charges for services Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Engineering services Culture and recreation Debt service Principal Interest Capital outlay General government Public works Culture and recreation Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources and uses Net change in fund balances Total net assets, beginning Total net assets, ending

$

2,076,800 7,157,400 534,000 3,585,000 471,500 100,000 115,600 1,722,400 117,700 115,000 38,000

Final $

2,076,800 7,157,400 534,000 3,585,000 471,500 100,000 115,600 1,722,400 117,700 115,000 38,000

Actual $

2,003,152 8,756,971 595,289 3,337,617 575,537 93,779 143,649 2,062 1,936,061 307,819 54,106 32,093

Variance with Final Budget Positive (Negative) $

(73,648) 1,599,571 61,289 (247,383) 104,037 (6,221) 28,049 2,062 213,661 190,119 (60,894) (5,907)

16,033,400

16,033,400

17,838,135

1,804,735

3,681,980 10,832,764 280,050 1,746,550

3,681,980 10,832,764 280,050 1,746,550

3,133,580 10,516,700 244,992 1,789,225

64,250 9,050

64,250 9,050

64,250 9,016

34

27,000 750 4,590

27,000 750 4,590

26,934 -

66 750 4,590

16,646,984

16,646,984

15,784,697

862,287

2,053,438

2,667,022

548,400 316,064 35,058 (42,675)

(613,584)

(613,584)

611,700 (2,177,870)

611,700 (2,177,870)

611,700 (2,802,976)

(625,106)

(1,566,170)

(1,566,170)

(2,191,276)

(625,106)

(2,179,754)

(2,179,754)

(137,838)

7,300,786

7,300,786

5,121,032

92

$

5,121,032

$

2,041,916

7,300,786

-

7,162,948

$ 2,041,916


CITY OF DELANO SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES – BUDGET AND ACTUAL DEVELOPER IMPACT FEES FUND For the Fiscal Year Ended June 30, 2012

Actual

Variance with Final Budget Positive (Negative)

535,000 52,700

$ 2,286,796 74,568

$ 1,751,796 21,868

587,700

587,700

2,363,090

1,775,390

EXPENDITURES: Current General government Public safety Public works Culture and recreation Public safety

7,612 22,836 30,449 7,613 70,000

7,612 22,836 30,449 7,613 70,000

8,479 6,652 4,263 3,237 -

Total expenditures

138,510

138,510

22,631

115,879

449,190

449,190

2,340,459

1,891,269

Budgeted Amounts Original REVENUES: Charges for services Investment earnings Total revenue

Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers out Total other financing sources and uses Net change in fund balances Total net assets (deficit), beginning Total net assets (deficit), ending

$

Final

535,000 52,700

$

(867) 16,184 26,186 4,376 70,000

(2,138,455)

(2,138,455)

(1,935,454)

203,001

(2,138,455)

(2,138,455)

(1,935,454)

203,001

(1,689,265)

(1,689,265)

9,913,628 $ 8,224,363

93

405,005

2,094,270

9,913,628

9,913,628

-

$ 8,224,363

$ 10,318,633

$ 2,094,270


CITY OF DELANO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2012 Defined Benefit Pension Trust Schedule of Funding Status and Progress

Actuarial Valuation Date

Actuarial Value of Assets (a)

Actuarial Accrued Liability (AAL) Entry Age (b)

Unfunded AAL (UAAL) (b)-(a)

Funded Ratio (a/b)

Covered Payroll (c)

UAAL as Percentage of Covered Payroll ((b-a)/c)

2011 2010 2009

$ 23,208,657 $ 20,715,515 $ 18,323,795

$ 33,978,297 $ 32,480,826 $ 29,881,644

68.30% 63.78% 61.32%

$ 10,769,640 $ 11,765,311 $ 11,557,849

$ 8,052,394 $ 8,552,939 $ 8,128,608

133.74% 137.56% 142.19%

Other Post Employment Benefits (OPEB) Schedule of Funding Status and Progress

Actuarial Valuation Date 6/30/2011 6/30/2009

Actuarial Value of Assets (a) $

-

Actuarial Accrued Liability (AAL) Entry Age (b) $

1,809,122 1,171,649

Unfunded AAL (UAAL) (b)-(a)

Funded Ratio (a/b)

Covered Payroll (c)

UAAL as Percentage of Covered Payroll ((b-a)/c)

$ 1,809,122 1,171,649

0% -

N/A N/A

N/A N/A

94


SUPPLEMENTARY INFORMATION COMBINING STATEMENTS NON-MAJOR FUNDS TRUST AND AGENCY FUNDS


CITY OF DELANO EXPLANATION OF NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) Special Revenue Funds The Special Revenue Funds are used by the City to account for the accumulation and disbursement of restricted resources. The following is a description of the City’s Special Revenue Funds: 

The Gas Tax Fund - Accounts for revenues and expenditures apportioned to the City under the Streets and Highway Code, Sections 2103, 2105, 2106, 2107, and 2107.5 of the State of California. Expenditures for administration, maintenance and construction must be for operation of public streets and highways and improvements of exclusive public mass transit guide ways.

The TDA Streets Funds - Revenues for this fund are derived from two major sources the Local Transportation Fund (LTF) and the State Transit Assistance Fund (STA). Revenues for the LTF fund are derived from ¼ cent of the 7.25 cent retail sales tax collected statewide. The ¼ cent is returned by the State Board of Equalization to each county according to the amount of tax collected in that county. Revenues for the STA fund are derived from statewide sales tax on gasoline and diesel fuel. Revenues are apportioned by population and are administered by Kern Council of Governments, the use of these funds are restricted for the purpose of financing transportation activities and transportation planning.

The SLESF Fund The Supplemental Law Enforcement Services Fund (SLESF) – Accounts for grant revenues received from Kern County under the Funding for the Citizens’ Option for Public Safety (COPS) program. These revenues are restricted to fund a variety of law enforcement programs.

The CRA Low & Moderate Housing Fund - Accounts for the 20% required set aside tax increment revenues for the low and moderate income housing program.

The Housing/HODAG Fund - Accounts for Home Grants coming from the U.S. Department of Housing & Urban Development that provides assistance to first time home buyers.

The Economic Development Block Grant - Accounts for expenditures restricted for approved projects that have been funded by Federal Economic Development Block Grant Funds received through county funding.

The Senior Citizens Nutrition Fund - Accounts for expenditures restricted for approved senior citizen nutrition programs that have been funded by USDA Foods.

The Landscape Maintenance Districts Fund - Accounts for special assessments levies against certain properties to defray the cost of landscape maintenance districts.

The CDBG Fund - Accounts for expenditures restricted for approved projects that have been funded by Federal Community Development Block Grant Funds received through county funding.

96


CITY OF DELANO EXPLANATION OF NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) 

The Inmate Welfare Fund - Revenues are generated from inmate use of public

telephones commissions, profits from inmate purchases from the canteen sales, revenue generated from contracts with educational agencies, and interest earned on unused funds. Mandated per California Penal Code Section 4025 the uses of these funds are to provide services essential to the benefit, welfare and educational needs of the inmates, any funds that are not needed for the welfare of the inmates may be

expended for the maintenance of the detention facility. Maintenance of detention facility may include the salary and benefits of personnel used in the programs to benefit the inmates, including, but not limited to, education, drug and alcohol treatment, welfare, library, accounting, and other programs deemed appropriate. 

The Asset Seizure Fund – Accounts for proceeds of asset forfeitures seized by law enforcement officials from illicit narcotic activities and the restricted use of such proceeds by the city to help fund its law enforcement activities.

The CCF Equipment Replacement Fund - Separates and accounts for funds restricted for replacement of equipment at the Community Correctional Facility.

The Miscellaneous Fund – Represents various home buyer assistance and rehabilitation loans under the CALHOME program, CDBG-R, and Workforce Housing.

The Standard Emergency Management Systems Funds (SEMS) – Funded by transfers of various funds. Accounts for expenditures needed to operate a communications network that will provide an effective response to emergencies.

The Traffic Safety Fund - Separates and accounts for fees charged to release a vehicle that has been impounded by law enforcement officials and the restricted use of such proceeds by the City to help funds its law enforcement activities.

The RTC/COP Construction Fund - was established to account for the construction of the 1989 Delano Return to Custody Facility (RTC).

The Special Revenue Grants - Fund Accounts for various grants City applies to and is awarded but funds are restricted for specific purposes.

The Community Correctional Facility Fund (CCF) Special Revenue Fund accounts for the operations of the Delano Community Correctional Facility. The principal source of funding is from the State of California Department of Corrections.

The First Time Homebuyers Housing Fund Special Revenue Fund accounts for operations in providing and expanding safe and affordable housing opportunities for persons and families of low and moderate income. The principal source of funding is from the Federal HOME program.

Delano Housing Authority – (Housing Authority) was established in 2011 by the City. The Housing Authority’s primary purpose is to provide safe and sanitary housing accommodations for persons with very low, low or moderate income. City Council members serve as the Housing Authority’s commissioners and have full accountability for fiscal matters.

97


CITY OF DELANO EXPLANATION OF NON-MAJOR GOVERNMENTAL FUNDS (CONTINUED) Debt Service Funds The Debt Service Funds account for the accumulation of resources for, and the payment of, governmental long-term debt principal and interest. The governmental debt serviced by the Debt Service Fund consists of tax allocation refunding bonds and lease revenue bonds. The following is a description of the City’s Debt Service Funds: The CRA Debt Service Fund - Accounts for the receipt of tax increment revenues collected and disbursed by Kern County, Kern County pass-through and the expenditures of funds for debt service on Tax Allocation Bonds, as well as the transfer of funds to the RDA Pass-through, RDA Capital Projects, and RDA Low-Mod Housing Funds. 

The Delano Financing Authority Debt Service Fund - Accounts for the debt service of the Delano Financing Authority Lease Revenue Refunding Bonds Series 2002 A, that were issued to assist the City in the prepayment of its lease obligations under the RTC Facility lease under the original COP agreement and refinance the same.

The Debt Service Fund - Accounts for the issuance of the Delano Financing Authority Lease Revenue Bonds, Series 2010A to provide funding for a new Police Station and capital improvement projects, including the Woollomes Avenue Bridge Project and payment of cost of issuance. Capital Projects Fund

The Capital Projects Fund accounts for all resources used for the acquisitions and/or construction of major capital facilities by the City, except those financed by the Enterprise Fund. The City reports one Non-Major Capital Projects Fund, the City Capital Projects Fund.

98


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR FUNDS GOVERNMENTAL FUNDS June 30, 2012 Special Revenue Funds ASSETS Cash and investments Cash with fiscal agents Receivables: Accounts Intergovernmental Due from other funds Inventories Loans receivable, net of allowance for uncollectible loans

Totals

$ 1,393,340 -

562,087 71,768 355,731 78,915 848,000

-

-

562,087 71,768 355,731 78,915 848,000

Total assets

6,695,394

2,146,316

1,393,340

10,235,050

LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Deferred revenue Deposits payable

413,490 59,664 1,463,318 1,272 10,370

648,244 -

1,988,045 471,611 -

2,401,535 531,275 2,111,562 1,272 10,370

Total liabilities

1,948,114

648,244

2,459,656

5,056,014

Fund Balances: Nonspendable Restricted Assigned Unassigned

4,773,671 (26,391)

1,498,072 -

(1,066,316)

6,271,743 (1,092,707)

Total fund balances

4,747,280

1,498,072

(1,066,316)

5,179,036

$ 6,695,394

$ 2,146,316

99

$

Capital Project Funds

2,146,316

Total liabilities and fund balances

$ 4,458,033 -

Debt Service Funds

$ 1,393,340

$

$

5,851,373 2,146,316

10,235,050


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR FUNDS GOVERNMENTAL FUNDS For the Fiscal Year Ended June 30, 2012 Special Revenue Funds REVENUES: Property taxes Sales taxes Motor fuel tax Fees and fines Intergovemental Program income Charges for services Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Public works Culture and recreation Community and economic development Pass thru payments Debt service Principal Interest Capital outlay Total expenditures Excess (deficiency) of revenues over expenditures

1,452,615 237,955 159,631 3,965,007 56,493 20,042 110,463

$

1,767,117 1,452,615 237,955 159,631 4,346,602 56,493 99,607 110,463

997,284 2,091,294 1,573,290 248,020 575,738 -

4,239 3,850 443,233

-

1,001,523 2,091,294 1,573,290 248,020 579,588 443,233

93 410,923

1,105,000 1,628,598 -

2,506,795

1,105,000 1,628,691 2,917,718

5,896,642

3,184,920

2,506,795

11,588,357

(1,338,238)

(2,125,200)

(3,357,874)

2,067,263 -

773,330 (75,000)

4,289,970 (1,264,172)

2,067,263

698,330

3,025,798

-

(1,870,220)

365,769

(1,141,195)

4,381,511 $

$

8,230,483

Special Item: Extraordinary loss on AB1X26

Total net assets (deficit), beginning

381,595 381,595

260,205

Net change in fund balances

$

Totals

1,846,682

1,449,377 (1,189,172)

Total other financing sources and uses

1,767,117 79,565 -

Capital Project Funds

6,002,206

105,564

OTHER FINANCING SOURCES (USES): Transfers in Transfers out

Total net assets (deficit), ending

Debt Service Funds

4,747,280

100

2,639,267 $

1,498,072

(1,870,220)

(1,426,870)

(2,202,296)

360,554 $ (1,066,316)

7,381,332 $

5,179,036


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS June 30, 2012 Gas Tax Fund ASSETS Cash and investments Receivables: Accounts Intergovernmental Due from other funds Inventories Loans receivable, net Advances to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Unearned revenue Deposits payable

$

653,650

TDA Streets Fund $

233 -

117,862

CRA Low & Moderate Housing Fund

SLESF Fund $

448,177 -

5,285

$

-

-

$

653,883

$

566,039

$

5,285

$

-

$

33,144 18,261 -

$

216,152 -

$

-

$

-

Total liabilities

51,405

216,152

-

-

Fund Balances: Restricted Unassigned

602,478 -

349,887 -

5,285 -

-

Total fund balances

602,478

349,887

5,285

-

Total liabilities and fund balances

$

653,883

101

$

566,039

$

5,285

$

-


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) June 30, 2012

Housing/ HODAG Fund ASSETS Cash and investments Receivables: Accounts Intergovernmental Due from other funds Inventories Loans receivable, net Advances to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Unearned revenue Deposits payable

$

99

Economic Development Block Grant

Senior Citizens Nutrition Fund

Landscape Maintenance Districts

$

$

$

-

5,892 -

864 12,203 8,337 -

216,507 -

$

99

$

5,892

$

21,404

$

216,507

$

-

$

12 4,921 -

$

8,454 5,307 -

$

10,050 947 -

-

4,933

13,761

10,997

Fund Balances: Restricted Unassigned

99 -

959 -

7,643 -

205,510 -

Total fund balances

99

959

7,643

205,510

Total liabilities

Total liabilities and fund balances

$

99

102

$

5,892

$

21,404

$

216,507


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) June 30, 2012 Inmate Welfare Fund

CDBG Fund ASSETS Cash and investments Receivables: Accounts Intergovernmental Due from other funds Inventories Loans receivable, net Advances to other funds

$

$

-

Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Unearned revenue Deposits payable

129,209

766,959

Asset Seizure Fund $

503 30,776 21,569 -

CCF Equipment Replacement Fund

8,710

$

-

126,231 -

129,209

$

819,807

$

8,710

$

126,231

-

$

795,656 -

$

10,370

$

-

$

-

795,656

10,370

Fund Balances: Restricted Unassigned

129,209 -

24,151 -

(1,660)

126,231 -

Total fund balances

129,209

24,151

(1,660)

126,231

Total liabilities

Total liabilities and fund balances

$

129,209

103

$

819,807

$

8,710

-

$

126,231


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) June 30, 2012 Miscellaneous Fund ASSETS Cash and investments Receivables: Accounts Intergovernmental Due from other funds Inventories Loans receivable, net Advances to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Unearned revenue Deposits payable

$

557,255

Traffic Safety Fund

SEMS Fund $

79,001 -

39,015

$

-

RTC/COP Construction Fund

256,907

$

20,676 -

415,731 -

$

636,256

$

39,015

$

277,583

$

415,731

$

124,782 4,084 324,955 -

$

347 -

$

-

$

-

Total liabilities

453,821

347

-

-

Fund Balances: Restricted Unassigned

182,435 -

38,668 -

277,583 -

415,731 -

Total fund balances

182,435

38,668

277,583

415,731

Total liabilities and fund balances

$

636,256

104

$

39,015

$

277,583

$

415,731


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) June 30, 2012 Special Revenue Grant Fund ASSETS Cash and investments Receivables: Accounts Intergovernmental Due from other funds Inventories Loans receivable, net Advances to other funds Total assets LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Unearned revenue Deposits payable

$

First Time Home Buyers Program Fund

CCF Fund -

$

71,768 -

-

$

48,776 -

-

Delano Housing Authority $

1,527 324,955 -

1,157,857 848,000 320,860

$

71,768

$

48,776

$

326,482

$

2,326,717

$

13,195 22,827 59,205 1,272 -

$

5,791 77 -

$

283,502 -

$

1,563 3,240 -

Total liabilities

96,499

5,868

283,502

4,803

Fund Balances: Restricted Unassigned

(24,731)

42,908 -

42,980 -

2,321,914 -

Total fund balances

(24,731)

42,908

42,980

2,321,914

Total liabilities and fund balances

$

71,768

105

$

48,776

$

326,482

$

2,326,717


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) June 30, 2012

Total Non-Major Special Revenue Funds ASSETS Cash and investments Receivables: Accounts Intergovernmental Due from other funds Inventories Loans receivable, net Advances to other funds

$

4,458,033 562,087 71,768 355,731 78,915 848,000 320,860

Total assets

6,695,394

LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses Due to other funds Unearned revenue Deposits payable

413,490 59,664 1,463,318 1,272 10,370

Total liabilities

1,948,114

Fund Balances: Restricted Unassigned

4,773,671 (26,391)

Total fund balances

4,747,280

Total liabilities and fund balances

6,695,394

106


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS For the Fiscal Year Ended June 30, 2012 Gas Tax Fund REVENUES: Sales taxes Motor fuel tax Fees and fines Intergovemental Program income Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Public works Culture and recreation Community and economic development Debt service Interest Capital outlay General government Public works Community and economic development Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources and uses

1,452,615 2,114 913

Total net assets (deficit), beginning Total net assets (deficit), ending

$

$

664,346 1,466 -

CRA Low & Moderate Housing Fund

SLESF Fund $

100,000 85 -

$

1,925 -

1,455,642

665,812

100,085

1,925

41,312 1,120,728 -

275,418 -

30 -

6,180 -

17,853 17,853 -

-

-

-

1,179,893

275,418

30

6,180

275,749

390,394

100,055

170,410 -

(156,330)

(100,000)

-

170,410

(156,330)

(100,000)

-

Special Item: Extraordinary gain/loss on AB1X26 Net change in fund balances

TDA Streets Fund

(4,255)

-

-

-

(2,364,380)

446,159

234,064

55

(2,368,635)

156,319

115,823

5,230

602,478

$ 349,887

107

$

5,285

2,368,635 $

-


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) For the Fiscal Year Ended June 30, 2012 Housing/ HODAG Fund REVENUES: Sales taxes Motor fuel tax Fees and fines Intergovemental Program income Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Public works Culture and recreation Community and economic development Debt service Interest Capital outlay General government Public works Community and economic development Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources and uses

129 -

Senior Citizens Nutrition Fund

Landscape Maintenance Districts

$

$

$

Total net assets (deficit), beginning $

207,454 33,381 45 683

237,955 1,506 50

14,172

241,563

239,511

65 -

80,005 -

218,470 -

177,144 -

-

-

-

-

65

80,005

218,470

177,144

64

(65,833)

23,093

62,367

(28,138)

50,988 -

17,597 -

(50,000)

(28,138)

50,988

17,597

(50,000)

-

-

-

-

Net change in fund balances

14,151 21 -

129

Special Item: Extraordinary gain/loss on AB1X26

Total net assets (deficit), ending

Economic Development Block Grant

(28,074)

(14,845)

40,690

12,367

28,173

15,804

(33,047)

193,143

99

108

$

959

$

7,643

$ 205,510


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) For the Fiscal Year Ended June 30, 2012 Inmate Welfare Fund

CDBG Fund REVENUES: Sales taxes Motor fuel tax Fees and fines Intergovemental Program income Investment earnings Miscellaneous Total revenue EXPENDITURES: Current General government Public safety Public works Culture and recreation Community and economic development Debt service Interest Capital outlay General government Public works Community and economic development Total expenditures Excess (deficiency) of revenues over expenditures

$

249,190 814 -

59 -

$

5,700 850 -

59

6,550

300 188,519

74,121 -

1,069 -

10,352 -

60,800 60,800

-

-

-

249,619

74,121

1,069

10,352

385

(12,409)

(1,010)

(3,802)

-

(760,506)

-

-

-

(760,506)

-

-

-

-

Special Item: Extraordinary gain/loss on AB1X26

Total net assets (deficit), ending

$

61,712

Total other financing sources and uses

Total net assets (deficit), beginning

7,597 54,115

CCF Equipment Replacement Fund

250,004

OTHER FINANCING SOURCES (USES): Transfers in Transfers out

Net change in fund balances

$

Asset Seizure Fund

-

-

385

(772,915)

128,824 $ 129,209

109

(1,010)

797,066 $

24,151

(3,802)

(650) $

(1,660)

130,033 $

126,231


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) For the Fiscal Year Ended June 30, 2012 Miscellaneous Fund REVENUES: Sales taxes Motor fuel tax Fees and fines Intergovemental Program income Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Public works Culture and recreation Community and economic development Debt service Interest Capital outlay General government Public works Community and economic development Total expenditures Excess (deficiency) of revenues over expenditures

1,310,534 1,364 803 300

$

$

159,631 1,611 -

$

2,780 -

161,242

2,780

818,090 -

4,849 -

29,550 -

1,160 -

332,270 332,270 -

93 -

-

-

1,150,360

4,942

29,550

1,160

162,641

11,333

131,692

1,620

-

-

(84,600)

-

-

-

(84,600)

-

-

-

-

-

162,641

11,333

47,092

1,620

19,794

27,335

230,491

414,111

38,668

$ 277,583

$ 415,731

Special Item: Extraordinary gain/loss on AB1X26

Total net assets (deficit), ending

225 16,050 16,275

Total other financing sources and uses

Total net assets (deficit), beginning

$

RTC/COP Construction Fund

1,313,001

OTHER FINANCING SOURCES (USES): Transfers in Transfers out

Net change in fund balances

Traffic Safety Fund

SEMS Fund

182,435

110

$


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) For the Fiscal Year Ended June 30, 2012 Special Revenue Grant Fund REVENUES: Sales taxes Motor fuel tax Fees and fines Intergovemental Program income Investment earnings Miscellaneous

$

Total revenue EXPENDITURES: Current General government Public safety Public works Culture and recreation Community and economic development Debt service Interest Capital outlay General government Public works Community and economic development Total expenditures Excess (deficiency) of revenues over expenditures

Total other financing sources and uses Special Item: Extraordinary gain/loss on AB1X26 Net change in fund balances Total net assets (deficit), beginning Total net assets (deficit), ending

261,125 37,669

$

$

812,205 683

$

354,453 256 -

Delano Housing Authority $

5,353 -

298,794

812,888

354,709

5,353

2,353 220,947 107,076

1,779,926 -

280,143

47,819 -

-

-

-

-

330,376

1,779,926

280,143

47,819

(967,038)

74,566

(42,466)

-

1,210,382 (9,598)

-

-

-

1,200,784

-

-

-

-

-

2,364,380

(31,582)

233,746

74,566

2,321,914

6,851

(190,838)

(31,586)

(31,582)

OTHER FINANCING SOURCES (USES): Transfers in Transfers out

First Time Home Buyers Program Fund

CCF Fund

(24,731)

111

$

42,908

$

42,980

$

2,321,914


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) For the Fiscal Year Ended June 30, 2012 Total Non-Major Special Revenue Funds REVENUES: Sales taxes Motor fuel tax Fees and fines Intergovemental Program income Investment earnings Miscellaneous

$

Total revenue

1,452,615 237,955 159,631 3,965,007 56,493 20,042 110,463 6,002,206

EXPENDITURES: Current General government Public safety Public works Culture and recreation Community and economic development Debt service Interest Capital outlay General government Public works Community and economic development

997,284 2,091,294 1,573,290 248,020 575,738 93 410,923 332,270 17,853 60,800

Total expenditures

5,896,642

Excess (deficiency) of revenues over expenditures

105,564

OTHER FINANCING SOURCES (USES): Transfers in Transfers out

1,449,377 (1,189,172)

Total other financing sources and uses

260,205

Special Item: Extraordinary gain/loss on AB1X26

-

Net change in fund balances

365,769

Total net assets (deficit), beginning Total net assets (deficit), ending

4,381,511 $

112

4,747,280


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR DEBT SERVICE FUNDS June 30, 2012 Delano Financing Authority Fund

CRA Debt Service Fund ASSETS Cash with fiscal agents Receivables: Accounts

$

-

$ -

Debt Service Fund

Total Non-Major Debt Service Funds

2

$ 2,146,314

$ 2,146,316

-

-

-

Total assets

$

-

$

2

$ 2,146,314

$ 2,146,316

LIABILITIES AND FUND BALANCES Liabilities: Due to other funds

$

-

$

-

$

$

648,244

648,244

Total liabilities

-

-

648,244

648,244

Fund Balances: Restricted

-

2

1,498,070

1,498,072

Total fund balances

-

2

1,498,070

1,498,072

2

$ 2,146,314

$ 2,146,316

Total liabilities and fund balances

$

-

113

$


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR DEBT SERVICE FUNDS For the Fiscal Year Ended June 30, 2012 Delano Financing Authority Fund

CRA Debt Service Fund REVENUES: Property taxes Investment earnings

$

Total revenue EXPENDITURES: Current General government Community and economic development Pass thru payments Debt service Principal Interest Total expenditures Excess (deficiency) of revenues over expenditures

1,767,117 23,075

Total net assets (deficit), beginning Total net assets (deficit), ending

$

56,490

$

1,767,117 79,565

-

56,490

1,846,682

3,850 443,233

-

4,239 -

4,239 3,850 443,233

250,000 416,335

-

855,000 1,212,263

1,105,000 1,628,598

1,113,418

-

2,071,502

3,184,920

676,774

-

(2,015,012)

(1,338,238)

-

-

2,067,263

2,067,263

-

-

2,067,263

2,067,263

(1,870,220)

-

-

(1,870,220)

(1,193,446)

-

52,251

(1,141,195)

1,193,446

2

1,445,819

2

$ 1,498,070

Total other financing sources and uses

Net change in fund balances

-

1,790,192

OTHER FINANCING SOURCES (USES): Transfers in

Special Item: Extraordinary loss on AB1X26

$

Total Non-Major Debt Service Funds

Debt Service Fund

$

-

114

$

2,639,267 $

1,498,072


CITY OF DELANO COMBINING BALANCE SHEET NON-MAJOR CAPITAL PROJECTS FUND June 30, 2012

City Capital Projects Fund

Total Non-Major Capital Projects Fund

$ 1,393,340

$ 1,393,340

Total assets

1,393,340

1,393,340

LIABILITIES AND FUND BALANCES Liabilities: Accounts payable Other accrued expenses

1,988,045 471,611

1,988,045 471,611

Total liabilities

2,459,656

2,459,656

Fund Balances: Unassigned

(1,066,316)

(1,066,316)

Total fund balances

(1,066,316)

(1,066,316)

ASSETS Cash and investments

$ 1,393,340

Total liabilities and fund balances

115

$ 1,393,340


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES NON-MAJOR CAPITAL PROJECTS FUND For the Fiscal Year Ended June 30, 2012

City Capital Projects Fund REVENUES: Intergovemental

$

381,595

Total Non-Major Capital Projects Fund $

381,595

Total revenue

381,595

381,595

EXPENDITURES: Capital outlay

2,506,795

2,506,795

2,506,795

2,506,795

(2,125,200)

(2,125,200)

773,330 (75,000)

773,330 (75,000)

698,330

698,330

Total expenditures Excess (deficiency) of revenues over expenditures OTHER FINANCING SOURCES (USES): Transfers in Transfers out Total other financing sources and uses Net change in fund balances

(1,426,870)

Total net assets (deficit), beginning

360,554

Total net assets (deficit), ending

$ (1,066,316)

116

(1,426,870) 360,554 $ (1,066,316)


CITY OF DELANO COMBINING BALANCE SHEET TRUST AND AGENCY FUNDS June 30, 2012 Inmate Trust Fund ASSETS Cash and investments Cash with fiscal agents Other

Trust Deposit Fund

Total Trust and Agency Funds

RDA Pass-thru Fund

$

17,390 1,434

$

488,414 -

$

-

$

488,414 17,390 1,434

Total assets

$

18,824

$

488,414

$

-

$

507,238

LIABILITIES Liabilities: Due to others

$

18,824

$

488,414

$

-

$

507,238

Total liabilities

$

18,824

$

488,414

$

-

$

507,238

117


CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENSE, AND CHANGES IN FUND BALANCES TRUST AND AGENCY FUNDS For the Fiscal Year Ended June 30, 2012

Inmate Trust Fund INCREASES: Total increases

$

Trust Deposit Fund -

DECREASES: Total decreases

22

Excess (deficiency) of revenues over expenditures Net Increase (Decrease)

$

(22)

118

$

1,738

(22) $

1,736

(2)

140,916

$

140,916

(2) $

Total Trust and Agency Funds

RDA Pass-thru Fund

142,676

$

-

142,652

(24) $

(24)


STATISTICAL SECTION


Statistical Section (Unaudited) This part of the City of Delano’s comprehensive annual financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City’s overall financial health. Contents

Page

Financial Trends – These schedules contain information to help the reader to understand how the City’s financial performance and well-being have changed over time. 1. 2. 3. 4.

Net Assets by Component Change in Net Assets Fund Balances of Governmental Funds General Governmental Tax Revenue by Source

121 122 124 125

Revenue Capacity – These schedules contain information to help the reader assess the City’s property tax. 5. Assessed Value of Taxable Property 6. Principal Property Tax Owners 7. Direct and Overlapping Property Tax Rates

126 127 128

Debt Capacity – These schedules present information to help the reader assess the affordability of the City’s current levels of outstanding debt and the City’s ability to issue additional debt in the future. 8. Pledged Revenue Coverage 9. Historical and Overlapping Debt 10. Direct and Overlapping Debt

129 130 131

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. 11. Demographic and Economic Statistics 12. Principal Employers

132 133

Operating Information – These schedules contain service and infrastructure data to help the reader understand how the information in the City’s finacial report relates to the services the City provides and the activities it performs. 13. Full-time City Government Employees by Function/Program 14. Operating Indicators by Function/Program 15. Captial Assets Statistics by Function/Program

134 135 136

Sources: Unless otherwise noted, the information in these schedules was derived from the City’s comprehensive annual financial reports for the relevant year.

120


CITY OF DELANO Net Assets by Component Last Ten Fiscal Years (accrual basis of accounting)

2003 Governmental activities: Invested in capital assets, net of related debt Restricted Unrestricted

$ 13,553,207 13,592,121 9,651,060 13,105,206 (13,808,203) (12,235,326)

Total governmental activities net asset $ Business-type activities: Invested in capital assets, net of related debt Restricted Unrestricted Total business-type activities net asse

2004

2005

2006

Fiscal Year 2007 2008

2009

2010

2011

2012

14,017,432 11,706,658 (6,695,665)

14,502,447 154,272,581 17,456,074 10,605,839 (5,046,635) 7,985,005

148,421,018 7,847,186 20,244,162

151,470,775 7,948,776 16,199,978

149,570,114 14,945,025 5,988,074

147,129,054 13,094,872 5,109,844

142,576,771 7,345,512 11,108,063

9,396,064

14,462,001

19,028,425

26,911,886

172,863,425

176,512,366

175,619,529

170,503,213

165,333,770

161,030,346

$ 14,335,532 5,718,899

13,852,951 6,927,174

14,660,202 7,244,065

15,160,230 7,424,283

16,157,458

16,269,419

27,430,998

22,880,050

21,889,571

25,287,807

7,911,523

5,750,291

3,315,569

(1,667,914)

(1,487,042)

(4,323,251)

20,054,431

20,780,125

21,904,267

22,584,513

24,068,981

22,019,710

30,746,567

21,212,136

20,402,529

20,964,556

Primary government: Invested in capital assets, net of related debt Restricted Unrestricted

$ 27,888,739 9,651,060 (8,089,304)

27,445,072 13,105,206 (5,308,152)

28,677,634 11,706,658 548,400

29,662,677 17,456,074 2,377,648

170,430,039 10,605,839 15,896,528

164,690,437 7,847,186 25,994,453

178,901,773 7,948,776 19,515,547

172,450,164 14,945,025 4,320,160

169,018,625 13,094,872 3,622,802

167,864,578 7,345,512 6,784,812

Total primary government net assets

$ 29,450,495

35,242,126

40,932,692

49,496,399

196,932,406

198,532,076

206,366,096

191,715,349

185,736,299

181,994,902

The City of Delano implemented GASB 34 for the fiscal year ended June 30, 2003.

121Â


City of Delano Change in Net Assets Last Ten Fiscal Years (Accrual Basis of Accounting) 2003 Expenses: Governmental activities: General government Public safety Public works Engineering Services Recreation & Social Services Community & Economic development Education Interest on long-term debt Total governmental activities expenses Business-type activities: Water & sewer Refuse Transit Airport Total business-type activities expenses Total primary government expenses

$

Program revenues: Governmental activities: Charges for services: General government Public safety Public works Engineering Services Recreation & Social Services Community & Economic development Education Interest on long-term debt Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services: Water & sewer Refuse Transit Airport Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues

2005

2,481,277 12,313,439 1,548,316 178,206 1,159,559 402,170 33,647 1,893,621 20,010,235

2,347,922 12,276,536 1,418,088 188,383 1,004,700 902,413 352,661 1,469,244 19,959,947

3,957,606 1,555,210 1,081,406 283,755 6,877,977 26,888,212

4,024,248 1,501,989 963,371 265,945 6,755,553 26,715,500

2006

2007

2,400,078 13,099,446 1,490,466 161,365 1,238,797 139,966 370,035 1,417,818 20,317,971

2,744,188 14,414,529 1,472,179 229,309 1,467,977 398,167 443,043 1,357,918 22,527,310

3,417,132 21,324,215 1,863,619 340,104 2,343,465 2,159,312 490,556 1,382,839 33,321,242

4,052,748 1,717,096 1,082,565 242,960 7,095,369 27,413,340

4,123,281 1,841,056 1,187,132 385,519 7,536,988 30,064,298

4,796,216 2,084,486 1,298,017 387,006 8,565,725 41,886,967

1,280,424 1,756,851 1,092,629

1,306,242 7,977,930 2,239,354 291,010 282,265 61,273 352,661 332,683 1,764,767 1,796,286

1,251,373 8,937,167 1,563,803 162,646 161,179 352,661 141,560 1,102,715 1,336,819

1,263,106 8,657,795 2,620,321 188,446 503,881 10,303 443,043 256,440 2,143,970 1,368,675

1,375,467 9,413,666 3,223,716 191,068 237,397 199,929 1,854,862 620,216

14,286,199

16,404,471

15,009,923

17,455,980

17,116,321

3,664,703 1,417,600 79,699 240,318 21,430 513,840

3,941,077 1,468,755 65,737 250,433 11,531 1,810,436

4,068,327 1,484,106 64,993 225,660 21,657 -

4,328,664 1,785,769 59,517 349,167 11,802 -

4,509,922 2,266,604 56,730 340,311 12,090 1,383,016

1

-

684,732 7,064,983 2,265,269 33,818 107,493 -

Net revenues (expenses): Governmental activities Business-type activities Total net revenues (expenses) General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes Sales tax Transient occupancy taxes Other taxes Motor vehicle in lieu, unrestricted Investment income Other general revenues Transfers Total governmental activities Business-type activities: Other taxes Investment income Miscellaneous revenues Transfers Total business-type activities Total primary government Extraordinary gain/loss on AB 1X26 Changes in net assets Governmental activities Business-type activities Total primary government

2004

5,937,590

7,547,969

5,864,743

6,534,919

8,568,673

20,223,789

23,952,440

20,874,666

23,990,899

25,684,994

(5,724,036) (940,387) (6,664,423)

(3,555,476) 792,416 (2,763,060)

(5,308,048) (1,230,626) (6,538,674)

(5,071,330) (1,002,069) (6,073,399)

(16,204,921) 2,948 (16,201,973)

3,029,299 3,208,152 174,085 1,879,257 2,388,694 334,937 423,974 259,951 11,698,349

2,996,475 3,724,716 161,002 1,134,988 1,953,116 150,622 179,974 (636,779) 9,664,114

5,948,376 3,874,580 147,442 1,130,308 465,358 350,398 194,327 (782,239) 11,328,550

6,999,897 4,049,832 146,988 1,218,469 980,158 497,021 655,596 (425,034) 14,122,927

9,218,809 3,467,984 185,150 1,650,450 1,133,365 571,978 197,964 16,425,700

120,215 (259,951) (139,736) 11,558,613

64,234 (1,173,657) (1,109,423) 8,554,691

129,276 782,239 911,515 12,240,065

140,344 425,034 565,378 14,688,305

1,257,772 316,920 104,792 (197,964) 1,481,520 17,907,220

-

-

-

$

1

-

5,974,313 (1,080,123) 4,894,190

6,108,638 (317,007) 5,791,631

122Â

6,020,502 (319,111) 5,701,391

9,051,597 (436,691) 8,614,906

220,779 1,484,468 1,705,247


City of Delano Change in Net Assets (Continued) Last Ten Fiscal Years (Accrual Basis of Accounting) 2008 Expenses: Governmental activities: General government Public safety Public works Engineering Services Recreation & Social Services Community & Economic development Education Interest on long-term debt Total governmental activities expenses Business-type activities: Water & sewer Refuse Transit Airport Total business-type activities expenses Total primary government expenses Program revenues: Governmental activities: Charges for services: General government Public safety Public works Engineering Services Recreation & Social Services Community & Economic development Education Interest on long-term debt Operating grants and contributions Capital grants and contributions Total governmental activities program revenues Business-type activities: Charges for services: Water & sewer Refuse Transit Airport Operating grants and contributions Capital grants and contributions Total business-type activities program revenues Total primary government program revenues Net revenues (expenses): Governmental activities Business-type activities Total net revenues (expenses)

2009

2011

2012

4,337,179 23,510,152 2,502,891 527,928 2,639,634 2,718,202 582,293 1,281,831 38,100,110

5,696,345 25,397,307 2,125,191 392,877 2,981,785 2,789,933 663,823 1,138,991 41,186,252

6,584,470 19,403,123 9,730,375 540,612 2,612,945 2,203,015 518,287 956,413 42,549,240

6,561,343 19,836,178 10,392,866 565,339 2,674,055 1,895,470 475,378 1,708,054 44,108,683

5,763,986 13,206,646 10,609,838 572,847 2,422,548 635,101 302,317 1,717,724 35,231,007

5,677,953 2,199,900 1,628,014 515,833 10,021,700 48,121,810

6,168,922 2,310,885 1,407,954 501,619 10,389,380 51,575,632

7,840,624 2,840,239 1,696,482 611,501 12,988,846 55,538,086

8,182,310 2,744,226 1,672,051 660,724 13,259,311 57,367,994

9,570,591 2,634,318 1,671,770 508,142 14,384,821 49,615,828

1,602,927 10,970,395 3,756,818 222,665 276,655 232,991 2,161,599 722,780

1,647,145 11,273,023 3,860,453 228,807 284,287 239,418 2,221,228 742,719

3,356,738 243,502 1,902,430 37,322 116,170 9,364,689 4,643,350

3,288,150 103,312 1,985,773 38,337 109,387 12,791,542 1,840,709

3,278,183 92,655 2,148,966 38,614 106,027

4,086,039 1,388,909

19,946,830

20,497,080

19,664,201

20,157,210

11,139,393

4,706,399 2,239,025 68,026 344,080 1,940,673 -

4,870,197 2,290,196 65,332 209,782 10,232,165 -

5,946,477 2,249,200 58,223 330,944 1,479,825 -

6,993,034 2,221,705 61,664 409,502 736,809 -

8,548,083 2,289,511 93,059 421,250 1,969,111 -

9,298,203

17,667,672

10,064,669

10,422,714

13,321,014

29,245,033

38,164,752

29,728,870

30,579,924

24,460,407

(18,153,280) (723,497) (18,876,777)

(20,689,172) 7,278,292 (13,410,880)

(22,885,039) (2,924,177) (25,809,216)

(23,951,473) (2,836,597) (26,788,070)

(24,091,614) (1,063,807) (25,155,421)

5,541,228 8,594,782 193,761 5,705,609 737,848 417,755 (1,242,430) 19,948,553

5,824,363 7,632,028 135,240 1,874,295 3,657,566 287,027 97,498 (2,384,580) 17,123,437

5,196,111 8,518,752 165,732 3,160,173 3,572,430 205,520 117,457 (2,154,145) 18,782,030

3,770,269 10,209,586 180,345 2,192,620 3,337,617 334,536 142,556 (1,543,889) 18,623,640

20,243 155,738 1,242,430 1,418,411 21,366,964

(93,010) 6,828 62,600 2,157,767 2,134,185 19,257,622

1,767 55,889 1,969,334 2,026,990 20,809,020

81,945 1,543,889 1,625,834 20,249,474

-

919,522

General revenues and other changes in net assets: Governmental activities: Taxes: Property taxes 9,972,155 Sales tax 3,272,875 Transient occupancy taxes 226,071 Other taxes 2,649,796 Motor vehicle in lieu, unrestricted Investment income 1,142,344 Other general revenues 1,557,092 677,889 Transfers 19,498,222 Total governmental activities Business-type activities: Gain (loss) on sale of property Investment income 334,828 Miscellaneous revenues 52,918 (677,889) Transfers (290,143) Total business-type activities 19,208,079 Total primary government Extraordinary gain/loss on AB 1X26 Changes in net assets Governmental activities Business-type activities Total primary government

2010

-

1,344,942 (1,013,640) 331,302

(740,619) 8,696,703 7,956,084

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(5,761,602) (789,992) (6,551,594)

(5,169,443) (809,607) (5,979,050)

(4,548,452) 562,027 (3,986,425)


CITY OF DELANO, CALIFORNIA Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 2010-11 General Fund Nonspendable Restricted Committed Assigned Unassigned Total general fund All other governmental funds: Nonspendable Restricted Committed Assigned Unassigned Total all other governmental funds

2011-12

331,335

229,180

7,110,531

6,933,768

7,441,866

7,162,948

30,139 7,071,084 544,567 (183,114)

78,915 3,628,078 347,334 (1,099,269)

7,462,676

2,955,058

The City of Delano implemented GASB 54 for the fiscal year ended June 30, 2011. Information prior to the implementation of GASB 54 is not available. The City of Delano implemented GASB 54 for fiscal year ended June 30, 2003. Information prior to the implementation of GASB 34 is not available.

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CITY OF DELANO, CALIFORNIA GENERAL GOVERNMENT REVENUES BY SOURCE (1) (MODIFIED ACCRUAL BASIS OF ACCOUNTING) Last Ten Fiscal Years PRORAM REVENUES

Fiscal Year *** 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Charges for Services $ 16,839,039 $ 18,573,908 $ 18,699,692 $ 20,466,452 $ 21,814,810 $ 24,419,981 $ 24,968,640 $ 14,241,006 $ 15,210,864 $ 17,016,348

Operating Grants and Contributions

Capital Grants and Contributions

$ 1,778,281 $ $ 1,776,298 $ $ 1,113,315 $ $ 2,155,772 $ $ 1,866,952 $ $ 4,102,272 $ $ 12,453,393 $ $ 10,844,514 $ $ 13,528,351 $ $ 6,055,150 $

Taxes

GENERAL REVENUES Grants and Contributions Not Restricted Unrestricted to Specific Investments Programs Earnings Miscellaneous

1,606,469 $ 9,709,557 $ 1,796,286 (2) $ 10,266,755 $ 1,336,819 $ 11,566,064 $ 1,368,675 $ 13,395,344 $ 2,003,232 $ 15,780,165 $ 722,780 $ 17,220,897 $ 742,719 $ 20,035,380 $ 4,643,350 $ 19,123,492 $ 1,840,709 $ 20,428,387 $ 1,388,909 $ 20,609,959 $

1- Source-Finance Dept. (2) Capital grants & contributions is netted by the capital contributions made by governmental funds and enterprise funds to the enterprise funds

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-

$ 334,937 $ $ 214,856 $ $ 479,177 $ $ 497,021 $ $ 1,450,285 $ $ 1,477,172 $ $ 758,091 $ $ 293,855 $ $ 207,287 $ $ 334,536 $

336,337 179,975 156,548 524,409 676,770 510,010 573,493 181,364 173,346 224,501

Total $ $ $ $ $ $ $ $ $ $

30,604,620 32,808,078 33,351,615 38,407,673 43,592,214 48,453,112 59,531,716 49,327,581 51,388,944 45,629,403


CITY OF DELANO Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years (in thousands of dollars) Redevelopment Agency

City Fiscal Year Ended June 30

1

Taxable Assessed

Less: Secured

Unsecured Exemptions

1

Value

Taxable Total Assessed Direct Tax

Less: Secured Unsecured Exemptions

1

Value

Rate

2003

577,981

11,501

(22,819)

566,663

96,110

7,793

(864)

103,039

2.302%

2004

611,668

11,188

(23,376)

599,480

96,110

7,793

(864)

103,039

2.257%

2005

652,134

11,544

(23,520)

640,158

96,110

7,793

(864)

103,039

2.310%

2006

711,967

11,216

(24,229)

698,954

96,110

7,793

(864)

103,039

2.305%

2007

857,150

10,711

(23,768)

844,093

226,019

15,294

(979)

240,334

2.386%

2008

989,699

10,025

(23,733)

975,991

247,691

31,653

(949)

278,395

2.327%

2009

1,033,877

10,324

(24,035) 1,020,166

274,345

33,671

(970)

307,046

2.265%

2010

947,052

12,741

(24,740)

935,053

286,480

37,507

(998)

322,989

2.259%

2011

908,705

12,753

(24,867)

896,591

285,927

35,568

(1,033)

320,462

2.296%

2012

895,329

14,668

(24,791)

885,206

287,271

33,384

(991)

319,664

2.346%

Beginning with the fiscal year ended June 30, 2002, exemptions are netted directly against the individual property categories.

NOTE: In 1978 the voters of the State of California passed Proposition 13 which limited property 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 increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price 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.

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CITY OF DELANO Principal Property Tax Payers Current Year and Nine Years Ago

2012

2003 Percent of Total City Taxable Taxable Assessed Assessed Value Value

Taxable Assessed Value

Percent of Total City Taxable Assessed Value

Sears Holdings Corp.

$ 44,848,028

11.70%

49,894,862

6.28%

Paramount Citrus Packing Co.

$ 38,923,871

10.16%

45,323,361

5.71%

Casitas 80 LP

0.00%

6,020,752

0.76%

Troy CMBS Properties LLC

0.00%

4,429,864

0.56%

Delano Energy Co Inc.

0.00%

4,084,141

0.51%

Michael and Helen Finkelstein, Trust

0.00%

2,960,744

0.37%

1.29%

2,233,019

0.28%

0.00%

2,204,972

0.28%

2,086,307

0.26%

2,053,653 121,291,675

0.0026 15.01%

Taxpayer

Harbans Grewal

$

4,926,049

Investors Grade Properties Inc. Second Harvey B. Pollak LP

$ 14,395,282

3.76%

HD Development of Maryland Inc.

$

8,440,004

2.20%

20th and 18th Avenue Associates

$

7,459,995

1.95%

Cecil & Randolph Associates LLC

$

5,228,747

1.36%

Kmart Corp

$

5,108,009

1.33%

Arredondo Ventures Inc.

$

5,061,487

1.32%

Rajinder K. Momi Elk Properties LP

$

4,584,286

1.20%

$ 138,975,758

36.26%

Source: California Municipal Statistics, Inc. (1) 2011/2012 Local Secured Assessed Valuation $383,276,.102.

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CITY OF DELANO Direct and Overlapping Property Tax Rates (Rate per $100 of assessed value) Last Ten Fiscal Years

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

City Direct Rates: City basic rate

1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000

Redevelopment agency

1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000

Total City Direct Rate

2.000000 2.000000 2.000000 2.000000 2.000000 2.000000 2.000000 2.000000 2.000000 2.000000

Overlapping Rates: Elementary and/or Unified School Bond0.115967 0.119028 0.109709 0.093042 0.168017 0.147128 0.111768 0.131792 0.135290 0.134925 High School Bonds

0.155447 0.090065 0.096535 0.096834 0.162595 0.116796 0.099207 0.060797 0.097324 0.132845

Kern Co. Water Agency ZN 17 Debt

0.013881 0.015312 0.014513 0.010638 0.008349 0.010017 0.008404 0.010943 0.009357 0.014797

Kern Co. Water Agency ZN 19 Debt

0.017188 0.021042 0.019726 0.014911 0.010405 0.014193 0.012211 0.015953 0.014494 0.023717

Kern Com. Coll. Dist. SRID 2003A

0.000000 0.011803 0.009176 0.009630 0.000000 0.005992 0.000141 0.002379 0.003095 0.003290

GOB 2000D

0.000000 0.000000 0.060006 0.024018 0.016746 0.017682 0.016673 0.018615 0.018353 0.018147

GOB 2000E

0.000000 0.000000 0.000000 0.056415 0.019967 0.014784 0.016745 0.018816 0.018181 0.018205

Total Direct Rate

2.302483 2.257250 2.309665 2.305488 2.386079 2.326592 2.265149 2.259295 2.296094 2.345926

NOTE: In 1978, California voters passed Proposition 13 which sets the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of the City of Delano bonds. Source: Auditor-Controller's Office, Kern County

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CITY OF DELANO, CALIFORNIA PLEDGED REVENUE COVERAGE Last Ten Fiscal years Fiscal Year 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Pledged Revenues 1,404,911 1,428,386 1,430,751 1,717,330 2,171,816 1,918,499 2,052,668 2,638,385 2,391,095 N/A

Total Debt Service (1) 586,486 619,523 1,013,180 1,012,161 1,016,992 1,014,117 1,015,517 1,018,952 1,016,616 N/A

Debt Service Coverage 2.39 2.31 1.41 1.70 2.14 1.89 2.02 2.59 2.35 N/A

(1) Annual debt service is shown on a bond year basis. Source: Compiled by Muni Financial (California Municipal Statistics)

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CITY OF DELANO, CALIFORNIA Historical and Overlapping Debt Last Ten Fiscal Years

Ratios to 2011-2012 Assessed Valuation: 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Ratios to Adjusted Assessed Valuation: Combined Direct Debt

Combined Total Debt

n/a 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 2.90% 2.84%

n/a 6.42% 6.55% 6.32% 7.48% 7.06% 6.50% 6.87% 9.70% 9.25%

n/a 2.78% 3.08% 3.20% 4.58% 4.44% 3.99% 4.02% 4.03% 3.85%

Source: Compiled by Muni Financial (California Municipal Statistics)

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CITY OF DELANO, CALIFORNIA STATEMENT OF DIRECT AND OVERLAPPING DEBT June 30, 2012

2011-12 Assessed Valuation Less: Redevelopment Incremental Valuation Total Adjusted Valuation

$ 1,230,651,899 320,654,816 $ 909,997,083

% OVERLAPPING TAX AND ASSESSMENT DEBT: Applicable McFarland Unified School District 1.311% Delano Union School District 0.022% Delano Joint Union High School District 37.594% Kern Community College District Safety, Reapir and Improvement 59.418% Kern Community College District Assessment District 1.421% TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT

Debt 12/3/11 $ 2,135 24,758,734 21,251,888 1,365,306 46,984 $ 47,425,047

DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT: Kern County Certificates of Participation 1.144% Kern County Pension Obligations 1.144% Kern County Board of Education Certificates of Participation 1.144% Kern Community College District Certificates of Participation 1.162% Kern Community College District Benefit Obligations 1.162% Delano Union School District Certificates of Participation 59.418% City of Delano General Fund Obligations 100.000% TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT

COMBINED TOTAL DEBT

Ratios to 2011/12 Assessed Valuation Total Overlapping Tax Assessment Debt Ratios to Adjusted Assessed Valuation: Combined Direct Debt ($25,860,000) Combined Total Debt

3.85% 2.84% 9.25%

STATE SCHOOL BUILDING AID REPAYABLE AS OF 6/30/12 (1) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations Source: Compiled by Muni Financial (California Municipal Statistics)

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$0

$

$

1,463,062 4,565,767 599,170 1,089,375 972,419 2,174,699 25,860,000 36,724,492

(1) $

84,149,539


CITY OF DELANO, CALIFORNIA DEMOGRAPHIC STATISTICS Last Ten Fiscal Years Ave. Annual Population Increase

Kern County

Delano's Population as Percent

Population

In Percent

Population

of County

40,904 42,007 43,181 45,056 49,359 53,037 54,447 53,108 53,041 53,819 52,005

75.93 2.70 2.79 4.34 9.55 7.45 2.66 (2.46) (0.13) 1.47 (3.37)

687,552 702,853 724,940 753,070 761,972 786,220 805,798 819,891 839,631 831,134 841,744

5.95 5.98 5.96 5.98 6.48 6.75 6.76 6.48 6.32 6.48 6.18

Area in Square

Year 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12

Miles 9.9 9.9 12.2 12.9 11.9 13.4 13.4 13.4 13.4 13.4 13.4

Source: State Department of Finance, Population Research Division Kern County Population taken from Kern County CAFR

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CITY OF DELANO Principal Employers Current Year and Nine Years Ago

Employer

2012 Percent of Number of Total Employees Employment

2003 Percent of Number of Total Employees Employment

Kern Valley State Prison

1,650

3.70%

1,239

0.46%

North Kern State Prison

1,571

2.03%

-

0.00%

Delano Union Elementary School District

875

1.08%

665

0.25%

Delano Regional Medical Center

800

0.90%

465

0.17%

Paramount Citrus Association

525

0.81%

550

0.21%

Delano Joint Union High School District

430

0.81%

336

0.13%

Vallarta Supermarkets

351

0.79%

-

0.00%

Sears Logistics

252

0.78%

653

0.24%

City of Delano

233

0.71%

318

0.12%

Delano Distict Skilled Nursing Facility

179

0.66%

120

0.04%

K-mart Deparment Store

159

0.00%

105

0.04%

Railex

132

0.00%

-

0.00%

Pandol and Sons

-

0.00%

1,000

0.37%

Anton Caratan and Son

-

0.00%

300

0.11%

"Total Employment" as used above represents the total employment of all employers located within City limits. Source: State Department of Commerce City of Delano Chamber of Commerce

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CITY OF DELANO, CALIFORNIA Full Time City Employees by Function Last Ten Fiscal years

Function

2003

2004

Full Time Employees as of Fiscal Year Ended June 30, 2005 2006 2007 2008 2009 2010

General Government

21.4

22.7

23.3

26.5

25.9

40.8

40.8

48.2

48.0

41.9

Public Safety

59.0

64.0

64.0

70.0

70.0

76.0

76.0

77.0

77.0

75.0

Public Works

10.8

10.8

13.3

17.7

15.8

25.6

25.6

17.1

19.0

16.6

Recreation Program

2.0

1.5

1.5

3.5

3.5

4.0

4.0

4.0

4.0

3.5

Community Development

4.9

5.0

7.0

9.5

9.5

10.5

10.5

8.7

8.7

7.1

Water

10.6

10.6

12.5

13.0

13.1

19.7

19.7

18.3

18.3

19.5

Wastewater

10.6

10.6

11.5

11.4

11.5

15.9

15.9

19.2

18.5

18.5

Refuse

14.4

14.4

15.4

16.2

16.3

16.6

16.6

16.1

16.1

13.5

Transit

13.6

11.4

11.4

12.5

12.5

9.0

9.0

9.5

9.5

9.5

CCF Facility

84.0

78.0

78.0

78.0

78.0

88.0

88.0

83.0

83.0

-

Source: City of Delano Finance Department

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2011

2012


CITY OF DELANO, CALIFORNIA Operating Indicators by Function Last Ten Fiscal years

Police: Calls for service Felony Arrests Misdemeanor Arrests Property loss Property Recovery Traffic Citations Traffic Accidents Parking Citations Water Average daily consumption (in gallons mgd) Service Connections Sewer Average daily sewage treatmen (thousands of gallons)

Fiscal Year 2007 2008

2003

2004

2005

2006

2009

2010

2011

2012

11,572 284 242 1,557,898 763,764 1,209 199 166

35,901 739 782 4,809,650 2,101,617 3,353 514 1,643

31,945 764 785 4,454,817 3,075,824 2,362 554 511

36,188 891 1,033 5,550,635 3,637,851 3,391 596 536

42,190 831 1,446 4,621,525 3,022,505 4,498 614 302

45,052 752 1,094 5,953,963 4,212,165 5,098 604 942

43,930 712 927 4,490,480 2,841,644 5,915 624 659

42,023 649 913 4,567,949 2,733,981 5,518 624 1,195

39,044 572 674 4,988,491 1,945,561 5,006 617 643

35,794 504 562 2,556,806 1,274,583 3,270 616 380

8,100

8,100

9,000

9,040

9,590

9,230

8,930

8,270

8,130

7,380

7,863

7,863

8,200

8,200

8,200

8,795

8,795

8,795

8,800

9,027

4,551

4,753

4,753

4,384

4,799

4,681

4,486

4,365

4,125

4,106

Source: City of Delano Finance Department Public Works Department, Delano Police Department

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CITY OF DELANO, CALIFORNIA Capital Asset Statistics Last Ten Fiscal years

Fiscal Year 2007 2008

2003

2004

2005

2006

Police: Stations

1

1

1

1

1

Fire: Fire Stations (County)

2

2

2

2

112.39 1,363 28

112.39 1,363 28

112.39 1,363 32

8

8

108.50 16,100

Public Works: Streets (miles) Streetlights Traffic Signals Parks and recreation: Parks Water: Water mains (miles) Maximum daily capacity (thousands of gallons) City Well sites Fire Hydrants Wasterwater: Sanitary sewers (miles) Maximum daily treatment capac (thousands of gallons) Airport: Number of municipal airports Runway lenght in feet

2009

2010

2011

2012

1

1

1

1

1

2

2

2

2

2

2

112.39 1,363 32

112.89 1,363 36

113.37 1,363 40

138.13 1,363 40

138.13 1,363 40

138.13 1,363 44

138.13 1,363 44

8

8

8

8

8

8

8

8

108.50 16,100

108.50 11,000

108.50 13,850

108.50 14,000

108.50 14,900

108.50 14,750

108.50 14,070

110.00 14,690

110.00 13,470

11 744

11 744

11 750

11 750

11 750

11 750

11 750

11 750

13 750

15 750

80 4,551

80 4,753

80 4,753

80 4,384

80 4,799

80 4,681

80 4,486

80 4,365

80 4,125

80 4,106

1 5,650

1 5,650

1 5,650

1 5,650

1 5,650

1 5,650

1 5,650

1 5,650

1 5,650

1 5,650

Source: City of Delano Finance Department Public Works Department

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