city of delano 2013 cafr

City of Delano, California

COMPREHENSIVEANNUAL FINANCIAL REPORT

For Fiscal Year Ended June 30, 2013

COMPREHENSIVE

ANNUAL FINANCIAL REPORT

OF THE CITY OF DELANO, CA

Delano “Feel the Momentum”

INCORPORATED 1915

For Fiscal Year Ended June 30, 2013

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, 2013

TABLE OF CONTENTS Page

INTRODUCTORY SECTION Letter of Transmittal 2 Organizational Chart 9 List of Elected and Appointed Officials 10

FINANCIAL SECTION

Independent Auditors’ Report 12 Management Discussion and Analysis 15 Basic Financial Statements: Government-wide Financial Statements:

Statement of Net Position 25 Statement of Activities 26

Fund Financial Statements: Balance Sheet – Governmental Funds 28 Reconciliation of the Balance Sheet - Governmental Funds

to the Government-wide Statement of Net Position 30 Statement of Revenues, Expenditures, and Changes in Fund

Balances – Governmental Funds 31 Reconciliation of the Statement of Revenues, Expenditures and

Changes in Fund Balances - Governmental Funds to the Government-wide Statement of Activities 33

Statement of Net Position – Proprietary Funds 35 Statement of Revenues, Expenses, and Changes in Net

Position – Proprietary Funds 36 Statement of Cash Flows – Proprietary Funds 37 Statement of Fiduciary Net Position – Fiduciary Funds 39 Statement of Changes in Fiduciary Net Position – Fiduciary Funds 40

Notes to the Financial Statements 42 Required Supplementary Information:

Statement of Revenues, Expenditures and Changes in Fund Balances, Budget vs. Actual – General Fund 86

Statement of Revenues, Expenditures and Changes in Fund Balances, Budget vs. Actual – Developer Impact Fees Fund 87

Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Capital Projects 2010A 88 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Gas Tax Fund 89 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – TDA Streets Fund 90 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – SLESF Fund 91 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Economic Development Block Grant Fund 92




Required Supplementary Information (continued): Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Senior Citizens Nutrition Fund 93 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Landscape Maintenance Districts Fund 94 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Asset Seizure Fund 95 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Miscellaneous Fund 96 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – SEMS Fund 97 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Traffic Safety Fund 98 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Special Revenue Grant Fund 99 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – First Time Home Buyers Program Fund 100 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Delano Housing Authority Fund 101 Statement of Revenues, Expenditures and Changes in Net Position, Budget vs. Actual – Debt Service Fund 102 Required Supplementary Information – Defined Benefit Pension Trust 103 Required Supplementary Information – Other Postemployment Benefits 103

Combining and Individual Fund Financial Statements and Schedules:

Explanation of Non-Major Governmental Funds 105 Combining Balance Sheet – Non-Major Funds - Governmental Funds 108 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances-

Non-Major Funds – Governmental Funds 109 Combining Balance Sheet – Non-Major Funds – Special Revenue Funds 110 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances-

Non-Major Funds – Special Revenue Funds 115 Combining Balance Sheet – Non-Major Funds – Debt Service Funds 120 Combining Statement of Revenues, Expenditures, and Changes in Fund

Balances-Non-Major Funds – Debt Service Funds 121 Combining Statement of Net Position – Agency Funds 122 Combining Statement of Changes in Assets and Liabilities – Agency Funds 123

STATISTICAL SECTION

Net Position by Component 126 Changes in Net Position 127 Fund Balances of Governmental Funds 129 General Governmental Tax Revenues by Source 130 Assessed Value and Estimated Actual Value of Taxable Property 131




STATISTICAL SECTION (continued) Net Assessed Value of Property by Use Code, Citywide 132 Principal Property Taxpayers 133 Direct and Overlapping Property Tax Rates 134 Principal Sales Tax Producers 135 Property Tax Levies and Collections 136 Ratios of Outstanding Debt by Type 137 Ratios of General Bonded Debt Outstanding 138 Pledged-Revenue Coverage 139 Historical and Overlapping Debt 140 Legal Debt Margin Information 141 Statement of Direct and Overlapping Debt 142 Demographic and Economic Statistics 143 Principal Employers 144 Full-time City Government Employees by Function/Program 145 Operating Indicators by Function/Program 146 Capital Asset Statistics by Function/Program 147

INTRODUCTION SECTION

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Legal Services

CCFAdministration Economic DevelopmentPatrol Senior NutritionInvestigations RecreationTraffic Enforcement Code Enforcement Current and advance Planning

Building Regulations/Code EnforcementSustainable GrowthGIS

AdministrationFinancial Management Treasury Management EngineeringUtility Billing Public WorksBusiness License AirportInformation Systems Government BuildingsPayroll Park Maintenance

PersonnelRisk Management Fire SuppressionWorker's Comp Fire PreventionHealth Insurance Medical AidLabor RelationsTransit

City Clerk(Phyllis Kraft)

City Manager(Maribel G. Reyna )

Finance Director/Treasurer

( Rosa Rios)

Fire Department (Kern County Contract)

Police (Mark DeRosia)

Human Resources Director

(Noemi Zamudio)

Citizens of Delano

City CouncilCity Attorney

(Bonifacio "Bonny" Garcia )

Comm. Development(Richelle Carino)

Engineering/Public Works Director

(Roman Dowling )

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City of Delano

Principal Officials June 30, 2013

ELECTED OFFICIALS

MAYOR JOE AGUIRRE MAYOR PRO TEM RICARDO CHAVEZ

COUNCIL MEMBER LIZ MORRIS COUNCIL MEMBER GRACE VALLEJO

COUNCIL MEMBER RUBEN PASCUAL

ADMINISTRATION

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

FINANCIAL SECTION

Mayer Hoffman McCann P.C. An Independent CPA Firm 5060 California Avenue, Suite 800 Bakersfield, California, 93309 661-325-7500 ph 661-325-7004 fx www.mhmcpa.com

Member of Kreston International - a global network of independent accounting firms

INDEPENDENT AUDITORS’ REPORT

To the City of Delano City of Delano, California

Report on the Financial Statements

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Delano, California, as of and for the year ended June 30, 2013, and the related notes to the financial statements, which collectively comprise the City of Delano’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

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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, 2013, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The financial statements for the year ended June 30, 2013 reflect certain prior period adjustments as described further in note 15 to the financial statements. Our opinion is not modified with respect to this matter. As described further in notes 1 and 15 to the financial statements, the accompanying financial statements reflect certain changes in the reporting of deferred inflows and outflows, net position and certain items previously reported as assets and liabilities due to the implementation of Governmental Accounting Standards Board (GASB) Statements Nos. 63 and 65. Our opinion is not modified with respect to this matter.

Other Matters

Required Supplementary Information

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

Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City of Delano’s basic financial statements. The combining and individual nonmajor fund financial statements, the introductory section and the statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. The combining and individual nonmajor fund financial statements are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional

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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 section and the statistical section have not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated December 23, 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 in considering City of Delano’s internal control over financial reporting and compliance.

Bakersfield, CaliforniaDecember 23, 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, 2013. 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 Position 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 government-wide 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 long-term 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

Government-Wide Statements Governmental Funds Proprietary Funds Fiduciary Funds

Scope Entire City The activities of the Activities the City Instances in which

Government (except City that are not operates similar to the City is the trustee

Fiduciary Funds) and proprietary or private businesses or agent for someone

the City's component fiduciary else's resources

Required -Statement of net -Balance Sheet -Statement of net -Statement of

Financial position -Statement of position fiduciary net

Statements -Statement of revenues, -Statement of position

Activities expenditures and revenues, -Statement of

changes in expenses and changes in

fund balances changes in net fiduciary net

position position

-Statement of

cash flows

Accounting Accrual accounting Modified accrual Accrual accounting Accrual accounting

Basis and and economic accounting and and economic and economic

Measurement resources focus current financial resourcesfocus

resources focus resources focus

Focus

Type of Asset All assets and Only assets expected All assets and liabilities, All assets and liabilities

Liability liabilities, both to be used up and both financial and both short-term and long-

Information financial and liabilities that come due capital, and short-term term; and capital

capital, and short- during the year or soon and long-term term and long-term thereafter; no capital

assets or long-term debt Included

Type of All revenues and Revenues for which All revenues and expenses All revenues and

Inflow/Outflow expenses during cash is received during during the year, regardless expenses during year,

year, regardless of or soon after the end of or when cash is received regardless of when cash

when cash is received the year; expenditures or paid is received or paid

when goods or services

have been received

and payment is due

during the year or

soon thereafter

Fund Statements

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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 Position 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 position and changes in them. You can think of the City’s net position – 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 position 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 Position 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 Successor Agency

to 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 year-end 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 Position and the Statement of Activities) and governmental funds in reconciliation at following each of the fund financial statements.

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 Position 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.

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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 Fiduciary Statement of Net Position and Fiduciary Statement of Changes in Net Position. 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 The net position may serve as a useful indicator over time of the City’s financial position. The City’s combined net position at the close of fiscal year ended June 30, 2013 was $186,739,480 as shown on Table 1 below. The largest portion of the City’s net position (about $160 million, or 87% of total net position) reflects its investment in capital assets (land, building, machinery, and equipment) less accumulated depreciation and any related debt used to acquire those assets that is still outstanding. The City uses these capital assets to provide the essential services to citizens; consequently the City’s investment in its capital assets is reported net of related debt, it should be noted that the resources needed to repay this debt must be provided from other sources, since the capital assets themselves cannot be used to liquidate these liabilities. There is approximately $70 million in debt outstanding related to the acquisition and construction of these capital assets.

Table 1 Net Position

(In Thousands)

2013 2012 2013 2012 2013 2012

Current & other assets 42,775$ 51,860$ 2,813$ (1,436)$ 45,588$ 50,424$

Capital assets 151,479 142,577 68,037 64,905 219,516 207,482

Total assets 194,254 194,437 70,850 63,469 265,104 257,906

Long‐term debt outstanding 26,871 27,549 45,183 41,820 72,054 69,369

Other liabilities 5,490 4,469 820 684 6,310 5,153

Total liabilities 32,361 32,018 46,003 42,504 78,364 74,522

Net position

Net investment in

capital assets 139,380 138,800 23,158 23,382 162,538 162,182

Restricted 25,370 14,340 ‐ ‐ 25,370 14,340

Unrestricted (2,857) 9,279 1,689 (2,417) (1,168) 6,862

Total net position 161,893$ 162,419$ 24,847$ 20,965$ 186,740$ 183,384$

Governmental Activities

Business‐Type

Activities

Total Primary

Government

At the end of the current fiscal year, the City is able to report positive net position balances as a whole for both the government as a whole, as well as for its separate governmental and business-type activities. The same situation held true for the prior fiscal year. The increase from the previous fiscal year 2012 and fiscal year 2013 is $3.3 million or 1.8%. Expenditures decreased in total by $3.1 million, primarily due to 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 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. As compared to fiscal year 2011-2012 the City continued to encumber expenditures after the closing primarily in unemployment and maintenance of the facility some of those costs were minimized by fiscal year 2012-2013. City-wide revenues in total increased by $5.5 million; the outlook for an increase in net position citywide was expected, due to growth in economic development. Revenues in charges for services increased approximately by $4.4 million due to the impact fees generated from new retail and commercial

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development that came online in fiscal year 2012-2013 and future development expected in the upcoming fiscal year 2013-2014. City has also sought alternative revenues in grants to assist with operations and capital projects where all possible. Net position of the City’s governmental activities decreased by $526 thousand (from $162.4 million in FY12 to $161.9 million in FY13). The net position for the business-type activities for FY13 increased from prior year by approximately $3.9 million (FY12 was $20,965 and FY13 $24,847). In fiscal year 2012-2013, the City implemented rate increases of the scheduled five year utility rate increases that were approved in 2009 by City Council. Furthermore, the City recognized the $2 million dollar forgiveness of debt that was granted by the Water State Control Board. The City’s proprietary funds require a significant investment in capital equipment and facilities to conduct operations, scheduled increases in rates as approved will help with meeting required obligations and state mandates. The City also began to make payment obligations on January 01, 2013 to the State Water Board for the loan expansion of the Wastewater Treatment Plant. Revenues of the City’s business-type activities (see Table 2) increased by $3.2 million ($13.4 million in 2012 to $16.6 million in 2013) The details of the changes in the City’s Net Position are shown in Table 2 below.

Table 2 Statement of Activities

(In Thousands)

2013 2012 2013 2012 2013 2012

Revenues

Program Revenues

Charges for services 9,020$ 6,061$ 12,809$ 11,352$ 21,829$ 17,413$

Capital grants and contributions 3,577 1,389 2,318 ‐ 5,895 1,389

Operating grants and contributions 1,395 4,086 1,516 1,969 2,911 6,055

General revenues: ‐ ‐

Property taxes 3,037 3,770 ‐ ‐ 3,037 3,770

Sales & Other taxes 10,683 10,210 ‐ ‐ 10,683 10,210

Other general revenues 5,862 5,797 44 82 5,906 5,879

Total revenues 33,574 31,313 16,687 13,403 50,261 44,716

Program expenses

General government 5,171 5,930 ‐ ‐ 5,171 5,930

Public safety 12,069 13,207 ‐ ‐ 12,069 13,207

Public works 10,580 10,609 ‐ ‐ 10,580 10,609

Engineering services 670 573 ‐ ‐ 670 573

Culture & recreation 2,525 2,423 ‐ ‐ 2,525 2,423

Community development 132 635 ‐ ‐ 132 635

Pass thru Education ‐ 443 ‐ ‐ ‐ 443

Long‐term debt interest/charges 1,202 1,718 ‐ ‐ 1,202 1,718

Water/sewer ‐ ‐ 9,615 9,571 9,615 9,571

Non‐major enterprise funds ‐ ‐ 4,905 4,814 4,905 4,814

Total expenses 32,349 35,538 14,520 14,385 46,869 49,923

Excess (deficiency) before

transfers 1,225 (4,225) 2,167 (982) 3,392 (5,207)

Transfers In and Out (1,715) (1,544) 1,715 1,544 ‐ ‐

Special item:

Extraordinary gain/loss on AB 1X26 ‐ 3,284 ‐ ‐ ‐ 3,284

Change in net position (490) (2,485) 3,882 562 3,392 (1,923)

Net position beginning of year, as restated 162,383 164,904 20,965 20,403 183,348 185,307

Net position end of year 161,893$ 162,419$ 24,847$ 20,965$ 186,740$ 183,384$


Business‐Type

Activities

Total Primary

Government

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Governmental Activities The revenue sources from governmental activities presented in the preceding table are illustrated in a pie chart shown below as Figure 1, which illustrates the percentage relationship of these revenues to each other, as well as their impact on the City‘s total resources.

Revenues by Source – Governmental Activities Figure 1 Fiscal Year 2012-2013

27%

11%4%9%

32%

17%

Charges for services

Capital grants andcontributions

Operating grants andcontributions

Property taxes

Sales & Other taxes

Other general revenues

As shown in the above pie chart, roughly 39% of the City’s major revenue sources in the Governmental revenues comprise from taxes, comprised of property, sales and use, motor vehicle in lieu, franchise, and transient occupancy taxes. The following projects are underway to enable the City to increase tax revenues in the governmental activities: 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 an opening date of August 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 $32.3 million compared to $35.5 million last year. Business-Type Activities 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. The Arsenic Mitigation project is estimated to be completed by May 2014.

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Expenses – Governmental Activities

‐

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2012‐2013

2011‐2012

The City has been implementing expenditure reductions to enable them to operate in a fiscally responsible manner due to the uncertainty in economic conditions that continue to exist throughout the State. 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.

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 unassigned fund balance of the general fund was $10.2 million as compared to last fiscal year’s unassigned fund balance of $6.9 million, while total fund balance reached $10.5 million. As a measure of the general fund’s liquidity, it may be useful to compare both unassigned fund balance and total fund balance to total fund expenditures. Unassigned fund balance represents 63% of total general fund expenditures, while total fund balance represents 65% of that same amount. During the current fiscal year, the City’s general fund balance increased by $3.3 million which is largely attributed to the increase in property and sales tax. Revenues increased by $2.6 million and expenditures increased by $476,640 from last year primarily due to increases in health insurance and pension costs, and the City providing cost of living adjustments to its employees that ranged between 2% to 5% depending on the bargaining unit. Furthermore, in order to comply with the new California Public Employees’ Pension Reform Act (PEPRA) of 2013, the City was able to bargain with its bargaining units for employees to begin making contributions into their pension plan. Overall the General Fund performed very well this fiscal year, the City continues to make its debt obligation net transfer out of $2.4 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, a major fund, experienced a restricted fund balance increase of approximately $2.2 million as a result of the new commercial development that the City experienced in the current fiscal year. The Capital Projects 2010A fund, a major fund, had a restricted fund balance of $8 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.

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Major Enterprise Funds. Below is a condensed statement of cash flows for the proprietary funds for June 30, 2013, with comparative amounts for 2012.

Business‐Type Activities 2013 2012

Net Cash provided by operating activities: 5,352,618 3,215,930

Net Cash used in non‐capital financing activities: (3,011,748) 2,305,855

Net Cash used in capital and relating financing activities: (1,268,586) (5,521,785)

Net Cash provided by investing activities: 1,718 ‐

Net increase in cash and cash equivalents: 1,074,002 ‐

Cash and cash equivalents, beginning of year 352 352

Cash and cash equivalents, end of year 1,074,354 352 The Water & Sewer Fund net position increased by $3.8 due to the recognition of the $2 million loan forgiveness of the WWTP expansion project. A total net position of $19.5 million was noted at June 30, 2013; revenues increased by $1.3 million or 15.7% operating expenses increased by $5,764 from prior year. Increase in revenue was expected due to the implementation of the scheduled increase rates that were approved in 2009. Costs were maintained primarily steady in 2013.

CAPITAL ASSETS

Capital Assets (net of depreciation)

(In Thousands)

2013 2012 2013 2012 2013 2012

Land 5,259$ 5,058$ 3,184$ 3,184$ 8,443$ 8,242$

Buildings 3,032 2,891 1,238 1,364 4,270 4,255

Improvements 21,523 12,647 41,533 43,601 63,056 56,248

Infrastructure 107,470 113,441 ‐ ‐ 107,470 113,441

Equipment & Machinery 1,406 1,648 2,149 2,777 3,555 4,425

Construction in progress 12,789 6,892 19,933 13,979 32,722 20,871

Total 151,479$ 142,577$ 68,037$ 64,905$ 219,516$ 207,482$


Business‐Type

Activities

Total Primary

Government

There was a net increase of $8.9 million to capital assets under governmental activities primarily attributed to the Woollomes Bridge Project and the construction of the New Police Department during the year ended June 30, 2013. There was a net increase of $3.1 million of assets in all the enterprise funds which consists primarily of the arsenic mitigation project in the water fund.

23

LONG-TERM DEBT At the end of the current fiscal year, the City had bonded debt outstanding of $24.9 million; 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 2013 policies have been implemented throughout the city to reduce the liability for accrued compensated absences. The Successor Agency (a Fiduciary Fund), reported tax allocation bonds of $14.4 million and $14.6 million at June 30, 2013 and 2012, respectively.

Outstanding Debt (In Thousands)

2013 2012 2013 2012 2013 2012

Lease Revenue Bond 2010A 24,974$ 25,860$ ‐$ ‐$ 24,974$ 25,860$

Compensated absences 587 615 304 297 891 912

Capital Lease ‐ 69 ‐ ‐ ‐ 69

Net OPEB obligation 1,310 887 ‐ ‐ 1,310 887

Water loans payable ‐ ‐ 16,508 9,718 16,508 9,718

Sewer loans payable ‐ ‐ 28,371 31,804 28,371 31,804

26,871$ 27,431$ 45,183$ 41,819$ 72,054$ 69,250$


Business‐Type

Activities

Total Primary

Government

During the current fiscal year, the City paid off $820 thousand in general government long-term debt and incurred an additional $6.8 million of debt in the Water Fund primarily for the Arsenic Mitigation Project and recognized the $2 million of loan forgiveness in the Sewer Fund for the WWTP expansion. Additional information on the City’s long-term debt can be found in the notes to the accompanying financial statements.

BUDGET and ECONOMIC FACTORS The City’s most recent adopted biennial budget for fiscal years 2013/2014 – 2014/2015 shows that the City is working to live within its means. The major goals and issues that dominated the budgeting process for this biennial budget are discussed in the adopted budget transmittal letter with the measures adopted to address prevailing issues. 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.

BASIC FINANCIAL STATEMENTS

CITY OF DELANO STATEMENT OF NET POSITION

June 30, 2013

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

25

Governmental Business-TypeActivities Activities Totals

ASSETSCash and investments 22,251,723$ 1,074,354$ 23,326,077$ Cash with fiscal agents 15,018,228 - 15,018,228 Receivables (net of allowance for uncollectibles) 2,877,847 1,826,243 4,704,090 Receivable from external parties 794,832 - 794,832 Internal balances 196,684 (196,684) - Inventories 86,827 102,111 188,938 Prepaids and other assets 202,929 6,877 209,806 Deposits with insurance company 102,076 - 102,076

Notes and loans receivable, net 1,243,860 - 1,243,860 Capital assets:

Non-depreciable 18,048,199 23,116,887 41,165,086 Depreciable, net of accumulated depreciation 133,431,505 44,920,346 178,351,851

Total assets 194,254,710 70,850,134 265,104,844

LIABILITIESAccounts payable 4,930,002 489,086 5,419,088 Other accrued expenses 393,330 165,793 559,123 Accrued interest payable 93,918 - 93,918 Deposits payable 73,191 110,584 183,775 Unearned revenue - 55,198 55,198 Noncurrent liabilities:

Due within one year 1,441,006 1,892,066 3,333,072 Due in more than one year 25,430,488 43,290,702 68,721,190

Total liabilities 32,361,935 46,003,429 78,365,364

NET POSITIONNet investment in capital assets 139,379,687 23,158,000 162,537,687 Restricted for:

Community and economic development 15,776,268 - 15,776,268 Capital projects 8,048,910 - 8,048,910 Debt service 1,544,947 - 1,544,947

Unrestricted (2,857,037) 1,688,705 (1,168,332)

Total net position 161,892,775$ 24,846,705$ 186,739,480$

CITY OF DELANO STATEMENT OF ACTIVITIES



26

Operating CapitalCharges for Grants and Grants and Governmental Business-Type

Expenses Services Contributions Contributions Activities Activities TotalFunctions/ProgramsPrimary GovernmentGovernmental activities:

General government 5,170,654$ 6,127,124$ -$ 1,494,586$ 2,451,056$ - 2,451,056$ Public safety 12,068,717 347,354 555,870 206,187 (10,959,306) - (10,959,306) Public works 10,580,186 2,099,297 574,545 376,688 (7,529,656) - (7,529,656) Engineering services 670,561 368,988 - - (301,573) - (301,573) Culture and recreation 2,525,513 77,678 188,284 1,500,000 (759,551) - (759,551) Community and economic development 132,414 - 76,231 - (56,183) - (56,183)

Interest on long-term debt and fiscal charges 1,202,955 - - - (1,202,955) - (1,202,955)

Total governmental activities 32,351,000 9,020,441 1,394,930 3,577,461 (18,358,168) - (18,358,168)

Business-type activities:Water and sewer 9,615,374 9,940,712 - 2,000,000 - 2,325,338 2,325,338 Non-major enterprise funds 4,905,150 2,868,605 1,516,049 317,910 - (202,586) (202,586)

Total business-type activities 14,520,524 12,809,317 1,516,049 2,317,910 - 2,122,752 2,122,752

Total primary government 46,871,524$ 21,829,758$ 2,910,979$ 5,895,371$ (18,358,168) 2,122,752 (16,235,416)

General revenuesProperty taxes 3,036,844 - 3,036,844 Sales taxes 10,682,634 - 10,682,634 Franchise taxes 608,307 - 608,307 Motor fuel tax 238,235 - 238,235 Motor vehicle in lieu tax, unrestricted 3,389,477 - 3,389,477 Other taxes 606,361 - 606,361 Investment earnings 88,210 9,129 97,339 Insurance recoveries 700,000 - 700,000 Miscellaneous 232,753 35,658 268,411

Transfers (1,714,610) 1,714,610 -

Total general revenues and transfers 17,868,211 1,759,397 19,627,608

Change in net position (489,957) 3,882,149 3,392,192

Net position - beginning, as restated 162,382,732 20,964,556 183,347,288

Net position - ending 161,892,775$ 24,846,705$ 186,739,480$

Program Revenues Net (Expense) Revenue and Change in Net PositionPrimary Government

FUND FINANCIAL STATEMENTS

CITY OF DELANO BALANCE SHEET

GOVERNMENTAL FUNDS June 30, 2013


28

DeveloperGeneral Impact Fees

Fund FundASSETSCash and investments 5,095,064$ 12,555,180$ Cash with fiscal agents - - Receivables:

Accounts 913,450 - Taxes 1,478,014 - Intergovernmental - - Other 32,436 -

Due from other funds 4,185,108 - Inventories 26,825 - Prepaids and other assets 193,867 -

Notes and loans receivable, net 75,000 - Advances to other funds - -

Total assets 11,999,764$ 12,555,180$

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable 1,059,337$ 1,240$ Other accrued expenses 323,405 - Due to other funds 38,256 - Deposits payable 62,821 -

Total liabilities 1,483,819 1,240

Fund Balances:Nonspendable 295,692 - Restricted - 12,553,940 Unassigned 10,220,253 -

Total fund balances 10,515,945 12,553,940

Total liabilities and fund balances 11,999,764$ 12,555,180$

CITY OF DELANO BALANCE SHEET

GOVERNMENTAL FUNDS June 30, 2013


29

Capital Other TotalProjects Governmental Governmental2010A Funds Funds

ASSETSCash and investments -$ 2,944,872$ 20,595,116$ Cash with fiscal agents 12,872,074 2,146,154 15,018,228 Receivables:

Accounts - 158,894 1,072,344 Taxes - - 1,478,014 Intergovernmental - 286,001 286,001 Other - - 32,436

Due from other funds - 30,776 4,215,884 Inventories - 21,569 48,394 Prepaids and other assets - - 193,867

Notes and loans receivable, net - 848,000 923,000 Advances to other funds - 320,860 320,860

Total assets 12,872,074$ 6,757,126$ 44,184,144$

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable 2,654,419$ 1,161,347$ 4,876,343$ Other accrued expenses - 45,614 369,019 Due to other funds 2,177,676 1,075,651 3,291,583 Deposits payable - 10,370 73,191

Total liabilities 4,832,095 2,292,982 8,610,136

Fund Balances:Nonspendable - - 295,692 Restricted 8,039,979 4,776,206 25,370,125 Unassigned - (312,062) 9,908,191

Total fund balances 8,039,979 4,464,144 35,574,008

Total liabilities and fund balances 12,872,074$ 6,757,126$ 44,184,144$

CITY OF DELANO RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS

TO THE STATEMENT OF NET POSITION June 30, 2013


30

Amounts reported for governmental activities in the statement of net position are different because:

Total Fund balances - governmental funds 35,574,008$

Capital assets used in governmental activities are not financial resources and,therefore, are not reported in the funds. 150,802,345

Internal service funds were used by management to charge the costs of certainactivities, such as insurance and fleet management, to individual funds. Theassets and liabilities of the Internal service funds were included in governmentalactivities in the Government-Wide Statement of Net Position.

Net position included in governmental activities 2,354,298

Adjustment to reflect the consolidation of ISF activities related to enterprise funds included in governmental funds. 96,510 2,450,808

Long-term liabilities, including bonds payable, are not due and payable inthe current period and, therefore, are not reported in the funds. (26,840,468)

Interest on long-term debt is not accrued in the governmental funds, butrather is recognized as an expenditure when due. (93,918)

Total Adjustments 126,318,767 Net position of governmental activities 161,892,775$

CITY OF DELANO STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS



31

DeveloperGeneral Impact Fees

Fund FundREVENUES:

Property taxes 3,036,844$ -$ Sales taxes 9,483,851 - Franchise taxes 608,307 - Motor fuel tax - - Motor vehicle in lieu tax 3,389,477 - Other taxes 650,545 973 Fees and fines 109,421 - Licenses and permits 322,518 - Intergovernmental 1,849,188 - Program income - - Charges for services 187,901 3,984,581 Asset seizure revenue - - Investment earnings (87,190) (71,019) Miscellaneous 875,319 -

Total revenues 20,426,181 3,914,535

EXPENDITURES:Current

General government 3,119,343 16,977 Public safety 10,856,248 465 Public works - 465 Engineering services 263,451 - Culture and recreation 1,690,253 560 Community and economic development - -

Debt servicePrincipal 68,610 - Interest 4,656 -

Capital outlay 258,776 34,174

Total expenditures 16,261,337 52,641

Excess (deficiency) of revenues over expenditures 4,164,844 3,861,894

OTHER FINANCING SOURCES (USES):Transfers in 1,477,845 - Transfers out (2,289,692) (1,626,587)

Total other financing sources and uses (811,847) (1,626,587)

Net change in fund balances 3,352,997 2,235,307

Fund balances, beginning 7,162,948 10,318,633

Fund balances, ending 10,515,945$ 12,553,940$

CITY OF DELANO STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS



32

Capital Other TotalProjects Governmental Governmental2010A Funds Funds

REVENUES:Property taxes -$ -$ 3,036,844$ Sales taxes - 1,198,783 10,682,634 Franchise taxes - - 608,307 Motor fuel tax - 238,235 238,235 Motor vehicle in lieu tax - - 3,389,477 Other taxes - - 651,518 Fees and fines - 130,225 239,646 Licenses and permits - - 322,518 Intergovernmental - 3,133,172 4,982,360 Program income - 73,367 73,367 Charges for services - - 4,172,482 Asset seizure revenue - 5,010 5,010 Investment earnings 72,618 166,524 80,933 Miscellaneous - 1,821,758 2,697,077

Total revenues 72,618 6,767,074 31,180,408


General government - 1,692,281 4,828,601 Public safety - 556,609 11,413,322 Public works - 1,496,836 1,497,301 Engineering services - - 263,451 Culture and recreation - 365,461 2,056,274 Community and economic development - 129,787 129,787

Debt servicePrincipal - 920,000 988,610 Interest - 1,194,577 1,199,233

Capital outlay 14,312,613 3,206,868 17,812,431

Total expenditures 14,312,613 9,562,419 40,189,010

Excess (deficiency) of revenues over expenditures (14,239,995) (2,795,345) (9,008,602)

OTHER FINANCING SOURCES (USES):Transfers in - 2,595,822 4,073,667 Transfers out - (515,369) (4,431,648)

Total other financing sources and uses - 2,080,453 (357,981)

Net change in fund balances (14,239,995) (714,892) (9,366,583)

Fund balances, beginning 22,279,974 5,179,036 44,940,591

Fund balances, ending 8,039,979$ 4,464,144$ 35,574,008$

CITY OF DELANO RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE STATEMENT OF ACTIVITIES



33

Amounts reported for governmental activities in the statement of activities are differentbecause of the items described below:

Net changes in fund balances - total governmental funds (9,366,583)$

Governmental funds report capital outlay as expenditures. However, in the statement of activities, the cost of those assets is allocated over their estimateduseful lives as depreciation expense. 17,993,932

Depreciation expense on capital assets is reported in the government-widestatement and changes in net position, but it does not require the use of current financial resources. Therefore, depreciation expense is not reported as anexpenditure on the fund statements.

Governmental capital assets (9,033,219)

Capital assets of internal service funds (132,032) (9,165,251)

The net effect of various sales transactions involving capital assets is to decreasenet position.

Governmental loss (34,041) Internal service fund loss (3,010) (37,051)

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, butare reported as an expense in the government-wide statements. 30,907

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, butare reported as an expense in the government-wide statements. (304,776)

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 position. 988,609

Accrued interest payable is not reported in the governmental funds. 1,458

Amortization expense on bond premium is reported in the government-widestatement and changes in net position but it does not require the use of currentfinancial resources. Therefore, amortization expense is not reported as an expenditure on the fund statements. 2,006

Internal service funds were used by management to charge the costs of certainactivities, such as insurance and fleet management, to individual funds. The netexpenditure of the internal service funds was reported with governmental activities. (585,477)

Revenues recorded in government-wide statement of activities in prioryear recorded as revenues in the governmental funds in the current year. (47,731)

Total Adjustments: 8,876,626

Change in net position of governmental activities (489,957)$

PROPRIETARY FUNDS


PROPRIETARY FUNDS June 30, 2013


35

GovernmentalActivities

Water Non-Major Internal& Sewer Enterprise Service

Fund Funds Totals FundASSETSCurrent Assets:

Cash and investments 144,048$ 930,306$ 1,074,354$ 1,656,607$ Receivables:

Accounts 1,058,672 720,334 1,779,006 9,052 Intergovernmental - 14,189 14,189 - Other 32,494 554 33,048 -

Due from other funds 10,446 - 10,446 - Inventories 99,568 2,543 102,111 38,433 Prepaids and other assets 4,397 2,480 6,877 9,062 Deposits with insurance company - - - 102,076

Total current assets 1,349,625 1,670,406 3,020,031 1,815,230

Noncurrent Assets:Capital assets:

Non-depreciable 21,584,037 1,532,850 23,116,887 - Depreciable, net of

accumulated depreciation 42,085,983 2,834,363 44,920,346 677,359 Total noncurrent assets 63,670,020 4,367,213 68,037,233 677,359

Total assets 65,019,645 6,037,619 71,057,264 2,492,589

LIABILITIESCurrent liabilities:

Accounts payable 283,611 205,475 489,086 53,659 Other accrued expenses 80,822 84,971 165,793 24,311 Due to other funds - 110,620 110,620 29,295 Unearned revenue - 55,198 55,198 - Deposits payable 76,177 34,407 110,584 -

Total current liabilities 440,610 490,671 931,281 107,265

Noncurrent liabilities:Due within one year 1,892,066 - 1,892,066 - Due in more than one year 43,180,671 110,031 43,290,702 31,026

Total noncurrent liabilities 45,072,737 110,031 45,182,768 31,026 Total liabilities 45,513,347 600,702 46,114,049 138,291

NET POSITIONNet Investment in capital assets 18,790,787 4,367,213 23,158,000 677,359 Unrestricted

Refuse - 221,297 221,297 - Water & Sewer 715,511 - 715,511 - Airport - 76,994 76,994 - Transit - 771,413 771,413 - Internal Service Fund - - - 1,676,939

Total net position 19,506,298$ 5,436,917$ 24,943,215$ 2,354,298$

Adjustment to report the cumulative internal balance for the net effect of the activity between the internal service funds and the enterprise funds over time. (96,510)

Net position of business-type activities 24,846,705$

Busines-type Activities

CITY OF DELANO STATEMENT OF REVENUES, EXPENSES, AND

CHANGES IN NET POSITION PROPRIETARY FUNDS



36

GovernmentalActivities

Water Non-Major Internal& Sewer Enterprise Service

Fund Funds Totals FundOperating Revenues:

Charges for services 9,940,712$ 2,868,605$ 12,809,317$ 2,900,009$ Miscellaneous 32,989 2,669 35,658 4,150

Total operating revenue 9,973,701 2,871,274 12,844,975 2,904,159

Operating Expenses:Personnel 2,608,870 1,907,518 4,516,388 805,394 Maintenance and operations 3,676,250 2,139,933 5,816,183 2,379,334 Depreciation expense 2,833,883 538,983 3,372,866 132,032 Miscellaneous 14,278 170,683 184,961 3,046

Total operating expenses 9,133,281 4,757,117 13,890,398 3,319,806

Operating income (loss) 840,420 (1,885,843) (1,045,423) (415,647)

Nonoperating revenues (expenses):Forgiveness of debt 2,000,000 - 2,000,000 - Intergovernmental - 1,833,959 1,833,959 - Investment earnings 7,965 1,164 9,129 7,277 Interest expense (410,366) (7,818) (418,184) (7,186) Loss on sale of property (13,382) (6,854) (20,236) (3,010)

Total nonoperating revenues (expenses) 1,584,217 1,820,451 3,404,668 (2,919)

Transfers in 1,410,357 308,208 1,718,565 - Transfers out - (3,955) (3,955) (493,658)

Total transfers 1,410,357 304,253 1,714,610 (493,658)

Change in net position 3,834,994 238,861 4,073,855 (912,224)

Net position, beginning 15,671,304 5,198,056 3,266,522

Net position, ending 19,506,298$ 5,436,917$ 2,354,298$

Adjustment for the net effect of the current year activity between (191,706) the internal service funds and the enterprise funds.

Changes in net position of business-type activites 3,882,149$

Business-type Activities

CITY OF DELANO STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS For the Fiscal Year Ended June 30, 2013


37

GovernmentalBusiness-type Activities - Enterprise Funds ActivitiesWater Non-Major Total Internal

& Sewer Proprietary Proprietary ServiceFund Funds Funds Funds

CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers 9,898,307$ 4,349,088$ 14,247,395$ 2,910,056$ Receipts from other governments - 1,516,049 1,516,049 - Payments to employees for salaries and benefits (2,612,169) (1,869,487) (4,481,656) (799,606) Payments to suppliers and service providers (3,638,782) (2,290,388) (5,929,170) (2,364,262)

Net cash provided by (used for) operating activities 3,647,356 1,705,262 5,352,618 (253,812)

CASH FLOWS FROM NONCAPITAL AND RELATED FINANCING ACTIVITIES

Cash received from other funds 1,410,357 308,726 1,719,083 236,261 Cash paid to other funds (3,749,307) (981,524) (4,730,831) (493,658)

Net cash provided by (used for) noncapitaland related financing activities (2,338,950) (672,798) (3,011,748) (257,397)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESProceeds from capital-related debt 7,261,951 - 7,261,951 - Capital grants received - 317,910 317,910 - Acquisition and construction of capital assets (6,110,867) (413,616) (6,524,483) (111,805) Principal paid on capital-related debt (1,905,780) - (1,905,780) - Interest paid on capital-related debt (410,366) (7,818) (418,184) (7,186)

Net cash provided by (used for) capital and related financing activities (1,165,062) (103,524) (1,268,586) (118,991)

CASH FLOWS FROM INVESTING ACTIVITIESInterest received 502 1,216 1,718 7,277

Net cash provided by investing activities 502 1,216 1,718 7,277

Net increase (decrease) in cash 143,846 930,156 1,074,002 (622,923)

Cash, beginning of year 202 150 352 2,279,530

Cash, end of year 144,048$ 930,306$ 1,074,354$ 1,656,607$

RECONCILIATION OF OPERATING INCOME TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIESOperating income (loss) 840,420$ (1,885,843)$ (1,045,423)$ (415,647)$ Depreciation 2,833,883 538,983 3,372,866 132,032 Nonoperating intergovernmental revenue - 1,516,049 1,516,049 - Loss on investments - (52) (52) - Adjustments:

Change in receivables (79,901) 1,450,959 1,371,058 5,897 Change in inventory 767 - 767 22,315 Change in prepaid expenses (3,351) (2,480) (5,831) (9,062) Change in accounts payable 54,329 22,762 77,091 4,865 Change in other accrued expenses (3,299) 38,031 34,732 5,788 Change in unearned revenues (11,000) 13,529 2,529 - Change in deposits payable 15,508 13,324 28,832 -

Net cash provided by (used in) operating activities 3,647,356$ 1,705,262$ 5,352,618$ (253,812)$

NONCASH CAPITAL, FINANCING AND INVESTING ACTIVITIESForgiveness of debt by State of CA 2,000,000$ -$ 2,000,000$ -$ Capital assets contributed by other funds 7,463 (6,699) 764 -

FIDUCIARY FUNDS


FIDUCIARY FUNDS June 30, 2013


39

Private Purpose Trust Fund

CRAPension Successor Agency

Trust Agency Total FundsASSETSCash and cash equivalents 1,355,327$ 962,616$ 2,317,943$ 498,034$ Investments, at fairvalue:

Domestic stock 10,351,689 - 10,351,689 - Investment contract 4,116,384 - 4,116,384 - International stock 3,130,717 - 3,130,717 - Mutual funds 1,640,873 - 1,640,873 - Annuities 740,172 - 740,172 -

Total investments 19,979,835 - 19,979,835 - Cash with fiscal agent - 2,193,536 2,193,536 17,392 Contributions receivable and other receivables 348 1,100 1,448 1,434 Prepaid assets 123,917 - 123,917 - Note receivable, net - 382,797 382,797 - Land held for resale - 5,547,957 5,547,957 - Capital assets:

Depreciable, net of accumulated depreciation - 38,569 38,569 - Total assets 21,459,427 9,126,575 30,586,002 516,860

LIABILITIESAccounts payable 3,007 9,275 12,282 4,950 Other accrued expenses - 1,545 1,545 - Accrued interest payable - 239,777 239,777 - Due to other funds 118,098 676,734 794,832 - Advances to other funds - 320,860 320,860 - CRA pass thru liability - - - 405,013 Other liabilities 3,461 19,352 22,813 106,897 Due within one year - 275,000 275,000 - Due in more than one year - 14,105,000 14,105,000 -

Total liabilities 124,566 15,647,543 15,772,109 516,860

NET POSITION (DEFICIT)Held in trust for pension benefits and other

purposes 21,334,861$ (6,520,968)$ 14,813,893$

CITY OF DELANO STATEMENT OF CHANGES IN NET POSITION

FIDUCIARY FUNDS For the Fiscal Year Ended June 30, 2013


40

Private Purpose Trust Fund

CRAPension Successor

Trust Agency Total

AdditionsContributions:

Property Taxes -$ 2,364,163$ 2,364,163$ Employer 1,310,718 - 1,310,718 Participants 524,553 - 524,553 Miscellaneous contributions 2,355 13,001 15,356

Total contributions 1,837,626 2,377,164 4,214,790 Investment earnings:

Interest 178,213 47,787 226,000 Net increase in the fair value of investments 2,318,147 - 2,318,147

Total investment earnings 2,496,360 47,787 2,544,147 Less investment expense (173,129) - (173,129)

Net investment earnings 2,323,231 47,787 2,371,018 Total additions 4,160,857 2,424,951 6,585,808

DeductionsDepreciation - 4,286 4,286 Benefits paid to participants 1,400,295 - 1,400,295 Refund of contributions 441,113 - 441,113 General and administrative expenses 135,202 2,299,856 2,435,058 Maintenance & operations - 23,268 23,268 Debt Services - Interest - 743,154 743,154

Total deductions 1,976,610 3,070,564 5,047,174

OTHER FINANCING SOURCES (USES):Transfers out - (862,971) (862,971)

Change in net position 2,184,247 (1,508,584) 675,663

Net position (deficit), beginning, as restated 19,150,614 (5,012,384) 14,138,230 Net position (deficit), ending 21,334,861$ (6,520,968)$ 14,813,893$

NOTES TO THE FINANCIAL STATEMENTS

CITY OF DELANO NOTES TO THE FINANCIAL STATEMENTS For the Fiscal Year Ended June 30, 2013

42

(1) Summary of significant accounting policies

A. Description of governmental-wide financial statements

The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information on all of the nonfiduciary activities of the primary government and its component units. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues, and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges to external customers for support. Likewise, the primary government is reported separately from certain legally separate component units for which the primary government is financially accountable. B. Reporting entity

The City of Delano (the City) is a municipal corporation governed by an elected mayor and five-member governing council (council). The accompanying financial statements present the government and its component units, entities for which the government is considered to be financially accountable. Blended component units are, in substance, part of the primary government’s operations, even though they are legally separate entities. Thus, blended component units are appropriately presented as funds of the primary government.

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


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(1) Summary of significant accounting policies (continued)

B. 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 Delano 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. For more information about the Successor Agency to the Redevelopment Agency of the City of Delano, contact the City's Finance Department, 1015 Eleventh Avenue, Delano, CA 93216 or online at www.cityofdelano.org.

C. Basis of presentation - government-wide financial statements

While separate government-wide and fund financial statements are presented, they are interrelated. The governmental activities column incorporates data from governmental funds and internal service funds, while business-type activities incorporate data from the government’s enterprise funds. Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government- wide financial statements.

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. 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.


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D. Basis of presentation – fund financial statements

The fund financial statements provide information about the government’s funds, including its fiduciary funds and blended component units. Separate statements for each fund category - governmental, proprietary, and fiduciary - are presented. The emphasis of fund financial statements is on major governmental and enterprise funds, each displayed in a separate column. All remaining governmental and enterprise funds are aggregated and reported as nonmajor funds. Major individual governmental and enterprise funds are reported as separate columns in the fund financial statements.

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 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.

The City reports the following major proprietary fund:

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. 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 Private Purpose Trust Fund accounts for the assets received from the City’s former redevelopment agency in order to liquidate its enforceable obligations, pursuant to Assembly Bill X1 26 which dissolved redevelopment agencies in California.


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(1) Summary of significant accounting policies (continued) D. Basis of presentation – fund financial statements (continued)

Agency Funds are used to account for assets of others for which the City acts as an agent. 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.

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. 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. During the course of operations the City has activity between funds for various purposes. Any residual balances outstanding at year end are reported as due from/to other funds and advances to/from other funds. While these balances are reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Balances between the funds included in governmental activities (i.e., the governmental and internal service funds) are eliminated so that only the net amount is included as internal balances in the governmental activities column. Similarly, balances between the funds included in business-type activities (i.e., the enterprise funds) are eliminated so that only the net amount is included as internal balances in the business-type activities column.


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D. Basis of presentation – fund financial statements (continued) Further, certain activity occurs during the year involving transfers of resources between funds. In fund financial statements these amounts are reported at gross amounts as transfers in/out. While reported in fund financial statements, certain eliminations are made in the preparation of the government-wide financial statements. Transfers between the funds included in governmental activities are eliminated so that only the net amount is included as transfers in the governmental activities column. Similarly, balances between the funds included in business-type activities are eliminated so that only the net amount is included as transfers in the business-type activities column. 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. Measure focus and basis of accounting The accounting and financial reporting treatment is determined by the applicable measurement focus and basis of accounting. Measurement focus indicates the type of resources being measured such as current financial resources or economic resources. The basis of accounting indicates the timing of transactions or events for recognition in the financial statements. The government-wide financial statements are reported using the economic resources measurement focus and the accrual basis of accounting, as are the proprietary fund 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. The 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. General capital asset acquisitions are reported as expenditures in governmental funds. Issuance of long-term debt and acquisitions under capital leases are reported as other financing sources.


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E. Measure focus and basis of accounting (continued)

Property taxes, sales 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 period. Entitlements are recorded as revenues when all eligibility requirements are met, including any time requirements, and the amount is received during the period or within the availability period for this revenue source (within 60 days of yearend). Expenditure-driven grants are recognized as revenue when the qualifying expenditures have been incurred and all other eligibility requirements have been met, and the amount is received during the period or within the availability period for this revenue source (within 60 days of yearend). All other revenue items are considered to be measurable and available only when cash is received by the government. The proprietary, pension and other postemployment benefit trust, and private-purpose trust funds are reported using the economic resources measurement focus and the accrual basis of accounting. The agency fund has no measurement focus but utilizes the accrual basis of accounting for reporting its assets and liabilities.

F. 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 project-length 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 on the department level. Transfers relating to capital outlays involving $5,000 or more require approval of the 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 fund. The City Council made several supplementary appropriations throughout the year which were not material.


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G. Assets, liabilities, and net position/fund balance Cash and cash equivalents 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. Investments 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. Cash with fiscal agents 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. 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.” 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.


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G. Assets, liabilities, and net position/fund balance (continued)

Inter-fund transactions 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 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. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased. 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 government-wide 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.


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G. Assets, liabilities, and net position/fund balance (continued)

Capital assets (continued)

Land and construction in progress are not depreciated. The other property, plant, equipment, and infrastructure of the primary government are depreciated using the straight line method over the following estimated useful lives: Assets Useful Lives Buildings 25-29 yearsImprovements 5-30 yearsInfrastructure 25-29 yearsMachinery & equipment 5-30 years Land held for resale Land held for resale is stated at the lower of historical cost or net realizable value, if estimable. Deferred outflows/inflows of resources In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net position that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then. The government did not report any items that qualified for reporting in this category. In addition to liabilities, the statement of financial position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net position that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The government did not report any items that qualified for reporting in this category.

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.


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G. Assets, liabilities, and net position/fund balance (continued) Long-term obligations In the government-wide financial statements and proprietary fund types in the fund financial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable government activities, business-type activities, or proprietary fund type statement of net position. Bond premium and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as expense when incurred. 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. Net position/fund balance

The accompanying financial statements reflect the implementation of GASB Statements Nos. 63 and 65. Significant impacts of GASB Statement No. 63 include changing the title of the statement of net assets to the statement of net position and reformatting the statement of net position to add separate sections for deferred inflows of resources and deferred outflows of resources. Significant impacts of GASB Statement No. 65 include reclassifying as deferred inflows of resources and deferred outflows of resources certain balances that were previously reported as assets and liabilities. GASB Statement No. 65 also required that debt issuance costs be reported as expenses when incurred. The retroactive effects of implementing this change in reporting debt issuance costs resulted in a restatement of the beginning net position, as described further in Note 15.

Net position flow assumption Sometimes the government will fund outlays for a particular purpose from both restricted (e.g., restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted – net position and unrestricted – net position in the government-wide and proprietary fund financial statements, a flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted – net position to have been depleted before unrestricted – net position is applied. Fund balance flow assumption

Sometimes the government will fund outlays for a particular purpose from both restricted and unrestricted resources (the total of committed, assigned, and unassigned fund balance). In order to calculate the amounts to report as restricted, committed, assigned and unassigned fund balance in the governmental fund financial


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G. Assets, liabilities, and net position/fund balance (continued) Fund balance flow assumption (continued) statements flow assumption must be made about the order in which the resources are considered to be applied. It is the government’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last. Fund balance polices 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 position is classified in the following categories: Net investment in capital assets – This category groups all capital assets, including infrastructure, into one component of net position. Accumulated depreciation and the outstanding balances of debt that are attributable to the acquisition, construction or improvement of these assets reduce this category. Restricted net position – This category presents external restrictions imposed by creditors, grantors, contributors or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.


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G. Assets, liabilities, and net position/fund balance (continued) Fund balance polices (continued) Unrestricted net position – This resulting category presents the remaining City net position and this measure of equity is unrestricted, legally or otherwise. The City Council is the highest level of decision-making authority, may commit fund balance for specific purposes pursuant to constraints imposed by formal actions taken, through adoption of a resolution. These committed amounts cannot be used for any other purpose unless the City Council removes or changes the specified use through the same 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. 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. 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.


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(2) Stewardship, compliance and accountability

Deficit fund equity

The City has accumulated fund deficits in the following individual funds: Governmental activities:

Nonmajor governmental funds:CCF Fund (126,349)$ Economic Development Block Grant (84,849) Miscellaneous Special Revenue Funds (64,317) Senior Citizen's Nutrition Fund (36,290) Asset Seizure Fund (257)

Total (312,062)$

The CCF fund deficit is expected to be reduced by future profitable operations. For all other nonmajor governmental funds, the City expects to transfer additional funds from the General Fund, as needed. Excess of Expenditures Over Appropriations in Individual Funds The City incurred no material excess of expenditures over appropriations in individual funds. Classification of Fund Balances A detail of the classification of fund balances is as follows:

Developer Cap Other

General Impact Service Projects GovernmentalFund balances: Fund Fund 2010A Fund Total

Nonspendable:Inventory 26,825$ -$ -$ -$ 26,825$ Prepaid items 193,867 - - - 193,867 Notes/loans receivable 75,000 - - - 75,000

Restricted for:Capital projects - - 8,039,979 8,931 8,048,910 Community and economic development - 12,553,940 - 3,222,328 15,776,268 Debt service - - - 1,544,947 1,544,947

Unassigned: 10,220,253 - - (312,062) 9,908,191 Total fund balances 10,515,945$ 12,553,940$ 8,039,979$ 4,464,144$ 35,574,008$


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(3) Cash deposits with financial institutions The City’s cash and investments consist of the following as of June 30, 2013:

Deposits 4,824,931$ Cash on hand 4,224 Investments 41,292,734 Cash and investments 46,121,889

Cash and Investments with Fiscal Agents 17,229,156

Total 63,351,045$

The City’s deposits and investments are reflected in the accompanying basic financial statements as of June 30, 2013:


Business Type Activities

Fiduciary Funds Total

Cash and Investments 22,251,723$ 1,074,354$ 22,795,812$ 46,121,889$ Cash with Fiscal Agents 15,018,228 - 2,210,928 17,229,156

37,269,951$ 1,074,354$ 25,006,740$ 63,351,045$

(4) 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 Federally Sponsored Agency SecuritiesLocal Agency Investment Fund (state pool) Repurchase Agreements not to Exceed 90 DaysBankers' Acceptances Medium Term Corporate Notes and Mutual FundsU.S. Treasury Bills and Notes 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 24,786,727$ Fiscal Agents (Bond trustees for the City and its component units) 17,229,156 Pension fund investment committee 21,335,162

Total 63,351,045$


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(4) Investments (continued) 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 pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio.

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

Authorized by Investment

Policy

Maximum Maturity (years)

Maximum Percentage of

Portfolio

Maximum Investment in One Issuer

Minimum Ratings

U.S. Treasury and Agencies Yes 5 None None NoneCommercial paper Yes 5 None None PI/AICertificates of deposits (CD's) Yes 5 None 100K AMedium term notes Yes 5 None None ALocal Agency Investment Fund Yes N/A None None 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 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. 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.


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(4) 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:

Less than 1 1-5 More than 5 TotalGovernment Sponsored Entity Debt -$ 10,770,640$ -$ 10,770,640$ GIC - - 2,146,141 2,146,141 Annuity Contracts - - 1,018,952 1,018,952 Held by trustee:

California Local Agency Investment Fund 24,606,322 - - 24,606,322 24,606,322$ 10,770,640$ 3,165,093$ 38,542,055$

Investment Maturities (in Years)

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:

Investment Type AA+ Total

Government Sponsored Entity Debt 10,770,640$ 10,770,640$

Not rated:GIC 2,146,141 Annuity Contracts 1,018,952 California Local Agency Investment Fund 24,606,322

38,542,055$

Ratings as of Year End

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, 2013, the City’s bank balance was $5,005,861 (carrying amount of $3,469,604); of the bank balance, $990,379 was insured and $4,015,482 was secured by collateral held by the City’s agent in the agent’s name.


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(4) Investments (continued) 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 $10,770,640 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 was one investment representing more than 5% of the City’s total investments as follows:

Issuer AmountFederal Home Loan Banks 5,890,520$ U.S. Bank Corporate Trust Services GIC - Bayerische Landesbank 2,146,141$ Fannie Mae 1,955,490$

Government Sponsored Entity

Government Sponsored Entity

Type of Investment

Investment Contract

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 as of June 30, 2013: Cash and cash equivalents 1,355,327$ Investments 19,979,835

Total 21,335,162$


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(4) Investments (continued) Pension trust (continued) Deposits - custodial credit risk Custodial credit risk is the risk that in the event of a bank failure, the Plan’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, 2013, the Plan has a bank balance of $1,355,327. Of the bank balance, $1,355,327 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 $1,016,987, none of which was exposed to custodial credit risk. Investments As of June 30, 2013, the Plan had the following investments: Domestic stocks 10,351,689$ Investment contract 4,116,384 International stocks 3,130,717 Mutuals funds 1,640,873 Annuities 740,172

Total 19,979,835$

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, $1,698,705 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.


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(4) Investments (continued) Pension trust (continued) Credit risk and interest rate risk As of June 30, 2013, the Plan’s investments subject to credit risk and interest rate risk consist of the following:

Investment Types Amount Less than 1 1 to 5Investment Contract 4,116,384$ 2,000,000$ 2,116,384$

4,116,384$ 2,000,000$ 2,116,384$

BB B Total

Mutual funds 150,995$ 21,804$ 172,799$

Not Rated:Mutual Funds 1,468,074 Investment Contract 4,116,384

Total Investments subject to credit rating 5,757,257$

Investment Type

Ratings as of Year End

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 as of June 30, 2013:

Issuer Type of Investment Amount

Great West Life and Annuity Insurance Company Investment Contract 4,116,384$


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(5) 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 June 30, 2013:

Taxes Accounts Intergovernmental OtherGovernmental funds:

General Fund 1,478,014$ 913,450$ -$ 32,436$ Other Governmental Funds - 158,894 286,001 -

Total governmental funds 1,478,014 1,072,344 286,001 32,436

Governmental ActivitiesInternal Service Fund - 9,052 - -

Enterprise Funds - 1,779,006 14,189 33,048 Fiduciary Funds - 2,882 - -

Total 1,478,014$ 2,863,284$ 300,190$ 65,484$

(6) Notes/Loans receivable

Notes and loans receivable consist of the following at June 30, 2013:

Beginning Ending Allowance for

Balance Additions Deletions Balance Uncollectible Net

Notes Receivable

General fund:

Monterey Golf Management 75,000$ -$ -$ 75,000$ -$ 75,000$

Other governmental funds:

Limited Partnership 630,000 - - 630,000 - 630,000

Casitas-80 L.P. 218,000 - - 218,000 - 218,000

923,000 - - 923,000 - 923,000

Loans Receivable

Other governmental funds:

CDBG Fund 2,199,097 - 63,900 2,135,197 2,135,197 -

First Time Homebuyers

Housing Fund 3,967,213 - 69,300 3,897,913 3,897,913 -

Other Miscellaneous Fund 946,203 189,116 7,283 1,128,036 1,128,036 -

7,112,513 189,116 140,483 7,161,146 7,161,146 -

Advance

Delano housing authority:

CRA Successor Agency 320,860 - - 320,860 - 320,860

Total Notes/Loans Receivable 8,356,373$ 189,116$ 140,483$ 8,405,006$ 7,161,146$ 1,243,860$

Note Receivable

Fiduciary Fund:

CRA Successor Agency

Automobile dealership 448,419$ -$ 65,622$ 382,797$ -$ 382,797$

The borrowing between the CRA Successor Agency and the Delano Housing Authority Fund (a nonmajor fund of the City of Delano) is presented as an advance in the fund financial statements and as a note receivable in the government wide financial Statements.


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(6) Notes/Loans receivable (continued)

A. Notes receivable

General Fund – Monterey Golf Management Group, LLC On September 9, 2013 the City amended its lease agreement with Monterey Golf Management Group, LLC (“Monterey Golf Management”). This lease amendment created a note receivable in the amount of $75,000 from Monterey Golf Management. The note is due in full on or before June 17, 2018. Portions of the note payments will be waived in the following amounts on the following dates: $15,000 on June 17, 2014; $15,000 on June 17, 2015; $15,000 on June 17, 2016; $15,000 on June 17, 2017; and $15,000 on June 17, 2018. If the City terminates the agreement for justifiable causes prior to any of the waiver periods, Monterey Golf Management Group shall repay the remaining balance outstanding based upon the termination date.

Other Governmental funds - Jasmine Heights Limited Partnership A note receivable in the amount of $630,000 represents advances to the limited partnership under an agreement dated February 12, 1996 between the limited partnership and the City. 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. Other Governmental funds - Casitas-80 L.P 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 2014. Successor Agency - Automobile dealership 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 commenced on May 1, 2010 in 120 monthly installments of $5,468.


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A. Notes receivable (continued) Successor Agency - Automobile dealership (continued) 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, 2013, the principal has been reduced $65,622. In addition all interest due in any one year will not be required to be paid if the borrower exceeds the required $192,000. The outstanding balance of the loan as of June 30, 2013 was $382,797.

B. Loans receivable

Other governmental funds - Community Development Block Grant Loans receivable in the amount of $2,135,197 represents various housing rehabilitation program loans. Under most agreements, loans are free of interest and 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 accounts has been provided for the full amount as the City does not expect to collect such loans.

Other governmental funds - First Time Homebuyer's Loans receivable in the amount of $3,897,913 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 accounts has been provided for the full amount as the City does not expect to collect such loans.


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B. Loans receivable (continued) Other governmental funds – CALHOME Loans receivable in the amount of $1,128,036 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. An allowance for uncollectible accounts has been provided for the full amount as the City does not expect to collect such loans.

(7) 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, 2013, were as follows:

Receivable fund Payable Fund Amount

General Fund Capital Projects 2010A 2,177,676$ Nonmajor Governmental Funds 1,075,651 Successor Agency Funds 676,734 Pension Trust Fund 118,098 Nonmajor Enterprise Funds 110,104 Internal Service Funds 26,845

4,185,108

Water & Sewer Fund General Fund 7,480 Internal Service Funds 2,450 Nonmajor Enterprise Funds 516

10,446

Nonmajor Governmental Funds General Fund 30,776 Total 4,226,330$


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(7) Inter-fund transactions (continued) Due To / Due From (continued) 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. Transfers in / out Transfers in/out consist of the following at June 30, 2013:

In

Transfers out General Fund

Nonmajor Governmental Funds

Water Sewer Fund

Nonmajor Enterprise funds Total

General Fund -$ 2,119,513$ 45,971$ 124,208$ 2,289,692$

Developer Impact Fees Fund - 346,309 1,280,278 - 1,626,587

Nonmajor governmental funds 140,000 130,000 61,369 184,000 515,369

Nonmajor enterprise fund - - 3,955 - 3,955

Internal Service Fund 474,874 - 18,784 - 493,658

Fudiciary Fund 862,971 - - - 862,971

1,477,845$ 2,595,822$ 1,410,357$ 308,208$ 5,792,232$

Transfers occur because of the following reasons: First, transfers are used to move revenues from the fund 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.


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(8) Capital assets Capital asset activity for the fiscal year ended June 30, 2013, was as follows:

Beginning Transfers EndingBalance In/(Out) Increases Decreases Balance

Governmental Activities:Capital Assets, No Depreciation

Land 5,057,841$ -$ 201,403$ -$ 5,259,244$ Construction in Progress 6,892,105 (4,430,029) 10,326,879 - 12,788,955

Total Capital Assets, Not Depreciated 11,949,946 (4,430,029) 10,528,282 - 18,048,199

Capital Assets, Being DepreciatedBuildings 15,050,682 - 780,625 (176,168) 15,655,139 Improvements 25,789,265 4,430,029 6,437,182 (399,652) 36,256,824 Equipment and Machinery 7,075,324 (44,951) 358,982 (742,947) 6,646,408 Infrastructure 149,264,000 - - - 149,264,000

Total Capital Assets, Being Depreciated 197,179,271 4,385,078 7,576,789 (1,318,767) 207,822,371

Less Accumulated Depreciation for:Buildings (12,159,925) - (638,998) 176,168 (12,622,755) Improvements (13,141,868) - (1,978,258) 385,760 (14,734,366) Equipment and Machinery (5,427,293) 44,187 (577,271) 720,552 (5,239,825) Infrastructure (35,823,360) - (5,970,560) - (41,793,920)

Total Accumulated Depreciation (66,552,446) 44,187 (9,165,087) 1,282,480 (74,390,866)

Total Capital Assets, Being Depreciated, Net 130,626,825 4,429,265 (1,588,298) (36,287) 133,431,505

Governmental Activities Capital Assets, Net 142,576,771$ (764)$ 8,939,984$ (36,287)$ 151,479,704$

Beginning Transfers EndingBalance In/(Out) Increases Decreases Balance

Business-Type Activities:Capital Assets, No Depreciation

Land 3,183,749$ -$ -$ -$ 3,183,749$ Construction in Progress 13,979,425 (134,898) 6,088,611 - 19,933,138

Total Capital Assets, Not Depreciated 17,163,174 (134,898) 6,088,611 - 23,116,887

Capital Assets, Being DepreciatedBuildings 5,506,523 - - (63,373) 5,443,150 Improvements 59,534,977 134,898 413,889 - 60,083,764 Equipment and Machinery 15,423,307 44,951 21,982 (1,205,789) 14,284,451

Total Capital Assets, Being Depreciated 80,464,807 179,849 435,871 (1,269,162) 79,811,365

Less Accumulated Depreciation for:Buildings (4,143,444) - (123,951) 62,333 (4,205,062) Improvements (15,933,516) - (2,617,045) - (18,550,561) Equipment and Machinery (12,645,933) (44,187) (631,870) 1,186,594 (12,135,396)

Total Accumulated Depreciation (32,722,893) (44,187) (3,372,866) 1,248,927 (34,891,019)

Total Capital Assets, Being Depreciated, Net 47,741,914 135,662 (2,936,995) (20,235) 44,920,346

Business-Type Activities Capital Assets, Net 64,905,088$ 764$ 3,151,616$ (20,235)$ 68,037,233$


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(8) Capital assets (continued)

Beginning EndingBalance Increases Decreases Balance

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 (116,572) (4,286) - (120,858)

Fiduciary Activities Capital Assets, Net 42,855$ (4,286)$ -$ 38,569$

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

General government 197,690$ Public safety 602,190 Public works 7,486,684 Engineering services 407,110 Culture, recreation and social services 469,239 Community and economic development 2,174

Total 9,165,087$

Business-Type Activities:Water & Sewer 2,833,883$ Refuse 194,556 Airport 107,959 Transit 236,468

Total 3,372,866$

Fiduciary Activities - RDA Successor Agency:Community and economic development 4,286$

(9) Long-term debt

A recap of the long-term debt and their outstanding balances by activity as of June 30, 2013, follows:

Due WithinBeginning Ending Due Within More ThanBalance Additions Reductions Balance One Year One Year

Governmental Activities:Bonds payable:

Lease revenue bondsseries 2010A 25,860,000 - 920,000 24,940,000 940,000 24,000,000 Bond premium 36,103 - 2,006 34,097 2,006 32,091

Total bonds payable 25,896,103 - 922,006 24,974,097 942,006 24,032,091

Capital Lease obligation 68,610 - 68,610 - - -

Net OPEB obligation 1,005,247 388,063 83,287 1,310,023 - 1,310,023

Compensated absences payable 612,181 380,292 405,099 587,374 499,000 88,374

Governmental activitiesLong-term liability 27,582,141$ 768,355$ 1,479,002$ 26,871,494$ 1,441,006$ 25,430,488$


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(9) Long-term debt (continued)

Due WithinBeginning Ending Due Within More ThanBalance Additions Reductions Balance One Year One Year

Business-type Activities:Notes payable

LaSalle Bank - Water 209,657$ -$ 138,467$ 71,190$ 71,190$ -$ Chevron Energy Solutions - Water 2,595,764 - 333,626 2,262,138 354,084 1,908,054 Public Health - Water 6,913,210 7,261,951 - 14,175,161 - 14,175,161 State of California - Sewer 31,804,431 - 3,433,689 28,370,742 1,446,399 26,924,343

Total notes payable 41,523,062 7,261,951 3,905,782 44,879,231 1,871,673 43,007,558

Compensated absences payable 296,844 175,774 169,081 303,537 20,393 283,144

Business-type activitiesLong-term liability 41,819,906$ 7,437,725$ 4,074,863$ 45,182,768$ 1,892,066$ 43,290,702$

Beginning Ending Due Within More Than

Fiduciary Activities - Balance Additions Reductions Balance One Year One YearRDA Successor Agency:Bonds payable:

Tax allocation refunding 12,485,000$ -$ -$ 12,485,000$ -$ 12,485,000$ bonds series A

Tax allocation refundingbonds series B 2,155,000 - 260,000 1,895,000 275,000 1,620,000

Fiduciary ActivitiesLong-term liability 14,640,000$ -$ 260,000$ 14,380,000$ 275,000$ 14,105,000$

For the governmental activities: compensated absences, net pension obligation, and net other postemployment benefit obligation are generally liquidated by the general fund. 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 the 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, 2019. The outstanding balance as of June 30, 2013, was $12,485,000. Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total

2014 -$ 634,575$ 634,575$ 2015 - 634,575 634,575 2016 - 634,575 634,575 2017 - 634,575 634,575 2018 - 634,575 634,575

2019-2023 1,605,000 3,046,375 4,651,375 2024-2028 2,545,000 2,480,300 5,025,300 2029-2033 3,240,000 1,776,000 5,016,000 2034-2038 4,140,000 880,000 5,020,000

2039 955,000 47,750 1,002,750

12,485,000$ 11,403,300$ 23,888,300$


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(9) Long-term debt (continued)

Tax allocation refunding bonds (continued) 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, payments commenced September 1, 2003. Principal payment is due on September 1 each year. The outstanding balance as of June 30, 2013, was $1,895,000. Debt service payments to maturity are as follows: Year Ending June 30, Principal Interest Total

2014 275,000$ 105,827$ 380,827$ 2015 290,000 91,692 381,692 2016 305,000 75,278 380,278 2017 325,000 58,015 383,015 2018 340,000 39,620 379,620 2019 360,000 20,376 380,376

1,895,000$ 390,808$ 2,285,808$

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 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, payments commenced June 1, 2012. Principal payments are due on December first of each year. The outstanding balance as of June 30, 2013 was $24,940,000.


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(9) Long-term debt (continued) Lease revenue bonds (continued) Debt service requirements to maturity are as follows: Year Ending June 30, Principal Interest Total

2014 940,000$ 1,171,212$ 2,111,212$ 2015 970,000 1,140,138 2,110,138 2016 1,000,000 1,103,162 2,103,162 2017 1,040,000 1,062,363 2,102,363 2018 1,085,000 1,014,438 2,099,438

2019-2023 6,250,000 4,229,369 10,479,369 2024-2028 7,895,000 2,537,125 10,432,125 2029-2031 5,760,000 464,100 6,224,100

24,940,000$ 12,721,907$ 37,661,907$

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. Annual payments commenced on December 20, 2010. The city made their final payment toward the lease during the current fiscal year and the lease is now satisfied. Notes payable Old National Bank – Water

The Water Utility fund owes Old National Bank, formerly 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, 2013, was $71,190. Debt service amounts to maturity are as follows: Year Ending June 30, Principal Interest Total

2014 71,190$ 1,337$ 72,527$

71,190$ 1,337$ 72,527$


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(9) Long-term debt (continued) Notes payable (continued)

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, now PNC Bank, 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, 2013 the outstanding obligation was $2,262,138. Debt service amounts to maturity are as follows: Year Ending June 30, Principal Interest Total

2014 $354,084 90,610$ $444,6942015 382,956 75,107 458,063 2016 413,483 58,351 471,834 2017 445,750 40,270 486,020 2018 433,295 20,972 454,267 2019 232,570 4,352 236,922

2,262,138$ 289,662$ 2,551,800$

State of California Department of Public Health The City entered into a finance agreement with the State of California Dept of Public Health to finance the construction of a safe drinking water project for the amount of $20, 709,156. The agreement calls for no interest with principal payments starting December 1, 2014 and maturing December 2034. At June 30, 2013, outstanding draw downs on the agreement were $14,175,161. The debt service amortization disclosed below reflects the final amount of the agreement. During March 2013 the State amended the agreement with the City to increase the project cost by $3,000,000 which will be funded through grant revenues, the loan amount will remain the same. The construction project is expected to be completed by May 2014.


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(9) 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 $1,035,458 -$ $1,035,4582016 1,035,458 - 1,035,4582017 1,035,458 - 1,035,4582018 1,035,458 - 1,035,458

2019-2023 5,177,289 - 5,177,2892024-2028 5,177,289 - 5,177,2892029-2033 5,177,288 - 5,177,288

2034 1,035,458 - 1,035,458

$20,709,156 -$ $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. The construction project was completed during July, 2012. At the completion of project, the City accumulated $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 was forgiven resulting in $29,804,431 of notes payable to the State Water Board. Principal payments started January 01, 2013. As of June 30, 2013, the outstanding obligation was $28,370,742. 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, Principal Interest Total

2014 $1,446,399 283,707$ $1,730,1062015 1,460,862 269,243 1,730,1052016 1,475,471 254,635 1,730,1062017 1,490,226 239,880 1,730,1062018 1,505,128 224,978 1,730,106

2019-2023 7,754,443 896,087 8,650,5302024-2028 8,149,997 500,533 8,650,5302029-2031 5,088,216 102,102 5,190,318

$28,370,742 $2,771,165 $31,141,907


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(10) 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 the Statutory limits workers’ compensation per occurrence in excess of $5,000,000. The CSJVRMA is a consortium of fifty-four (54) cities in the San Joaquin Valley, California. It was created and operates under the provisions of section 6500-6515 of the California Government Code. 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, 2012 (most recent information available), are presented below:

Total Assets 101,409,059$ Total Liabilities 87,910,081

Net Assets 13,498,978$

Total Revenues 26,883,955$ Total Expenses 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:

Assessed Current YearFiscal Year Contributed (Refunded) to Provision for Claim City's

Ended June 30, by the City the City Claims Payments Fund Balance

Workers compensation:2013 613,006$ 85,289$ (461,938)$ (585,239)$ (1,544,199)$ 2012 742,436$ 244,675$ (195,755)$ (1,021,685)$ (1,195,317)$ 2011 677,520$ 35,195$ (602,633)$ (688,416)$ (964,988)$

Liability and property damage:2013 332,493$ (128,376)$ 146,605$ (457,157)$ 224,397$ 2012 372,639$ (144,059)$ (48,977)$ (225,083)$ 330,832$ 2011 372,059$ (131,800)$ (230,364)$ (66,489)$ 376,312$


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(11) 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 2011-1220 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, 2013, was comprised as follows:

2013

Active MembersVested (active members 100% vested) 76Non-vested (active members less than 100% vested) 62

Total Active Members 138

Retirees and Beneficiaries of Deceased 12Retirees Currently Receiving Benefits 60Terminated Members Entitled to but Not Yet

Receiving Benefits 82

Total 292

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. 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.


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(11) Employees retirement system (continued)

A. City of Delano Employees Pension Plan (continued)

Pension benefits (continued) 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 2011-1220 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, 2013, the annual required contribution to the Plan by the City was determined at 31.640% of covered payroll. Contributions aggregating $1,837,626 were made in fiscal year 2013, which were at 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 position. 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. Funding status and progress As of June 30, 2013, the most recent actuarial valuation date, the Plan was 62.39% funded. The actuarial accrued liability for benefits was $35,920,288 and the actuarial value of assets was $22,412,259, resulting in an unfunded actuarial accrued liability (UAAL) of $13,508,029. The covered payroll as of June 30, 2013 valuation was $6,271,116. The ratio of UAAL to the covered payroll was 215.40%. 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 on the following page presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits.


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A. City of Delano Employees Pension Plan (continued) Funding Status and Progress (continued)

( 2 )

Actuarial( 1 ) Accrued ( 3 ) ( 4 ) ( 5 )

Fiscal Year Actuarial Liability (AAL) Funded Unfunded Annual ( 6 )Ending Value of Projected Rates (%) AAL (UAAL) Covered UAAL (%)

June 30, Assets Unit Credit (1)/(2) (2)-(1) Payroll (4)/(5)

2013 22,412,259$ 35,920,288$ 62.39% 13,508,029$ 6,271,116$ 215.40%2012 22,869,464$ 35,090,044$ 65.17% 12,220,580$ 6,360,344$ 192.14%2011 23,208,657$ 33,978,297$ 68.30% 10,769,640$ 8,052,394$ 133.74%

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. 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:

ContributionRate

Management (including police management 9.0%Safety/Police (prior to July 1, 2005) 7.4%General 6.2%


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Contributions (continued)

The City makes the above contribution on behalf of its employees based on the participants’ basic earnings, years of service, and job classification, except educational, incentive or longevity pay, which is excluded from the participant’s basic earnings. Participant accounts are credited interest earnings from the investment return of the trust fund. Effective June 1, 2013, all Management members hired prior to January 1, 2013 will contribute 3% of the employee’s cost of the existing retirement plan, and all unit members hired on or after January 1, 2013 will contribute 9% or 50% of normal cost, whichever is greater. Effective December 29, 2012, all General members not contributing shall be required to pay 3% of their base pay towards retirement. All General unit members currently paying 6.2% of their base pay towards retirement will continue to pay 6.2% until their 5th year of service. The first pay period 5 years after their hire date, General unit members shall be required to pay 3% of their base pay towards retirement. Newly hired General unit members on or after January 1, 2013 shall be required to pay 6.2% or 50% of normal cost, whichever is greater. 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:

Annual Fiscal Required Percentage Net PensionYear Contribution Contributed Obligation

6/30/2013 2,012,427$ 100% - 6/30/2012 1,900,778$ 100% - 6/30/2011 2,039,716$ 100% -

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 types of benefits provided at the time each valuation and 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


78



Actuarial methods and assumptions (continued) methods and significant assumptions used in the valuation year of June 30, 2012 are summarized in this note to conform to the disclosure requirements for GASB No. 50. Valuation date June 30, 2013

Actuarial cost method Modified entry age normal cost

Amortization method Level percent of payroll, open

Remaining amortization period Actuarial gains/losses are amortized over 20 years, open.

Asset valuation method Market value

Actuarial assumptions:

Investment rate of return * 7.50% 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 ScaleAA for mortality improvement from 1994 to 1999.

Retirement age Assumed average retirement age is 62; normalretirement age is 60.

B. 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.


79


B. CalPERS (continued) 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 year 2012-13 was 33.557% 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. Annual pension cost For fiscal year 2012-13, the estimated City’s annual pension cost was $1,024,722 and the City actually contributed $1,024,722. 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: Actuarial Valuation

Valuation date 6/30/2010

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%.


80


B. CalPERS (continued) As of June 30, 2010, the City’s Safety Police Plan membership consists of 46 active, 11 transferred, 3 separated, and 7 retired. Three-Year Trend Information for the City's Safety Plan:

Fiscal Year Annual Pension Percentage of Net Pension

Ending Cost (APC) APC Contributed Obligation6/30/2013 1,024,722$ 100.00% -$ 6/30/2012 997,786 100.00% - 6/30/2011 789,495 100.00% -

Funded Status and Funding Progress The funded status of the Risk Pool as of June 30, 2013, the most recent actuarial valuation is as follows:

Actuarial Unfunded UAAL asActuarial Actuarial Accrued (Excess a % ofValuation Value of Liability (AAL) Assets) AAL Funded Covered Covered

Date Assets Entry Age (UAAL) Ratio Payroll Payroll

6/30/11 421,374,728$ 503,491,275$ 82,116,547$ 83.7% 63,392,685$ 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.

(12) 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.


81

(12) Other Post Employment Benefits (OPEB) (continued)

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 2012-13, the City’s annual OPEB cost was $415,410. 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, 2013, were as follows:

Annual required contribution 385,253$ Interest on net OPEB obligation 75,394 Amortization of the ARC (72,584)

Annual OPEB cost 388,063 Contributions made (83,287)

Increase in net OPEB obligation 304,776

Net OPEB obligation - beginning of year 1,005,247

Net OPEB obligation - end of year 1,310,023$

Annual Actual Percentage of Net Ending

Year Ended OPEB Employer Annual OPEB Cost OPEBJune 30, Cost Contributions Contributed Obligation (Asset)

2013 388,063$ 83,287$ 21.5% 1,310,023$ 2012 442,067 79,179 17.9% 1,005,247 2011 298,607 53,578 17.9% 642,359

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 pay-as-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 2012-13, the City contributed $83,287 to the OPEB. As of June 30, 2013, the most recent actuarial valuation date, the actuarial accrued liability for benefits was $ 1,318,247, all of which was unfunded.


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(12) Other Post Employment Benefits (OPEB) (continued)

Funding policy, funded status, funding progress (continued) 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. 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 7.5% 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 2008 to 2012 has been 5.1%. 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% future annual increase in health care benefits. The actuarial report therefore provides an alternative medical trend analysis with the rate of 8% per year to observe the reduction in the funding requirement from the assumed rate of 6% per year.

(13) 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.


83

(13) Contingent liabilities and commitments (continued) 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. Construction commitments Construction activity at year end includes the Arsenic Mitigation Project and the Police Station Project. Open Contracts on these projects could not be reasonably estimated as of yearend.

(14) 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. 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. 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. 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, 2006, and 2012 Certificates. Accordingly, the Certificates are not reported as liabilities in the accompanying financial statements.


84

(15) Prior period adjustment The City implemented GASB Statement No. 65 Items Previously Reported as Assets and Liabilities and in conformance with this new guidance, all unamortized debt issuance costs previously recorded as other assets were written off to expense as of June 30, 2012. This prior period adjustment resulted in a direct adjustment to the beginning balance of net position as shown in the following table:

Private Purpose

Trust Fund CRA Governmental

Successor Agency Activities

Net position (deficit), June 30, 2012, as previously reported (2,769,804)$ 162,848,457$ Less: Write off unamortized debt-issuance costs (2,242,580) (465,725)

Net position (deficit), June 30, 2012, as restated (5,012,384)$ 162,382,732$

(16) Subsequent Events

The City’s Police Station construction project is materially complete and is expected to open in January of 2014. The City finalized negotiations in December 2013 with the State of California for a contract to house state prisoners in the currently non-operated correctional facility owned by the City. The City anticipates opening the facility in January of 2014.

REQUIRED SUPPLEMENTARY INFORMATION

CITY OF DELANO SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES

IN FUND BALANCES – BUDGET AND ACTUAL GENERAL FUND


86

Variance withFinal Budget -

PositiveOriginal Final Actual (Negative)

REVENUES:Property taxes 2,099,300$ 2,099,300$ 3,036,844$ 937,544$ Sales taxes 7,351,700 7,351,700 9,483,851 2,132,151 Franchise taxes 540,000 540,000 608,307 68,307 Motor vehicle in lieu tax 3,625,000 3,625,000 3,389,477 (235,523) Other taxes 488,100 488,100 650,545 162,445 Fees and fines 105,700 105,700 109,421 3,721 Licenses and permits 118,100 118,100 322,518 204,418 Intergovemental 1,986,700 1,986,700 1,849,188 (137,512) Charges for services 119,700 119,700 187,901 68,201 Investment earnings 120,000 120,000 (87,190) (207,190) Miscellaneous 40,000 40,000 875,319 835,319

Total revenues 16,594,300 16,594,300 20,426,181 3,831,881


General government 3,547,950 3,547,950 3,119,343 428,607 Public safety 11,162,210 11,162,210 10,856,248 305,962 Engineering services 284,230 284,230 263,451 20,779 Culture and recreation 1,802,990 1,802,990 1,690,253 112,737

Debt servicePrincipal 68,610 68,610 68,610 - Interest 4,660 4,660 4,656 4

Capital outlayGeneral government - - 199,540 (199,540) Public safety 37,950 37,950 38,876 (926) Public works 750 750 - 750 Culture and recreation 28,100 28,100 20,360 7,740

Total expenditures 16,937,450 16,937,450 16,261,337 676,113

Excess (deficiency) of revenues over expenditures (343,150) (343,150) 4,164,844 4,507,994

OTHER FINANCING SOURCES (USES):Transfers in 607,850 607,850 1,477,845 869,995 Transfers out (2,296,540) (2,296,540) (2,289,692) 6,848

Total other financing sources and uses (1,688,690) (1,688,690) (811,847) 876,843

Net change in fund balances (2,031,840) (2,031,840) 3,352,997 5,384,837

Fund balances, beginning 7,162,948 7,162,948 7,162,948 -

Fund balances, ending 5,131,108$ 5,131,108$ 10,515,945$ 5,384,837$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL DEVELOPER IMPACT FEES FUND


87



REVENUES:Charges for services 535,000$ 535,000$ 3,984,581$ 3,449,581$ Investment earnings 52,700 52,700 (71,019) (123,719) Other taxes - - 973 973

Total revenue 587,700 587,700 3,914,535 3,326,835


General government - - 16,977 (16,977) Public safety - - 465 (465) Public works - - 465 (465) Culture and recreation - - 560 (560)

Capital outlay 418,122 418,122 34,174 383,948

Total expenditures 418,122 418,122 52,641 365,481

Excess of revenues over expenditures 169,578 169,578 3,861,894 3,692,316

OTHER FINANCING SOURCES (USES):Transfers out (1,292,400) (1,292,400) (1,626,587) (334,187)

Total other financing sources and uses (1,292,400) (1,292,400) (1,626,587) (334,187)

Net change in fund balances (1,122,822) (1,122,822) 2,235,307 3,358,129


Fund balances, ending 9,195,811$ 9,195,811$ 12,553,940$ 3,358,129$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL CAPITAL PROJECTS 2010A


88



REVENUES:Investment earnings 35,000$ 35,000$ 72,618$ 37,618$

Total revenue 35,000 35,000 72,618 37,618


Capital outlayGeneral government 9,382,364 9,382,364 4,525,081 4,857,283 Public safety 15,198,541 15,198,541 9,787,532 5,411,009

Total expenditures 24,580,905 24,580,905 14,312,613 10,268,292

Net change in fund balances (24,545,905) (24,545,905) (14,239,995) 10,305,910


Fund balances, ending (2,265,931)$ (2,265,931)$ 8,039,979$ (10,305,910)$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL GAS TAX FUND


89



REVENUES:Sales taxes 1,438,369$ 1,438,369$ 1,198,783$ (239,586)$ Investment earnings 5,000 5,000 2,046 (2,954) Miscellaneous - - 189 189

Total revenues 1,443,369 1,443,369 1,201,018 (242,351)


General government 70,000 70,000 41,966 28,034 Public safety 400 400 - 400 Public works 1,254,480 1,254,480 1,275,270 (20,790)

Capital outlayPublic works 98,332 98,332 112,395 (14,063)

Total expenditures 1,423,212 1,423,212 1,429,631 (6,419)

Excess (deficiency) of revenues over expenditures 20,157 20,157 (228,613) (248,770)

OTHER FINANCING SOURCES (USES):Transfers in 130,000 130,000 130,000 - Transfers out (184,000) (184,000) (184,000) -

Total other financing sources and uses (54,000) (54,000) (54,000) -

Net change in fund balances (33,843) (33,843) (282,613) (248,770)

Fund balances, beginning 602,478 602,478 602,478 -

Fund balances, ending 568,635$ 568,635$ 319,865$ (248,770)$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL TDA STREETS FUND


90



REVENUES:Program income 564,000$ 564,000$ 571,001$ 7,001$ Investment earnings - - 956 956

Total revenues 564,000 564,000 571,957 7,957


Public works 4,000 4,000 4,484 (484) Capital outlay

Public works 455,000 455,000 460,199 (5,199)

Total expenditures 459,000 459,000 464,683 (5,683)

Excess (deficiency) of revenues over expenditures 105,000 105,000 107,274 2,274

OTHER FINANCING SOURCES (USES):Transfers out (130,000) (130,000) (130,000) -


Net change in fund balances (25,000) (25,000) (22,726) 2,274


Fund balances, ending 324,887$ 324,887$ 327,161$ 2,274$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL SLESF FUND


91



REVENUES:Program income 100,000$ 100,000$ 100,000$ -$ Investment earnings - - (27) (27)

Total revenues 100,000 100,000 99,973 (27)


Public safety - - 21 (21)

Total expenditures - - 21 (21)

Excess (deficiency) of revenues over expenditures 100,000 100,000 99,952 (48)



Net change in fund balances - - (48) (48)


Fund balances, ending 5,285$ 5,285$ 5,237$ (48)$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL ECONOMIC DEVELOPMENT BLOCK GRANT FUND


92



REVENUES:Program income -$ -$ 28,250$ 28,250$

Total revenues - - 28,250 28,250


General government 76,450 76,450 114,058 (37,608)

Total expenditures 76,450 76,450 114,058 (37,608)

Excess (deficiency) of revenues over expenditures (76,450) (76,450) (85,808) (9,358)


Fund balances, beginning 959 959 959 -

Fund balances, ending (75,491)$ (75,491)$ (84,849)$ (9,358)$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL SENIOR CITIZENS NUTRITION FUND


93



REVENUES:Intergovemental 216,564$ 216,564$ 188,284$ (28,280)$ Program income 32,000 32,000 31,400 (600) Miscellaneous 200 200 204 4

Total revenues 248,764 248,764 219,888 (28,876)


Culture and recreation 270,365 270,365 263,821 6,544


Excess (deficiency) of revenues over expenditures (21,601) (21,601) (43,933) (22,332)



Fund balances, ending (13,958)$ (13,958)$ (36,290)$ (22,332)$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL LANDSCAPE MAINTENANCE DISTRICTS FUND


94



REVENUES:Motor vehicle in lieu tax 248,030$ 248,030$ 238,235$ (9,795)$ Investment earnings 1,000 1,000 852 (148) Miscellaneous 1,200 1,200 - (1,200)

Total revenues 250,230 250,230 239,087 (11,143)


Public works 285,520 285,520 184,757 100,763


Excess (deficiency) of revenues over expenditures (35,290) (35,290) 54,330 89,620



Net change in fund balances (85,290) (85,290) 4,330 89,620



Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL ASSET SEIZURE FUND


95



REVENUES:Asset seizure revenue 4,500$ 4,500$ 5,010$ 510$ Investment earnings - - 32 32

Total revenues 4,500 4,500 5,042 542


Public safety 4,500 4,500 3,639 861

Total expenditures 4,500 4,500 3,639 861

Excess (deficiency) of revenues over expenditures - - 1,403 1,403

Net change in fund balances - - 1,403 1,403

Fund balances, beginning (1,660) (1,660) (1,660) -

Fund balances, ending (1,660)$ (1,660)$ (257)$ 1,403$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL MISCELLANEOUS FUND


96



REVENUES:Intergovemental 896,436$ 896,436$ 734,946$ (161,490)$ Program income - 80,000 7,883 (72,117) Investment earnings - - 860 860 Miscellaneous - - 100 100

Total revenues 896,436 976,436 743,789 (232,647)


General government 143,100 971,720 363,775 607,945 Capital outlay

General government 1,722,556 1,722,556 626,766 1,095,790

Total expenditures 1,865,656 2,694,276 990,541 1,703,735

Excess (deficiency) of revenues over expenditures (969,220) (1,717,840) (246,752) 1,471,088

Net change in fund balances - - (246,752) -


Fund balances, ending 182,435$ 182,435$ (64,317)$ -$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL SEMS FUND


97



REVENUES:Investment earnings -$ -$ 168$ 168$ Miscellaneous 19,790 19,790 14,440 (5,350)

Total revenues 19,790 19,790 14,608 (5,182)


Public safety 19,900 19,900 4,764 15,136 Debt service

Interest - - 64 (64)


Excess (deficiency) of revenues over expenditures (110) (110) 9,780 9,890

Net change in fund balances (110) (110) 9,780 9,890



Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL TRAFFIC SAFETY FUND


98



REVENUES:Fees and fines 152,000$ 152,000$ 130,225$ (21,775)$ Investment earnings - - 927 927

Total revenues 152,000 152,000 131,152 (20,848)


Public works 70,000 70,000 32,325 37,675 Culture and recreation 105,000 105,000 101,640 3,360

Capital outlayPublic safety 70,000 70,000 53,207 16,793


Excess (deficiency) of revenues over expenditures (93,000) (93,000) (56,020) 36,980



Net change in fund balances (133,000) (133,000) (96,020) 36,980



Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL SPECIAL REVENUE GRANT FUND


99



REVENUES:Intergovemental 2,361,943$ 2,361,943$ 594,350$ (1,767,593)$ Miscellaneous - - 306,541 306,541

Total revenues 2,361,943 2,361,943 900,891 (1,461,052)


General government (37,074) (37,074) 7,267 (44,341) Public safety 977,558 977,558 389,586 587,972 Community and economic development 324,514 324,514 129,698 194,816

Capital outlayGeneral government - - - - Public works 1,369,058 1,369,058 254,891 1,114,167

Total expenditures 2,634,056 2,634,056 781,442 1,852,614


OTHER FINANCING SOURCES (USES):Transfers in 5,000 5,000 5,000 -

Total other financing sources and uses 5,000 5,000 5,000 -


Fund balances, beginning (24,731) (24,731) (24,731) -

Fund balances, ending (291,844)$ (291,844)$ 99,718$ 391,562$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL FIRST TIME HOMEBUYERS PROGRAM FUND


100



REVENUES:Intergovemental 400,000$ 400,000$ 2,865$ (397,135)$ Program income - - 2,000 2,000 Investment earnings - - 122 122

Total revenues 400,000 400,000 4,987 (395,013)


Community and economic development - - 57 (57)

Total expenditures - - 57 (57)

Excess (deficiency) of revenues over expenditures 400,000 400,000 4,930 (395,070)

Net change in fund balances 400,000 400,000 4,930 (395,070)


Fund balances, ending 442,980$ 442,980$ 47,910$ (395,070)$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL DELANO HOUSING AUTHORITY FUND


101



REVENUES:Investment earnings -$ -$ 117,576$ 117,576$ Miscellaneous 202,100 202,100 - (202,100)

Total revenues 202,100 202,100 117,576 (84,524)


General government 189,600 189,600 1,157,471 (967,871)

Total expenditures 189,600 189,600 1,157,471 (967,871)

Excess (deficiency) of revenues over expenditures 12,500 12,500 (1,039,895) (1,052,395)

Net change in fund balances 12,500 12,500 (1,039,895) (1,052,395)


Fund balances, ending 2,334,414$ 2,334,414$ 1,282,019$ (1,052,395)$

Budgeted Amounts


IN FUND BALANCES – BUDGET AND ACTUAL DEBT SERVICE FUND


102



REVENUES:Investment earnings 22,300$ 22,300$ 37,818$ 15,518$

Total revenues 22,300 22,300 37,818 15,518


General government 22,400 22,400 3,212 19,188 Debt service

Principal 920,000 920,000 920,000 - Interest 1,194,520 1,194,520 1,194,513 7

Total expenditures 2,136,920 2,136,920 2,117,725 19,195

Excess (deficiency) of revenues over expenditures (2,114,620) (2,114,620) (2,079,907) 34,713

OTHER FINANCING SOURCES (USES):Transfers in 2,131,920 2,131,920 2,114,513 (17,407)

Total other financing sources and uses 2,131,920 2,131,920 2,114,513 (17,407)

Net change in fund balances 17,300 17,300 34,606 17,306


Fund balances, ending 1,515,370$ 1,515,370$ 1,532,676$ 17,306$

Budgeted Amounts

CITY OF DELANO REQUIRED SUPPLEMENTARY INFORMATION


103

Defined Benefit Pension Trust Schedule of Funding Status and Progress

Actuarial UAAL asActuarial Accrued Unfunded Percentage

Actuarial Value of Liability (AAL) AAL Funded Covered of CoveredValuation Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b)-(a) (a/b) (c) ((b-a)/c)2013 22,412,259$ 35,920,288$ 62.39% 12,220,580$ 6,271,116$ 194.87%2012 22,869,464$ 35,090,044$ 65.17% 12,220,580$ 6,360,344$ 192.14%2011 23,208,657$ 33,978,297$ 68.30% 10,769,640$ 8,052,394$ 133.74%

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

Actuarial UAAL asActuarial Accrued Unfunded Percentage

Actuarial Value of Liability (AAL) AAL Funded Covered of CoveredValuation Assets Entry Age (UAAL) Ratio Payroll Payroll

Date (a) (b) (b)-(a) (a/b) (c) ((b-a)/c)6/30/2013 -$ 1,318,247$ 1,318,247$ 0% N/A N/A6/30/2011 -$ 1,809,122$ 1,809,122$ 0% N/A N/A6/30/2010 -$ 1,171,649$ 1,171,649$ 0% N/A N/A

SUPPLEMENTARY INFORMATION

COMBINING STATEMENTS NON-MAJOR FUNDS AND AGENCY FUNDS

CITY OF DELANO EXPLANATION OF NON-MAJOR GOVERNMENTAL FUNDS

105

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 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 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.


106

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) - 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.


107

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 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.

CITY OF DELANO COMBINING BALANCE SHEET

NON-MAJOR FUNDS GOVERNMENTAL FUNDS

June 30, 2013

108

Special Debt CapitalRevenue Service Projects

Funds Funds Fund TotalsASSETSCash and investments 2,343,702$ 12,269$ 588,901$ 2,944,872$ Cash with fiscal agents - 2,146,154 - 2,146,154 Receivables:

Accounts 158,894 - - 158,894 Intergovernmental 151,491 - 134,510 286,001

Due from other funds 30,776 - - 30,776 Inventories 21,569 - - 21,569

Notes and loans receivable, net 848,000 - - 848,000 Advances to other funds 320,860 - - 320,860

Total assets 3,875,292$ 2,158,423$ 723,411$ 6,757,126$

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable 446,867$ -$ 714,480$ 1,161,347$ Other accrued expenses 45,614 - - 45,614 Due to other funds 462,175 613,476 - 1,075,651 Deposits payable 10,370 - - 10,370

Total liabilities 965,026 613,476 714,480 2,292,982

Fund Balances:Restricted 3,222,328 1,544,947 8,931 4,776,206 Unassigned (312,062) - - (312,062)

Total fund balances 2,910,266 1,544,947 8,931 4,464,144

Total liabilities and fund balances 3,875,292$ 2,158,423$ 723,411$ 6,757,126$

CITY OF DELANO COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND

CHANGES IN FUND BALANCES NON-MAJOR FUNDS

GOVERNMENTAL FUNDS For the Fiscal Year Ended June 30, 2013

109

Special Debt CapitalRevenue Service ProjectsFunds Funds Fund Totals

REVENUES:Sales taxes 1,198,783$ -$ -$ 1,198,783$ Motor fuel tax 238,235 - - 238,235 Fees and fines 130,225 - - 130,225 Intergovemental 2,191,446 16,000 925,726 3,133,172 Program income 73,367 - - 73,367 Asset seizure revenue 5,010 - - 5,010 Investment earnings 126,046 37,856 2,622 166,524 Miscellaneous 321,758 - 1,500,000 1,821,758

Total revenues 4,284,870 53,856 2,428,348 6,767,074


General government 1,685,300 6,981 - 1,692,281 Public safety 556,609 - - 556,609 Public works 1,496,836 - - 1,496,836 Culture and recreation 365,461 - - 365,461 Community and economic development 129,787 - - 129,787

Debt servicePrincipal - 920,000 - 920,000 Interest 64 1,194,513 - 1,194,577

Capital outlayGeneral government 863,177 - 52,832 916,009 Public safety 71,687 - - 71,687 Public works 572,594 - 17,060 589,654 Culture and recreation - - 2,351 2,351 Community and economic development - - 1,627,167 1,627,167

Total expenditures 5,741,515 2,121,494 1,699,410 9,562,419

Excess (deficiency) of revenues over expenditures (1,456,645) (2,067,638) 728,938 (2,795,345)

OTHER FINANCING SOURCES (USES):Transfers in 135,000 2,114,513 346,309 2,595,822 Transfers out (515,369) - - (515,369)

Total other financing sources and uses (380,369) 2,114,513 346,309 2,080,453

Net change in fund balances (1,837,014) 46,875 1,075,247 (714,892)

Fund balances, beginning 4,747,280 1,498,072 (1,066,316) 5,179,036

Fund balances, ending 2,910,266$ 1,544,947$ 8,931$ 4,464,144$


NON-MAJOR SPECIAL REVENUE FUNDS June 30, 2013

110

Housing/Gas Tax TDA Streets SLESF HODAG

Fund Fund Fund FundASSETSCash and investments 412,775$ 527,119$ 5,237$ 99$ Receivables:

Accounts - - - - Intergovernmental - - - -

Due from other funds - - - - Inventories - - - - Notes and loans receivable, net - - - - Advances to other funds - - - -

Total assets 412,775$ 527,119$ 5,237$ 99$

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable 73,990$ 199,958$ -$ -$ Other accrued expenses 18,920 - - - Due to other funds - - - - Deposits payable - - - -

Total liabilities 92,910 199,958 - -

Fund Balances:Restricted 319,865 327,161 5,237 99 Unassigned - - - -

Total fund balances 319,865 327,161 5,237 99

Total liabilities and fund balances 412,775$ 527,119$ 5,237$ 99$


NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED) June 30, 2013

111

Economic Senior Citizens LandscapeDevelopment Nutrition Maintenance CDBGBlock Grant Fund Districts Fund

ASSETSCash and investments -$ -$ 228,288$ 133,356$ Receivables:

Accounts - 37,186 - - Intergovernmental - - - -


Total assets -$ 37,186$ 228,288$ 133,356

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable 19$ 3,057$ 17,402$ -$ Other accrued expenses 5,494 6,694 1,046 - Due to other funds 79,336 63,725 - - Deposits payable - - - -

Total liabilities 84,849 73,476 18,448 -

Fund Balances:Restricted - - 209,840 133,356 Unassigned (84,849) (36,290) - -

Total fund balances (84,849) (36,290) 209,840 133,356

Total liabilities and fund balances -$ 37,186$ 228,288$ 133,356$



112

Inmate Asset CCF EquipmentWelfare Seizure Replacement Miscellaneous

Fund Fund Fund FundASSETSCash and investments 27,080$ 9,713$ 126,515$ 75,650$ Receivables:

Accounts 503 400 - 103,215 Intergovernmental - - - -

Due from other funds 30,776 - - - Inventories 21,569 - - - Notes and loans receivable, net - - - - Advances to other funds - - - -

Total assets 79,928$ 10,113$ 126,515$ 178,865$

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable -$ -$ -$ 134,848$ Other accrued expenses - - - 869 Due to other funds 56,021 - - 107,465 Deposits payable - 10,370 - -

Total liabilities 56,021 10,370 - 243,182

Fund Balances:Restricted 23,907 - 126,515 - Unassigned - (257) - (64,317)

Total fund balances 23,907 (257) 126,515 (64,317)

Total liabilities and fund balances 79,928$ 10,113$ 126,515$ 178,865$



113

Traffic RTC/COPSEMS Safety ConstructionFund Fund Fund

ASSETSCash and investments 48,790$ 163,973$ 416,690$ -$ Receivables:

Accounts - 17,590 - - Intergovernmental - - - 151,491


Total assets 48,790$ 181,563$ 416,690$ 151,491$

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable 342$ -$ -$ 10,229$ Other accrued expenses - - - 12,591 Due to other funds - - - 28,953 Deposits payable - - - -

Total liabilities 342 - - 51,773

Fund Balances:Restricted 48,448 181,563 416,690 99,718 Unassigned - - - -

Total fund balances 48,448 181,563 416,690 99,718

Total liabilities and fund balances 48,790$ 181,563$ 416,690$ 151,491$

Special Revenue

Grant Fund



114

Delano Non-MajorCCF First Time Housing Special RevenueFund Homebuyers Authority Funds

ASSETSCash and investments -$ 47,910$ 120,507$ 2,343,702$ Receivables:

Accounts - - - 158,894 Intergovernmental - - - 151,491

Due from other funds - - - 30,776 Inventories - - - 21,569 Notes and loans receivable, net - - 848,000 848,000 Advances to other funds - - 320,860 320,860

Total assets -$ 47,910$ 1,289,367$ 3,875,292$

LIABILITIES AND FUND BALANCESLiabilities:Accounts payable -$ -$ 7,022$ 446,867$ Other accrued expenses - - - 45,614 Due to other funds 126,349 - 326 462,175 Deposits payable - - - 10,370

Total liabilities 126,349 - 7,348 965,026

Fund Balances:Restricted - 47,910 1,282,019 3,222,328 Unassigned (126,349) - - (312,062)

Total fund balances (126,349) 47,910 1,282,019 2,910,266

Total liabilities and fund balances -$ 47,910$ 1,289,367$ 3,875,292$


CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS For the Fiscal Year Ended June 30, 2013

115

Housing/Gas Tax TDA Streets SLESF HODAG

Fund Fund Fund FundREVENUES:

Sales taxes 1,198,783$ -$ -$ -$ Motor fuel tax - - - - Fees and fines - - - - Intergovemental - 571,001 100,000 - Program income - - - - Asset seizure revenue - - - - Investment earnings 2,046 956 (27) - Miscellaneous 189 - - -

Total revenues 1,201,018 571,957 99,973 -


General government 41,966 - - - Public safety - - 21 - Public works 1,275,270 4,484 - - Culture and recreation - - - - Community and economic development - - - -

Debt serviceInterest - - - -

Capital outlayGeneral government - - - - Public safety - - - - Public works 112,395 460,199 - -

Total expenditures 1,429,631 464,683 21 -

Excess (deficiency) of revenues over expenditures (228,613) 107,274 99,952 -

OTHER FINANCING SOURCES (USES):Transfers in 130,000 - - - Transfers out (184,000) (130,000) (100,000) -


Net change in fund balances (282,613) (22,726) (48) -

Fund balances, beginning 602,478 349,887 5,285 99

Fund balances, ending 319,865$ 327,161$ 5,237$ 99$


CHANGES IN FUND BALANCES NON-MAJOR SPECIAL REVENUE FUNDS (CONTINUED)


116

Economic Senior Citizens LandscapeDevelopment Nutrition Maintenance CDBGBlock Grant Fund Districts Fund

REVENUES:Sales taxes -$ -$ -$ -$ Motor fuel tax - - 238,235 - Fees and fines - - - - Intergovemental - 188,284 - - Program income 28,250 31,400 - 3,834 Asset seizure revenue - - - - Investment earnings - - 852 505 Miscellaneous - 204 - -

Total revenues 28,250 219,888 239,087 4,339


General government 114,058 - - 160 Public safety - - - - Public works - - 184,757 - Culture and recreation - 263,821 - - Community and economic development - - - 32


Capital outlayGeneral government - - - - Public safety - - - - Public works - - - -

Total expenditures 114,058 263,821 184,757 192


OTHER FINANCING SOURCES (USES):Transfers in - - - - Transfers out - - (50,000) -

Total other financing sources and uses - - (50,000) -


Fund balances, beginning 959 7,643 205,510 129,209

Fund balances, ending (84,849)$ (36,290)$ 209,840$ 133,356$




117

Inmate Asset CCF EquipmentWelfare Seizure Replacement Miscellaneous

Fund Fund Fund FundREVENUES:

Sales taxes -$ -$ -$ -$ Motor fuel tax - - - - Fees and fines - - - - Intergovemental - - - 734,946 Program income - - - 7,883 Asset seizure revenue - 5,010 - - Investment earnings - 32 467 860 Miscellaneous 21 - - 100

Total revenues 21 5,042 467 743,789


General government - - - 363,775 Public safety 265 3,639 183 - Public works - - - - Culture and recreation - - - - Community and economic development - - - -


Capital outlayGeneral government - - - 626,766 Public safety - - - - Public works - - - -

Total expenditures 265 3,639 183 990,541

Excess (deficiency) of revenues over expenditures (244) 1,403 284 (246,752)

OTHER FINANCING SOURCES (USES):Transfers in - - - - Transfers out - - - -

Total other financing sources and uses - - - -

Net change in fund balances (244) 1,403 284 (246,752)

Fund balances, beginning 24,151 (1,660) 126,231 182,435

Fund balances, ending 23,907$ (257)$ 126,515$ (64,317)$




118

Traffic RTC/COPSEMS Safety ConstructionFund Fund Fund

REVENUES:Sales taxes -$ -$ -$ -$ Motor fuel tax - - - - Fees and fines - 130,225 - - Intergovemental - - - 594,350 Program income - - - - Asset seizure revenue - - - - Investment earnings 168 927 1,562 - Miscellaneous 14,440 - - 306,541

Total revenues 14,608 131,152 1,562 900,891


General government - - 603 7,267 Public safety 4,764 - - 389,586 Public works - 32,325 - - Culture and recreation - 101,640 - - Community and economic development - - - 129,698

Debt serviceInterest 64 - - -

Capital outlayGeneral government - - - 236,411 Public safety - 53,207 - 18,480 Public works - - - -

Total expenditures 4,828 187,172 603 781,442

Excess (deficiency) of revenues over expenditures 9,780 (56,020) 959 119,449

OTHER FINANCING SOURCES (USES):Transfers in - - - 5,000 Transfers out - (40,000) - -

Total other financing sources and uses - (40,000) - 5,000

Net change in fund balances 9,780 (96,020) 959 124,449

Fund balances, beginning 38,668 277,583 415,731 (24,731)


Special Revenue

Grant Fund




119

First Time Delano Non-Major

CCF Home Buyers Housing Special RevenueFund Program Fund Authority Funds

REVENUES:Sales taxes -$ -$ -$ 1,198,783$ Motor fuel tax - - - 238,235 Fees and fines - - - 130,225 Intergovemental - 2,865 - 2,191,446 Program income - 2,000 - 73,367 Asset seizure revenue - - - 5,010 Investment earnings - 122 117,576 126,046 Miscellaneous 263 - - 321,758

Total revenues 263 4,987 117,576 4,284,870


General government - - 1,157,471 1,685,300 Public safety 158,151 - - 556,609 Public works - - - 1,496,836 Culture and recreation - - - 365,461 Community and economic development - 57 - 129,787

Debt serviceInterest - - - 64

Capital outlayGeneral government - - - 863,177 Public safety - - - 71,687 Public works - - - 572,594

Total expenditures 158,151 57 1,157,471 5,741,515

Excess (deficiency) of revenues over expenditures (157,888) 4,930 (1,039,895) (1,456,645)

OTHER FINANCING SOURCES (USES):Transfers in - - - 135,000 Transfers out (11,369) - - (515,369)

Total other financing sources and uses (11,369) - - (380,369)

Net change in fund balances (169,257) 4,930 (1,039,895) (1,837,014)

Fund balances, beginning 42,908 42,980 2,321,914 4,747,280

Fund balances, ending (126,349)$ 47,910$ 1,282,019$ 2,910,266$


NON-MAJOR DEBT SERVICE FUNDS June 30, 2013

120

Delano TotalFinancing Debt Non-MajorAuthority Service Debt Service

Fund Fund FundsASSETSCash and investments 12,269$ -$ 12,269$ Cash with fiscal agents 2 2,146,152 2,146,154

Total assets 12,271$ 2,146,152$ 2,158,423$

LIABILITIES AND FUND BALANCESLiabilities:Due to other funds -$ 613,476$ 613,476$

Total liabilities - 613,476 613,476

Fund Balances:Restricted 12,271 1,532,676 1,544,947

Total fund balances 12,271 1,532,676 1,544,947

Total liabilities and fund balances 12,271$ 2,146,152$ 2,158,423$


CHANGES IN FUND BALANCES NON-MAJOR DEBT SERVICE FUNDS


121

Delano TotalFinancing Debt Non-MajorAuthority Service Debt Service

Fund Fund FundsREVENUES:

Intergovemental 16,000$ -$ 16,000$ Investment earnings 38 37,818 37,856

Total revenues 16,038 37,818 53,856


General government 3,769 3,212 6,981 Debt service

Principal - 920,000 920,000 Interest - 1,194,513 1,194,513

Total expenditures 3,769 2,117,725 2,121,494

Excess (deficiency) of revenues over expenditures 12,269 (2,079,907) (2,067,638)

OTHER FINANCING SOURCES (USES):Transfers in - 2,114,513 2,114,513

Total other financing sources and uses - 2,114,513 2,114,513

Net change in fund balances 12,269 34,606 46,875

Fund balances, beginning 2 1,498,070 1,498,072

Fund balances, ending 12,271$ 1,532,676$ 1,544,947$

CITY OF DELANO AGENCY FUNDS

COMBINING STATEMENT OF NET POSITION June 30, 2013

122

TotalInmate Trust Trust andTrust Deposit AgencyFund Fund Funds

ASSETSCash and cash equivalents -$ 498,034$ 498,034$ Cash with fiscal agent 17,392 - 17,392 Contributions receivable and other receivables 1,434 - 1,434

Total assets 18,826$ 498,034$ 516,860$

LIABILITIESAccounts payable -$ 4,950$ 4,950$ CRA pass thru liability - 405,013 405,013 Other liabilities 18,826 88,071 106,897

Total liabilities 18,826$ 498,034$ 516,860$

CITY OF DELANO AGENCY FUNDS

COMBINING STATEMENT OF CHANGES IN ASSETS AND LIABILITIES June 30, 2013

123

Inmate Trust Fund Balance BalanceJuly 1, 2012 Additions Deductions June 30, 2013

ASSETSCash and investments -$ -$ -$ -$ Cash with fiscal agents 17,390 2 - 17,392 Contributions receivable and other receivables 1,434 - - 1,434

Total assets 18,824$ 2$ -$ 18,826$

LIABILITIESAccounts payable -$ -$ -$ -$ Deposits payable - - - - CRA Pass thru liability - - - - Other liabilities 18,824 2 - 18,826

Total liabilities 18,824$ 2$ -$ 18,826$

Trust Deposit Fund

ASSETSCash and investments 488,414$ 9,620$ -$ 498,034$ Cash with fiscal agents - - - - Contributions receivable and other receivables - - - -

Total assets 488,414$ 9,620$ -$ 498,034$

LIABILITIESAccounts payable 2,730$ 2,220$ -$ 4,950$ Deposits payable 1,785 - 1,785 - CRA Pass thru liability 404,306 707 - 405,013 Other liabilities 79,593 8,478 - 88,071

Total liabilities 488,414$ 11,405$ 1,785$ 498,034$

Total Agency Funds

ASSETSCash and investments 488,414$ 9,620$ -$ 498,034$ Cash with fiscal agents 17,390 2 - 17,392 Contributions receivable and other receivables 1,434 - - 1,434

Total assets 507,238$ 9,622$ -$ 516,860$

LIABILITIESAccounts payable 2,730$ 2,220$ -$ 4,950$ Deposits payable 1,785 - 1,785 - CRA Pass thru liability 404,306 707 - 405,013 Other liabilities 98,417 8,480 - 106,897

Total liabilities 507,238$ 11,407$ 1,785$ 516,860$

STATISTICAL SECTION

125

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. Net Position by Component 126 2. Change in Net Position 127 3. Fund Balances of Governmental Funds 129 4. General Governmental Tax Revenue by Source 130

Revenue Capacity – These schedules contain information to help the reader assess the City’s property tax.

5. Assessed Value and Estimated Actual Value of Taxable Property 131 6. Net Assessed Value of Property by Use Code, Citywide 132 7. Principal Property Tax Payers 133 8. Direct and Overlapping Property Tax Rates 134 9. Principal Sales Tax Producers 135 10. Principal Tax Levies and Collections 136

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.

11. Ratios of Outstanding Debt by Type 137 12. Ratios of General Bonded Debt Outstanding 138 13. Pledged Revenue Coverage 139 14. Historical and Overlapping Debt 140 15. Legal Debt Margin Information 141 16. Direct and Overlapping Debt 142

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.

17. Demographic and Economic Statistics 143 18. Principal Employers 144

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.

19. Full-time City Government Employees by Function/Program 145 20. Operating Indicators by Function/Program 146 21. Captial Assets Statistics by Function/Program 147

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

126

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Governmental activities:

Net investment incapital assets 13,592,121$ 14,017,432 14,502,447 154,272,581 148,421,018 151,470,775 149,570,114 147,129,054 139,229,157 139,379,687

Restricted 13,105,206 11,706,658 17,456,074 10,605,839 7,847,186 7,948,776 14,945,025 13,094,872 14,340,007 25,370,125 Unrestricted (12,235,326) (6,695,665) (5,046,635) 7,985,005 20,244,162 16,199,978 5,988,074 5,109,844 9,279,293 (2,857,037)

Total governmental activities net position 14,462,001$ 19,028,425 26,911,886 172,863,425 176,512,366 175,619,529 170,503,213 165,333,770 162,848,457 161,892,775

Business-type activities:Net investment in

capital assets 13,852,951$ 14,660,202 15,160,230 16,157,458 16,269,419 27,430,998 22,880,050 21,889,571 23,381,726 23,158,000 Restricted - - - Unrestricted 6,927,174 7,244,065 7,424,283 7,911,523 5,750,291 3,315,569 (1,667,914) (1,487,042) (2,417,170) 1,688,705

Total business-type activities net position 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 24,846,705

Primary government:Net investment in

capital assets 27,445,072$ 28,677,634 29,662,677 170,430,039 164,690,437 178,901,773 172,450,164 169,018,625 162,610,883 162,537,687Restricted 13,105,206 11,706,658 17,456,074 10,605,839 7,847,186 7,948,776 14,945,025 13,094,872 14,340,007 25,370,125 Unrestricted (5,308,152) 548,400 2,377,648 15,896,528 25,994,453 19,515,547 4,320,160 3,622,802 6,862,123 (1,168,332)

Total primary government net position 35,242,126$ 40,932,692 49,496,399 196,932,406 198,532,076 206,366,096 191,715,349 185,736,299 183,813,013 186,739,480

The City of Delano implemented GASB 63/65 for the fiscal year ended June 30, 2013. Fiscal year 2013 beginning net position was restated to reflect this.

City of DelanoNet Position by Component

Last Ten Fiscal Years(accrual basis of accounting)

Fiscal Year

127

City of Delano Changes in Net Position Last Ten Fiscal Years

(Accrual Basis of Accounting) Fiscal Year

2004 2005 2006 2007 2008

Expenses:Governmental activities:

General government 2,347,922$ 2,400,078 2,744,188 3,417,132 4,337,179 Public safety 12,276,536 13,099,446 14,414,529 21,324,215 23,510,152 Public works 1,418,088 1,490,466 1,472,179 1,863,619 2,502,891 Engineering Services 188,383 161,365 229,309 340,104 527,928 Recreation & Social Services 1,004,700 1,238,797 1,467,977 2,343,465 2,639,634 Community & Economic development 902,413 139,966 398,167 2,159,312 2,718,202 Education 352,661 370,035 443,043 490,556 582,293 Interest on long-term debt 1,469,244 1,417,818 1,357,918 1,382,839 1,281,831

Total governmental activities expenses 19,959,947 20,317,971 22,527,310 33,321,242 38,100,110

Business-type activities:Water & sewer 4,024,248 4,052,748 4,123,281 4,796,216 5,677,953 Refuse 1,501,989 1,717,096 1,841,056 2,084,486 2,199,900 Transit 963,371 1,082,565 1,187,132 1,298,017 1,628,014 Airport 265,945 242,960 385,519 387,006 515,833

Total business-type activities expenses 6,755,553 7,095,369 7,536,988 8,565,725 10,021,700 Total primary government expenses 26,715,500 27,413,340 30,064,298 41,886,967 48,121,810

Program revenues:Governmental activities:

Charges for services:General government 1,306,242 1,251,373 1,263,106 1,375,467 1,602,927 Public safety 7,977,930 8,937,167 8,657,795 9,413,666 10,970,395 Public works 2,239,354 1,563,803 2,620,321 3,223,716 3,756,818 Engineering Services 291,010 162,646 188,446 191,068 222,665 Recreation & Social Services 282,265 161,179 503,881 237,397 276,655 Community & Economic development 61,273 - 10,303 - - Education 352,661 352,661 443,043 - - Interest on long-term debt 332,683 141,560 256,440 199,929 232,991 Operating grants and contributions 1,764,767 1,102,715 2,143,970 1,854,862 2,161,599 Capital grants and contributions 1,796,286 1,336,819 1,368,675 620,216 722,780

Total governmental activities program revenues 16,404,471 15,009,923 17,455,980 17,116,321 19,946,830

Business-type activities:Charges for services:Water & sewer 3,941,077 4,068,327 4,328,664 4,509,922 4,706,399 Refuse 1,468,755 1,484,106 1,785,769 2,266,604 2,239,025 Transit 65,737 64,993 59,517 56,730 68,026 Airport 250,433 225,660 349,167 340,311 344,080 Operating grants and contributions 11,531 21,657 11,802 12,090 1,940,673 Capital grants and contributions 1,810,436 - - 1,383,016 -

Total business-type activities program revenues 7,547,969 5,864,743 6,534,919 8,568,673 9,298,203

Total primary government program revenues 23,952,440 20,874,666 23,990,899 25,684,994 29,245,033

Net revenues (expenses):Governmental activities (3,555,476) (5,308,048) (5,071,330) (16,204,921) (18,153,280) Business-type activities 792,416 (1,230,626) (1,002,069) 2,948 (723,497)

Total net revenues (expenses) (2,763,060) (6,538,674) (6,073,399) (16,201,973) (18,876,777)

General revenues and other changes in net position:Governmental activities:

Taxes:Property taxes 2,996,475 5,948,376 6,999,897 9,218,809 9,972,155 Sales tax 3,724,716 3,874,580 4,049,832 3,467,984 3,272,875 Transient occupancy taxes 161,002 147,442 146,988 185,150 226,071 Other taxes 1,134,988 1,130,308 1,218,469 1,650,450 2,649,796

Motor vehicle in lieu, unrestricted 1,953,116 465,358 980,158 - - Investment income 150,622 350,398 497,021 1,133,365 1,142,344 Other general revenues 179,974 194,327 655,596 571,978 1,557,092 Transfers (636,779) (782,239) (425,034) 197,964 677,889

Total governmental activities 9,664,114 11,328,550 14,122,927 16,425,700 19,498,222

Business-type activities:Other taxes 1,257,772 - Investment income 64,234 129,276 140,344 316,920 334,828 Miscellaneous revenues - - - 104,792 52,918 Transfers (1,173,657) 782,239 425,034 (197,964) (677,889)

Total business-type activities (1,109,423) 911,515 565,378 1,481,520 (290,143) Total primary government 8,554,691 12,240,065 14,688,305 17,907,220 19,208,079

Extraordinary gain/loss on AB 1X26 - - - - - Changes in net position

Governmental activities 6,108,638 6,020,502 9,051,597 220,779 1,344,942 Business-type activities (317,007) (319,111) (436,691) 1,484,468 (1,013,640)

Total primary government 5,791,631$ 5,701,391 8,614,906 1,705,247 331,302

128

City of Delano Change in Net Position (Continued)

Last Ten Fiscal Years (Accrual Basis of Accounting)

Fiscal Year

2009 2010 2011 2012 2013

Expenses:Governmental activities:

General government 5,696,345 6,584,470 6,561,343 5,763,986 5,170,654 Public safety 25,397,307 19,403,123 19,836,178 13,206,646 12,068,717 Public works 2,125,191 9,730,375 10,392,866 10,609,838 10,580,186 Engineering Services 392,877 540,612 565,339 572,847 670,561 Recreation & Social Services 2,981,785 2,612,945 2,674,055 2,422,548 2,525,513 Community & Economic development 2,789,933 2,203,015 1,895,470 635,101 132,414 Education 663,823 518,287 475,378 302,317 - Interest on long-term debt 1,138,991 956,413 1,708,054 1,717,724 1,202,955

Total governmental activities expenses 41,186,252 42,549,240 44,108,683 35,231,007 32,351,000

Business-type activities:Water & sewer 6,168,922 7,840,624 8,182,310 9,570,591 9,615,374 Refuse 2,310,885 2,840,239 2,744,226 2,634,318 2,703,283 Transit 1,407,954 1,696,482 1,672,051 1,671,770 1,662,147 Airport 501,619 611,501 660,724 508,142 539,720

Total business-type activities expenses 10,389,380 12,988,846 13,259,311 14,384,821 14,520,524 Total primary government expenses 51,575,632 55,538,086 57,367,994 49,615,828 46,871,524

Program revenues:Governmental activities:

Charges for services:General government 1,647,145 3,356,738 3,288,150 3,278,183 6,127,124 Public safety 11,273,023 243,502 103,312 92,655 347,354 Public works 3,860,453 1,902,430 1,985,773 2,148,966 2,099,297 Engineering Services 228,807 37,322 38,337 38,614 368,988 Recreation & Social Services 284,287 116,170 109,387 106,027 77,678 Community & Economic development - - - - - Education - - - - - Interest on long-term debt 239,418 - - - - Operating grants and contributions 2,221,228 9,364,689 12,791,542 4,086,039 1,394,930 Capital grants and contributions 742,719 4,643,350 1,840,709 1,388,909 3,577,461

Total governmental activities program revenues 20,497,080 19,664,201 20,157,210 11,139,393 13,992,832

Business-type activities:Charges for services:Water & sewer 4,870,197 5,946,477 6,993,034 8,548,083 9,940,712 Refuse 2,290,196 2,249,200 2,221,705 2,289,511 2,331,950 Transit 65,332 58,223 61,664 93,059 89,085 Airport 209,782 330,944 409,502 421,250 447,570 Operating grants and contributions 10,232,165 1,479,825 736,809 1,969,111 1,516,049 Capital grants and contributions - - - - 2,317,910

Total business-type activities program revenues 17,667,672 10,064,669 10,422,714 13,321,014 16,643,276

Total primary government program revenues 38,164,752 29,728,870 30,579,924 24,460,407 30,636,108

Net revenues (expenses):Governmental activities (20,689,172) (22,885,039) (23,951,473) (24,091,614) (18,358,168) Business-type activities 7,278,292 (2,924,177) (2,836,597) (1,063,807) 2,122,752

Total net revenues (expenses) (13,410,880) (25,809,216) (26,788,070) (25,155,421) (16,235,416)

General revenues and other changes in net position:Governmental activities:

Taxes:Property taxes 5,541,228 5,824,363 5,196,111 3,770,269 3,036,844 Sales tax 8,594,782 7,632,028 8,518,752 10,209,586 10,682,634 Transient occupancy taxes 193,761 135,240 165,732 180,345 214,139 Other taxes 5,705,609 1,874,295 3,160,173 2,192,620 1,238,764

Motor vehicle in lieu, unrestricted - 3,657,566 3,572,430 3,337,617 3,389,477 Investment income 737,848 287,027 205,520 334,536 88,210 Other general revenues 417,755 97,498 117,457 142,556 932,753 Transfers (1,242,430) (2,384,580) (2,154,145) (1,543,889) (1,714,610)

Total governmental activities 19,948,553 17,123,437 18,782,030 18,623,640 17,868,211

Business-type activities:Gain (loss) on sale of property - (93,010) - - - Investment income 20,243 6,828 1,767 81,945 9,129 Miscellaneous revenues 155,738 62,600 55,889 - 35,658 Transfers 1,242,430 2,157,767 1,969,334 1,543,889 1,714,610

Total business-type activities 1,418,411 2,134,185 2,026,990 1,625,834 1,759,397 Total primary government 21,366,964 19,257,622 20,809,020 20,249,474 19,627,608

Extraordinary gain/loss on AB 1X26 - - - 919,522 - Changes in net position

Governmental activities (740,619) (5,761,602) (5,169,443) (4,548,452) (489,957) Business-type activities 8,696,703 (789,992) (809,607) 562,027 3,882,149

Total primary government 7,956,084 (6,551,594) (5,979,050) (3,986,425) 3,392,192

129

2011 2012 2013General Fund

Nonspendable 331,335$ 229,180$ 295,692$ Restricted - - - Committed - - - Assigned - - - Unassigned 7,110,531 6,933,768 10,220,253

Total general fund 7,441,866$ 7,162,948$ 10,515,945$

All other governmental funds:Nonspendable 30,139$ 78,915$ -$ Restricted 7,071,084 3,628,078 25,370,125 Committed - - - Assigned 544,567 347,334 - Unassigned (183,114) (1,099,269) (312,062)

Total all other governmental funds 7,462,676$ 2,955,058$ 25,058,063$

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.

City of DelanoFund Balances of Governmental Funds

Last Ten Fiscal Years

(modified accrual basis of accounting)

130

City of Delano

GENERAL GOVERNMENT REVENUES BY SOURCE (1)(MODIFIED ACCRUAL BASIS OF ACCOUNTING)


Grants andOperating Capital Contributions

Charges Grants Grants Not Restricted Unrestricted

Fiscal for and and to Specific InvestmentsYear Services Contributions Contributions Taxes Programs Earnings Miscellaneous Total

***2003-04 18,573,908$ 1,776,298$ 1,796,286$ (2) 10,266,755$ -$ 214,856$ 179,975$ 32,808,078$ 2004-05 18,699,692$ 1,113,315$ 1,336,819$ 11,566,064$ -$ 479,177$ 156,548$ 33,351,615$ 2005-06 20,466,452$ 2,155,772$ 1,368,675$ 13,395,344$ -$ 497,021$ 524,409$ 38,407,673$ 2006-07 21,814,810$ 1,866,952$ 2,003,232$ 15,780,165$ -$ 1,450,285$ 676,770$ 43,592,214$ 2007-08 24,419,981$ 4,102,272$ 722,780$ 17,220,897$ -$ 1,477,172$ 510,010$ 48,453,112$ 2008-09 24,968,640$ 12,453,393$ 742,719$ 20,035,380$ -$ 758,091$ 573,493$ 59,531,716$ 2009-10 14,241,006$ 10,844,514$ 4,643,350$ 19,123,492$ -$ 293,855$ 181,364$ 49,327,581$ 2010-11 15,210,864$ 13,528,351$ 1,840,709$ 20,428,387$ -$ 207,287$ 173,346$ 51,388,944$ 2011-12 17,016,348$ 6,055,150$ 1,388,909$ 20,609,959$ -$ 334,536$ 224,501$ 45,629,403$ 2012-13 23,163,762$ 2,910,979$ 5,895,371$ 19,261,858$ -$ 97,339$ 268,411$ 51,597,720$

(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

PRORAM REVENUES GENERAL REVENUES

131

Fiscal Year End Secured Property

Unsecured Property

Less: Exemptions

Taxable Assessed Value

Secured Property

Unsecured Property

Less: Exemptions

Taxable Assessed Value

Total Tax Rate (`1)

2003-04 611,668 11,188 (23,376) 599,480 96,110 7,793 (864) 103,039 1.2572502004-05 652,134 11,544 (23,520) 640,158 96,110 7,793 (864) 103,039 1.3096652005-06 711,967 11,216 (24,229) 698,954 96,110 7,793 (864) 103,039 1.3054882006-07 857,150 10,711 (23,768) 844,093 226,019 15,294 (979) 240,334 1.3860792007-08 989,699 10,025 (23,733) 975,991 247,691 31,653 (949) 278,395 1.3265922008-09 1,033,877 10,324 (24,035) 1,020,166 274,345 33,671 (970) 307,046 1.2651492009-10 947,052 12,741 (24,740) 935,053 286,480 37,507 (998) 322,989 1.2592952010-11 908,705 12,753 (24,867) 896,591 285,927 35,568 (1,033) 320,462 1.2690942011-12 895,329 14,668 (24,791) 885,206 287,271 33,384 (991) 319,664 1.3459262012-13 870,110 7,139 (67,096) 810,153 463,995 45,667 (63,407) 446,255 1.306748

City of DelanoAssessed Value and Estimated Actual Value of Taxable Property

Last Ten Fiscal YearsCity (Excl RDA)

Source:County Assessor Data, MuniServices, LLC Source: 2011-12 and prior, previously published CAFR Report (1.) Total direct tax rate is represented by TRA 02-000

Redevelopment Agency

132

Category 2012-13Agriculture 16,217,709Commercial 144,724,956Government 3,881,266Industrial 71,467,404Institution 44,592,243Manufacturing 7,589,038Miscellaneous 2,716,066Professional 37,028,159Recreation 1,281,491Residential 916,346,048Unitary 434,777Unknown 76,904,385Vacant 10,920,932

Net Secured Value 1,334,104,474

Unsecured 52,806,230Exemptions 130,502,829

Net Assessed Value 1,256,407,875

City of DelanoNet Assessed Value of Property by Use Code, Citywide

Last Fiscal Year

Source: County Assessor data, MuniServices, LLCUse code categories are based on County Assessor's data

Agriculture1%

Commercial 10%

Industrial5%

Institution 3%

Manufacturing1%

Professional3%

Residential 66%

Unknown 6%

Vacant 1%

Unsecured 4%

2012‐13 Land Use Agriculture

Commercial

Government

Industrial

Institution

Manufacturing

Miscellaneous

Professional

Recreation

Residential

Unitary

Unknown

Vacant

Unsecured

133

TaxpayerTaxable Value

($)

Percent of Total City Taxable

Value (%)Taxable Value

($)

Percent of Total City Taxable

Value (%)Paramount Citrus Packing Co LLC 55,835,662 4.44% 45,472,673 6.47%Sears Roebuck & Co 51,627,708 4.11% 51,537,596 7.34%Second Harvey B Pollak LP 14,683,186 1.17% 0 0.00%Brar Harbinder S Family LP II 9,928,218 0.79% 1,919,970 0.27%HD Dev of MD Inc 8,608,803 0.69% 0 0.00%Brandywine-Delano LTD 7,001,245 0.56% 6,078,870 0.87%Central Cal Foundtn For Health 6,496,034 0.52% 0 0.00%Delano Retail Center LLC 6,387,450 0.51% 0 0.00%K Mart Corp 6,237,364 0.50% 0 0.00%Cecil & Randolph Asscs LLC 4,891,000 0.39% 0 0.00%Momi Rajinder K 4,578,306 0.36% 0 0.00%Terra Group Inc 4,536,747 0.36% 2,249,070 0.32%SKM Enterprises LLC 4,068,126 0.32% 0 0.00%Goldstein Cypress LP 3,967,845 0.32% 3,441,394 0.49%Finkelstein Michael & Helen Re 3,843,590 0.31% 2,997,357 0.43%MKS Enterprises LLC 3,718,971 0.30% 3,225,740 0.46%Walgreen Co 3,598,084 0.29% 0 0.00%Arredondo Ventures Inc 3,574,728 0.28% 1,968,027 0.28%Vallarta Supermarkets 3,450,702 0.27% 0 0.00%Pacific Investments Advisors LLC 3,328,475 0.26% 0 0.00%San Joaquin Helicopters Inc 3,236,841 0.26% 2,965,722 0.42%1st Ave Self Storage LLC 3,082,936 0.25% 0 0.00%Bright House Networks LLC 2,796,777 0.22% 0 0.00%Delano Valley Inv LLC 2,792,417 0.22% 0 0.00%Joseph Vineyard Est LLC 2,519,174 0.20% 0 0.00%Lyons Charles J Jr 0 0.00% 6,633,909 0.94%Workman Bros Dev Co 0 0.00% 5,483,910 0.78%Troy Cmbs Prop LLC 0 0.00% 4,518,460 0.64%Sandhu Gurdial S & Kaleka Duld 0 0.00% 2,932,716 0.42%Bingley Land Co Inc 0 0.00% 2,883,624 0.41%Elk Prop LP 0 0.00% 2,094,725 0.30%Save Mart Of Modesto 0 0.00% 1,972,199 0.28%Zaninovich Vincent B & Sons 0 0.00% 1,964,097 0.28%D & M Young Inc 0 0.00% 1,946,068 0.28%Twean Subsidiary LLC 0 0.00% 1,803,712 0.26%Western Farm Service 0 0.00% 1,634,165 0.23%Demond Frank Long Tr 0 0.00% 1,600,000 0.23%Pacific Resources Assoc LLC 0 0.00% 1,529,361 0.22%Delano Gardens 0 0.00% 1,488,377 0.21%Randolph Village LLC 0 0.00% 1,483,823 0.21% Total Top 25 Taxpayers 224,790,389 17.89% 161,825,565 23.04%

Total Taxable Value 1,256,407,875 100.00% 702,519,000 100.00%

2012-13 2003-04

Source: 2012-13 County Assessor data, MuniServices, LLC

City of DelanoPrincipal Property Tax Payers

Last Fiscal Year and Nine Years Ago

134

2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13Basic City and County Levy City of Delano 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.197374 County of Kern 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.802626

Total 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000

Override Assessments Elementary and/or Unified School Bond 0.119028 0.109709 0.093042 0.168017 0.147128 0.111768 0.131792 0.135290 0.134925 0.121752 High School Bonds 0.090065 0.096535 0.096834 0.162595 0.116796 0.099207 0.060797 0.097324 0.132845 0.121062 Kern Co. Water Agency ZN 17 Debt 0.015312 0.014513 0.010638 0.008349 0.010017 0.008404 0.010943 0.009357 0.014797 0.010320 Kern Co. Water Agency ZN 19 Debt 0.021042 0.019726 0.014911 0.010405 0.014193 0.012211 0.015953 0.014494 0.023717 0.016640 Kern Com.Coll.Dist.SRID 2002A 0.011803 0.009176 0.009630 0.000000 0.005992 0.000141 0.002379 0.003095 0.003290 0.003249 GOB 2000D 0.000000 0.060006 0.024018 0.016746 0.017682 0.016673 0.018615 0.018353 0.018147 0.017223 GOB 2000E 0.000000 0.000000 0.056415 0.019967 0.014784 0.016745 0.018816 0.018181 0.018205 0.016502

Total Override Rate 0.257250 0.309665 0.305488 0.386079 0.326592 0.265149 0.259295 0.296094 0.345926 0.306748

Total Tax Rate 1.257250 1.309665 1.305488 1.386079 1.326592 1.265149 1.259295 1.296094 1.345926 1.306748

Source:2012-13 County Auditor/Controller data, MuniServices, LLC Source: 2011-12 and prior, previously published CAFR Report : TRAs 02-000 is represented for this report

City of DelanoDirect and Overlapping Property Tax Rates


135

Taxpayer Business Type Taxpayer Business Type99 Cents Only Stores Department Stores American Transit Mix Bldg Matls-WhsleARCO AM/PM Mini Marts Service Stations ARCO AM/PM Mini Marts Service StationsAutoZone Auto Parts/Repair AutoZone Auto Parts/RepairBerchtold Equipment Company Bldg Matls-Whsle Berchtold Equipment Company Bldg Matls-WhsleButtonwillow Warehouse Company Leasing Buttonwillow Warehouse Company LeasingCentral Valley Office Supply Office Equipment Chevron Service Stations Service StationsChevron Service Stations Service Stations Daco Farm Supply Bldg Matls-WhsleCrop Production Services Florist/Nursery Delano Building Materials Bldg Matls-RetailDaco Farm Supply Bldg Matls-Whsle Delano Chevrolet Buick GMC Auto Sales-NewDelano Chevrolet Buick GMC Auto Sales-New Delano Ranch Market Food MarketsFactory 2-U Department Stores Dilfer Chrysler/Jeep/Dodge Auto Sales-NewFastrip Service Stations Service Stations Factory 2-U Department StoresGreg's Petroleum Service Energy Sales Fastrip Service Stations Service StationsHome Depot Bldg Matls-Retail Floyd's Stores Bldg Matls-RetailJC Penney Company Department Stores Garces Auto Sales Auto Sales-UsedK Mart Stores Department Stores Greg's Petroleum Service Energy SalesMcDonald's Restaurants Restaurants JC Penney Company Department StoresNorth Kern Machinery Heavy Industry K Mart Stores Department StoresRite Aid Drug Stores Drug Stores King's Liquor Liquor StoresShell Service Stations Service Stations McDonald's Restaurants RestaurantsSmart & Final Food Markets North Kern Motorsports Misc. Vehicle SalesTaco Bell Restaurants Rite Aid Drug Stores Drug StoresVallarta Supermarket Food Markets Save Mart Supermarkets Food MarketsWalgreen's Drug Stores Drug Stores USA Service Stations Service StationsZee Mini Mart Food Markets Western Farm Service Chemical Products

2012-13 2003-04

Source: 2012-13 SBOE data, MuniServices, LLCTop Sales Tax Producers listed in alphabetical order.

City of DelanoPrincipal Sales Tax Producers

Last Fiscal Year and Nine Years Ago

136

Secured Amt. Del. % Del.Fiscal Year Tax Charge (2) 6/30 6/302002-2003 $1,216,031.10 (1) - 2003-2004 $1,254,050.65 (1) - 2004-2005 $1,338,395.40 (1) - 2005-2006 $1,668,957.73 (1) - 2006-2007 $1,939,757.56 (1) - 2007-2008 $1,965,427.22 (1) - 2008-2009 $2,108,475.16 (1) - 2009-2010 $1,874,358.40 (1) - 2010-2011 $1,839,715.13 (1) - 2011-2012 $1,809,950.91 (1) -

levy and distribution. The method guarantees distribution of 100% of the assessments levied to the taxiing entity.(2) 1% General Fund apportionment.

CITY OF DELANOProperty Tax Levies and Collections


(1) Kern County utilizes the Teeter Plan for assessment

137

CITY OF DELANO, CALIFORNIA

Ratios of Outstanding Debt by TypeLast Ten Fiscal years


Business-type

Activities

Fiscal YearGeneral Obligation

Bonds (1) Capital Leases

General Obligation Bonds (1)

Total Outstanding Debt

Percentage of Personal Income (2) Population (3)

Debt per

Capita2002-03 23,894,864 - 1,502,986 25,397,850 N/A 42,007 605 2003-04 22,987,071 - 2,486,845 25,473,916 27.00% 42,293 602 2004-05 22,201,333 - 2,918,620 25,119,953 26.10% 43,438 578 2005-06 20,892,086 254,000 2,717,642 23,863,728 22.80% 45,093 529 2006-07 19,736,669 207,073 2,292,187 22,235,929 20.70% 49,293 451 2007-08 18,269,400 158,285 5,362,507 23,790,192 22.20% 52,877 450 2008-09 17,079,900 107,562 4,274,492 21,461,954 25.70% 53,714 400 2009-10 15,130,000 54,827 28,276,102 43,460,929 35.00% 53,985 805 2010-11 41,605,000 132,859 37,336,432 79,074,291 37.80% 54,447 1,452 2011-12 25,860,000 66,610 41,523,062 67,449,672 36.00% 52,005 1,297 2012-13 24,974,097 - 44,879,231 69,853,328 30.70% 51,963 1,344

(!) Net of original issuance discounts and premiums.(2) Personal Income is disclosed in Demographic and economic statistics(3) US Census Bureau

138


Ratios of General Bonded Debt OutstandingLast Ten Fiscal years

Fiscal

YearGeneral Obligation

Bonds (1)

Less Amounts Available in Debt Service Fund (2) Total

Percentage of Estimated Actual Taxable Value of

Property (3)

Per Capita

(4)2002-03 No general obligation bonded debt2003-04 No general obligation bonded debt2004-05 No general obligation bonded debt2005-06 No general obligation bonded debt2006-07 No general obligation bonded debt2007-08 No general obligation bonded debt2008-09 No general obligation bonded debt2009-10 No general obligation bonded debt2010-11 No general obligation bonded debt2011-12 No general obligation bonded debt2012-13 No general obligation bonded debt

(1) This is the general bonded debt of both governmental and business-type activities, net of original issuance discounts and premiums.(2) This is the amount restricted for debt service principal payments(3) See the Schedule of Assessed Value and the Estimated Actual Value of Taxable Property for property value data.(4) Population data can be found in the Schedule of Demographic and Economic Statistics.

139


PLEDGED REVENUE COVERAGELast Ten Fiscal years

Fiscal Pledged Total Debt ServiceYear Revenues Debt Service (1) Coverage

2002-03 1,404,911 586,486 2.392003-04 1,428,386 619,523 2.312004-05 1,430,751 1,013,180 1.412005-06 1,717,330 1,012,161 1.702006-07 2,171,816 1,016,992 2.142007-08 1,918,499 1,014,117 1.892008-09 2,052,668 1,015,517 2.022009-10 2,638,385 1,018,952 2.592010-11 2,391,095 1,016,616 2.352011-12 N/A N/A N/A2012-13 N/A N/A N/A

(1) Annual debt service is shown on a bond year basis.Source: Compiled by Muni Financial (California Municipal Statistics)Due to the dissolution of the redevelopment agency, data was not available andno further debt outstanding was secured by pledged revenues.

140

Ratios to Adjusted Assessed Valuation: Combined Direct Debt

Combined Total Debt

2003 n/a n/a n/a2004 2.78% 0.00% 6.42%2005 3.08% 0.00% 6.55%2006 3.20% 0.00% 6.32%2007 4.58% 0.00% 7.48%2008 4.44% 0.00% 7.06%2009 3.99% 0.00% 6.50%2010 4.02% 0.00% 6.87%2011 4.03% 2.90% 9.70%2012 3.85% 2.84% 9.25%2013 4.10% 1.97% 9.32%

Source: Compiled by Muni Financial (California Municipal Statistics)

City of DelanoHistorical and Overlapping Debt


Ratios to 2012-2013 Assessed Valuation:

141

Fiscal Year Total Taxable Taxable Assessed Estimated

Ended Assessed Value as a Percentage of ActualJune 30 Value Estimated Actual Value Taxable Value

2013 810,153$ 0.06% 1,256,407,875

2012 885,206 0.07% 1,230,651,899

2011 896,591 0.07% 1,242,953,659

2010 935,053 0.07% 1,283,780,885

2009 1,020,166 0.08% 1,352,217,065

Total Five Year Valuation 6,366,011,383

Five Year Average Full Valuation of Taxable Real Property 1,273,202,277

Constitutional Debt Limit (7% of Average Full Valuation) 89,124,159

Outstanding General Obligation Indebtedness as of June 30, 2013 Government Activities - General Obligation Debt 24,032,091

Business-type Activities - General Obligation Debt 43,007,558 Governmental Activities - Short-term Debt-Bond Anticipation Notes 942,006 Business Activities - Short-term Debt-Bond Anticipation Notes 1,871,673 Net Indebtedness subject to debt limit 69,853,328

Net debt contracting margin 19,270,831

Percentage of net debt contracting margin available 21.62%

Percentage of net debt contracting power exhausted 80.85%

CITY OF DELANOLegal Debt Margin Information

June 30, 2013

142

2012-13 Assessed Valuation 1,268,873,443$

%OVERLAPPING TAX AND ASSESSMENT DEBT: Applicable Debt 12/31/12McFarland Unified School District 0.018% 2,599$ Delano Union School District 66.207% 26,794,509 Delano Joint Union High School District 42.853% 23,552,009Kern Community College District Safety, Reapir and Improvement District 1.634% 1,622,029

0TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 51,971,146$

DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT:Kern County Certificates of Participation 1.431% 1,760,702$ Kern County Pension Obligations 1.431% 5,285,048Kern County Board of Education Certificates of Participation 1.431% 611,824Kern Community College District Certificates of Participation 1.478% 1,381,708Kern Community College District Benefit Obligations 1.478% 1,226,518Delano Union School District Certificates of Participation 66.207% 17,359,939City of Delano General Fund Obligations 100.000% 24,940,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND OBLIGATION DEBT 52,565,739$

OVERLAPPING TAX INCREMENT DEBTDelano Redevelopment Agency 95.661% 13,756,052$ TOTAL OVERLAPPING TAX INCREMENT DEBT 13,756,052

COMBINED TOTAL DEBT (1) 118,292,937$

Ratios to 2012/13 Assessed Valuation Total Overlapping Tax Assessment Debt 4.10%Ratios to Adjusted Assessed Valuation: Combined Direct Debt ($24,940,000) 1.97% Combined Total Debt 9.32%

Ratios to Redevelopment Incremental Valuation ($338,265,278) Total Overlapping Tax Increment Debt 4.07%

(1) Excludes tax and revenue anticipation notes, revenue, mortgagerevenue and tax allocation bonds and non-bonded capital lease obligationsSource: Compiled by Muni Financial (California Municipal Statistics)

City of DelanoSTATEMENT OF DIRECT AND OVERLAPPING DEBT

June 30, 2013

143

42,293 $429,148 $10,147 27.0%

43,438 $462,519 $10,648 26.1%

45,093 $501,918 $11,131 22.8%

49,293 $584,037 $11,848 20.7%

52,877 $651,718 $12,325 22.2%

53,714 $667,955 $12,435 25.7%

53,985 $652,671 $12,090 35.0% 27.7 51.6% 7.5%54,447 $552,256 $10,143 37.8% 28.8 51.0% 5.7%52,005 $550,993 $10,595 36.0% 29.5 50.6% 5.8%51,963 $573,464 $11,036 30.7% 28.8 52.2% 7.1%

THE CITY OF DELANO

DEMOGRAPHIC AND ECONOMIC STATISTICS

Calendar YearPopulation

Personal Income (In Thousands)

Per Capita Personal Income

Unemployment Rate Median Age

% of Pop 25+ with High School Degree

2003

2004

2005

2006

2007

Population: California State Department of Finance. Unemployment Data: California Employment Development Department2000-2009 Income, Age, and Education Data: ESRI - Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries2010 and later - Income, Age and Education Data - US Census Bureau, most recent American Community Survey

2008

2009

2010

2011

2012

Notes and Data Sources:

10,000

10,400

10,800

11,200

11,600

12,000

12,400

12,800

0

5

10

15

20

25

30

35

40

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Per Capita Pers Income Unemployment Rate

Per

Cap

ita

Per

sonal

Inco

me

Unem

plo

ymen

t Rate

Personal Income and Unemployment

0

4,000

8,000

12,000

16,000

20,000

24,000

28,000

32,000

2009 2010 2011 2012

Less Than High School High School Graduate College Graduate

Popula

tion

Education Level Attained for Population 25and Over

144

City of DelanoPrincipal Employers

Current Year and Nine Years Ago

Percent of Percent of Number of Total City Number of Total City

Employer Employees Employment Employees Employment

Kern Valley State Prison 1,545 11.03% 1,239 10.87%

North Kern State Prison 1,357 9.67% - 0.00%

Paramount Citrus Association 1,200 8.57% 550 4.82%

Delano Union Elementary School District 864 6.17% 665 5.83%

Delano Regional Medical Center 670 4.80% 465 4.08%

Delano Joint Union High School District 440 3.10% 336 2.95%

Vallarta Supermarkets 358 2.55% - 0.00%

Wal-mart 300 2..14% - 0.00%

Sears Logistics 275 1.96% 653 5.73%

City of Delano 216 1.54% 318 2.79%

Delano District Skilled Nursing Facility 189 1.35% 120 1.05%

Railex 179 1.30% - 0.00%

Kmart 140 1.00% - 0.00%

Pandol & Sons 1,000 8.77%

"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

2013 2004

145

Function 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

General Government 22.7 23.3 26.5 25.9 40.8 40.8 48.2 48.0 41.9 31.0

Public Safety 64.0 64.0 70.0 70.0 76.0 76.0 77.0 77.0 75.0 73.0

Public Works 10.8 13.3 17.7 15.8 25.6 25.6 17.1 19.0 16.6 20.0

Recreation Program 1.5 1.5 3.5 3.5 4.0 4.0 4.0 4.0 3.5 16.0

Community Development 5.0 7.0 9.5 9.5 10.5 10.5 8.7 8.7 7.1 5.0

Water 10.6 12.5 13.0 13.1 19.7 19.7 18.3 18.3 19.5 21.0

Wastewater 10.6 11.5 11.4 11.5 15.9 15.9 19.2 18.5 18.5 12.0

Refuse 14.4 15.4 16.2 16.3 16.6 16.6 16.1 16.1 13.5 14.0

Transit 11.4 11.4 12.5 12.5 9.0 9.0 9.5 9.5 9.5 13.0

CCF Facility 78.0 78.0 78.0 78.0 88.0 88.0 83.0 83.0 - - Total 229.0 238.0 258.2 256.0 306.0 306.0 301.0 302.0 205.0 205.0

Source: City of Delano Finance Department

City of Delano

Full Time City Employees by Function

Last Ten Fiscal years

Full Time Employees as of Fiscal Year Ended June 30,

146

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Police: Calls for service 35,901 31,945 36,188 42,190 45,052 43,930 42,023 39,044 35,794 38,650 Felony Arrests 739 764 891 831 752 712 649 572 504 552 Misdemeanor Arrests 782 785 1,033 1,446 1,094 927 913 674 562 548 Property loss 4,809,650 4,454,817 5,550,635 4,621,525 5,953,963 4,490,480 4,567,949 4,988,491 2,556,806 3,912,039 Property Recovery 2,101,617 3,075,824 3,637,851 3,022,505 4,212,165 2,841,644 2,733,981 1,945,561 1,274,583 1,717,580 Traffic Citations 3,353 2,362 3,391 4,498 5,098 5,915 5,518 5,006 3,270 3,469 Traffic Accidents 514 554 596 614 604 624 624 617 616 711 Parking Citations 1,643 511 536 302 942 659 1,195 643 380 1,025

Water Average daily consumption 8,100 9,000 9,040 9,590 9,230 8,930 8,270 8,130 7,380 7,318 (in gallons mgd) Service Connections 7,863 8,200 8,200 8,200 8,795 8,795 8,795 8,800 9,027 9,081

Sewer Average daily sewage treatment 4,753 4,753 4,384 4,799 4,681 4,486 4,365 4,125 4,106 5,071 (thousands of gallons)

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

City of Delano

Operating Indicators by Function


Fiscal Year

147

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013Police: Stations 1 1 1 1 1 1 1 1 1 1

Fire: Fire Stations (County) 2 2 2 2 2 2 2 2 2 2

Public Works: Streets (miles) 112.39 112.39 112.39 112.89 113.37 138.13 138.13 138.13 138.13 138.68 Streetlights 1,363 1,363 1,363 1,363 1,363 1,363 1,363 1,363 1,363 1,383 Traffic Signals 28 32 32 36 40 40 40 44 44 48

Culture and recreation: Parks 8 8 8 8 8 8 8 8 8 8 Community Centers 1 1 1 1 1 1 1 1 1 1 Civic Center 1 1 1 1 1 1 1 1 1 1

Water: Water mains (miles) 108.50 108.50 108.50 108.50 108.50 108.50 108.50 110.00 110.00 112.00 Maximum daily capacity 16,100 11,000 13,850 14,000 14,900 14,750 14,070 14,690 13,470 13,470 (thousands of gallons) City Well sites 11 11 11 11 11 11 11 13 15 15 Fire Hydrants 744 750 750 750 750 750 750 750 750 750

Wastewater: Sanitary sewers (miles) 80 80 80 80 80 80 80 80 80 80 Maximum daily treatment capacity 4,753 4,753 4,384 4,799 4,681 4,486 4,365 4,125 4,106 5,071 (thousands of gallons)

Airport: Number of municipal airports 1 1 1 1 1 1 1 1 1 1 Runway lenght in feet 5,650 5,650 5,650 5,650 5,650 5,650 5,650 5,650 5,650 5,650

Source: City of Delano Finance DepartmentPublic Works Department

City of Delano

Capital Asset Statistics


Fiscal Year

city of delano 2013 cafr

Documents

statement of changes

statement of revenues

actual general fund

actual slesf fund

actual miscellaneous

actual sems fund

fund financial statements

actual gas tax fund