Colton City of COMPREHENSIVE ANNUAL FINANCIAL REPORT .docx

Colton
City of
COMPREHENSIVE ANNUAL
FINANCIAL REPORT
Fiscal Year Ended June 30, 2019
City of Colton, California
650 N. La Cadena Drive, Colton, California 92324
THIS PAGE INTENTIONALLY LEFT BLANK
CITY OF COLTON, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
WITH REPORT ON AUDIT
BY INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
FOR THE YEAR ENDED JUNE 30, 2019
Prepared By:

Finance Department
Finance Administration Division
Comprehensive Annual Financial Report
For the Fiscal Year Ended June 30, 2019
Table of Contents
Page
Number
INTRODUCTORY SECTION:
Letter of Transmittal i
Municipal Officials v
Organization Chart vi
Government Finance Officers Association Certificate vii
FINANCIAL SECTION:
Independent Auditors’ Report 1
Managements’ Discussion and Analysis
(Required Supplementary Information) 5

Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position 17
Statement of Activities 18
Fund Financial Statements:
Governmental Funds:
Balance Sheet 20
Reconciliation of the Governmental Funds Balance Sheet
to the Statement of Net Position 21
Statement of Revenues, Expenditures and Changes in Fund
Balances 22
Reconciliation of the Governmental Funds Statement of
Revenues,
Expenditures and Changes in Fund Balances to the Statement
of Activities 23
Budgetary Comparison Statement by Department - General
Fund 25
Proprietary Funds:
Statement of Revenues, Expenses and Changes in Net Position
30
Statement of Cash Flows 32
Fiduciary Funds:
Statement of Changes in Net Position 37
Notes to Financial Statements 39

Table of Contents
Page
Number
Required Supplementary Information: 87
CalPERS Pension Plans:
Safety Plans:
Schedule of Proportionate Share of the Net Pension Liability
88
Schedule of Contributions 89
Miscellaneous Plan:
Schedule of Changes in the Net Pension Liability and Related
Ratios 90
Schedule of Contributions 91
Other Post-Employment Benefits Plan:
Schedule of Changes in the Total OPEB Liability and Related
Ratios 92
Supplementary Information:
Combining and Individual Fund Statements and Schedules:
Other Governmental Funds: 93
Combining Balance Sheet 96
Combining Statement of Revenues, Expenditures and
Changes in Fund Balances 102
Schedules of Revenues, Expenditures and Changes in
Fund Balance - Budget and Actual:
Gas Tax Special Revenue Fund 108
Community Child Care Special Revenue Fund 109

Library Grant Special Revenue Fund 110
Community Development Block Grant Special Revenue Fund
111
State Traffic Relief Special Revenue Fund 112
Asset Seizure Special Revenue Fund 113
Air Quality Special Revenue Fund 114
Drug/Gang Intervention Special Revenue Fund 115
Host City Fees Special Revenue Fund 116
Storm Water Special Revenue Fund 117
Local Transportation Special Revenue Fund 118
New Facilities Special Revenue Fund 119
Civic Center Development Fee Special Revenue Fund 120
Fire Facility Development Fee Special Revenue Fund 121
Police Facility Development Fee Special Revenue Fund 122
ViTep Special Revenue Fund 123
Miscellaneous Grants Special Revenue Fund 124
Housing Authority Special Revenue Fund 125
Table of Contents
Page
Number
Supplementary Information (Continued):
Other Governmental Funds (Continued):
Schedules of Revenues, Expenditures and Changes in

Fund Balance - Budget and Actual (Continued):
Public Financing Authority Debt Service Fund 126
Taxable Pension Funding Bonds Debt Service Fund 127
Capital Improvements Capital Projects Fund 128
Development Fees Capital Projects Fund 129
Colton Crossing Capital Projects Fund 130
Internal Service Funds: 131
Combining Statement of Net Position 132
Combining Statement of Revenues, Expenses and Changes in
Net Position 133
Combining Statement of Cash Flows 134
Agency Funds: 135
Combining Statement of Assets and Liabilities 136
Combining Statement of Changes in Assets and Liabilities 137
Private-Purpose Trust Funds: 139
Combining Statement of Net Position 140
Combining Statement of Changes in Net Position 141
STATISTICAL SECTION:
Description of Statistical Section Contents 143
Financial Trends:
Net Position by Component - Last Ten Fiscal Years 145
Changes in Net Position - Last Ten Fiscal Years 146
Fund Balances of Governmental Funds - Last Ten Fiscal Years
148
Changes in Fund Balances of Governmental Funds - Last Ten
Fiscal Years 150

Table of Contents
Page
Number
STATISTICAL SECTION (CONTINUED):
Revenue Capacity:
Assessed Value and Estimated Actual Value of Taxable
Property - Last Ten Fiscal Years 152
Property Tax Rates - All Overlapping Governments - Last Ten
Fiscal Years 153
Principal Property Tax Payers - Current and Nine Years Ago
154
Property Tax Levies and Collections - Last Ten Fiscal Years
155
Taxable Sales by Category - Last Ten Calendar Years 156
Direct and Overlapping Sales Tax Rates - Last Ten Fiscal
Years 157
Top 25 Principal Sales Tax Remitters - Identified by Category
158
Debt Capacity:
Ratios of Outstanding Debt by Type - Last Ten Fiscal Years
159
Direct and Overlapping Governmental Activities Debt - As of
June 30, 2017 160
Legal Debt Margin Information - Last Ten Fiscal Years 161
Pledged-Revenue Coverage - Last Ten Fiscal Years 162

Demographic and Economic Information:
Demographic and Economic Statistics - Last Ten Calendar
Years 163
Top 20 Principal Employers - Current Year and Nine Years
Ago 164
Operating Information:
Full-Time City Government Employees by Function/Program -
Last Ten Fiscal Years 165
Operating Indicators by Function/Program - Last Ten Fiscal
Years 166
Capital Asset Statistics by Function/Program - Last Ten Fiscal
Years 167
INTRODUCTORY SECTION
i

ii
iii
Colton
City of
City Council
Dr. Luis S. González
Frank J. Navarro
Mayor
District 2
Kenneth Koperski
Council Member
District 3
District 4 District 5
Isaac T. Suchil
Council Member
District 6
David J. Toro
Council Member

District 1
Ernest R. Cisneros
Mayor Pro Tem
Council Member
Jack R. Woods
Council Member
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FINANCIAL SECTION

2875 Michelle Drive, Suite 300 | Irvine, California 92606 |
WNDECPA.com | 714.978.1300
1
INDEPENDENT AUDITORS’ REPORT
Honorable Mayor and
Members of the City Council
of the City of Colton
Colton, 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 Colton, California (the
City), as of and for the year ended June 30, 2019, and the
related notes to the financial statements, which
collectively comprise the City’s basic financial statements as
listed in the table of contents.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair
presentation of these financial statements in accordance
with accounting principles generally accepted in the United
States of America; this includes the design,
implementation and maintenance of internal control relevant to
the preparation and fair presentation of financial
statements that are free from material misstatement, whether

due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express opinions on these basic
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 basic financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the basic
financial statements. The procedures selected depend on the
auditors’ 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 auditors consider internal control relevant to
the City’s preparation and fair presentation of the
financial statements in order to design audit procedures that are
appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the
City’s internal control. Accordingly, we express no
such opinion. An audit also includes evaluating the
appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by
management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinions.

2
Opinions
In our opinion, the financial statements referred to above
present fairly, in all material respects, the respective
financial position of the governmental activities, the business-
type activities, each major fund and the aggregate
remaining fund information of the City, as of June 30, 2019,
and the respective changes in financial position and,
where applicable, cash flows thereof and the budgetary
comparison information for the General Fund for the year
then ended in accordance with accounting principles generally
accepted in the United States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of
America require that the management’s
discussion and analysis, the CalPERS pension plans - schedule
of proportionate share of the net pension liability
and the schedule of contributions - safety plans, the schedule of
changes in the net pension liability and related
ratios and the schedule of contributions - miscellaneous plan
and the other post-employment benefit
plan - schedule of changes in the OPEB liability and related
ratios, identified as Required Supplementary
Information (RSI) in the accompanying table of contents, be
presented to supplement the basic financial
statements. Such information, although not a part of the basic

financial statements, is required by the
Governmental Accounting Standards Board, who considers it to
be an essential part of financial reporting for
placing the basic financial statements in an appropriate
operational, economic, or historical context. We have
applied certain limited procedures to the RSI 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 the audit of the basic financial statements. We
do not express an opinion or provide any assurance on the RSI
because the limited procedures do not provide us
with sufficient evidence to express an opinion or provide any
assurance.
Other Information
Our audit was conducted for the purpose of forming opinions on
the financial statements that collectively comprise
the City’s basic financial statements. The introductory section,
the combining and individual fund statements and
schedules (supplementary information) and statistical section
are presented for purposes of additional analysis and
are not a required part of the basic financial statements.
The supplementary information, as listed in the table of
contents, is the responsibility of management and was
derived from and relates directly to the underlying accounting
and other records used to prepare the basic financial
statements. Such information has been subjected to the auditing
procedures applied in the audit of the basic
financial statements and certain additional procedures,
including comparing and reconciling such information

directly to the underlying accounting and other records used to
prepare the basic financial statements or to the
basic financial statements themselves and other additional
procedures in accordance with auditing standards
generally accepted in the United States of America. In our
opinion, the supplementary information is fairly stated
in all material respects in relation to the basic financial
statements as a whole.
3
Other Information (Continued)
The introductory section and 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 them.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have
also issued our report dated December 19, 2019, on
our consideration of the City’s internal control over financial
reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grant
agreements and other matters. The purpose of that
report is to describe the scope of our testing of internal control
over financial reporting and compliance and the
results of that testing, and not to provide an opinion on internal
control over financial reporting or on compliance.
That report is an integral part of an audit performed in

accordance with Government Auditing Standards in
considering the City’s internal control over financial reporting
and compliance.
Irvine, California
December 19, 2019
4
5
Management’s Discussion and Analysis
As management of the City of Colton, California (“City”) we
offer readers of the City’s financial statements this narrative
overview and analysis of the financial activities of the City of
Colton for the fiscal year ended June 30, 2019. To obtain a
complete picture of the City’s financial condition, this
document should be read in conjunction with the accompanying

letter
of transmittal and financial statements.
Financial Highlights
All changes in financial conditions in the following discussion
are expressed relative to fiscal year 2017-18. Please note that
each of these changes will be discussed in detail in the
appropriate sections of this analysis.
exceeded its liabilities and deferred inflows of resources
at the close of the fiscal year by $120,880,240 (net position).
The two components of this total are: ($6,867,489) in
governmental activities and $127,747,729 in business-type
activities.
$21,604,303, or 21.7%.
ear, unassigned fund
balance for the general fund was $6,290,763 and balances
committed for the City’s pension and OPEB liabilities total
$10,150,871 and $4,558,102 respectively.
-term liabilities related to Governmental Activities
decreased by $1,109,975 or 2.65%, while long-term
liabilities related to Business-type activities decreased

$4,974,049, or 7.51%, over the prior year.
activities reported combined ending net position of
($6,867,489), an increase of $11,955,819 over the prior year.
-term liabilities of the
governmental activities and business-type activities include net
pension liabilities of $78,046,285 and $18,883,836 respectively,
which represents increases of $1,382,613, or 1.8%,
and $458,846, or 2.5%, respectively. As of June 30, 2019, total
long-term liabilities of the governmental activities
and business-type activities include net OPEB liabilities of
$25,039,289 and $5,891,597 respectively, which
represents increases of $400,770, or 1.6%, and $93,403, or
1.6%, respectively.
Overview of the Financial Statements
This discussion and analysis is intended to serve as an
introduction to the City’s basic financial statements. The City’s
basic
financial statements contain three components: government-
wide financial statements; fund financial statements; and notes
to the basic financial statements
This report also contains supplementary information in addition

to the basic financial statements.
Government-wide Financial Statements. The government-wide
financial statements are designed to provide readers with
a broad overview of the City’s finances in a manner similar to a
private sector business. These statements include all assets,
deferred outflows of resources, liabilities, and deferred inflows
of resources of the City using the accrual basis of accounting,
which is similar to the accounting used by most private-sector
companies. All of the current year’s revenues and expenses
are taken into account regardless of when cash is received or
paid.
The statement of net position presents information on all City
assets deferred outflows of resources, liabilities, and deferred
inflows of resources, with the difference reported as net
position. Over time, increases or decreases in net position may
serve
as a useful indicator of whether the financial position of the
City is improving or deteriorating.
6

The statement of activities presents information showing how
the government’s net position changed during the most recent
fiscal year. All changes in net position are reported as soon as
the underlying event giving rise to the change occurs regardless
of the timing of related cash flows. Thus, some of the revenues
and expenses reported in this statement will have no effect on
cash until some future fiscal period.
Both government-wide financial statements distinguish
functions of the City that are principally supported by taxes and
intergovernmental revenues (governmental activities) from
functions that are intended to recover some or all of their costs
through user fees and charges (business-type activities).
Governmental activities. Most of the City’s basic services are
reported in this category, including general administration
(city manager, city clerk, finance, etc.), police and fire
protection, public works and community development. Property
taxes,
sales tax, transient occupancy tax, user fees, interest income,
franchise fees, state and federal grants, contributions from other
agencies, and other revenues finance these activities.
Business-type activities. The City charges a fee to customers to
cover all or most of the cost of certain services it provides.

The City’s Electric, Water and Wastewater utilities are reported
in this category.
The government-wide financial statements are available on
pages 17-19 of this report.
Fund Financial Statements. The fund financial statements
provide detailed information about the individual funds, not the
City as a whole. A fund is a fiscal and accounting entity with a
self-balancing set of accounts that is used to keep track of
specific sources of funding and spending for a particular
purpose. Certain funds are required by state law and bond
covenants.
However, additional funds have been established to assist with
controlling and managing money for particular purposes or to
show that legal responsibilities for using certain taxes, grants,
and other resources are being met. All of the funds of the City
can be divided into three categories: governmental funds,
proprietary funds, and fiduciary funds.
Governmental funds. Most of the City’s basic services are
reported in governmental funds, which focus on how money
flows in and out of those funds and year-end balances that are
available for spending. These funds are reported using an
accounting method called modified accrual accounting, which

measures cash and all other financial assets that can readily
be converted to cash. The governmental fund statements provide
a detailed short-term view of the City’s general government
operations and the basic services it provides. Governmental
fund information helps determine whether there are more or
fewer financial resources that can be spent in the near future to
finance the City’s programs. The differences between the
results in the governmental fund financial statements to those in
the government-wide financial statements are explained in a
reconciliation following each governmental fund financial
statement.
In addition to the major funds reported separately on the
governmental fund balance sheet and in the governmental fund
statement of revenues, expenditures, and changes in fund
balances, the City also maintains 18 special revenue funds, 3
capital
project funds, and 2 debt service funds. Data from these funds
are combined into a single, aggregated presentation referred
to as other governmental funds. Individual fund data for each of
these non-major governmental funds is provided in the form
of combining statements after the notes section of the report.
The City adopts an annual appropriated budget for all of its
governmental and proprietary funds. Budgetary comparison
statements have been provided for the General Fund to

demonstrate compliance with this budget. This comparison is
available
on page 25 of this report.
The basic governmental fund financial statements are available
on pages 20-23 of this report.
7
Proprietary funds. When the City charges customers for the
services it provides, these services are generally reported in
proprietary funds. The City maintains two different types of
proprietary funds: enterprise funds and internal service funds.
Enterprise funds are used to report the same functions presented
as business-type activities in the government-wide financial
statements. The City uses enterprise funds to account for its
Electric, Water and Wastewater activities. Internal service funds
are an accounting device used to accumulate and allocate costs
internally among the City’s various functions. The City uses
an internal service fund to account for its insurance programs,
information services department and facilities/equipment
maintenance activities. Because these services predominantly
benefit governmental rather than business-type functions, these

funds have been included within governmental activities in the
government-wide financial statement.
Proprietary funds provide the same type of information as the
government-wide financial statements with more detail. The
proprietary fund financial statements provide separate
information for the Electric, Water and Wastewater operations,
all of
which are considered major funds of the City. The City’s
internal service funds combined are shown separately under the
heading Governmental Activities – Internal Service Funds.
The basic proprietary fund financial statements are available on
Fiduciary Funds. Fiduciary funds are used to account for
resources held for the benefit of parties outside the government.
Fiduciary funds are not reflected in the government-wide
financial statements because the resources of these funds are not
available to support the City’s programs. The accounting used
for fiduciary funds is much like that used for proprietary funds.
The City’s fiduciary activities are reported in a separate
Statement of Fiduciary Net Position. Individual fund data for
each
of these fiduciary funds is provided in the form of combining

statements after the notes section of the report. The City
currently
has two agency funds and two private-purpose trust funds. The
Successor Agency of the former Redevelopment Agency
(RDA) is accounted for as a private-purpose trust fund.
The basic fiduciary fund financial statements are available on
Notes to the financial statements. The notes provide additional
information that is essential to a full understanding of the
data provided in the government-wide and fund financial
statements. The Notes to the financial statements are available
on
Required Supplementary Information. Required actuarial
valuation schedules and underlying assumptions for Safety and
Miscellaneous CalPERS Pension Plans and the schedule of
progress for the Other Post-Employment Benefits (OPEB) Plan
are contained in this section. Required Supplementary
Information is available on pages 89-94 of this report.
Other information. In addition, the combining statements
referred to earlier in connection with non-major governmental

funds, internal service funds and fiduciary funds are presented
immediately following the notes to the financial statements.
Combining and individual fund statements and schedules are
available on pages 95-143 of this report.
8
GOVERNMENT-WIDE FINANCIAL ANALYSIS
As referenced earlier, net position may serve over time as a
useful indicator of a government’s financial position. At the end
of the current year, total City assets and deferred outflows of
resources exceeded liabilities and deferred inflows of resources
by $120,880,240, an increase of $21,604,303 over the prior
year. Of this net increase, governmental activities net position
increased by $11,955,891 and business-type activities increased
by $9,648,484. The underlying reasons for major changes in
each of these components will be discussed in the following
sections.
Governmental Activities
In the case of the City, governmental activities increased the
City of Colton’s net position by $11,955,819 a 63.5% increase

over the prior year. By far, the largest portion of the City’s net
position is its investment in capital assets. Total assets and
deferred outflows of resources for governmental activities
increased $11,842,551, or 8.9%.
Total assets government-wide increased by $21,943,009 as a
result of increases in revenues that were complemented by a
decrease in expenses. Total revenues increased by $2,331,673,
which is attributed to increases in the property taxes, sales
taxes, franchises, transient occupancy taxes, investment income,
and capital gains and contributions. Declines were realized
in the operating grants and contributions category for general
government and transfers. Overall, the increase in revenues is
a positive indicator showing stabilizing growth in the City. The
City’s governmental expenses were $2,268,760 lower in
comparison to the prior year. Year-over-year reductions in
General Government, Public Works, and Interest on long-term
debt expenditure categories offset increases in expenditures
related to Public Safety and Community Services.
2019 2018 2019 2018 2019 2018
Current and Other Assets 58,008,713$ 44,190,218$
102,264,369$ 98,515,685$ 160,273,082$
142,705,903$
Capital Assets 70,112,845 67,464,024 114,234,032

112,507,023 184,346,877$ 179,971,047$
Total Assets 128,121,558 111,654,242 216,498,401
211,022,708 344,619,959 322,676,950
Deferred Outflow of Resources 16,161,667 20,786,432
3,298,499 4,854,850 19,460,166$
25,641,282$
Long-term Debt Outstanding 143,734,317 143,060,909
86,017,175 90,438,975 229,751,492
233,499,884
Other Liabilities 3,147,370 3,427,634 5,516,550
7,025,357 8,663,920 10,452,991
Total Liabilities 146,881,687 146,488,543
91,533,725 97,464,332 238,415,412
243,952,875
Deferred Inflow of Resources 4,269,027 4,775,439
515,446 313,981 4,784,473
5,089,420
Net Position:
Net Investment in Capital
Assets 60,205,081 57,614,290 67,651,026
67,086,623 127,856,107 124,700,913
Restricted 25,567,031 18,434,877 3,982,965
3,932,103 29,549,996 22,366,980
Unrestricted (92,639,601) (94,872,475)
56,113,738 47,080,519 (36,525,863)
(47,791,956)
Total Net Position (6,867,489)$ (18,823,308)$
127,747,729$ 118,099,245$ 120,880,240$

99,275,937$
Governmental Activities Business-Type Activities Government-
Wide Totals
City of Colton's Net Position
As of June 30
9
The City’s Change in Net Position for Governmental as well as
Business-Type activities is illustrated in the following table:
2019 2018 2019 2018 2019 2018
Revenues
Program Revenues:
Charges for Services 9,909,845$ 8,344,863$
88,345,608$ 87,834,924$ 98,255,453$
96,179,787$
Operating Contributions and Grants 3,121,417
3,308,845 3,121,417 3,308,845
Capital Contributions and Grants 7,642,045 3,974,921
7,642,045 3,974,921
General Revenues:
Property Taxes 10,693,887 9,718,702
10,693,887 9,718,702
Sales Taxes 11,263,771 9,360,121 11,263,771

9,360,121
Other Taxes 2,969,762 2,867,325 2,969,762
2,867,325
Use of Money and Property 3,121,914 1,930,035
2,261,794 740,256 5,383,708
2,670,291
Other 341,440 491,218 2,500
76,418 343,940 567,636
Total Revenues 49,064,081 39,996,030
90,609,902 88,651,598 139,673,983
128,647,628
Expenses
General Government 2,575,487 3,323,729
2,575,487 3,323,729
Public Safety 31,119,615 28,429,019 31,119,615
28,429,019
Community Services 7,188,321 6,327,804
7,188,321 6,327,804
Public Works 6,011,976 6,171,521 6,011,976
6,171,521
Interest on long-term debt 1,773,988 2,148,554
1,773,988 2,148,554
Electric 51,029,071 48,785,845 51,029,071
48,785,845
Water 9,005,710 8,728,560 9,005,710
8,728,560
Wastewater 9,365,512 9,410,998 9,365,512
9,410,998
Total Expenses 48,669,387 46,400,627
69,400,293 66,925,403 118,069,680
113,326,030
Increase/(Decrease) in Net

Position Before Transfers 394,694 (6,404,597)
21,209,609 21,726,195 21,604,303
15,321,598
Transfers 11,561,125 13,252,825 (11,561,125)
(13,252,825) - -
Increase/(Decrease) in Net Position 11,955,819$
6,848,228$ 9,648,484$ 8,473,370$
21,604,303$ 15,321,598$
Net Position - Beginning of Year, (18,823,308)$
(25,671,536)$ 118,099,245$ 109,625,875$
99,275,937$ 83,954,339$
as restated
Net Position - End of Year (6,867,489)$ (18,823,308)$
127,747,729$ 118,099,245$ 120,880,240$
99,275,937$
Governmental Activities Business-Type Activities Government-
Wide Totals
City of Colton's Changes in Net Position
Fiscal Year Ended June 30
The following presents the cost of each of the City’s five
largest programs—general government, community services,
public
works, public safety and interest on long-term debt – as well as
each program’s net cost (total cost less revenues generated
by the activities). The net cost shows the financial burden that
was placed on the City’s taxpayers by each of these functions.

Function/Program Total Cost of Service Net Cost of Service
General Government 2,575,487$ (1,380,347)$
Public Safety 31,119,615 (28,077,399)
Community Services 7,188,321 (3,046,670)
Public Works 6,011,976 6,282,324
Interest on Long-Term Debt 1,773,988 (1,773,988)
Total Governmental Activities 48,669,387$
(27,996,080)$
Cost of Governmental Programs
10
Business-Type Activities
The following presents the cost of each of the City’s three
utilities – Electric, Water and Wastewater – as well as each
utility’s
net cost (total cost less revenues generated by the activities).
The net cost shows the amount not funded through user charges

for these services.
Business-type activities increased the City’s net position by
$9,648,484, which represents an 8.2% increase. The major
components are as follows:
Electric Utility
The Electric Utility operations net cost of service decreased
$2,171,688 over the prior year. Operating revenues were
relatively flat, with a marginal increase of $71,538 over the
prior year; a 0.1% change. Operating expenses increased by
$1,953,093, which represents a 4.1% increase.
Water Utility
In previous years, the Water Fund has struggled due to ongoing
costs related to the regional battle to remove perchlorate from
underground water sources. Additionally, water conservation
measures enacted in response to state legislation caused a
decline in operating revenues. Effective July 1, 2016, water rate

increases approved in Ordinance O-08-16 took effect to
address the effects water conservation efforts and the
maintenance and operations needs of the utility. Water Utility
sales and
charges for current services increased $550,661, representing a
4.3% increase. During the fiscal year, Water Utility operating
expenses also increased $296,753, or 3.7%.
Wastewater Utility
Operating revenues decreased by $111,515 or 1.1% over the
prior period. Operating expenses decreased by $155,310, or
1.7%.
Type of Business Total Cost of Service Net Cost of Service
Electric Utility 51,029,071$ 14,209,421$
Water Utility 9,005,710 4,267,937
Wastewater Utility 9,365,512 467,957
Total Business-Type Activity 69,400,293$ 18,945,315$
Business-Type Activities
11
FINANCIAL ANALYSIS OF THE GOVERNMENT’S FUNDS

Governmental Funds. The focus of the City’s governmental
funds is to provide information on near-term inflows, outflows
and balances of spendable resources. Such information is useful
in assessing the City’s financing requirements. In particular,
unassigned fund balance may serve as a useful measure of a
government’s net resources available for spending at the end of
the fiscal year.
As of the end of the current fiscal year, the City’s governmental
funds reported combined ending fund balances of
$45,275,840, an increase of $11,637,180 over the prior year, as
restated. Of this balance, $168,716, or 0.4% is classified as
non-spendable for inventory and prepaid costs; $24,787,814 or
54.7% is considered legally restricted fund balance to fund
such areas as capital projects, public safety, debt service, and
other services; an additional $14,708,973, or 32.5%, represents
balances committed by the City Council for pension and OPEB
liabilities; and the remaining 12.4%, or $5,610,337, is
considered unassigned fund balance.
The City’s General Fund is the only major fund on the balance
sheet for governmental funds. All remaining governmental
funds are combined into Other Governmental Funds.

The General Fund is the major operating fund of the City. At
the end of the current fiscal year, the General Fund’s
unassigned
fund balance was $6,290,763, or 29.7% of its total fund balance
of $21,168,452. Unassigned fund balance serves as a useful
measure of a government's net resources available for spending
at the end of the fiscal year. Subsequent to June 30, 2017,
City Council adopted Resolution R-91-17, a General Fund
Balance Policy which seeks to fund unfunded liabilities and
other
deferred maintenance needs of the City. As of June 30, 2019,
committed balances for pension and OPEB liabilities are
$10,150,871 and $4,558,102 respectively. The total General
Fund ending fund balance was $5,820,862 more than the
previous year’s fund balance. The General Fund’s top three
revenue categories for the year, namely property tax, sales tax,
and other taxes, saw a combined increase of $2,600,177, or
11.6%, over the prior year. This is attributed to an increases in
property and sales tax revenues, which is indicative of growth
and a rebounding economy.

Revenue Category Amount Percent of Total
Property Tax 10,693,887$ 31.7%
Sales Tax 11,263,771 33.4%
Other Taxes 2,969,762 8.8%
Licenses and Permits 2,456,053 7.3%
Intergovernmental 1,088,904 3.2%
Charges for Services 2,565,329 7.6%
Use of Money and Property 2,090,979 6.2%
Fines and Forfeitures 359,956 1.1%
Contributions 75,000 0.2%
Miscellaneous 120,540 0.4%
Total General Fund Revenue 33,684,181$ 100%
Revenue by Source - General Fund
12
(5,000,000)
0
5,000,000
10,000,000

15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
45,000,000
Electric Water Waste Water
Proprietary Funds
Unrestricted Net Position
As of June 30
2019
2017
2016
2015
2014
2013
Proprietary Funds. The City’s proprietary funds provide the
same type of information found in the government-wide

financial statements but in greater detail by fund.
GENERAL FUND BUDGETARY HIGHLGIHTS
During the year, with the recommendation from the City’s staff,
the City Council revised the City budget numerous times in
order to adjust for changes in cost and revenue estimates. All
amendments that result in a net change in estimated revenue or
appropriations in any given fund are approved by City Council.
The General Fund grouping schedule, for financial statement
presentation purposes, include Refuse Fund accounts.
Budget to Actual

The General Fund original budget projected revenues and
appropriations at $40,642,135 and $39,239,808, respectively.
With respect to revenue, projections increased by $671,706
throughout the course of the year, mainly during the mid-year
budget review process. Actual revenues received for the fiscal
year exceeded projections by $4,092,170 for a total of
$45,406,011 in General Fund revenues. The positive budget
variances pertain mostly to an increase in sales tax, property
tax,
other taxes, charges for current services, use of money and
property, and licenses and permits, which were supplemented
with
positive variances most other revenue categories and offset by a
negative variance in the miscellaneous revenue and transfers
in.
On the expenditure side, the amended appropriations increased
the budget by $1,739,799. Although there were a number of
changes to the original budget, the largest increases were due to
the roll of open purchase orders and approved carryover
requests from the prior year as well as other operational
adjustments made at mid-year. Actual total expenditures came
at
$39,585,149, or $1,394,458 under-budget, primarily due to
positive variances in General Government and Public Works.

CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
The City’s investment in capital assets for its governmental and
business-type activities as of June 30, 2019, was
$184,706,877 (net of accumulated depreciation), which
represents an increase of $4,375,830, or 2.4%, over the prior
year.
This investment in capital assets includes land, building and
system improvements, machinery and equipment, park facilities,
roads, highways, streets and bridges.
13
Governmental Activity
During the year, the Public Works department added the
following land and projects to capital assets:
at the following locations:
– Washington to Cahuilla Street
– 8th to Pine Street

– La Cadena to BNSF
– Washington to north of City Limit
– Iron Horse to Eucalyptus
– Meridian to west of Hermosa Street
ll Street – Rancho Avenue to Michigan Avenue
– 6th Street to La Cadena Drive
– Eucalyptus to Indigo Avenue
– Matich Drive to Wild Canyon
– Valley Boulevard to F Street
Fairway Drive – Auto Plaza to Crossroad
– Reche Canyon to Canyon Drive
– Valley Boulevard to 300 feet north.
– Fogg St. to La Cadena Dr.
– Bordwell Ave. to south of Rancho Ave.
er street and sidewalk improvement projects:

- Colt-17-3-03k/2989 – East H and
East G Sidewalk Improvement
- Colt-17-4-03k/2990 – East E
Sidewalk Improvement
- Colt-17-5-03k/2990 – Laurel
Ave. Sidewalk Improvement
-17-03K-2987 – L Street Alley
Paving Project
-16-2-03K-7529 – Ivy Ave., C St.,
Vista Way, Illinois Ave. and Holly Ave.
Engineering
projects
-18-1-03K/0142 - Alley Paving from Olive. St. to
Laurel Street between Holly Ave. and
Fairview Ave.
-18-1-03K/0141 - 5th Street Curb/Gutter and
Alley Paving from 4th to 5th Street between L St.
and M St.
-18-1-03K/0143 - Alley Paving from 7th to La
Cadena Dr. between Olive and Hanna St. and
Installation of Concrete Curb/Gutter at Fairview Ave. north of

Hillcrest..
SB-1 funded)
1) San Bernardino Ave. – Indigo Ave. to Sycamore (North
side only)
2) La Cadena Drive – Barton Road. to Iowa
3) Mt. Vernon Ave – F St. to Colton Ave.
4) Santo Antonio Drive – Mt. Vernon Ave. to East End
5) Washington Street – Hunts Lane to Waterman Ave
6) Rancho Ave – Johnston Street to Mill Street
7) Valley Blvd – City Limit to Wildrose Avenue
8) Reche Canyon Road – 0.20 miles South of Washington St.
to City limit.
– Washington Street Traffic Signal
Interconnect Project.
14
– Completed plan check for grading, hydrology,
off/on site improvement for the following projects:

Valley Blvd.
Blvd.(ARCO Station)
icine at the southeast
corner of Meridian Ave. and San Bernardino
Ave.
and San Bernardino Ave.
Woodpine Ave.
Business-Type Activity
Electric Department
cable as part of the ongoing cable replacement program.
-only
meters with two-way communication bridge meters (AMI).
overhead conductor on the electric system as part of the
ongoing capital maintenance project.
efficiency LED street lights.
Issued a Request For Proposals to replace the data acquisition
system software are the Agua Mansa Power Plant.

transmission lines.
pleted installation of the Transmission Protection System
at the Century Substation.
units for the replacement of 11 HVAC units at 5 City
facilities with proceeds from the California Cap & Trade
Program
estimated 2,001,090 kWh
Water Department
-rails at Wild Canyon Reservoir
the electrical panel at Prado Station
-VAL at Valley pressure reducing station
-VAL at Laurel pressure reducing station
uilt CLA-VAL at Well 19
Wastewater Department
-solid processing
#3
-solids

contaminant
– 50, Grand Terrace
– 40)
– 28, Grand Terrace – 3)
aised to
grade 13 man hole covers.
Additional information on the City’s capital assets is available
in Note 5 on pages 57-58 of this report.
15
2019 2018 2019 2018 2019 2018
Land $12,706,911 $12,706,911 $6,269,991 $9,008,062
$18,976,902 $21,714,973
Const ruct ion in progress 13,447,123 11,301,077
1,949,471 3,981,948 15,396,594 15,283,025
St ruct ure and
Improvement s 12,691,674 12,989,000 18,869,628
20,897,959 31,561,302 33,886,959
Furnit ure and Equipment 2,362,354 1,911,044
15,270,919 15,157,493 17,633,273 17,068,537
Capacit y Right s - - 3,583,642
3,716,369 3,583,642 3,716,369
Infrast ruct ure 28,904,783 28,555,992 68,290,381
59,745,192 97,195,164 88,301,184
Total 70,112,845$ 67,464,024$ 114,234,032$ 112,507,023$
184,346,877$ 179,971,047$

C i ty of C ol ton 's C api tal Asse ts at Ju n e 30
(n e t of de pre ci ati on )
Bu si n e ss-Type
Acti vi ti e s Total
Gove rn m e n tal
Acti vi ti e s
Long-Term Debt
Governmental Activities
During the year, the City entered into a capital lease agreement
for a Type I KME Fire Engine. The City’s future commitment
for this capital lease at June 30, 2019, is $637,877. Overall,
long-term debt for governmental activities was $40,648,743, a
decrease of $1,109,975 as compared to the prior year. The
primary components of the debt are the Taxable Pension
Funding
Bonds, Series 2007 with a balance of $22,571,063 and the
Public Finance Authority Lease Revenue Bonds, 2007 Series B,
which has a balance of $9,255,000.
Proprietary Funds
The major components of long-term debt for business-type

activities are bonds to finance infrastructure needs of the City’s
utilities. Overall, long-term debt for proprietary funds decreased
by $4,974,049, or 7.5%, over the prior year. Detailed
information related to long-term liabilities may be found in
Note 7 to the financial statements.
The City maintains an “A” issuer credit rating (ICR) with a
stable outlook with Standard & Poor’s. The underlying rating on
the City’s pension funding bonds is an “A” and the underlying
rating on the City’s lease revenue bonds issued by the Public
Financing Authority is an “A-.” The Colton Public Financing
Authority for the Electric Utility issuances maintains an “A3”
rating with Moody’s.
Additional information on the City’s long-term debt is available
in Note 7 on pages 60-68 of this report.
16
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
According to Kiplinger’s Economic Outlook, low jobless rates
and rising incomes across the United States are indicative
factors for the best growth since before the Great Recession.

However, due to the trade war with China, a slowdown in job
growth has been most pronounced in Southern California,
especially the Inland Empire, which is home to a lot of
warehousing
and logistics.1 But in Colton, construction continues to be
robust, with mixed use retail, industrial and residential
developments. Within Colton’s industrial areas, current
construction is impressive, with over 3,978,000 square feet of
completed, under construction, or proposed industrial
development, such as Walmart’s new Consolidation Center and
Hillwood’s new building for Avalon Apparel, all of which has
or will create approximately 1,300 to 1,500 net new job
opportunities. A new medical non-profit school known as
California University of Science and Medicine is under
construction
with their first 100,000 square foot classroom facility.
Woodsprings Suites hotel, the Habit Burger Grill, Firehouse
Subs,
Popeye’s Chicken, a 5th Starbucks Coffee Shop, Waba Grill,
The Buffalo Spot, Black Bear Diner and Jack in the Box are all
nearing completion of development along with over 175 new
residential units within the Hub City Centre area. Already
completed are Pepper Express Chevron, Mor Furniture, CVS
Pharmacy, Richardson’s first 104,000 square foot indoor RV
Center, Mattress Firm, and United Packaging Group expansion.
Colton’s Hub City Centre “Vision” concept is being planned
for new townhomes, condos, luxury apartments, assisted living
mixed in with outdoor dining, walking trails, new independent
retailers, restaurants, medical offices, fitness gyms and much
more. Colton’s growth has not slowed, and its economic
forecast
shows signs of continued growth in all areas of residential,
retail and industrial development creating numerous jobs.
The City’s original adopted General Fund Budget revenues and

appropriations for fiscal year 2019-20 were $41,037,639 and
$40,612,1849, respectively. The fiscal year 2019-20 adopted
General Fund budget is representative of a small budget surplus
while meeting its minimum reserve requirement as estimated for
June 30, 2019. The passage of Measure V in November
2018 provided the City the much-needed stabilization to
continue to provide services at the current level and for future
General Fund services amidst the acutely rising pension costs
and OPEB costs.
The City is committed to strong fiscal and strategic management
and economic growth and development to ensure a stable
financial future. We are dedicated to lead our community by
demonstrating the fiscal health and sustainability of our beloved
City. A copy of the City’s 2019-20 budget is accessible in
electronic format on the Finance Department’s page of the
City’s
website (www.coltonca.gov) or by contacting the Finance
Department (see below).
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 of Colton’s finances and to show the City’s
accountability for the money it receives. Questions concerning
any of
the information provided in this report or requests for additional
financial information should be addressed to the City’s
Finance Department at the City of Colton, 650 North La Cadena
Drive, Colton, CA 92324.

1 Kiplinger’s Economic Outlook for All 50 States, 2020 dated
October 16, 2019
2019 2018 2019 2018 2019 2018
Revenue bonds 9,255,000$ 9,730,000$ $56,428,379
$60,490,483 65,683,379$ 70,220,483$
Capit al lease obligat ions 637,877 110,825
637,877 110,825
T axable P ension Bonds 22,571,063 23,819,225
22,571,063 23,819,225
Not es P ayable - - 4,176,058 4,986,455
4,176,058 4,986,455
Compensat ed absences 1,932,898 2,017,464 637,305
738,853 2,570,203 2,756,317
Ot her long-t erm liabilit ies 6,251,905 6,081,204
6,251,905 6,081,204
Total 40,648,743$ 41,758,718$ $61,241,742 $66,215,791
101,890,485$ 107,974,509$
C i ty of C ol ton O u tstan di n g De bt at Ju n e 30
Bu si n e ss-Type
Acti vi ti e s Total
Gove rn me n tal
Acti vi ti e s
Governmental Business-Type
Activities Activities Total

ASSETS:
Cash and investments 50,802,821$ 68,190,004$
118,992,825$
Receivables:
Accounts 1,283,227 10,286,871 11,570,098
Taxes 2,481,748 - 2,481,748
Notes and loans - 853,338
853,338
Accrued interest 165,136 389,780
554,916
Internal balances (525,110) 525,110 -
Prepaid items 1,726 562,395 564,121
Prepaid bond insurance - 26,000
26,000
Deposits - 2,291,117 2,291,117
Due from other governments 919,548 37,763
957,311
Due from successor agency 110,823 -
110,823
Inventories 167,140 1,313,397 1,480,537
Land held for resale 84,131 -

84,131
Restricted assets:
Cash and investments 115,029 -
115,029
Cash with fiscal agent 2,400,739 17,428,594
19,829,333
Capital assets not being depreciated 26,154,034
8,579,462 34,733,496
Capital assets, net of accumulated depreciation 43,958,811
106,014,570 149,973,381
TOTAL ASSETS 128,119,803 216,498,401
344,618,204
DEFERRED OUTFLOWS OF RESOURCES:
Deferred amount on refunding 70,547 215,801
286,348
Deferred amount from OPEB 1,285,924 302,571
1,588,495
Deferred amount from pensions 14,805,196 2,780,127
17,585,323
TOTAL DEFERRED OUTFLOWS OF RESOURCES 16,161,667
3,298,499 19,460,166
LIABILITIES:
Accounts payable 2,151,127 3,544,544

5,695,671
1,291,634
Unearned revenues 398,857 -
398,857
Deposits payable - 1,277,758
1,277,758
Noncurrent liabilities:
Due within one year 5,463,209 5,343,206
10,806,415
Due in more than one year 35,185,534 55,898,536
91,084,070
OPEB liability - due in more than one year 25,039,289
5,891,597 30,930,886
Pension liability - due in more than one year 78,046,285
18,883,836 96,930,121
TOTAL LIABILITIES 146,881,687 91,533,725
238,415,412
DEFERRED INFLOWS OF RESOURCES:
Deferred amounts from OPEB 1,300,968 306,110
1,607,078
Deferred amounts from pensions 2,968,059 209,336
3,177,395

TOTAL DEFERRED INFLOWS OF RESOURCES 4,269,027
515,446 4,784,473
NET POSITION (DEFICIT):
Net investment in capital assets 60,205,081 67,651,026
127,856,107
Restricted
Public safety 592,707 - 592,707
Capital projects 20,890,069 -
20,890,069
Debt service 2,548,244 3,982,965 6,531,209
Education 50,083 - 50,083
Community services - -
-
Affordable housing 959,789 -
959,789
Air quality projects 526,139 -
526,139
Unrestricted (92,641,356) 56,113,738
(36,527,618)
TOTAL NET POSITION (DEFICIT) (6,869,244)$
127,747,729$ 120,878,485$
CITY OF COLTON

STATEMENT OF NET POSITION
June 30, 2019
See accompanying notes to financial statements.
17
Charges Operating Capital
for Grants and Grants and
Expenses Services Contributions Contributions
Governmental activities:
General government 2,575,487$ 1,165,679$ 29,461$
-$
Public safety 31,119,615 1,930,282 1,111,934 -
Community services 7,188,321 3,054,377 636,165 449,354
Public works 6,011,976 3,759,507 1,342,102 7,192,691
Interest on long-term debt 1,773,988 - -
-
Total Governmental Activities 48,669,387 9,909,845
3,119,662 7,642,045
Business-Type Activities:
Electric utility 51,029,071 65,238,492 - -
Water utility 9,005,710 13,273,647 - -
Waste water utility 9,365,512 9,833,469 -
-
Total Business-Type Activities 69,400,293 88,345,608 -
-
Total Primary Government 118,069,680$ 98,255,453$

3,119,662$ 7,642,045$
General Revenues:
Taxes:
Property taxes, levied for general purposes
Transient occupancy taxes
Franchise taxes
Other taxes
Intergovernmental - State shared sales taxes
Motor vehicle in lieu - unrestricted
Investment income
Other
Transfers
Total General Revenues and Transfers
Change in net position
Net Position - Beginning of Year
Net Position - End of Year
Program Revenues
CITY OF COLTON
STATEMENT OF ACTIVITIES
For the year ended June 30, 2019
Functions/programs

18
Governmental Business-Type
Activities Activities Total
(1,380,347)$ -$ (1,380,347)$
(28,077,399) - (28,077,399)
(3,048,425) - (3,048,425)
6,282,324 - 6,282,324
(1,773,988) - (1,773,988)
(27,997,835) - (27,997,835)
- 14,209,421 14,209,421
- 4,267,937 4,267,937
- 467,957 467,957
- 18,945,315 18,945,315
(27,997,835) 18,945,315 (9,052,520)
10,693,887 - 10,693,887
1,062,307 - 1,062,307
1,741,402 - 1,741,402
166,053 - 166,053
11,263,771 - 11,263,771
25,788 - 25,788
3,121,914 2,261,794 5,383,708
315,652 2,500 318,152

11,561,125 (11,561,125) -
39,951,899 (9,296,831) 30,655,068
11,954,064 9,648,484 21,602,548
(18,823,308) 118,099,245 99,275,937
(6,869,244)$ 127,747,729$ 120,878,485$
Primary Government
Net (Expenses) Revenue and Changes in Net Position
19
Other Total
Governmental Governmental
General Funds Funds
ASSETS:
40,618,933$
Receivables:
Accounts 651,744 630,682 1,282,426
Taxes 2,380,119 101,629 2,481,748
Accrued interest 64,819 70,226 135,045
Prepaid items 1,576 - 1,576
Due from other governments 101,932 817,616
919,548

Due from successor agency - 110,823
110,823
Due from other funds 193,201 22,830
216,031
Inventories 167,140 - 167,140
Land held for resale - 84,131 84,131
Restricted assets:
Cash and investments - 62,312
62,312
Cash and investments with fiscal agents -
2,400,739 2,400,739
TOTAL ASSETS 22,225,188$ 26,255,264$ 48,480,452$
LIABILITIES:
Accounts payable 1,056,736$ 752,875$ 1,809,611$
Unearned revenues - 398,857 398,857
Due to other funds - 216,031 216,031
TOTAL LIABILITIES 1,056,736 1,367,763
2,424,499
Unavailable revenues - 781,868
781,868
TOTAL DEFERRED
INFLOWS OF RESOURCES - 781,868
781,868
FUND BALANCES:
Nonspendable:

Inventories 167,140 - 167,140
Restricted:
Public safety - 592,707 592,707
Capital projects - 20,110,852 20,110,852
Debt service - 2,548,244 2,548,244
Education - 50,083 50,083
Affordable housing - 959,789 959,789
Air quality projects - 526,139 526,139
Committed to:
Pension obligation 10,150,871 - 10,150,871
OPEB obligation 4,558,102 - 4,558,102
Unassigned 6,290,763 (682,181) 5,608,582
TOTAL FUND BALANCES 21,168,452 24,105,633
45,274,085
TOTAL LIABILITIES, DEFERRED INFLOWS
OF RESOURCES AND FUND BALANCES 22,225,188$
26,255,264$ 48,480,452$
June 30, 2019
CITY OF COLTON
BALANCE SHEET - GOVERNMENTAL FUNDS
20
Fund balances - total governmental funds 45,274,085$

Amounts reported for governmental activities in the Statement
of Net Position
are different because:
Capital assets, net of depreciation have not been included as
financial
resources in governmental fund activity. 69,728,422
Long-term debt and related items, and compensated absences
that have
not been included in the governmental fund activity:
County memorandum of understanding (1,829,298)$
Capital lease obligations (637,877)
Taxable pension funding bonds, Series 2007 (22,571,063)
Lease revenue bonds, 2007 Series B (9,255,000)
Deferred loss on refunding to be amortized 70,547
Bond discount to be amortized 149,511
Bond premium to be amortized (85,434)
Compensated absences (1,873,431)
(36,032,045)
Pension related debt applicable to the City governmental
activates are not due and

payable in the current period and accordingly are not reported
as fund liabilities.
Deferred outflows of resources and deferred inflows of
resources related to pensions
are only reported in the Statement of Net Position as the
changes in these amounts
affect only the government-wide statements for governmental
activities.
Deferred outflows of resources 14,805,196
Deferred inflows of resources (2,968,059)
Pension liability (78,046,285)
(66,209,148)
OPEB-related debt applicable to the City's governmental
activities is not due and
payable in the current period and accordingly is not reported as
fund liabilities.
Deferred outflows of resources and deferred inflows of
resources related to OPEB
are only reported in the statement of net position, as the
changes in these amounts
affect only the government-wide statements for governmental
activities.

Deferred outflows of resources 1,285,924
Deferred inflows of resources (1,300,968)
Net OPEB liability (25,039,289)
(25,054,333)
Accrued interest payable for the current portion of interest due
on bonds are not reported in the governmental funds. (597,386)
Revenues reported as unavailable revenue in the governmental
funds and
recognized in the Statement of Activities. These are included in
the
intergovernmental revenues in the governmental fund activity.
781,868
Internal service funds are used by management to charge the
costs of certain
activities, such as equipment management and self-insurance, to
individual
funds. The assets and liabilities of the internal service funds
must be added
to the Statement of Net Position. 5,239,293
Net deficit of governmental activities (6,869,244)$
CITY OF COLTON

RECONCILIATION OF THE GOVERNMENTAL FUNDS
BALANCE SHEET TO THE STATEMENT OF NET POSITION
June 30, 2019
21
Other Total
Governmental Governmental
General Funds Funds
REVENUES:
Taxes 10,693,887$ 606,757$ 11,300,644$
Sales taxes 11,263,771 - 11,263,771
Other taxes 2,969,762 - 2,969,762
Licenses and permits 2,456,053 -
2,456,053
Intergovernmental 1,088,904 6,735,799 7,824,703
Charges for services 2,565,329 2,718,677 5,284,006
Use of money and property 2,090,979 629,064
2,720,043
Fines and forfeitures 359,956 308,790 668,746
Contributions 75,000 - 75,000
Miscellaneous 120,540 3,467,403 3,587,943
TOTAL REVENUES 33,684,181 14,466,490 48,150,671
EXPENDITURES:
Current:
General government (438,554) 221,056 (217,498)

Public safety 27,245,005 808,667 28,053,672
Community services 6,030,869 1,034,282 7,065,151
Public works 2,054,320 4,441,717 6,496,037
Capital outlay 797,849 1,614,387 2,412,236
Debt service:
Principal retirement 110,825 2,040,000 2,150,825
Interest and fiscal charges 3,304 1,491,729
1,495,033
TOTAL EXPENDITURES 35,803,618 11,651,838
47,455,456
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (2,119,437) 2,814,652
695,215
OTHER FINANCING SOURCES (USES):
Proceeds from capital lease 637,877 -
637,877
Transfers in 11,083,953 4,071,140 15,155,093
Transfers out (3,781,531) (1,071,229) (4,852,760)
TOTAL OTHER FINANCING
SOURCES (USES) 7,940,299 2,999,911 10,940,210
NET CHANGE IN FUND BALANCES 5,820,862
5,814,563 11,635,425
FUND BALANCES - BEGINNING OF YEAR 15,347,590
18,291,070 33,638,660
FUND BALANCES - END OF YEAR 21,168,452$
24,105,633$ 45,274,085$

CHANGES IN FUND BALANCES - GOVERNMENTAL
FUNDS
CITY OF COLTON
STATEMENT OF REVENUES, EXPENDITURES AND
22
Net change in fund balances - total governmental funds
11,635,425$
Amounts reported for governmental activities in the Statement
of Activities
are different because:
Governmental funds report capital outlays as expenditures.
However, in
the Statement of Activities, the cost of those assets is allocated
over the
the estimated useful lives as depreciation expense. This is the
amount
by which capital outlay exceeded depreciation and disposals in
the current period.
Capital outlays 5,290,489$
Depreciation (2,577,810) 2,712,679
Pension expense reported in the governmental funds includes
the annual required
contributions. In the Statement of Activities, pension expense

includes the change
in the net pension liability, and related change in pension
amounts for deferred
outflows of resources and deferred inflows of resources.
(5,557,868)
The issuance of long term debt provides current financial
resources to governmental
funds, while the repayment of the principal of long-term debt
consumes the current
financial resources of governmental funds. Neither transaction,
however, has any
effect on net position. Also, governmental funds report the
effect of issuance cost,
discounts and similar items when the debt is first issued,
whereas these amounts are
deferred and amortized in the Statement of Activities. These
amounts are the net
effect of these differences in the treatments of long-term debt
and related items.
Debt issued or incurred:
Accreted interest (316,838)
Capital lease obligations (637,877)
Principal repayments:
Capital lease obligations 110,825
Taxable pension funding bonds, Series 2007 1,565,000
Lease revenue bonds, 2007 Series B 475,000
Bond defeasance amortization (12,550)
Bond premium and discount amortization (1,735)
1,181,825
Accrued interest for long-term liabilities. This is the net
change in accrued
interest for the current period. 46,520

Compensated absences expenses reported in the Statement of
Activities do not
require the use of current financial resources and, therefore, are
not reported as
expenditures in the governmental funds. 81,047
OPEB expense reported in the governmental funds includes the
actual payments
contributions. In the statement of activities, OPEB expense
includes the
change in the net OPEB liability and related change in OPEB
amounts for
deferred outflows deferred inflows of resources. (331,318)
Revenues reported as unavailable revenue in the governmental
funds
and recognized in the Statement of Activities. These are
included in
the intergovernmental revenues in the governmental fund
activity. 639,448
Internal service funds are used by management to charge the
costs of certain
activities, such as equipment management and self-insurance, to
individual
funds. The net revenues (expenses) of the internal service fund
is reported
with governmental activities. 1,546,306
Change in net position of governmental activities 11,954,064$
CITY OF COLTON
RECONCILIATION OF THE GOVERNMENTAL FUNDS
STATEMENT OF

REVENUES, EXPENDITURES AND CHANGES IN FUND
BALANCES
TO THE STATEMENT OF ACTIVITIES
23
24
Variance with
Final Budget
Positive
Original Final Actual (Negative)
Budgetary Fund Balance, July 1 15,347,590$ 15,347,590$
15,347,590$ -$
Resources (Inflows):
Taxes 9,740,000 9,740,000 10,693,887 953,887

Sales taxes 9,540,000 9,540,000 11,263,771
1,723,771
Other taxes 2,400,000 2,400,000 2,969,762
569,762
Licenses and permits 1,904,500 2,056,425 2,456,053
399,628
Intergovernmental 1,047,232 1,067,337 1,088,904
21,567
Charges for services 2,140,357 2,219,533 2,565,329
345,796
Use of money and property 1,613,280 1,628,280
2,090,979 462,699
Fines and forfeitures 197,000 271,000 359,956
88,956
Contributions 50,000 50,000 75,000
25,000
Miscellaneous 557,997 570,497 120,540
(449,957)
Transfers in 10,813,892 11,132,892 11,083,953
(48,939)
Proceeds from capital lease 637,877 637,877
637,877 -
Amounts Available for Appropriations 55,989,725
56,661,431 60,753,601 4,092,170

Charges to Appropriations (Outflows):
Current:
General government:
City Council 235,077 237,077 213,268
23,809
City Clerk 354,190 354,190 337,623
16,567
City Manager 1,173,333 1,173,118 1,003,711
169,407
Human Resources 2,001,584 2,113,791 1,789,944
323,847
Financial Services 3,066,722 3,162,942 3,083,083
79,859
City Attorney 883,555 1,031,555 559,755
471,800
City Treasurer 57,368 57,368 57,422
(54)
Nondepartmental - 113,150 30,905
82,245
Cost allocation (7,514,265) (7,514,265) (7,514,265)
-
Public safety:
Police 15,526,171 15,698,873 15,758,255 (59,382)

Fire 11,429,248 11,557,074 11,486,750 70,324
Community services:
Parks, recreation and family services 3,879,060 4,113,483
3,872,377 241,106
Community development 2,252,864 2,406,309
2,158,492 247,817
Public works:
Public services 2,383,479 2,451,777 2,054,320
397,457
Capital outlay 819,725 982,029 797,849
184,180
Debt service:
Principal retirement 150,953 150,952 110,825
40,127
Interest and fiscal charges 19,053 19,053
3,304 15,749
Transfers out 2,521,691 2,871,131 3,781,531
(910,400)
Total Charges to Appropriations 39,239,808 40,979,607
39,585,149 1,394,458
Budgetary Fund Balance, June 30 16,749,917$ 15,681,824$
21,168,452$ 5,486,628$

CITY OF COLTON
BUDGETARY COMPARISON STATEMENT BY
DEPARTMENT
GENERAL FUND
For year ended June 30, 2019
Budgeted Amounts
25
Utility Utility Utility
ASSETS:
CURRENT ASSETS:
Cash and investments 41,649,868$ 16,940,558$ 9,599,578$
Receivables:
Accounts 7,317,779 1,654,626 1,314,466
Prepaid bond insurance - 26,000 -
Deposits 2,291,117 - -
Due from other governments - 37,763 -
Inventories 1,188,981 124,416 -
Loans receivable, current portion 227,184 -
87,666
Restricted assets

Cash and investments - - -
Cash with fiscal agent 3,982,965 8,408,631 5,036,998
TOTAL CURRENT ASSETS 56,900,816 27,246,478
16,693,477
NONCURRENT ASSETS:
Loans receivable, net of current portion 165,427 -
373,061
Capital assets, not being depreciated 3,260,739 4,915,683
403,040
Capital assets, net of
accumulated depreciation 46,325,670 23,244,489
36,444,411
TOTAL NONCURRENT ASSETS 49,751,836 28,160,172
37,220,512
TOTAL ASSETS 106,652,652 55,406,650 53,913,989
DEFERRED OUTFLOWS OF RESOURCES:
Deferred amount on refunding 215,801 - -
Deferred amount from OPEB 159,248 59,718
83,605
Deferred amount from pensions 1,625,982 656,851
497,294
TOTAL DEFERRED OUTFLOWS
OF RESOURCES 2,001,031 716,569 580,899
CITY OF COLTON
PROPRIETARY FUNDS

June 30, 2019
Business-Type Activities - Enterprise Funds
26
Business-Type
Activities -
Enterprise Funds Governmental
(Continued) Activities
Internal
Total Service Funds
68,190,004$ 10,183,888$
10,286,871 801
389,780 30,091
562,395 150
26,000 -
2,291,117 -
37,763 -
1,313,397 -
314,850 -
- 52,717
17,428,594 -

100,840,771 10,267,647
538,488 -
8,579,462 -
106,014,570 384,423
115,132,520 384,423
215,973,291 10,652,070
215,801 -
302,571 -
2,780,127 -
3,298,499 -
27
LIABILITIES:
CURRENT LIABILITIES:
Accounts payable 2,020,694$ 1,053,297$ 470,553$
Deposits payable 1,210,480 67,278 -
Accrued compensated absences 366,140 144,808
87,001
Accrued claims and judgments - - -
Bonds and notes payable 3,030,000 675,132
1,040,125

TOTAL CURRENT LIABILITIES 6,969,935 2,159,690
1,730,131
NONCURRENT LIABILITIES:
Accrued compensated absences 39,357 - -
Accrued claims and judgments - - -
Net OPEB liability 3,100,841 1,162,815 1,627,941
Net pension liability 11,044,387 4,461,612 3,377,837
Bonds and notes payable 27,096,640 19,401,732 9,360,807
TOTAL NONCURRENT LIABILITIES 41,281,225
25,026,159 14,366,585
TOTAL LIABILITIES 48,251,160 27,185,849 16,096,716
Deferred amounts from pensions 122,432 49,459
37,445
Deferred amount from OPEB 161,111 60,416
84,583
TOTAL DEFERRED INFLOWS OF RESOURCES 283,543
109,875 122,028
NET POSITION:
Net investment in capital assets 19,675,570 16,491,939
31,483,517
Restricted for debt service 3,982,965 - -
Unrestricted 36,460,445 12,335,556 6,792,627
TOTAL NET POSITION 60,118,980$ 28,827,495$
38,276,144$
Prior years' accumulated adjustment to reflect the
consolidation of internal service funds activities

related to the enterprise funds
Current year's adjustment to reflect the
consolidation of internal service funds
activities related to the enterprise funds
Net position of business-type activities
CITY OF COLTON
PROPRIETARY FUNDS
(CONTINUED)
June 30, 2019
28
Business-Type
Activities -
Internal
Total Service Funds
3,544,544$ 341,516$
694,248 -

1,277,758 -
597,949 38,986
- 1,997,480
4,745,257 -
10,859,756 2,377,982
39,357 20,481
- 2,489,204
5,891,597 -
18,883,836 -
55,859,179 -
80,673,969 2,509,685
91,533,725 4,887,667
209,336 -
306,110 -
515,446 -
67,651,026 384,423
3,982,965 -
55,588,628 5,379,980
127,222,619 5,764,403$
490,984
34,126
127,747,729$

29
OPERATING REVENUES:
Sales and service charges 58,461,746$ 12,310,343$
9,411,293$
Miscellaneous 6,776,746 963,304 422,176
TOTAL OPERATING REVENUES 65,238,492 13,273,647
9,833,469
OPERATING EXPENSES:
Salaries and benefits 7,342,422 2,617,575 2,524,462
Maintenance and operations 3,219,906 3,717,583
3,378,283
Generation 1,866,791 - -
Purchased power 29,877,990 - -
Contractual services - - -
Claims and benefits - - -
Charges from other funds 3,357,817 1,146,833
1,744,498
Amortization - - 140,727
Depreciation expense 4,056,771 834,089 1,287,297
TOTAL OPERATING EXPENSES 49,721,697 8,316,080
9,075,267
OPERATING INCOME 15,516,795 4,957,567 758,202
NONOPERATING REVENUES (EXPENSES):
Intergovernmental 2,500 - -

Interest revenue 1,148,662 690,950 422,182
Interest expense (1,239,753) (700,026) (298,751)
Loss on disposal of capital assets (82,845) -
-
TOTAL NONOPERATING
REVENUES (EXPENSES) (171,436) (9,076)
123,431
INCOME (LOSS) BEFORE TRANSFERS 15,345,359
4,948,491 881,633
TRANSFERS IN - - -
TRANSFERS OUT (11,353,838) (97,196) (110,091)
CHANGE IN NET POSITION 3,991,521 4,851,295
771,542
NET POSITION - BEGINNING OF YEAR 56,127,459
23,976,200 37,504,602
NET POSITION - END OF YEAR 60,118,980$ 28,827,495$
38,276,144$
Adjustment to reflect the consolidation of internal
service fund activities related to enterprise funds
Change in net position - Enterprise Funds
Change in net position of business-type activities
CITY OF COLTON
STATEMENT OF REVENUES, EXPENSES AND CHANGES
IN NET POSITION
PROPRIETARY FUNDS

30
Business-Type
Activities -
Internal
Total Service Funds
80,183,382$ 5,617,427$
8,162,226 18,610
88,345,608 5,636,037
12,484,459 1,040,269
10,315,772 1,711,538
1,866,791 -
29,877,990 -
- 153,845
- 2,619,274
6,249,148 -
140,727 -

6,178,157 63,857
67,113,044 5,588,783
21,232,564 47,254
2,500 -
2,261,794 274,386
(2,238,530) -
(82,845) -
(57,081) 274,386
21,175,483 321,640
- 1,316,546
(11,561,125) (57,754)
9,614,358 1,580,432
117,608,261 4,183,971
127,222,619$ 5,764,403$
34,126$
9,614,358
9,648,484$
31

CASH FLOWS FROM OPERATING ACTIVITIES:
Cash received from customers and users 65,495,466$
13,240,710$ 9,754,623$
Cash paid to suppliers for goods and services (38,438,674)
(5,179,537) (4,815,303)
Cash paid to employees for services (7,391,234)
(2,655,179) (2,539,594)
NET CASH PROVIDED BY
OPERATING ACTIVITIES 19,665,558 5,405,994
2,399,726
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:
Cash paid to other funds (11,353,838) (97,196)
(110,091)
Loan repayments received 375,327 -
-
Repayments received from other funds 10,369 -
-
NET CASH PROVIDED (USED) BY
NONCAPITAL FINANCING ACTIVITIES (10,968,142)
(97,196) (110,091)

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:
Intergovernmental 2,500 - -
Acquisition and construction of capital assets (1,627,263)
(5,649,755) (3,577,720)
Proceeds from installment sales agreement - -
-
Proceeds from bond issuance - -
-
Issuance costs paid - - -
Proceeds from land held for resale 2,734,000 -
-
Principal paid on capital debt (2,905,000) (657,202)
(1,012,476)
Interest paid on capital debt (1,498,582) (727,570)
(316,085)
NET CASH USED BY CAPITAL
AND RELATED FINANCING ACTIVITIES (3,294,345)
(7,034,527) (4,906,281)
CASH FLOWS FROM INVESTING ACTIVITIES:
Interest received 1,041,727 666,907 347,924

INVESTING ACTIVITIES 1,041,727 666,907
347,924
NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 6,444,798
(1,058,822) (2,268,722)
CASH AND CASH EQUIVALENTS -
BEGINNING OF YEAR 39,188,035 26,408,011
16,905,298
CASH AND CASH EQUIVALENTS - END OF YEAR
45,632,833$ 25,349,189$ 14,636,576$
CASH AND CASH EQUIVALENTS:
Current cash and investments 41,649,868$ 16,940,558$
9,599,578$
Restricted cash and investments - -
-
Restricted cash with fiscal agent 3,982,965 8,408,631
5,036,998
TOTAL CASH AND CASH EQUIVALENTS 45,632,833$
25,349,189$ 14,636,576$
PROPRIETARY FUNDS

CITY OF COLTON
STATEMENT OF CASH FLOWS
32
Business-Type
Activities -
Internal
Total Service Funds
88,490,799$ 5,635,988$
(48,433,514) (4,240,536)
(12,586,007) (1,043,788)
27,471,278 351,664
(11,561,125) (57,754)
375,327 -
10,369 1,316,546

(11,175,429) 1,258,792
2,500 -
(10,854,738) -
- -
- -
- -
2,734,000 -
(4,574,678) -
(2,542,237) -
(15,235,153) -
2,056,558 260,541
2,056,558 260,541
3,117,254 1,870,997
82,501,344 8,365,608
85,618,598$ 10,236,605$
68,190,004$ 10,183,888$
- 52,717
17,428,594 -

85,618,598$ 10,236,605$
(Continued)
33
RECONCILIATION OF OPERATING INCOME
TO NET CASH PROVIDED BY
OPERATING ACTIVITIES:
Operating income 15,516,795$ 4,957,567$
758,202$
Adjustments to reconcile operating
income to net cash provided
by operating activities:
Amortization - - 140,727
Depreciation expense 4,056,771 834,089
1,287,297
Changes in assets, deferred outflows of resources,
liabilities and deferred inflows of resources:

(Increase) decrease in:
Accounts receivable 179,623 (19,728)
(78,846)
Prepaid items (4,391) - -
Deposits receivable (950,445) - -
Inventories 103,195 (15,172) -
Deferred amounts from OPEB (4,403) (1,670)
(2,400)
Deferred amounts from pension 887,787 358,639
271,523
Increase (decrease) in:
Accounts payable (582,541) (831,625)
(106,024)
Accrued liabilities - - -
Unearned revenue - - -
Deposits payable 77,351 (13,209) -
Claims and judgments - - -
Compensated absences (48,812) (37,604)
(15,132)
Net OPEB liability 48,039 18,394 26,970
Net pension liability 268,360 108,410

82,076
Deferred amounts from OPEB (4,203) (1,556)
(2,112)
Deferred amounts from pension 122,432 49,459
37,445
OPERATING ACTIVITIES 19,665,558$ 5,405,994$
2,399,726$
NONCASH INVESTING, CAPITAL
AND FINANCING ACTIVITIES:
Loss on disposal of capital assets (82,845)$ -$
-$
CITY OF COLTON
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
(CONTINUED)
34

Business-Type
Activities -
Internal
Total Service Funds
21,232,564$ 47,254$
140,727 -
6,178,157 63,857
81,049 (49)
(4,391) (150)
(950,445) -
88,023 -
(8,473)
1,517,949 -
(1,520,190) 75,305
- -
- -

64,142 -
- 168,966
(101,548) (3,519)
93,403 -
458,846 -
(7,871) -
209,336 -
27,471,278$ 351,664$
(82,845)$ -$
35
Private-Purpose
Trust Agency
Funds Funds
ASSETS:
Receivables:
Taxes - 9,367
Notes and loans - 3,630
Prepaid items - 15,783

Land held for resale 4,900,000 -
Restricted assets:
Cash and investments 335,984 39,279
Cash and investments with fiscal agents -
264,958
TOTAL ASSETS 7,939,566 4,205,920$
LIABILITIES:
Accounts payable 1,382 145,266$
Accrued liabilities - 2,182,794
Accrued interest 251,516 -
Deposits payable 230,799 657,597
Due to other governments - 37,763
Due to City 110,823 -
Due to bondholders - 1,182,500
Long-term liabilities:
Due in one year 1,040,000 -
Due in more than one year 13,121,990 -
TOTAL LIABILITIES 14,756,510 4,205,920$
NET POSITION:
Held in trust for endowment 942,697
Held in trust for other purposes (7,759,641)
TOTAL NET POSITION (6,816,944)$
CITY OF COLTON
FIDUCIARY FUNDS
June 30, 2019

36
Private-Purpose
Trust
Funds
ADDITIONS:
Contributions 16,730$
Taxes 1,834,087
Interest and change in fair value of investments 77,580
TOTAL ADDITIONS 1,928,397
DEDUCTIONS:
Administrative expenses 85,503
Interest expense 523,849
TOTAL DEDUCTIONS 609,352
CHANGE IN NET POSITION 1,319,045
NET POSITION - BEGINNING OF YEAR (8,135,989)
NET POSITION - END OF YEAR (6,816,944)$
CITY OF COLTON
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS

37
38
Notes to Basic Financial Statements
June 30, 2019
39
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the City of Colton, California
(City), have been prepared in accordance with
generally accepted accounting principles (GAAP) as applied to
government units. The Governmental
Accounting Standards Board (GASB) is the accepted standard-
setting body for establishing governmental
accounting and financial reporting principles. The more
significant of the City’s accounting policies are
described below.
a. Description of the Reporting Entity

The City of Colton, California (the City), is located in the
County of San Bernardino and was incorporated
on July 20, 1887, under the general laws of the State of
California. The City operates under an elected
Council/City Manager form of government. The City’s major
operations include police and fire
protection, electric, water, sanitation, public works, parks,
recreation and certain social services and
general administration services. As required by accounting
principles generally accepted in the United
States of America, these financial statements present the City
and its component units, entities for which
the City is considered financially accountable.
A component unit is included in the primary government’s
financial statements if the City appoints a
voting majority of the component unit’s governing body and (1)
it is able to impose its will on the
component unit or (2) there is a potential for the component unit
to provide specific financial benefits to,
or impose specific financial burdens on, the City. The
component units discussed below are controlled by
common governing boards, which are substantively the same as
the City’s. In addition, the component
units provide services or other benefits almost entirely to the
City, and there is a potential for the
component units to impose financial burdens on the City.
Therefore, these component units are presented
as blended component units for financial reporting purposes.
The component units have the same fiscal
year end as the City. The blended component units discussed
below, although legally separate entities,
are in substance part of the government operation and have been
combined herein.
A brief description of each component unit follows:

The Colton Public Financing Authority (the Authority) was
created by a joint powers agreement, formed
for the purpose of issuing bonds in order to finance capital
improvement projects. The Authority’s Board
of Directors is composed of the seven elected City Council
members. The activity of the Authority is
recorded in the Public Financing Authority Debt Service Fund.
Separate financial statements are not
prepared for the Authority.
The Colton Utility Authority (the Utility Authority) was created
on July 18, 2001, pursuant to Joint Powers
Law Articles 1 through 4 (commencing with Section 6500) of
Chapter 5, Division 7, Title 1 of the
California Government Code and the Marks-Roos Local Bond
Pooling Act of 1985. The Utility Authority
was formed to provide for the lease, ownership, operation,
maintenance, construction and financing of the
Water and Wastewater Utility systems. The City Council acts as
the governing board of the Utility
Authority. The activity of the Utility Authority is recorded in
the Water Utility and Wastewater Utility
Proprietary Funds. Separate financial statements are not
prepared for the Utility Authority.
June 30, 2019
40

(CONTINUED)
a. Description of the Reporting Entity (Continued)
On September 1, 2000, the Utility Authority entered into an
agreement with the City to lease the Water
and Wastewater Utilities. As part of lease agreement, the assets
and infrastructure of the Water and
Wastewater systems were valued at $44,907,889 and
$36,682,260, respectively, and a 5.048% discount
rate was established. The lease payments are to be paid by the
Utility Authority to the City from the Water
and Wastewater Utility Funds in the amount of $870,000 and
$570,000 each year, respectively, from
surplus utility revenues. In the event that surplus utility
revenues exceed these amounts, the Utility
Authority is required to prepay a portion of the total lease
payments. See Note 7 for disclosure of bond.
The Colton Housing Authority (Housing Authority) was
established on March 15, 2011. The Housing
Authority was activated pursuant to State Law Section 34240 of
the California Health and Safety Code,
which allows for every City to establish a housing authority.
The Housing Authority is designed to protect
local housing funds and programs, provide new revenue
opportunities for affordable housing programs,
serve the public interest, promote public safety and welfare and
ensure decent, safe sanitary and affordable
housing accommodations to persons of low income. The City
Council of the City serves as the Housing
Authority’s Commissioners and has operational responsibility
for the component unit. The activity of the

Housing Authority is recorded in the Housing Authority Special
Revenue Fund. Separate financial
statements are not prepared for the Housing Authority.
b. Government-Wide and Fund 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. For the most part, the effect of interfund
activity has been removed from these
statements. Governmental activities, which normally are
supported by taxes and intergovernmental
revenues, are reported separately from business-type activities,
which rely to a significant extent on fees
and charges for support.
Likewise, the primary government (including its blended
component units) is reported separately from
discretely presented component units for which the primary
government is financially accountable. The
City has no discretely presented component units. Certain
eliminations have been made as prescribed by
GASB Statement No. 34 in regard to interfund activities,
payables and receivables. All internal balances
in the statement of net position have been eliminated except
those representing balances between the
governmental activities and the business-type activities, which
are presented as internal balances and
eliminated in the total primary government column. In the
statement of activities, inter-fund services have
been eliminated; however, those transactions between
governmental and business-type activities have not

been eliminated.
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 customers or applicants who
purchase, use, or directly benefit from goods, services or
privileges provided by a given function or
segment, and (2) grants and contributions that are restricted to
meeting the operational or capital
requirements of a particular function or segment. Taxes and
other items not properly included among
program revenues are reported instead as general revenues.
June 30, 2019
41
(CONTINUED)
b. Government-Wide and Fund Financial Statements
(Continued)
The underlying accounting system of the City is organized and
operated on the basis of separate funds,

each of which is considered to be a separate accounting entity.
The operations of each fund are accounted
for with a separate set of self-balancing accounts that comprise
its assets, deferred outflows of resources,
liabilities, deferred inflows of resources, fund equity, revenues
and expenditures or expenses, as
appropriate. Governmental resources are allocated to and
accounted for in individual funds based upon
the purposes for which they are to be spent and the means by
which spending activities are controlled.
Separate financial statements for the City’s governmental,
proprietary and fiduciary funds are presented
after the government-wide financial statements. These
statements display information about major funds
individually and other governmental funds in the aggregate for
governmental funds. Fiduciary fund
statements, even though excluded from the government-wide
financial statements, include financial
information for private-purpose trust funds and agency funds.
c. Measurement Focus, Basis of Accounting and Financial
Statement Presentation
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 private-purpose trust funds financial
statements. Under the economic resources measurement focus,
all assets, deferred outflows of resources,
liabilities and deferred inflows of resources (whether current or
noncurrent) associated with their activity
are included on their statements of net position. Operating
statements present increases (revenues) and
decreases (expenses) in total net position. Under the accrual
basis of accounting, revenues are recorded
when earned and expenses are recorded when a liability is
incurred, regardless of the timing of related
cash flows. Property taxes are recognized as revenues in the
year for which they are levied. Grants and
similar items are recognized as revenue as soon as all eligibility
requirements imposed by the provider
have been met.
The City’s fiduciary fund financial statements report agency
funds and private-purpose trust funds.
Agency funds are used to account for situations where the
government’s role is purely custodial. All assets
reported in an agency fund are offset by a liability to the party
on whose behalf they are held. Agency
funds have no measurement focus. Private-purpose trust funds
are accounted for using the economic
resources measurement focus and the accrual basis of
accounting.
Governmental fund financial statements are reported using the
current financial resources measurement
focus and the modified accrual basis of accounting. Under the
current financial resources measurement
focus, only current assets, current liabilities and deferred
inflows of resources are generally included on
their balance sheets. The reported fund balance is considered to

be a measure of “available spendable
resources.” Governmental fund operating statements present
increases (revenues and other financing
sources) and decreases (expenditures and other financing uses)
in fund balance. Accordingly, they are
said to present a summary of sources and uses of “available
spendable resources” during a period.
Noncurrent portions of long-term receivables due to
governmental funds are reported on their balance
sheets in spite of their spending measurement focus.
June 30, 2019
42
(CONTINUED)
Statement Presentation (Continued)
Under 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
fiscal period. Expenditures generally are recorded when a
liability is incurred, as under accrual
accounting. However, debt service expenditures, as well as
expenditures related to compensated absences,
claims and judgments, are recorded only when payment is due.
Property taxes, franchise taxes, licenses
and interest associated with the current fiscal period are all
considered to be susceptible to accrual and so
have been recognized as revenues of the current fiscal period.
Only the portion of special assessments
receivable due within the current fiscal period is considered to
be susceptible to accrual as revenue of the
current period. All other revenue items are considered to be
measurable and available only when cash is
received by the government.
The City reports the following major governmental fund:
financial resources applicable to the
general government operation of the City. All general operating
revenues and expenditures which
are not restricted and accounted for in another fund are recorded
in the General Fund.
The City reports the following major Proprietary Funds:
to account for the
production, distribution and transmission of
electric energy to residents and businesses located within the
City.

and distribution of potable water to
residents and businesses located within the City.
operation and maintenance of the water
reclamation plant and sewage system.
Additionally, the City reports the following fund types:
Governmental Fund Types
of specific revenue sources (other
than special assessments, expendable trusts, or major capital
projects), that are restricted to
expenditures for special purposes.
Funds are used to account for the accumulation
of resources for, and the payment
of, long-term debt principal, interest and related costs other
than those being financed by
proprietary funds.
al
resources to be used for the acquisition
or construction of major facilities other than those financed by

Proprietary, Special Assessment
and/or Trust Funds.
June 30, 2019
43
(CONTINUED)
Statement Presentation (Continued)
Propriety Fund Types
cost of building and equipment
maintenance, information services, self-insurance and
automotive shop provided by one
department to other departments of the City.
Fiduciary Fund Types
-Purpose Trust Funds account for the activities of
the Cemetery Endowment and the

Successor Agency to the Redevelopment Agency for the City of
Colton (Successor Agency). The
Cemetery Endowment private-purpose trust fund holds
donations made to the City for the
Cemetery and the Successor Agency private-purpose trust fund
accounts for the assets and
liabilities of the former redevelopment agency and its allocated
revenue to pay estimated
installment payments of enforceable obligations until the
obligations of the former redevelopment
agency are paid in full and assets have been liquidated.
the City as trustee or custodian. They
act as a temporary repository for federal and state wages, as
well as various other forms of payroll
contributions collected from employees until remitted to the
relevant authorities. They also
account for various assessment districts for which the City acts
as an agent for debt service
activity.
d. New Accounting Pronouncements
GASB Current-Year Standards
GASB 83 - Certain Asset Retirement Obligations, effective for
periods beginning after June 15, 2018,
and did not impact the City.
GASB 88 - Certain Disclosures Related to Debt, Including
Direct Borrowings and Direct Placements,
effective for periods beginning after June 15, 2018, and did not

significantly impact the City.
Pending Accounting Standards
GASB has issued the following statements, which may impact
the City’s financial reporting requirements
in the future:
- Fiduciary Activities, effective for periods
beginning after December 15, 2018.
- Leases, effective for periods beginning after
December 15, 2019.
- Accounting for Interest Cost Incurred before the
End of a Construction Period, effective
for periods beginning after December 15, 2019.
- Majority Equity Interests - an amendment of
GASB Statements No. 14 and No. 61,
effective for periods beginning after December 15, 2018.
- Conduit Debt Obligations, effective for periods
beginning after December 15, 2020.
June 30, 2019

44
(CONTINUED)
e. Cash and Investments
The City’s cash and cash equivalents are considered to be cash
on hand, demand deposits and short-term
investments with original maturities of three months or less
from the date of acquisition. The City
maintains a cash and investment pool that is available for use
for all funds. Each fund type’s position in
the pool is reported in the financial statements as cash and
investments.
Investments are recorded at fair value, which is the price that
would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market
participants at the measurement date.
Investments that are not traded on a market, such as investments
in external pools, are valued based on
the stated fair value represented by the external pool.
f. Receivables and Payables
Activity between funds that are representative of
lending/borrowing arrangements outstanding at the end
of the fiscal year are referred to as either “due to / from other
funds” (i.e., the current portion of interfund
loans) or “advances to / from other funds” (i.e., the noncurrent
portion of interfund loans).

All trade and property tax receivables are shown net of an
allowance for uncollectibles.
Property tax revenue is recognized in the fiscal year for which
the taxes have been levied providing they
become available. Available means then due, or past due and
receivable within the current period and
collected within the current period or expected to be collected
soon enough thereafter (not to exceed
60 days) to be used to pay liabilities of the current period. The
County of San Bernardino collects property
taxes for the City. Tax liens attach annually as of 12:01 A.M. on
the first day in January preceding the
fiscal year for which the taxes are levied. Taxes are levied on
both real and personal property as it exists
on that date. The tax levy covers the fiscal period July 1 to June
30. All secured personal property taxes
and one-half of the taxes on real property are due November 1;
the second installment is due February 1.
All taxes are delinquent, if unpaid, on December 10 and April
10, respectively. Unsecured personal
property taxes become due on the first of March each year and
are delinquent on August 31.
g. Inventories and Prepaid Items
Inventories of materials and supplies are carried at cost on a
moving average basis. The City uses the
consumption method of accounting for inventories. 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.
h. Restricted Assets
Certain proceeds of debt issues, as well as certain resources set
aside for their repayment, are classified
as restricted assets in the financial statements because their use
is limited by applicable bond covenants.
June 30, 2019
45
(CONTINUED)
i. Capital Assets
Capital assets, which include property, plant, equipment and
infrastructure assets (e.g., roads, bridges,
sidewalks and similar items), are reported in the government-
wide financial statements. The government
defines capital assets as assets with an initial, individual cost of
more than $5,000 (amount not rounded)
and an estimated useful life in excess of two years. Such assets
are recorded at historical cost or estimated
historical cost if purchased or constructed. Donated capital

assets are recorded at acquisition value at the
date of donation.
The costs of normal maintenance and repairs that do not add to
the value of the asset or materially extend
assets lives are not capitalized. Major outlays for capital assets
and improvements are capitalized as
projects are constructed.
Property, plant and equipment of the primary government, as
well as the component units, are depreciated
using the straight-line method over the following estimated
useful lives:
Building and structures 40 years
Furniture and equipment 7 years
Public domain infrastructure 50 years
j. Deferred Outflows/Inflows of Resources
In addition to assets, the Statement of Net Position and the
Governmental Funds Balance Sheet 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 future
periods and will not be recognized as an outflow of resources
(expense/expenditure) until that time. The
City has the following items that qualify for reporting in this
category:

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