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Home My WebLink About2019/03/25 - Agenda Packet - Planned Communities Citizens' Oversight Committee M MARCH 25, 2019 PLANNED COMMUNITIES CITIZENS' OVERSIGHT COMMITTEE AGENDA PUBLIC WORKS SERVICE CENTER 8794 LION STREET RANCHO CUCAMONGA, CA 91730 � ,A 6:30 P.M. CALL TOr ORDER Al. Pledge of Allegiance A2. Roll Call: Jaime Garcia, Chair Otis Greer Pete Peterson A3. Approval of Minutes: March 6, 2018 Page 2 J ' B. PUBLIC COMMUNICATIONS, This is the time and place for the general public to address the Planned Communities Citizens' Oversight Committee on any item listed or not listed on the agenda. State law prohibits the Committee from addressing any issue not previously included on the Agenda. The Committee may receive testimony and set the matter for a subsequent meeting. Comments are to be limited to five minutes per individual. C: ITEMS FOR, DISCUSSION Cl. Review and Discussion of Annual Independent Auditors' Report and Page 4 Approval of Annual Written Report to the City Council C2. Election of Committee Chair and Vice-Chair D. ,ADJOURNMENT l I,Melinda Garcia,Administrative Secretary of the City of Rancho Cucamonga, hereby certifies that a true, accurate copy of the foregoing agenda was posted on March 21, 2019 at 5:30pm per Government Code Section 54954.2 at 10500 Civic Center Drive and 8794 Lion Street, Rancho Cucamonga, CA 91730. Melinda Garcia CITY OF RANCHO CUCAMONGA PLANNED COMMUNITIES CITIZENS' OVERSIGHT COMMITTEE ANNUAL MEETING MINUTES rp 61 rrr/ A` LrL TO ORDER' W P'rER�/ICE CENTER C'O F �,,,/,/, .�,�/i/✓r,,r,,, ,r,,.l„ % , ,,, t r rrr ,i•,,,,„ •,P, The City of Rancho Cucamonga Planned Communities Citizens'Oversight Committee held their Annual Meeting on Tuesday, March 6, 2018 at the Rancho Cucamonga City Yard, 8794 Lion Street, Rancho Cucamonga, California. Finance Director Layne called the meeting to order at 6:00 p.m. Al. Pledge of Allegiance: Led by Director Wittkopf A2. Roll Call: Present: Jaime Garcia, Otis Greer, Christina Macias, Ruth McMillan, Demeke Muarega and Pete Peterson. Staff Present: Lori Sassoon, Deputy City Manager; Tamara Layne, Finance Director; Bill Wittkopf, Public Works Director; Noah Daniels, Finance Manager; Chris Bopko, Management Analyst III; Kelly Guerra, Special Districts Technician; Kirk Hamblin, City Auditor; and Melinda Garcia, Administrative Secretary. A3. Approval of Minutes: Vice-Chair McMillan motioned to approve the minutes from the meeting of April 18, 2017. The motion was seconded by Committee Member Peterson. „/,/r/, ,, r PUBLIC COMMUNICATIONS r r No public communications were made. r rr r ,.a) p..,,. r///„i..i..% o/r/,it�i/i✓//,/�..,,d///fivr% ri / /r,/>„rr rir / // + i/ � ;� ,.,... //-....✓r ii :; „' 1 // r, /// o rr r l ti ;,s / ✓� r ri r/ �/ii r✓ ,r i /� TEMOF DI l, / � N /. � ,"Ma”, r, ✓ ,r/�/ ,l ,vr�r.xr r „� ;n,d ,, l�r/ a ro,,,r,//r 1,/G/�/✓////� l�� r r/ �eG�U//✓if rr'l,G// Cl. Election of Committee Chair and Vice-Chair. The meeting began with a discussion concerning the Committee's role and responsibilities. Committee Member Muarega suggested scheduling a follow-up meeting to discuss further. Chair Garcia motioned to move item Cl to C6 to allow the auditor the opportunity to discuss the report. Vice-Chair McMillan seconded the motion. C2. Review and Discussion of Annual Independent Report. City Auditor Hamblin, provided detailed information about the role of the auditor, procedures, the various letters that they issue, and results. A discussion ensued regarding rates, fund balances, uses of funds, administrative costs, reserves and the budget. Staff provided information explaining what is permitted within the special districts and what is not. A tour of the LMD's was suggested. Staff to provide dates for the tour and follow-up meeting. Page 2 Planned Communities Citizens' Oversight Committee Minutes March 6, 2018 Page 2 C3. Review and Approval of Annual Written Report to the City Council. A discussion concerning the report ensued. A few corrections were suggested by the Committee. Committee Member Macias motioned to approve the Annual Report to the City Council with the suggested corrections. The motion was seconded by Committee Member Peterson. Chair Garcia agreed to present the report to the City Council. Staff to follow-up with date. C4. Review the Hiring of a New Maintenance Coordinator to Oversee Landscape Maintenance Contracts, Trails, Pesticide Applications, and Water Management Throughout the Planned Communities Districts. The discussion began with Chair Garcia asking about the new position and how it will be funded. Director Wittkopf provided background information, as well as funding for the position. Director Layne requested the Committee formally support the position. Committee Member Peterson moved to approve the request. The motion was seconded by Vice-Chair McMillan. C5. Planned Communities District Updates. Director Wittkopf provided a list of numerous projects throughout the City. A discussion ensued concerning trash service, drought tolerant landscaping and the state's drought restrictions. C6. Continued— Election of Committee Chair and Vice-Chair. Committee Member Peterson motioned for Jaime Garcia to continue as the Chair and Ruth McMillan to continue as the Vice-Chair. The motion was seconded by Committee Member Muarega and unanimously approved by the Committee. �,.;,, r r G y/G /�rJ///r,ii.: % %%,�ir jf/rr O r/�/// rii err/ i f ,. ,,,, a'.... r / ✓ r rr r / /✓ ZI Committee Member Muarega motioned to adjourn the meeting. The motion was seconded by Chair Garcia. The meeting adjourned at 7:45 p.m. Respectfully submitted, Jaime Garcia, Chair Date: Page 3 ci Annual Independent Auditors ' Report and Report to the City Council Audit Communication Letter LSL* • • r'PAc ANn Anv February 25, 2019 To the Planned Communities Citizens' Oversight Committee City of Rancho Cucamonga, California We have audited the statement of revenues, expenditures and changes in fund balances of the Landscape Maintenance Districts #2 Victoria, #4R Terra Vista, #6R Caryn Community, and #7 North Etiwanda (collectively, the Districts) of the City of Rancho Cucamonga for the year ended June 30, 2018. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to the City Council of Rancho Cucamonga dated June 5, 2018. Professional standards also require that we communicate to you the following information related to our audit. Significant Audit Findings Qualitative Aspects of Accounting Practices Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the Districts are described in the notes to the statement of revenues, expenditures and changes in fund balances. No new accounting policies were adopted that impacted the statement of revenues, expenditures and changes in fund balances of the Districts, and the application of existing policies was not changed during Fiscal Year 2017/18. We noted no transactions entered into by the Districts during the fiscal year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the revenues, expenditures and changes in fund balances in the proper period. The revenues, expenditures and changes in fund balances disclosures are neutral, consistent, and clear. Difficulties Encountered in Performing the Audit We encountered no significant difficulties in dealing with management in performing and completing our audit. Corrected and Uncorrected Misstatements Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are trivial, and communicate them to the appropriate level of management. No misstatements were found. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction that could be significant to the revenues, expenditures and changes in fund balances or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. PrimeGlobal .n.f�ffmy IMepndmfAaountlng Flfna Page 6 ••• LS Loo 6 00 To the Planned Communities Citizens'Oversight Committee City of Rancho Cucamonga, California Management Representations We have requested certain representations from management that are included in the management representation letter dated February 25,2019. Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a"second opinion"on certain situations. If a consultation involves application of an accounting principle to the Districts' revenues, expenditures and changes in fund balances or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Other Audit Findings or Issues We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Districts' auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention. Other Matters New Accounting Standards The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for Fiscal Year 2017/18 audit: GASB Statement No. 75, Accounting and Financial Reporting for Post-Employment Benefits Other Than Pensions. GASB Statement No. 81, Irrevocable Split Interest Agreements. GASB Statement No. 85, Omnibus 2097. GASB Statement No. 86, Certain Debt Extinguishment Issues. The following Governmental Accounting Standards Board (GASB) pronouncements are effective in the following fiscal year audits and should be reviewed for proper implementation by management: Fiscal Year 2018/19: GASB Statement No. 83, Certain Assets Retirement Obligations. GASB Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowing and Direct Placements. Fiscal Year 2019/20: GASB Statement No. 84, Fiduciary Activities. Page 7 ••• L S Le*000 00 To the Planned Communities Citizens' Oversight Committee City of Rancho Cucamonga, California Fiscal Year 2020/21: GASB Statement No. 87, Leases. Restriction on Use This information is intended solely for the use of the Planned Communities Citizens' Oversight Committee and management of the Districts and is not intended to be, and should not be, used by anyone other than these specified parties. Very truly yours, 04, .04 so—, 4; 00� Brea, California Page 8 Statement of Revenues , Expenditures and Changes in Fund Balances for the Districts for the Year Ended June 30 , 2018 LANDSCAPE MAINTENANCE DISTRICTS #2 VICTORIA, #4R TERRA VISTA, #6R CARYN COMMUNITY, AND #7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2018 Page 10 LANDSCAPE MAINTENANCE DISTRICTS #2 VICTORIA,#4R TERRA VISTA, #6R CARYN COMMUNITY,AND #7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2018 Page 11 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#4R TERRA VISTA, #6R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA, CALIFORNIA YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS Page Number INDEPENDENT AUDITORS' REPORT............................................................................................... 1 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES INFUND BALANCES....................................................................................................................3 NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES INFUND BALANCES....................................................................................................................4 Page 12 LS •••• • e* •L0 r'PAs ANF) ADV1';CG�F INDEPENDENT AUDITORS' REPORT To the Planned Communities Citizen's Oversight Committee City of Rancho Cucamonga, California Report on the Statement of Revenues, Expenditures and Changes in Fund Balances We have audited the accompanying statement of revenues, expenditures and changes in fund balances of Landscape Maintenance Districts #2 Victoria, #4R Terra Vista, #6 Caryn Community, and #7 North Etiwanda of the City of Rancho Cucamonga (collectively, the Districts), for the year ended June 30, 2018, and the related notes to statement of revenues, expenditures and changes in fund balances, as listed in the table of contents. Management's Responsibility for the Statement of Revenues, Expenditures and Changes in Fund Balances Management is responsible for the preparation and fair presentation of the statement of revenues, expenditures and changes in fund balances 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 the statement of revenues, expenditures and changes in fund balances that are free from material misstatement,whether due to fraud or error. Auditors'Responsibility Our responsibility is to express opinions on the statement of revenues, expenditures and changes in fund balances based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the State Controller's Minimum Audit Requirements for California Special District. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues, expenditures and changes in fund balances are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenues, expenditures and changes in fund balances. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the statement of revenues, expenditures and changes in fund balances, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Districts' preparation and fair presentation of the statement of revenues, expenditures and changes in fund balances 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 Districts' 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 statement of revenues, expenditures and changes in fund balances. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrlmeGlobal Ani tbna lndt,mdmtA ntlp,Rmu Page 13 •.00 LSL••** • To the Planned Communities Citizen's Oversight Committee City of Rancho Cucamonga, California Opinions In our opinion, the statement of revenues, expenditures and changes in fund balances referred to above present fairly, in all material respects, the respective financial position of the revenues, expenditures and changes in fund balances of Landscape Maintenance Districts #2 Victoria, #4R Terra Vista, #6 Caryn Community, and#7 North Etiwanda of the City of Rancho Cucamonga for the year then ended June 30, 2018, in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 25, 2019 on our consideration of the Districts' 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 Districts' internal control over financial reporting and compliance. *�'W-0 et Brea, California February 25, 2019 2. Page 14 LANDSCAPE MAINTENANCE DISTRICTS 02 VICTORIA,#4R TERRA VISTA, #6R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2018 Landscape Landscape Landscape Maintenance Landscape Maintenance Maintenance District#611 Maintenance District#2 District#411 Caryn District#7 Victoria Terra Vista Community North Etiwanda Revenues: Taxes $ 3,403,834 $ 2,749,632 $ 498,034 $ 947,754 Charges for services 1,315 1,202 - 5,346 Use of money and property 4,717 10,690 437 30,509 Contributions from City 293,490 - 52,460 50,000 Miscellaneous - - - 10 Total Revenues 3,703,356 2,761,524 550,931 1,033,619 Expenditures: Personnel services 790,788 926,068 15,191 177,615 Operating costs: Operations and maintenance 142,696 89,673 5,553 22,444 Contract services 1,088,151 296,803 211,664 316,525 Tree maintenance 163,321 54,735 28,361 7,450 Utilities 839,411 377,145 120,893 281,337 Assessment administration 36,060 22,080 7,030 16,910 General overhead allocation 265,170 221,990 31,690 84,600 Interfund allocation 75,180 - - - Capital outlay 139,224 15,976 - - Total Expenditures 3,540,001 2,004,470 420,382 906,881 Excess(Deficiency)of Revenues Over(Under)Expenditures 163,355 757,054 130,549 126,738 Net Change in Fund Balances 163,355 757,054 130,549 126,738 Fund Balances, Beginning of Year 3,528,134 4,897,659 419,983 1,135,274 Fund Balances, End of Year $ 3,691,489 $ 5,654,713 $ 550,532 $ 1,262,012 See Notes to Financial Statements 3 Page 15 LANDSCAPE MAINTENANCE DISTRICTS 42 VICTORIA,#411 TERRA VISTA, #611 CARYN COMMUNITY,AND 07 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA,CALIFORNIA NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30,2018 Note 1: Description of the Reporting Entity The City of Rancho Cucamonga was incorporated on November 30, 1977, under the laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. It is governed by an elected five-member board. The City of Rancho Cucamonga, California, has formed certain maintenance districts and authorized the levy of assessments pursuant to the terms and provisions of the"Landscaping and Lighting Act of 1972," being Division 15, Part 2 of the Streets and Highways Code of the State of California (commencing with Section 22500). The City levies annual assessments to finance the costs and expenses necessary for maintenance and improvements in each assessment district. The City cannot levy and collect annual assessments within an assessment district without complying with the procedures specified in the Landscaping and Lighting Act of 1972. On an annual basis,an Engineer's Report must be prepared for each assessment district which contains a full and detailed description of the improvements and the proposed assessments upon assessable lots and parcels of land within the district. The City Council must also adopt a resolution of intention which: • Declares the intention of the City Council to levy and collect assessments within the assessment district for the fiscal year stated therein. • Generally describes the existing and proposed improvements and any substantial changes proposed to be made in existing improvements. • Refers to the assessment district by its distinctive designation and indicates the general location of the district. • Refers to the Engineer's Report for a full and detailed description of the improvements, the boundaries of the assessment district and any zones therein, and the proposed assessments upon assessable lots and parcels of land within the district. • Gives notice of the time and place for public hearing by the City Council on the levy of the proposed assessment. • States whether the assessment is proposed to increase from the previous year. The improvements for the maintenance districts include,but are not limited to turf,ground cover, planter beds,shrubs, plants and trees,landscape lighting,irrigation systems,electrical energy for irrigation controllers, hardscapes, entry signs, sound walls, and all associated appurtenant facilities.A description of the specific improvements to be maintained and serviced within each assessment district is set forth in the Annual Engineer's Report. Maintenance may include the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement, including repair, removal, or replacement of all or any part of any improvement; providing for the life, growth, health, and beauty of landscaping, including cultivation,irrigation,trimming,spraying,fertilizing,or treating for disease or injury;the removal of trimmings,rubbish,debris,and other solid waste;the cleaning,sandblasting,and painting of walls and other improvements to remove or cover graffiti.Service may include the furnishing of electric current or energy, gas, or other illuminating agent for the lighting or operation of any improvements;and water for the irrigation of any landscaping,the operation of any fountains,or the maintenance of any other improvements. 4 Page 16 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#4R TERRA VISTA, #611 CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA,CALIFORNIA NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) FOR THE YEAR ENDED JUNE 30,2018 Note 1: Description of the Reporting Entity(Continued) The accompanying statement of revenues,expenditures and changes in fund balances contains information relative only to the Landscape Maintenance Districts#2 Victoria, #4R Terra Vista, #6R Caryn Community,and#7 North Etiwanda of the City of Rancho Cucamonga,which are an integral part of the City of Rancho Cucamonga. Victoria Neighborhood Parks and Landscape Maintenance District(LMD 2)was formed in 1982 and consists of 5,890 single family homes, 592 condominiums, 589 multi-family units, 42.33 acres of commercial/industrial, 70.27 acres of public service parcels, and 36.99 acres of vacant land,six parks,and trails.On June 5,2013,a Proposition 218 ballot proceeding was held and residents approved a rate increase. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2017/18 2018/19 Change Single family home $ 489.17 $ 503.80 3.00% Condominium unit 360.21 370.98 3.00% Mufti-family unit 342.42 352.66 3.00% Commercial/industdal parcel per acre 2,312.44 2,381.60 3.00% Public service parcel per acre 133.41 137.40 3.00% Undeveloped parcel per acre 97.83 100.76 3.00% Landscape Maintenance District No.4R (LMD 4R)was formed in 1984 and consists of 2,652 single family homes, 1,227 condominiums, 3,809 multi-family, 35.41 acres of schools, 177.60 acres of commercial/industrial,and 75.68 acres of vacant land.On December 2,2009,a Proposition 218 ballot proceeding was held and residents approved a rate increase. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2017/18 2018/19 Change Single family home $ 397.15 $ 397.15 0.00% Condominium unit 317.72 317.72 0.00% Multi-family unit 278.01 278.01 0.00% Commercial/industrial parcel per acre 1,290.74 1,290.74 0.00% Undeveloped parcel per acre 99.29 99.29 0.00% School parcel per acre 99.29 99.29 0.00% Landscape Maintenance District No.6R(LMD 6R) was formed in 1986 and consists of 963 single family homes in Zone 1,310 single family homes in Zone 2,5.35 acres of schools,and 0.54 acres of vacant land. On September 1,2010,a Proposition 218 ballot proceeding was held and residents approved a rate increase. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2017/18 2018/19 Change Single family home-Zone 1 $ 413.57 $ 425.97 3.00% Single family home-Zone 2 310.18 319.48 3.00% School parcel per acre 103.39 106.49 3.00% Undeveloped parcel per acre 103.39 106.49 3.00% 5 Page 17 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#411 TERRA VISTA, #8R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA,CALIFORNIA NOTES TO STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) FOR THE YEAR ENDED JUNE 30,2018 Note 1: Description of the Reporting Entity(Continued) Landscape Maintenance District No.7(LMD 7)was formed in 1989 and currently consists of 3,073 single family homes. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2017/18 2018/19 Change Single family home $ 307.05 $ 307.05 0.00% Note 2: Measurement Focus, Basis of Accounting and Financial Statement Presentation The statement of revenues,expenditures and fund balances is reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are generally recorded when a liability is incurred,as under accrual accounting. However, debt service expenditures,as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Assessment Revenue Assessment revenue is recognized on the modified accrual basis,that is,in the fiscal year for which the assessments 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 to be used to pay liabilities of the current period.The County of San Bernardino collects the assessments for the Landscape Maintenance Districts.Assessment liens attach annually as of 12:01 A.M.on the first day in January proceeding the fiscal year for which the assessments are levied.Assessments are levied on real property as it exists on that date.The assessment levy covers the fiscal period July 1 to June 30. One-half of the assessment is due November 1; the second half of the assessment is due February 1. All assessments are delinquent if unpaid on December 10 and April 10, respectively. Fund Type All of the funds included in this report are accounted for in the City's financial records as special revenue funds.Special revenue funds account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes. Special revenue funds are designed to help determine and demonstrate resources that must be used for a specified purpose are, in fact, used for that purpose. 6 Page 18 Informal Purposes Statement of Revenues , Expenditures and Changes in Fund Balances for the Districts for the Year Ended June 30 , 2017 LANDSCAPE MAINTENANCE DISTRICTS #2 VICTORIA, #4R TERRA VISTA, #6R CARYN COMMUNITY,AND #7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30, 2017 Page 20 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#4R TERRA VISTA, #6R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA, CALIFORNIA YEAR ENDED JUNE 30, 2017 TABLE OF CONTENTS Page Number INDEPENDENT AUDITORS' REPORT............................................................................................... 1 STATEMENT OF REVENUES, EXPENDITURES AND CHANGES INFUND BALANCES.................................................................................................................... 3 NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES INFUND BALANCES....................................................................................................................4 Page 21 see • •• CPAs AND AD,;"S"-QRS INDEPENDENT AUDITORS' REPORT To the Planned Communities Citizen's Oversight Committee City of Rancho Cucamonga, California Report on the Statement of Revenues, Expenditures and Changes in Fund Balances We have audited the accompanying statement of revenues, expenditures and changes in fund balances of Landscape Maintenance Districts #2 Victoria, #4R Terra Vista, #6 Caryn Community and #7 North Etiwanda of the City of Rancho Cucamonga (collectively, the Districts), for the year ended June 30, 2017, and the related notes to the statement of revenues, expenditures and changes in fund balances, as listed in the table of contents. Management's Responsibility for the Statement of Revenues, Expenditures and Changes in Fund Balances Management is responsible for the preparation and fair presentation of the statement of revenues, expenditures and changes in fund balances 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 the statement of revenues, expenditures and changes in fund balances that are free from material misstatement,whether due to fraud or error. Auditors'Responsibility Our responsibility is to express opinions on the statement of revenues, expenditures and changes in fund balances based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the State Controller's Minimum Audit Requirements for California Special District. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues, expenditures and changes in fund balances are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenues, expenditures and changes in fund balances. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the statement of revenues, expenditures and changes in fund balances, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the statement of revenues, expenditures and changes in fund balances in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the statement of revenues, expenditures and changes in fund balances. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. PrimeGlobal Ani Mona/ IndepmdmtA ntlnp firm' Page 22 •••• LSL••00 • To the Planned Communities Citizen's Oversight Committee City of Rancho Cucamonga, California Opinions In our opinion, the statement of revenues, expenditures and changes in fund balances referred to above present fairly, in all material respects, the respective financial position of the revenues, expenditures and changes in fund balances of Landscape Maintenance Districts #2 Victoria, #4R Terra Vista, #6 Caryn Community and #7 North Etiwanda of the City of Rancho Cucamonga for the year then ended June 30, 2017, in accordance with accounting principles generally accepted in the United States of America. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 29, 2018 on our consideration of the District'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 District's internal control over financial reporting and compliance. Brea, California January 29, 2018 2 Page 23 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#4R TERRA VISTA, #6R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2017 Landscape Landscape Landscape Maintenance Landscape Maintenance Maintenance District#6R Maintenance District#2 District#411 Caryn District#7 Victoria Terra Vista Community North Etiwanda Revenues: Taxes $ 3,312,506 $ 2,884,665 $ 483,758 $ 942,746 Charges for services 2,862 1,085 - 2,804 Use of money and property 3,911 10,389 525 28,665 Contributions from City 276,640 - 31,880 50,000 Total Revenues 3,595,919 2,896,139 516,163 1,024,215 Expenditures: Current: Community development: Personnel services 785,601 886,159 17,848 182,262 Operating costs: Operations and maintenance 57,763 170,104 5,941 19,685 Contract services 1,143,559 485,364 194,020 303,953 Tree maintenance 130,560 71,365 27,000 7,090 Utilities 721,137 312,472 128,906 242,629 Assessment administration 34,870 22,990 7,020 15,430 General overhead allocation 269,020 213,750 32,490 82,860 Interfund allocation 70,000 - - - Capital outlay 160,120 263,628 - - Total Expenditures 3,372,630 2,425,832 413,225 853,909 Excess(Deficiency)of Revenues Over(Under)Expenditures 223,289 470,307 102,938 170,306 Fund Balance, Beginning of Year 3,304,845 4,427,352 317,045 964,968 Fund Balance, End of Year $ 3,528,134 $ 4,897,659 $ 419,983 $ 1,135,274 See Notes to Financial Statements 3, Page 24 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#4R TERRA VISTA, #6R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA, CALIFORNIA NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES FOR THE YEAR ENDED JUNE 30,2017 Note 1: Description of the Reporting Entity The City of Rancho Cucamonga was incorporated on November 30, 1977,under the laws of the State of California and enjoys all the rights and privileges applicable to a General Law City. It is governed by an elected five-member board. The City of Rancho Cucamonga, California, has formed certain maintenance districts and authorized the levy of assessments pursuant to the terms and provisions of the"Landscaping and Lighting Act of 1972," being Division 15, Part 2 of the Streets and Highways Code of the State of California (commencing with Section 22500). The City levies annual assessments to finance the costs and expenses necessary for maintenance and improvements in each assessment district. The City cannot levy and collect annual assessments within an assessment district without complying with the procedures specified in the Landscaping and Lighting Act of 1972. On an annual basis,an Engineer's Report must be prepared foreach assessment district which contains a full and detailed description of the improvements and the proposed assessments upon assessable lots and parcels of land within the district. The City Council must also adopt a resolution of intention which: • Declares the intention of the City Council to levy and collect assessments within the assessment district for the fiscal year stated therein. • Generally describes the existing and proposed improvements and any substantial changes proposed to be made in existing improvements. • Refers to the assessment district by its distinctive designation and indicates the general location of the district. • Refers to the Engineer's Report for a full and detailed description of the improvements, the boundaries of the assessment district and any zones therein, and the proposed assessments upon assessable lots and parcels of land within the district. • Gives notice of the time and place for public hearing by the City Council on the levy of the proposed assessment. • States whether the assessment is proposed to increase from the previous year. The improvements for the maintenance districts include,but are not limited to turf,ground cover, planter beds,shrubs,plants and trees,landscape lighting,irrigation systems,electrical energy for irrigation controllers, hardscapes, entry signs, sound walls, and all associated appurtenant facilities.A description of the specific improvements to be maintained and serviced within each assessment district is set forth in the Annual Engineer's Report. Maintenance may include the furnishing of services and materials for the ordinary and usual maintenance, operation, and servicing of any improvement, including repair, removal,or replacement of all or any part of any improvement; providing for the life, growth, health, and beauty of landscaping, including cultivation, irrigation,trimming,spraying,fertilizing,or treating for disease or injury;the removal of trimmings,rubbish,debris,and other solid waste;the cleaning,sandblasting,and painting of walls and other improvements to remove or cover graffiti.Service may include the furnishing of electric current or energy, gas, or other illuminating agent for the lighting or operation of any improvements; and water for the irrigation of any landscaping,the operation of any fountains,or the maintenance of any other improvements. 4 Page 25 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#411 TERRA VISTA, #6R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA,CALIFORNIA NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) FOR THE YEAR ENDED JUNE 30,2017 Note 1: Description of the Reporting Entity(Continued) The accompanying statement of revenues,expenditures and changes in fund balances contains information relative only to the Landscape Maintenance Districts#2 Victoria, #4R Terra Vista, #6R Caryn Community, and#7 North Etiwanda of the City of Rancho Cucamonga,which are an integral part of the City of Rancho Cucamonga. Victoria Neighborhood Parks and Landscape Maintenance District(LMD 2)was formed in 1982 and consists of 5,890 single family homes, 592 condominiums, 589 multi-family units, 42.33 acres of commercial/industrial, 70.27 acres of public service parcels, and 36.99 acres of vacant land,six parks,and trails.On June 5,2013,a Proposition 218 ballot proceeding was held and residents approved a rate increase. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2016/17 2017/18 Change Single family home $ 476.19 $ 489.17 2.73% Condominium unit 350.65 360.21 2.73% Multi-family unit 333.33 342.42 2.73% Commercial/industrial parcel per acre 2,251.08 2,312.44 2.73% Public service parcel per acre 129.87 133.41 2.73% Undeveloped parcel per acre 95.24 97.83 2.73% Landscape Maintenance District No.411 (LMD 4R)was formed in 1984 and consists of 2,652 single family homes, 1,227 condominiums, 3,809 multi-family, 35.41 acres of schools, 177.60 acres of commercial/industrial,and 75.68 acres of vacant land.On December 2,2009,a Proposition 218 ballot proceeding was held and residents approved a rate increase. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2016/17 2017/18 Change Single family home $ 418.05 $ 397.15 -5.00% Condominium unit 334.44 317.72 -5.00% Multi-family unit 292.64 278.01 -5.00% Commercial/industrial parcel per acre 1,358.66 1,290.74 -5.00% Undeveloped parcel per acre 104.51 99.29 -5.00% School parcel per acre 104.51 99.29 -5.00% Landscape Maintenance District No.6R(LMD 6R) was formed in 1986 and consists of 963 single family homes in Zone 1,310 single family homes in Zone 2,5.35 acres of schools,and 0.54 acres of vacant land. On September 1,2010,a Proposition 218 ballot proceeding was held and residents approved a rate increase. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2016/17 2017/18 Change Single family home-Zone 1 $ 402.65 $ 413.57 2.71% Single family home-Zone 2 301.99 310.18 2.71% School parcel per acre 100.66 103.39 2.71% Undeveloped parcel per acre 100.66 103.39 2.71% 5 Page 26 LANDSCAPE MAINTENANCE DISTRICTS#2 VICTORIA,#4R TERRA VISTA, #6R CARYN COMMUNITY,AND#7 NORTH ETIWANDA CITY OF RANCHO CUCAMONGA,CALIFORNIA NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES (CONTINUED) FOR THE YEAR ENDED JUNE 30,2017 Note 1: Description of the Reporting Entity(Continued) Landscape Maintenance District No.7(LMD 7)was formed in 1989 and currently consists of 3,073 single family homes. The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2016/17 2017/18 Change Single family home $ 307.05 $ 307.05 0.00% Note 2: Measurement Focus, Basis of Accounting and Financial Statement Presentation The statement of revenues,expenditures and fund balances is reported using the current financial resources measurement focus and the modified accrual basis of accounting. Revenues are recognized as soon as they are both measurable and available. Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period. For this purpose, the government considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. Expenditures are generally recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures,as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due. Assessment Revenue Assessment revenue is recognized on the modified accrual basis,that is,in the fiscal year for which the assessments 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 to be used to pay liabilities of the current period. The County of San Bernardino collects the assessments for the Landscape Maintenance Districts.Assessment liens attach annually as of 12:01 A.M.on the first day in January proceeding the fiscal year for which the assessments are levied.Assessments are levied on real property as it exists on that date.The assessment levy covers the fiscal period July 1 to June 30. One-half of the assessment is due November 1; the second half of the assessment is due February 1. All assessments are delinquent if unpaid on December 10 and April 10, respectively. Fund Type All of the funds included in this report are accounted for in the City's financial records as special revenue funds.Special revenue funds account for and report the proceeds of specific revenue sources that are restricted or committed to expenditures for specified purposes. Special revenue funds are designed to help determine and demonstrate resources that must be used for a specified purpose are, in fact, used for that purpose. 6 Page 27 Independent Auditors ' Report on Internal Control Over Financial Reporting and on Compliance and Other Matters LSL•000 •• • r'PAs ANn An i3(=F,S INDEPENDENT AUDITORS' REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS To the Planned Communities Citizens' Oversight Committee City of Rancho Cucamonga, California We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the statement of revenues, expenditures and changes in fund balances of Landscape Maintenance Districts #2 Victoria, #4R Terra Vista, #6R Caryn Community,and#7 North Etiwanda of the City of Rancho Cucamonga,California,(collectively,the Districts) for the year ended June 30, 2018, and the related notes to statement of revenues, expenditures and changes in fund balances, and have issued our report thereon dated February 25, 2019. Internal Control over Financial Reporting In planning and performing our audit of the statement of revenues, expenditures and changes in fund balances,we considered the Districts' internal control over financial reporting(internal control)to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the statement of revenues, expenditures and changes in fund balances, but not for the purpose of expressing an opinion on the effectiveness of the Districts' internal control.Accordingly,we do not express an opinion on the effectiveness of the Districts' internal control. A deficiency in intemal control exists when the design or operation of a control does not allow management or employees,in the normal course of performing their assigned functions,to prevent,or detect and correct, misstatements on a timely basis.A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Districts' statement of revenues, expenditures and changes in fund balances will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whetherthe Districts'statement of revenues,expenditures and changes in fund balances are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of statement of revenues, expenditures and changes in fund balances amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.PrimeGlobal IMeymdmlA=IFlrm Page 29 ••• L L••• • To the Planned Communities Citizens'Oversight Committee City of Rancho Cucamonga, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Districts' internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Districts' internal control and compliance. Accordingly, this communication is not suitable for any other purpose. 04, *�P--4;za, Brea, California February 25, 2019 Page 30 Report to the City Council J u STAFF' REPORT PLANNED COMMUNITIES CITIZENS' OVERSIGHT COMMITTEE DATE: April 17, 2019 TO: Mayor and Members of the City Council FROM: Planned Communities Citizens' Oversight Committee BY: Lori Sassoon, Deputy City Manager/Administrative ices SUBJECT: SUMMARY OF REVIEW OF RESULTS OF A INDEPENDENT AUDIT CONCERNING FY 2017/18 EXPENDITU LMDs 2 (VICTORIA), 4 (TERRA VISTA), 6 (CARYN), AND 7 (NO NDA) RECOMMENDATION: It is recommended that the City Council receiv He this rep BACKGROUND: When property owners approved ne in LMD 2 e 2013, as part of that action a Citizens' Oversight Committee were by the Council. The purpose of this Committee was to meet annually to revi a dit a prepared, and confirm that the revenues received from the assess s wer pr tely. The Committee has neither budgetary or oper ision-m ri authority to allocate financial resources or direct sta As established in tion 13-0 a Comm is made up of at least five members of the public who must be I ight a own property within any LMD under the oversight o ommi the ommittee's scope of oversight has been expand 2 to de LMD 4-R ( rra Vista) and LMD 6-R (Caryn Communities), and (North a). ANA At our me of March 25, 9, Finance Director Tamara Layne and a representative from the accounting Lance, S Lunghard LLP provided an overview of the audit for these LMDs for FY 2016/1repo nerated by the audit include: o Audit Commun tter(Attachment A) o IndependentAudit 'Report on Statement of Revenues, Expenditures, and Changes in Fund Balance (Attachment B) o Independent Auditors'Report on Internal Control Over Financial Reporting(Attachment C) Page 1 of 2 Page 32 SUMMARY OF REVIEW OF RESULTS OF ANNUAL INDEPENDENT AUDIT CONCERNING FY 2017/18 EXPENDITURES IN LMDS 2(VICTORIA), 4(TERRA VISTA), 6(CARYN),AND 7 (NORTH ETIWANDA) APRIL 17, 2019 It was noted that in accordance with the law, each of these LMDs accounts for its own revenue and expenditures in its own funds. The auditor reviewed their work and a discussion was held regarding the audit process, and how the City ensures that funds collected for LMD maintenance and operations are spent to the benefit of each LMD. The auditors and City Finance staff confirmed that the revenues received have been expended appropriately on maintenance, operations, and capital improvements in each of these districts. We appreciate the opportunity to serve our community on this C ittee. If you have any questions regarding our annual meeting, members of the Comm' ill be present at the City Council meeting to present this report and discuss those questi ith you. FISCAL IMPACT: N/A COUNCIL GOAL(S) ADDRESSED: N/A ATTACHMENTS: Attachment 1 —Audit Communicate Attachment 2 — Statement of Reveitures Changes in Fund Balances for the Districts for the year ended Ju 0, 2 Attachment 3 — Inde p Audito Re rn I Control Over Financial Reporting and on Co Nwmw Othe Page 2 of 2 Page 33