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Home My WebLink About2018/03/13 - Agenda Packet - West-Side Citizens' Oversight Committee irli r r I MARCH 13, 2018 WEST-SIDE CITIZENS' OVERSIGHT COMMITTEE AGENDA PUBLIC WORKS SERVICE CENTER 8794 LION STREET RANCHO CUCAMONGA, CA 91730 . / 1:."/ ,'/ r r / l / r//✓.,./r/// I(,/!i /.,�. ,✓ / /J/// ,. r. / ,// /'/r ,/erJ'/r,✓r ,,.ilr �f r,�G� f/,rt,,,....,r If//,re,e'�r/ /�p 1,�. ,.Hr! ri/�i � ✓�// / / /ar: // //r/I/1/i. �/r�i/ ��'.9 I � �: fjr/l[„F D/i, q �. d/ ia, (olt/✓i�r/i✓//��//�/../r/i/ii///J/// //it,.,r //l "/,,� y,�! �,..,. ', f o-pv //t!i`/ ✓ 9 (f . 17e /) CALL rTO,ORDrER/, -r7 / Ir/r//iJiew/�,dr /� d�„�'.,u.�i////i, ,:,,,.Ll it/,/li///�%�„� ��r..,�.C,�r L% „l/1��y7 r,�rr�i,';,r/1✓1,lr�i,�,„,.-,I/r/,,,G l%r..c/ /,i,,iL,/u„/„/,,,:5r„r,,,,,,,r„i,�, ,,,i,.z /,,,,,,,r,,,',,,/, ,,,,,,., Al. Pledge of Allegiance A2. Roll Call: Joey Catuara David DeMauro Velma Gilbert Theresa Marji Janet Ryerson A3. Approval of Minutes: September 7, 2017 Page 1 ///)//,l///,� �/✓/% /,/G�,:r/ ///1/ro,//:,r%,/%/„ref/ r// /i ,i// / i r / .:l r r/i . //PUBLIC,Cy� MM �%SII �r ATIONS 11 This is the time and place for the general public to address the West-Side Districts 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. �,r �o r%,/,.rrr,�/�1�,��/� f 1,�,�,/�d��f..�f///��,,,,,br r�/r,�� ,r �,�a��t �,,.,lor,,,,mG r,,, „r•A,.ra. e/r„ ��,..r., 1, rru„:ml,�/ ,i/�„��/; /i„o,m l /si�/ii J1.1 r„r;,,�.,,�.': Cl. Review and Discussion of Annual Independent Auditors' Report and Page 3 Approval of Annual Written Report to the City Council C2. Discussion of Capital Improvement Project-Street Light Installations(Oral Report) C3. Discussion of Equestrian Ring at Heritage Park(Oral Report) C4. Discussion of Ball Field Lights at Old Town Park(Oral Report) C5. Discussion of Community Outreach Survey C6. Election of Committee Chair and Vice-Chair r !� %; / / f/ it ,/ /i,, r r r/// ,rl fi,r //�//ri/�i/ //J r✓f r„ r / r/si ,,;<. 1J<J r o,yi / //f ///,��// /// /��/%, a� 1. ,�% r ✓, ro �/i / /r i /i/ �., //� r r/i �.�r /i.://r ;ri ,.,%i/� r � ///�/:. �i r✓; ri/✓/ % //�r/ �a. t ,; /i lr /::/i// /� i r ,,,, ,v l ///r./ /��//% ///�� /� /�/// �/; rv / rr ✓ / i, ti //// ;/� / r / /i Vii/ r r /rJ/ ,� ,, rri,r,,<�ir�,/,%%,�,,,,,/ /,,,,�r<r/� /,,,rz�r/,/„/�/l///i„G� :,ti �i /r)%,dJ,N.«,,, „✓m,�,4a ,l�,�r�, ,,, r Jr,Grir �,,v/,l�/� /i,/, /,, r� /,/p., , /ice. ,,,,,�i,�%✓z,r ,,/i, ', 1,,,,,,, I, Melinda Garcia, Administrative Secretary of the City of Rancho Cucamonga, hereby certify that a true, accurate copy of the foregoing agenda was posted on March 8, 2018 at 5:30pm per Government Code Section 54954.2 at 10500 Civic Center Drive and 8794 Lion Street, Rancho Cucamonga, CA 91730. Melinda Garcia Page 1 CITY OF RANCHO CUCAMONGA WEST-SIDE DISTRICTS CITIZENS' OVERSIGHT COMMITTEE SPECIAL MEETING MINUTES „., ii% r�- /� /i / ■ / r ✓. // J J ! O M ,/ / a r/i/i /r// r /r r/r/iii r� The City of Rancho Cucamonga West-Side Districts Citizens' Oversight Committee held a Special meeting on Thursday, September 7, 2017 at City Hall, 10500 Civic Center Drive, Rancho Cucamonga, California. Committee Member Catuara called the meeting to order at 8:12 a.m. Al. Pledge of Allegiance: Led by Committee Member Catuara A2. Roll Call: Present: Joey Catuara, Velma Gilbert, Theresa Marji and Janet Ryerson. Absent: David DeMauro Staff Present: Lori Sassoon, Deputy City Manager; Tamara Layne, Finance Director; Noah Daniels, Finance Manager; Chris Bopko, Management Analyst III; and Melinda Garcia, Administrative Assistant. r rr / /iso.,1 //i< //,i %/< r, ///, ✓, ,/, ,„ / r // / /i r / r / / ,.%,/,r /✓, I..,/i�///�//rr./ / //�. r �� •// PUBLIC/C.. „,. /,.. .�r.. / //.�/r .r.. r/ //�/. ,/ ,,, �,/t,�.,./�/��r.,.<..i/,��/1/�i ..rl x✓.� /a„1,.:, ,,,,, ,,.,oi ,t a, a„ ,ne„w, . Io „f, ,.„. r �,Ji,,//�/!�rlrni�GJ /�, ll//�/ �ii/ No public communications were made. Cl. Tour Staff and the Committee toured sites in LMD 1, SLD 2 and PD 85. The Committee had questions about maintenance practices, contracts, who is responsible for which aspects of maintenance (contractors vs city staf), the drought, future planned improvements, etc. C2. Approval of Minutes Committee Member Margi motioned to approve the minutes from the meeting on September 7, 2017. The motion was seconded by Committee Member Catuara and harmoniously approved. C3. Election of Committee Chair and Vice-Chair Committee Member Ryerson motioned for Committee Member Margi be the Chair and Committee Member Gilbert be the Vice-Chair. The motions were seconded by Committee Member Catuara and unanimously approved by the Committee. Page 2 WEST-SIDE DISTRICTS CITIZENS' OVERSIGHT COMMITTEE SPECIAL MEETING MINUTES MARCH 13, 2018 PAGE 2 C4. Communications with the Community A What Works Cities presentation was provided by staff. The Committee made several recommendations they felt would help simplify the information to residents. A discussion ensued concerning different ways to reach out to the community. After discussing several options that did not work, the Committee decided to create a survey aimed at getting input from the community. Staff suggested a work plan be established by the Committee with their goals. An informal work meeting was scheduled on Monday, September 25th for the Committee to discuss flyers for the survey, the creation of a data base and questions that may be asked by residents. C5. West-Side Districts Updates. Finance Manager Daniels provided information concerning the distribution of the Newsletter to residents. The Committee provided input they felt would be beneficial to residents. r r / ////%� r /i%�%ii��r /� r % jr /r/ /�. r r/G "//,r r //i r2 " r " /'/ // E ,ADJO RNMENT , ' / /i r rr rr// .:/ //ii it/�a%/%/: //i/i /�/ ..��„ � ,r, „G„ r i, ,�r,d,:;., r iiu, Committee Member Catuara motioned to adjourn the meeting. The motion was seconded by Committee Member Marji. The meeting adjourned at 10:47am Respectfully submitted, Theresa Marji, Chair Date: �ii� llilli i�� i��'�' ii i� � III i il � �� I II II � � I � � � � Illnii a ��ir I� VIII �� ii iiAlli Il�ll��i�il��ll II Iliiu �iiuuiililiiu ��i it i ul��ip l yl uw �jj��lili�l,�llllll�l� ��li �l � � �� 'llili�il�� u��III� IY��ll�llljlllllllllll �li�l�i illj it l��`��I''1,��I � 1��1 � ��i dl�i, Ui�liii � i � uuuiluJui�lliuiul��llhhlllulilliluil�hl��llllllll��lll�luiiiiilillllluluulllluluiluuu � i i iIIuiuuul�l�lllll��ll� ll�� l�l�li�'iVuuilufy � � ..t � I l iii � �'1' l i�,; , i � � �� j��lulilllll �ii � i��llll�i� ll � �� i W�li�l� � l alai � l�'j��i��ji l��l�� l ��II"��I�� l illlllllliiiliiiii � � llll �llll� l ll��llii � iiuiuil��IIIhI�Ulll�� lll!�i�lllll�l�l�l �� l�l�lllllllllllllil� lilllllllllliullll�li��liiu�� i �i��ll�� i� ��ii�� lililil�i��llipuiii , II �Iui Il�li�u�llll� �� l�'iiillllll uiiiiiiii�iiigl��li�q1�iill�iuu�� i�'�I�Ililliliiiii�iiijilliillgflil�lllllliiiilllil !I I�I � uiuliiiuu�l�iii �� 4 �pI I��I �IIIIII IlVll � I� III�II i) Ih' lll Ilm�i�luiilli��i��iii�, Ipiiiu�lu0lilii�u�lluViy�I��ii Ii �II � �iII, �-�� Il �ii�uiiiiiil'lllll, llll�llii�luum � ��ii�w '.' ll �I� �� ll� ��illi� II�IIIII I!�� ' � + I��I �� i �� i�l�� I i io��iii�iillliul � I � IIIIIiI� II� I � � ��IIuIIilVlll iii �., � � � uU��llll�� i �� il � � � � ll� li��iiiulluuuuu�uuu�il u I� " iulll�ll�llll�l�l �� 1l � � ��l�� i �l �� i� � IIIuIIQ �i�II Vli iiulinii�qui��q � II �u�� iluimiViiiil�'il� � ui a i�i�i�i�i��i��nilil� �� a�� IIIIIIIII�I�II �IIII I�IIII II�� I�� II�' �IIIIIIIIII I ��I�� i� i u NUiiulll IIII i Illllllllllllluluu mm!J IIID iiiiiiuuui �IIIIIIII �IIIVlllllllllllllllllll � �� u°.•.I �,, 'uiiuuui��iiliil��l�l�l �� il� � ��IIINd' II �I III Illllllllllllllllll�ii��iiiu�u �i ��uouuullllllll ��iul I ii��ilQi�lll ��I��,i�gii�i� � I � iiiiii I IIII li��llllllllllllllllllll �il�lli�!!!;!!I if� uii uul�i��i� iiiiiii� i� llllllll lllugii �� " Illllllluim�i�ip�p �u,, � � �� u iuuliiuu �iiii �� ii . i u�i �I I II � «i puilliuill � i iililll�l��l IIIIIII�� iii �� 9i��il"Il��q �� l�d��l '��V�Illlll��llllll ��lllll �lllll�� l�� u�llll�� I� SII � I� i�illii�� i��u� ��iiiiililll � �� iili�l� it ! I � !, � � I�Ippl��u�p, �� lil�luiiu��i�i�i� uu i i �liu iiia iu VIII dui ulllll �I��iuu �iiii� lllll�� l� � III�� '� IIII � � , li�ii� l� llllil��iiiililiiiilili'll � iiiii�il� luwiw Ill �ctn Ilii illllllllll I � � II Illli�� l"iiilllllll�l�lllll � �I Ilu � �i � i �� Ilgll,ll �� Ih��ll�� ll �� I iiui�ildddidi�llilll,�illiili�lll�l�,lllllll,,l�I,III,III,I,I,I,,I,,l,�� l„Illl,iiu�uii IIIIIIIII�I'IIIIVVi�pppll�,,,��i��,��,��t�� ;�i ��,, �� p , ii�� llll ; , ,,;,�,�;� I�I�I�� u�� II �� :� VIII Page 3 000 L S Loo January 29, 2018 To the West-Side Districts Citizens' Oversight Committee City of Rancho Cucamonga, California We have audited the revenues, expenditures and changes in fund balances of the Landscape Maintenance District #1 General City, Street Lighting District #2 Residential, and Park and Recreation Improvement District#85 (collectively, the Districts) of the City of Rancho Cucamonga for the year ended June 30, 2017. 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 May 24, 2017. Professional standards also require that we communicate to you the following information related to our audit. Slanificant 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 financial statements. 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 2016/17. 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 financial statements in the proper period. The financial statement 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. ri Global A n. Page 4 LSX000 ee ee To the West-Side Districts Citizens'Oversight Committee City of Rancho Cucamonga, California 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 financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Management Representations We have requested certain representations from management that are included in the management representation letter dated January 29,2018. 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' statement of 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 We applied certain limited procedures to the audit. These procedures include, but are not limited to, the following: Proposed Segmentation of the Engagement We utilize a governmental audit program which we will tailor to the Districts' operations. The tailoring is necessary to accommodate specific client circumstances and to recognize differences in organizational structure. Our audit programs are organized by financial statement category. This approach takes full advantage of our accumulated experience. The primary benefit is that the risk of omitting important procedures is substantially reduced. We believe that this approach tends to be the most effective and efficient for an entity such as the Districts. The audit procedures are listed in the most logical sequence which improves efficiency. The savings in effort and time gained by using our audit program can free an auditor's attention for unusual or difficult situations that may arise. The audit programs are designed to increase audit efficiency by linking financial statement assertions, audit objectives, and procedures that are basic to most governmental audit engagements. Page 5 LSX000 000 s 68 To the West-Side Districts Citizens' Oversight Committee City of Rancho Cucamonga, California Sample Size and Extent of Statistical Sampling Our approach may be to utilize statistical sampling in the areas of receipts, disbursements, utility billing and payroll. Here we develop a statistical conclusion based upon an initial computer selected random sample which is based on the population and other risk factors identified. If errors are noted in the sample, the sample size will be expanded. We believe that a random selection can be efficient, while providing each item in the population an equal chance of being selected. Additionally, we may select a stratified sample of all transactions over a specified dollar limit for review. This allows us to cover all high dollar value transactions not otherwise selected in the random sample. Our samples are selected randomly utilizing IDEA data analysis software. Extent of EDP Software Our traditional approach is to"audit around"the computer, which means that we verify output by agreeing it, through our audit tests, with corresponding source input transactions. We do not choose to use audit software that runs through the Districts' computer system, such as a test deck. Like other aspects of the internal control structure, computer controls are documented in our memoranda and questionnaires. We will consider whether specialized skills are needed to consider the effect of computer processing on the audit, to understand the internal control structure policies and procedures or to design and perform audit procedures.The decision to use a computer specialist in audit planning is a matter of our professional judgment. We will consider the complexity of the computer system and assess whether we can identify the types of misstatements that might occur. LSL's IT Specialist will be involved in the planning and performance of the audit and also in assessing the IT controls of the Districts. Analytical Procedures We use analytical procedures as an overall review of the financial information in the preliminary and final stages of the audit. These procedures are designed to assist us in planning our audit and in assessing the propriety of the conclusions reached and in the evaluation of the overall financial statement presentation. The procedures to be utilized consist of determining expectations for percentage increases and decreases between significant revenue, expenditure and balance sheet accounts, reading the financial statements and related notes, and we focus on overall relationships within the financial statements. Once determined, these are reviewed to determine if the changes appear reasonable or require further analysis. For all significant differences, explanations are obtained as to why the situation occurred and additional substantive procedures may be applied and related evidence gathered to resolve concerns and questions. Approach to Understanding Districts' Internal Control Structure To gain an understanding of the Districts' internal control structure, we will perform procedures as required by the new Auditing Standards, primarily SAS 104-111. This will include documenting the major transaction classes, purpose of funds, the structure of the Districts and to quantify materiality. We will review and make recommendations on the internal control structure, which consists of Control Environment, Accounting System and Control Procedures. We will review internal controls in the area of cash; investments; revenues and receivables; expenditures and accounts payable; payroll; inventories; property and equipment, debt and debt service; insurance and claims. Based on the result of our review, we will issue a formal internal control report (SAS 115 Letter) that will identify any significant deficiencies and or material weaknesses which we identify. This report is required by the Government Auditing Standards issued by the Page 6 000 To the West-Side Districts Citizens'Oversight Committee City of Rancho Cucamonga, California Comptroller General of the United States. In addition, we will also issue a separate communication letter directly to the City Council. This letter would communicate any significant deficiencies or material weaknesses we identify in the internal control system and other matters that we feel should be communicated to the governing board.All internal control issues will initially also be discussed with management of the Districts. Approach to Determining Laws and Regulations Subject to Audit The Laws and Regulations that will be subject to audit test work are determined from the applicable laws, regulations, contracts, and grant agreements which we identify through the understanding we obtain of the Districts and our extensive experience with governmental entities. Approach to be Taken in Drawing Audit Samples For the purpose of tests of controls and tests of compliances with laws and regulations, we use audit sampling. Tests of controls are procedures directed towards determining the effectiveness of the design or operation of an internal structure policy or procedures. Normally, audit sampling is used for tests of controls that involve inspection of documents and reports indicating performance of the policy or procedures and, in many cases, re-performance of the application of the policy or procedures. These sampling procedures test the operating effectiveness of an internal control structure policy or procedures by determining how the policy or procedure was applied, the consistency with which it was applied during the audit period, and by whom it was applied. To achieve this goal, we draw samples in the area of disbursements, receipts, utility billing and payroll. Each document selected will be tested for various attributes that are designed to verify compliance with different aspects of internal controls. Additionally, each sample item will be tested for coding to the proper accounts and posting to the general ledger. New Accountinq Standards The following new Governmental Accounting Standards Board (GASB) pronouncements were effective for Fiscal Year 2016/2017 audit: GASB Statement No. 73, Accounting and Financial Reporting for Pensions and Related Assets That Are Not within the Scope of GASB Statement No. 68, and Amendments to Certain Provisions of GASB Statement Nos. 67 and 68. GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans. GASB Statement No. 77, Tax Abatement Disclosures. GASB Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined Benefit Pension Plans. GASB Statement No. 80, Blending Requirements for Certain Component Units-an Amendment of GASB Statement No. 14. GASB Statement No. 82, Pension Issues an Amendment of GASB Statements No. 67, No. 68, and No. 73. Page 7 LS12's see see 00 To the West-Side Districts Citizens' Oversight Committee City of Rancho Cucamonga, California The following Governmental Accounting Standards Board (GASB) pronouncements are effective in the following Fiscal Year audit and should be reviewed for proper implementation by management: Fiscal year 2017/2018 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 2017. GASB Statement No. 86, Certain Debt Extinguishment Issues. Fiscal Year 2018/2019 GASB Statement No. 83, Certain Assets Retirement Obligations. Fiscal Year 2019/2020 GASB Statement No. 84, Fiduciary Activities. 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. 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IIS ,,,,,;I;II,�„ � 11,111,11 , iiiililuiii � ��ull�ll� �l � �� ;,��i.l i � � �uii��uii ��ii�i�u��ll l,ll�llll ll�l�l�l� i � j��l� u''ildi�il�i�tl�il� �ui�i I � � VIII � �n��i dl��l� ll��ul9�lii�lllllii�l�l�l�l�llll�illuppi�i�� puu�lili�li�liuuiill�l�llllll�ll��lill�tllilili�ulu 'i! " 'uii �� l � liii�l� r'I�il�lll��ll�i�l�lll ��l��lll ili Illli ��,��i � � III � � �� { iil, ii i I �I��Illu� � '�II�jl��pillllI�i�llililuli,illll�lll��l�l� lllli��lil Page 8 LANDSCAPE MAINTENANCE DISTRICT#1 GENERAL CITY, STREET LIGHTING DISTRICT#2 RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#85 CITY OF RANCHO CUCAMONGA, CALIFORNIA STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES YEAR ENDED JUNE 30,2017 Page 9 LANDSCAPE MAINTENANCE DISTRICT#1 GENERAL CITY, STREET LIGHTING DISTRICT#2 RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#85 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 10 000 690 LS Lso P. INDEPENDENT AUDITORS' REPORT To the West-Side Districts Citizens'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 District#1 General City, Street Lighting District#2 Residential and Park and Recreation Improvement District#85 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, expendidures 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. PrImil .w +iad r y Page 11 Goo LSL**Goo a To the West-Side Districts Citizens'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 District#1 General City, Street Lighting District#2 Residential and Park and Recreation Improvement District#85 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 12 LANDSCAPE MAINTENANCE DISTRICT#1 GENERAL CITY,STREET LIGHTING DISTRICT#2 RESIDENTIAL, AND PARK AND RECREATION IMPROVEMENT DISTRICT#85 CITY OF RANCHO CUCAMONGA STATEMENT OF REVENUES,EXPENDITURES AND CHANGES IN FUND BALANCE YEAR ENDED JUNE 30,2017 Landscape Park and Maintenance Street Lighting Recreation District#1 District#2 Improvement General City Residential District#85 Revenues: Taxes $ 1,244,301 $ 372,613 $ 1,162,430 Charges for services 10,413 - 15,096 Use of money and property 28,088 (2,314) 118,827 Contributions from City 121,360 350,170 230,580 Developer participation - 440 - Miscellaneous 545 - 331 Total Revenues 1,404,707 720,909 1,527,264 Expenditures: Current: Community development: Personnel services 27,495 - 350,886 Operating costs: Operations and maintenance 39,225 - 115,300 Contract services 498,057 667 164,845 Tree maintenance 49,888 - 18,200 Utilities 367,124 642,300 252,934 Assessment administration 65,870 37,400 153,430 General overhead allocation 43,421 3,390 64,370 Capital outlay - - 173,276 Total Expenditures 1,091,080 683,757 1,293,241 Excess(Deficiency)of Revenues Over(Under)Expenditures 313,627 37,152 234,023 Fund Balance,Beginning of Year 948,728 198,643 1,211,151 Fund Balance, End of Year $ 1,262,355 $ 235,795 $ 1,445,174 See Notes to Financial Statements Page 13 LANDSCAPE MAINTENANCE DISTRICT#1 GENERAL CITY,STREET LIGHTING DISTRICT#2 RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#85 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 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 accompanying statement of revenues,expenditures and changes in fund balances contains information relative only to the Landscape Maintenance District#1 General City,Street Lighting District #2 Residential, and Park and Recreation Improvement District #85 of the City of Rancho Cucamonga,which are an integral part of the City of Rancho Cucamonga. Landscape Maintenance District No. 1 (LMD 1)was formed in 1979 and consists of 8,329 single family homes, 10,222 multi-family units,and 8.83 acres of vacant land,seven parks, and trails. Landscape improvements provided in LMD 1 may include, but are not limited to:turf, ground cover, shrubs and trees, sprinkler and irrigation systems, ornamental lighting, drainage systems, masonry walls, entryway monuments, and associated appurtenances. These improvements include all necessary services; operations; administration; and maintenance required to keep the abovementioned improvements in healthy,vigorous,and satisfactory working condition. 4 Page 14 LANDSCAPE MAINTENANCE DISTRICT#1 GENERAL CITY,STREET LIGHTING DISTRICT#2 RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#85 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 assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2016/17 2017/18 Change Single family home $ 92.21 $ 92.21 0.00% Condominium unit 46.11 46.11 0.00% Multi-family unit 46.11 46.11 0.00% Commercial/industrial parcel per acre 184.42 184.42 0.00% Street Lighting Maintenance District No.2(SLD 2)was formed in August 1983 and consists of 7,248 single family homes, 1,989 multi-family units,and 35.16 acres of non-residential land.The SLD 2 assessments pay for energy and maintenance for streetlights within the public right-of-way and dedicated easements within the boundaries of SLD 2.The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2016/17 2017/18 Change Single family home $ 39.97 $ 39.97 0.00% Multi-family unit 39.97 39.97 0.00% Commercialfindustrial parcel per acre 79.94 79.94 0.00% Park and Recreation Improvement District No. 85 (Red Hill and Heritage Park District) (PD 85)was formed in April 1985.PD 85 is a combination Improvement and Maintenance District. This special tax was issued to pay for bonds that were sold in 1985 and refinanced in 1993.The bonds that were sold for the construction of the parks have been paid off as of 2005.However,all parcels in PD 85 will continue to be assessed for the on-going maintenance of both parks.The boundary of PD 85 is citywide except properties within the planned communities.The assessment rates are as follows: Fiscal Year Fiscal Year Percentage 2016/17 2017/18 Change Single family home $ 31.00 $ 31.00 0.00% Condominium unit 31.00 31.00 0.00% Multi-family unit 31.00 31.00 0.00% Commercial/industrial parcel <1.50 acres 15.50/Lot 15.50/1-ot 0.00% 1.51 -3.50 acres 46.50/Lot 46.50/Lot 0.00% 3.51 -7.00 acres 108.50/1-ot 108.50/1-ot 0.00% 7.01 -14.00 acres 217.00/1-ot 217.00/Lot 0.00% 14.01 -25.00 acres 434.00/Lot 434.00/Lot 0.00% >25.01 acres 775.00/Lot 775.00/Lot 0.00% 5 Page 15 LANDSCAPE MAINTENANCE DISTRICT#1 GENERAL CITY,STREET LIGHTING DISTRICT#2 RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#85 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 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 The Landscape Maintenance District#1 General City and Street Lighting District#2 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. The Park and Recreation Improvement District#85 fund included in this report is accounted for in the City's financial records as an agency fund. Agency funds are used to account for assets held by the City as trustee of agent for individuals,private organizations,or other governmental unites,and/or other funds. 6 (Il�iiii�l � ��lll�lll,1,l�l�lpllliiiii�liiij��ii;;;'��i��ilil �I�II�N'�fti�llll�ll��illi��4l�il� iiiiuijuiiiih;lipullli�� "' il�� i��llllillliliii �'�� ' IIIIIII�IIII � �� IOu i it i u ��Ilil�l�l��iiilljl uuilll i Il�lllillllllli i wl� lll�l�� l ��'I I��I I I I� I��l uii�i�i�l�l I llllllllli '� ill YIIi IIII �I�I IIII I � Illiiillllll ill; � � illll��liiliiuiliilll �� uuii��l�il iri�I'iill �� III� ,, �� IIIIIII� �II�� fil� ii �lllill�l�l� �li� �gillliil�!I��ui��lll�i�itiiti�lll�llii�iih u��l��i�llio�u�ii��y "V 1111111 �� Ill�ll�iiii)��i�� 'iil ' �iiiiiiui�i� ii � i iiill ��uul�llill�! �Iliiii ,ii;iii��l�4i� �IViliiil,lllllliiiiij�� IIuIIu� 111111111 I� � � l �llllllii`i`iillli,��llldllliq� ll iiliil�llllliii ��iiil ��;liill �llli �llli�ll�l � li� llll��iiiillilll�ll��l��ll��l,�ll�ll� �,,� l � i� ll VIII 1 11 iiPm ' � liiill� � I I � � � �I�� I�I�I�I iii��raIIOuNUllll ii iuU � �� i � ��' � �Il � � iiil �uu � � �, �lll�ll� iiilii �I�ild �ii�ii� ll '� uulluiui� iii�ii�i��iiliiiiiii ��iii��uu � lllilliu ��r!� illltldi i i I � � I �„� IIII „ ILII Illlllllll �i IIIIIIIIIIIIII��IIIIII II „I ` ��„ � � � r �ipui � �l��l��l�l�l�l��llllllll�l��l , ��l�l�� li�� yll��i i��II � �� ;�uU�iII�Jl;i�lllliiiiullllllllll � U ¢ �' uuu �� lli IIIIIIII IIIIII iiiiiu liu SIU I u 1111111 � 1111111II 111111 IIII. I ��'1��r��u�� f � ilii �i I it i I � � �uiiiui ip i � lii iuui i � � Wer 11 IIID i VIII ml�"�� iuuu� �I�lii�i��e�li�li�� «��4irt ��;b�pl Idi I��IIII�� UVillll��ii � (�� "'iui VIII SII iulll_ liulllllllllllllllllll iii �� 111111 �� iiuuuuuuuuuui �llllllllllllllllllllllllllllll ' °' �Illi � ll�ll �u�l��upp��yl riii�iiiiii� � r' I 'liy i ilii �!ii� uuiiii� iiii � Il�lllliiilill"' " Il�� li�l�� iii u ,,,,, II��II ��I�'��IIVC�iII'�iililli�lilll�i il;;!IIIIIIII 1111111 I��iiiljiii I u IIfIII II Ilp!I,III III IIIIII�III �� I IIIA ��° 1 °1°�� ,, ,�� , ,, �, � �� IIIIIIIIIIIIIIII �� V�I��I��'j,1�i1,��lll'liiigllllllllllllllllll�� , Page 16 Goo 000 LS U's 00 N °F 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 West-Side Districts 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 District#1 General City, Street Lighting District#2 Residential, and Park and Recreation Improvement District #85 of the City of Rancho Cucamonga, California, (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, and have issued our report thereon dated January 29, 2018. 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 internal 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 entity's 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. ri Global Page 17 LSoo 0Goo 00 To the West-Side Districts Citizens' Oversight Committee City of Rancho Cucamonga, California Compliance and Other Matters As partof obtaining reasonable assurance about whether the 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. 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 District's 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. "'SzW -Or-44o� Brea, California January 29, 2018 �IItlllliliiimVli i uu i�i�lll�ll Io�� i, JliluluUiiiillllllllll��l�l � u IINr'li uui � � �� III IIS Il 11 lll,n~t ' i �i i Iliill 11111, IOW �` IIII�II II ��I � �� i�llii iN ��il � 1111111 �iy��5iii illl �� II��I �Iliiq � � I� � �utl �III � 1 t��I)+IIIJIIIIII�IUIIlOiIillllu�Ii��I�� ly11l�I�Il�li�Ij�lylWlll�lll1�1`III14�`i�illllili��Illllil�N�uu�� i�ii,�,uiii�i��llllll�� ll� �l�„I�� llliul��I��iillillll+I�IIV�II��ll l�l�uuuiui�iuliliil�i�liil,lii' lil ��lliii � ' II � �� VIII �I � I� Ili l;i � ii �illlli i i � �� Vlijiii�i��i�llh� l�ll iiiiiil�i�lliliiillllllll�lll� l� llll� �� i��llllllllll�llll�llll�i� i��i� lllllll �I � � i �p� I��V ail � II ��N��d�ll IIIIIII�II Illlu�� I Il��u�IIIII IIIIIIIIIII 111111.111 � � � , I ��I��]�iWilliui�ull�lll i. III �� IIIII�II iii iii�i�llll uuiu� �� IIID �iI�I ��III�Niijli!;��Il��lll�l� � ll�ll � l��lllllll ��llllllllllllllllllllllllll�l�ltllllll��lll � u �lllllll � � Il��liil ��VII�IIi�ii�i�liliuU�Ulllllll� I�IIIIIIIIIIIIIIIIIIIIIIIIIIII �� llllll��ll�l��iiili 111111„ ipi " "VIII 'llllllll�iillll�llllllIl�lllll�llllllllllllllliulliilllllll ll IIIII �I,i, III i�lll�;l”"��Illlll�l �ij,i,,,;i;lllulllllu�q� �llll�ilililil"' "I�III"I' llll��llll�llllll��llll 1111111 IIII III�IIIIIIII �I lililillllllll�l I � i��i'iiiilllll'�� III I VIII � II111111 � � � mill!iIII�IIII111111IIII�I� Ill�llll�llilll �l�ll i � l � , ��uilllllllllll�l�lllllllll l �„ iiiuiiglllllliiiq�� u u��u, d�ilud�w��iili�i�u� ll� �l � 6I�I�ui�ll!!IilUi�uul�l� ,liii� 61 l Page 18 OEM= STAFF REPORT � WEST-SIDE DISTRICTS CITIZENS' OVERSIGHT COMMITTEE DATE: April 4, 2018 TO: Mayor and Members of the City Council FROM: West-Side Districts Citizens' Oversight Committee BY: Lori Sassoon, Deputy City Manager/Administrat' rvices SUBJECT: SUMMARY OF REVIEW OF RESULTS OF L INDEPENDENT AUDIT CONCERNING FY 2016/17 EXPE IN LANDSCAPE MAINTENANCE DISTRICT #1, ST IGH DISTRICT #2, AND PARK AND RECREATION IMPRO NT DISTRI 5 RECOMMENDATION: It is recommended that the City Council receive a this BACKGROUND: Established by Resolution 15-207, the istricts s' Oversight Committee is made up of five members of the public that r rope 'thin Landscape Maintenance District#1, Street Light District#2 Reside and Rec n Improvement District#85 (collectively "the Districts do not e s anding City Commission or Committee. A primary p Comm revie annual audit after it is prepared and report the results review a City cil and the community on an annual basis. The Committee has er budg or operati decision-making authority, nor the authority to allocate financial re s ANAL ' At ol ting of Mar 20 ance Director Tamara Layne and a representative from the acco firm of Lance, & L rd LLP provided an overview of the audit for the Districts for FY 17. The repo nerat y the audit include: o Audit unication L (Attachment A) o Independe itorsrt on Statement of Revenues, Expenditures, and Changes in Fund Balance (Atta o Independent Au Report on Internal Control Over Financial Reporting (Attachment C) It was noted that in accordance with the law, each of the Districts 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 maintenance and operations are spent to the benefit of each District. The auditors and City Finance staff confirmed that the revenues received have been expended appropriately on maintenance, operations, and capital improvements in each of the Districts. D,Ino 1 of 7 Page 19 SUMMARY OF REVIEW OF RESULTS OF ANNUAL INDEPENDENT AUDIT CONCERNING FY 2016/17 ExPENDITURES IN LIVID 1, SLD 2, AND PD-85 APRIL 4, 2018 We appreciate the opportunity to serve our community on this Committee. If you have any questions regarding our annual meeting, members of the Committee will be present at the City Council meeting to present this report and discuss those questions with you. FISCAL IMPACT: N/A COUNCIL GOAL(S) ADDRESSED: 16. N/A ATTACHMENTS: Attachment 1 —Audit Communication Letter Attachment 2 — Statement of Revenues, Expendi and Cha in Fund Balances for the Districts for the year ended June 30, 201 Attachment 3 — Independent Auditors' R on Internal Contr er Financial Reporting and on Compliance and Other MAM Paae 2 of 2