HomeMy WebLinkAbout2019/03/18 - Agenda Packet - West-Side Citizens' Oversight Committee r
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MARCH 18, 2019
WEST-SIDE CITIZENS' OVERSIGHT COMMITTEE AGENDA
PUBLIC WORKS SERVICE CENTER
8794 LION STREET
RANCHO CUCAMONGA, CA 91730
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Al. Pledge of Allegiance
A2. Roll Call: David DeMauro, Chair
Velma Gilbert, Vice-Chair
Denise Garzaro
Theresa Marji
A3. Approval of Minutes: October 15, 2018 Page 2
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.
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
I, Melinda Garcia, Executive Assistant of the City of Rancho Cucamonga, hereby certify that a true,
accurate copy of the foregoing agenda was posted on March 14, 2019 at 5:30pm per Government Code
Section 54954.2 at 10500 Civic Center Drive, Rancho Cucamonga, CA 91730.
Melinda Garcia
CITY OF RANCHO CUCAMONGA
WEST-SIDE DISTRICTS CITIZENS' OVERSIGHT COMMITTEE
MEETING MINUTES
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The City of Rancho Cucamonga West-Side Districts Citizens' Oversight Committee held a
meeting on Monday, October 15, 2018 at the Rancho Cucamonga City Hall, 10500 Civic Center
Drive, Rancho Cucamonga, California. Chair DeMauro called the meeting to order at 6:OOp.m.
Al. Pledge of Allegiance:
Led by Chair DeMauro
A2. Roll Call:
Present: David DeMauro, Denise Garzaro, Velma Gilbert and Theresa Marji
Staff Present: Bill Wittkopf, Public Works Services Director; Noah Daniels, Finance
Manager; Kelly Guerra, Special Districts Technician; and Melinda Garcia, Executive
Assistant.
A3. Approval of Minutes:
Committee Member Marji motioned to approve the minutes from the meetings of March
13, 2018 and September 18, 2018. The motion was seconded by Committee Member
DeMauro.
�� �''UB�IC �QIVIMUNICATIC�N,S
B1. No public communications were made.
�.`MTENi � CSF D�S'CUSSION
Cl. Review and Discuss Lessons Learned List
The discussion began with Chair DeMauro explaining the intent of creating an informative
fact sheet for residents. The Committee agreed that the fact sheet provides core facts
that can be used to gain confidence on the complexities of the districts. It was determined
that the fact list could best be used as a reference tool for existing and future Committee
Members. Finance Manager Daniels will consolidate comments provided by staff and
distribute the final fact list at the next meeting.
C2. Discussion of Stakeholder Outreach Activities and Engagement
A thank you message was created by the Committee at the meeting that is to be emailed
to the list gathered from the survey. Staff to provide the email list to the Communications
Division for distribution of the thank you message and a link to the previous newsletter.
The Committee addressed their long-term goals:
1. Identify existing Committees and groups and review a survey highlight being
prepared by Chair DeMauro. Start working with other groups to practice their
presentation.
Page 2
WEST-SIDE DISTRICTS CITIZENS' OVERSIGHT COMMITTEE MEETING MINUTES
OCTOBER 15, 2018
PAGE 2
2. Develop an elevator pitch for other Committees and community groups.
3. Develop another newsletter.
�. ,ADJQURNMENT
Committee Member Marji motioned to adjourn the meeting. The motion was seconded by
Chair DeMauro. The meeting adjourned at 7:32p.m.
Respectfully submitted,
David DeMauro, Chair
Date:
Page 3
C1
Annual Independent
Auditors ' Report
and Report to the
City Council
Audit
Communication
Letter
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February 2G. 2O1Q
Tothe West-Side Districts Citizens' Oversight Committee
City ofRancho Cucamonga, California
We have audited the ahsomond of revenuoo, expenditures and changes in fund balances of the
Landscape Maintenance District #1 General City, Street Lighting District #2 Residential, and Perk and
Recreation Improvement District#85 (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 toour audit.
Significant Audit Findings
Qualitative Aspects ofAccounting 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 rovenueo,
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 2O17/18.
We noted no transactions entered into by the Districts during the fieua/ year for which there in a lack of
authoritative guidance or consensus. All significant transactions have been recognized in the revenues,
expenditures and changes infund balances inthe proper period.
The revenues, expenditures and changes in fund balances disclosures are neutral, consistent, and clear.
Difficulties Encountered inPerforming 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 |etter, o disagreement with management is a financial eucounting, reporting, or
auditing motter, whether or not resolved to our satisfaction that could be significant to the revenueo,
expenditures and changes in fund balances or the auditor's report. We are pleased to report that no such
disagreements arose during the course ofour audit. �g9rirneG|oba|
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Tothe West-Side Districts Citizens' Oversight Committee
City ofRancho 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 canee, management may decide to consult with other accountants about auditing and accounting
mattem. oimi|artoob\aininga''eeoondopinion^ onoartoinoituotionn. |faoonou|taUoninvo|vaaapp|ioation
of an accounting principle to the Districts' revenuea, expenditures and changes in fund balances or a
determination of the type of auditor's opinion that may be expressed on those atatamenta, 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 orIssues
We generally discuss a variety ofmatters, including the application of accounting principles and auditing
atandards, 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 Baoofito
Other Than Pensions.
GASB Statement No. 81. Irrevocable Split Interest Agreements.
GASB Statement No. 85, Omnibus 2017.
GASB Statement No. 88. Certain Debt Extinguishment Issues.
The following Governmental Accounting Standards Board (GASB) pronouncements are effective inthe
following fiscal year audits and should be reviewed for proper implementation by management:
Fiscal Year 2O18/10:
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 201Q/2O:
GASB Statement No. 84. Fiduciary Activities.
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Tothe West-Side Districts Citizens' Oversight Committee
City ofRancho Cucamonga, California
Fiscal Year 2O2O/21:
GASB Statement No. 87, Leases.
Restriction on Use
This information is intended solely for the use of the West-Side Districts 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,
Bme, California
Page
Statement of
Revenues ,
Expenditures and
Changes in Fund
Balances for the
Districts for the
Year Ended
June 30 , 2018
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, 2018
Page 10
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 30,2018
Page 11
LANDSCAPE MAINTENANCE DISTRICT#1GENERAL CITY,
STREET LIGHTING DISTRICT#2RESIDENTIAL,AND
PARK AND RECREATION IMPROVEMENT DISTRICT#85
CITY OFRANCHO CUCAMONGA. CALIFORNIA
YEAR ENDED JUNE 3O. 2O18
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUD|TORS' REPORT............................................................................................... 1
STATEMENT OFREVENUES, EXPENDITURES AND CHANGES
|NFUND BALANCES...............................................................-----------------' 3
NOTES TOSTATEMENT OFREVENUES, EXPENDITURES AND CHANGES
|NFUND BALANCES--------------------------------------'4
Page 12
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|NDEPENDENTAUDITORS' REPORT
Tothe West-Side Districts Citizens' Oversight Committee
City ofRancho Cucamonga, California
Report on the Statement of Revenues, Expenditures and Changes in Fund Balances
We have audited the accompanying statement ufrevenues, expenditures and changes infund balances
of Landscape Maintenance District#1 General City, Street Lighting District#2 Residential, and Perk and
Recreation Improvement District#85 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, aolisted inthe table ofcontents.
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 navenuoa,
expenditures and changes infund balances in accordance with accounting principles generally accepted
in the United States of America; this includes the deuign, imp|ementation, and maintenance of internal
control relevant to the preparation and fair presentation of the statement of r*venuea, expenditures and
changes in fund balances that are free from material misstatement, whether due to fraud or error.
AuoKtoms'Respmns/bJ/ty
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 ofrevenues,
expenditures and changes in fund balances are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and diao|nnuveo 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 ba|anoee, whether due tofraud or error. In making those
risk eeeeanmanta, 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 uimumntanuoo, 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 mode by management, as well as evaluating the overall presentation of
the statement ofrevenues, expenditures and changes infund balances.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinions.
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Tothe West-Side Districts Citizens' Oversight Committee
City ofRancho Cucamonga, California
Opinions
In our opinion, the statement ufrevenues, expenditures and changes in fund balances referred to above
present fair!y, in all material reepactn, the respective financial position of the revenuea, 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 Juno 30. 2018. in accordance with accounting principles generally accepted in the
United States ofAmerica.
Other Reporting Required byGovernment Auditing Standards
In accordance with Government Auditing Stundurdo, 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, regu|etiono, uontradn, and grant agreements and
other matters. The purpose of that report in 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 pert of an audit performed in
accordance with Government Auditing Standards in considering the Districts' internal control over
financial reporting and compliance.
Brea, California
February 25. 2O1Q
Page 14
LANDSCAPE MAINTENANCE DISTRICT#1 GENERAL CITY,STREET LIGHTING DISTRICT#2 RESIDENTIAL,
AND PARK AND RECREATION IMPROVEMENT DISTRICT#86
CITY OFRANCHO CUCAKnnNG4
STATEMENT OFREVENUES,EXPENDITURES AND CHANGES|NFUND BALANCES
YEAR ENDED JUNE 3V 2010
Landscape Park and
Maintenance Street Lighting Recreation
District#1 District#2 Improvement
General CiResidential District#86
Revenues:
/oxen $ 1.245.848 $ 378.255 $ 1.164.042
Charges for services 15.313 - 20.808
Use ufmoney and property 20.257 (11.013) 122.249
Contributions from City 123.410 350.170 203.990
Miscellaneous 380 410005 2,163
Total Revenues 1,413,318 1,123,017 1,613,363
Expenditures:
Personnel services 27,203 ' 200.940
Operating costs:
Operations and maintenance 80.891 4.278.761 54.085
Contract services 473.933 82.770 232.065
Tree maintenance 51.985 ' 19.124
Utilities 383.532 336.844 290.400
Reimbursement ofelection costs ' - -
Assessment administration 66.090 40.080 152.220
General overhead allocation 40.960 3.400 40.640
Miscellaneous - - 2.860
Capital outlay - - 65.000
Debt service:
Principal retirement - 156.494 -
Interest and fiscal charges ' 31,543 '
Total Expenditures 1,104,094 4,877,842 1,066,602
Net Change in Fund Balances 808.224 (3.754.825) 447.851
Fund Ba|oncaa, Beginning of Year 1,262,355 235,795 1,445,174
Fund Be|ennea, End ofYear
See Notes u»Financial Statements 3
Page 15
LANDSCAPE MAINTENANCE DISTRICT#1GENERAL CITY, STREET LIGHTING DISTRICT#2
RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#8S
CITY OFRANCHO CUCAMONGA' CALIFORNIA
NOTES TOSTATEMENT OFREVENUES, EXPENDITURES AND CHANGES |NFUND BALANCES
FOR THE YEAR ENDED JUNE 3U2O18
Note 1: Description ofthe 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 byanelected 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 of1A72.''being Division 15. Part ofthe Streets and Highways Code ofthe State of
California(commencing with Section 2250O).The City levies annual assessments tofinance 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 of1072. On an
annual basis,an Engineer's Report must be prepared for each assessment district which contains
o full and detailed description of the improvements and the proposed uooenomonto upon
assessable lots and parcels ofland within the District.
The City Council must also adopt aresolution ofintention which:
^ Dec|enaa 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(obemade inexisting improvements.
^
Refers tothe assessment district byits 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 ofland 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 Pork 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
D.320single family homes, 1O.222multi-family units,and D.83acres ofvacant land,seven parks,
and trails. Landscape improvements provided inLN1U1 may include, but are not limited to:turf,
ground cover, shrubs and trees, sprinkler and irrigation systems, ornamental lighting, drainage
oyntemo, masonry wmUe, entryway monumente, 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.
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Page 16
LANDSCAPE MAINTENANCE DISTRICT#1GENERAL CITY, STREET LIGHTING DISTRICT#2
RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#M5
CITY OFRANCHO CUCAMONGA' CAL!FORN|A
NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES |NFUND BALANCES
(CONTINUED)
FOR THE YEAR ENDED JUNE 302U1O
Note 1: Description ufthe Reporting Entity(Continued)
The assessment rates are eefollows:
Fiscal Year Fiscal Year Percentage
2017/18 2018/19 Change
Single family home $ 92.21�
Condominium unit 46.11 46.11 0.0096
Multi-family unit 4611 4611 0.0096
Commercial/industrial parcel per acre 18442 184.42 0.00%
Street Lighting Maintenance District No.2(SLD 2)was formed inAugust 1Q83and consists uf
7.248single family homes, 1.Q8Qmulti-family units,and 3S.1Gacres ofnon-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
2017/18 2018/19 Change
Single family home $ 39.97 $ 39.97-
[Nu|h4ami/y unit 39.97 39.97 0.00%
Commercial/industrial parcel per acre 79.04 79.04 0.00%
Park and Recreation Improvement District No. 85 (Red Hill and Heritage Park District)
(PD 85)was formed in April 1985. PID 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 eefollows:
Fiscal Year Fiscal Year Percentage
2017/18 2018/19 Change
Single family home $ 31.00 $ �31.00
Condominium unit 31.00 31.00 0.00%
Multi-family unit 31.00 31.00 0.00Y4
Commercial/industrial parcel
<1.50 aoma 15.50/Lot 15.50/Lot [i00%
1.51 -3.50acres 46.50/Lo 4650Lcd 0.00%
3.51 -7.O0acres 108.50/Ln 108.50/Lot 0.00%
7.01 - 14.00 acres 217.00/Lo 217.00Lot 0.00%
14.01 '25.00acres 434.00/Lo 434.00Lo4 0.00%
>25.01 oums 775.00Lut 775.00Lut 0.00%
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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, 2018
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.
Note 3: Advances from City
On August 16, 2017, the City Council authorized an advance of$4,286,054 from the General
Fund to the Street Lighting District#2 Fund to provide funding for the purchase and acquisition of
Southern California Edison owned streetlights,the installation of LED lighting to streetlights,and
other one-time costs necessary to inventory the streetlights. The advance was completed in
phases and bears interest at 1.0% on the outstanding balance. The advance is payable in
monthly installments and the final payment will occur in August 2037. At June 30, 2018, the
outstanding balance amounted to$4,110,376.
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Page 18
Independent
Auditors ' Report on
Internal Control
Over Financial
Reporting and on
Compliance and
Other Matters
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INDEPENDENT AUDUORG' REPORTONINTERNAL CONTROL
OVER FINANCIAL REPORTING AND ONCOMPLIANCE AND OTHER MATTERS
BASED ONANAUDIT 0FFINANCIAL STATEMENTS PERFORMED |NACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
Tothe West-Side Districts Citizens' Oversight Committee
City ofRancho 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 Statee, the statement of revenues, expenditures and
changes in fund balances of Landscape Maintenance District #1 General City, Street Lighting District #2
Residential, and Perk and Recreation Improvement District #85 of the City of Rancho Cucamonga,
California, (collectively, the Districts)for the year ended Juno 30. 2018. and the related notes tostatement
of revenues, expenditures and changes in fund ba|ennen, and have issued our report thereon dated
February 25. 2010.
Internal Control over Financial Reporting
In planning and performing our audit of the statement of vevanuea, 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 ba|anuoe, 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 o material misstatement of the Districts'
statement of revenues, expenditures and changes in fund balances will not be prevented, or detected and
corrected on n timely basis. A significant deficiency is a definienoy, oro combination of deficiencies, in
internal control that is less severe than o material vveaknema, 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 |imitetiono, during our audit wm 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 whether the Districts'statement of revenues,expenditures
and changes in fund balances are free from material miootatement, we performed tests of its compliance
with certain provisions of |ewa, r*gu|ationa, oontroota, and grant agreemento, noncompliance with which
could have a direct and material effect on the determination of the statement of revenues,expenditures and
changes in fund balances amounts. Howover, providing an opinion on compliance with those provisions
was not an objective ofour audit, and aocording|y, we do not express such on opinion. The results of our
tests disclosed no instances of noncompliance orother matters that are required to be reported under
Government Auditing Standards. PrinmeG|oba|
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Tothe Wast-Side Districts Citizens' Oversight Committee
City ofRancho Cucamonga, California
Purpose ofthis 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 on opinion on the effectiveness of the Districts' internal
control or on compliance. This report is on integral part of an audit podbnnod in accordance with
Government Auditing Standards in considering the Districts' internal control and compliance.
Aocnnding|y, this communication is not suitable for any other purpose.
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Brea, California
February 2S. 2O1Q
Page 21
Informal Purposes
Statement of
Revenues ,
Expenditures and
Changes in Fund
Balance for the Year
Ended
June 30 , 2017
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 23
LANDSCAPE MAINTENANCE DISTRICT#1GENERAL CITY,
STREET LIGHTING DISTRICT#2RESIDENTIAL,AND
PARK AND RECREATION IMPROVEMENT DISTRICT#O5
CITY OFRANCHO CUCAK8ONGA. CALIFORNIA
YEAR ENDED JUNE 3O. 2O17
TABLE OF CONTENTS
`
Page
Number
INDEPENDENT AUO|TORS' REPORT............................................................................................... 1
STATEMENT UFREVENUES, EXPENDITURES AND CHANGES
|NFUND BALANCES--------------------------------------' 3
NOTES TOSTATEMENT OFREVENUES, EXPENDITURES AND CHANGES
INFUND BALANCES.....................-------------------------------'4
MMMUMMEMIMMMMMEMEN
L.S� �
INDEPENDENT AUDITORS' REPORT
Tnthe West-Side Districts Citizens' Oversight Committee
City ofRancho 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 Qh/, 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 remanueo, expenditures and
changes infund balances, aolisted inthe table ofcontents.
Management's Responsibility for the Statement ofRevenues, Expenditures and Changes /nFund
Balances
Management is responsible for the preparation and fair presentation of the statement of revenuee,
expenditures and changes infund balances in accordance with accounting principles generally accepted
in the United States of America; this includes the deuign, imp|ementadon, and maintenance of internal
control relevant to the preparation and fair presentation of the statement of revenues, expenditures and
changes infund balances that are free from material misstatement, whether due tofraud orerror.
Auditons'Res9ons/bil/ty
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 Staten 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 infund 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 bo|onoee, whether due to fraud or error. In making those
risk aoomoementa, the auditor considers internal control relevant to the entity's preparation and fair
presentation of the statement of navanuea, expenditures and changes in fund balances in order to design
audit procedures that are appropriate in the oircumatencen, but not for the purpose of expressing an
opinion on the effectiveness of the entity's internal control. Aoonrding|y, 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 menagemont, as well uuevaluating the overall presentation of
the statement ofrevenues, expenditures and changes infund balances.
We believe that the audit evidence we have obtained iesufficient and appropriate to provide o basis for
our audit opinions.
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Tothe West-Side Districts Citizens' Oversight Committee
City ofRancho Cucamonga, California
Opinions
In our opinion, the statement ofrevenues, expenditures and changes in fund balances referred to above
present fair|y, in all material reapeds, the respective financial position of the revenuee, expenditures and
changes in fund balances of Landscape Maintenance District #1 General Qh/, 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 ofAmerica.
Other Reporting Required byGovernment Auditing Standards
In accordance with Government Auditing Stmndondo, 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, vegu|oUono, controote, 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 port 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 20. 2O18
2
Page 26
LANDSCAPE MAINTENANCE DISTRICT#1GENERAL CITY, STREET LIGHTING DISTRICT#2RESIDENTIAL,
AND PARK AND RECREATION IMPROVEMENT DISTRICT#85
CITY nFRANCHO CUCAMONGA
STATEMENT nFREVENUES,EXPENDITURES AND CHANGES|NFUND BALANCE
YEAR ENDED JUNE 302017
Landscape Park and
Maintenance Street Lighting Recreation
District#1 District#2 Improvement
General City Residential District#85
Revenues:
Taxes $ 1.244.301 o 372.613 $ 1.162.430
Charges for services 10'413 ' 15.096
Use ofmoney and property 20.008 (2.314) 110.827
Contributions from City 121.360 350.170 230.500
Developer participation - 440 '
Miscellaneous 545 331
Total Revenues 1,404,707 720909 1,527,264
Expenditures:
Current:
Community development:
Personnel services 27.495 - 350.806
Operating costs:
Operations and maintenance 38.225 - 115.300
Contract services 498.057 067 164.845
Tree maintenance 49.000 - 10.200
Ud|iboo 307.124 642.300 252.934
Assessment administration 05.870 37.480 153.430
General overhead allocation 43.421 8.380 04.370
Capital outlay - - 173,276
Total Expenditures 1,091,080 6u37a7 1,293,241
Excess(Defioionoy)ufRevenues
Over(Under)Expenditures 313,627 37,152 234,023
Fund Balance, Beginning ofYear 948,728 198,643 1,211,151
Fund Balance, End of Year
See Notes tnFinancial Statements 3
Paqe 27
LANDSCAPE MAINTENANCE DISTRICT#1GENERAL CITY, STREET LIGHTING DISTRICT#2
RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#RS
CITY OFRANCHO CUCAKHONGA, CAL|FORN|A
NOTES TO STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
FOR THE YEAR ENDED JUNE 3O 2017
Note 1: Description ofthe 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 byonelected five-member board.
The City of Rancho Cucamonga, California, has formed certain maintenance districts and
authorizedthe|avyofaaaeoomentmpumuanttothetermoondproviaionsoftha^Landaoapingand
Lighting Act of 1972,"being Division 15,Part 2 of the Streets and Highways Code of the State of
California(commencing with Section 225OU).The City levies annual assessments tufinance the
costs and expenses necessary for maintenance and improvements in each District.
The City cannot levy and no/|ont annual oao*oomento within an assessment district without
complying with the procedures specified in the Landscaping and Lighting Act of1S72. 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 ofland within the District.
The City Council must also adopt aresolution ofintention which:
^ Deo|ome the intention of the City Council to levy and collect ooaaoamento within the
assessment district for the fiscal year stated therein.
^
Generally describes the existing and proposed improvements and any substantial
changes proposed tobemade inexisting 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 thenoin, and the proposed
assessments upon assessable lots and parcels ofland 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 Perk 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 (LKHO 1)was formed in 1979 and onnoixtn of
D.32Qsingle family homes, 10.222multi-family units,and 8.83acres ofvacant land,seven parks,
and trails. Landscape improvements provided in LN1D 1 may include, but are not limited to:turf,
ground cover, shrubs and trees, sprinkler and irrigation systems, ornamental lighting, drainage
eyetemo, masonry wa||o, 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.
Page 28
LANDSCAPE MAINTENANCE DISTRICT#1GENERAL CITY,STREET LIGHTING DISTRICT#2
RESIDENTIAL,AND PARK AND RECREATION IMPROVEMENT DISTRICT#85
CITY OFRANCHO CUCAh8ONGA. CALIFORNIA
NOTES TO STATEMENT[3FREVENUES, EXPENDITURES AND CHANGES |0FUND BALANCES
(CONTINUED)
FOR THE YEAR ENDED JUNE 302017
Note 1: Description ofthe Reporting Entity(Continumd)
The assessment rates are osfollows:
Fiscal Year Fiscal Year Percentage
2016/17 2017/18 Change
Single family home $ 92.31 $ 92.21 '
Condominium unit 48.11 46.11 0D0Y4
K8u|dfamilyunit 46.11 46.11 0.00Y6
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
7.24Osingle family homes, 1.QO0multi-family units,and 35.16acres ofnon-residential land.The
SLID 2 assessments pay for energy and maintenance for streetlights within the public right-of-way
and dedicated easements within the boundaries of SLID 2.The assessment rates are as follows:
Fiscal Year Fiscal Year Percentage
2016/17 2017/18 Change
Single family home $ 30.97 $ �39]97
Multi-family unit 39.97 39.97 0.00%
Commercial/industrial parcel per acre 70.94 70.94 0.0096
Park and Recreation Improvement District No. 85 (Red Hill and Heritage Park District)
(PD 85)was formed in April 1985.PID 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 forthe construction of the parks have been paid off as of 2005. However,all
parcels in PID 85 will continue to be assessed for the on-going maintenance of both parks. The
boundary of PID 85 is citywide except properties within the planned communities.The assessment
rates are aofollows:
Fiscal Year Fiscal Year Percentage
2016/17 2017/18 Change
Single family home $ 31.00 $ �31.00-
Condominium unit 31.00 31.00 0.00Y6
N1u|tifami|yunit 31.00 31.00 0.0096
Commercial/industrial parcel
<1.50 acres 15.501-ot 15.50/Lot 0.00%
1.51 -3.5Oacres 46.50Lot 46.50/Lot 0.00%
3.51 -7.00acres 108.50Lot 108.501-od 0.0096
7.01 - 14.00 acres 217.00Lot 217.00Lot 0.00%
14.01 -25.UOacres 434.00Lot 434.00Lot 0.0096
>25.01 acres 775.00Loi 775.00Lot 0.00%
5
Page 29
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 yearfor
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
Page 30
Report to the
City Council
WEST-SIDESTAFF REPORT
DISTRICTS ' ' COMMITTEE
DATE: April 17, 2019
TO: Mayor and Members of the City Council
FROM: West-Side Districts Citizens' Oversight Committee
BY: Lori Sassoon, Deputy City Manager/Administrati rvices
SUBJECT: SUMMARY OF REVIEW OF RESULT NNUAL INDEPENDENT
AUDIT CONCERNING FISCAL YE EXPENDITURES IN
LANDSCAPE MAINTENANCE CT TREET LIGHTING
DISTRICT #2, AND PARK RECREAT IMPROVEMENT
DISTRICT #85.
RECOMMENDATION:
It is recommended that the City Council receive and fi ort.
BACKGROUND:
Established by Resolution 15-207, the side Citiz versight Committee is made
up of members of the public th t reside, an n pr in L dscape Maintenance District
#1, Street Light District ntial, a P nd tion Improvement District #85
(collectively "the Dist r' an not s n any oth r standing City Commission or
Committee. A prima pose of t ommitt to review the annual audit after it is prepared
and report the res its review e City C it and the community on an annual basis.
The Committee has nei decision-making authority, nor the authority
to allocat sour direct sta
AN S:
At ou ting of March 1 19, ce Director Tamara Layne and a representative from the
accounts m of Lance, S Lung and LLP provided an overview of the audit for the Districts
for Fiscal 017/18. Th orts generated by the audit include:
• Audit Co is etter
• Independe s' Report on Statement of Revenues, Expenditures and Changes in
Fund Balance
• Independent Auditors' Report on Internal Control Over Financial Reporting
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.
Page 32
SUMMARY OF REVIEW OF RESULTS OF ANNUAL INDEPENDENT AUDIT CONCERNING
FY 2017/18 ExPENDITURES IN LIVID 1, SLD 2, AND PD-85
APRIL 17, 2019
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:
N/A
ATTACHMENTS:
Attachment 1 —Audit Communication Letter
Attachment 2 — Statement of Revenues, Expenditures C angel in Balances for the
Districts for the year ended June 30, 2018
Attachment 3 — Independent Auditors' Report on al Control Over Fin Reporting and
on Compliance and Other Matters
Page 33