HomeMy Public PortalAboutFinancial Report - Measure AA Oversight- FY16Measure AA Bond
Annual Accountability Report
May 11, 2014 – June 30, 2016
Stephen E. Abbors, General Manager
Stefan Jaskulak, Chief Financial Offi cer
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Measure AA Bond Annual Accountability Report
Table of Contents
Letter from the General Manager ii
Letter from the Chief Financial Officer iii
Mission Statement iv
Measure AA Portfolio Map v
Section One
Executive Summary 1
Chart 1: Portfolio Allocation to Expenditure Roll Up 2
Chart 2: Total Portfolio Expenditures by Expenditure Category 2
Chart 3: Portfolio Level Expenditures to Allocations 3
Chart 4: Land Acquisition MAA Expenditures 4
Priority Portfolio Actions, by Region
(from MAA Expenditure Plan) 7
Portfolio Expenditure Summary
Numerically, by Portfolio Number 14
Financial Report from New World ERP by Project 66
Section Two
Measure AA Ballot Language
Section Three
Annual Financial Audit Report
Page i
Measure AA Bond Annual Accountability ReportPage ii
Stephen E. Abbors, General Manager
Message from the General Manager
to the Bond Oversight Committee
When the public passed Measure AA in 2014, they voted for a long-term environmental vision in
which the region’s spectacular open spaces--its forests, bay lands, ridgelines, and waterways--are
preserved in perpetuity, damaged habitat is restored, native plants and animals thrive, and
people have access to, and connect with, nature. They entrusted the Midpeninsula Regional
Open Space District with that vision based on the District’s excellent 42-year performance
record as well as a provision in Measure AA that provided for the formation of a new
citizen Bond Oversight Committee.
As members of our inaugural Bond Oversight Committee, your service ensures that the highest
levels of transparency are maintained and that Measure AA funds are being used as defined
in the voter-approved expenditure plan.
Indirectly, but just as importantly, your role ensures that open space performs its many functions
that support our region’s quality of life. Open space protects scenic beauty and preserves natural
habitat. It provides essential life support systems that remove air and water pollution, produce
oxygen, and mitigate climate change. It offers opportunities for education, recreation, and renewal
of spirit. It establishes boundaries for urban development--creating smart, sustainable growth in
our region. And, when there are opportunities to enhance biodiversity, open space can include
agricultural lands, which not only improves the environment, but also preserves our region’s
unique rural heritage.
We believe your review of Measure AA projects will leave you with a new understanding of how
the District uses Measure AA bond funds to fulfill the public’s vision for open space—a vision that
protects, restores, and creates access to our region’s incredible natural lands.
As we tell the unabbreviated story of all of our projects, including the often complex processes
required to do our work, we are also telling the story of a larger framework to protect and restore
the environment on a regional scale and the creation of a model for restoration that can be used
elsewhere. As you review the Measure AA fiscal Audit Report we hope you know that your
work here supports us in doing the very best job we can of being good stewards of the
environment for generations to come.
Measure AA Bond Annual Accountability Report Page iii
Message from the Chief Financial Offi cer
to the Bond Oversight Committee
Bond Oversight Committee:
This report is the District’s fi rst formal chapter in telling the story of our accomplishments
and work related to the passage of Measure AA, and the fulfi llment of two key tenets of that
legislation: transparency and accountability. The voters put their faith in the District when
they approved Measure AA, a $300 million bond measure to accelerate land acquisition,
environmental restoration, and public access. We present this report to you to document our
progress as we expend those funds according to plan.
As Committee members, your role was defi ned and authorized by Board Policy, adopted on
August 12, 2015, which states:
The Committee has the following three responsibilities for each of the years the Measure AA
general obligation tax is collected or revenues expended:
• Review Plan expenditures on an annual basis to verify conformity with the Expenditure Plan
• Review the District’s Annual Audit and Annual Accountability report and present the
Committee’s fi ndings to the Board at a public meeting
• Review any proposed amendments to the Expenditure Plan
The Committee Chair shall report the Committee’s fi ndings at a public meeting of the
Board of Directors.
The Committee shall not have authority to recommend, advise, or direct any such matters
that may fall under its responsibility to review. The Committee is not advisory to the Board
of Directors and has no power to determine how General Fund monies are spent. The Board
of Directors retains its authority to make such decisions and determinations.
In this historic moment, the inaugural year of the District’s Bond Oversight Committee,
we anticipate a smooth process as you review the District’s Annual Audit and Annual
Accountability Report.
We thank you for your time and service to your community and to the health of the
environment we all share.
Sincerely,
Stefan Jaskulak,
Chief Financial Offi cer
Sincerely,
Stefan Jaskulak,
The mission of the Midpeninsula Regional Open Space District
is to acquire and preserve a regional greenbelt of open space land
in perpetuity, protect and restore the natural environment, and
provide opportunities for ecologically sensitive public enjoyment
and education.
While implementing the District’s overall mission of open space
land preservation, resource management, and low-intensity
recreation, the District’s mission for the Coastal Annexation
Area as defined by the Service Plan is:
To acquire and preserve in perpetuity open space land and
agricultural land of regional significance, protect and restore
the natural environment, preserve rural character, encourage
viable agricultural use of land resources, and provide opportunities
for ecologically sensitive public enjoyment and education.
Fremont Older Open Space Preserve by Sue Copeland
Measure AA Bond Annual Accountability Report
The mission of the Midpeninsula Regional Open Space District
is to acquire and preserve a regional greenbelt of open space land
in perpetuity, protect and restore the natural environment, and
provide opportunities for ecologically sensitive public enjoyment
and education.
While implementing the District’s overall mission of open space
land preservation, resource management, and low-intensity
recreation, the District’s mission for the Coastal Annexation
Area as defined by the Service Plan is:
To acquire and preserve in perpetuity open space land and
agricultural land of regional significance, protect and restore
the natural environment, preserve rural character, encourage
viable agricultural use of land resources, and provide opportunities
for ecologically sensitive public enjoyment and education.
Page iv
Measure AA Bond Annual Accountability Report Page v
Midpeninsula Regional Open Space District
Measure AA Portfolio Map
Top 25 Priority Action Portfolios*#
Regional Trail Connections Projects*Regional Trail Connections
*Represents generalized locations
Midpen open space preserves
1. Open Miramontes Ridge
2. Build New Bayfront Trails
3. Complete the Purisima-to-the-Sea Trail
4. Build Walking, Hiking and Biking Trails
at El Corte de Madera Creek
5. Open Upper La Honda Creek Preserve
6. Develop New Trails at Windy Hill
7. Open Driscoll Ranch Area at
La Honda Creek
8. Preserve Upper San Gregorio
Creek Watershed
9. Open New Trails at Russian Ridge
10. Re-Open Alpine Road at Coal Creek
11. Build Welcome Center at Rancho
San Antonio
12. Complete Middle Stevens Creek Trail
13. Expand Grazing at Cloverdale
Coastal Ranch
14. Open New Trails throughout
the Redwoods
15. Protect More Redwood Forests
16. Create New Access Facilities
at Long Ridge
17. Complete Upper Stevens Creek Trail
18. Complete Saratoga to Sea Trail
19. Open El Sereno Trails to Dogs and
Complete Trail Connections
20. Preserve Safe Wildlife Corridors
across Hwy. 17
21. Open Bear Creek Redwoods
22. Open Cathedral Oaks at Sierra Azul
23. Open Mount Umunhum at Sierra Azul
24. Open Rancho de Guadalupe at
Sierra Azul
25. Open Loma Prieta Area at Sierra Azul
Measure AA Bond Annual Accountability ReportPage vi
Rancho San Antonio Open Space Preserve by Karl Gohl
Measure AA Bond Annual Accountability Report Page 1
Executive Summary
We are pleased to present the Midpeninsula Regional Open Space District’s First Annual Measure AA
Accountability Report. The timeframe of this report spans from May 11, 2014 – June 30, 2016 and
reflects Measure AA expenditures during this time period. The structure of this document is guided by
the Measure AA Ballot language, specifically Priority Portfolio Actions, by Region, which appears on
page 7 of this report.
The Expenditure Plan and the 25 Priority Actions, as well as the Portfolio designations and locations,
were the culmination of the Vision Planning effort that began in 2012. The Vision Plan spanned
18 months and was a public visioning process with the goal of informing the strategic direction of
the District for the next 40 years. That process yielded a project list of 54 priority actions that then
were narrowed to the top 25 Priority Actions for the purposes of the ballot initiative. Measure AA
funded the top 25 Priority Actions through their inclusion in the Measure AA Expenditure Plan. This
Measure AA Accountability Report is arranged in parallel with the Measure AA Expenditure Plan to
facilitate review; projects are grouped in 25 key project portfolios organized by geographic area
within the District’s boundaries.
No change in portfolio allocation is proposed for this reporting period. In the future, should a shift
in portfolio allocations be needed, the Measure AA Bond Oversight Committee will be advised
through the Committee communication process for document review as soon as we are certain we
are going to need to amend the Expenditure Plan.
Bond Oversight Committee and Nexus with Budget and Action Plan
The Measure AA Bond Oversight Committee’s role is specific to reviewing retrospective expenditures,
so this Committee is not charged with reviewing the budget or other prospective information, unless it
is provided as part of an explanation of a proposed Portfolio Allocation adjustment. That said, there
is a synergy between the budgeted and actual expenditures, and the following information is being
provided as context for, and insight into, the District’s management of Measure AA spending.
Each year the District embarks upon a priority setting and budgeting process with the Board, which
begins a 5-6 month planning process. The final Budget and Action Plan is being approved prior to
the start of the fiscal year, which begins July 1. Within the Budget and Action Plan document, there
is a Measure AA Project Budget Overview which provides a prospective view into the next year’s
planned spending.
Bond Issuance, Size, and Look–Back
In June 2014, voters approved a $300 million general obligation bond to be used to protect natural
open space lands; open preserves or areas of preserves that are currently closed; construct public
access improvements such as new trails and staging areas; and restore and enhance open space
land, which includes forests, streams, watersheds, and coastal ranch areas.
The District issued its first tranche of bonds in August 2015 and it was sized at $45 million to
reimburse itself for project expenses planned for approximately the next two years, as well as
the legally permitted look-back period of 60 days prior to the Board’s Certification of election
results. Therefore, this Measure AA Accountability Report for this year includes expenses from
May 11, 2014 – June 30, 2016. Future reports will run with the fiscal year.
$350,000,000
$300,000,000
$250,000,000
$200,000,000
$150,000,000
$100,000,000
$50,000,000
$0
Expenditure Plan Spending Expenditure Plan Allocation Remaining
$278,797,903
Capacity remaining
$21,202,097
Expended
TOTAL PORTFOLIO EXPENDITURES BY EXPENDITURE CATEGORY
NO
ACTIVITY/NO >$1->$1,000 >$10K >$100K >$1M >2M
MONEY SPENT <$1,000 <$10K <$100K <$1M <$2M <$5M >$5M
6 11 1 2 3 17 5 7
8 19 20 4 15
10 9 23
12 21
13 22
14 24
16 25
18
*Numbers in the table above represent the portfolio numbers.
Measure AA Bond Annual Accountability ReportPage 2
Portfolio Allocations and Expenditures
The chart below depicts a roll-up of how much of the Total Measure AA Expenditure Plan Allocation
has been used on a life-to-date basis.
Portfolio Allocation to Expenditure Roll Up
The following breakdown provides an order of magnitude insight into the amounts expended based
on the portfolio number and size category. It also shows those portfolios where projects have not been
funded by Measure AA, such that the Bond Oversight Committee does not have expenses to review
for those portfolios, and the Bond Oversight Committee can focus their efforts in the most relevant
portfolios. Portfolio names are referenced in the next section starting with page 16.
Measure AA Bond Annual Accountability Report Page 3
The following chart shows the Expenditure Plan allocations broken down to the portfolio level with the
life to date expenditures for each portfolio. The purpose of this chart is to show an order of magnitude
between the Portfolio Allocations that were approved in the Expenditure Plan and the relative expenditures
in the portfolio that have been made, life-to-date. For a more detailed look at this, please reference
the Financial Report on page 66, which contains actual expenditure numbers and remaining allocation.
This view will become relevant in the future if an allocation shift is recommended, but this is not being
proposed at this time.
Spending Trends
As of June 30, 2016, an estimated $21million MAA funds have been expended. The key spending
trend for this reporting period is the land and associated costs. Of the $21 million expended in
this reporting period, $17 million was related to Land Acquisition and Related Expenses, which
represents 81% of all spending. A chart containing a breakdown of the Portfolios with Land
Acquisition costs follows:
Portfolio Level Expenditures to Allocations
MA
A
0
1
MA
A
0
2
MA
A
0
3
MA
A
0
4
MM
A
0
5
MA
A
0
6
MA
A
0
7
MA
A
0
8
MA
A
0
9
MA
A
1
0
MA
A
1
1
MA
A
1
2
MA
A
1
3
MA
A
1
4
MA
A
1
5
MA
A
1
6
MA
A
1
7
MA
A
1
8
MA
A
1
9
MA
A
2
0
MA
A
2
1
MA
A
2
2
MA
A
2
3
MA
A
2
4
MA
A
2
5
Life to Date Portfolio Expenditures Portfolio Allocation per Expenditure Plan
$60,000,000
$50,000,000
$40,000,000
$30,000,000
$20,000,000
$10,000,000
$0
PORTFOLIOS LAND
WITH LAND PURCHASE AND
ACQUISITION ASSOCIATED
EXPENSES COSTS PURPOSE NOTES
Preliminary surveying of property.
1 $6,315 Potential Property Purchase Opportunity to purchase the land for
conservation purposes has not yet
been realized
2 $97,437 SFPUC Easement at Ravenswood Trail Easement property right
3 $382,288 Riggs Property Purchase Includes lot line adjustment
5 $1,756,093 Toepfer and Ashworth Property Purchases Land conservation purchases
7 $9,008,773 Apple Orchard and Events Center property
and Cunha Property Purchases Land conservation purchases
15 $2,495,713 POST/Alpine Ranch Easement Easement property right
17 $754,552 Lysons Property Purchase Property Expense equals Purchase Price
minus grant income of $740,000
22 $540,587 Freudenberg Land Purchase Land conservation purchase
23 $1,264,084 Property Purchase Meyer Property Purchase and
associated costs
24 $300,056 Barth Property Purchase Land conservation purchase
25 $410,150 Burton Property Purchase Land conservation purchase
Total Land
Acquisition MAA
Expenditures $17,096,048
Land Acquisition MAA Expenditures
(May 11, 2014–June 30, 2016)
Measure AA Bond Annual Accountability ReportPage 4
Monte Bello Open Space Preserve by Karl Gohl
Measure AA Bond Annual Accountability Report Page 5
Anticipated Future Trends
The Bond Oversight Committee primarily reviews expenses that have been realized retrospectively.
That said, the following section provides a high-level glimpse of the District trajectory, related to
anticipated expenditures based on the approved FY Budget and Action Plan as well as operational
workload. This is being provided for contextual purposes and to demonstrate the managed progress
the District is making toward MAA Projects.
Next year’s report, which will cover Fiscal Year 2016–2017, will include the third year of MAA funding.
As of the close of the next reporting period, it is estimated, based on the Approved FY 2016 –2017
Budget that the planned life to date spending will exceed $38 million, or approximately 12% of
the $300 million bonding capacity authorized under Measure AA.
The District anticipates that the Portfolio expenditures for the next year will increase as there was significant
progress on the Mount Umunhum project during the summer of 2016 construction season, and those
large expenses will be realized in the following reporting period (June 1, 2016 –June 30, 2017), in
addition to other expenses that occurred during the summer construction season.
Since the Engineering and Construction Department became fully staffed in Spring of 2016, the work
they did during the summer construction season at Mount Umunhum and in other preserves increased
at a faster pace than in prior years, so construction-related expenses are anticipated to increase
commensurately over the next year.
The Planning Department also has made significant progress in El Sereno, La Honda, and Bear Creek
Redwoods, and although the expenses for those preserves were considered planning feasibility and
paid for through other funding sources, it is expected that MAA eligible expenses may start to come
in to support MAA Portfolio projects in those preserves, and others in the planning phases.
Finally, Portfolio allocations include estimated land acquisition costs. Since purchases are primarily
opportunity-driven, these are estimates not tied to a specific time frame, and we do not know when
the properties and/or rights will be available for purchase. The Real Property Department has been
actively pursuing targeted opportunities for land purchases as well as the purchase of property rights
and easements, and it is anticipated that those expenses may be realized into the future, when the
opportunity becomes available.
Measure AA Bond Annual Accountability ReportPage 6
Windy Hill Open Space Preserve by Deane Little
Measure AA Bond Annual Accountability Report Page 7
Priority Portfolio Actions, by Region
(From the Measure AA Expenditure Plan)
South Bay Foothills
(Los Gatos, Monte Sereno, Saratoga, and Santa Cruz Mountains)
Portfolio 18: South Bay Foothills – Saratoga to Sea Trail and Wildlife Corridor
• Protect wildlife corridor along Highway 9
• Connect trail to Saratoga to Sea Trail and Skyline-to-the-Sea Trail
• Portfolio Allocation: $1,365,000
Portfolio 19: El Sereno – Dog Trails and Connections
• Provide infrastructure to open trails to dogs
• Develop connections to Skyline, Sanborn County Park, and Lexington Reservoir
• Portfolio Allocation: $2,254,000
Portfolio 20: South Bay Foothills – Wildlife Passage and Ridge Trail Improvements
• Establish safe corridors for mountain lions across Highway 17
• Establish Bay Area Ridge Trail crossing
• Portfolio Allocation: $13,966,000
Portfolio 21: Bear Creek Redwoods – Public Recreation and Interpretive Projects
• Open for hiking, equestrian activities
• Provide parking areas, trails, upgrade stables
• Restore and protect habitats for various species
• Repair roads and trails to reduce sediment
• Rehabilitate Alma College site
• Portfolio Allocation: $17,478,000
Portfolio 22: Sierra Azul – Cathedral Oaks Public Access and
Conservation Projects
• Develop multi-use trail and plan future trails as land is available
• Develop parking
• Restore plant communities and soils
• Install trailside amenities
• Preserve additional open space and complete wildlife corridor in upper Los Gatos
Creek watershed
• Portfolio Allocation: $6,714,000
Measure AA Bond Annual Accountability ReportPage 8
Portfolio 23: Sierra Azul – Mount Umunhum Public Access and
Interpretive Projects
• Open Mount Umunhum for multi-use public access to summit via road and trail
• Open Bay Area Ridge Trail and nearby trail connections
• Preserve additional open space and complete wildlife corridor
• Portfolio Allocation: $27,972,000
Portfolio 24: Sierra Azul – Rancho de Guadalupe Family Recreation
• Open Rancho de Guadalupe to public access
• Develop accessible multi-use trails with amenities such as parking and family recreation
• Restore habitat for rare species
• Protect cultural and natural resources
• Portfolio Allocation: $10,078,000
Portfolio 25: Sierra Azul – Loma Prieta Area Public Access, Regional Trails,
and Habitat Projects
• Provide public access and recreation, including small campground
• Develop, improve, connect regional multi-use trails to Forest of Nisene Marks State Park,
to protected land to the east, and to Mount Umunhum
• Protect Steelhead habitat, rare plants and grasslands, and restore Knob Cone Pine Stands
• Portfolio Allocation: $7,986,000
Sierra Azul Open Space Preserve by Jack Gescheidt
Measure AA Bond Annual Accountability Report Page 9
Peninsula Foothills and Bay
(Cupertino, Los Altos, Los Altos Hills, Sunnyvale, Mountain View, Palo Alto,
East Palo Alto, Menlo Park, Atherton, Redwood City, San Carlos, Woodside,
Portola Valley, Skyline)
Portfolio 2: Regional – Bayfront Habitat Protection and Public Access Partnerships
• Partner to complete gaps in Bay Trail and develop city-to-bay trails
• Support wetland restoration and associated interpretive facilities
• Preserve additional Bayfront open space
• Portfolio Allocation: $5,052,000
Portfolio 4: El Corte de Madera Creek – Bike Trail and Water Quality Projects
• Develop single-use biking/hiking trails, complete Ridge Trail gaps, and develop trail system
leading to parking area
• Restore damaged trails to improve water quality
• Preserve additional open space as available
• Portfolio Allocation: $8,376,000
Portfolio 5: La Honda Creek – Upper Area Recreation, Habitat Restoration,
and Conservation Grazing Projects
• Open upper half of the preserve to public; provide biking/hiking/equestrian trails,
dog access, and staging areas
• Provide loop and connector trails
• Restore habitat for rare species
• Improve fencing, corrals, and water systems to reintroduce conservation grazing
• Portfolio Allocation: $11,733,000
Portfolio 6: Windy Hill – Trail Improvements, Preservation, and Hawthorns Area
Historic Partnership
• Improve trails, complete pond facilities
• Increase multi-use trails, study possible improvements to increase dog use
• Open Hawthorns Area; develop trails connecting to Portola Valley and Palo Alto trails
• Partner to protect, restore, and interpret historic buildings
• Improve habitat conditions in Los Trancos Creek
• Preserve additional scenic open space as available
• Portfolio Allocation: $12,740,000
Measure AA Bond Annual Accountability ReportPage 10
Portfolio 8: La Honda Creek and Russian Ridge – Preservation of Upper
San Gregorio Watershed and Ridge Trail Completion
• Preserve Upper San Gregorio watershed; restore endangered species habitats
• Support opportunities to provide additional water for fisheries
• Complete Bay Area Ridge Trail multi-use connections and gaps
• Provide additional public use facilities
• Portfolio Allocation: $15,347,000
Portfolio 9: Russian Ridge – Public Recreation, Grazing, and Wildlife
Protection Projects
• Open currently closed areas of preserve
• Construct and extend trails
• Improve fencing, corrals, and water systems to reintroduce conservation grazing
• Improve habitat for sensitive species, implement pond enhancement projects for garter snakes
and red-legged frogs
• Portfolio Allocation: $5,560,000
Portfolio 10: Coal Creek – Reopen Alpine Road for Trail Use
• Reopen Alpine Road as trail connection between Portola Valley and Skyline Boulevard
• Reroute trails to reduce erosion and improve visitor experience
• Portfolio Allocation: $8,017,000
Portfolio 11: Rancho San Antonio – Interpretive Improvements, Refurbishing,
and Transit Solutions
• Add welcome center
• Refurbish and add interpretive exhibits to Deer Hollow Farm
• Support of transit improvement options such as bike trails, bike share station, bus service,
or additional parking
• Portfolio Allocation: $10,811,000
Portfolio 12: Peninsula and South Bay Cities – Partner to Complete Middle
Stevens Creek Trail
• Support work by cities to develop the middle section of the Stevens Creek Trail and enhance
neighborhood connections
• Support work by partners to complete stream corridor restoration and Steelhead habitat
enhancement below dam
• Develop and install interpretive signage
• Portfolio Allocation: $1,038,000
Measure AA Bond Annual Accountability Report Page 11
Portfolio 16: Long Ridge – Trail, Conservation, and Habitat Restoration
Projects (Saratoga)
• Improve roadside parking and provide restrooms
• Develop new trail connections to Eagle Rock and Devils Canyon
• Repair trails for year-round, multi-use access
• Protect watersheds for Steelhead
• Preserve additional open space as available
• Implement pond and habitat enhancement restoration projects to benefit rare species
• Portfolio Allocation: $5,140,000
Portfolio 17: Regional – Complete Upper Stevens Creek Trail
• Complete multi-use connection between the Bay Trail and Bay Area Ridge Trail above
the reservoir through Picchetti Ranch Open Space Preserve and Lower/Upper Stevens
Creek County Parks
• Improve Preserve trails and neighborhood connections
• Preserve additional open space as available
• Portfolio Allocation: $7,760,000
Long Ridge Open Space Preserve by Greg Lewis
Measure AA Bond Annual Accountability ReportPage 12
Coast
(Half Moon Bay, San Gregorio, Pescadero, La Honda)
Portfolio 1: Miramontes Ridge – Gateway to the Coast Public Access,
Stream Restoration, and Agriculture Enhancement
• Preserve scenic open space land as available, and establish wildlife corridor
• Restore fish and red-legged frog habitats in Madonna Creek watershed
• Partner to enhance water availability for agriculture and fish
• Develop trail loop system, including Ridge Trail and neighborhood access points
• Develop staging area, repair bridges
• Portfolio Allocation: $27,774,000
Portfolio 3: Purisima Creek Redwoods – Purisima-to-the-Sea Trail,
Watershed Protection, and Conservation Grazing
• Complete and open multi-use Purisima-to-the-Sea Trail connection between Ridge Trail
and Coastal Trail, and new parking areas
• Preserve additional open space as available
• Remove fish barriers and restore Lobitos Creek
• Restore ponds for endangered species
• Portfolio Allocation: $7,608,000
Portfolio 7: La Honda Creek – Driscoll Ranch Public Access, Endangered
Wildlife Protection, and Conservation Grazing
• Open Driscoll Ranch Area; provide biking/hiking/equestrian trails, limited dog access,
parking areas, and interpretive displays
• Develop loop and connector trails
• Restore habitat for endangered species
• Restore La Honda Creek; remove fish migration barriers
• Portfolio Allocation: $14,825,000
Portfolio 13: Cloverdale Ranch – Wildlife Protection, Grazing,
and Trail Connections
• Improve fencing, corrals, and water systems to increase conservation grazing and sustain
large contiguous grasslands
• Restore habitat for endangered species
• Provide trail connections to nearby state parks
• Portfolio Allocation: $15,712,000
Measure AA Bond Annual Accountability Report Page 13
Portfolio 14: Regional – Trail Connections and Campgrounds
• Develop trails between Butano, Pescadero County Park, Russian Ridge, and between
Skyline and Portola Redwoods, and Big Basin State Park
• Partner with county and state parks to improve existing campgrounds
• Portfolio Allocation: $3,966,000
Portfolio 15: Regional – Redwood Protection and Salmon Fishery Conservation
• Preserve additional open space as available
• Protect and enhance redwood stands, mountain scenery, various habitats,
and Steelhead salmon
• Portfolio Allocation: $50,728,000
Russian Ridge Open Space Preserve by Deane Little
Measure AA Bond Annual Accountability ReportPage 14
Portfolio Expenditures
Numerically, by Portfolio Number
Skyline Ridge Open Space Preserve by Midpen Staff
Measure AA Bond Annual Accountability Report Page 15
Preface
The Portfolio Expenditure Summary includes a description of each of the 25 MAA Portfolio projects,
which was included in the Measure AA ballot language, under the Expenditure Plan section. Included
within each Portfolio Description is the Portfolio Allocation, which also was designated in the Expenditure
Plan. This bond funding allocation may be shifted if needed following the Board of Director’s approval,
however, for this reporting period, no deviation from the original Expenditure Plan is proposed.
The Portfolio Expenditures listed in the Description section represent all project costs, which have
been deemed eligible for Measure AA reimbursement from inception through June 30, 2016.
These numbers tie to the numbers in Section 3, Annual Audit, page 56, Measure AA Bond
Program Schedule of Program Expenditures.
Portfolios that have no incurred expenditures are included in this report to keep the continuity
of the report from year to year.
Additional contextual information is included in the Notable Accomplishments, Project Challenges,
and Potential Next Steps, as well as the Tables and Charts associated with each Portfolio. Though
the Bond Oversight Committee review is focused on actual expenditures, additional narrative
information has been included to help provide a sense of the projects, the nexus with non-MAA
work or partner work, and general status. The tables and charts restate information gleaned from
the District’s accounting system and provide another graphical way to view the expenditures.
Finally, where available, we have included actual photographs of the preserves in which the
Portfolio projects occur as a visual reference.
Measure AA Bond Annual Accountability ReportPage 16
Portfolio 1: Miramontes Ridge—Gateway to the Coast Public
Access, Stream Restoration, and Agriculture Enhancement
Description
• Preserve scenic open space land as available, and establish wildlife corridor
• Restore fish and red-legged frog habitats in Madonna Creek watershed
• Partner to enhance water availability for agriculture and fish
• Develop trail loop system, including Ridge Trail and neighborhood access points
• Develop staging area, repair bridges
• Portfolio Allocation: $27,774,000
• Portfolio Expenditures through 6/30/2016: $6,315
Notable Accomplishments
• Expenditures related to land acquisition activities
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• Continue pursuing a potential new property purchase
Miramontes Ridge Open Space Preserve by Robert Buelteman
Portfolio Allocation:
Portfolio Expenditures:
$27,774,000
$6,315 OF FUNDS USED
0.02%
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
01 Miramontes Ridge:
Gateway to Coast Public
Access, Stream Restoration
and Agriculture Enhancement
Gateway to San Mateo Coast
01-003 Potential
Property Purchase $6,315
Subtotal $27,774,000 $6,315 $27,767,685 0.02%
Measure AA Bond Annual Accountability Report Page 17
Measure AA Bond Annual Accountability ReportPage 18
Ravenswood Open Space Preserve by John Green
Portfolio 2: Regional—Bayfront Habitat Protection
and Public Access Partnerships
Description
• Partner to complete gaps in Bay Trail and develop city-to-bay trails
• Support wetland restoration and associated interpretive facilities
• Preserve additional Bayfront open space
• Portfolio Allocation: $5,052,000
• Portfolio Expenditures through 6/30/2016: $97,437
Notable Accomplishments
• With consultant assistance, worked closely with the San Francisco Public Utilities
Commission (SFPUC) to identify a mutually agreeable easement corridor and trail
alignment to connect the public between University Avenue and Ravenswood Open
Space Preserve in East Palo Alto
• Prepared the CEQA documentation for both the easement transfer and for construction
of the new trail connection
• Prepared the conceptual design plans for the new Bay Trail connection
Project Challenges
• Requires extensive, multiple agency coordination, and permits, including coordination
between cities, Association of Bay Area Governments (ABAG), San Francisco Public Utilities
Commission (SFPUC) and other governmental and regulatory entities
Potential Next Steps
• Complete the CEQA review process
• Secure Midpen and SFPUC approvals for the easement exchange
• Initiate more detailed schematic designs for the new trail
Portfolio Allocation:
Portfolio Expenditures:
$5,052,000
$97,437 1.93%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
02 Regional:
Bayfront Habitat Protection
and Public Access Partnership
Habitat Protection and
Public Access
02-002 Easement SFPUC
Ravenswood Trail $97,437
Subtotal $5,052,000 $97,437 $4,954,563 1.93%
Measure AA Bond Annual Accountability Report Page 19
Measure AA Bond Annual Accountability ReportPage 20
Purisima Creek Redwoods Open Space Preserve by Sandy Sommer
Portfolio 3: Purisima Creek Redwoods—Purisima-to-the-Sea
Trail, Watershed Protection and Conservation Grazing
Description
• Complete and open multi-use Purisima-to-the-Sea Trail connection between Ridge Trail
and Coastal Trail, and new parking areas
• Preserve additional open space as available
• Remove fish barriers and restore Lobitos Creek
• Restore ponds for endangered species
• Portfolio Allocation: $7,608,000
• Portfolio Expenditures through 6/30/2016: $503,968
Notable Accomplishments
• Finalized the Harkins Bridge design and submitted the permit application
• Completed preliminary feasibility studies for a new trail alignment and parking lot
• Purchased the 40.2 acre former Riggs Property, helping to protect the Lobitos Creek Watershed,
which provides spawning habitat for Coho salmon and Steelhead
• Prepared maps and legal descriptions for a lot line adjustment application to San Mateo
County to transfer the 241-acre Purisima Uplands property to Midpen to help complete the
Purisima-to-the-Sea Trail
• Completed the lot line adjustment application to be ready to submit to the County
Project Challenges
• Securing the Army Corps permit for Harkins Bridge Project has experienced significant delays
due in part to insufficient staffing capacity with the Army Corps. Permit review is expected to begin
in earnest by December
Potential Next Steps
• Secure all necessary permits and issue a Request for Bid for the Harkins Bridge Project and the
Purisima uplands lot line adjustment application to San Mateo County
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
03 Purisima Creek Redwoods:
Purisima-to-the-Sea Trail,
Watershed Protection, and
Conservation Grazing
03-001 Lot Line
Adjustment/Riggs
Property Purchase $382,288
03-004 Harkins Bridge
Replacement $121,680
Subtotal $7,608,000 $503,968 7,104,032 6.62%
Portfolio Allocation:
Portfolio Expenditures:
$7,608,000
$503,968
6.62%
OF FUNDS USED
Measure AA Bond Annual Accountability Report Page 21
Measure AA Bond Annual Accountability ReportPage 22
Portfolio 4: El Corte de Madera Creek—Bike trail and
Water Quality Projects
Description
• Develop single-use biking/hiking trails, complete Ridge Trail gaps, and develop
trail system leading to parking area
• Restore damaged trails to improve water quality
• Preserve additional open space as available
• Portfolio Allocation: $8,376,000
• Portfolio Expenditures through 6/30/2016: $358,121
Notable Accomplishments
• Received permits and constructed the first phase of the Oljon Trail
• Finalized construction plans for the second phase of the Oljon Trail and submitted the
construction permit application to San Mateo County
• Completion of Watershed Protection Program final phase
Project Challenges
• Securing the necessary California Department of Fish and Wildlife (CDFW) permit for the
next phase of trail work may result in construction delays
Potential Next Steps
• Submit the CDFW permit application and secure the permit to construct Phase 2
• Initiate construction of the Phase 2 Oljon Trail segment
El Corte de Madera Creek Open Space Preserve by Karl Gohl
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
04 El Corte de Madera Creek:
Bike Trail and Water
Quality Projects
04-002 ECdM Watershed
Protection Final Phase $247,563
04-003 ECdM Watershed
Protection Reassessment $83,956
04-004 Oljon Trail $26,602
Subtotal $8,376,000 $358,121 $8,017,879 4.28%
Portfolio Allocation:
Portfolio Expenditures:
$8,376,000
$358,121
4.28%
OF FUNDS USED
Measure AA Bond Annual Accountability Report Page 23
Measure AA Bond Annual Accountability ReportPage 24
Portfolio 5: La Honda Creek—Upper Area Recreation,
Habitat Restoration, and Conservation Grazing Projects
Description
• Open upper half of the preserve to public; provide biking/hiking/equestrian trails,
dog access, and staging areas
• Provide loop and connector trails
• Restore habitat for rare species
• Improve fencing, corrals, and water systems to reintroduce conservation grazing
• Portfolio Allocation: $11,733,000
• Portfolio Expenditures through 6/30/2016: $2,071,424
Notable Accomplishments
• Demolition and site cleanup of two dilapidated structures
• Began the Red Barn Site Plan, including conducting traffic counts, site evaluations of a
new driveway for a new parking lot, and the evaluation of historic features to ensure
new improvements do not impact the historic landscape of the site
• Purchased the 38.14-acre former Toepfer Property to facilitate a future Ridge Trail extension
opportunity between La Honda Creek OSP (LHC) and El Corte de Madera Creek OSP (ECdM)
• Purchased the 5-acre former Ashworth Property to facilitate a future Ridge Trail extension
opportunity between LHC and ECdM
• New grazing infrastructure around the Red Barn area, riparian protection fencing to resume
conservation grazing, 26,000 feet of pipe and 23 new water troughs installed at McDonald
and Driscoll Ranches
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• Finalize the Red Barn Site Plan, conduct CEQA review, and forward to the Board for approval
La Honda Creek Open Space Preserve by Randy Weber
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
05 La Honda Creek: Upper
Recreation Area, Habitat
Restoration and Conservation
Grazing Projects
05-001 Land Conservation $1,756,093
05-002 Grazing/Water
Systems Infrastructure $209,765
05-004 Sears Ranch
Interim Parking $5,074
05-005 Red Barn Parking Area $13,562
05-006 Sears Ranch
Road Repair $86,930
Subtotal $11,733,000 $2,071,424 $9,661,576 17.65%
Portfolio Allocation:
Portfolio Expenditures:
$11,733,000
$2,071,424
17.65%
OF FUNDS USED
Measure AA Bond Annual Accountability Report Page 25
Measure AA Bond Annual Accountability ReportPage 26
Windy Hill Open Space Preserve by Karl Gohl
Portfolio 6: Windy Hill—Trail Improvements, Preservation,
and Hawthorns Area Historic Partnership
Description
• Improve trails, complete pond facilities
• Increase multi-use trails, study possible improvements to increase dog use
• Open Hawthorns Area; develop trails connecting to Portola Valley and Palo Alto trails
• Partner to protect, restore, and interpret historic buildings
• Improve habitat conditions in Los Trancos Creek
• Preserve additional scenic open space as available
• Portfolio Allocation: $12,740,000
• Portfolio Expenditures through 6/30/2016: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
Portfolio Allocation:
Portfolio Expenditures:
$12,740,000
$0 0%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
06 Windy Hill: Implementation,
Preservation and Hawthorns
Area Historic Partnership
Subtotal $12,740,000 0 $12,740,000 0.00%
Measure AA Bond Annual Accountability Report Page 27
Measure AA Bond Annual Accountability ReportPage 28
Portfolio 7: La Honda Creek—Driscoll Ranch Public Access,
Endangered Wildlife Protection, and Conservation Grazing
Description
• Open Driscoll Ranch Area; provide biking/hiking/equestrian trails, limited dog access,
parking areas, and interpretive displays
• Develop loop and connector trails
• Restore habitat for endangered species
• Restore La Honda Creek; remove fish migration barriers
• Portfolio Allocation: $14,825,000
• Portfolio Expenditure through 6/30/2016: $9,834,870
Notable Accomplishments
• Completed a second phase of repairs to Sears Ranch Road, including culvert replacements,
to prepare the road for public use and improve access for the grazing tenant and for ongoing
patrol and maintenance needs
• Completed the design and solicited bids for a third phase of repairs to Sears Ranch Road
• Began design of the Sears Ranch Parking Lot and the related traffic analysis for the new parking lot
• Apple Orchard road repair and culvert replacement
• Purchased the 30-acre former Cunha Trust Property at the end of Sears Ranch Road to consolidate
District ownership of the private road that will serve as the driveway entrance into the new
Sears Ranch Parking Lot
• Completed the reconstruction of one pond (DR5) to enhance breeding habitat for the California
Red-Legged Frog and improve the water source as a cattle stock pond
• Completed road improvements to address erosion issues for the La Honda Creek Watershed
Protection Project/Driscoll Ranch Roads Sediment Reduction project and remediation of
hazardous waste
• Purchased the 307.64-acre former POST Apple Orchard and Event Center as well as a 3-acre
parcel from POST in the San Gregorio Creek properties for the purpose of protecting and
further restoring redwood habitat along San Gregorio Creek and habitat for Coho Salmon
and Steelhead
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• Complete a third phase of repairs to Sears Ranch Road
• Complete the construction plans for the Sears Ranch Parking Lot and submit and secure
a permit application with San Mateo County
Portfolio Allocation:
Portfolio Expenditures:
$14,825,000
$9,834,870
66.34%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
07 La Honda Creek:
Driscoll Ranch Public Access,
Endangered Wildlife Protection,
and Conservation Grazing
07-001 Apple Orchard/Event
Center Purchase $6,008,068
07-002 Fisheries Restoration
Design/Permitting $727,716
Less: 07-002
Grant Income ($230,970)
07-004 Fisheries
Enhancement Event
Center $20,000
07-005 Pond DR05
Repair/Restore $150,682
07-006 Cunha Land Purchase $3,080,705
07-007 Wool House
Demolitions $38,606
07-009 Sears Ranch
Parking Area $37,499
07-010 Sears Ranch
Road Repair $2,564
Subtotal $14,825,000 $9,834,870 $4,990,130 66.34%
Measure AA Bond Annual Accountability Report Page 29
Measure AA Bond Annual Accountability ReportPage 30
San Gregorio Creek Watershed by Deane Little
Portfolio 8: La Honda Creek/Russian Ridge—Preservation of
Upper San Gregorio Watershed and Ridge Trail Completion
Description
• Preserve Upper San Gregorio watershed; restore endangered species habitats
• Support opportunities to provide additional water for fisheries
• Complete Bay Area Ridge Trail multi-use connections and gaps
• Provide additional public use facilities
• Portfolio Allocation: $15,347,000
• Portfolio Expenditures through 6/30/2016: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
08 La Honda Creek/
Russian Ridge: Preservation
of Upper San Gregorio
Watershed and Ridge Trail
Subtotal $15,347,000 0 $15,347,000 0.00%
Portfolio Allocation:
Portfolio Expenditures:
$15,347,000
$0 0%
OF FUNDS USED
Measure AA Bond Annual Accountability Report Page 31
Measure AA Bond Annual Accountability ReportPage 32
Russian Ridge Open Space Preserve by Erica Simmons
Portfolio 9: Russian Ridge—Public Recreation, Grazing,
and Wildlife Protection Projects
Description
• Open currently closed areas of preserve
• Construct and extend trails
• Improve fencing, corrals, and water systems to reintroduce conservation grazing
• Improve habitat for sensitive species, implement pond enhancement projects for garter
snakes and red-legged frogs
• Portfolio Allocation: $5,560,000
• Portfolio Expenditures through 6/30/2016: $236,185
Notable Accomplishments
• Opened the new Mindego Gateway Parking Area
• Constructed and opened an extension of Mindego Hill Trail to the top of the prominent
Mindego Hill; two bridges and two puncheons which are a part of the Ancient Oaks Trail
• New corral and water system upgrades at Mindego ranch, including two 5,000 gallon water
storage tanks, 11,000 feet of buried pipe, six water troughs, and solar-powered water pump
for storage tanks. Selected grazing tenant
• Remediation of Mindego Ranch area
• Non-MAA support work: Entered into an MOU with CDFW for the recovery of the San Francisco
garter snake to streamline the construction of facilities in the Mindego Area
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• No potential next steps identified at this time
Portfolio Allocation:
Portfolio Expenditures:
$5,560,000
$236,185
4.25%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
09 Russian Ridge: Public
Recreation, Grazing, and
Wildlife Protection Projects
09-001 Mindego Grazing
Infrastructure $169,078
09-004 Mindego Hill Trail $67,107
Subtotal $5,560,000 $236,185 $5,323,815 4.25%
Measure AA Bond Annual Accountability Report Page 33
Mindego Hill Trail, Russian Ridge Open Space Preserve by Midpen Staff
Measure AA Bond Annual Accountability ReportPage 34
Coal Creek Open Space Preserve by Jack Gescheidt
Portfolio 10: Coal Creek—Reopen Alpine Road for Trail Use
Description
• Reopen Alpine Road as trail connection between Portola Valley and Skyline Boulevard
• Reroute trails to reduce erosion and improve visitor experience
• Portfolio Allocation: $8,017,000
• Portfolio Expenditures through 6/30/2016: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
Portfolio Allocation:
Portfolio Expenditures:
$8,017,000
$0 0%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
10 Coal Creek: Reopen Alpine
Road for Trail Use
Subtotal $8,017,000 $0 $8,017,000 0.00%
Measure AA Bond Annual Accountability Report Page 35
Measure AA Bond Annual Accountability ReportPage 36
Rancho San Antonio Open Space Preserve by Karl Gohl
Portfolio 11: Rancho San Antonio—Interpretive Improvements,
Refurbishing, and Transit Solutions
Description
• Add welcome center
• Refurbish and add interpretive exhibits to Deer Hollow Farm
• Support of transit improvement options such as bike trails, bike share station, bus service,
or additional parking
• Portfolio Allocation: $10,811,000
• Portfolio Expenditures through 6/30/2016: $728
Notable Accomplishments
• Most work accomplished in Rancho San Antonio has an alternative funding source
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• No potential next steps identified at this time
Portfolio Allocation:
Portfolio Expenditures:
$10,811,000
$728 0.01%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
11 Rancho San Antonio:
Interpretive Improvements,
Refurbishment and Transit
Solutions
Subtotal $10,811,000 $728 $10,811,000 0.01%
Measure AA Bond Annual Accountability Report Page 37
Measure AA Bond Annual Accountability ReportPage 38
Stevens Creek Trail by Don Debold
Portfolio 12: Peninsula/South Bay Cities—Partner to
Complete Middle Stevens Creek Trail
Description
• Support work by cities to develop the middle section of the Stevens Creek Trail and
enhance neighborhood connections
• Support work by partners to complete stream corridor restoration and Steelhead habitat
enhancement below dam
• Develop and install interpretive signage
• Portfolio Allocation: $1,038,000
• Portfolio Expenditures through 6/30/2016: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
Portfolio Allocation:
Portfolio Expenditures:
$1,038,000
$0 0%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
12 Peninsula/South Bay Cities:
Partner to Complete Middle
Stevens Creek Trail
Subtotal $1,038,000 $0 $1,038,000 0.00%
Measure AA Bond Annual Accountability Report Page 39
Measure AA Bond Annual Accountability ReportPage 40
Cloverdale ranch on the San Mateo Coast by Leigh Ann M. Gessner
Portfolio 13: Cloverdale Ranch—Wildlife Protection,
Grazing, and Trail Connections
Description
• Improve fencing, corrals, and water systems to increase conservation grazing
and sustain large contiguous grasslands
• Restore habitat for endangered species
• Provide trail connections to nearby state parks
• Portfolio Allocation: $15,712,000
• Portfolio Expenditures through 6/30/2016: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
Portfolio Allocation:
Portfolio Expenditures:
$15,712,000
$0 0%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
13 Cloverdale Ranch: Wildlife
Protection, Grazing and
Trail Connections
Subtotal $15,712,000 $0 $15,712,000 0.00%
Measure AA Bond Annual Accountability Report Page 41
Measure AA Bond Annual Accountability ReportPage 42
Russian Ridge Open Space Preserve by Vaibhav Tripathi
Portfolio 14: Regional—Trail Connections and Campgrounds
Description
• Develop trails between Butano, Pescadero County Park, and Russian Ridge, and between
Skyline, Portola Redwoods, and Big Basin State Park
• Partner with county and state parks to improve existing campgrounds
• Portfolio Allocation: $3,966,000
• Portfolio Expenditures through 6/30/2016: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
Portfolio Allocation:
Portfolio Expenditures:
$3,966,000
$0 0%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
14 Regional: Trail Connections
and Campgrounds
Subtotal $3,966,000 $0 $3,966,000 0.00%
Measure AA Bond Annual Accountability Report Page 43
Measure AA Bond Annual Accountability ReportPage 44
Purisima Creek Redwoods Open Space Preserve by Karl Gohl
Portfolio 15: Regional—Redwood Protection
and Salmon Fishery Conservation
Description
• Preserve additional open space as available
• Protect and enhance redwood stands, mountain scenery, various habitats,
and Steelhead salmon
• Portfolio Allocation: $50,728,000
• Portfolio Expenditures through 6/30/2016: $2,495,713
Notable Accomplishments
• Expenditures for this portfolio project were for a conservation easement covering 353-acre
Alpine Ranch property from POST
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• No project next steps identified at this time
Portfolio Allocation:
Portfolio Expenditures:
$50,728,000
$2,495,713
4.92%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
15 Regional: Redwoods
Protection and Salmon
Fishery Conservation
15-001 POST/Alpine Ranch
Easement $2,495,713
Subtotal $50,728,000 $2,495,713 $48,232,287 4.92%
Measure AA Bond Annual Accountability Report Page 45
Measure AA Bond Annual Accountability ReportPage 46
Long Ridge Open Space Preserve by Amanda Mills
Portfolio 16: Long Ridge—Trail, Conservation,
and Habitat Restoration Projects (Saratoga)
Description
• Improve roadside parking and provide restrooms
• Develop new trail connections to Eagle Rock and Devils Canyon
• Repair trails for year-round, multi-use access
• Protect watersheds for Steelhead
• Preserve additional open space as available
• Implement pond and habitat enhancement restoration projects to benefit rare species
• Portfolio Allocation: $5,140,000
• Portfolio Expenditures through 6/30/20126: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
Portfolio Allocation:
Portfolio Expenditures:
$5,140,000
$0 0%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
16 Long Ridge: Trail, Conservation
and Habitat Restoration
Projects (Saratoga)
Subtotal $5,140,000 $0 $5,140,000 0.00%
Measure AA Bond Annual Accountability Report Page 47
Measure AA Bond Annual Accountability ReportPage 48
Stevens Creek Reservoir by Karl Gohl
Portfolio 17: Regional—Complete Upper Stevens Creek Trail
Description
• Complete multi-use connection between the Bay Trail and Bay Area Ridge Trail above
the reservoir through Picchetti Ranch Open Space Preserve and Lower/Upper Stevens
Creek County Parks
• Improve Preserve trails and neighborhood connections
• Preserve additional open space as available
• Portfolio Allocation: $7,760,000
• Portfolio Expenditures through 6/30/16: $1,016,344
Notable Accomplishments
• Demolition and site cleanup of dilapidated, unsafe structures
• Completed the evaluation, design, and submitted permit applications for two footbridges
across Stevens Creek
• Purchased the 60-acre former Lysons Property, securing land to facilitate the Upper
Stevens Creek regional trail. Leveraged partnership funds to match the MAA funds
expended for this purchase
Project Challenges
• Permits for the Stevens Creek foot bridges require extensive review by City of Palo Alto
City Council, due to the type of project extending permit review to one year
Potential Next Steps
• Secure permits and bid out the construction work
Portfolio Allocation:
Portfolio Expenditures:
$7,760,000
$1,016,344
13.1%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
17 Regional: Complete Upper
Stevens Creek Trail
17-001 Lysons Property
Purchase $1,494,552
Less: Grant Income
(50% of purchase price) ($740,000)
17-002 Lobner Demolition $128,760
17-004 Lower Stevens Canyon
Hiking Bridge $133,032
Subtotal $7,760,000 $1,016,344 $6,743,656 13.10%
Measure AA Bond Annual Accountability Report Page 49
Measure AA Bond Annual Accountability ReportPage 50
Portfolio 18: South Bay Foothills—Saratoga to Sea
Trail and Wildlife Corridor
Description
• Protect wildlife corridor along Highway 9
• Connect trail to Saratoga to Sea Trail and Skyline-to-the-Sea Trail
• Portfolio Allocation: $1,365,000
• Portfolio Expenditures through 6/30/2016: $0
MAA Funds have not been expended on this Portfolio for this reporting period,
therefore there are no funds in this Portfolio for the Bond Oversight Committee to
validate at this time. This does not necessarily mean that work is not underway in
this Preserve, it just means that if there is work in process, other funding sources
are being utilized, and the scope is not what was contemplated as part of this
Portfolio within the MAA Expenditure Plan, or the scope is not currently eligible
for MAA fundings.
Saratoga to Sea Trail by Midpen Staff
Portfolio Allocation:
Portfolio Expenditures:
$1,365,000
$0 0%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
18 South Bay Foothills: Saratoga
to Sea Trail and Wildlife
Corridor
Subtotal $1,365,000 $0 $1,365,000 0.00%
Measure AA Bond Annual Accountability Report Page 51
Measure AA Bond Annual Accountability ReportPage 52
El Sereno Open Space Preserve by Jack Gescheidt
Portfolio 19: El Sereno—Dog Trails and Connections
Description
• Provide infrastructure to open trails to dogs
• Develop connections to Skyline, Sanborn County Park, and Lexington Reservoir
• Portfolio Allocation: $2,254,000
• Portfolio Expenditures through of 6/30/16: $715
Notable Accomplishments
• Initiated research work to understand existing conditions and property rights that may
affect the proposed opening of the trails to dogs on-leash
• Expenditures to date were used for title insurance associated with a potential land purchase
Project Challenges
• Additional property rights are needed to provide contiguous access across all
existing trailheads
Potential Next Steps
• Complete CEQA review and prepare a Use and Management Plan Amendment for Board
to consider a recommendation to open existing trails to dogs on-leash. The predominant
MAA expenditures anticipated in the future will likely be related to purchasing land rights,
easements, and fee title to provide access in support of the Portfolio Description
Portfolio Allocation:
Portfolio Expenditures:
$2,254,000
$715 0.03%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
19 El Sereno: Dog Trails
and Connections $715
Subtotal $2,254,000 $715 $2,253,285 0.03%
Measure AA Bond Annual Accountability Report Page 53
El Sereno Open Space Preserve by Todd Ditchendorf
Measure AA Bond Annual Accountability ReportPage 54
Provide safe corridors for mountain lions across Highway 17
by Santa Clara County Open Space Authority
Portfolio 20: South Bay Foothills—Wildlife Passage
and Ridge Trail Improvements
Description
• Establish safe corridors for mountain lions across Highway 17
• Establish Bay Area Ridge Trail crossing
• Portfolio Allocation: $13,966,000
• Portfolio Expenditures through 6/30/2016: $90,038
Notable Accomplishments
• Retained consultant team to begin work on Project Preliminary Alternatives Reports for
both the Wildlife Corridor, and Bay Area Ridge Trail Crossing at Highway 17
Project Challenges
• Complex Caltrans process and coordination with numerous project partners and stakeholders
Potential Next Steps
• Develop a Cooperative Agreement with Caltrans and a Caltrans Project Initiation Document
Portfolio Allocation:
Portfolio Expenditures:
$13,966,000
$90,038 0.64%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
20 South Bay Foothills: Wildlife
Passage and Ridge Trail
Improvements
20-001 Highway 17
Crossing Culvert $89,721
20-002 Highway 17 Bay Area
Ridge Trail Crossing $317
Subtotal $13,966,000 $90,038 $13,875,962 0.64%
Measure AA Bond Annual Accountability Report Page 55
Measure AA Bond Annual Accountability ReportPage 56
Portfolio 21: Bear Creek Redwoods—Public Recreation
and Interpretive Projects
Description
• Open for hiking, equestrian activities
• Provide parking areas, trails, upgrade stables
• Restore and protect habitats for various species
• Repair roads and trails to reduce sediment
• Rehabilitate Alma College site
• Portfolio Allocation: $17,478,000
• Portfolio Expenditures through 6/30/2016: $330,411
Notable Accomplishments
• Awarded a contract for design and engineering services to prepare construction plans for the
new Alma College Parking Lot, which includes a new driveway, pedestrian crossing over
Bear Creek Road, restroom, ADA trail, and trailhead
• Developed the Bear Creek Stables Site Plan alternatives and secured Board selection of the
preferred alternative for CEQA review purposes
• Conducted water resources inventory, IPM plan to control vegetation, fuels reduction plan
• Conducted trail resources inventory
• Completed the draft Alma College Cultural Landscape Rehabilitation Plan and secured Board
selection of a preferred alternative for CEQA review purposes
• Held a total of nine (9) successful public workshops/public and neighborhood meetings related
to Bear Creek Stable Site Plan and Alternatives, Preserve Plan Goals and Proposed Actions,
with up to 150 in attendance
• Completed a cultural resources evaluation to inform the Preserve Plan Environmental
Impact Report (EIR)
Project Challenges
• Parking layout needs to be modified to reduce impacts to the Western pond turtle while
avoiding major impacts to the surrounding historic resources
• Parking lot may also impact an adjacent, large underground culvert that extends under
Bear Creek Road, which may require additional engineering work
• Complex water sources and rights issues
Potential Next Steps
• Finalize the parking lot layout and complete the construction plans
• IPM implementation on roads and trails, shaded fuel break
• Road and trail improvements
• Begin the first phase of the detailed design for the Alma College Site Improvements
• Board approval of the Preserve Plan, including the Stables Site Plan and Alma
College Rehabilitation Plan
Portfolio Allocation:
Portfolio Expenditures:
$17,478,000
$330,411 1.89%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
21 Bear Creek Redwoods:
Public Recreation and
Interpretive Projects
21-001 Moody Gulch Fence
and Gate Improvements $848
21-002 Bear Creek Redwoods
Preserve Plan ($14,369)
21-003 Water Infrastructure
Improvements $85,742
21-004 Bear Creek Stables
Site Plan (Phase I) $6,125
21-005 Bear Creek Preserve
Plan (Phase I) $53,809
21-006 Alma College
Rehabilitation $155,082
21-007 Bear Creek Reserve
Invasive Weed
Treatment $43,174
Subtotal $17,478,000 $330,411 $17,147,589 1.89%
Measure AA Bond Annual Accountability Report Page 57
Measure AA Bond Annual Accountability ReportPage 58
Preserve upper Los Gatos Creek watershed at Sierra Azul
Open Space Preserve by Midpen Staff
Portfolio 22: Sierra Azul—Cathedral Oaks Public
Access and Conservation Projects
Description
• Develop multi-use trail and plan future trails as land is available
• Develop parking
• Restore plant communities and soils
• Install trailside amenities
• Preserve additional open space and complete wildlife corridor in upper Los Gatos Creek watershed
• Portfolio Allocation: $6,714,000
• Portfolio Expenditure: $566,694
Notable Accomplishments
• Native plant restoration of Hendrys Creek property
• Received partnership funds to purchase the 117-acre former Hendrys Creek Property to protect
wildlife corridors and watershed lands. Progress towards MAA goals, but no MAA funds used
on this purchase
• Purchased the 24.41-acre former Freudenberg Property to protect wildlife corridors
and watershed lands
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• No project next steps identified at this time
Portfolio Allocation:
Portfolio Expenditures:
$6,714,000
$561,694
8.37%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
22 Sierra Azul: Cathedral Oaks
Public Access and
Conservation Projects
22-001 Hendrys Creek
Restoration $61,752
Less: 22-001
Grant Income ($40,000)
22-003 Freudenberg Land
Purchase $539,942
Subtotal $ 6,714,000 $561,694 $6,147,306 8.37%
Measure AA Bond Annual Accountability Report Page 59
Hendrys Creek, Sierra Azul Open Space Preserve by Midpen Staff
Measure AA Bond Annual Accountability ReportPage 60
Portfolio 23: Sierra Azul—Mount Umunhum Public Access
and Interpretation Projects
Description
• Open Mount Umunhum for multi-use public access to summit via road and trail
• Open Bay Area Ridge Trail and nearby trail connections
• Preserve additional open space and complete wildlife corridor
• Portfolio Allocation: $27,972,000
• Portfolio Expenditures through 6/30/2016: $2,882,928
Notable Accomplishments
• Completed nearly 4-miles of the new Mount Umunhum Trail to connect people to the summit
• Confirmed the design goals and completed the conceptual design for the Guadalupe Creek
Overlook (a featured overlook along the Mount Umunhum Trail) and new trail bridges
• Commenced site and contour restoration of the summit
• Finalized construction plans and bid-out the Summit Project, which includes new parking at the
summit, ADA-accessible trails, weather shelters, stairs, ceremonial circle, and other site amenities
• Finalized construction plans and bid-out the Mount Umunhum Road Rehabilitation Project to
improve over five (5) miles of roadway for the public to safely drive to and from the summit
• Developed interpretive material content and initiated the design of new interpretive signage
and exhibits
• Surveyed and mapped rare plant populations and collected native plant seeds in support of
the restoration planting plan
• Purchased the 38.97-acre former Meyer/Connolly Property to protect additional open space
and wildlife corridors
Project Challenges
• Installation of three required bridges requires a permit from the CA Dept. of Fish and Wildlife,
and helicopter use for the delivery of bridge components. One segment will require specialized
design and equipment to install steps and a railing
Potential Next Steps
• Complete the installation of three new bridges
• Finalize the design and construct the new trail steps and open the Mount Umunhum Trail
to public use
• Complete construction of the Summit Project and open the site to public access
• Complete construction of the Road Repairs Project and open the road to public use
• Install the interpretive signage/exhibits
Portfolio Allocation:
Portfolio Expenditures:
$27,972,000
$2,882,928
10.31%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
23 Sierra Azul: Mount Umunhum
Public Access and
Interpretive Projects
23-001 Property Purchase $1,264,084
23-002 Bald Mtn. Staging
Area to Summit Trail $121,489
23-004 Summit Restoration
and Improvement $978,058
23-005 Mt. Um. Trail Overlook
and Bridges $195,764
23-006 Mt. Um. Road –
Design/Permitting $323,533
Subtotal $27,972,000 $2,882,928 $25,089,072 10.31%
Measure AA Bond Annual Accountability Report Page 61
Grassroots Ecology grew plants for Mount
Umunhum Summit project by Midpen Staff
Measure AA Bond Annual Accountability ReportPage 62
Rancho de Guadalupe Area at Sierra Azul Open Space Preserve by David Tharp
Portfolio 24: Sierra Azul—Rancho de Guadalupe
Family Recreation
Description
• Open Rancho de Guadalupe to public access
• Develop accessible multi-use trails with amenities such as parking and family recreation
• Restore habitat for rare species
• Protect cultural and natural resources
• Portfolio Allocation: $10,078,000
• Portfolio Expenditures through 6/30/2016: $300,056
Notable Accomplishments
• Demolition and site cleanup
• Conducted environmental restoration of unused structures and their building footprint
• Purchased 4 acres of the Barth property
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• No project next steps identified at this time
Portfolio Allocation:
Portfolio Expenditures:
$10,078,000
$300,056
2.98%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
24 Sierra Azul: Rancho de
Guadalupe Family Recreation
24-001 Barth Property
Purchase $300,056
Subtotal $10,078,000 $300,056 $9,777,944 2.98%
Measure AA Bond Annual Accountability Report Page 63
Sierra Azul Open Space Preserve by Karl Gohl
Measure AA Bond Annual Accountability ReportPage 64
Sierra Azul Open Space Preserve by Frances Freyberg
Portfolio 25: Sierra Azul—Loma Prieta Area Public Access,
Regional Trails, and Habitat Projects
Description
• Provide public access and recreation, including small campground
• Develop, improve, connect regional multi-use trails to Forest of Nisene Marks State Park,
to protected land to the east, and to Mount Umunhum
• Protect Steelhead habitat, rare plants and grasslands, and restore Knob Cone Pine Stands
• Portfolio Allocation: $7,986,000
• Portfolio Expenditures through 6/30/2016: $410,150
Notable Accomplishments
• Purchased the 40-acre former Burton/Robinson Property to protect additional habitat
within the Loma Prieta area
Project Challenges
• No project challenges identified at this time
Potential Next Steps
• No project next steps identified at this time
Portfolio Allocation:
Portfolio Expenditures:
$7,986,000
$410,150
5.14%
OF FUNDS USED
EXPENDITURE LIFE-TO-DATE EXPENDITURE
PLAN EXPENDED THROUGH PLAN PERCENT
PORTFOLIO PROJECT ALLOCATION 6.30.2016 REMAINING EXPENDED
25 Sierra Azul: Loma Prieta Area
Public Access, Regional Trails
and Habitat Projects
25-001 Burton Property
Purchase $410,150
Subtotal $7,986,000 $410,150 $7,575,850 5.14%
Measure AA Bond Annual Accountability Report Page 65
Sierra Azul Open Space Preserve by Midpen Staff
EXPENDITURE PRIOR PERIOD CURRENT PERIOD TOTAL LIFE-TO- EXPENDITURE
PORT. PLAN 11-MAY-14 1-APR-15 DATE THROUGH PLAN PERCENT
# PROJECT ALLOCATION 31-MAR-15 30-JUN-16 6/30/16 REMAINING EXPENDED
01 Miramontes Ridge: Gateway
to Coast Public Access, Stream
Restoration, and Agriculture
Enhancement
Gateway to San Mateo Coast
01-003 Zions Property Purchase $6,315 $6,315
Subtotal $27,774,000 $6,315 $6,315 $27,767,685 0.02%
02 Regional: Bayfront Habitat
Protection and Public Access
Partnership
Habitat Protection and Public Access
02-002 Easement SFPUC
Ravenswood Trail $22,603 $74,834 $97,437
Subtotal $5,052,000 $22,603 $74,834 $97,437 $4,954,563 1.93%
03 Purisima Creek Redwoods: Purisima
to Sea Trail, Watershed Protection,
and Conservation Grazing
03-001 Lot Line Adjustment/Riggs
Property Purchase $382,000 $288 $382,288
03-004 Harkins Bridge Replacement $86,887 $34,793 $121,680
Subtotal $7,608,000 $468,887 $35,081 $503,968 $7,104,032 6.62%
04 El Corte de Madera Creek: Bike
Trail and Water Quality Projects
04-002 ECdM Watershed
Protection Final Phase $247,563 $247,563
04-003 ECdM Watershed
Protection Reassessment $45,507 $38,449 $83,956
04-004 Oljon Trail $3,930 $22,672 $26,602
Subtotal $8,376,000 $49,437 $308,684 $358,121 $8,017,879 4.28%
05 La Honda Creek: Upper Recreation
Area, Habitat Restoration, and
Conservation Grazing Projects
05-001 Land Conservation $20,000 $1,736,093 $1,756,093
05-002 Grazing/Water Systems
Infrastructure $178,850 $30,915 $209,765
05-004 Sears Ranch Interim Parking $5,074 $5,074
05-005 Red Barn Parking Area $13,562 $13,562
05-006 Sears Ranch Road Repair $86,930 $86,930
Subtotal $11,733,000 $198,850 $1,872,574 $2,071,424 $9,661,576 17.65%
Financial Report from New World ERP
Measure MAA Expenditures
Measure AA Bond Annual Accountability ReportPage 66
EXPENDITURE PRIOR PERIOD CURRENT PERIOD TOTAL LIFE-TO- EXPENDITURE
PORT. PLAN 11-MAY-14 1-APR-15 DATE THROUGH PLAN PERCENT
# PROJECT ALLOCATION 31-MAR-15 30-JUN-16 6/30/16 REMAINING EXPENDED
06 Windy Hill: Trail Implementation,
Preservation, and Hawthorns Area
Historic Partnership
Subtotal $12,740,000 $12,740,000 0.00%
07 La Honda Creek: Driscoll Ranch
Public Access, Endangered Wildlife
Protection, and Conservation Grazing
07-001 Apple Orchard/Event
Center Purchase $6,008,068 $6,008,068
07-002 Fisheries Restoration
Design/Permitting $727,716 $727,716
Less: 07-002 Grant Income ($230,970) ($230,970)
07-004 Fisheries Enhancement
Event Center $20,000 $20,000
07-005 Pond DR05 Repair/Restore $150,682 $150,682
07-006 Cunha Land Purchase $3,080,705 $3,080,705
07-007 Wool House Demolitions $38,606 $38,606
07-009 Sears Ranch Parking Area $37,499 $37,499
07-010 Sears Ranch Road Repair $2,564 $2,564
Subtotal $14,825,000 $150,682 $9,684,188 $9,834,870 $4,990,130 66.34%
08 La Honda Creek/Russian Ridge:
Preservation of Upper San Gregorio
Watershed and Ridge Trail
Subtotal $15,347,000 $15,347,000 0.00%
09 Russian Ridge: Public Recreation,
Grazing, and Wildlife
Protection Projects
09-001 Mindego Grazing
Infrastructure $135,748 $33,330 $169,078
09-004 Mindego Hill Trail $30,571 $36,536 $67,107
Subtotal $5,560,000 $166,319 $69,866 $236,185 $5,323,815 4.25%
10 Coal Creek: Reopen Alpine
Road for Trail Use
Subtotal $8,017,000 $8,017,000 0.00%
11 Rancho San Antonio: Interpretive
Improvements, Refurbishing, and
Transit Solutions $728 $728
Subtotal $10,811,000 $728 $728 $10,810,272 0.01%
Measure AA Bond Annual Accountability Report Page 67
EXPENDITURE PRIOR PERIOD CURRENT PERIOD TOTAL LIFE-TO- EXPENDITURE
PORT. PLAN 11-MAY-14 1-APR-15 DATE THROUGH PLAN PERCENT
# PROJECT ALLOCATION 31-MAR-15 30-JUN-16 6/30/16 REMAINING EXPENDED
12 Peninsula/South Bay Cities: Partner to
Complete Middle Stevens Creek Trail
Subtotal $1,038,000 $1,038,000 0.00%
13 Cloverdale Ranch: Wildlife Protection,
Grazing, and Trail Connections
Subtotal $15,712,000 $15,712,000 0.00%
14 Regional: Trail Connections
and Campgrounds
Subtotal $3,966,000 $3,966,000 0.00%
15 Regional: Redwoods Protection and
Salmon Fishery Conservation
15-001 POST/Alpine Ranch
Easement $2,508,695 ($12,982) $2,495,713
Subtotal $50,728,000 $2,508,695 ($12,982) $2,495,713 $48,232,287 4.92%
16 Long Ridge: Trail, Conservation,
and Habitat Restoration
Projects (Saratoga)
Subtotal $5,140,000 $5,140,000 0.00%
17 Regional: Complete Upper
Stevens Creek Trail
17-001 Lysons Property Purchase $1,497,059 ($2,507) $1,494,552
Less: Grant Income ($740,000) ($740,000)
17-002 Lobner Demolition $128,760 $128,760
17-004 Lower Stevens Canyon
Hiking Bridge $42,216 $90,816 $133,032
Subtotal $7,760,000 $1,668,035 ($651,691) $1,016,344 $6,743,656 13.10%
18 South Bay Foothills: Saratoga to
Sea Trail and Wildlife Corridor
Subtotal $1,365,000 $1,365,000 0.00%
19 El Sereno: Dog Trails and
Connections $715 $715
Subtotal $2,254,000 $715 $715 $2,253,285 0.03%
Measure AA Bond Annual Accountability ReportPage 68
EXPENDITURE PRIOR PERIOD CURRENT PERIOD TOTAL LIFE-TO- EXPENDITURE
PORT. PLAN 11-MAY-14 1-APR-15 DATE THROUGH PLAN PERCENT
# PROJECT ALLOCATION 31-MAR-15 30-JUN-16 6/30/16 REMAINING EXPENDED
20 South Bay Foothills: Wildlife
Passage and Ridge Trail
Improvements
20-001 Highway 17
Crossing Culvert $89,721 $89,721
20-002 Highway 17 Bay Area
Ridge Trail Crossing $317 $317
Subtotal $13,966,000 $90,038 $90,038 $13,875,962 0.64%
21 Bear Creek Redwoods: Public
Recreation and Interpretive Projects
21-001 Moody Gulch Fence and
Gate Improvements $848 $848
21-002 Bear Creek Redwoods
Preserve Plan ($14,369) ($14,369)
21-003 Water Infrastructure
Improvements $85,742 $85,742
21-004 Bear Creek Stables Site
Plan (Phase I) $6,125 $6,125
21-005 Bear Creek Preserve
Plan (Phase I) $53,809 $53,809
21-006 Alma College Rehabilitation $155,082 $155,082
21-007 Bear Creek Reserve Invasive
Weed Treatment $43,174 $43,174
Subtotal $17,478,000 $330,411 $330,411 $17,147,589 1.89%
22 Sierra Azul: Cathedral Oaks Public
Access and Conservation Projects
22-001 Hendrys Creek Restoration $45,685 $20,422 $61,752
Less: Grant Income ($40,000) ($40,000)
22-003 Freudenberg Land Purchase $539,942 $539,942
Subtotal $6,714,000 $45,685 $512,009 $561,694 $6,147,306 8.37%
23 Sierra Azul: Mount Umunhum Public
Access and Interpretive Projects
23-001 Property Purchase $1,264,084 $1,264,084
23-002 Bald Mtn. Staging Area
to Summit Trail $11,626 $109,863 $121,489
23-004 Summit Restoration
and Improvement $48,676 $929,382 $978,058
23-005 Mt. Um. Trail Overlook
and Bridges $243 $195,521 $195,764
23-006 Mt. Um. Road –
Design/Permitting $323,533 $323,533
Subtotal $27,972,000 $60,545 $2,822,383 $2,882,928 $25,089,072 10.31%
Measure AA Bond Annual Accountability Report Page 69
EXPENDITURE PRIOR PERIOD CURRENT PERIOD TOTAL LIFE-TO- EXPENDITURE
PORT. PLAN 11-MAY-14 1-APR-15 DATE THROUGH PLAN PERCENT
# PROJECT ALLOCATION 31-MAR-15 30-JUN-16 6/30/16 REMAINING EXPENDED
24 Sierra Azul: Rancho de Guadalupe
Family Recreation
24-001 Barth Property Purchase $300,056 $300,056
Subtotal $10,078,000 $300,056 $300,056 $9,777,944 2.98%
25 Sierra Azul: Loma Prieta Area Public
Access, Regional Trails, and
Habitat Projects
25-001 Burton Property Purchase $10,150 $400,000 $410,150
Subtotal $7,986,000 $10,150 $400,000 $410,150 $7,575,850 5.14%
Source: New World ERP System
Measure AA Bond Annual Accountability ReportPage 70
Midpeninsula Regional Open Space District
330 Distel Circle
Los Altos, California 94022-1404
Phone: 650-691-1200 • Fax: 650-691-0485
E-mail: info@openspace.org
Web site: www.openspace.org PRINTED ON 100% POST
CONSUMER WASTE PAPER
PRINTED WITHSOY INK
Photo on front cover
Russian Ridge Open Space Preserve by Karl Gohl
-5-
EXHIBIT A
Expenditure Plan
TITLE: To improve access to hiking and biking opportunities, protect and preserve redwood forests, natural
open spaces, the scenic beauty of the region and coastline, critical wildlife habitat, restore creeks to protect
water quality, and reduce forest fire risk.
1. SUMMARY
Founded by voters in 1972, the Midpeninsula Regional Open Space District (“District”) has protected, in
perpetuity, 62,000 acres of open space containing 26 preserves and more than 220 miles of trails that serve
Santa Clara, San Mateo, and a portion of Santa Cruz counties. The District’s preserves provide a scenic
backdrop to the region offering residents places for hiking, biking, horseback riding, or simply connecting with
nature, close to home. Throughout its 41-year history the District has used taxpayer dollars wisely, leveraging
funds to bring in state, federal, and private grant money, and providing annual audits in a transparent public
process. The District is governed by a publicly elected board of directors.
Over the years, the number of acres and miles of trails the District owns and maintains have steadily
increased, as have the number of visitors and the cost of land. Expanding public access, restoring sensitive
environments and purchasing land are costly, yet are high priorities for the public.
To reinforce and expand these types of services and resources, the Board of Directors is placing this
funding measure on the June 3, 2014 ballot.
$300 million in General Obligation Bonds will be sold. The bond repayment would be financed by an
annual property tax override based on a tax rate not to exceed $3.18 per $100,000 of assessed value of
property owned per year.
This Expenditure Plan outlines priority actions identified by the public and proposed by the District to be
funded with bond proceeds. Part B describes each priority action and describes what goals it will achieve. Part
C of the Expenditure Plan describes the establishment of an independent Citizen Oversight Committee.
-6-
2. PRIORITY ACTIONS
The priority actions listed below are the result of a process that combined scientific analysis with broad
public engagement to create a shared vision for the future of the District and the region’s open space. Each
priority action may address one or more of the following as more specifically described in the table Priority
Actions, By Region attached to this Expenditure Plan:
• Improved hiking, biking, and equestrian opportunities
• Protection and preservation of redwoods, natural open spaces, the scenic beauty of the region
and coastline, critical habitats
• Restoration of creeks to protect water quality
• Reduction of forest fire risk
Priority actions are distributed throughout the District as depicted on the map attached to this
Expenditure Plan.
If approved, the bond proceeds would be allocated to fund the capital improvements necessary to
implement the priority actions listed below. Note: the number associated with each priority action does not
denote its priority level, but is only used for identification purposes to correlate with the locations depicted on
the map.
The estimates associated with each priority action are in 2014 dollars. These are estimates only, and
the actual costs may change in implementation.
The District may annually review and propose amendments to the Expenditure Plan to provide for the
use of additional federal, state and local funds, to account for unexpected revenues, or to take into
consideration unforeseen circumstances. The District shall act on no more than one package of amendments
each fiscal year. The District shall establish a process for proposed Expenditure Plan amendment(s) which
ensures that the Citizen Oversight Committee is included in the development. Upon completion of this
process, amendments(s) to the Expenditure Plan must be passed by a two-thirds majority of the District Board
in a publicly noticed meeting.
-7-
PRIORITY ACTIONS, BY REGION
South Bay Foothills
(Los Gatos, Monte Sereno, Saratoga, and Santa Cruz Mountains)
18 South Bay Foothills: Saratoga-to-Sea Trail and Wildlife Corridor
Protect wildlife corridor along Highway 9. Connect trail to Saratoga-to-Sea Trail and Skyline-to-Sea Trail.
$1,365,000
19 El Sereno: Dog Trails and Connections
Provide infrastructure to open trails to dogs. Develop connections to Skyline, Sanborn County Park, & Lexington
Reservoir. $2,254,000
20 South Bay Foothills: Wildlife Passage and Ridge Trail Improvements
Establish safe corridors for mountain lions across Highway 17. Establish Bay Area Ridge Trail crossing.
$13,966,000
21 Bear Creek Redwoods: Public Recreation and Interpretive Projects
Open for hiking, equestrian activities. Provide parking areas, trails; upgrade stables. Restore & protect habitats
for various species. Repair roads & trails to reduce sediment. Rehabilitate Alma College site. $17,478,000
22 Sierra Azul: Cathedral Oaks Public Access and Conservation Projects
Develop multi-use trail & plan future trails as land is available. Develop parking. Restore plant communities and
soils. Install trailside amenities. Preserve additional open space and complete wildlife corridor in upper Los Gatos
Creek watershed. $6,714,000
23 Sierra Azul: Mt. Umunhum Public Access and Interpretation Projects
Open Mt. Umunhum for multi-use public access to summit via road and trail. Open Bay Area Ridge Trail and
nearby trail connections. Preserve additional open space and complete wildlife corridor. $27,972,000
24 Sierra Azul: Rancho de Guadalupe Family Recreation
Open Rancho de Guadalupe to public access. Develop accessible multi-use trails with amenities such as parking
and family recreation. Restore habitat for rare species. Protect cultural and natural resources. $10,078,000
25 Sierra Azul: Loma Prieta Area Public Access, Regional Trails and Habitat Projects
Provide public access and recreation, including small campground. Develop, improve, connect regional multi-use
trails to Forest of Nisene Marks State Park, to protected land to east, and to Mt. Umunhum. Protect Steelhead
habitat, rare plants and grasslands, restore Knobcone Pine stands. $7,986,000
-8-
Peninsula Foothills and Bay
(Cupertino, Los Altos, Los Altos Hills, Sunnyvale, Mountain View, Palo Alto, East Palo Alto,
Menlo Park, Atherton, Redwood City, San Carlos, Woodside, Portola Valley, Skyline
2 Regional: Bayfront Habitat Protection and Public Access Partnerships
Partner to complete gaps in Bay Trail and develop city-to-bay trails. Support wetland restoration and associated
interpretive facilities. Preserve additional bayfront open space. $5,052,000
4 El Corte de Madera Creek: Bike Trail and Water Quality Projects
Develop single-use biking/hiking trails, complete Ridge Trail gaps, and develop trail system leading to parking
area. Restore damaged trails to improve water quality. Preserve additional open space as available.
$8,376,000
5 La Honda Creek: Upper Area Recreation, Habitat Restoration and Conservation Grazing
Projects
Open upper half of the preserve to public; provide biking/hiking/equestrian trails, dog access, and staging areas.
Provide loop & connector trails. Restore habitat for rare species. Improve fencing, corrals, and water systems to
reintroduce conservation grazing. $11,733,000
6 Windy Hill: Trail Improvements, Preservation and Hawthorns Area Historic Partnership
Improve trails, complete pond facilities. Increase multi-use trails, study possible improvements to increase dog
use. Open Hawthorns Area; develop trails connecting to Portola Valley and Palo Alto trails. Partner to protect,
restore, and interpret historic buildings. Improve habitat conditions in Los Trancos Creek. Preserve additional
scenic open space as available. $12,740,000
8 La Honda Creek/Russian Ridge: Preservation of Upper San Gregorio Watershed & Ridge Trail
Completion
Preserve upper San Gregorio watershed; restore endangered species habitats. Support opportunities to provide
additional water for fisheries. Complete Bay Area Ridge Trail multi-use connections and gaps. Provide additional
public use facilities. $15,347,000
9 Russian Ridge: Public Recreation, Grazing and Wildlife Protection Projects
Open currently closed areas of preserve. Construct and extend trails. Improve fencing, corrals, and water
systems to reintroduce conservation grazing. Improve habitat for sensitive species, implement pond
enhancement projects for garter snakes and red-legged frogs. $5,560,000
10 Coal Creek: Reopen Alpine Road for Trail Use
Reopen Alpine Road as trail connection between Portola Valley & Skyline Blvd. Reroute trails to reduce erosion
and improve visitor experience. $8,017,000
11 Rancho San Antonio: Interpretive Improvements, Refurbishing, and Transit Solutions
Add welcome center, refurbish and add interpretive exhibits to Deer Hollow Farm. Support of transit improvement
options such as bike trails, bikeshare station, bus service, or additional parking. $10,811,000
12 Peninsula/South Bay Cities: Partner to Complete Middle Stevens Creek Trail
Support work by cities to develop the middle section of the Stevens Creek Trail and enhance neighborhood
connections. Support work by partners to complete stream corridor restoration and steelhead habitat
enhancement below dam. Develop and install interpretive signage. $1,038,000
16 Long Ridge: Trail, Conservation and Habitat Restoration Projects (Saratoga)
Improve roadside parking and provide restrooms. Develop new trail connections to Eagle Rock and Devils
Canyon. Repair trails for year-round multi-use access. Protect watersheds for steelhead. Preserve additional
open space as available. Implement pond and habitat enhancement restoration projects to benefit rare species.
$5,140,000
17 Regional: Complete Upper Stevens Creek Trail
Complete multi-use connection between the Bay Trail & Bay Area Ridge Trail above the reservoir through
Picchetti Ranch Open Space Preserve & Lower/Upper Stevens Creek County Parks. Improve Preserve trails and
neighborhood connections. Preserve additional open space as available. $7,760,000
-9-
Coast
(Half Moon Bay, San Gregorio, Pescadero, La Honda,)
1 Miramontes Ridge: Gateway to the Coast Public Access, Stream Restoration and Agriculture
Enhancement
Preserve scenic open space land as available, and establish wildlife corridor. Restore fish and red-legged frog
habitats in Madonna Creek watershed. Partner to enhance water availability for agriculture and fish. Develop
trail loop system, including Ridge Trail and neighborhood access points. Develop staging area, repair bridges.
$27,774,000
3 Purisima Creek Redwoods: Purisima-to-Sea Trail, Watershed Protection and Conservation
Grazing
Complete and open multi-use Purisima-to-Sea trail connection between Ridge Trail and Coastal Trail, and new
parking areas. Preserve additional open space as available. Remove fish barriers and restore Lobitos Creek.
Restore ponds for endangered species. $7,608,000
7 La Honda Creek: Driscoll Ranch Public Access, Endangered Wildlife Protection and
Conservation Grazing
Open Driscoll Ranch Area; provide biking/hiking/equestrian trails, limited dog access, parking areas, and
interpretive displays. Develop loop & connector trails. Restore habitat for endangered species. Restore La
Honda Creek; remove fish migration barriers. $14,825,000
13 Cloverdale Ranch: Wildlife Protection, Grazing and Trail Connections
Improve fencing, corrals, and water systems to increase conservation grazing and sustain large contiguous
grasslands. Restore habitat for endangered species. Provide trail connections to nearby State parks.
$15,712,000
14 Regional: Trail Connections and Campgrounds
Develop trails between Butano, Pescadero County Park, Pescadero, Russian Ridge, and between Skyline and
Portola Redwoods, Big Basin State Park. Partner with County and State Parks to improve existing campgrounds.
$3,966,000
15 Regional: Redwood Protection and Salmon Fishery Conservation
Preserve additional open space as available. Protect and enhance redwood stands, mountain scenery, various
habitats and steelhead salmon. $50,728,000
-10-
-11-
3. INDEPENDENT CITIZEN OVERSIGHT COMMITTEE
An Independent Citizen Oversight Committee will be formed to verify expenditures of bond proceeds.
The Independent Citizen Oversight Committee will consist of seven at-large members, all of whom shall be
District residents. The Citizen Oversight Committee will be selected by the Board and interviewed and
approved in open session, and will be subject to the conflict of interest constraints of the California Political
Reform Act.
The responsibilities of the Committee include:
• Review Plan expenditures on an annual basis to verify conformity with the Expenditure Plan.
• Review District’s Annual Audit and Annual Accountability report and present the Committee’s findings
to the Board at a public meeting.
• Review any proposed amendments to the Expenditure Plan.
-12-
EXHIBIT B
TAX RATE STATEMENT
An election will be held in the Midpeninsula Regional Open Space District (the "District") on June 3,
2014, to authorize the sale of up to $300 million in bonds of the District to provide public access and acquire,
restore, and preserve open space throughout the District as described in the ballot measure. If the bonds are
approved, the District expects to sell the bonds in several series over time. Principal and interest on the bonds
will be payable from the proceeds of tax levies made upon the taxable property in the District. The information
contained in numbered paragraphs 1 - 3 below is provided in compliance with sections 9400-9404 of the
Elections Code of the State of California.
1. The best estimate of the tax which would be required to be levied to fund this bond issue during the
first fiscal year after the sale of the first series of bonds, based on estimated assessed valuations available at
the time of filing of this statement, is $1.00 per $100,000 of assessed valuation in fiscal year 2015-16.
2. The best estimate of the tax rate which would be required to be levied to fund this bond issue during
the first fiscal year after the sale of the last series of bonds, based on estimated assessed valuations available
at the time of filing of this statement, is $2.90 per $100,000 of assessed valuation in fiscal year 2044-45.
3. The best estimate of the highest tax rate which would be required to be levied to fund this bond
issue, based on estimated assessed valuations available at the time of filing of this statement, is $3.18 per
$100,000 of assessed valuation in fiscal year 2034-35.
Voters should note that the estimated tax rates are based on the estimated ASSESSED VALUE of
taxable property on the respective County's official tax rolls, not on a property's market value. Property owners
should consult their own property tax bills to determine their property's assessed value and any applicable tax
exemptions.
Attention of all voters is directed to the fact that the foregoing information is based upon the District's
projections and estimates only, which are not binding upon the District. The actual tax rates and the years in
which they will apply may vary from those presently estimated, due to variations from these estimates in the
timing of bond sales, the amount of bonds sold and market interest rates at the time of each sale, and actual
assessed valuations over the term of repayment of the bonds. The dates of sale and the amount of bonds sold
at any given time will be determined by the District based on its needs for funds and other factors. The actual
interest rates at which the bonds will be sold will depend on the bond market at the time of each sale. Actual
future assessed valuation will depend upon the amount and value of taxable property within the District as
determined by the respective County Assessor in the annual property value assessment process.
Dated: _______, 2014.
_________________________
General Manager
Midpeninsula Regional Open Space District
MIDPENINSULA REGIONAL
OPEN SPACE DISTRICT
ANNUAL FINANCIAL AUDIT REPORT
JUNE 30, 2016
CHAVAN & ASSOCIATES, LLP
CERTIFIED PUBLIC ACCOUNTANTS
1475 SARATOGA AVE., SUITE 180
SAN JOSE, CA 95129
Midpeninsula Regional Open Space District
Santa Clara County
Table of Contents
TITLE PAGE
FINANCIAL SECTION:
Independent Auditor’s Report ..................................................................................................... 1 - 3
Management’s Discussion and Analysis ..................................................................................... 5 - 10
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position .............................................................................................. 12
Statement of Activities .................................................................................................. 13
Fund Financial Statements:
Balance Sheet – Governmental Funds ........................................................................... 14
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position ....................................................................................... 15
Statement of Revenues, Expenditures, and Changes
in Fund Balance – Governmental Funds ................................................................. 16
Reconciliation of Governmental Funds Statement of Revenues, Expenditures,
and Changes in Fund Balance to the Statement of Activities ................................. 17
Notes to the Basic Financial Statements ............................................................................... 18 - 47
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of Revenue, Expenditures and Changes in Fund Balance –
Budget and Actual (GAAP) General Fund ........................................................................... 49
Schedule of Revenue, Expenditures and Changes in Fund Balance –
Budget and Actual (GAAP) Capital Projects Fund .............................................................. 50
Schedule of Revenue, Expenditures and Changes in Fund Balance –
Budget and Actual (GAAP) Debt Service Fund ................................................................... 51
Schedule of Pension Plan Contributions ..................................................................................... 52
Schedule of Net Pension Liability Proportionate Shares ............................................................. 53
Schedule of Funding Progress – Other Postemployment Benefits .............................................. 54
SUPPLEMENTARY INFORMATION:
Measure AA Bond Program – Schedule of Program Expenditures ............................................. 56
Notes to Supplementary Information .......................................................................................... 57
OTHER INDEPENDENT AUDITOR’S REPORTS:
Independent Auditor’s 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 ......................................... 59 - 60
FINANCIAL
SECTION
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
INDEPENDENT AUDITOR’S REPORT
Board of Directors
Midpeninsula Regional Open Space District
Los Altos, California
Report on the Financial Statements
We have audited the accompanying financial statements of the Midpeninsula Regional Open Space
District (the District), as of and for the fifteen months ended June 30, 2016, and the related notes to
the financial statements, which collectively comprise the District’s basic financial statements as listed
in the table of contents.
Management’s Responsibility for the Financial Statements
The District’s management is responsible for the preparation and fair presentation of these financial
statements in accordance with accounting principles generally accepted in the United States of
America; this includes the design, implementation, and maintenance of internal control relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the District’s
preparation and fair presentation of the financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the District’s internal control. Accordingly, we express no such opinion. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinions.
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the District, as of June 30, 2016, and the respective changes in
financial position for the fifteen months then ended in accordance with accounting principles
generally accepted in the United States of America.
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
Emphasis of a Matter
New Accounting Pronouncements
As discussed in Note 1 to the financial statements, the District adopted the provisions GASB
Statement No. 72, Fair Value Measurement and Application, GASB Statement No. 79, Certain
External Investment Pools and Pool Participants, and GASB Statement No. 76, The Hierarchy of
Generally Accepted Accounting Principles for State and Local Governments, effective June 30, 2016.
Our opinion is not modified with respect to these matters.
Change in Reporting Period
In order to improve the transparency over reporting financial transactions and overall operations, the
District changed its reporting period from April 1st through March 31st to July 1st through June 30th.
The financial statements and the related note disclosures included in this report cover the fifteen
month period ended June 30, 2016. The most recently issued financial statements previous to this
covered the fiscal period ended March 31, 2015, thus information may not be comparable between the
financial statements and note disclosures included in each of these reports. Our opinion is not
modified with respect to this matter.
Basis of Presentation
As of June 30, 2016, the District created a capital projects fund in order to account for resources
restricted to capital outlay. To the establish the capital projects fund, the District recorded a prior
period adjustment of $5,248,837 to account for projects reported in the General Fund in prior periods
that were restricted under bond Measure AA. See page 16 to review the impact on the governmental
funds. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the
management’s discussion and analysis, budgetary comparison information, pension schedules and
other postemployment benefit information be presented to supplement the basic financial statements.
Such information, although not a part of the basic financial statements, is required by the
Governmental Accounting Standards Board who considers it to be an essential part of financial
reporting for placing the basic financial statements in an appropriate operational, economic, or
historical context. We have applied certain limited procedures to the required supplementary
information in accordance with auditing standards generally accepted in the United States of
America, which consisted of inquiries of management about the methods of preparing the information
and comparing the information for consistency with management’s responses to our inquiries, the
basic financial statements, and other knowledge we obtained during our audit of the basic financial
statements. We do not express an opinion or provide any assurance on the information because the
limited procedures do not provide us with sufficient evidence to express an opinion or provide any
assurance.
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that
collectively comprise the District’s basic financial statements. The supplementary information as
listed in the table of contents is presented for purposes of additional analysis and is not a required part
of the basic financial statements. This information is the responsibility of management and was
derived from, and relates directly to, the underlying accounting and other records used to prepare the
basic financial statements. Such information has been subjected to the auditing procedures applied in
the audit of the basic financial statements and certain additional procedures, including comparing and
reconciling such information directly to the underlying accounting and other records used to prepare
the basic financial statements or to the basic financial statements themselves, and other additional
procedures in accordance with auditing standards generally accepted in the United States of America.
In our opinion, the supplementary information as listed in the table of contents is fairly stated, in all
material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated September
10, 2016 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.
September 10, 2016
San Jose, California
Management’s Discussion and Analysis
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Period Ended June 30, 2016
INTRODUCTION
The purpose of the Management’s Discussion and Analysis (MD&A) is to present a discussion and analysis of the
District’s financial performance during the fifteen-month Period ended on June 30, 2016. In order to align with
best practices of public agencies, the District’s Board adopted Resolution 15-32 on July 22, 2015, changing the
District’s fiscal year end to June 30 from the prior March 31 and thereby extending the 2015-2016 fiscal year to
fifteen months. This report will (1) focus on significant financial issues, (2) provide an overview of the District’s
financial activity, (3) identify changes in the District’s financial position, (4) identify any individual fund issues or
concerns, and (5) provide descriptions of significant asset and debt activity. This information, presented in
conjunction with the annual Basic Financial Statements, is intended to provide a comprehensive understanding of
the District’s operations and financial standing.
Required Components of the Annual Financial Report
OVERVIEW AND USE OF THE FINANCIAL STATEMENTS
This annual report consists of a series of basic financial statements and notes. The statements are organized so the
reader can understand the District as an entire operating entity by providing an increasingly detailed look at
specific financial activities.
The Statement of Net Position and Statement of Activities is comprised of the government-wide financial
statements and provides information about the activities of the District as a whole, presenting both an aggregate
view of the District’s finances as well as a longer-term view of those finances. Fund Financial Statements provide
the next level of detail. For governmental funds, these statements reflect how services were financed in the short-
term as well as what remains for future spending. The Basic Financial Statements also include notes that explain
some of the information in the financial statements and provide more detailed data.
The full annual financial report is a product of three separate parts: the basic financial statements, supplementary
information, and this section, the Management’s Discussion and Analysis. The three sections together provide a
comprehensive financial overview of the District. The basic financials are comprised of two kinds of statements
that present financial information from different perspectives, government-wide and fund statements.
Government-wide financial statements, which comprise the first two statements, provide both short-term and
long-term information about the District’s overall financial position.
Individual parts of the District, which are reported as fund financial statements, focus on reporting the
District’s operations in more detail. These fund financial statements comprise the remaining statements.
Management’s
Discussion & Analysis
Government-Wide
Financial Statements
Fund
Financial Statements
Notes to the
Financial Statements
Basic
Financial Statements
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Period Ended June 30, 2016
Notes to the financial statements, provide more detailed data and provide explanations to some of the
information in the statements. The required supplementary information section provides further explanations
and additional support for the financial statements.
GOVERNMENT-WIDE FINANCIAL STATEMENTS - STATEMENT OF NET POSITION AND THE STATEMENT OF
ACTIVITIES
The view of the District as a whole looks at all financial transactions and asks the question, “How did we do
financially during the Period 2015 - 2016?” The Statement of Net Position and the Statement of Activities answers
this question. These statements include all assets and liabilities using the accrual basis of accounting similar to the
accounting practices used by most private-sector companies. This basis of accounting takes into account all of the
current year revenues and expenses regardless of when cash is received or paid.
These two statements report the District’s net position and changes in net position. This change in net position is
important because it tells the reader that, for the District as a whole, whether the financial position of the District
has improved or diminished. The causes of this change may be the result of many factors, some financial, and
some not. Non-financial factors include the District’s property tax base, current property tax laws in California
restricting revenue growth, facility conditions and other factors.
In the Statement of Net Position and the Statement of Activities, the District reports governmental activities which
reflect the District’s programs and services. The District does not have any business type activities.
FINANCIAL HIGHLIGHTS
Driven by the continue strong economy in Silicon Valley, District property tax revenues again increased above its
long-term trend line in the period 2016, growing by $9.9 million, or 28% over the prior year. District tax revenue
growth and other metrics will not be comparable to the prior year due to the fifteen-month period of the current
financial statements. The assessed valuation of secured and unsecured property within the District, as of June 30,
2016, increased by 10.1%. The District received 66% of its tax revenue from Santa Clara County and 34% from
San Mateo County.
The most significant financial events were:
The issuance of $45 million of Measure AA General Obligation (GO) bonds
Tax revenue related to the GO bonds amounted to $1.78 million
The District made a $3 million pre-payment to CalPERS towards the District’s unfunded pension
liability. The savings from this payment is projected to save the District $3.3 million spread over the next
20 years
Committed Reserves for Infrastructure were increased by an additional $15 million to better reflect the
District’s future facilities requirements in support of the implementation of Measure AA projects
Purchased $13 million of land and associated structures funded through Measure AA GO bond proceeds
District expenditures were within the annual budget. Excluding land acquisition and debt service, total District
spending was $28.47 million, which was $7.27 million, or 20%, below budget. As in most recent years, a large
majority of the budget variance was due to delays and deferrals of capital projects; the District spent 104% of its
budget for salaries and benefits (including the $3 million pre-payment to CalPERS), and 81% of the budget for
services and supplies.
The District’s net position increased by $0.3 million and included a reduction to beginning net position from the
implementation of GASB 68 of $11.8 million. GASB 68 required the District to record a net pension obligation
for its share of the CalPERS miscellaneous pension plan totaling $11.4 million. The actual change in net position
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Period Ended June 30, 2016
before this adjustment was $12.1 million for period 2016. The assets of the District exceeded liabilities at the close
of the 2016 period by $321.5 million. Of this total net position, $277.6 million, or 86%, was the District’s net
investment in capital assets (capital assets net of related debt).
REPORTING THE DISTRICT’S MOST SIGNIFICANT FUNDS
Fund Financial Statements
The analysis of the District’s fund financial statements begins on page 14. Fund financial reports provide detailed
information about the District’s major funds. The District uses one operating fund, the General Fund, to account
for a multitude of financial transactions and one debt service fund to account for debt service payments.
Governmental Funds
The General Fund is a governmental fund type and is reported using an accounting method called modified
accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The
governmental fund statements provide a detailed short-term view of the District’s general government operations
and the basic services it provides. Governmental fund information helps determine whether there are more or
fewer financial resources that can be spent in the future to finance educational programs. The relationship (or
differences) between governmental activities (reported in the Statement of Net position and the Statement of
Activities) and governmental funds is reconciled in the financial statements.
THE DISTRICT AS A WHOLE
Recall that the Statement of Net Position provides the perspective of the District as a whole. Table 1 provides a
summary of the District’s net position as compared to las period:
Percentage
2016 2015 Change Change
Assets
Current Assets 83,335,071$ 45,980,316$ 37,354,755$ 81.24%
Noncurrent Assets 430,311,829 413,584,109 16,727,720 4.04%
Total Assets 513,646,900$ 459,564,425$ 54,082,475$ 11.77%
Total Deferred Outflows of Resources 9,274,127$ 2,623,220$ 6,650,907$ 253.54%
Liabilities
Current Liabilities 4,496,132$ 2,962,155$ 1,533,977$ 51.79%
Noncurrent Liabilities 193,612,099 138,100,426 55,511,673 40.20%
Total Liabilities 198,108,231$ 141,062,581$ 57,045,650$ 40.44%
Total Deferred Inflows of Resources 3,352,133$ -$ 3,352,133$ 100.00%
Net Position
Net Investment in Capital Assets 277,624,874$ 278,611,038$ (986,164)$ -0.35%
Restricted 4,370,456 2,565,732 1,804,724 70.34%
Unrestricted 39,465,333 39,948,294 (482,961) -1.21%
Total Net Position 321,460,663$ 321,125,064$ 335,599$ 0.10%
Table 1 - Summary of Statement of Net Position
Total net position increased by $0.3 million, as revenues exceeded expenditures. Noncurrent assets increased due
to $16.7 million of capital expenditures. Total liabilities increased due to $45 million in proceeds from the
issuance of Measure AA general obligation bonds.
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Period Ended June 30, 2016
Table 2 shows the changes in net position for Period 2016 as compared to 2015.
Percentage
2016 2015 Change Change
Revenues
Program revenues 2,829,519$ 2,389,605$ 439,914$ 18.41%
General revenues:
Property taxes 44,980,497 35,081,540 9,898,957 28.22%
Investment earnings 647,839 201,813 446,026 221.01%
Miscellaneous 810,250 216,219 594,031 274.74%
Total Revenues 49,268,105 37,889,177 11,378,928 30.03%
Program Expenses
Land preservation 26,079,919 19,477,519 6,602,400 33.90%
Interest 9,751,674 7,202,178 2,549,496 35.40%
Depreciation 1,311,272 1,231,881 79,391 6.44%
Total Expenses 37,142,865 27,911,578 9,231,287 33.07%
Change in Net Position 12,125,240 9,977,599 2,147,641 21.52%
Adjustment to Beginning Net Position (11,789,641) - (11,789,641) 100.00%
Beginning Net Position 321,125,064 311,147,465 9,977,599 3.21%
Ending Net Position 321,460,663$ 321,125,064$ 335,599$ 0.10%
Table 2 - Summary of Changes in Net Position
Program revenues increased because the District received more grant income and charges for services in period
2016. In period 2015, the District received $1 million in capital grants versus $1.2 million in period 2016.
Property tax revenue increased by 28% due to growth in assessed valuation in both Santa Clara and San Mateo
portions of the District and the passing of Measure AA. Investment earnings increased due to higher cash
balances.
THE DISTRICT’S FUND BALANCE
Table 3 provides an analysis of the District’s fund balances and the total change in fund balances from the prior
year.
Capital Debt
General Projects Service Percentage
Fund Fund Fund Total 2015 Change Change
Restricted for debt service -$ -$ 3,116,266$ 3,116,266$ -$ 3,116,266$ 100%
Restricted for Hawthorne maintenance 1,971,040 - - 1,971,040 1,702,556 268,484 16%
Restricted for Measure AA Projects - 23,778,047 - 23,778,047 - 23,778,047 100%
Committed for infrastructure 30,000,000 - - 30,000,000 15,000,000 15,000,000 100%
Committed for equipment replacement 2,400,000 - - 2,400,000 2,400,000 - 0%
Committed for natural disasters 3,000,000 - - 3,000,000 3,000,000 - 0%
Assigned for infrastructure - - - - 3,000,000 (3,000,000) -100%
Unassigned 16,857,586 - - 16,857,586 21,329,605 (4,472,019) -21%
Total Fund Balance 54,228,626$ 23,778,047$ 3,116,266$ 81,122,939$ 46,432,161$ 34,690,778$ 75%
Table 3 - Summary of Fund Balance (All Governmental Funds)
2016
Following the completion of its new thirty-year strategic plan, the Board of Directors committed a majority of the
unassigned fund balance during period 2016 to reserves for infrastructure, equipment replacement and natural
disasters. See page 24 of the audit report for a description of each commitment.
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Period Ended June 30, 2016
GENERAL FUND BUDGETING HIGHLIGHTS
The District’s budget is prepared according to California law and in the modified accrual basis of accounting.
During the course of 2016, the District revised its General Fund budget, which resulted in an increase in total
budgeted expenditures of $7.665 million from the original to final budget. The primary driver behind this increase
was due to the extension of the 2015-2016 fiscal year to fifteen months. The final budgeted revenue estimate was
$47.8 million. The original budgeted estimate was $38.7 million. A summary of the original and final budget is
presented below:
Percent
Original Budget Final Budget Variance Variance
Revenues
Property taxes 36,305,000$ 45,430,000$ 9,125,000$ 25.13%
Grant revenues 451,000 451,000 - 0.00%
Property management 1,586,500 1,586,500 - 0.00%
Investment earnings 145,000 145,000 - 0.00%
Other revenues 175,000 175,000 - 0.00%
Total Revenues 38,662,500 47,787,500 9,125,000 23.60%
Expenditures
Salaries and employee benefits 15,393,844 21,281,262 5,887,418 27.66%
Services and supplies 5,789,463 7,567,138 1,777,675 23.49%
Capital outlay 1,012,000 1,012,000 - 0.00%
Total Expenses 22,195,307 29,860,400 7,665,093 25.67%
Excess of Revenues over Expenditures 16,467,193 17,927,100 1,459,907 8.87%
Transfers in (out)(12,145,558) (12,145,558) - 0.00%
Net Change in Fund Balance 4,321,635$ 5,781,542$ 1,459,907$ 33.78%
Table 4 - Summary of Original to Final Budgets
The budgetary comparison schedules following Note 10 of the footnotes shows how the District financial results
of period 2016, on a GAAP basis, compared to the original budget adopted in March 2015 and the final budget
amended in February 2016. Total revenue was $1.6 million, or 3.4%, under budget. Total expenditures were $7.3
million, or 20.4%, below budget, leaving an excess of revenue over expenditure of $17.7 million. Spending for
salaries, benefits, services and supplies was at 97.8% of budget as compared to 88.6% in the prior year.
CAPITAL ASSETS
Table 4 shows 2016 capital asset balances as compared to 2015.
Percentage
2016 2015 Change Change
Land 403,773,365$ 390,690,696$ 13,082,669$ 3.35%
Construction-in-Progress 7,223,594 3,250,593 3,973,001 122.22%
Structure and Improvements 7,115,767 7,188,257 (72,490) -1.01%
Infrastructure 7,551,992 7,700,415 (148,423) -1.93%
Equipment 945,829 910,497 35,332 3.88%
Vehicles 1,844,342 1,736,367 107,975 6.22%
Total Capital Assets - Net 428,454,889$ 411,476,825$ 16,978,064$ 4.13%
Table 5 - Summary of Capital Assets Net of Depreciation
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Period Ended June 30, 2016
LONG TERM LIABILITIES
Table 5 summarizes the changes in long-term liabilities over the past two reporting periods.
Percentage
2016 2015 Change Change
Promissory Notes 65,176,664$ 66,163,003$ (986,339)$ -1.49%
Bonds 115,198,421 70,400,744 44,797,677 63.63%
Net Pension Obliugation 11,420,125 - 11,420,125 100.00%
Compensated Absences 1,816,889 1,536,679 280,210 18.23%
Total Long-term Liabilities 193,612,099$ 138,100,426$ 55,511,673$ 40.20%
Table 6 - Summary of Long-term Liabilities
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The Board of Directors adopted the District’s budget for Period 2016-2017 on June 22, 2016. This budget
assumes $47.6 million in revenues and a growth in general fund property tax income of 7% over the prior period.
This budget funds $19.1 million of capital spending, of which $15.5 million is expected to qualify for
reimbursement from Measure AA GO bond funds. Operating expenditures and general fund debt service are
budgeted at $27.3 million and $11.1 million, respectively. If all revenues, expenditure (including debt service)
occur as budgeted, the District’s overall cash balances would increase by $6.1 million.
CONTACTING THE DISTRICT’S FINANCIAL MANAGEMENT
This financial report is designed to provide our citizens, taxpayers, parents, participants, investors and creditors
with a general overview of the District’s finances and to demonstrate the District’s accountability for the money it
receives. Questions concerning any of the information provided in this report or requests for additional financial
information should be addressed to the Administrative Office, Midpeninsula Regional Open Space District, 330
Distel Circle, Los Altos, California 94022.
Basic Financial Statements
Assets
Current assets:
Cash and investments 81,598,301$
Accounts receivable:
Deposits 1,537,825
Rent 3,506
Interest 168,025
Due from other governments:
Taxes receivable 11,792
Other current assets 15,622
Total current assets 83,335,071
Noncurrent assets:
Net OPEB asset 699,015
Notes receivable 151,425
Unamortized issuance costs 1,006,500
Non-depreciable capital assets 410,996,958
Capital assets, net of depreciation 17,457,931
Total noncurrent assets 430,311,829
Total Assets 513,646,900$
Deferred Outflows of Resources
Pension expense and contributions 6,990,099$
Deferred loss on early retirement of long-term debt 2,284,028
Total Deferred Outflows of Resources 9,274,127$
Liabilities
Current liabilities:
Accounts payable 1,137,971$
Deposits payable 98,770
Payroll and other liabilities 975,391
Accrued interest 2,284,000
Total current liabilities 4,496,132
Noncurrent liabilities:
Due within one year 5,465,679
Due after one year 188,146,420
Total noncurrent liabilities 193,612,099
Total Liabilities 198,108,231$
Deferred Inflows of Resources
Pension adjustments 3,352,133$
Net Position
Net investment in capital assets 276,394,511$
Restricted for:
Debt service 3,116,266
Hawthorne maintenance 1,971,040
OPEB 699,015
Total restricted 5,786,321
Unrestricted 39,279,831
Total Net Position 321,460,663$
Midpeninsula Regional Open Space District
Statement of Net Position
June 30, 2016
The notes to the financial statements are an integral part of this statement.
Net (Expense)
Capital Revenue and
Charges for Grants and Changes in
Expenses Services Contributions Net Position
Governmental activities:
Land preservation 26,079,919$ 1,635,889$ 1,193,630$ (23,250,400)$
Interest 9,751,674 - - (9,751,674)
Depreciation 1,311,272 - - (1,311,272)
Total governmental activities 37,142,865$ 1,635,889$ 1,193,630$ (34,313,346)
General revenues:
Property taxes 44,980,497
Investment earnings 647,839
Other revenues 743,607
Special items - loss on disposal of capital assets 66,643
Total general revenues and special items 46,438,586
Change in net position 12,125,240
Net position beginning 321,125,064
Prior period adjustment - GASB 68 pension adjustments (11,789,641)
Net position beginning as adjusted 309,335,423
Net position ending 321,460,663$
Midpeninsula Regional Open Space District
Statement of Activities
For the Fifteen Month Period Ended June 30, 2016
Program Revenues
The notes to the financial statements are an integral part of this statement.
Capital Debt Total
General Projects Service Governmental
Fund Fund Fund Funds
ASSETS
Cash and investments 54,151,757$ 24,330,278$ 3,116,266$ 81,598,301$
Receivables:
Deposits 1,537,825 - - 1,537,825
Rent 3,506 - - 3,506
Interest 168,025 - - 168,025
Due from other governments:
Taxes receivable 11,792 - - 11,792
Other current assets 15,622 - - 15,622
Due from other funds 65,011 19,016 - 84,027
Notes receivable 151,425 - - 151,425
Total Assets 56,104,963$ 24,349,294$ 3,116,266$ 83,570,523$
LIABILITIES
Liabilities:
Accounts payable 580,398$ 557,573$ -$ 1,137,971$
Deposits payable 98,770 - - 98,770
Due to other funds 70,353 13,674 - 84,027
Payroll and other liabilities 975,391 - - 975,391
Total Liabilities 1,724,912 571,247 - 2,296,159
DEFERRED INFLOWS OF RESOURCES
Unearned revenue 151,425 - - 151,425
FUND BALANCE
Restricted for:
Debt service - - 3,116,266 3,116,266
Measure AA capital projects - 23,778,047 - 23,778,047
Hawthorne maintenance 1,971,040 - - 1,971,040
Committed for:
Infrastructure 30,000,000 - - 30,000,000
Equipment replacement 2,400,000 - - 2,400,000
Natural disasters 3,000,000 - - 3,000,000
Unassigned 16,857,586 - - 16,857,586
Total Fund Balance 54,228,626 23,778,047 3,116,266 81,122,939
Total Liabilities and Fund Balance 56,104,963$ 24,349,294$ 3,116,266$ 83,570,523$
Balance Sheet
Midpeninsula Regional Open Space District
June 30, 2016
Governmental Funds
The notes to the financial statements are an integral part of this statement.
Total fund balance - governmental funds 81,122,939$
Amounts reported in the Statement of Net Position are different because:
Capital assets used in governmental activities are not financial resources and therefore are not
reported as assets in governmental funds.
Capital assets at cost 442,283,344$
Accumulated depreciation (13,828,455) 428,454,889
Principal on notes receivables are recorded as unearned revenue in the funds, which upon collection is a current
financial resource. In the government-wide financial statements, repayment of the principal amount
does not generate revenue in the statement of activities; therefore, unearned revenue is not recorded.151,425
Net OPEB assets are not available to pay for current period expenditures and, therefore, are not
recognized in the governmental funds statements.699,015
The difference between projected and actual earnings from pension plan assets is not included in the
plan's actuarial study until the next fiscal year and are reported as deferred inflows of
resources in the statement of net position.3,637,966
Interest payable on long-term debt does not require the use of current financial resources and, therefore,
is not reported in the governmental funds.(2,284,000)
Issuance costs, discounts and premiums related to bond issues are recorded as other financing
sources and uses in the fund financial statements but are recorded as assets or liabilities
and amortized over the life of the bond in the statement of net position:1,006,500
Deferred loss on early retirement of long-term debt is recorded in the Statement of Net Position as a deferred outflow
of resources and amortized on a straight line basis over the original life of the defeased bond.2,284,028
Long-term liabilities are not due and payable in the current period and therefore are not reported
as liabilities in the funds. Long-term liabilities at year-end consists of:
Bonds 115,198,421$
Net pension obligations 11,420,125
Promissory notes 65,176,664
Compensated absences 1,816,889 (193,612,099)
Total net position - governmental activities 321,460,663$
Midpeninsula Regional Open Space District
Balance Sheet to the Statement of Net Position
June 30, 2016
Reconciliation of the Governmental Funds
The notes to the financial statements are an integral part of this statement.
Capital Debt Total
General Projects Service Governmental
Fund Fund Fund Funds
Revenues:
Property taxes 43,203,891$ -$ 1,776,606$ 44,980,497$
Grant income 222,660 970,970 - 1,193,630
Property management 1,635,889 - - 1,635,889
Investment earnings 453,540 185,502 26,740 665,782
Other revenues 643,849 - - 643,849
Total revenues 46,159,829 1,156,472 1,803,346 49,119,647
Expenditures:
Current:
Salaries and employee benefits 22,077,184 412,718 - 22,489,902
Services and supplies 6,147,083 327,881 - 6,474,964
Capital outlay 242,376 18,658,484 - 18,900,860
Debt service:
Principal - - 4,366,938 4,366,938
Interest - - 6,477,830 6,477,830
Total expenditures 28,466,643 19,399,083 10,844,768 58,710,494
Excess (deficiency) of revenues
over (under) expenditures 17,693,186 (18,242,611) (9,041,422) (9,590,847)
Other financing sources (uses):
Transfers in - 2,269,495 9,876,063 12,145,558
Transfers out (12,145,558) - - (12,145,558)
Proceeds from bond issuances - 45,000,000 - 45,000,000
Premium from bond issuances - - 2,281,625 2,281,625
Total other financing sources (uses)(12,145,558) 47,269,495 12,157,688 47,281,625
Net changes in fund balance 5,547,628 29,026,884 3,116,266 37,690,778
Fund balance beginning 43,432,161 - - 43,432,161
Prior period adjustment - Capital Projects Fund 5,248,837 (5,248,837) - -
Fund balance beginning - as adjusted 48,680,998 (5,248,837) - 48,680,998
Fund balance ending 54,228,626$ 23,778,047$ 3,116,266$ 81,122,939$
Midpeninsula Regional Open Space District
Statement of Revenues, Expenditures and Changes in Fund Balance
Governmental Funds
For the Fifteen Month Period Ended June 30, 2016
The notes to the financial statements are an integral part of this statement.
Total net change in fund balance - governmental funds 37,690,778$
Capital outlays are reported in governmental funds as expenditures. However, in the Statement
of Activities, the cost of those assets is allocated over their estimated useful lives as
depreciation expense.
Expenditures capitalized as capital assets 18,222,696$
Depreciation expense (1,311,272) 16,911,424
Governmental funds do not report loss on disposal of capital assets. However, in the government-wide
statement of activities and changes in net position, the cost to dispose of capital assets, net any
proceeds, is accounted for as a special item. 66,643
Repayment of notes receivable is reported as revenue in the governmental funds because financial resources
were received and available during the fiscal year. In the statement of net position, the payment reduces
the principal balance of notes receivable and does not generate revenue in the statement of activities.(17,943)
Accreted interest on capital appreciation bonds is not recorded in the governmental funds but is
required to be recorded under the accrual basis of accounting in the government wide financial
statements.(1,064,650)
The governmental funds report debt proceeds as an other financing source, while repayment of debt
principal is reported as an expenditure. Interest is recognized as an expenditure in the governmental
funds when it is due. The net effect of these differences in the treatment of long-term debt and
related items is as follows:
Proceeds from the issuance of general obligation bonds (47,281,625)$
Repayment of bond principal 2,730,000
Repayment of promissory notes princpal 1,636,938 (42,914,687)
Deferred loss on early retirement of long-term debt is amortized over the life of the debt in the statement of activities.
Amortization expense is not reported in the governmental funds.(339,194)
Prepaid issuance costs, discounts and premiums related to bond issues are recorded as other financing
sources and uses in the fund financial statements but are recorded as assets or liabilities
and amortized over the life of the bond in the statement of net position:
Amortization of issuance costs and premiums - net 99,758
In the Statement of Activities, compensated absences are measured by the amount earned during the
year. In governmental funds, however, expenditures for those items are measured by the amount
of financial resources used (essentially the amounts paid). This year, vacation earned exceeded the
amounts used.(280,210)
In governmental funds, actual contributions to pension plans are reported as expenditures in the year incurred.
However, in the government-wide statement of activities, only the current year pension expense as noted in the
plans' valuation reports is reported as an expense, as adjusted for deferred inflows and outflows of resources.4,007,482
In the Statement of Activities, the net postemployment benefit asset is the amount by which the contributions
toward the OPEB plan were more than the annual required contribution as actuarially determined. The net
postemployment benefit is not recorded in the governmental fund statements. The change in the net
OPEB was recorded in the Statement of Activities in the amount of:(164,161)
Interest on long-term debt in the Statement of Activities differs from the amount reported in the governmental funds
because interest is recognized as an expenditure in the funds when it is due and thus requires the use of
current financial resources. In the Statement of Activities, however, interest expense is recognized as the interest
accrues, regardless of when it is due.(1,870,000)
Change in net position of governmental activities 12,125,240$
Midpeninsula Regional Open Space District
Statement of Revenues, Expenditures and Changes in Fund Balance
For the Fifteen Month Period Ended June 30, 2016
Reconciliation of the Governmental Funds
to the Statement of Activities
The notes to the financial statements are an integral part of this statement.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES
A. General
The Midpeninsula Regional Open Space District (the District) was formed in 1972 to acquire and
preserve public open space land in northern and western portions of Santa Clara County. In June
1976, the southern and eastern portions of San Mateo County were annexed to the District. The
District annexed a small portion of the northern tip of Santa Cruz County in 1992. In September
2004, the District completed the Coastside Protection Program, which extended the District
boundaries to the Pacific Ocean in San Mateo County, from the southern borders of Pacifica to
the San Mateo/Santa Cruz County line.
B. Accounting Principles
The accounting policies of the District conform to generally accepted accounting principles as
prescribed by the Governmental Accounting Standards Board (GASB) and the American Institute
of Certified Public Accountants (AICPA).
C. Reporting Entity
As required by generally accepted accounting principles, these basic financial statements present
the Midpeninsula Regional Open Space District and its component unit. The component unit
discussed in the following paragraph is included in the District's reporting entity because of the
significance of their operational or financial relationships with the District.
Blended Component Unit. The District and the County of Santa Clara entered into a joint
exercise of powers agreement dated May 1, 1996, creating the Midpeninsula Regional Open
Space District Financing Authority (the Authority), pursuant to the California Government Code.
The District is financially accountable for the Authority, as it appoints a voting majority of the
governing board; is able to impose its will in the Authority; and the Authority provides specific
financial benefits to, and imposes specific financial burdens on, the District. The Authority was
formed for the sole purpose of providing financing assistance to the District to fund the
acquisition of land to preserve and use as open space. As such, the Authority is an integral part of
the District, and accordingly, all of the Authority's activity is blended within the accompanying
debt service fund.
D. Reporting Period
In order to improve the transparency over reporting financial transactions and overall operations,
the District changed its reporting period from April 1st through March 31st to July 1st through
June 30th. The financial statements and the related note disclosures included in this report cover
the fifteen month period ended June 30, 2016. The most recently issued financial statements
previous to this covered the fiscal period ended March 31, 2015, thus information may not be
comparable between the financial statements and note disclosures included in each of these
reports.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
E. Basis of Presentation
Government-wide Financial Statements:
The government-wide financial statements (i.e., the Statement of Net Position and the Statement
of Activities) report information on all of the activities of the District. The Statement of Net
Position reports all assets, deferred outflows of resources, liabilities, deferred inflows of
resources, and net position.
The government-wide statements are prepared using the economic resources measurement focus.
This approach differs from the manner in which governmental fund financial statements are
prepared. Governmental fund financial statements, therefore, include the reconciliation with brief
explanations to better identify the relationship between the government wide statements and the
statements for the governmental funds.
The government-wide statement of activities presents a comparison between direct expenses and
program revenues for each function or program of the District’s governmental activities. Direct
expenses are those that are specifically associated with a service, program, or department and are
therefore clearly identifiable to a particular function. The District does not allocate indirect
expenses to functions in the statement of activities. Program revenues include charges paid by the
recipients of goods or services offered by a program, as well as grants and contributions that are
restricted to meeting the operational or capital requirements of a particular program. Revenues
that are not classified as program revenues are presented as general revenues of the District, with
certain exceptions. The comparison of direct expenses with program revenues identifies the
extent to which each governmental function is self-financing or draws from the general revenues
of the District.
Fund Financial Statements:
Fund financial statements report detailed information about the District. The accounting and
financial treatment applied to a fund is determined by its measurement focus. All governmental
funds are accounted for using a flow of current financial resources measurement focus. With this
measurement focus, only current assets, deferred outflows, current liabilities and deferred inflows
are generally included on the balance sheet. The Statement of Revenues, Expenditures, and
Changes in Fund Balance for these funds present increases (i.e., revenues and other financing
sources) and decreases (i.e., expenditures and other financing uses) in net current assets.
F. Basis of Accounting
Basis of accounting refers to when revenues and expenditures are recognized in the accounts and
reported in the financial statements. Government-wide financial statements are prepared using
the accrual basis of accounting. Governmental funds use the modified accrual basis of
accounting.
Revenues - Exchange and Non-exchange Transactions:
Revenue resulting from exchange transactions, in which each party gives and receives essentially
equal value, is recorded under the accrual basis when the exchange takes place. On a modified
accrual basis, revenue is recorded in the fiscal period in which the resources are measurable and
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
become available. “Available” means the resources will be collected within the current fiscal
period or are expected to be collected soon enough thereafter to be used to pay liabilities of the
current fiscal period. For the District, “available” means collectible within the current period or
within 90 days after period-end.
Non-exchange transactions, in which the District receives value without directly giving equal
value in return, include property taxes, grants, and entitlements. Under the accrual basis, revenue
from property taxes is recognized in the fiscal period for which the taxes are levied. Revenue
from grants and entitlements is recognized in the fiscal period in which all eligibility
requirements have been satisfied. Eligibility requirements include timing requirements, which
specify the period when the resources are to be used or the fiscal period when use is first
permitted; matching requirements, in which the District must provide local resources to be used
for a specific purpose; and expenditure requirements, in which the resources are provided to the
District on a reimbursement basis. Under the modified accrual basis, revenue from non-exchange
transactions must also be available before it can be recognized.
Deferred Outflows/Deferred Inflows:
A deferred outflow of resources is a consumption of net assets by the government that is
applicable to a future reporting period, for example; prepaid items and deferred charges.
A deferred inflow of resources is an acquisition of net assets by the government that is applicable
to a future reporting period, for example; unearned revenue and advance collections.
Unearned Revenue:
Unearned revenue arises when assets are received before revenue recognition criteria have been
satisfied. Grants and entitlements received before eligibility requirements are met are recorded as
deferred inflows from unearned revenue. In the governmental fund financial statements,
receivables associated with non-exchange transactions that will not be collected within the
availability period have been recorded as deferred inflows from unearned revenue.
Expenses/Expenditures:
On the accrual basis of accounting, expenses are recognized at the time a liability is incurred. On
the modified accrual basis of accounting, expenditures are generally recognized in the accounting
period in which the related fund liability is incurred, as under the accrual basis of accounting.
However, under the modified accrual basis of accounting, debt service expenditures, as well as
expenditures related to compensated absences and claims and judgments, are recorded only when
payment is due. Allocations of cost, such as depreciation and amortization, are not recognized in
the governmental funds. When both restricted and unrestricted resources are available for use, it
is the District’s policy to use restricted resources first, then unrestricted resources as they are
needed.
G. Fund Accounting
The accounts of the District are organized into two funds with a separate set of self-balancing
accounts that comprise of the District’s assets, deferred outflows, liabilities, deferred inflows,
fund balance, revenues, and expenditures.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Major funds are defined as funds that have either assets, liabilities, revenues or
expenditures/expenses equal to ten percent of their fund-type total and five percent of the grand
total. The General Fund is always a major fund. The District may also select other funds it
believes should be presented as major funds.
The District reported all of its funds as major governmental funds in the accompanying financial
statements:
General Fund. The General Fund is the general operating fund of the District. It is used to
account for all financial resources. The major revenue sources for this fund are property taxes,
grant revenues and interest income. Expenditures are made for land preservation and other
operating expenditures.
Capital Projects Fund. The Capital Projects Fund is used to account for resources from bond
proceeds and other related resources that are restricted, committed, or assigned to expenditures
for capital outlays, including the acquisition or construction of land, land improvements,
structures, capital facilities and other capital assets in the governmental funds.
Debt Service Fund. The Debt Service Fund is used to account for accumulation of resources for,
and the payment of long-term debt principal, interest and related costs. Resources are provided
by General Fund transfers and interest income on unspent funds.
H. Budgets and Budgetary Accounting
The District's Board of Directors adopts an annual operating budget for the District as a whole,
which includes both its General and Debt Service Funds on or before June 30, for the ensuing
fiscal period. The Board of Directors may amend the budget by resolution during the fiscal
period. The legal level of control, the level at which expenditures may not legally exceed the
budget, is at the category level.
I. Assets, Liabilities, and Equity
1. Cash and Cash Equivalents
The Entity’s cash deposits are considered to be cash on hand and cash in banks. Cash and
Cash Equivalents are generally considered short-term, highly liquid investments with a
maturity of three months or less from the purchase date.
2. Investments
Investments are recorded at fair value in accordance with GASB Statement No. 72, Fair
Value Measurement and Application. Accordingly, the change in fair value of investments
is recognized as an increase or decrease to investment assets and investment income. This
statement changed the definition of fair value and is effective for periods beginning after
June 15, 2015.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
The following is a summary of the definition of fair value:
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction. In determining this amount, three valuation techniques are
available:
Market approach - This approach uses prices generated for identical or similar assets
or liabilities. The most common example is an investment in a public security traded
in an active exchange such as the NYSE.
Cost approach - This technique determines the amount required to replace the current
asset. This approach may be ideal for valuing donations of capital assets or historical
treasures.
Income approach - This approach converts future amounts (such as cash flows) into a
current discounted amount.
Each of these valuation techniques requires inputs to calculate a fair value. Observable
inputs have been maximized in fair value measures, and unobservable inputs have been
minimized.
3. Prepaid Expenditures
The District has the option of reporting expenditures in governmental funds for prepaid items
either when purchased or during the benefiting period. The District has chosen to report the
expenditure during the benefiting period.
4. Capital Assets
Capital assets, which include land, buildings and improvements, furniture, equipment, and
construction in progress, are reported in the government-wide financial statements. Such
assets are valued at historical cost or estimated historical cost unless obtained by annexation or
donation, in which case they are recorded at estimated market value at the date of receipt. The
District utilizes a capitalization threshold of $1 for land, $25,000 for equipment, fixtures and
vehicles, $50,000 for infrastructure, improvements, buildings and structures.
Projects under construction are recorded at cost as construction in progress and transferred to
the appropriate asset account when substantially complete. Costs of major improvements
and rehabilitation of buildings are capitalized. Repair and maintenance costs are charged to
expense when incurred. Equipment disposed of, or no longer required for its existing use, is
removed from the records at actual or estimated historical cost, net of accumulated
depreciation.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
All capital assets, except land and construction in progress, are depreciated using the straight-
line method over the following estimated useful lives:
Assets Years
Structures/Improvements 50
Public Access Infrastructure 20 - 50
Equipment/Fixtures 5 - 20
Vehicles 5
Software 5 - 10
5. Compensated Absences
In accordance with the District's memorandum of understanding with various employee
groups, employees accrue fifteen days of vacation during the first nine years of service,
twenty days between service years 10 and fourteen, twenty-one days between service years
fifteen and nineteen, twenty-three days between service years twenty and twenty-four, and
twenty-five days after twenty-five years of service. An employee may accumulate vacation
time earned to a maximum of two times the amount of his/her annual vacation accrual.
Full-time employees accrue twelve days of sick leave: annually from the date of employment.
An employee may accumulate sick leave time earned on an unlimited basis. Upon
resignation, separation from service, or retirement from District employment, workers in
good standing with ten or more years of District employment shall receive a cash payment of
the equivalent cash value of accrued sick leave as follows:
Percentage of equivalent
cash value of accrued
Years of Employment sick leave
15-20 20%
16-20 25%
21 or more 30%
An employee hired before August 9, 2006, who retires from the District shall receive a cash
payment of the percentage of equivalent cash value or accrued sick leave based on years of
employment as described above, and apply the remainder of the equivalent cash value toward
his/her cost of retiree medical plan premiums and/or other qualified medical expenses. Upon
retirement, the amount qualified and designated for retiree medical costs shall be deposited in
the Retiree Health Savings (RHS) plan, set up by the District. The cost for maintaining the
retiree's RHS account and the annual fee for the reimbursement process of qualified medical
expenses will be paid for by the retiree.
An employee hired on or after August 9, 2006, who retires from the District may elect to
receive only a cash payment of the percentage of equivalent cash value of accrued sick leave
based on years of employment as described above.
In all cases the equivalent cash value of accrued sick leave will be based on current rate of
pay as of the date of separation from District employment.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
The District accrues for all salary-related items in the government-wide statements for which
they are liable to make a payment directly and incrementally associated with payments made
for compensated absences on termination.
6. Long-Term/Noncurrent Obligations
In the government-wide financial statements, long-term debt and other long-term obligations
are reported as liabilities in the Statement of Net Position.
7. Debt Discount and Issuance Costs
Debt discounts, premiums, and prepaid issuance costs are capitalized as an offset to long-
term debt and amortized using the straight line method over the life of the related debt.
Issuance costs for the District's tax-exempt commercial paper short-term borrowings are
expensed as incurred.
8. Fund Balance Classifications
In accordance with Government Accounting Standards Board 54, Fund Balance Reporting
and Governmental Fund Type Definitions, the District classifies governmental fund balances
as follows:
Nonspendable fund balance includes amounts that cannot be spent either because it is not
in spendable form or because of legal or contractual constraints.
Restricted fund balance includes amounts that are constrained for specific purposes
which are externally imposed by providers, such as creditors or amounts constrained due
to constitutional provisions or enabling legislation.
Committed fund balances includes amounts that are constrained for specific purposes that
are internally imposed by the government through formal action of the highest level of
decision making authority and does not lapse at period-end. Committed fund balances
were imposed by the District’s board of directors as follows:
o Infrastructure: $30 million; projected minimum requirement for expansion of field
and office facilities over the next five years.
o Equipment Replacement: $2.4 million; projected requirement for equipment and
vehicle replacement based on the amount of accumulated depreciation recorded on
capital assets in service.
o Natural Disasters: $3.0 million; projected emergency expenditures required to
respond quickly to a major fire, earthquake or flood.
Assigned fund balance includes amounts that are intended to be used for specific
purposes that are neither considered restricted or committed. Fund balance may be
assigned by the General Manager.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Unassigned fund balance includes positive amounts within the general fund which has
not been classified within the above mentioned categories and negative fund balances in
other governmental funds.
The District uses restricted/committed amounts to be spent first when both restricted and
unrestricted fund balance is available unless there are legal documents/contracts that prohibit
doing this, such as a grant agreement requiring dollar for dollar spending. Additionally, the
District would first use committed, then assigned, and lastly unassigned amounts of
unrestricted fund balance when expenditures are made.
9. Net Position
Net position represents the difference between assets, deferred outflows of resources,
liabilities and deferred inflows of resources. Net investment in capital assets consists of
capital assets, net of accumulated depreciation, reduced by the outstanding balances of any
borrowings used for the acquisition, construction or improvement of those assets. In
addition, deferred outflows of resources and deferred inflows of resources that are
attributable to the acquisition, construction, or improvement of those assets or related debt
also are included in the net investment in capital assets component of net position. Net
position is reported as restricted when there are limitations imposed on its use either through
the enabling legislation adopted by the District or through external restrictions imposed by
creditors, grantors, laws or regulations of other governments. The District applies restricted
resources when an expense is incurred for purposes for which both restricted and unrestricted
net position is available.
Unrestricted net position reflect amounts that are not subject to any donor-imposed
restrictions. This class also includes restricted contributions whose donor-imposed
restrictions were met during the fiscal period. A deficit unrestricted net position may result
when significant cash balances restricted for capital projects exist. Once the projects are
completed, the restriction on these assets are released and converted to capital assets.
10. Property Taxes
The District receives property tax revenue from Santa Clara and San Mateo Counties (the
Counties). The Counties are responsible for assessing, collecting and distributing property
taxes in accordance with state law. Secured property taxes are recorded as revenue when
apportioned, in the fiscal period of the levy. The counties apportion secured property tax
revenue in accordance with the alternate method of distribution prescribed by Section 4705
of the California Revenue and Taxation Code. This alternate method provides for crediting
each applicable fund with its total secured taxes upon completion of the secured tax roll -
approximately October 1 of each year. Taxes are levied annually on July 1st, and one-half are
due by November 1st and one-half by February 1st. Taxes are delinquent after December
10th and April 10th, respectively. Supplemental property taxes are levied on a pro-rata basis
when changes in assessed valuation occur due to the completion of construction or sales
transactions. Liens on real property are established on January 15th for the ensuing fiscal
period.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
On June 30, 1993, the Board of Supervisors adopted the "Teeter" method of property tax
allocation. This method allocates property taxes based on the total property tax billed. At
year-end, the County advances cash to each taxing jurisdiction equal to its current year
delinquent taxes. Once the delinquent taxes are collected, the revenue from penalties and
interest remains with the County and is used to pay the interest cost of borrowing the cash
used for the advances.
11. Accounting Estimates
The presentation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and
assumptions that affect the reported amounts reported in the financial statements and
accompanying notes. Actual results may differ from those estimates.
J. Implemented New Accounting Pronouncements
GASB Statement No. 72, Fair Value Measurement and Application
In February 2015, GASB issued Statement No. 72, Fair Value Measurement and Application.
The provisions of GASB Statement No. 72 (GASB 72) are effective for reporting periods
beginning after June 15, 2015. Earlier application is encouraged.
GASB 72 provides guidance for applying fair value to certain investments and disclosures related
to all fair value measurements. The statement generally requires state and local governments to
measure investments at fair value. The statement defines an investment as a security or other
asset that (a) a government holds primarily for the purpose of income or profit and (b) has a
present service capacity based solely on its ability to generate cash or to be sold to generate cash.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between participants at the measurement date.
The statement requires that acquisition value (an entry price) be used to measure the following
assets:
a. donated capital assets;
b. donated works of art, historical treasures, and other similar assets; and
c. capital assets received in a service concession arrangement. These assets were previously
required to be measured at fair value.
GASB 72 requires that sound and consistent valuation techniques be used to determine fair value.
The valuation techniques should maximize the use of relevant observable inputs and minimize
the use of unobservable inputs. The valuation technique used should be consistent with one or
more of three approaches that are appropriate in the circumstances: the market approach, cost
approach, and income approach. Valuation techniques should be applied consistently from period
to period. A change in valuation technique or its application is appropriate if it achieves a
measurement that is equally or more representative of an asset’s fair value under the
circumstances.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Inputs to valuation techniques used to measure fair value are categorized into three levels as
noted in the investments disclosure section.
The implementation of GASB 72 did not have a significant impact on the District’s financial
statements and did not result in any prior period restatements or adjustments.
GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for
State and Local Governments
The purpose of GASB Statement No. 76 (GASB 76) is to identify the sources of accounting
principles used to prepare financial statements of state and local governmental entities in
conformity with GAAP and the framework for selecting those principles. GASB Statement No.
76 supersedes GASB Statement No. 55, The Hierarchy of Generally Accepted Accounting
Principles for State and Local Governments.
GASB 76 reduces the authoritative sources of GAAP from four categories to two. According to
the statement, "The sources of authoritative GAAP are categorized in descending order of
authority as follows:
a. Officially established accounting principles—Governmental Accounting Standards Board
(GASB) Statements (Category A).
b. GASB Technical Bulletins; GASB Implementation Guides; and literature of the AICPA
cleared by the GASB (Category B)."
Sources of nonauthoritative accounting literature are identified in paragraph 7 of GASB 76, and
includes GASB Concepts Statements.
The implementation of GASB 76 did not have a significant impact on the District’s financial
statements and did not result in any prior period restatements or adjustments.
GASB Statement No. 79, Certain External Investment Pools and Pool Participants
GASB 79 addresses accounting and financial reporting for certain external investment pools and
pool participants. Specifically, it establishes criteria for an external investment pool to qualify for
making the election to measure all of its investments at amortized cost for financial reporting
purposes. An external investment pool qualifies for that reporting if it meets all of the applicable
criteria established in GASB 79. The specific criteria address (1) how the external investment
pool transacts with participants; (2) requirements for portfolio maturity, quality, diversification,
and liquidity; and (3) calculation and requirements of a shadow price. Significant noncompliance
prevents the external investment pool from measuring all of its investments at amortized cost for
financial reporting purposes. Professional judgment is required to determine if instances of
noncompliance with the criteria established by this Statement during the reporting period,
individually or in the aggregate, were significant.
If an external investment pool does not meet the criteria established by this Statement, that pool
should apply the provisions in paragraph 16 of Statement No. 31, Accounting and Financial
Reporting for Certain Investments and for External Investment Pools, as amended. If an external
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
investment pool meets the criteria in GASB 79 and measures all of its investments at amortized
cost, the pool’s participants also should measure their investments in that external investment
pool at amortized cost for financial reporting purposes. If an external investment pool does not
meet the criteria in GASB 79, the pool’s participants should measure their investments in that
pool at fair value, as provided in paragraph 11 of Statement 31, as amended.
GASB 79 establishes additional note disclosure requirements for qualifying external investment
pools that measure all of their investments at amortized cost for financial reporting purposes and
for governments that participate in those pools. Those disclosures for both the qualifying external
investment pools and their participants include information about any limitations or restrictions
on participant withdrawals.
The requirements of GASB 79 are effective for reporting periods beginning after June 15, 2015,
except for certain provisions on portfolio quality, custodial credit risk, and shadow pricing. Those
provisions are effective for reporting periods beginning after December 15, 2015. Earlier
application is encouraged. The implementation of GASB 79 did not have a significant impact on
the District’s financial statements and did not result in any prior period restatements or
adjustments.
K. Upcoming Accounting and Reporting Changes
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than
Pension Plans.
The provisions in Statement 74 are effective for fiscal years beginning after June 15, 2016. The
objective of this Statement is to improve the usefulness of information about postemployment
benefits other than pensions (other postemployment benefits or OPEB) included in the general
purpose external financial reports of state and local governmental OPEB plans for making
decisions and assessing accountability. This Statement replaces Statements No. 43, Financial
Reporting for Postemployment Benefit Plans Other Than Pension Plans, as amended, and No.
57, OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans. It also
includes requirements for defined contribution OPEB plans that replace the requirements for
those OPEB plans in Statement No. 25, Financial Reporting for Defined Benefit Pension Plans
and Note Disclosures for Defined Contribution Plans, as amended, Statement 43, and Statement
No. 50, Pension Disclosures. The scope of this Statement includes OPEB plans—defined benefit
and defined contribution—administered through trusts that meet the following criteria:
Contributions from employers and nonemployer contributing entities to the OPEB plan
and earnings on those contributions are irrevocable.
OPEB plan assets are dedicated to providing OPEB to plan members in accordance with
the benefit terms.
OPEB plan assets are legally protected from the creditors of employers, nonemployer
contributing entities, and the OPEB plan administrator. If the plan is a defined benefit
OPEB plan, plan assets also are legally protected from creditors of the plan members.
Management anticipates that this statement will not have a direct impact on the District’s
financial statements.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits
Other Than Pensions.
The provisions in Statement 75 are effective for fiscal years beginning after June 15, 2017. The
primary objective of this Statement is to improve accounting and financial reporting by state and
local governments for postemployment benefits other than pensions (other postemployment
benefits or OPEB). It also improves information provided by state and local governmental
employers about financial support for OPEB that is provided by other entities. This Statement
replaces the requirements of Statements No. 45, Accounting and Financial Reporting by
Employers for Postemployment Benefits Other Than Pensions, as amended, and No. 57, OPEB
Measurements by Agent Employers and Agent Multiple-Employer Plans, for OPEB. Statement
No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pension Plans,
establishes new accounting and financial reporting requirements for OPEB plans.
The scope of this Statement addresses accounting and financial reporting for OPEB that is
provided to the employees of state and local governmental employers. This Statement establishes
standards for recognizing and measuring liabilities, deferred outflows of resources, deferred
inflows of resources, and expense/expenditures. For defined benefit OPEB, this Statement
identifies the methods and assumptions that are required to be used to project benefit payments,
discount projected benefit payments to their actuarial present value, and attribute that present
value to periods of employee service. Note disclosure and required supplementary information
requirements about defined benefit OPEB also are addressed.
In addition, this Statement details the recognition and disclosure requirements for employers with
payables to defined benefit OPEB plans that are administered through trusts that meet the
specified criteria and for employers whose employees are provided with defined contribution
OPEB. This Statement also addresses certain circumstances in which a nonemployer District
provides financial support for OPEB of employees of another District.
In this Statement, distinctions are made regarding the particular requirements depending upon
whether the OPEB plans through which the benefits are provided are administered through trusts
that meet the following criteria:
Contributions from employers and nonemployer contributing entities to the OPEB plan
and earnings on those contributions are irrevocable.
OPEB plan assets are dedicated to providing OPEB to plan members in accordance with
the benefit terms.
OPEB plan assets are legally protected from the creditors of employers, nonemployer
contributing entities, the OPEB plan administrator, and the plan members.
The District is in the process of determining the impact this statement will have on the financial
statements.
GASB Statement No. 77, Tax Abatement Disclosures
GASB Statement No. 77, Tax Abatement Disclosures, addresses financial reporting about the
nature and magnitude of tax abatements of governmental entities. The statement requires that
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
governments that enter into tax abatements disclose more comprehensive information about the
agreements, including the following:
a. Brief descriptive information including what tax is being abated, the authority under
which the abatement is provided, and the eligibility criteria
b. The gross dollar amount of taxes abated during the period
c. Other commitments made by a government as part of the agreement
The complete disclosure requirements are provided in paragraphs 7 and 8 of GASB 77
GASB 77 is effective for periods beginning after December 15, 2015.
The District does not anticipate a material impact on its financial statements from the
implementation of this standard.
GASB Statement No. 78, Pensions Provided through Certain Multiple-Employer Defined
Benefit Pension Plans
The objective of this Statement is to address a practice issue regarding the scope and applicability
of GASB Statement No. 68, Accounting and Financial Reporting for Pensions. This issue is
associated with pensions provided through certain multiple-employer defined benefit pension
plans and to state or local governmental employers whose employees are provided with such
pensions.
Prior to the issuance of this GASB 78, the requirements of GASB 68 applied to the financial
statements of all state and local governmental employers whose employees are provided with
pensions through pension plans that are administered through trusts that meet the criteria in
paragraph 4 of that statement.
GASB 78 amends the scope and applicability of GASB 68 to exclude pensions provided to
employees of state or local governmental employers through a cost-sharing multiple-employer
defined benefit pension plan that (1) is not a state or local governmental pension plan, (2) is used
to provide defined benefit pensions both to employees of state or local governmental employers
and to employees of employers that are not state or local governmental employers, and (3) has no
predominant state or local governmental employer (either individually or collectively with other
state or local governmental employers that provide pensions through the pension plan). This
Statement establishes requirements for recognition and measurement of pension expense,
expenditures, and liabilities; note disclosures; and required supplementary information for
pensions that have the characteristics described above.
The requirements of this Statement are effective for reporting periods beginning after December
15, 2015. Earlier application is encouraged.
The District does not anticipate a material impact on its financial statements from the
implementation of this standard.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
NOTE 2 - CASH AND INVESTMENTS
Summary of Cash and Investments
The following summarizes deposits as of June 30, 2016:
Cash and
Cash Equivalents
Available
Cash and Investments for Operations Restricted Total
Cash Deposits:
Cash in Banks 54,545$ 1,531,668$ 1,586,213$
Petty Cash 1,500 - 1,500
Total Cash Deposits 56,045 1,531,668 1,587,713
Investments:
California Local Agency Investment Fund 358,217 - 358,217
Brokerage Accounts/Cash with Fiscal Agents 14,430,230 25,845,177 40,275,407
Santa Clara County Pool 37,775,597 1,415,865 39,191,462
Total Investments 52,564,044 27,261,042 79,825,086
Total Cash and Investments 52,620,089$ 28,792,710$ 81,412,799$
Cash in Banks
Cash balances in banks are insured up to $250,000 per insured bank by the Federal Deposit Insurance
Corporation ("FDIC"). The District’s accounts are held with various banks. As of June 30, 2016, the
District’s bank balances exceeded FDIC coverage by $1,504,987.
Fair Value Measurements
GASB 72 established a hierarchy of inputs to the valuation techniques above. This hierarchy has three
levels:
Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
Level 2 inputs are quoted market prices for similar assets or liabilities, quoted prices for identical
or similar assets or liabilities in markets that are not active, or other than quoted prices that are
not observable
Level 3 inputs are unobservable inputs, such as a property valuation or an appraisal.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
The Entity has the following investments with recurring fair value measurements as of June 30, 2016:
12 Months 13 - 24 25 - 60 More Than
Rating Fair Value or Less Months Months 60 Months
Money Market Accounts n/a 100,670$ n/a 100,670$ -$ -$ -$ 0.13%
Mutual Funds n/a 141,392 Level 2 141,392 - - - 0.18%
Municipal Bonds AA-/A+ 3,503,232 Level 2 300,375 361,116 2,841,741 - 4.37%
Corp/Gov Bonds A-/A+ 28,278,960 Level 1 5,078,523 17,946,649 5,253,788 - 35.32%
LAIF n/a 358,439 Level 2 358,439 - - - 0.45%
Santa Clara County Pool n/a 39,191,462 Level 2 21,676,389 8,016,009 9,499,064 - 48.94%
U.S. Obligations AAA 8,501,322 Level 1 5,616,465 2,884,857 - - 10.62%
Total Investments 80,075,477$ 33,272,253$ 29,208,631$ 17,594,593$ -$ 100.00%
Input
Level
Maturities
Concen-
trationsInvestment Type
Cash in Santa Clara County Treasury
Santa Clara County is a fiscal agent of the District. The fair value of the District's investment in the
county pool is reported at amounts based on the District's pro-rata share of the fair value provided by the
County Treasurer for the entire portfolio (in relation to the amortized cost of the portfolio). The balance
available for withdrawal is based on the accounting records maintained by the County Treasurer, which is
recorded on the amortized costs basis. Santa Clara County investment pool funds were available for
withdrawal on demand and had an average maturity date of less than one year.
All cash and investments are stated at fair value. Pooled investment earnings are allocated monthly based
on the average cash and investment balances of the various funds of the County.
California Local Agency Investment Fund
The District is a participant in the Local Agency investment Fund (LAIF) that is regulated by California
Government Code Section 16429 under the oversight of the Treasurer of the State of California. The
District reports its investment in LAIF at the fair value amount provided by LAIF, which is the same as
the value of the pool share. The balance is available for withdrawal on demand, and is based on the
accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in
LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other
asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies,
government-sponsored enterprises, United States Treasury Notes and Bills, and corporations. At June 30,
2016, these investments had an average maturity date of less than one year.
Investments Authorized by Debt Agreements
The District must maintain required amounts of cash and investments with trustees or fiscal agents under
the terms of certain debt issues. These funds are used if the District fails to meet its obligations under
these debt issues.
Restricted for Debt Service
As of June 30, 2016, the District had $1,700,401 held by Zions bank as trustee, pledged to the payment or
security of its outstanding bond issues. The District also had money held by the Bank of New York during
the period (zero balance at period-end) which was pledged to the payment or security of its outstanding
bonds. All transactions associated with debt service were administered by the Bank.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Cash Restricted for Hawthorne Property Maintenance
On November 10, 2011, the District received the gift of the 79 acre Hawthorne property, in Portola
Valley, California, and an endowment of $2,018,445 to manage the property in perpetuity. The cash
balance restricted for this purpose at June 30, 2016 was $1,531,668.
Policies and Practices
The District's Investment Policy and the California Government Code allow the District to invest in the
following, provided the credit ratings of the issuers are acceptable to the District and approved
percentages and maturities are not exceeded. The table below also identifies certain provisions of the
California Government Code or the District's Investment Policy where it is more restrictive:
Authorized Investment Type
Maximum
Remaining
Maturity
Maximum Percentage of
Portfolio
Maximum
Investment
in one Issuer
Medium Term Notes 5 years 30% No Limit
Money Market and Mutual Funds N/A 20% 10%
U.S. Treasury Obligations 5 years No Limit No Limit
Federal Agency Securities 5 years No Limit No Limit
Banker's Acceptance 180 days 40% 30%
Commercial Paper 270 days 25% 10%
Negotiable Certificates of Deposit 5 years 30% No Limit
Repurchase Agreements 1 year No Limit No Limit
Reverse Repurchase Agreements 92 days 20% No Limit
Local Agency Investment Fund (LAIF) N/A $40 million per account No Limit
a) Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of
an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its
fair value to the changes in market interest rates. The District manages its exposure to interest rate
risk by investing in the Santa Clara County investment pool and LAIF, which had fair values of
approximately $6.3 billion and $75.4 billion, respectively as of June 30, 2016, and diversifying its
investments, as noted above, through the utilization of brokers.
b) Credit Risk
Credit risk is the risk of loss due to the failure of the security issuer. This is measured by the
assignment of a rating by a nationally recognized statistical rating organization. The investment with
the County’s investment pool is governed by the County’s general investment policy. The County’s
investments in 2016 included U.S. government securities or obligations explicitly guaranteed by the
U.S. government that are not considered to have credit risk exposure. See the schedule above for a
summary of the District’s ratings by investment type.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
c) Custodial Credit Risk – Deposits
Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be
returned to it. The District does not have a policy for custodial credit risk for deposits. However, the
California Government code requires that a financial institution secure deposits made by State or
local governmental units by pledging securities in an undivided collateral pool held by a depository
regulated under State law (unless so waived by the governmental unit). The market value of the
pledged securities in the collateral pool must equal at least 110 percent of the total amount deposited
by the public agencies. California law also allows financial institutions to secure public deposits by
pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits
and letters of credit issued by the Federal Home Loan Bank of San Francisco having a value of 105
percent of the secured deposits.
d) Concentration of Credit Risk
The District was not exposed to concentration of credit risk because it had no investments in any one
issuer that exceeded 5% of its total investment portfolio.
NOTE 3 - NOTES RECEIVABLE
On December 17, 1997, the District sold the title to and possession of a 50-year fee determinable estate
10-acre parcel near the Skyline Ridge Open Space Preserve. The District financed the purchase in the
amount of $288,800 over 25 years at a rate of 10% per annum. Monthly principal and interest payments
of $2,634 are due on the 1st of each month and late if not paid by the 10th, with the final payment
scheduled December 1, 2022. The outstanding balance at June 30, 2016 was $151,425.
NOTE 4 - CAPITAL ASSETS AND DEPRECIATION
Capital asset activity for the period ended June 30, 2016 is shown below:
Balance Deletions/ Balance
Capital Assets March 31, 2015 Additions Adjustments June 30, 2016
Non-depreciable:
Land 390,690,696$ 13,082,669$ -$ 403,773,365$
Construction in Progress 3,250,593 4,241,773 (268,773) 7,223,593
Total Non-Depreciable 393,941,289 17,324,443 (268,773) 410,996,959
Depreciable:
Structure and Improvements 15,319,717 285,000 - 15,604,717
Infrastructure 9,716,248 266,552 (1,000) 9,981,800
Equipment 1,843,504 150,311 - 1,993,815
Vehicles 3,414,658 465,163 (173,768) 3,706,053
Total Depreciable 30,294,127 1,167,026 (174,768) 31,286,385
Less Accumulated Depreciation for:
Structure and Improvements (8,131,460) (428,018) 70,528 (8,488,950)
Infrastructure (2,015,833) (413,975) - (2,429,808)
Equipment (933,007) (114,979) - (1,047,986)
Vehicles (1,678,291) (354,300) 170,880 (1,861,711)
Total Accumulated Depreciation (12,758,591) (1,311,272) 241,408 (13,828,455)
Total Depreciable Capital Assets - Net 17,535,536 (144,246) 66,640 17,457,930
Total Capital Assets - Net 411,476,825$ 17,180,197$ (202,133)$ 428,454,889$
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
NOTE 5 - LONG-TERM DEBT
The following is a summary of the changes in long-term debt for the period ended June 30, 2016:
Beginning Ending Due Within
Long-term Obligations Balance Additions Deductions Balance One Year
Promissory Notes:
Current Interest 40,871,108$ -$ 1,636,938$ 39,234,170$ 1,063,105$
Capital Appreciation 15,474,708 - - 15,474,708 -
Accreted interest 2,924,794 1,064,650 - 3,989,444 -
Unamortized Bond Premium 6,892,393 - 414,051 6,478,342 -
Subtotal Promissory Notes 66,163,003 1,064,650 2,050,989 65,176,664 1,063,105
Bonds:
Current Interest 70,320,000 45,000,000 2,730,000 112,590,000 4,130,000
Unamortized Bond Premium 80,744 2,583,686 56,009 2,608,421 -
Subtotal Bonds 70,400,744 47,583,686 2,786,009 115,198,421 4,130,000
Net Pension Obligation - 11,420,125 - 11,420,125 -
Compensated Absences 1,536,679 280,210 - 1,816,889 272,574
Total Long-term Obligations 138,100,426$ 60,348,671$ 4,836,998$ 193,612,099$ 5,465,679$
Promissory Notes
Daloia Land Purchase Contract Promissory Note
During the fiscal year ending 2003 the District entered into a land purchase contract promissory note
in the amount of $240,000. The promissory note bears interest at a fixed rate of 6.25% and matures
October 10, 2017.
Hunt Living Trust Promissory Note
On April 1, 2003, the District entered into a $1,500,000 promissory note with the Hunt Living Trust
as part of a lease and management agreement. The note is due in full on April 1, 2023 and bears
interest at 5.5% semi-annually through April 1, 2013 and 5.0% per annum until the maturity, or prior
redemption, of the note.
2010 Bergman Note
On Nov 30, 2010, the District issued a promissory note with Principal of $850,000 and interest of 4%
to finance the purchase of land. Interest is due on a quarterly basis beginning February 28, 2011 and
mature on November 30, 2015.
2012 Refunding Promissory Notes
On January 19, 2012, the District advance refunded $34,652,643 in 1999 lease revenue bonds by
issuing $31,264,707 in promissory notes. The 2012 notes bear interest rates ranging from 2.00% to
6.04%. The notes are a blend of current interest and capital appreciation notes maturing through
2042. The net proceeds of $33,295,663 (after payment of $278,683 in underwriting fees, insurance,
and other issuance costs and a premium of $2,309,638) were used to purchase U.S government
securities. Those securities were deposited in an irrevocable trust with an escrow agent to provide for
all future debt service payments on the 1999 Series bonds. As a result, the 1999 Series bonds are
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
considered to be defeased and the liability for those bonds has been removed from the long-term debt
in the financial statements.
2015 Refunding Promissory Notes
On January 22, 2015, the District advance refunded $29,986,962 in 2004 Revenue Bonds by issuing
$28,578,500 in promissory notes. The 2015 notes bear interest rates ranging from 2.00% to 5.00%.
The notes are current interest notes maturing through 2035. The net proceeds of $28,325,491 (after
payment of $253,009 in underwriting fees, insurance, and other issuance costs and a premium of
$4,948,500) were used to purchase U.S government securities. Those securities were deposited in an
irrevocable trust with an escrow agent to provide for all future debt service payments on the 2004
Revenue Bonds. As a result, the 2004 Revenue Bonds are considered to be defeased and the liability
for those bonds has been removed from the long-term debt in the financial statements.
Revenue and General Obligation Bonds
2015A and 2015B General Obligation Bonds
On July 29, 2015, the District issued $40,000,000 of 2015A general obligation bonds and $5,000,000
of 2015B federally taxable general obligation bonds to finance certain projects authorized by voters.
The bonds bear interest from 1.5% to 5% and are due semi-annually on March 1 and September 1.
The bonds were issued at a premium of $2,559,224 with an underwriter’s discount of $107,599 and
issuance costs of $170,000.
2007 Series A Revenue Refunding Bonds and Series B-T Taxable Revenue Refunding Bonds
On December 15, 2006 the District issued six series of promissory notes (2007 District Notes) for the
purpose of refunding its 1996 Project Lease, 1996 Promissory Notes, 1999 Project Lease, and 1999
Promissory Notes. On December 15, 2006 the Authority, on behalf of the District, issued
$52,415,000 of 2007 Series A Revenue Refunding Bonds and $6,785,000 of 2007 Series B-T
Taxable Revenue Refunding Bonds for the purpose of defeasing the aggregate purchase price of the
2007 District Notes. The Series A bonds bear interest from 4.0% to 5.0% and Series B-T bonds bear
interest at 5.15%. Interest for both series A and B-T are due semiannually on March 1 and September
1. Principal payments for the Series A bonds began September, 2012 and are due annually, thereafter.
Principal payments for the Series B-T bonds are due annually on September 1.
2011 Revenue Bonds
On May 19, 2011, the Authority, on behalf of the District, issued $20,500,000 of 2011 Revenue
Bonds for the purpose of acquiring land to preserve and use as open space and pay bond issue and
related costs. The Bonds are not general obligations. Each period, the District will appropriate
revenues-mainly limited properly tax collections that Santa Clara County and San Mateo County
allocate to the District – to pay its obligations under a Lease Agreement for use and occupancy of
District land in addition to other District debt and lease obligations unrelated to this financing. The
Current Interest Bonds bear interest at 2.0% to 6.0% and are due semi-annually on March 1 and
September 1. Principal payments on the Current Interest Bonds are due annually September 1.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
The following schedule summarizes the District’s outstanding promissory notes and bonds as of June
30, 2016:
Original Beginning Ending
Long Term Debt Issue Balance Additions Retirements Balance
Promissory Notes:
Daloia Note 240,000$ 61,109$ -$ 26,938$ 34,171$
Hunt Note 1,500,000 1,500,000 - - 1,500,000
Bergman Note 850,000 850,000 - 850,000 -
2012 Refunding Note Current Int. 15,790,000 14,829,999 - 355,000 14,474,999
2012 Refunding Note Cap Apprec. 15,474,707 15,474,708 - - 15,474,708
2015 Refunding Note 23,630,000 23,630,000 - 405,000 23,225,000
Subtotal Promissory Notes 57,484,707 56,345,816 - 1,636,938 54,708,878
Bonds:
2015A General Obligation Bonds 40,000,000 - 40,000,000 - 40,000,000
2015B General Obligation Bonds 5,000,000 - 5,000,000 - 5,000,000
2007 Series A Refunding 52,415,000 49,935,000 - 2,635,000 47,300,000
2011 Lease Revenue 20,500,000 20,385,000 - 95,000 20,290,000
Subtotal Bonds 117,915,000 70,320,000 45,000,000 2,730,000 112,590,000
Accreted Interest - 2012 Refunding Note 2,924,794 1,064,650 - 3,989,444
Unamortized Bond Premium 6,973,137 2,583,686 470,060 9,086,763
Total Long Term Debt 175,399,707$ 136,563,747$ 48,648,336$ 4,836,998$ 180,375,085$
The promissory notes future debt service requirements as of June 30, 2016 were as follows:
Year Ending March 31, Principal
Remaining
Accretion Interest Total
2017 1,063,105$ -$ 1,855,666$ 2,918,771$
2018 1,126,067 - 1,816,384 2,942,451
2019 1,199,999 - 1,765,775 2,965,774
2020 1,285,000 - 1,707,675 2,992,675
2021 1,370,000 - 1,654,925 3,024,925
2022-2026 9,995,000 - 7,025,325 17,020,325
2027-2031 19,337,251 - 3,705,350 23,042,601
2032-2036 12,975,269 10,811,786 587,750 24,374,805
2037-2041 6,357,187 16,660,661 - 23,017,848
2042-2046 - 17,998,052 - 17,998,052
Total Debt Service 54,708,878$ 45,470,499$ 20,118,850$ 120,298,227$
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
The bonds future debt service requirements as of June 30, 2016 were as follows:
Year Ending March 31, Principal
Remaining
Accretion Interest Total
2017 4,130,000$ -$ 5,083,213$ 9,213,213$
2018 4,430,000 - 4,904,694 9,334,694
2019 4,655,000 - 4,707,538 9,362,538
2020 4,395,000 - 4,510,188 8,905,188
2021 4,840,000 - 4,306,776 9,146,776
2022-2026 28,245,000 - 17,705,071 45,950,071
2027-2031 17,800,000 - 11,352,277 29,152,277
2032-2036 12,420,000 - 8,850,514 21,270,514
2037-2041 9,510,000 - 6,333,625 15,843,625
2042-2046 22,165,000 - 1,497,463 23,662,463
Total Debt Service 112,590,000$ -$ 69,251,359$ 181,841,359$
Amortization of the deferred loss on early retirement of long-term debt for the fiscal period ended
June 30, 2016 was as follows:
Beginning Balance 2,623,220$
Amortization (339,194)
Ending Balance 2,284,026$
NOTE 6 - RENTAL INCOME
The District rents certain land and structures to other entities under operating leases with terms
generally on a month-to-month basis. Rental income of $1,284,477 was received during the period
ended June 30, 2016.
NOTE 7 - EMPLOYEE RETIREMENT SYSTEMS
Pension Plan
General Information about the Pension Plans
Plan Description - The District provides benefits to eligible employees through cost-sharing
multiple employer defined benefit pension plans (the Plan(s)) administered by the California Public
Employees’ Retirement System (CalPERS). Members of the Plan include all permanent employees
working full-time. Benefit provisions under the Plans are established by State statute and District
resolution. CalPERS issues publicly available reports that include a full description of the pension
plans regarding benefit provisions, assumptions and membership information that can be found on
the CalPERS website.
Benefits Provided - CalPERS provides service retirement and disability benefits, annual cost of
living adjustments and death benefits to plan members, who must be public employees and
beneficiaries. Benefits are based on years of credited service, equal to one year of full-time
employment. Members with five years of total service are eligible to retire at age 55 with statutorily
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
reduced benefits. All members are eligible for non-industrial disability benefits after 10 years of
service. The death benefit is the Optional Settlement 2W Death Benefit. The cost of living
adjustments for the Plan are applied as specified by the Public Employees’ Retirement Law.
The Plans’ provisions and benefits in effect at June 30, 2016, are summarized as follows:
Benefit formula 2% @ 55
Benefit vesting schedule 5 Years
Benefit payments Monthly for Life
Retirement age 55
Monthly benefits as a % of eligible compensation 2.0% to 2.7%
Required employee contribution rates 8.00%
Required employer contribution rates 14.85%
Contributions - Section 20814(c) of the California Public Employees’ Retirement Law requires that
the employer contribution rates for all public employers be determined on an annual basis by the
actuary and shall be effective on the July 1 following notice of a change in the rate. Funding
contributions for the Plan are determined annually on an actuarial basis as of June 30 by CalPERS.
The actuarially determined rate is the estimated amount necessary to finance the costs of benefits
earned by employees during the year, with an additional amount to finance any unfunded accrued
liability. The District is required to contribute the difference between the actuarially determined rate
and the contribution rate of employees.
For the year ended June 30, 2016, the contributions recognized as part of pension expense for the
Plan were as follows:
Total
Contributions - employer $ 256,897
Contributions - employee 122,144
Total contributions $ 379,041
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to
Pensions
As of June 30, 2016, the District reported net pension liabilities for its proportionate shares of the net
pension liability of the Plan as follows:
Proportionate
Share of Net
Pension Liability
Miscellaneous Plan $ 11,420,125
The District’s net pension liability for the Plan is measured as the proportionate share of the net
pension liability. The net pension liability of the Plan is measured as of June 30, 2015, and the total
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
pension liability for the Plan used to calculate the net pension liability was determined by an
actuarial valuation as of June 30, 2014 using standard procedures. The District’s proportion of the
net pension liability was based on a projection of the District’s long-term share of contributions in to
the pension plan relative to the projected contributions of all participating employers, as actuarially
determined. The District’s proportionate share of the net pension liability for the Plan as of June 30,
2014 and 2015 was as follows:
Proportion of Net
Pension Liability
Proportion - June 30, 2014 0.3985%
Proportion - June 30, 2015 0.4163%
Change 0.0178%
For the year ended June 30, 2016, the District recognized pension expense of $781,494. At June 30,
2016, the District reported deferred outflows of resources and deferred inflows of resources related
to pensions from the following sources:
Deferred Outflows
of Resources
Deferred
Inflows of
Resources
4,788,977$ -$
Changes in assumptions - (824,734)
87,172 -
2,113,950 (2,527,399)
6,990,099$ (3,352,133)$
Pension contributions subsequent to measurement date
Differences between expected and actual experiences
Net differences between projected and actual earnings
on plan investments
Total
The District reported $183,304 as deferred outflows of resources related to contributions subsequent
to the measurement date that will be recognized as a reduction of the net pension liability in the year
ended June 30, 2017. Other amounts reported as deferred outflows of resources and deferred inflows
of resources related to pensions will be recognized as pension expense as follows:
Measurement Periods
Ended June 30:
Deferred
Outflows/(inflows)
of Resources
2016 $ 4,211,583
2017 (577,394)
2018 (524,711)
2019 528,488
Total $ 3,637,966
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Actuarial Assumptions - The total pension liabilities in the June 30, 2014 actuarial valuations were
determined using the following actuarial assumptions:
Valuation Date June 30, 2014
Measurement Date June 30, 2015
Actuarial Cost Method Entry-Age Normal
Cost Method
Actuarial Assumptions:
Discount Rate 7.65%
Inflation 2.75%
Payroll Growth 3.00%
Projected Salary Increase 3.3% - 14.2% (1)
Investment Rate of Return 7.5% (2)
Mortality (3)
(3) Derived using CalPERS' membership data for all funds
(1) Depending on age, service and type of employment
(2) Net of pension plan investment expenses, including inflation
Discount Rate - The discount rate used to measure the total pension liability was 7.65 percent for
the Plan. To determine whether the municipal bond rate should be used in the calculation of a
discount rate for the Plan, CalPERS stress tested plans that would most likely result in a
discount rate that would be different from the actuarially assumed discount rate. Based on the
testing, none of the tested plans run out of assets. Therefore, the current 7.65 percent discount
rate is adequate and the use of the municipal bond rate calculation is not necessary. The long
term expected discount rate of 7.65 percent will be applied to all plans in the Public Employees
Retirement Fund (PERF). The stress test results are presented in a detailed report that can be
obtained from the CalPERS website.
CalPERS was scheduled to review all actuarial assumptions as part of its regular Asset Liability
Management (ALM) review cycle that was scheduled to be completed in February 2018. Any
changes to the discount rate will require Board action and proper stakeholder outreach. For these
reasons, CalPERS expects to continue using a discount rate net of administrative expenses for
GASB 67 and 68 calculations through at least the 2017-18 fiscal year. CalPERS will continue to
check the materiality of the difference in calculation until such time as they have changed their
methodology. The long-term expected rate of return on pension plan investments was determined
using a building-block method in which best-estimate ranges of expected future real rates of return
(expected returns, net of pension plan investment expense and inflation) are developed for each
major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term
and long-term market return expectations as well as the expected pension fund cash flows. Using
historical returns of all the funds’ asset classes, expected compound returns were calculated over
the short-term (first 10 years) and the long-term (11-60 years) using a building-block approach.
Using the expected nominal returns for both short-term and long-term, the present value of
benefits was calculated for each fund. The expected rate of return was set by calculating the
single equivalent expected return that arrived at the same present value of benefits for cash flows
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
as the one calculated using both short-term and long-term returns. The expected rate of return
was then set equivalent to the single equivalent rate calculated above and rounded down to the
nearest one quarter of one percent. The table below reflects the long-term expected real rate of
return by asset class. The rate of return was calculated using the capital market assumptions applied
to determine the discount rate and asset allocation. These rates of return are net of administrative
expenses.
New
Strategic Real Return Real Return
Asset Class Allocation Years 1 - 10 (a) Years 11+ (b)
Global Equity 47.00% 5.25% 5.71%
Global Fixed Income 19.00% 0.99% 2.43%
Inflation Sensitive 6.00% 0.45% 3.36%
Private Equity 12.00% 6.83% 6.95%
Real Estate 11.00% 4.50% 5.13%
Infrastructure and Forestland 3.00% 4.50% 5.09%
Liquidity 2.00% -0.55% -1.05%
Total 100.00%
(b) An expected inflation of 3.0% used for this period.
(a) An expected inflation of 2.5% used for this period.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate - The following presents the District’s proportionate share of the net pension
liability for the Plan, calculated using the discount rate for the Plan, as well as what the District’s
proportionate share of the net pension liability would be if it were calculated using a discount rate
that is 1-percentage point lower or 1-percentage point higher than the current rate:
1% Decrease 6.65%
Net Pension Liability $ 19,152,347
Current Discount Rate 7.65%
Net Pension Liability $ 11,420,125
1% Increase 8.65%
Net Pension Liability $ 5,036,278
Pension Plan Fiduciary Net Position - Detailed information about each pension plan’s fiduciary net
position is available in the separately issued CalPERS financial reports.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Other Postemployment Benefits (OPEB)
Plan Description
The District joined the California Employers' Retiree Benefit Trust (CERBT), an agent multiple-
employer plan administered by CALPERS, consisting of an aggregation of single-employer plans.
The District Board authorized a deposit of $1,900,000 in CERBT on June 5, 2008, to begin funding
its OPEB liability. By Board resolution and through agreements with its labor unit, the District
provides certain health care benefits for retired employees (spouse and dependents are not included)
under third-party insurance plans. A summary of eligibility and retiree contribution requirements are
shown below:
Eligibility Service or disability retirement from the District
=> Age 50 and 5 years of service
Continue participation in Public Employees
=> Medical and Hospital Care Act (PEMHCA)
Retiree Medical
Benefit
District pays retiree medical premiums up to:
=> $300/month effective 1/1/07
=> $350/month effective 1/1/09
Must be at least equal to statutory PEMHCA minimum
($122 in 2015, $125 in 2016)
PEMHCA
Administrative Fee
District pays CalPERS administrative fees (0.32% of
premiums for 2015/16)
Surviving Spouse
Continuation
Retiree benefit continues to surviving spouse if
retiree elects survivor annuity under CalPERS
retirement plan
Other OPEB None
Funding Policy
In accordance with the District's budget, the Annual Required Contribution (ARC) is to be funded
throughout the period as a percentage of payroll. Concurrent with implementing Statement No. 45,
the District’s Board of Directors passed a resolution to participate in CERBT, an irrevocable trust
established to fund OPEB. CERBT is managed by an appointed board not under the control of the
District. This Trust is not considered a component unit by the District and has been excluded from
these financial statements. Separately issued financial statements for CERBT may be obtained from
CALPERS at P.O. Box 942709, Sacramento, CA 94229-2709.
Annual OPEB Cost and Net OPEB Obligation
The District’s annual OPEB cost is calculated based on the ARC, an amount actuarially determined
in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover normal cost each period and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
The following table shows the components of the District’s annual OPEB cost for the period, the
amount actually contributed to the plan, and changes in the District’s net OPEB obligation:
Description Balance
Annual required contribution 391,000$
Interest on net OPEB asset (79,000)
Adjustment to annual required contribution 74,000
Annual OPEB cost (expense) 386,000
Contributions made (221,839)
Decrease in net OPEB asset 164,161
Net OPEB obligation (asset) - beginning (863,176)
Net OPEB obligation (asset) - ending $ (699,015)
The District’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the net OPEB obligation for 2016 was as follows:
Percentage Net OPEB
Period Annual of Annual Obligation/
Ended OPEB Cost Cost Contributed (Asset)
March 31, 2014 265,000 65% (1,003,925)
March 31, 2015 298,000 53% (863,176)
June 30, 2016 386,000 57%(699,015)
Funded Status and Funding Progress
The most recent actuarial valuation date was June 30, 2015. The following summarizes the funded
status of the plan as of June 30, 2016:
Description Balance
4,612,000$
2,727,487
1,884,513$
59%
11,049,000$
17%
Funded ratio (actuarial value of plan assets/AAL)
Projected covered payroll (active Plan members)
UAAL as a percentage of covered payroll
Actuarial accrued liability (AAL)
Value of plan assets
Unfunded actuarial accrued liability (UAAL)
Actuarial Methods and Assumptions
The ARC was determined as part of the actuarial valuation using the entry age normal actuarial cost
method. This is a projected benefit cost method, which takes into account those benefits that are
expected to be earned in the future as well as those already accrued. The actuarial assumptions
included (a) 6.04% to 7.25% investment rate of return, (b) 3.25% projected annual salary increase,
and (c) health inflation increases of 0% for 1 year, 1.5% for the next 5 years, and 3% thereafter. The
actuarial methods and assumptions used include techniques that smooth the effects of short-term
volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect
a long-term perspective and actuarial valuations involve estimates of the value of reported amounts
and assumptions about the probability of events far into the future. Actuarially determined amounts
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
are subject to revision at least biannually as results are compared to past expectations and new
estimates are made about the future. The District's OPEB unfunded actuarial accrued liability is being
amortized as a level percentage of projected payroll using a 30 year open amortization period.
NOTE 8 - JOINT VENTURES (JOINT POWERS AGREEMENTS)
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of
assets; injuries to employees; and natural disasters. Prior to July 1, 2002, the District managed and
financed these risks by purchasing commercial insurance. On July 1, 2002, the District joined the
California Joint Powers Insurance Authority (CAL JPIA). CAL JPIA is composed of 119 California
public entities and is organized under a joint powers agreement pursuant to California Government
Code Section 6500 et seq. The purpose of CAL JPIA is to arrange and administer programs for the
pooling of self-insurance losses, to purchase excess insurance or reinsurance, and to arrange for
group-purchased insurance for property and other coverages. CAL JPIA's pool began covering claims
of its members in 1978. Each member government has an elected official as its representative on the
Board of Directors. The Board operates through a nine member Executive Committee.
During the past three fiscal periods, none of the programs of protection have had settlements or
judgments that exceeded pooled or insured coverage. There have been no significant reductions in
pooled or insured liability coverage from coverage in the prior period.
Self-Insurance Programs of the CAL JPIA
General and Automobile Liability
Each government member pays a primary deposit to cover estimated losses for a fiscal year (claims year).
General liability (GL) coverage includes bodily injury, personal injury, or property damage to a third
party resulting from a member activity. The GL program also provides automobile liability coverage. Six
months after the close of a fiscal period, outstanding claims are valued. A retrospective deposit
computation is then made for each open claims year. Costs are spread to members as follows: the first
$30,000 to $750,000 are pooled based on member's share of costs under $30,000; costs in excess of
$750,000 are shared by the members based upon each individual member's payroll. Costs of covered
claims above $5,000,000 are currently paid by reinsurance. The protection for each member is
$50,000,000 per occurrence, up to $50,000,000.
Worker's Compensation
The District also participates in the Worker's Compensation program administered by CAL JPIA. Pool
deposits and retrospective adjustments are valued in a manner similar to the General Liability pool. The
District is charged for the first $50,000 of each claim. Costs from $50,000 to $100,000 per claim are
pooled based on the member's losses under its retention level. Costs between $100,000 and $2,000,000
per claim are pooled based on payroll. Costs from $2,000,000 to $5,000,000 are paid by excess insurance
purchased by CAL JPIA. The excess insurance provides coverage to statutory limits.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Purchased Insurance
Environmental Insurance
The District participates in the Pollution and Remediation Legal Liability Program, which is available
through CAL JPIA. The policy provides coverage for both first and third party damages, including sudden
and gradual pollution at or from property, streets, sanitary sewer trunk lines and storm drain outfalls
owned by the District. Coverage is on a claims-made basis. There is a $50,000 deductible. CAL JPIA has
a limit of $50,000,000 for the 3-year period from July 1, 2008 through July 1, 2011. Each member of
CAL JPIA has a $10,000,000 aggregate limit during the 3-year policy term.
Property Insurance
The District participates in the All-Risk property program of CAL JPIA which includes all-risk coverage
for real and personal property (such as buildings, office furniture, equipment, vehicles, etc). This
insurance is underwritten by several insurance companies. Property is currently insured according to a
schedule of covered property submitted by the District to CAL JPIA. The All-Risk deductible is $5,000
per occurrence; $1,000 for non-emergency vehicles. Premiums for the coverage are paid annually and are
not subject to retroactive adjustments.
Boiler & Machinery Insurance
The District participates in the optional coverage for boiler and machinery, which is purchased separately
under the property program. Coverage is for physical damage for sudden and accidental breakdown of
boilers and machinery, and electrical injury. There is a $5,000 per accident or occurrence deductible.
Crime Insurance
The District participates in the crime program of CAL JPIA in the amount of $1,000,000 per claim, with a
$2,500 per occurrence deductible. Insurance provides coverage for employee dishonesty, failure to
faithfully perform duties, forgery, counterfeiting, theft, robbery, burglary, and computer fraud. Premiums
are paid annually and are not subject to retroactive adjustments.
Special Event Tenant User Liability Insurance
The District participates in the special events program of CAL JPIA which provides liability insurance
when District premises are used for special events. The insurance premium is paid by the tenant user to
the District according to a schedule. The District then pays the insurance arranged through CAL JPIA.
There is no deductible and the District is added as additional insured. Liability limits are purchased in $1
million per occurrence increments. Special Event Tenant User Liability Insurance. The District
participates in the special events program of CAL JPIA which provides liability insurance when District
premises are used for special events. The insurance premium is paid by the tenant user to the District
according to a schedule. The District then pays the insurance arranged through CAL JPIA. There is no
deductible and the District is added as additional insured. Liability limits are purchased in $1 million per
occurrence increments.
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2016
Vendors/Contractors Program
General liability coverage is provided to vendors/contractors who otherwise could not contract with the
District as they could not meet the minimum insurance requirement: $1 million per occurrence, $1 million
in aggregate.
NOTE 9 - COMMITMENTS AND CONTINGENCIES
The District may be exposed to various claims and litigation during the normal course of business.
However, management believes there were no matters that would have a material adverse effect on the
District’s financial position or results of operations as of June 30, 2016.
NOTE 10 - SUBSEQUENT EVENTS
Management has reviewed subsequent events and transactions that occurred after the date of the financial
statements through the date the financial statements were issued. The financial statements include all
events or transactions, including estimates, required to be recognized in accordance with generally
accepted accounting principles.
On September 22, 2016, the District issues $57 million in bonds called Green Bonds, 2016 Refunding for
the purpose of refunding its 2007 promissory note, 2007 Revenue Refunding Bonds and a portion of its
2011 Revenue Bonds.
NOTE 11 - PRIOR PERIOD ADJUSTMENT
The District recorded prior period adjustments for fiscal year 2016 to record the beginning balance of the
net pension liability and to record employer contributions made for pensions in fiscal year 2015 as a
deferred outflow/(inflow) of resources. The following is a summary of the adjustments made:
Description Amount
Net position - beginning 321,125,064$
Prior period adjustments:
Deferred outflows/(inflows) (1,941,438)
Net pension liabilities (9,848,203)
Net position - beginning, adjusted 309,335,423$
REQUIRED
SUPPLEMENTARY
INFORMATION
Variance with
Final Budget
Actual Positive -
Original Final (GAAP Basis)(Negative)
Revenues:
Property taxes 36,305,000$ 45,430,000$ 43,203,891$ (2,226,109)$
Grant income 451,000 451,000 222,660 (228,340)
Property management 1,586,500 1,586,500 1,635,889 49,389
Investment earnings 145,000 145,000 453,540 308,540
Other revenues 175,000 175,000 643,849 468,849
Total revenues 38,662,500 47,787,500 46,159,829 (1,627,671)
Expenditures:
Current
Salaries and employee benefits 15,393,844 21,281,262 22,077,184 (795,922)
Services and supplies 5,789,463 7,567,138 6,147,083 1,420,055
Capital outlay 1,012,000 1,012,000 242,376 769,624
Total expenditures 22,195,307 29,860,400 28,466,643 1,393,757
Excess (deficiency) of revenues
over (under) expenditures 16,467,193 17,927,100 17,693,186 (233,914)
Other financing sources (uses):
Transfers in - - - -
Transfers out (12,145,558) (12,145,558) (12,145,558) -
Total other financing sources (uses)(12,145,558) (12,145,558) (12,145,558) -
Net change in fund balance 4,321,635 5,781,542 5,547,628 (233,914)
Fund balance beginning 43,432,161 43,432,161 43,432,161 -
Prior period adjustment - Capital Projects Fund 5,248,837 5,248,837 5,248,837 -
Fund balance beginning - as adjusted 48,680,998 48,680,998 48,680,998 -
Fund balance ending 53,002,633$ 54,462,540$ 54,228,626$ (233,914)$
Budgeted Amounts
Midpeninsula Regional Open Space District
Budget to Actual (GAAP)
For the Fifteen Month Period Ended June 30, 2016
Schedule of Revenues, Expenditures and Changes in Fund Balance
General Fund
Variance with
Final Budget
Actual Positive -
Original Final (GAAP Basis)(Negative)
Revenues:
Property taxes -$ -$ -$ -$
Grant income - - 970,970 970,970
Property management - - - -
Investment earnings - - 185,502 185,502
Other revenues - - - -
Total revenues - - 1,156,472 1,156,472
Expenditures:
Current
Salaries and employee benefits 1,299,281 465,970 412,718 53,252
Services and supplies - - 327,881 (327,881)
Capital outlay 22,484,225 27,010,514 18,658,484 8,352,030
Total expenditures 23,783,506 27,476,484 19,399,083 8,077,401
Excess (deficiency) of revenues
over (under) expenditures (23,783,506) (27,476,484) (18,242,611) 9,233,873
Other financing sources (uses):
Proceeds from bond issuances 45,000,000 45,000,000 45,000,000 -
Transfers in 2,269,495 2,269,495 2,269,495 -
Transfers out - - - -
Total other financing sources (uses)47,269,495 47,269,495 47,269,495 -
Net change in fund balance 23,485,989 19,793,011 29,026,884 9,233,873
Fund balance beginning - - - -
Prior period adjustment - General Fund (5,248,837) (5,248,837) (5,248,837) -
Fund balance beginning - as adjusted (5,248,837) (5,248,837) (5,248,837) -
Fund balance ending 18,237,152$ 14,544,174$ 23,778,047$ 9,233,873$
Midpeninsula Regional Open Space District
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget to Actual (GAAP)
Capital Projects Fund
For the Fifteen Month Period Ended June 30, 2016
Budgeted Amounts
Variance with
Final Budget
Actual Positive -
Original Final (GAAP Basis)(Negative)
Revenues:
Property taxes -$ -$ 1,776,606$ 1,776,606$
Grant income - - - -
Property management - - - -
Investment earnings - - 26,740 26,740
Other revenues - - - -
Total revenues - - 1,803,346 1,803,346
Expenditures:
Debt service:
Principal 4,366,640 4,367,277 4,366,938 339
Interest 6,696,104 6,701,660 6,477,830 223,830
Total expenditures 11,062,744 11,068,937 10,844,768 224,169
Excess (deficiency) of revenues
over (under) expenditures (11,062,744) (11,068,937) (9,041,422) 2,027,515
Other financing sources (uses):
Premiums from bond issuances 2,281,625 2,281,625 2,281,625 -
Transfers in 9,876,063 9,876,063 9,876,063 -
Transfers out - - - -
Total other financing sources (uses)12,157,688 12,157,688 12,157,688 -
Net change in fund balance 1,094,944 1,088,751 3,116,266 2,027,515
Fund balance beginning - - - -
Fund balance ending 1,094,944$ 1,088,751$ 3,116,266$ 2,027,515$
Midpeninsula Regional Open Space District
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget to Actual (GAAP)
Debt Service Fund
For the Fifteen Month Period Ended June 30, 2016
Budgeted Amounts
Midpeninsula Regional Open Space District
Schedule of Pension Plan Contributions
June 30, 2016
2016 2015
Contractually Required Contributions (Actuarially Determined) 1,343,244$ 1,461,069$
Contributions in Relation to Actuarially Determined Contributions 1,428,427 1,480,508
Contribution Deficiency (Excess)(85,183) (19,439)
Covered Employee Payroll 15,519,041$ 15,112,947$
Contributions as a Percentage of Covered Payroll 9.20% 9.80%
Notes to Schedule:
Valuation Date: June 30, 2014
Assumptions Used: Entry Age Method used for Actuarial Cost Method
Level Percentage of Payroll (Closed) Used Amortization Method
3.8 Years Remaining Amortization Period
Inflation Assumed at 2.75%
Investment Rate of Returns set at 7.5%
CalPERS mortality table using 20 years of membership data for all funds
** Fiscal year 2015 was the first year of implementation, there fore only two years are shown.
Midpeninsula Regional Open Space District
Schedule of Net Pension Liability Proportionate Shares
June 30, 2016
2016 2015
District's Proportion of Net Pension Liability 0.41627% 0.39847%
District's Proportionate Share of Net Pension Liability 11,420,125$ 9,848,203$
District's Covered Employee Payroll 15,519,041$ 15,112,947$
District's Proportionate Share of NPL as a % of Covered Employee Payroll 73.59% 65.16%
Plan's Fiduciary Net Position as a % of the TPL 73.93% 76.19%
** Fiscal year 2015 was the first year of implementation, there fore only two years are shown.
Midpeninsula Regional Open Space District
Schedule of Funding Progress – Other Postemployment Benefits
June 30, 2016
Actuarial
Accrued UAAL as
Actuarial Liability Unfunded a Percentage
Actuarial Value of (AAL) AAL Funded Covered of Covered
Valuation Assets Entry Age (UAAL) Ratio Payroll Payroll
Date (a) (b) (b-a) (a/b) (c) ((b-a/c))
6/30/2011 2,058,000$ 1,844,000$ (214,000)$ 111.61% 7,331,000$ -2.92%
6/30/2013 2,035,000 2,555,000 520,000 79.65% 8,043,000 6.47%
6/30/2015 2,520,000 4,612,000 2,092,000 54.64% 11,049,000 18.93%
The above table is a summary schedule of the funding progress for the District’s OPEB plan as stated in
each actuarial study. The actuarial studies are based on assumptions and data available at the time each
study was completed. The actual funding progress of the plan as noted in Note 7 may be different than
the projections included in the actuarial studies.
SUPPLEMENTARY
INFORMATION
Expenditures Expenditures
from from
April 1, 2015 Inception
through through
Project No.Project Description June 30, 2016 June 30, 2016
20005 New Trail Easement - SFPUC, Ravenswood (MAA 2-2)-$ 22,603$
20088 POST Hendry's Creek Restoration (MAA 22-1)645 41,330
20101 Lysons Property ( 17-1 MAA )- 27,059
20102 Lobner Demolition (MAA 17-2)- 128,760
20109 Riggs Property Appraisal - (3-1 MAA)- 6,500
20110 Purisima Creek Uplands Lot line Adjustment (3-1 MAA)- 13,000
20112 Conservation Easement Upper Alpine Ranch Area (15-1 MAA)- 8,695
20113 Preservation of Upper Los Gatos Creek Watershed (22-1 MAA)- 5,000
20114 Land Conservation Opportunities MAA 25-1 (Burtons )- 150
30503 ECDM Trail Improvements (MAA 4-4)- 3,930
30904 Mindego Area - Mindego Hill Trail (MAA 9-4)3,625 34,196
31309 Mt Um Bald Mtn Staging to Summit Trail (MAA 23-2)6,020 17,646
31310 Mt Um Summit Restor & Improv (MAA 23-4)30,815 79,491
31311 Mt Um Trail Overlook & Bridges (MAA 23-5)- 243
31500 Measure AA Project 11-1 - 728
65101 PCR Harkins Bridge Replacement (MAA 3-4)21,901 108,788
65201 Lower Stevens Canyon Hiking Bridge (MAA 17-4)60,971 103,187
80016 ECdM Creek Watershed Protection Program (MAA 4-3)- 45,507
80029 Pond DR05 Repair (MAA 7-5)- 150,682
80037 Mindego Grazing Infrastructure (MAA 9-1)- 135,748
80038 LHC Grazing Infrastructure - McDonald Ranch Fencing (MAA 5-2)- 178,850
AA01 Miramontes Ridge - Gateway to San Mateo Coast 6,315 6,315
AA02 Bayfront Habitat Protection & Public Access Partnerships 74,834 74,834
AA03 Purisima Creek Redwoods: Purisma-to Sea Trail, Watershed/Graze 13,180 375,680
AA04 El Corte de Madera Creek: Bike Trail & Water Quality 308,684 308,684
AA05 La Honda Creek - Upper Recreation Area 1,872,574 1,892,574
AA07 Driscoll Ranch Public Access, Wildlife Protection, Grazing 9,915,158 9,915,158
AA09 Russian Ridge: Public Recreation, Grazing & Wildlife Protection 66,241 66,241
AA15 Regional: Redwood Protection & Salmon Fishery Conservation (12,982) 2,487,018
AA17 Regional: Complete Upper Stevens Creek Trail 27,338 1,497,338
AA19 El Sereno Dog Park & Connections 715 715
AA20 South Bay Foothills: Wildlife Passage/Ridge Trail Improvements 90,038 90,038
AA21 CR:Pub Recreation Proj 330,410 330,410
AA22 Cathedral Oaks Public Access & Conservation 560,364 560,364
AA23 Mt Um Pub Access/Intrep 2,785,549 2,785,549
AA24 Rancho de Guadalupe Family Recreation 300,056 300,056
AA25 Loma Prieta Area Public Access 400,000 410,000
Total MAA Bond Project Expenditures 16,862,451 22,213,067
Reimbursements from Grants and Contributions (1,010,970) (1,010,970)
Total MAA Bond Project Expenditures - Net Reimbursements 15,851,481$ 21,202,097$
Midpeninsula Regional Open Space District
Measure AA Bond Program
Schedule of Program Expenditures
June 30, 2016
Midpeninsula Regional Open Space District
Notes to Supplementary Information
June 30, 2016
NOTE 1 - BACKGROUND
Measure AA is a $300 million general obligation bond approved in June 2014 by over two-thirds of
Midpen voters. Proceeds from bonds, which will be sold in a series over approximately the next 20-
30 years, will be used to:
Protect natural open space lands
Open preserves or areas of preserves that are currently closed
Construct public access improvements such as new trails and staging areas
Restore and enhance open space land, which includes forests, streams, watersheds, and
coastal ranch areas.
On July 29, 2015, the District issued $40,000,000 of 2015A general obligation bonds and $5,000,000
of 2015B federally taxable general obligation bonds to finance certain projects authorized by voters.
The bonds bear interest from 1.5% to 5% and are due semi-annually on March 1 and September 1.
The bonds were issued at a premium of $2,559,224 with an underwriter’s discount of $107,599 and
issuance costs of $170,000.
Land acquisition is the first step to open space conservation. The Vision Plan identified 50,000 acres
of open space land that, when conserved, would significantly improve wildlife conditions, wetlands,
watersheds, creeks, sensitive plant communities and healthy outdoor recreation. As of January 2016,
Midpen has acquired 1,003 acres of land with $12,842,500 in funding support from Measure AA
Funds.
NOTE 2 - OVERISGHT COMMITTEE
The Oversight Committee is essential to implementing Measure AA and will consist of seven at-
large members who reside within the District. The Committee convenes at least once a year and
reviews annual Measure AA expenditures and Midpen’s Annual Audit and Accountability report.
Each year, the Committee’s findings will be presented to the Board at a public meeting and will be
posted on the District’s website.
NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basis of accounting utilized in preparation of this report may differ from accounting principles
generally accepted in the United States of America. Accordingly, the accompanying program
statement is not intended to present the financial position and the results of operations in conformity
with accounting principles generally accepted in the United States of America. Expenditures incurred
with Measure AA Bond proceeds are recorded on a modified accrual basis of accounting. Under the
modified accrual basis of accounting, revenue is recognized when it is measureable and available.
Similarly, expenses are recognized when they are incurred, not when they are paid.
OTHER INDEPENDENT
AUDITOR’S REPORTS
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
INDEPENDENT AUDITOR’S 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
Board of Directors
Midpeninsula Regional Open Space District
Los Altos, California
We have audited, in accordance with auditing standards generally accepted in the United States of
America and the standards applicable to financial audits contained in Government Auditing Standards
issued by the Comptroller General of the United States, the financial statements of the District as of
and for the period ended June 30, 2016, and the related notes to the financial statements, which
collectively comprise the District’s basic financial statements, and have issued our report thereon
dated September 10, 2016.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s 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 financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s
internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s
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 financial statements 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 over financial reporting was for the limited purpose described in
the first paragraph of this section and was not designed to identify all deficiencies in internal control
over financial reporting that might be material weaknesses or significant deficiencies. Given these
limitations, during our audit we did not identify any deficiencies in internal control over financial
reporting 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 District’s financial statements 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 financial statement amounts. However, providing an opinion
on compliance with those provisions was not an objective of our audit and, accordingly, we do not
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
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
entity’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 entity’s internal control and
compliance. Accordingly, this communication is not suitable for any other purpose.
September 10, 2016
San Jose, California