HomeMy Public PortalAboutAudit Report - District- FY18Midpeninsula Regional Open Space District
Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2018
Headquartered in Los Altos, California
Operating over 63,000 acres of Regional Open Space Preserves and Trails
within portions of San Mateo, Santa Clara, and Santa Cruz Counties
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Comprehensive Annual Financial Report
Fiscal Year Ended June 30, 2018
Midpeninsula Regional Open Space District
Prepared by:
Finance and Administrative Services
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Introductory Section
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Midpeninsula Regional Open Space District
Santa Clara County
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
TABLE OF CONTENTS
TITLE PAGE
INTRODUCTORY SECTION
Table of Contents......................................................................................................................... 1
Transmittal Letter ........................................................................................................................ 3
Principal Officials ........................................................................................................................ 9
Organizational Charter................................................................................................................. 10
Location Map ............................................................................................................................... 11
GFOA Certification ..................................................................................................................... 12
FINANCIAL SECTION
Independent Auditor’s Report...................................................................................................... 14
Management’s Discussion and Analysis ..................................................................................... 18
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position............................................................................................... 28
Statement of Activities ................................................................................................... 29
Fund Financial Statements:
Balance Sheet –Governmental Funds ........................................................................... 32
Reconciliation of the Governmental Funds Balance Sheet to the
Statement of Net Position ........................................................................................ 33
Statement of Revenues, Expenditures, and Changes
in Fund Balance –Governmental Funds ................................................................. 34
Reconciliation of Governmental Funds Statement of Revenues, Expenditures,
and Changes in Fund Balance to the Statement of Activities.................................. 35
Notes to the Basic Financial Statements ............................................................................... 38
REQUIRED SUPPLEMENTARY INFORMATION
Schedule of Revenue, Expenditures and Changes in Fund Balance –
Budget and Actual (GAAP) General Fund ........................................................................... 74
Schedule of Pension Plan Contributions ...................................................................................... 75
Schedule of Net Pension Liability Proportionate Shares............................................................. 76
Schedule of Contributions for Postemployment Benefits ............................................................ 77
Schedule of Changes in Total OPEB Liability ............................................................................ 78
SUPPLEMENTARY INFORMATION
Schedule of Revenue, Expenditures and Changes in Fund Balance –
Budget and Actual (GAAP) Measure AA Capital Projects Fund......................................... 82
Schedule of Revenue, Expenditures and Changes in Fund Balance –
Budget and Actual (GAAP) GF Capital Projects Fund......................................................... 83
Schedule of Revenue, Expenditures and Changes in Fund Balance –
Budget and Actual (GAAP) Debt Service Fund ................................................................... 84
Measure AA Bond Program –Schedule of Program Expenditures ............................................. 85
Notes to Supplementary Information ........................................................................................... 86
1
Midpeninsula Regional Open Space District
Santa Clara County
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
STATISTICAL SECTION
Net Position ................................................................................................................................. 90
Changes in Net Position............................................................................................................... 91
Fund Balances of Governmental Funds ....................................................................................... 92
Changes in Fund Balances of Governmental Funds .................................................................... 93
Assessed and Actual Value of Taxable Property ......................................................................... 94
Direct and Overlapping Property Tax Rates ................................................................................ 95
Principal Property Tax Payers ..................................................................................................... 96
Property Tax Levies and Collections ........................................................................................... 97
Ratios of General Bonded Debt Outstanding............................................................................... 98
Ratios of Outstanding Debt.......................................................................................................... 99
Legal Debt Margin Information ................................................................................................... 100
Demographic and Economic Statistics ........................................................................................ 101
Principal Employers..................................................................................................................... 102
Full-time Equivalent District Government Employees by Function............................................ 103
Capital Asset Statistics by Function ............................................................................................ 104
Operating Indicators by Function ................................................................................................ 105
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 ......................................... 108
2
3
4
5
6
7
8
Midpeninsula Regional Open Space District
Santa Clara County
Comprehensive Annual Financial Report
For the year ended June 30, 2018
DISTRICT BOARD OF DIRECTORS
Jed Cyr, Ward 3 - Board President (Term ends 12/31/2020)
Cecily Harris, Ward 7 - Vice President (resigned after 6/30/2018)
Yoriko Kishimoto, Ward 2 - Board Secretary (Term ends 12/31/2018)
Curt Riffle, Ward 4 - Board Treasurer (Term ends 12/31/2020)
Pete Siemens, Ward 1 - Board Member (Term ends 12/31/2018)
Nonette Hanko, Ward 5 - Board Member (Term ends 12/31/2018)
Larry Hassett, Ward 6 - Board Member (Term ends 12/31/2018)
DISTRICT MANAGEMENT
Ana Ruiz, General Manager
Brian Malone, Acting Assistant General Manager
Christine Butterfield, Acting Assistant General Manager
Michael L. Foster, Controller
Hilary Stevenson, Esq., General Counsel
Stefan Jaskulak, Chief Financial Officer/Director of Administrative Services
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Redwoods State Park
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Open Space Preserves and Locations
Land Trust, Private Watershed Lands,
& Conservation Easements/Plans
MROSD Preserves
Other Protected Open Space or Park
Lands & Public Watershed Lands
Private Property
Other Public Agency Lands
& Institutional Lands
# Preserve Acres
17 Russian Ridge 3,491
18 Saratoga Gap 1,608
19 Sierra Azul 18,939
20 Skyline Ridge 2,143
21 St. Joseph’s Hill 270
22 Stevens Creek 55
23 Teague Hill 626
24 Thornewood 167
25 Tunitas Creek* 1,660
26 Windy Hill 1,414
# Preserve Acres
9 Los Trancos 274
10 Miramontes Ridge* 1,716
11 Monte Bello 3,537
12 Picchetti Ranch 308
13 Pulgas Ridge 366
14 Purisima Creek
Redwoods 4,752
15 Rancho
San Antonio 3,988
16 Ravenswood 376
# Preserve Acres
1 Bear Creek
Redwoods 1,437
2 Coal Creek 508
3 El Corte de
Madera Creek 2,906
4 El Sereno 1,419
5 Foothills 212
6 Fremont Older 739
7 La Honda Creek 6,144
8 Long Ridge 2,035
* Currently not open for public access.
The Midpeninsula Regional Open Space District
11
Midpeninsula Regional Open Space District
Santa Clara County
Comprehensive Annual Financial Report
For the Year Ended June 30, 2018
GFOA CERTIFICATE
12
Financial Section
13
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 governmental activities and each
maj or fund for Midpeninsula Regional Open Space District (the District), as of and for the year ended
June 30, 2018, 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 ma terial 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 governmental activities and each major fund of the District, as of
June 30, 2018, and the respective changes in financial position for the year then ended in accordance
with accounting principles generally accepted in the United States of America.
14
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
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, schedule of pension plan
contributions, schedule of net pension liability proportionate shares, schedule of contributions for
postemployment benefits, and schedule of changes in total OPEB liability 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.
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.
Change in Accounting Principle
As discussed in Note 1 to the financial statements, the District adopted new accounting guidance,
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions (OPEB). The District currently funds this obligation on a pay-as-you go basis and
through contributions to a trust. The District anticipates that its ongoing funding and current resources
are sufficient to meet its obligations as they come due. Our opinion is not modified with respect to
this matter.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 29,
2018 on our consideration of the District’s internal control over financial reporting and on our tests of
15
1475 Saratoga Ave, Suite 180, San Jose, CA 95129
Tel: 408-217-8749 • E-Fax: 408-872-4159
info@cnallp.com • www.cnallp.com
its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other
matters. The purpose of that report is solely 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.
October 29, 2018
San Jose, California
16
Management’s Discussion and Analysis
17
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2018
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 year ended on June 30, 2018. 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
18
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2018
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 fiscal year 2017-2018?” 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
District tax revenue and other metrics will not be comparable to the prior period due to the fifteen-month period of the
prior period financial statements. As the overall economy continued to grow throughout the Silicon Valley, the District
witnessed further strong growth in the assessed valuation of both secured and unsecured property within its boundaries.
The 2018-19 assessed valuation reports released in June 2018 showed District-wide assessed values increasing by 7.3%
(7.2% in Santa Clara and 7.4% in San Mateo). The District received 30% of its tax revenue from Santa Clara County
and 56% from San Mateo County.
Other financial highlights included:
Tax revenue related to the GO bonds amounted to $2.45 million
The District issued $25.025 million in Refunding Bonds to defease and redeem $11.605 million 2012 Current
Interest Notes and $8.9 million 2012 Capital Appreciation Notes initial principal.
The District issued $50 million in General Obligation Bonds related to Measure AA and $11.22 million in
Parity Bonds.
Purchased $3.5 million land and associated structures funded through Measure AA GO bond proceeds.
The District implemented GASB 75 during the year, which required the District to record the unfunded
liability from other postemployment benefits offered to employees. The Net OPEB liability as of June 30, 2018
was $1,898,023. In prior years, the District was only required to record the accumulated difference between its
annual required contribution and the actual contributions made, which was an asset of $406,023 at June 30,
2017.
The assets of the District exceeded liabilities at the close of the 2017 fiscal year by $349 million. Of this total net
position, $312 million, or 89%, was the District’s net investment in capital assets (capital assets net of related debt).
19
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2018
REPORTING THE DISTRICT’S MOST SIGNIFICANT FUNDS
Fund Financial Statements
The analysis of the District’s fund financial statements begins on page 16. Fund financial reports provide detailed
information about the District’s major funds. The District uses one operating fund, the General Fund, to account for a
multitude of financial transactions, two capital project funds to account for capital projects, and one debt service fund
to account for debt service payments.
Governmental Funds
The General Fund is a governmental fund type and is reported using an accounting method called modified accrual
accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental
fund statements provide a detailed short-term view of the District’s general government operations and the basic
services it provides. Governmental fund information helps determine whether there are more or fewer financial
resources that can be spent in the future to finance educational programs. The relationship (or differences) between
governmental activities (reported in the Statement of Net position and the Statement of Activities) and governmental
funds is reconciled in the financial statements.
THE DISTRICT AS A WHOLE
Recall that the Statement of Net Position provides the perspective of the District as a whole.Table 1 provides a
summary of the District’s net position as compared to last period:
Percentage
2018 2017 Change Change
As sets
Cur rent Assets 135,924,361$ 77,668,537$ 58,255,824$ 75.01%
Othe r No ncur rent As sets 637,906 1,312,382 (674,476) -51.39%
Capi tal As sets 462,119,833 447,133,839 14,985,994 3.35%
To tal Assets 598,682,100$ 526,114,758$72,567,342$ 13.79%
To tal De ferred Out flows of Re sources 17,804,789$ 15,636,983$ 2,167,806$ 13.86%
Li abi lities
Cur rent Liabi lities 14,219,357$ 16,210,837$ (1,991,480)$ -12.28%
No ncur rent Liabi lities 252,063,016 186,466,568 65,596,448 35.18%
To tal Liabi lities 266,282,373$ 202,677,405$63,604,968$ 31.38%
To tal De ferred Inf lows of Re sources 1,416,399$ 2,071,424$ (655,025)$ -31.62%
Ne t Posi ti on
Ne t Investment in Capi tal As sets 312,120,869$ 308,600,974$3,519,895$ 1.14%
Re stricted 7,252,294 4,570,997 2,681,297 58.66%
Unr estricted 29,414,954 23,830,941 5,584,013 23.43%
To tal Ne t Position 348,788,117$ 337,002,912$11,785,205$ 3.50%
Ta bl e 1 - Summar y o f St at ement of Ne t Posi ti on
Total net position increased by $11.8 million, as revenues exceeded expenditures. Noncurrent assets increased due
mostly to $17.4 million of capital expenditures.
20
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2018
Table 2 shows the changes in net position for 2018 as compared to period 2017.
Percentage
2018 2017 Change Change
Re ve nue s
Program r evenue s 3,189,096$ 2,130,301$ 1,058,795$ 49.70%
Ge ne ral revenue s:
Property t axe s 47,798,349 43,860,976 3,937,373 8.98%
Investment earnings 1,045,124 462,618 582,506 125.92%
Miscellane ous 1,152,611 783,977 368,634 47.02%
To tal Re ve nue s 53,185,180 47,237,872 5,947,308 12.59%
Program Expe ns es
Land preservat ion 28,909,830 21,783,483 7,126,347 32.71%
Int erest 8,193,228 8,327,042 (133,814) -1.61%
De pr eciation 2,398,894 1,585,098 813,796 51.34%
To tal Expe ns es 39,501,952 31,695,623 7,806,329 24.63%
Chang e in Ne t Positi on 13,683,228 15,542,249 (1,859,021) -11.96%
Ad jus tment to Begi nning Ne t Positi on (1,898,023) -(1,898,023) 100.00%
Beginning Net Posi ti on 337,002,912 321,460,663 15,542,249 4.83%
Endi ng Net Posi ti on 348,788,117$ 337,002,912$ 11,785,205$ 3.50%
Ta bl e 2 - Summar y o f Chang es in Ne t Positi on
Of the $1 million increase in program revenues, $600 thousand was due to the increased grant revenue and $400
thousand was due to income from redevelopment agency (RDA)pass-through.
THE DISTRICT’S FUND BALANCE
Table 3 provides an analysis of the District’s fund balances and the total change in fund balances from the prior year.
Measure AA Debt
General Capital GF Capital Service Percentage
Fund Projects Fund Projects Fund Fund Total 2017 Change
35,968$ -$ -$-$ 35,968$ 55,093$ -35%
---5,791,164 5,791,164 2,193,934 164%
-46,468,809 -- 46,468,809 7,344,797 533%
1,466,982 --- 1,466,982 1,971,040 -26%
--7,043,765 -7,043,765 -100%
44,000,000 --- 44,000,000 30,000,000 47%
3,000,000 --- 3,000,000 2,400,000 25%
3,000,000 --- 3,000,000 3,000,000 0%
2,000,000 --- 2,000,000 -100%
Nonspendable for prepaid expenditure
Restricted for debt service
Restricted for Measure AA Projects
Restricted for Hawthorns maintenance
Restricted for capital projects
Committed for infrastructure
Committed for equipment replacement
Committed for natural disasters
Committed for capital main tenance
Committed for future acquisitions
and capital projects 3,000,000 --- 3,000,000 -100%
Committed for promissory note 300,000 --- 300,000 -100%
Unassign ed 16,306,537 --- 16,306,537 23,872,450 -32%
Total Fund Balance 73,109,487$46,468,809$ 7,043,765$ 5,791,164$132,413,225$70,837,314$83%
Ta ble 3 - Summary of Fund Balance (All Governmental Fu nds)
2018
Following the completion of its new thirty-year strategic plan, the Board of Directors committed a majority of the
unassigned fund balance during fiscal year 2018 to reserves for infrastructure, equipment replacement and natural
disasters. See page 36 of the audit report for a description of each commitment.
21
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2018
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 2018, the District revised its General Fund budget, which resulted in an increase in budgeted
expenditures of $116 thousand from the original to final budget. The final budgeted revenue estimate was $48 million.
A summary of the original and final budget is presented below:
Percent
Or iginal Budge t Fi nal Budge t Va rianc e Va rianc e
Re ve nue s
Property t axe s 44,839,000$ 45,403,688$ 564,688$ 1.26%
Gr ant revenue s 191,000 191,000 - 0.00%
Property manage me nt 1,197,092 1,197,092 - 0.00%
Investment earnings 636,000 820,000 184,000 28.93%
Ot he r revenue s 464,501 464,501 - 0.00%
To tal Re ve nue s 47,327,593 48,076,281 748,688 1.58%
Expe ndi tures
Sal ar ies and e mpl oyee bene fits 21,923,124 21,974,034 50,910 0.23%
Se rvices and s uppl ies 9,702,951 9,809,954 107,003 1.09%
Capi tal outlay 84,000 43,000 (41,000) -95.35%
To tal Expe ns es 31,710,075 31,826,988 116,913 0.37%
Ne t Chang e in F und B al anc e 15,617,518$ 16,249,293$ 631,775$ 4.05%
Ta bl e 4 - Summar y o f Or iginal to F inal B udg ets
District expenditures were over the annual budget for the Debt Service Fund by $200 thousand. The budget overage
was due to an adjustment during the year end closing process to record the bond issuance costs paid from the bond
proceeds.
CAPITAL ASSETS
Table 5 shows 2018 capital asset balances as compared to 2017.
Percentage
2018 2017 Change Change
Land 414,547,441$ 407,986,151$ 6,561,290$ 1.61%
Co ns truction-in-Progress 8,596,297 19,020,245 (10,423,948) -54.80%
St ructure and Impr ovements 7,320,057 6,715,297 604,760 9.01%
Inf rastructure 28,512,084 10,474,326 18,037,758 172.21%
Equi pme nt 989,551 804,552 184,999 22.99%
Ve hi cles 2,154,403 2,133,268 21,135 0.99%
To tal Capi tal As sets - Ne t 462,119,833$ 447,133,839$ 14,985,994$ 3.35%
Ta bl e 5 - Summar y o f Capi tal As sets Ne t of De pr eci at ion
Additional detail and information on capital asset activity is described in the notes to the financial statements, note 5.
22
Midpeninsula Regional Open Space District
Management’s Discussion and Analysis
For the Fiscal Year Ended June 30, 2018
LONG TERM LIABILITIES
Table 6 summarizes the changes in long-term liabilities from 2018 to 2017.
Percentage
2018 2017 Change Change
Promissory Notes 39,769,276$ 65,095,264$ (25,325,988)$ -38.91%
Bo nds 205,905,916 116,855,465 89,050,451 76.21%
Ne t Pension Obligat ion 11,022,824 10,121,906 900,918 8.90%
Ne t OP EB 1,845,000 - 1,845,000 100.00%
Co mpe ns at ed Abs ences 1,723,930 1,817,547 (93,617) -5.15%
To tal Lo ng-term Li abi lities 260,266,946$193,890,182$66,376,764$ 34.23%
Ta bl e 6 - Summar y o f Lo ng -term Li abi lities
Additional detail and information on long-term liabilities activity is described in the notes to the financial
statements, note 6.
ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The Board of Directors adopted the District’s budget for year 2018-2019 on June 13, 2018. This budget assumes $58.8
million in revenues and a growth in general fund property tax income of 6% over the prior period.This budget funds
$54.1 million of capital spending, of which $14.8 million is expected to qualify for reimbursement from Measure AA
GO bond funds, and $31.6 million represents the purchase of the District’s new administrative headquarters.This
building purchase will be fully funded from existing reserves. General Fund operating expenditures are budgeted at
$33.5 million, a 10.5% increase over the prior year’s budget. Debt service is budgeted at $15.7 million, $4 million
higher than the prior year budget due to the issuance of $50 million of GO bonds (second tranche of the Measure AA
funds) and $11.2 million of parity bonds in 2017-2018. If all revenues, expenditures (including debt service) occur as
budgeted, the District’s overall cash balances would increase by over $7 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.
23
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24
Basic Financial Statements
25
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26
GOVERNMENT-WIDE STATEMENTS
Statement of Net Position and Statement of Activities
The Statement of Net Position and the Statement of Activities summarize the entire District’s financial activities
and financial position.They are prepared on the same basis as is used by most businesses,which means they
include all the District’s assets and all its liabilities,as well as all its revenues and expenses.This is known as the
full accrual basis.The effect of all of the District’s transactions is taken into account,regardless of whether or
when cash changes hands, but all material internal transactions between District funds have been eliminated.
The Statement of Net Position reports the difference between the District’s total assets and the District’s total
liabilities,including all the District’s capital assets and all its long-term debt.The Statement of Net Position
presents information in a way that focuses the reader on the composition of the District’s net position,by
subtracting total liabilities from total assets.
The Statement of Net Position summarizes the financial position of all of the District’s Governmental Activities
in a single column.The District’s Governmental Activities include the activities of its General Fund,along with
all its Special Revenue Funds, Capital Projects Funds, and Debt Service Funds.
The Statement of Activities reports increases and decreases in the District’s net position.It is also prepared on
the full accrual basis,which means it includes all the District’s revenues and all its expenses,regardless of when
cash changes hands.This differs from the “modified accrual”basis used in the Fund financial statements,which
reflect only current assets, current liabilities, available revenues and measurable expenditures.
The Statement of Activities presents the District’s expenses first,listed by program.Program revenues –that is,
revenues which are generated directly by these programs -are then deducted from program expenses to arrive at
the net expense of each governmental program.The District’s general revenues are then listed in the
Governmental Activities and the Change in Net Position is computed and reconciled with the Statement of Net
Position.
Both these Statements include the financial activities of the District and the Midpeninsula Regional Open Space
District Financing Authority.This entity is legally separate but is a component unit of the District because it is
controlled by the District, which is financially accountable for the Authority’s activities.
27
Assets
Current assets:
Cash and investments 132,551,342$
Accounts receivable:
Deposits 3,119,075
Rent 8,094
Interest 209,661
Due from other governments:
Taxes receivable 221
Other current assets 35,968
Total current assets 135,924,361
Noncurrent assets:
Notes receivable 115,248
Un amortized issuance costs 522,658
Non-depreciable capital assets 423,143,738
Capital assets, net of depreciation 38,976,095
Total noncurrent assets 462,757,739
Total Assets 598,682,100$
Deferred Outflows of Resources
OPEB adjustments 412,000
Pension adjustments 7,151,966
Deferred loss on early retirement of long-term debt 10,240,823
Total Deferred Outflows of Resources 17,804,789$
Liabilities
Current liabilities:
Accounts payable 2,423,768$
Deposits payable 96,568
Payroll and other liabilities 990,800
Accrued interest 2,504,291
Current portion of long-term liabilities 8,203,930
Total current liabilities 14,219,357
Noncurrent liabilities:
Long-term liabilities - net of current portion 252,063,016
Total Liabilities 266,282,373$
Deferred Inflows of Resources
OPEB adjustments 82,400
Pension adjustments 1,333,999
Total Deferred Outflows of Resources 1,416,399$
Net Position
Net investment in capital assets 312,120,869$
Restricted for:
Debt service 5,785,312
Hawthorne maintenance 1,466,982
Total restricted 7,252,294
Un restricted 29,414,954
Total Net Position 348,788,117$
Midpeninsula Regional Open Space District
Statement of Net Position
June 30, 2018
The notes to the financial statements are an integral part of this statement.
28
Net (Expense)
Capital Revenue and
Charges for Grants and Changes in
Expenses Services Contributions Net Position
Governmental activities:
Land preservation 28,909,830$ 1,576,379$ 1,612,717$ (25,720,734)$
Interest and fiscal charges 8,193,228 - - (8,193,228)
Depreciation 2,398,894 - - (2,398,894)
Total governmental activities 39,501,952$ 1,576,379$ 1,612,717$ (36,312,856)
General revenues:
Property taxes 47,798,349
Investment earnings 1,045,124
Other revenues 1,126,058
Special item - loss on disposal of capital assets 26,553
Total general revenues and special item 49,996,084
Change in net position 13,683,228
Net position beginning 337,002,912
Prior period adjustment (GASB 75 Net OPEB Liability)(1,898,023)
Net position beginning as adjusted 335,104,889
Net position ending 348,788,117$
Midpeninsula Regional Open Space District
Statement of Activities
For the Fiscal Year Ended June 30, 2018
Program Revenues
The notes to the financial statements are an integral part of this statement.
29
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30
Fund Title Fund Description
General Fund The 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.
Measure AA Capital Projects Fund This fund is used to account for resources from bond proceeds and
expenditures for capital projects related to the Measure AA GO Bond.
GF Capital Projects Fund This fund is used to account for expenditures for capital projects not
related to any other capital projects funds.
Debt Service Fund This 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.
FUND FINANCIAL STATEMENTS
MAJOR GOVERNMENTAL FUNDS
The funds described below were determined to be Major Funds by the District in fiscal year 2018.
31
Measure AA GF Capital Debt Total
General Capital Projects Service Governmental
Fund Projects Fund Fund Fund Funds
Assets
Cash and investments 68,169,299$ 49,284,586$ 9,312,145$ 5,785,312$ 132,551,342$
Receivables:
Deposits 3,119,075 - - - 3,119,075
Rent 8,094 - - - 8,094
Interest 209,661 - - - 209,661
Due from other governments:
Taxes receivable 221 - - - 221
Other current assets 35,968 - - - 35,968
Due from other funds 5,119,189 1,285,387 674,707 5,852 7,085,135
Notes receivable 115,248 - - - 115,248
Total Assets 76,776,755$ 50,569,973$ 9,986,852$ 5,791,164$ 143,124,744$
Liabilities
Liabilities:
Accounts payable 809,865$ 676,149$ 937,754$ -$ 2,423,768$
Deposits payable 96,568 - - - 96,568
Due to other funds 1,654,787 3,425,015 2,005,333 - 7,085,135
Payroll and other liabilities 990,800 - - - 990,800
Total Liabilities 3,552,020 4,101,164 2,943,087 - 10,596,271
Deferred Inflows Of Resources
Unavailable revenues 115,248 - - - 115,248
Fund Balance
Nonspendable:
Prepaid expenditures 35,968 - - - 35,968
Restricted for:
Debt service - - - 5,791,164 5,791,164
Measure AA capital projects - 46,468,809 - - 46,468,809
Hawthorne maintenance 1,466,982 - - - 1,466,982
Capital projects - - 7,043,765 - 7,043,765
Committed for:
Infrastructure 44,000,000 - - - 44,000,000
Equipment replacement 3,000,000 - - - 3,000,000
Natural disasters 3,000,000 - - - 3,000,000
Capital maintenance 2,000,000 - - - 2,000,000
Future acquisitions and capital
projects 3,000,000 3,000,000
Promissory note 300,000 - - - 300,000
Unassigned 16,306,537 - - - 16,306,537
Total Fund Balance 73,109,487 46,468,809 7,043,765 5,791,164 132,413,225
Total Liabilities and Fund Balance 76,776,755$ 50,569,973$ 9,986,852$ 5,791,164$ 143,124,744$
Balance Sheet
Midpeninsula Regional Open Space District
June 30, 2018
Governmental Funds
The notes to the financial statements are an integral part of this statement.
32
Total fund balance - governmental funds 132,413,225$
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 479,769,749$
Accumulated depreciation (17,649,916) 462,119,833
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.115,248
The difference between projected and actual amounts in pension and OPEB plans are not included in the
plans' actuarial study until the next fiscal year and are reported as deferred outflows or
inflows of resources in the statement of net position as follows:
OPEB adjustments:
Difference between actual and expected earnings (82,400)
Contribution subsequent to measurement date 412,000
Pension adjustment
Change in assumptions 2,365,101
Difference between actual and expected experience (275,001)
Difference between actual and expected earnings 579,041
Difference between employer's contributions and proportionate share of contributions 1,924,035
Change in employer's proportion (1,058,998)
Contribution subsequent to measurement date 2,283,789
Interest payable on long-term debt does not require the use of current financial resources and,
therefore, is not reported in the governmental funds.(2,504,291)
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:
Premium 26,838,674$
Issuance cost (522,658) (26,316,016)
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.10,240,823
Long-term liabilities are not due and payable in the current year and therefore are not reported
as liabilities in the funds. Long-term liabilities at year-end consists of:
Bon ds 184,370,000$
Net pension obligations 11,022,824
Promissory notes 34,466,518
Compensated absences 1,723,930
Annual net OPEB obligation 1,845,000 (233,428,272)
Total net position - governmental activities 348,788,117$
Midpeninsula Regional Open Space District
Balance Sheet to the Statement of Net Position
June 30, 2018
Reconciliation of the Governmental Funds
The notes to the financial statements are an integral part of this statement.
33
Measure AA GF Capital Debt Total
General Capital Projects Service Governmental
Fund Projects Fund Fund Fund Funds
Revenues:
Property taxes 45,347,807$ -$ -$ 2,450,542$ 47,798,349$
Grant income 553,281 1,059,436 - - 1,612,717
Property management 1,576,379 - - - 1,576,379
Investment earnings 853,729 102,684 (37,855) 145,635 1,064,193
Other revenues 347,983 - - - 347,983
Total revenues 48,679,179 1,162,120 (37,855) 2,596,177 52,399,621
Expenditures:
Current:
Land preservation:
Salaries and employee benefits 19,983,975 730,701 - - 20,714,676
Services and supplies 7,475,205 24,468 11,251 - 7,510,924
Capital outlay - 11,032,939 5,407,129 - 16,440,068
Debt service:
Principal - - - 5,716,067 5,716,067
Advance refunding escrow - - - 676,232 676,232
Interest - - - 5,720,001 5,720,001
Issuance cost - 250,000 133,434 493,496 876,930
Total expenditures 27,459,180 12,038,108 5,551,814 12,605,796 57,654,898
Excess (deficiency) of revenues
over (under) expenditures 21,219,999 (10,875,988) (5,589,669) (10,009,619) (5,255,277)
Other financing sources (uses):
Transfers in - - - 9,409,095 9,409,095
Transfers out (9,409,095) - - - (9,409,095)
Payment to refunded debt
escrow agent - - - (27,659,551) (27,659,551)
Issuance of refunding debt - - - 25,025,000 25,025,000
Issuance of debt - 50,000,000 11,220,000 - 61,220,000
Premium from debt issuances - - 1,413,434 6,832,305 8,245,739
Total other financing sources (uses)(9,409,095) 50,000,000 12,633,434 13,606,849 66,831,188
Net changes in fund balance 11,810,904 39,124,012 7,043,765 3,597,230 61,575,911
Fund balance beginning 61,298,583 7,344,797 - 2,193,934 70,837,314
Fund balance ending 73,109,487$ 46,468,809$ 7,043,765$ 5,791,164$ 132,413,225$
Midpeninsula Regional Open Space District
Statement of Revenues, Expenditures and Changes in Fund Balance
Governmental Funds
For the Fiscal Year Ended June 30, 2018
The notes to the financial statements are an integral part of this statement.
34
Total net change in fund balance - governmental funds 61,575,911$
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 17,411,441$
Depreciation expense (2,398,894)
Loss on disposal of capital asset (26,553) 14,985,994
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.
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.(19,069)
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.(457,204)
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 and parity bonds (86,245,000)$
Bond premium capitalized (8,245,739)
Deferred loss on early retirement of refunded bonds 4,113,597
Advance refunding of bonds 24,222,186
Repayment of bond principal 4,590,000
Repayment of promissory notes principal 1,126,067 (60,438,889)
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.(590,802)
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 776,874
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.93,617
In governmental funds, actual contributions to pension and OPEB plans are reported as expenditures in the
year incurred. However, in the government-wide statement of activities, only the current year pension
and OPEB expense as noted in the plans' valuation reports is reported as an expense, as adjusted for
deferred inflows and outflows of resources.(1,694,913)
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.(548,291)
Change in net position of governmental activities 13,683,228$
Midpeninsula Regional Open Space District
Statement of Revenues, Expenditures and Changes in Fund Balance
For the Fiscal Year Ended June 30, 2018
Reconciliation of the Governmental Funds
to the Statement of Activities
The notes to the financial statements are an integral part of this statement.
35
Page Intentionally Left Blank
36
Notes to Financial Statements
37
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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.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.
38
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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.
E.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 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.
39
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Deferred Outflows/Deferred Inflows:
A deferred outflow of resources is defined as a consumption of net position that applies to a future
period(s) and so will not be recognized as an outflow of resources (expenses/expenditure) until then.
A deferred inflow of resources is defined as an acquisition of net position that applies to a future
period(s) and so will not be recognized as an inflow of resources (revenues) until that time.
When applicable, unamortized portions of the gain and loss on refunding debt are reported as deferred
inflows and deferred outflows of resources, respectively. Deferred outflows and inflows of resources
are reported for the changes related to benefit plans. In addition, when an asset is recorded in
governmental fund financial statements but the revenue is not available, a deferred inflow of
resources is reported until such time as the revenue becomes available.
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.
F.Fund Accounting
The accounts of the District are organized into four 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.
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.
40
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Measure AA Capital Projects Fund. The Measure AA Capital Projects Fund is used to account for
resources from bond proceeds and expenditures for capital projects related to the Measure AA GO
Bond.
GF Capital Projects Fund. GF Capital Projects Fund is used to account for expenditures for capital
projects not related to any other capital projects 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.
G.Budgets and Budgetary Accounting
The District's Board of Directors adopts an annual operating budget for the District by major fund,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.
H.Assets, Liabilities, and Equity
1. Cash and Cash Equivalents
The District’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.
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.
41
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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. Capital assets
are valued at cost when historical records are available and at an estimated historical cost when no
historical records exist. Donated capital assets are valued at their estimated fair market value on the
date received. Donated works of art and similar items and capital assets received in service
concession arrangements are reported at acquisition value. 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.
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.
42
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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 equiva le nt
cash value of accrued
Years of Employme nt sick leave
15-20 20%
16-20 25%
21 or more 30%
An employee hired before June 30, 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 July 1, 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.
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.Compensated absences are liquidated by the fund that has
recorded the related liability. The long-term portion of governmental activities compensated
absences is liquidated primarily by the General Fund.
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.
43
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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
ma king authority and does not lapse at period-end. Committed fund balances are imposed by
the District’s Committed fund balances were imposed by the District’s Board of Directors
resolution. Any changes to committed fund balance requires the approval of two-thirds of the
Board.
Committed fund balances were imposed by the District’s Board of Directors as follows:
o Infrastructure: $44 million; projected minimum requirement for expansion of field
and office facilities over the next five years.
o Equipment Replacement: $3 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 million; amounts committed to respond quickly to a major fire,
earthquake or flood.
o Future acquisitions and capital projects: $3 million; amounts committed to reserve for
future capital acquisitions.
o Capital maintenance: $2 million; amounts committed to reserve for future capital
repairs and maintenance.
o Promissory Note: $0.3 million; amounts committed to payment of promissory note.
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, pursuant to Board Policy 3.07, if authorized by the Board of Directors to
make such designations.
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.
44
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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.Pension
For purposes of measuring the net pension liability and deferred outflows/inflows of resources
related to pensions, and pension expense, information about the fiduciary net position of the
Agency’s California Public Employees’ Retirement System (CalPERS) plan (the Plan) and
additions to/deductions from the Plan’s fiduciary net position have been determined on the same
basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of
employee contributions) are recognized when due and payable in accordance with the benefit
terms. Plan member contributions are recognized in the period in which the contributions are due.
Investments are reported at fair value.
GASB Statement No. 68, Accounting and Financial Reporting for Pensions -an amendment of
GASB Statement No. 27 (GASB Statement No. 68) requires that the reported results pertain to
liability and asset information within certain defined timeframes. Liabilities are based on the
results of actuarial calculations performed as of June 30, 2016. For this report, the following
timeframes are used for the District’s pension plans:
Valuation Date (VD) ....................................... June 30, 2016
Measurement Date (MD) ................................ June 30, 2017
Measurement Period (MP) .............................. June 30, 2016 to June 30, 2017
45
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
11.Other Postemployment Benefits Oher Than Pensions (OPEB)
For purposes of measuring the net OPEB liability,deferred outflows of resources and deferred
inflows of resources related to OPEB, and OPEB expense information about the fiduciary net
position of the District’s Retiree Benefits Plan (the Plan) and additions to/deductions from the
Plan's fiduciary net position have been determined on the same basis as they are reported by the
Plan. For this purpose, the Plan recognizes benefit payments when due and payable in accordance
with the benefit terms.
12.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.
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 Counties 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 each County and is used to pay the interest cost of borrowing the cash used for the advances.
13.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.
I.Implemented New Accounting Pronouncements
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other
Than Pensions.-The provisions in Statement 75 are effective for the fiscal year ended June 30,
2018.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
46
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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 entity provides financial
support for OPEB of employees of another entity.
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.
As of June 30, 2018, according to GASB 75, the District’s net OPEB liability must be recognized.
Therefore, the previous net OPEB liability as of June 30, 2017 in the amount of $1,898,023 has been
shown as a restatement of net position on the Statement of Activities as a separate line item.
GASB Statement No. 86, Certain Debt Extinguishment Issues. -The primary objective of this
Statement is to improve consistency in accounting and financial reporting for in-substance defeasance
of debt by providing guidance for transactions in which cash and other monetary assets acquired with
only existing resources—resources other than the proceeds of refunding debt—are placed in an
irrevocable trust for the sole purpose of extinguishing debt. This Statement also improves accounting
and financial reporting for prepaid insurance on debt that is extinguished and notes to financial
statements for debt that is defeased in substance. The requirements of this Statement are effective for
financial statements for periods beginning after June 15, 2017. Earlier application is encouraged.
This statement did not have an impact on the District’s financial statements.
J.Upcoming Accounting and Reporting Changes
GASB Statement No. 83, Certain Asset Retirement Obligations. -This Statement addresses
accounting and financial reporting for certain asset retirement obligations (AROs). An ARO is a
legally enforceable liability associated with the retirement of a tangible capital asset. A government
47
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
that has legal obligations to perform future asset retirement activities related to its tangible capital
assets should recognize a liability based on the guidance in this Statement. The requirements of this
Statement are effective for financial statements for periods beginning after June 15, 2018. Earlier
application is encouraged.
The District doesn’t believe this statement will have a significant impact on the District’s financial
statements.
GASB Statement No. 84, Fiduciary Activities.-The objective of this Statement is to improve
guidance regarding the identification of fiduciary activities for accounting and financial reporting
purposes and how those activities should be reported.
This Statement establishes criteria for identifying fiduciary activities of all state and local
governments. The focus of the criteria generally is on (1) whether a government is controlling the
assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists.
Separate criteria are included to identify fiduciary component units and postemployment benefit
arrangements that are fiduciary activities. The requirements of this Statement are effective for
financial statements for periods beginning after December 15, 2018. Earlier application is
encouraged.
The District doesn’t believe this statement will have a significant impact on the District’s financial
statements.
GASB issued Statement No. 87, Leases. -The objective of this statement is to better meet the
information needs of financial statement users by improving accounting and financial reporting for
leases by governments. This statement increases the usefulness of governments’ financial statements
by requiring recognition of certain lease assets and liabilities for leases that previously were classified
as operating leases and recognized as inflows of resources or outflows of resources based on the
payment provisions of the contract. It establishes a single model for lease accounting based on the
foundational principle that leases are financings of the right to use an underlying asset. Under this
statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset,
and a lessor is required to recognize a lease receivable and a deferred inflow of resources, thereby
enhancing the relevance and consistency of information about governments’ leasing activities. The
requirements of this statement are effective for the District’s fiscal year ending June 30, 2021.
The District doesn’t believe this statement will have a significant impact on the District’s financial
statements.
GASB Statement No. 88, Certain Disclosures Related to Debt, Including Direct Borrowings and
Direct Placements.-This Statement addresses additional information to be disclosed in the notes to
the financial statements regarding debt, including unused lines of credit; assets pledged as collateral
for the debt; and terms specified in debt agreements related to significant events of default with
finance-related consequences, significant termination events with finance-related consequences, and
significant subjective acceleration clauses. The requirements of this Statement are effective for
financial statements for periods beginning after June 15, 2018. Earlier application is encouraged.
The District doesn’t believe this statement will have a significant impact on the District’s financial
statements.
48
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
GASB Statement No. 89, Accounting for Interest Cost Incurred Before the End of the
Construction Period.-This Statement addresses interest costs incurred before the end of a
construction period be recognized as an expense in the period in which the cost is incurred for
financial statements prepared using the economic resources measurement focus. As a result, interest
cost incurred before the end of a construction period will not be included in the historical cost of a
capital asset reported in a business-type activity or enterprise fund. The requirements of this
Statement are effective for financial statements for periods beginning after December 15, 2019.
Earlier application is encouraged.
The District doesn’t believe this statement will have a significant impact on the District’s financial
statements.
NOTE 2 -CASH AND INVESTMENTS
Summary of Cash and Investments
The following summarizes deposits as of June 30, 2018:
Cash and
Cash Equivalents
Availa ble
Cash and Investments for Operations Restricted Total
Cash Deposits:
Cash in Banks 153,745$ 45,000$ 198,745$
Petty Cash 1,500 - 1,500
Total Cash Deposits 155,245 45,000 200,245
Investments:
Calif ornia Local Age ncy Investment Fund 364,810 - 364,810
CalTRUST - 1,541,018 1,541,018
Brokerage Ac counts/Cash with Fiscal Age nts 16,827,082 62,308,237 79,135,319
Santa Clara County Pool 49,236,144 2,073,806 51,309,950
Total Investments 66,428,036 65,923,061 132,351,097
Total Cash and Investments 66,583,281$ 65,968,061$ 132,551,342$
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, 2018,the
District’s bank balances exceeded FDIC coverage by $295,436.
49
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Fair Value Measurements
GASB 72 established a hierarchy of inputs to the valuation techniques above. This hierarchy has three
levels:
Level 1 inputs are quoted prices in active markets for identical assets or liabilities.
Level 2 inputs are quoted market prices for similar assets or liabilities, quoted prices for identical
or similar assets or liabilities in markets that are not active, or other than quoted prices that are
not observable
Level 3 inputs are unobservable inputs, such as a property valuation or an appraisal.
The District has the following investments with recurring fair value measurements as of June 30, 2018:
12 Months 13 - 24 25 - 60 More T han
Rating Fair Value or Less Months Months 60 Months
Money Market Accounts n/a 2,862,722$ n/a 2,862,722$ -$ -$ -$ 2.16%
Mutual Funds n/a - Level 2 - - - - 0.00%
Municipal Bonds AAA/A-14,434,065 Level 2 3,468,263 2,812,818 6,892,840 1,260,144 10.91%
Corp/Gov Bonds AAA/A-46,486,163 Level 1 17,035,248 13,480,269 15,970,646 - 35.12%
LAIF n/a 364,810 Level 2 364,810 - - - 0.28%
CalTrust A+f 1,541,018 Level 2 - - 1,541,018 - 1.16%
Santa Clara County Pool n/a 51,309,950 Level 2 25,931,443 12,111,863 13,266,644 - 38.77%
U.S. Obliga tions AA+/A-15,352,369 Level 1 2,498,624 9,765,007 3,088,738 - 11.60%
Total Investments 132,351,097$ 52,161,110$ 38,169,957$ 40,759,886$ 1,260,144$ 100.00%
Maturities
Concen-
trationsInvestment Type
Input
Level
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,
2018, these investments had an average maturity date of less than one year.
50
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Investment Trust of California
The District is a participant in the Investment Trust of California (CalTRUST) which is a California joint
powers authority that has been established by its members pursuant to an agreement. The California
Government Code provides that Public Agencies may purchase shares of beneficial interest issues by a
joint powers authority, such as CalTRUST, organized pursuant to the Section 6500 of the Act. The
District reports its investment in CalTRUST at the fair value amount provided by CalTRUST. The
District participates in the Medium-Term Fund with CalTRUST. The balance in this Medium-Term Fund
is available for withdrawal once a week (on Wednesdays), and is based on the net asset value per share on
the Wednesday of each week. Included in CalTRUST's investment portfolio for the Medium-Term Fund
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, 2018, these investments
had an average maturity date of 1.5 to 3.5 years.
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, 2018, the District had $3,711,506 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.
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, 2018 was $1,466,982.
51
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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:
Au thorized Investment Type
Maxim um
Remaining
Maturity
Maxim um Percentage of
Portfolio
Maxim um
Investment
in one Issuer
Medium Term Notes 5 years 30%No Limit
Money Market and Mutual Funds N/A 20%10%
U.S. Treasury Obliga tions 5 years No Limit No Limit
Federal Age ncy Securities 5 years No Limit No Limit
Banker's Ac ceptance 180 days 40%30%
Commercial P aper 270 days 25%10%
Negotiable Certificates of Deposit 5 years 30%No Limit
Repurchase Agr eements 1 year No Limit No Limit
Reverse Repurchase Agr eements 92 days 20%No Limit
Local Age ncy Investment Fund (LAIF)N/A $40 millio n 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 $7.5 billion and $90 billion, respectively as of June 30, 2018, 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 2018 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.
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
52
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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
Concentration of credit risk is the risk of loss attributed to the magnitude of an investor’s holdings in
a single issuer. The District’s investment in the County’s commingled pool is diversified by the
County Treasurer by limiting the percentage of the portfolio that can be invested in any one issuer’s
name.In vestments in U.S. Treasuries, U.S. Agency securities explicitly backed by the U.S., and
mutual and pooled funds are not subject to this limitation.
More than 5% of the County’s commingled pooled investments are invested with the Federal
National Mortgage Association, Federal Home Loan Bank, Federal Home Loan Mortgage
Corporation, and Federal Farm Credit Bank.
NOTE 3 -INTERFUND TRANSACTIONS
Interfund Receivables and Payables
Interfund transactions are reported as loans or transfers. The District utilizes interfund transactions to
account for funding received by the General Fund which is then distributed to the other funds for special
uses, such as payment of debt or capital project and to supplement other funding sources. Loans are
reported as interfund receivables and payables, as appropriate, and are subject to elimination upon
consolidation.
The following interfund loans were outstanding at fiscal year end June 30, 2018:
Fu nd
Due from Other
Fu nds
Due to Other
Fu nds
General Fund 5,119,189$ 1,654,787$
Measure AA Capital Projects Fund 1,285,387 3,425,015
GF Capital Projects Fund 674,707 2,005,333
Debt Service Fund 5,852 -
Total 7,085,135$ 7,085,135$
At June 30, 2018, interfund transfers consisted of the following:
Fu nd Tra nsfer In Tra nsfer Out
General Fund -$ 9,409,095$
Debt Service Fund 9,409,095 -
Total 9,409,095$ 9,409,095$
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Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
NOTE 4 -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, 2018 was $115,248.
NOTE 5 -CAPITAL ASSETS AND DEPRECIATION
Capital asset activity for the period ended June 30, 2018 is shown below:
Balance Deletions/Balance
Capital Assets June 30, 2017 Ad ditions Ad justments June 30, 2018
No n-depreciable:
Land 407,986,151$ 6,561,290$ -$ 414,547,441$
Construction in Progress 19,020,245 9,051,138 (19,475,086) 8,596,297
Total Non-Depreciable 427,006,396 15,612,428 (19,475,086)423,143,738
Depreciable:
Structure and Improvements 15,604,717 1,039,891 - 16,644,608
Infrastructure 13,433,155 19,207,013 - 32,640,168
Equipment 1,993,815 339,642 - 2,333,457
Ve hicles 4,509,308 687,553 (189,083) 5,007,778
Total Depreciable 35,540,995 21,274,099 (189,083) 56,626,011
Less Accumulated Depreciatio n fo r:
Structure and Improvements (8,889,420) (435,131) - (9,324,551)
Infrastructure (2,958,829) (1,169,255) - (4,128,084)
Equipment (1,189,263) (154,643) - (1,343,906)
Ve hicles (2,376,040) (639,865) 162,530 (2,853,375)
Total Accumulated Depreciation (15,413,552) (2,398,894) 162,530 (17,649,916)
Total Depreciable Capital Assets - Net 20,127,443 18,875,205 (26,553) 38,976,095
Total Capital Assets - Net 447,133,839$ 34,487,633$ (19,501,639)$462,119,833$
54
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
NOTE 6 -LONG-TERM DEBT
The following is a summary of the changes in long-term debt for the period ended June 30, 2018:
Begin ning Ending Due Within
Long-term Obliga tions Balance Additions Deductions Balance One Year
Promissory Notes:
Current Interest 38,171,066$ -$ 12,731,067$ 25,439,999$ 1,200,000$
Capital Appreciation 15,474,708 - 8,894,106 6,580,602 -
Ac creted in terest 5,114,953 457,204 3,126,240 2,445,917 -
Unamortized Bond Premium 6,334,537 - 1,031,779 5,302,758 -
Subtotal Promissory Notes 65,095,264 457,204 25,783,192 39,769,276 1,200,000
Bonds:
Current Interest 102,715,000 86,245,000 4,590,000 184,370,000 5,280,000
Unamortized Bond Premium 14,140,465 8,245,739 850,288 21,535,916 -
Subtotal Bonds 116,855,465 94,490,739 5,440,288 205,905,916 5,280,000
Net Pension Obliga tion 10,121,906 900,918 - 11,022,824 -
Net OP EB - 1,845,000 - 1,845,000 -
Compensated Ab sences 1,817,547 1,314,930 1,408,547 1,723,930 1,723,930
Total Long-term Obliga tions 193,890,182$ 99,008,791$ 32,632,027$ 260,266,946$ 8,203,930$
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 matured 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.
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 considered to be defeased and the
liability for those bonds has been removed from the long-term debt in the financial statements. The 2012
Refunding Promissory Notes were partially defeased during fiscal year 2018 with issuance of the 2017
Refunding Bond as noted below.
55
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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
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. This Bond was partially defeased during fiscal year 2017 with
issuance of the 2016 Refunding Series A and B Green Bonds as noted below.
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.
2016A and 2016B Refunding Green Bonds
On September 8, 2016 the District issued $54,490,000 of 2016 Refunding Series A and $2,920,000 2016
Refunding Series B Green Bonds for the purpose of refunding its outstanding obligations under the 2007
Series A Revenue Refunding Bonds and prepay a portion of its obligations under the 2011 Lease Revenue
Bonds. As a result,the 2007 Series A Revenue Refunding Bonds and the 2011 Lease Revenue Bonds are
considered to be defeased and the liability for those bonds has been removed from the government-wide
financial statement of net position.
The refunding resulted in a difference between the reacquisition price and the net carrying amount of the
old debt of $5,032,161, which is reported as a deferred outflow on the government-wide statement of net
position. This difference, reported in the accompanying financial statements as a deduction from bonds
payable, is being charged to operations through fiscal year 2036 using the straight-line method. The
District completed the refunding to obtain an economic gain (difference between the present value of the
old and the new debt service payments) of $12,694,440.
The 2016 Refunding Green Bonds Series A bears interest from 2.0% to 5.0% and the Series B bears
interest of 0.73%. Interest for both Series A and B are due semi-annually on March 1 and September 1.
56
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Principal payments for Series A begins September 2017 and are due annually thereafter until September
2036. Series B has only one principal payment in September 2017.
2017 Series A Refunding Green Bonds
On December 13, 2017 the District issued $25,025,000 of 2017 Refunding Green Bonds for the purpose
of partially refunding its outstanding obligations under the 2012 Refunding Promissory Notes. The
proceeds of the 2017 Refunding Green Bonds, together with $676,232 of other District funds, were used
to defease and redeem $11,605,000 principal amount of the District’s outstanding 2012 Current Interest
Notes and $8,894,106 initial principal of the District’s outstanding 2012 Capital Appreciation Notes,
collectively, the 2012 Refunding Promissory Notes. The amounts defeased have been removed from the
government-wide financial statement of net position.
The refunding resulted in a difference between the reacquisition price and the net carrying amount of the
old debt of $4,113,597, which is reported as a deferred outflow on the government-wide statement of net
position. This difference, reported in the accompanying financial statements as a deduction from bonds
payable, is being charged to operations through fiscal year 2033 using the straight-line method. The
District completed the refunding to obtain an economic gain (difference between the present value of the
old and the new debt service payments) of $8,882,524.
The 2017 Refunding Green Bonds bears interest from 3.125% to 5.0%. Interest is due semi -annually on
March 1 and September 1. Principal payments begin September 2025 and are due annually thereafter until
September 2037.
2017 Series B Parity Bonds
On December 13, 2017, the District issued $11,220,000 of 2017 parity bonds to finance portion of the
cost of acquiring and improving staffing facilities for use by the District. The bonds bear interest of 5%
and are due semi-annually on June 30 and December 30. The bonds were issued at a premium of
$1,413,434 and issuance costs of $133,434.
2018 General Obligation Bonds
On February 1, 2018, the District issued $50,000,000 of 2018 general obligation bonds to finance 25
projects specified in Measure AA. The bonds bear interest from 2% to 5% and are due semi-annually on
March 1 and September 1. The bonds were issued at a premium of $3,691,291 with an issuance costs of
$455,462.
57
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
The following schedule summarizes the District’s outstanding promissory notes and bonds as of June 30,
2018:
Origin al Begin ning Ending
Long Term Debt Issue Balance Additions Retirements Balance
Promisso ry Notes:
Daloia Note 240,000$ 11,067$ -$ 11,067$ -$
Hunt Note 1,500,000 1,500,000 - - 1,500,000
2012 Refunding Note Current Int.15,790,000 14,109,999 - 11,985,000 2,124,999
2012 Refunding Note Cap Apprec.15,474,708 15,474,708 - 8,894,106 6,580,602
2015 Refunding Note 23,630,000 22,550,000 - 735,000 21,815,000
Subtotal Promisso ry Notes 56,634,708 53,645,774 - 21,625,173 32,020,601
Bo nds:
2011 Lease Revenue 20,500,000 1,080,000 - 150,000 930,000
2015A General Obliga tion Bonds 40,000,000 40,000,000 - - 40,000,000
2015B General Obliga tion Bonds 5,000,000 4,225,000 - 875,000 3,350,000
2016 Refunding Bond 57,410,000 57,410,000 - 3,565,000 53,845,000
2017 Refunding Bond 25,025,000 - 25,025,000 - 25,025,000
2017 Parity Bond 11,220,000 - 11,220,000 - 11,220,000
2018 General Obliga tion Bonds 50,000,000 - 50,000,000 - 50,000,000
Subtotal Bo nds 209,155,000 102,715,000 86,245,000 4,590,000 184,370,000
Accreted Interest:
2012 Refunding Note 5,114,953 457,204 3,126,240 2,445,917
Subtotal Accreted Interest 5,114,953 457,204 3,126,240 2,445,917
Unamo rtized Bond Premium 20,475,002 8,245,739 1,882,067 26,838,674
Total Long Term Debt 265,789,708$ 181,950,729$ 94,947,943$ 31,223,480$ 245,675,192$
The promissory notes future debt service requirements as of June 30, 2018 were as follows:
Year Ending June 30,Prin cipal
Remaining
Ac cretion Interest Total
2019 1,200,000$ -$ 1,194,875$ 2,394,875$
2020 1,285,000 - 1,136,775 2,421,775
2021 1,370,000 - 1,084,025 2,454,025
2022 1,445,000 - 1,029,625 2,474,625
2023 3,040,000 - 963,950 4,003,950
2024-2028 6,495,000 - 3,496,875 9,991,875
2029-2033 12,951,057 7,108,082 1,694,125 21,753,264
2034-2038 4,234,544 2,400,400 142,750 6,777,694
Total Debt Service 32,020,601$ 9,508,482$ 10,743,000$ 52,272,083$
58
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
The bonds future debt service requirements as of June 30, 2018 were as follows:
Year Ending June 30,Prin cipal
Remaining
Ac cretion Interest Total
2019 5,280,000$ -$ 7,996,117$ 13,276,117$
2020 7,830,000 - 7,417,788 15,247,788
2021 7,025,000 - 7,161,901 14,186,901
2022 6,675,000 - 6,895,263 13,570,263
2023 6,990,000 - 6,589,537 13,579,537
2024-2028 40,580,000 - 27,230,790 67,810,790
2029-2033 25,970,000 - 18,586,245 44,556,245
2034-2038 41,445,000 - 12,814,639 54,259,639
2039-2043 20,960,000 - 6,400,600 27,360,600
2044-2048 18,975,000 - 2,181,300 21,156,300
2049-2053 2,640,000 - 52,800 2,692,800
Total Debt Service 184,370,000$-$ 103,326,980$287,696,980$
Amortization of the deferred loss on early retirement of long-term debt for the fiscal period ended June
30, 2018 was as follows:
Begin ning Balance 6,976,997$
Ad dition 4,113,597
Am ortization (849,771)
Ending Balance 10,240,823$
NOTE 7 -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 $1,211,878 was received during the period ended June 30,
2018.
NOTE 8 -CALPERS PENSION PLAN
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 reduced benefits. All
59
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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, 2018, are summarized as follows:
Ti er 1 PEPRA
Bene fit formul a 2% @ 55 2% @ 6 2
Be ne fit ve sting s chedul e 5 Ye ar s 5 Ye ar s
Be ne fit payme nt s Mo nthl y f or Li fe Monthly for Life
Re tirement age 55 62
Mo nthl y be ne fits as a % o f eligible compens at ion 2.0% to 2.5% 2.00%
Re qui red e mpl oyee contribut ion r at es 8.000% 6.250%
Re qui red e mpl oyer contribution rat es 10.110% 6.533%
Mi scel lane ous
Employees Covered –At June 30, 2018, the following employees were covered by the benefit terms for
the Plan:
Miscellane ous
Ac tive 141
Tr ans ferred 50
Se par at ed 67
Re tired 70
To tal 328
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, 2018,the District contributed $2,283,789 to the plan.
Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions
As of June 30,2018, the District reported net pension liabilities for its proportionate shares of the net
pension liability of the Plan as follows:
Miscella neous $ 11,022,824
Proportio nate Share of
Net Pensio n
Liability/(Asset)
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, 2017, and the total pension
liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation
60
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
as of June 30, 2016 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 fiscal years June 30, 2017 and 2018 was
as follows:
Miscellaneous
Proportion - June 30, 2017 0.29137%
Proportion - June 30, 2018 0.27962%
Change - Increase/(Decrease)-0.01175%
For the fiscal year ended June 30, 2018,the District recognized pension expense of $3,297,743. At fiscal
year June 30,2018, the District reported deferred outflows of resources and deferred inflows of resources
related to pensions from the following sources:
Deferre d
Outflo ws o f
Reso urces
Deferre d
Inflo ws of
Reso urces
Changes of As sumptions 2,365,101$ -$
Differences between Expected and Ac tual Experience - 275,001
Differences between Projected and Actual Investment Earnings 579,041 -
Differences between Employer's Contributions and P roportionate
Share of Contributions 1,924,035 -
Change in Employer's Proportion - 1,058,998
Pension Contributions Made Subsequent to Measurement Date 2,283,789 -
To tal 7,151,966$ 1,333,999$
The District reported $2,283,789 as deferred outflows of resources related to contributions subsequent to
the measurement date that will be recognized as a reduction of the net pension liability in the year ended
June 30,2019. Other amounts reported as deferred outflows of resources and deferred inflows of
resources related to pensions will be recognized as pension expense as follows:
1,275,768$
1,630,830
971,367
(343,787)
-
-
3,534,178$
Fi scal Year
En ding June 30:
Thereafter
To tal
Deferre d
Outflo ws/
(Inflo ws ) of
Reso urces
2019
2020
2021
2022
2023
61
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Actuarial Assumptions -The total pension liabilities in the June 30, 2016 actuarial valuations were
determined using the following actuarial assumptions:
Valuation Date June 30, 2016
Measurement Date June 30, 2017
Actuarial Cost Method Entry-Age Normal Cost
Method
Actuarial Assumptions:
Discount Rate 7.15%
Inflation 2.75%
Payroll Growth 3.00%
Projected Salary Increase (1)
Investment Rate of Return 7.5% (2)
Mortality (3)
(1) Varies by age and service
(2) Net of pension plan investment expenses, including inflation
(3) Derived using CalPERS' membership data for all funds
Discount Rate -The discount rate used to measure the total pension liability was 7.15 percent for each
Plan.To determine whether the municipal bond rate should be used in the calculation of a discount rate
for each 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 7.15 percent discount rate is adequate and the use of the municipal bond
rate calculation is not necessary. The long term expected discount rate of 7.15 percent will be applied to
all plans in the Public Employees Retirement Fund (PERF). The cash flows used in the testing were
developed assuming that both members and employers will make their required contributions on time and
as scheduled in all future years. The stress test results are presented in a detailed report called “GASB
Crossover Testing Report” that can be obtained at CalPERS’ website under the GASB 68 section.
CalPERS is scheduled to review all actuarial assumptions as part of its regular Asset Liability
Management (ALM) review cycle that is 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 we have changed our 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 as the one calculated using both short-term and long-
62
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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.
New
Strategic Real Return Real Return
Asset Class Allocation Years 1 - 10 (a)Years 11+ (b)
Global Equity 47.00%4.90% 5.38%
Fixed Income 19.00%0.80% 2.27%
Inflation Sensitive 6.00%0.60% 1.39%
Private Equity 12.00%6.60% 6.63%
Real Estate 11.00%2.80% 5.21%
Infrastructure and Forestland 3.00%3.90% 5.36%
Liquidity 2.00%-0.40%-0.90%
Total 100.00%
(a) An expected inflation of 2.5% used for this period.
(b) An expected inflation of 3.0% 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:
Miscellaneo us
1% Decrease 6.15%
Net Pension Liabilit y 19,462,398$
1% Decrease 7.15%
Net Pension Liabilit y 11,022,824$
1% Increase 8.15%
Net Pension Liabilit y 4,033,017$
Pension Plan Fiduciary Net Position -Detailed information about each pension plan’s fiduciary net
position is available in the separately issued CalPERS financial reports.
63
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
NOTE 9 -POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
Plan Description -The District joined the California Employers' Retiree Benefit Trust (CERBT), an
agent multiple-employer defined benefit postemployment healthcare plan administered by CalPERS. See
eligibility requirements below. Retiree benefit continues to surviving spouse if retiree elects survivor
annuity under CalPERS retirement plan. The OPEB plan’s audited financial statements are available at
https://www.calpers.ca.gov/docs/forms-publications/gasb-75-schedule-changes-fiduciary-net-position-
2017.pdf.
Benefits Provided -The following is a summary of the plan benefits provided:
El igibility:Retire directly from the District under CalPER (age 50 and 5
years of service)
Continue participation in 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 le ast equal to statutory PEMHCA minim um ($122
in 2015, $125 in 2016)
PEMHCA Administrative Fe e:District pays CalPERS administrative fees (0.32% of premiums
for 2015/16)
Surviving Spo use Co ntinuatio n:Retiree beneift continues to surviving spouse if retiree elects
survivor annuity under CalPERS retirement plan
Employees Covered by Benefit Terms -At June 30, 2017 (the valuation date), the benefit terms
covered the following employees:
Ac tive employees 138
Inactive employees 31
To tal emplo yees 169
Contributions -The District makes contributions based on an actuarially determined rate and are
approved by the authority of the District’s Board. Total contributions during the year were $412,000.
Total contributions included in the measurement period were $513,000. The actuarially determined
contribution for the measurement period was $609,000. The District’s contributions were 4.01%of
payroll during the measurement period June 30, 2017 (reporting period June 30, 2018). Employees are
not required to contribute to the plan.
64
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Actuarial Assumptions -The following summarized the actuarial assumptions for the OPEB plan
included in this fiscal year:
Valuatio n Date:June 30, 2017
Measurement Date:June 30, 2017
Actuarial Co st Metho d:Entry age normal, level precentage of payroll
Amo rtizatio n Period:10.2 years
Asset Valuatio n Metho d:Investment ga in s and lo ses spread over 5 year rolling period
Actuarial Assumptio ns:
Disco unt Rate 6.75%
General Inflation 2.75%
Payroll Increases - Aggr egate - 3%
- Merit - CalPERS 1997-2015 experience study
Medical Tre nd - Non-medicare - 7.5% for 2019, decreasing to an ultimate
rate of 4.0% in 2076 and la ter years
- Medicare - 6.5% for 2019, decreasing to an ultimate rate of
4.0% in 2076 and la ter years
PEMHCA Minimum Increases 4.25%
Mo rt ality, Retirement,
Disability, Te rm inatio n CalPERS 1997-2015 experience study
Mo rt ality Improvement Post-retirement mortalit y projected fully generational wit h
Society of Actuaries Scale MP-2017
Healthcare Participatio n for
Fu ture Retirees
- Currently covered: 90%
- Currently waived: 60%
Discount Rate -The projection of cash flows used to determine the discount rate assumed that the
District contribution will be made at rates equal to the actuarially determined contribution rates. Based on
those assumptions, the OPEB plan's fiduciary net position was projected to cover all future OPEB
payments. Therefore, the discount rate was set to be equal to the long-term expected rate of return which
was applied to all periods of projected benefit payments to determine the total OPEB liability.
Long-Term Expected Rate of Return -The long-term expected rate of return on OPEB plan
investments was determined using a building-block method in which expected future real rates of return
(expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset
class. These ranges are combined to produce the long-term expected rate of return by weighting the
expected future real rates of return by the target asset allocation percentage and by adding expected
inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset
class are summarized in the following table:
Asset Class
Percentage of
Po rt fo lio
Lo ng-Term
Ex pected Rate of
Return
Global Equity 57.00%4.820%
Fixe d Income 27.00%1.470%
TIPS 5.00%1.290%
Commodities 3.00%0.840%
REIT s 8.00%3.760%
To tal 100.00%3.535%
65
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Net OPEB Liability -The District's net OPEB liability was measured as of June 30, 2017 (measurement
date), and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial
valuation as of June 30, 2017 (valuation date) for the fiscal year ended June 30, 2018 (reporting date).
The following summarizes the changes in the net OPEB liability during the year ended June 30, 2018, for
the measurement date of June 30, 2017:
Fi scal Year Ended June 30, 2018
(Measurement Date June 30, 2017)
To tal OPEB
Liability
Plan Fi duciary
Net Po sitio n
Net OPEB
Liability
Balance at June 30,2017 4,585,000$ 2,580,000$ 2,005,000$
Service cost 313,000 - 313,000
Interest in Total OPEB Liabilit y 326,000 - 326,000
Employer contributions - 513,000 (513,000)
Employer implicit subsidy - - -
Employee contributions - - -
Balance of diff between actual and exp experience - - -
Balance of diff between actual and exp earnings - - -
Balance of changes in assumptions - - -
Ac tual investment income - 287,000 (287,000)
Ad ministrative expenses - (1,000) 1,000
Benefit payments (113,000) (113,000) -
Other - - -
Net changes 526,000 686,000 (160,000)
Balance at June 30, 2018 5,111,000$ 3,266,000$ 1,845,000$
Covered Payroll at Measurement Date 12,802,887$
Total OPEB Liabilit y as a % of covered payroll 39.92%
Plan Fid. Net P osition as a % of T otal OP EB Liabilit y 63.90%
Service cost as a % of covered payroll 2.44%
Net OP EB Liabilit y as a % of covered payroll 14.41%
Deferred Inflows and Outflows of Resources -At June 30, 2018, the District reported deferred
outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferre d
Outflo ws of
Reso urces
Deferre d
Inflo ws of
Reso urces
Difference between actual and expected experience -$ -$
Difference between actual and expected earnings - (82,400)
Change in assumptions - -
OP EB contribution subsequent to measurement date 412,000 -
To tals 412,000$ (82,400)$
66
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Of the total amount reported as deferred outflows of resources related to OPEB, $412,000 resulting from
District contributions subsequent to the measurement date and before the end of the fiscal year will be
included as a reduction of the net OPEB liability in the year ended June 30, 2019. Other amounts reported
as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in
OPEB expense as follows:
Year Ended June 30,
2019 (20,600)$
2020 (20,600)
2021 (20,600)
2022 (20,600)
2023 -
Thereafter -
To tal (82,400)$
OPEB Expense -The following summarizes the OPEB expense by source during the year ended June
30, 2018, for the measurement date of June 30, 2017:
Service cost 313,000$
Interest in TOL 326,000
Expected investment in come (184,000)
Other -
Employee contributions -
Difference between actual and expected experience -
Difference between actual and expected earnings (20,600)
Change in assumptions -
Ad ministrative expenses 1,000
OPEB Ex pense 435,400$
The following summarizes changes in the net OPEB liability as reconciled to OPEB expense during the
year ended June 30, 2018, for the measurement date of June 30, 2017:
1,845,000$
(2,005,000)
(160,000)
Changes in deferred outflows -
Changes in deferred in flows 82,400
Employer contributions 513,000
OPEB Ex pense 435,400$
Net OP EB lia bilit y ending
Net OP EB lia bilit y beginin g
Change in net OP EB lia bilit y
67
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
Sensitivity to Changes in the Discount Rate -The net OPEB liability of the District, as well as what the
District's net OPEB liability would be if it were calculated using a discount rate that is one percentage
point lower or one percentage point higher, is as follows:
5.75%
(1% Decrease )
6.75%
(Curre nt Rate)
7.75%
(1% Increase )
Net OP EB Liabilit y 2,619,000$ 1,845,000$ 1,212,000$
Disco unt Rate
Sensitivity to Changes in the Healthcare Cost Trend Rates -The net OPEB liability of the District, as
well as what the District's net OPEB liability would be if it were calculated using healthcare cost trend
rates that are one percentage point lower or one percentage point higher than current healthcare cost trend
rates, is as follows:
3.25%
(1% Decrease )
4.25%
(Curre nt Rate)
5.25%
(1% Increase )
Net OP EB Liabilit y 1,646,000$ 1,845,000$ 2,109,000$
Tre nd Rate
NOTE 10 -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.
68
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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.
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 certain
types of cleanups; fuel spill or hazmat incidents; member listed non-owned disposal sites; above ground
and underground storage tanks; and for 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 three-year coverage period.
The current coverage period is July 2017 through July 1, 2020. Each member of CAL JPIA has a
$10,000,000 aggregate limit during the three-year period. The current coverage period is July 2017
through July 1, 2020.
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 scheduled 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
69
Midpeninsula Regional Open Space District
Notes to the Basic Financial Statements
June 30, 2018
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.
Vendors/Contractors Program
General liability coverage with or without professional liability is offered through CAL JPIA to
vendors/contractors who otherwise could not meet the District’s minimum insurance requirement: $1
million per occurrence, $2 million in aggregate.
Cyber Liability Program
The cyber liability program is partially covered under the liability program, and partially held through a
stand-alone coverage program. Cyber liability provides coverage for both first-and third-party claims.
First party coverage includes privacy, regulatory claims, security breach response, business income loss,
dependent business income loss, digital asset restoration costs, and cyber-extortion threats, while third-
party coverage includes privacy liability, network security liability, and multimedia liability. Members
work directly with the reinsurer to investigate and respond to claims. There is a $1 million per occurrence
limit of coverage,$1 million aggregate limit per policy period per member, and a $10 million aggregate
limit of coverage for all members per policy period.
NOTE 11 -COMMITMENTS AND CONTINGENCIES
The District may be exposed to various claims and litigation during the normal course of business.
However, management believes there were no matters that would have a material adverse effect on the
District’s financial position or results of operations as of June 30, 2018.
NOTE 12 -SUBSEQUENT EVENTS
Management has reviewed subsequent events and transactions that occurred after the date of the financial
statements through the date the financial statements were issued. The financial statements include all
events or transactions, including estimates, required to be recognized in accordance with generally
accepted accounting principles. Management has determined that there are no nonrecognized subsequent
events that require additional disclosure.
70
Required Supplementary Information
71
Page Intentionally Left Blank
72
REQUIRED SUPPLEMENTARY INFORMATION
BUDGETARY SCHEDULES
This schedule presents a comparison of the original budget,final budget and actual revenues and expenditures
for General Fund. The schedule presents the difference between the final budget and actuals.
PENSION SCHEDULES
These schedules present information that shows the District's proportionate share of the pension liability in the
cost sharing pools,actuarial information,and contributions.The proportionate share information is useful in
determining the District's liability on relation to all other entities in the pool.
POSTEMPLOYMENT BENEFIT SCHEDULES
These schedules present information that shows the District's total other postemployment benefits (OPEB),plan
fiduciary net position, and contributions related to retiree healthcare benefits provided by the District.
73
Variance with
Final Budget
Actual Positive -
Original Final (GAAP Basis)(Negative)
Revenues:
Property taxes 44,839,000$ 45,403,688$ 45,347,807$ (55,881)$
Grant income 191,000 191,000 553,281 362,281
Property management 1,197,092 1,197,092 1,576,379 379,287
Investment earnings 636,000 820,000 853,729 33,729
Other revenues 464,501 464,501 347,983 (116,518)
Total revenues 47,327,593 48,076,281 48,679,179 602,898
Expenditures:
Current
Salaries and employee benefits 21,923,124 21,974,034 19,983,975 1,990,059
Services and supplies 9,702,951 9,809,954 7,475,205 2,334,749
Capital outlay 84,000 43,000 - 43,000
Total expenditures 31,710,075 31,826,988 27,459,180 4,367,808
Excess (deficiency) of revenues
over (under) expenditures 15,617,518 16,249,293 21,219,999 4,970,706
Other financing sources (uses):
Transfers in - - - -
Transfers out - - (9,409,095) (9,409,095)
Total other financing sources (uses)- - (9,409,095) (9,409,095)
Net change in fund balance 15,617,518 16,249,293 11,810,904 (4,438,389)
Fund balance beginning 61,298,583 61,298,583 61,298,583 -
Fund balance ending 76,916,101$ 77,547,876$ 73,109,487$ (4,438,389)$
Budgeted Amounts
Midpeninsula Regional Open Space District
Budget to Actual (GAAP)
For the Fiscal Year Ended June 30, 2018
Schedule of Revenues, Expenditures and Changes in Fund Balance
General Fund
The notes to the financial statements are an integral part of this statement.
74
Midpeninsula Regional Open Space District
Schedule of Pension Plan Contributions
June 30, 2018
Mi scellane ous Pl an
Plan Me as ur ement Date 2017 2016 2015 2014
Fiscal Ye ar Ended 2018 2017 2016 2015
Contractually Requi red Contribut ions 1,763,650$ 1,514,352$ 1,358,520$ 1,461,069$
Contribut ions in Re lation to Cont ractual ly Required Cont ributions 2,283,789 2,529,862 4,788,977 1,343,244
Contri bution Defi ciency (Exc ess)(520,139)$ (1,015,510)$ (3,430,457)$ 117,825$
Covered P ayr oll (Fiscal Ye ar )12,802,887$ 11,834,150$ 9,862,578$ 8,994,979$
Contri butions as a Percentage of Co vered P ayr ol l 17.84% 21.38% 48.56% 14.93%
Notes to Sche dul e:
Val uation Dat e:June 3 0, 2 016
As sumptions Used:Entr y Age Method used for Ac tuarial Cost Method
Le ve l Percentage o f Payr oll and Direct Rat e Smo othing
3.8 Ye ars Remaini ng Amortizat ion Period
Inf lation Assumed at 2.7 5%
Investment Rate of Returns set at 7.5%
CalP ERS mortality tabl e using 20 year s of membe rship data fo r al l funds
** Fiscal ye ar 2 015 wa s the first year o f implementation, the refore only four years ar e shown.
75
Midpeninsula Regional Open Space District
Schedule of Net Pension Liability Proportionate Shares
June 30, 2018
Mi scel lane ous Plan
Plan Me as ur ement Date 2017 2016 2015 2014
Fi scal Ye ar Ende d 2018 2017 2016 2015
Proportion o f Net Pension Liability 0.27962% 0.29137% 0.41627% 0.39847%
Proportionat e Shar e of Ne t Pension Li ability 11,022,824$ 10,121,906$ 11,420,126$ 9,848,203$
Co ve red P ayr oll 11,834,150$ 9,862,578$ 8,994,979$ 8,448,635$
Proporti onat e Shar e of NPL as a % of Cove red P ayr ol l 93.14% 102.63% 126.96% 116.57%
Pl an's Fi duc iary Ne t Posi ti on as a % o f the TPL 82.04% 80.93% 79.23% 83.64%
** Fi scal ye ar 2 015 wa s the first ye ar o f impl ementation, t he refore only four ye ar s ar e shown.
76
Midpeninsula Regional Open Space District
Schedule of Contributions for Postemployment Benefits
June 30, 2018
Fi scal Ye ar
En ded June 30,
2018
Ac tuarially determined contribution (ADC)609,000$
Less: actual contribution in relation to AD C (513,000)
Contribution deficiency (excess)96,000$
Covered payroll for the fiscal year 2017/18 12,802,887$
Contributions as a percentage of covered payroll 4.01%
No tes to Schedule:
Assumpti ons and Methods
Va lu ation Date:June 30, 2017
Measurement Date:June 30, 2017
Ac tuarial Cost Method:Entry age normal, level precentage of payroll
Am ortization Period:10.2 years
Asset Valu ation Method:
Ac tuarial Assumptions:
Discount Rate 6.75%
General Inflation 2.75%
Payroll Increases
Medical Trend
PEMHCA Min im um Increases 4.25%
Mortalit y, Retirement,
Disabilit y, Termination
CalPERS 1997-2015
experience study
Mortalit y Improvement
Healthcare Participation for Future Retirees -Currently covered: 90%
-Currently waived: 60%
Other Notes
GASB 75 requires a schedule of contributions for the la st ten fiscal years, or for as many years as are availa ble
if less than ten years are availa ble. GASB 75 was adopted as of June 30, 2018.
Investment ga in s and lo ses spread over 5 year rollin g
period
Post-retirement mortalit y projected fully generational wit h
Society of Ac tuaries Scale MP -2017
-Non-medicare - 7.5% for 2019, decreasing to an ultimate
rate of 4.0% in 2076 and la ter years
-Medicare - 6.5% for 2019, decreasing to an ultimate rate
of 4.0% in 2076 and later years
-Aggr egate - 3%
-Merit - CalPERS 1997-2015 experience study
77
Midpeninsula Regional Open Space District
Schedule of Changes in Total OPEB Liability
June 30, 2018
Fi scal Ye ar
En ded June 30,
To tal OPEB liability 2018
Service cost 313,000$
Interest 326,000
Changes of benefit terms -
Differences between expected and actual exp erience -
Changes of assumptions -
Benefit payments (113,000)
Net change in T otal OPEB Liabilit y 526,000
Total OPEB Liabilit y - begin ning 4,585,000
Total OPEB Liabilit y - ending 5,111,000$
Plan fiduciary net po sition
Employer contributions 513,000$
Employer im plic t subsidy -
Employee contributions -
Net in vestment in come 287,000
Difference between estimated and actual earnings -
Benefit payments (113,000)
Other -
Ad ministrative expense (1,000)
Net change in pla n fiduciary net position 686,000
Plan fiduciary net position - begin ning 2,580,000
Plan fiduciary net position - ending 3,266,000$
Net OP EB lia bilit y 1,845,000$
Plan fiduciary net position as a percentage of the
total OPEB lia bilit y 63.90%
Covered employee payroll 12,802,887$
Net OP EB Liabilit y as a percentage of covered payroll 14.41%
Total OPEB Liabilit y as a percentage of covered payroll 39.92%
GASB 75 requires a schedule of contributions for the la st ten fiscal years, or for as many years as are
availa ble if less than ten years are availa ble. GAS B 75 was adopted as of June 30, 2018.
78
Supplementary Information
79
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80
SUPPLEMENTARY INFORMATION
BUDGETARY SCHEDULES
These schedules present comparisons of the original budget,final budget and actual revenues and expenditures
for major capital project funds and debt service funds.These schedules presents the difference between the final
budget and actuals.
PROGRAM EXPENDITURES
This schedule presents the program expenditures for the Measure AA Bond Program for the current year and the
in total since the inception of the program.
81
Variance with
Final Budget
Actual Positive -
Original Final (GAAP Basis)(Negative)
Revenues:
Property taxes -$-$-$-$
Grant income 581,060 781,060 1,059,436 278,376
Property management ----
Investment earnings -160,000 102,684 (57,316)
Other revenues ----
Total revenues 581,060 941,060 1,162,120 221,060
Expenditures:
Current
Salaries and employee benefits --730,701 (730,701)
Services and supplies 140,100 140,100 24,468 115,632
Capital outlay 11,208,289 12,063,626 11,032,939 1,030,687
Debt service:
Issuance cost --250,000 (250,000)
Total expenditures 11,348,389 12,203,726 12,038,108 165,618
Excess (deficiency) of revenues
over (under) expenditures (10,767,329) (11,262,666) (10,875,988) 386,678
Other financing sources (uses):
Transfers in ----
Transfers out ----
Issuance of debt --50,000,000 50,000,000
Total other financing sources (uses)--50,000,000 50,000,000
Net change in fund balance (10,767,329) (11,262,666)39,124,012 50,386,678
Fund balance beginning 7,344,797 7,344,797 7,344,797 -
Fund balance ending (3,422,532)$ (3,917,869)$ 46,468,809$ 50,386,678$
Midpeninsula Regional Open Space District
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget to Actual (GAAP)
Measure AA Capital Projects Fund
For the Fiscal Year Ended June 30, 2018
Budgeted Amounts
The notes to the financial statements are an integral part of this statement.
82
Variance with
Final Budget
Actual Positive -
Original Final (GAAP Basis)(Negative)
Revenues:
Property taxes -$-$-$-$
Grant income 236,000 236,000 -(236,000)
Property management ----
Investment earnings --(37,855) (37,855)
Other revenues ----
Total revenues 236,000 236,000 (37,855) (273,855)
Expenditures:
Current
Salaries and employee benefits ----
Services and supplies 615,700 95,150 11,251 83,899
Capital outlay 5,917,340 7,000,371 5,407,129 1,593,242
Debt service:
Issuance cost --133,434 (133,434)
Total expenditures 6,533,040 7,095,521 5,551,814 1,543,707
Excess (deficiency) of revenues
over (under) expenditures (6,297,040) (6,859,521) (5,589,669)1,269,852
Other financing sources (uses):
Transfers in ----
Transfers out ----
Issuance of debt --11,220,000 11,220,000
Premium from debt issuances --1,413,434 1,413,434
Total other financing sources (uses)--12,633,434 12,633,434
Net change in fund balance (6,297,040) (6,859,521) 7,043,765 13,903,286
Fund balance beginning ----
Fund balance ending (6,297,040)$ (6,859,521)$ 7,043,765$ 13,903,286$
Midpeninsula Regional Open Space District
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget to Actual (GAAP)
GF Capital Projects Fund
For the Fiscal Year Ended June 30, 2018
Budgeted Amounts
The notes to the financial statements are an integral part of this statement.
83
Variance with
Final Budget
Actual Positive -
Original Final (GAAP Basis)(Negative)
Revenues:
Property taxes 1,960,000$ 2,400,000$ 2,450,542$ 50,542$
Grant income - - - -
Property management - - - -
Investment earnings 472,000 465,000 145,635 (319,365)
Other revenues - - - -
Total revenues 2,432,000 2,865,000 2,596,177 (268,823)
Expenditures:
Debt service:
Principal 11,721,637 12,397,869 5,716,067 6,681,802
Advance refunding escrow - - 676,232 (676,232)
Interest - - 5,720,001 (5,720,001)
Issuance cost - - 493,496 (493,496)
Total expenditures 11,721,637 12,397,869 12,605,796 (207,927)
Excess (deficiency) of revenues
over (under) expenditures (9,289,637) (9,532,869) (10,009,619) (476,750)
Other financing sources (uses):
Transfers in - - 9,409,095 9,409,095
Transfers out - - - -
Payment to refunded bond escrow agent - - (27,659,551) (27,659,551)
Issuance of refunding bond - - 25,025,000 25,025,000
Premium from bond issuances - - 6,832,305 6,832,305
Total other financing sources (uses)- - 13,606,849 13,606,849
Net change in fund balance (9,289,637) (9,532,869) 3,597,230 13,130,099
Fund balance beginning 2,193,934 2,193,934 2,193,934 -
Fund balance ending (7,095,703)$ (7,338,935)$ 5,791,164$ 13,130,099$
Midpeninsula Regional Open Space District
Schedule of Revenues, Expenditures and Changes in Fund Balance
Budget to Actual (GAAP)
Debt Service Fund
For the Fiscal Year Ended June 30, 2018
Budgeted Amounts
The notes to the financial statements are an integral part of this statement.
84
Expenditures Expenditures
from from
July 1, 2017 Inception
through through
Project No.Project Description June 30, 2018 June 30, 2018
20005 -$22,603$
20088 -41,330
20101 -27,059
20102 -128,760
20109 -6,500
20110 -13,000
20112 -8,695
20113 -5,000
20114 -150
30503 -3,930
30904 -34,196
31309 -17,646
31310 -79,491
31311 -243
31500 -728
65101 - 108,788
65201 - 103,187
80016 -45,507
80029 - 150,682
80037 - 135,748
80038 -178,850
AA01 -52,915
AA02 409,892 697,060
AA03 524,266 982,082
AA04 211,770 530,521
AA05 125,258 2,232,854
AA06 8,490 8,490
AA07 1,060,621 11,888,804
AA09 136 72,011
AA10 17,663 21,949
AA11 29,511 29,511
AA15 - 3,009,855
AA17 12,666 1,521,241
AA19 426,550 427,265
AA20 4,862 196,836
AA21 2,207,812 3,427,105
AA22 22,678 662,573
AA23 6,697,599 21,984,693
AA24 14,900 1,606,896
AA25
New Trail Easement - SFPUC, Ravenswood (MAA 2-2)
POST Hendry's Creek Restoration (MAA 22-1)
Lysons Property ( 17-1 MAA )
Lobner Demolition (MAA 17-2)
Riggs Property Appraisal - (3-1 MAA)
Purisima Creek Uplands Lot line Adjustment (3-1 MAA)
Conservation Easement Upper Alpine Ranch Area (15-1 MAA)
Preservation of Upper Los Gatos Creek Watershed (22-1 MAA)
Land Conservation Opportunities MAA 25-1 (Burtons )
ECDM Trail Improvements (MAA 4-4)
Mindego Area - Mindego Hill Trail (MAA 9-4)
Mt Um Bald Mtn Staging to Summit Trail (MAA 23-2)
Mt Um Summit Restor & Improv (MAA 23-4)
Mt Um Trail Overlook & Bridges (MAA 23-5)
Measure AA Project 11-1
PCR Harkins Bridge Replacement (MAA 3-4)
Lower Stevens Canyon Hiking Bridge (MAA 17-4)
ECdM Creek Watershed Protection Program (MAA 4-3)
Pond DR05 Repair (MAA 7-5)
Mindego Grazing Infrastructure (MAA 9-1)
LHC Grazing Infrastructure - McDonald Ranch Fencing (MAA 5-2)
Miramontes Ridge - Gateway to San Mateo Coast
Bayfront Habitat Protection & Public Access Partnerships
Purisima Creek Redwoods: Purisma-to Sea Trail, Watershed/Graze
El Corte de Madera Creek: Bike Trail & Water Quality
La Honda Creek - Upper Recreation Area
Hawthorns Public Access Improvements
Driscoll Ranch Public Access, Wildlife Protection, Grazing
Russian Ridge: Public Recreation, Grazing & Wildlife Protection
Coal Creek: Reopen Alpine Road for Trail Use
Rancho San Antonio: Interpretive Improvements, Refurbishing
Regional: Redwood Protection & Salmon Fishery Conservation
Regional: Complete Upper Stevens Creek Trail
El Sereno Dog Park & Connections
South Bay Foothills: Wildlife Passage/Ridge Trail Improvements
CR:Pub Recreation Proj
Cathedral Oaks Public Access & Conservation
Mt Um Pub Access/Intrep
Rancho de Guadalupe Family Recreation
Loma Prieta Area Public Access - 410,000
Total MAA Bond Project Expenditures 11,774,674 50,874,754
Reimbursements from Grants, Contributions, and Other Funds (1,059,436) (2,694,744)
Total MAA Bond Project Expenditures - Net Reimbursements 10,715,238$ 48,180,010$
Midpeninsula Regional Open Space District
Measure AA Bond Program
Schedule of Program Expenditures
June 30, 2018
The notes to the financial statements are an integral part of this statement.
85
Midpeninsula Regional Open Space District
Notes to Supplementary Information
June 30, 2018
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.
On February 1, 2018, the District issued $50,000,000 of 2018 general obligation bonds to finance 25
projects specified in Measure AA. The bonds bear interest from 2% to 5% and are due semi-annually on
March 1 and September 1. The bonds were issued at a premium of $3,691,291 with an issuance costs of
$455,462.
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 June 30, 2018,
the District has acquired and /or preserved nearly 1,500 acres of land with over $22 million 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 ye ar, 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.
86
Statistical Information
87
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88
Financial Trends
Revenue Capacity
Debt Capacity
Demographic and Economic Information
Operating Information
Sources
These schedules contain service and infrastructure data to help the reader understand how the information in the District’s financial report relates to
the services the District provides and the activities it performs:
1. Full-Time Equivalent Employees by Function
2. Capital Asset Statistics by Function
3. Operating Indicators by Function
Unless otherwise noted, the information in these schedules is derived from the Annual Financial Reports for the relevant year.
STATISTICAL SECTION
This part of the District’s Comprehensive Annual Financial Report presents detailed information as a context for understanding what the
information in the financial statements,note disclosures,and required supplementary information says about the District’s overall financial
health. In contrast to the financial section, the statistical section information is not subject to independent audit.
These schedules contain trend information to help the reader understand how the District’s financial performance and well being have changed over
time:
1. Net Position
2. Changes in Net Position
3. Fund Balances of Governmental Funds
4. Changes in Fund Balances of Governmental Funds
These schedules contain information in relation to the District’s property tax assessments:
1. Assessed and Actual Value of Taxable Property
2. Direct and Overlapping Property Tax Rates
3. Pricipal Property Tax Payers
4. Property Tax Levies and Collections
These schedules present information to help the reader assess the affordability of the District’s current levels of outstanding debt and the District’s
ability to issue additional debt in the future:
1. Ratios of General Bonded Debt Outstanding
2. Ratios of Outstanding Debt by Type
3. Legal Debt Margin Information
These schedules offer demographic and economic indicators to help the reader understand the environment within which the District’s financial
activities take place:
1. Demographic and Economic Statistics
2. Principal Employers
89
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Governmental activities
Net investment in capital assets 205,980$ 225,092$ 236,546$ 245,393$ 259,638$ 268,869$ 278,611$ 276,395$ 308,601$ 312,121$
Restricted 1,405 1,417 1,408 1,568 2,731 4,327 2,566 5,786 4,571 7,252
Unrestricted 38,377 30,450 28,142 42,738 36,919 37,951 39,948 39,280 23,831 29,415
Total Net Position 245,762$ 256,959$ 266,096$ 289,699$ 299,288$ 311,147$ 321,125$ 321,461$ 337,003$ 348,788$
Source: Annual Financial Report
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
Midpeninsula Regional Open Space District
Net Position
(amounts expressed in thousands)
Last Ten Fiscal Years
(accrual basis of accounting)
90
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Expenses
Governmental activities
Land preservation 12,518$ 13,254$ 13,768$ 14,312$ 19,338$ 17,930$ 19,478$ 26,080$ 21,783$ 28,910$
Interest and fiscal charges 6,265 6,208 6,739 7,483 7,273 7,163 7,202 9,752 8,327 8,193
Depreciation 653 715 882 806 840 1,095 1,232 1,311 1,585 2,399
Loss on refunding of debt 381 381 - - - - - - -
Total governmental activities expenses 19,817 20,558 21,389 22,601 27,451 26,188 27,912 37,143 31,695 39,502
Program Revenues
Governmental Activities
Charges for Services 879 911 1,241 1,320 1,381 1,422 1,437 1,636 1,479 1,576
Grants and Contributions 9,050 659 1,393 1,453 913 1,901 953 1,194 651 1,613
Land donations - 2,259 17 13,928 3,890 - - - - -
Total governmental activities program revenues 9,929 3,829 2,651 16,701 6,184 3,323 2,390 2,830 2,130 3,189
Net (expense)/revenue - governmental activities (9,888) (16,729) (18,738) (5,900) (21,267) (22,865) (25,522) (34,313) (29,565) (36,313)
General Revenues and Other Changes in Net Position
Governmental Activities
Property taxes 26,351 27,631 27,269 28,737 30,270 32,433 35,082 44,980 43,861 47,798
Investment earnings - - 294 375 288 138 202 648 463 1,045
Use of money and property 1,228 80 - - - - - - - -
Miscellaneous 488 216 311 394 298 182 216 810 784 1,153
Total governmental activities 28,067 27,927 27,874 29,506 30,856 32,753 35,500 46,438 45,108 49,996
Change in Net Position
Governmental activities 18,179 11,198 9,136 23,606 9,589 9,888 9,978 12,125 15,543 13,683
Prior period adjustments - - - - - 1,971 - (11,790) - (1,898)
Total Changes in Net Position 18,179$ 11,198$ 9,136$ 23,606$ 9,589$ 11,859$ 9,978$ 335$ 15,543$ 11,785$
Source: Annual Financial Report
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
Midpeninsula Regional Open Space District
Changes in Net Position
Last Ten Fiscal Years
(accrual basis of accounting)
(amounts expressed in thousands)
91
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
General fund
Reserved 75$ 579$ -$ -$-$-$-$-$-$-$
Unreserved, designated in 20,379 15,657 - - - - - - - -
Unreserved, reported in 16,153 12,678 - - - - - - - -
Nonspendable - - - - - - - - 55 36
Restricted - - 731 - - 1,702 1,702 1,971 1,971 1,467
Committed - - - - - - 20,400 35,400 35,400 42,300
Assigned - - - - -5,000 - - - -
Unassigned - - 26,156 41,782 37,513 34,453 21,330 16,848 23,872 29,306
Total General Fund 36,607$ 28,914$ 26,887$ 41,782$ 37,513$ 41,155$ 43,432$ 54,219$ 61,298$ 73,109$
All other governmental funds
Reserved 1,405$ 1,417$ -$ -$-$-$-$-$-$-$
Restricted - - 1,408 1,568 1,634 1,621 -26,894 9,539 59,304
Total all other governmental funds 1,405$ 1,417$ 1,408$ 1,568$ 1,634$ 1,621$ -$ 26,894$ 9,539$ 59,304$
Source: Annual Financial Report
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
The District has implemented GASB 54 effective fiscal year ending March 31, 2011.
This Statement establishes new categories for reporting fund balance and revises the definitions for governmental fund types.
The District opted not to change the previous years' data.
(modified accrual basis of accounting)
(amounts expressed in thousands)
Midpeninsula Regional Open Space District
Fund Balances of Governmental Funds
Last Ten Fiscal Years
92
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
REVENUES
Property taxes 26,351$ 27,631$ 27,269$ 28,737$ 30,270$ 32,433$ 35,082$ 44,980$ 43,861$ 47,798$
Grant income 9,050 659 1,393 1,453 913 1,901 953 1,194 651 1,613
Property management 879 911 955 1,320 1,381 1,422 1,438 1,636 1,479 1,576
Investment earnings 1,228 80 294 375 288 150 216 666 480 1,064
Other 499 224 551 240 146 145 241 644 609 348
Land donation - 2,258 17 13,928 - - - - - -
TOTAL REVENUE 38,007 31,763 30,479 46,053 32,998 36,051 37,930 49,120 47,080 52,399
EXPENDITURES
Land Preservation 12,337 13,070 13,682 13,996 18,713 17,303 18,272 28,965 25,807 28,226
Capital outlay 29,460 18,557 11,596 27,190 9,611 8,231 8,445 18,901 19,961 16,440
Debt service:
Principal and advance refunding escrow 2,544 2,900 3,301 4,457 2,843 2,999 3,145 4,367 5,193 6,392
Interest and fiscal charges 5,044 4,919 4,786 5,355 6,034 5,859 5,749 6,478 7,190 6,597
TOTAL EXPENDITURES 49,385 39,446 33,365 50,998 37,201 34,392 35,611 58,711 58,152 57,655
EXCESS (DEFICIT) OF REVENUES
OVER EXPENDITURES (11,378) (7,683) (2,886) (4,945) (4,203) 1,659 2,319 (9,591) (11,072) (5,256)
OTHER FINANCING SOURCES AND USES
Transfers in 7,493 7,829 7,974 9,827 8,877 8,858 8,894 12,146 15,839 9,409
Transfers out (7,493) (7,829) (7,974) (9,827) (8,877) (8,858) (8,894) (12,146) (15,839) (9,409)
Other sources - - 850 20,000 - - - - - -
Payment to refunded bond escrow agent - - - - - - - - (68,187) (27,660)
Issuance of refunding debt - - - - - - - - 57,410 25,025
Advance refunding of revenue bonds - - - - - - (29,987) - - -
Issuance of debt - - - - - - 28,325 45,000 - 61,220
Premium from debt issuances - - - - - - - 2,282 11,564 8,246
TOTAL OTHER FINANCING SOURCES (USES)- - 850 20,000 - - (1,662) 47,282 787 66,831
SPECIAL ITEM
OPEB Funding (1,723) - - - - - - - - -
NET CHANGES IN FUND BALANCES (13,101)$ (7,683)$ (2,036)$ 15,055$ (4,203)$ 1,659$ 657$ 37,691$ (10,285)$ 61,575$
Debt Service as a percentage of noncapital expenditures 61.51%59.82%59.11%70.11%47.44%51.19%48.68%37.44%47.99%46.02%
Source: Annual Financial Report
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
Midpeninsula Regional Open Space District
Changes in Fund Balances of Governmental Funds
Last Ten Fiscal Years
(modified accrual basis of accounting)
(amounts expressed in thousands)
93
Fiscal Year Secured State Board Unsecured
Total before
Rdv. Increment
Total after Rdv.
Increment Total Direct Tax Rate
2009 105,225,752$ 5,138$ 6,543,064$ 111,773,954$ 107,222,540$ 1.00%
2010 108,749,899 5,138 7,220,172 115,975,209 110,945,627 1.00%
2011 108,672,177 5,138 6,448,241 115,125,556 110,403,735 1.00%
2012 110,480,451 5,192 6,843,137 117,328,780 112,337,379 1.00%
2013 115,665,767 5,192 7,574,405 123,245,364 117,796,453 1.00%
2014 125,816,313 5,192 8,032,680 133,854,185 128,261,360 1.00%
2015 134,293,819 3,616 8,134,278 142,431,713 136,364,266 1.00%
2016 148,710,117 3,616 8,236,861 156,950,594 151,221,560 1.00%
2017 161,457,837 3,616 8,664,927 170,126,380 163,586,434 1.00%
2018 174,219,310 3,616 9,773,726 183,996,652 177,153,795 1.00%
Fiscal Year Secured State Board Unsecured
Total before
Rdv. Increment
Total after Rdv.
Increment Total Direct Tax Rate
2009 49,927,409$ 6,759$ 2,058,386$ 51,992,554$ 48,084,153$ 1.00%
2010 51,288,838 6,652 2,039,518 53,335,008 49,431,098 1.00%
2011 51,197,326 6,653 2,006,682 53,210,661 49,373,928 1.00%
2012 51,670,521 2,465 1,952,159 53,625,145 49,913,049 1.00%
2013 53,793,234 2,465 1,948,563 55,744,262 51,977,724 1.00%
2014 57,513,572 2,336 2,180,554 59,696,462 55,714,674 1.00%
2015 60,798,837 2,343 2,087,353 62,888,533 58,641,318 1.00%
2016 66,177,633 3,086 2,363,781 68,544,500 63,519,108 1.00%
2017 72,017,698 3,085 2,640,434 74,661,217 68,354,025 1.00%
2018 78,506,564 3,085 2,996,701 81,506,350 73,565,159 1.00%
Source: California Municipal Statistics, Inc
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
County of San Mateo
Midpeninsula Regional Open Space District
Assessed and Actual Value of Taxable Property
Last Ten Fiscal Years
(amounts expressed in thousands)
County of Santa Clara
94
Fiscal Year
General Property
Tax Levy
Other
Overlapping
Governments
Open Space
District Total
General Property
Tax Levy
Other
Overlapping
Governments
Open Space
District Total
2009 1.00000 0.09740 - 1.09740 1.00000 0.06760 - 1.06760
2010 1.00000 0.11987 - 1.11987 1.00000 0.06970 - 1.06970
2011 1.00000 0.14951 - 1.14951 1.00000 0.07530 - 1.07530
2012 1.00000 0.15060 - 1.15060 1.00000 0.08120 - 1.08120
2013 1.00000 0.18750 - 1.18750 1.00000 0.08060 - 1.08060
2014 1.00000 0.18740 - 1.18740 1.00000 0.07470 - 1.07470
2015 1.00000 0.18304 - 1.18304 1.00000 0.08530 - 1.08530
2016 4 1.00000 0.17807 0.00080 1.17887 1.00000 0.08420 0.00080 1.08500
2017 1.00000 0.17160 0.00060 1.17220 1.00000 0.10990 0.00060 1.11050
2018 1.00000 0.18133 0.00090 1.18223 1.00000 0.10300 0.00090 1.10390
Source: California Municipal Statistics, Inc.
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
1 Due to the District’s size and that it is located in two counties (County of Santa Cruz excluded), there is no tax rate area that represents the typical
total tax rate for the District. The above tax rate areas are the largest in terms of assessed valuation for each County’s portion of the District.
2 The 2015-16 assessed valuation of Tax Rate Area (TRA) 6-001 is $23,936,719,617, which is 10.62% of the District’s total assessed valuation.
3 The 2015-16 assessed valuation of TRA 9-001 is $8,109,918,455, which is 3.60% of the District’s total assessed valuation.
4 Fiscal Year 2015-16 was the first year in which ad valorem property taxes authorized by Measure AA were levied.
Midpeninsula Regional Open Space District
Property Tax Rates
Direct and Overlapping1 Property Tax Rates
Last Ten Fiscal Years
County of Santa Clara (Tax Rate Area 6-001) 2 County of San Mateo (Tax Rate Area 9-001) 3
95
Taxpayer
Taxable Assessed
Valuation Rank
Percentage of
Total Assessed
Valuation
Taxable Assessed
Valuation Rank
Percentage of
Total Assessed
Valuation
Board of Trustees, Leland Stanford Jr. University 6,263,481$ 1 2.48%4,274,155$ 1 2.75%
Google Inc.3,490,160 2 1.39%331,368 12 0.21%
Campus Holdings Inc. 3,076,342 3 1.22%**
Apple Computer Inc. 1,232,162 4 0.49%562,086 2 0.36%
Lockheed Missiles and Space Co. Inc.996,510 5 0.39%547,805 3 0.35%
Sobrato Interests 784,904 6 0.31%**
Oracle Corp. 627,216 7 0.25%515,411 4 0.33%
Menlo & Juniper Networks LLC 603,926 8 0.24%**
Network Appliance Inc. 504,705 9 0.20%427,385 9 0.28%
Applied Materials Inc.491,686 10 0.19%477,829 6 0.31%
VII Pac Shores Investors LLC **500,706 5 0.32%
Yahoo Inc.**462,633 7 0.30%
Hewlett Packard Co.**452,845 8 0.29%
Sun Microsystems Inc. **343,506 10 0.22%
Total 18,071,092$ 7.16%8,895,729$ 5.72%
* Information not available
Source: California Municipal Statistics, Inc.
Midpeninsula Regional Open Space District
Principal Property Tax Payers
Current Year and Nine Years Ago
(amounts expressed in thousands)
Fiscal Year 2009Fiscal Year 2018
96
Fiscal Year
Santa Clara County
Taxes Levied
San Mateo County
Taxes Levied
Santa Clara County
Collections
% of County
Levy
San Mateo County
Collections
% of County
Levy
2016 1,186,363$ 527,932$ 1,177,636$ 99.3%524,982$ 99.4%
2017 968,301 431,711 962,730 99.4%429,436 99.5%
2018 1,558,456 705,842 1,553,773 99.7%701,923 99.4%
Source: California Municipal Statistics, Inc.
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
1 District's general obligation bond debt service levy. Prior years are not available. Levy began in FY2015-16
CollectionsLevy 1
Midpeninsula Regional Open Space District
Property Tax Levies and Collections
Last Ten Fiscal Years
97
Fiscal Year
General
Obligation Bonds
Debt Service
Monies Available Total
Taxable Assessed
Value
Percentage of
Taxable AV 1 Per Capita 2
2009 -$ -$ -$ 155,306,693$ 0.000%-$
2010 - - - 160,376,725 0.000%-
2011 - - - 159,777,663 0.000%-
2012 - - - 162,250,428 0.000%-
2013 - - - 169,774,177 0.000%-
2014 - - - 183,976,034 0.000%-
2015 - - - 195,005,584 0.000%-
2016 45,000 3,116 41,884 214,740,668 0.020%15.55
2017 44,225 2,194 42,031 231,940,459 0.018%15.52
2018 104,570 5,785 98,785 250,718,954 0.039%36.17
Source: Annual Financial Report
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
1 See the Schedule of Assessed and Actual Value of Taxable Property for property value data.
2 Population data can be found in the Schedule of Demographic and Economic Statistics.
Midpeninsula Regional Open Space District
Ratios of General Bonded Debt Outstanding
Last Ten Fiscal Years
(amounts expressed in thousands, except per-capita amount)
98
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Assessed Valuation:
Assessed value subject to debt levy 155,306,693$160,376,725$159,777,663$162,250,428$169,774,177$183,976,034$195,005,584$214,740,668$231,940,459$250,718,954$
Total assessed valuation 155,306,693 160,376,725 159,777,663 162,250,428 169,774,177 183,976,034 195,005,584 214,740,668 231,940,459 250,718,954
Debt Applicable to Limitation:
Total debt 124,952 123,671 123,019 140,539 138,952 140,159 136,564 180,375 181,951 245,675
Less: amount available for repayment - - - - - - - 3,116 2,200 5,785
Total debt applicable to limitation 124,952 123,671 123,019 140,539 138,952 140,159 136,564 177,259 179,751 239,890
Legal Debt Margin:
Bonded debt limit (15% AV)23,296,004 24,056,509 23,966,649 24,337,564 25,466,127 27,596,405 29,250,838 32,211,100 34,791,069 37,607,843
Debt applicable to limitation 124,952 123,671 123,019 140,539 138,952 140,159 136,564 177,259 179,751 239,890
Legal debt margin 23,171,052$ 23,932,838$ 23,843,630$ 24,197,025$ 25,327,175$ 27,456,246$ 29,114,274$ 32,033,841$ 34,611,318$ 37,367,953$
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
Under California Government Code Section 61126 (b) the Midpeninsula Regional Open Space District shall not incur bonded
indebtedness that exceeds 15% of the total assessed property value.
Midpeninsula Regional Open Space District
Legal Debt Margin Information
Last Ten Fiscal Years
(amounts expressed in thousands)
99
Fiscal Year
General
Obligation
Bonds
Lease
Revenue
Bonds Refunding Bonds Bond Premiums Notes Payable Total
Taxable Assessed
Value (AV)
Percentage of
Taxable AV
Percentage
of Personal
Income Per Capita
2009 -$ 65,098$ 53,215$ 719$ 5,920$ 124,952$ 155,306,693$ 0.080% 0.126% 990.96$
2010 - 65,049 52,204 663 5,755 123,671 160,376,725 0.077% 0.113% 915.89
2011 - 64,995 50,988 607 6,429 123,019 159,777,663 0.077% 0.102% 841.22
2012 - 51,947 49,179 2,515 36,898 140,539 162,250,428 0.087% 0.105% 874.60
2013 - 51,568 47,994 2,351 37,039 138,952 169,774,177 0.082% 0.102% 867.07
2014 - 51,021 50,665 2,188 36,285 140,159 183,976,034 0.076% 0.094% 811.92
2015 - 20,385 49,935 6,973 59,271 136,564 195,005,584 0.070% 0.083% 723.87
2016 45,000 20,290 47,300 9,087 58,698 180,375 214,740,668 0.084%**
2017 44,225 1,080 57,410 20,475 58,761 181,951 231,940,459 0.078%**
2018 104,570 930 78,870 26,839 34,466 245,675 250,718,954 0.098%**
*Information not available
Source: Annual Financial Report
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
(1)Details regarding the District's outstanding debt can be found in the notes to the financial statements.
(2)Refer to the Demographics Statistics for personal income and population data.
Ratios of Outstanding Debt
Last Ten Fiscal Years
Midpeninsula Regional Open Space District
(amounts expressed in thousands, except per-capita amount)
100
Fiscal Year Population 1
Personal Income 2
(in millions)
Per Capita
Personal Income 2
Median
Age 3
School
Enrollment 4
County Unemployment
Rate 5
2009 1,857,621 99,550$ 55,781$ 36.2 259,800 8.7%
2010 1,880,876 109,495 61,289 35.8 265,643 10.5%
2011 1,797,375 120,376 66,366 36.0 266,256 9.6%
2012 1,816,486 133,912 72,704 36.2 270,109 8.2%
2013 1,842,254 136,118 72,754 36.4 273,701 6.8%
2014 1,868,558 149,717 78,955 36.6 276,175 5.2%
2015 1,889,638 165,323 86,141 36.8 276,689 4.3%
2016 1,927,888 178,029 92,168 36.8 274,948 3.9%
2017 1,938,180 190,002 98,032 *273,264 3.4%
2018 1,956,958 ***272,132 2.9%
Calendar Year Population 1
Personal Income 2
(in millions)
Per Capita
Personal Income 2
Median
Age 3
School
Enrollment 4
County Unemployment
Rate 5
2009 713,617 50,175$ 70,311$ 38.9 89,971 8.9%
2010 719,951 53,084 73,739 39.3 91,371 8.5%
2011 729,425 58,228 79,872 39.4 92,097 7.9%
2012 740,738 65,167 87,986 39.6 93,674 6.8%
2013 750,489 65,656 87,501 39.3 93,931 5.6%
2014 758,581 71,111 93,672 39.4 94,567 4.3%
2015 759,155 78,607 102,516 39.8 95,187 3.5%
2016 765,895 82,046 106,615 39.5 95,502 3.2%
2017 770,203 87,486 113,410 *95,620 2.9%
2018 774,155 ***95,155 2.5%
* Information not available
Data Sources
1 State of California Department of Finance
2 U.S. Department of Commerce Bureau of Economic Analysis
3 U.S Census Bureau, American Community Survey
4 State of California Department of Education
5 State of California Employment Development Department, Labor Market Division
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
Midpeninsula Regional Open Space District
Demographic and Economic Statistics
Last Ten Fiscal Years
County of Santa Clara
County of San Mateo
101
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Function
Land:
Number of preserves 26 26 26 26 26 26 26 26 26 26
Acreage:
Santa Clara County 31,629.06 31,833.31 32,380.35 32,990.49 33,006.79 33,158.80 33,259.21 33,366.71 33,449.99 33,628.15
San Mateo County 25,325.44 26,588.84 26,704.01 27,625.36 28,668.49 28,977.86 29,063.13 29,452.58 29,643.96 29,664.41
Santa Cruz County 2,004.18 2,004.18 2,004.18 2,004.18 2,004.18 2,004.18 2,004.18 2,004.18 2,004.18 2,004.18
less: easements and life
estates held by other parties (1,825.88)(1,825.88)(1,825.88)(1,825.88)(1,825.88)(1,825.88)(1,825.88)(1,825.88)(1,825.88)(1,802.88)
Total 57,132.80 58,600.45 59,262.66 60,794.15 61,853.58 62,314.96 62,500.64 62,997.59 63,272.25 63,493.86
Facilities:
Administrative office 1 1 1 1 1 1 1 1 1 1
Field/patrol offices 2 2 2 2 2 2 2 2 2 3
Visitor Center 2 2 2 2 2 2 2 2 2 2
Vehicles & Equipment:
Patrol vehicles 28 32 35 37 39 41 38 37 42 36
Service vehicles 3 3 3 3 3 5 8 10 13 10
Maintenance vehicles 5 5 6 8 9 13 16 19 25 29
Administrative vehicles n/a n/a n/a n/a n/a n/a n/a n/a n/a 13
Motorcycles/ATVs/Electric bicycles 12 13 13 13 13 13 13 13 13 27
Bulldozers/excavators/tractors 16 16 17 17 20 21 21 23 23 20
Dump trucks 3 3 4 4 4 4 5 5 5 4
Water Truck 1 1 1 2 2 2 2 2 2 2
Trailers n/a n/a n/a n/a n/a n/a n/a n/a n/a 25
Chippers/mowers 2 2 2 2 2 4 4 5 5 5
Source: Midpenninsula Regional Open Space District
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
Beginning with FY2017-18 the District is using a new system for classifying and tracking vehicles and equipment.
Midpeninsula Regional Open Space District
Capital Asset Statistics by Function
Last Ten Fiscal Years
102
Employer
Number of
Employees 1 Rank
Percentage of
Total
Employment
Number of
Employees 2 Rank
Percentage of
Total
Employment
Apple Computer, Inc.25,000 1 2.44%10,000 3 1.23%
Alphabet/Google Inc.20,000 2 1.95%**
County of Santa Clara 18,806 3 1.84%**
Stanford University 16,919 4 1.65%**
Cisco Systems Inc.14,120 5 1.38%13,000 1 1.60%
Kaiser Permanente 12,500 6 1.22%5,000 10 0.61%
Stanford Healthcare 10,034 7 0.98%5,500 8 0.68%
Tesla Mortors Inc. 10,000 8 0.98%*
Intel Corporation 8,450 9 0.83%5,000 9 0.61%
City of San Jose 6,159 10 0.60%*
Lockheed Martin Space Systems Co.**10,400 2 1.28%
Intuit, Inc.**8,000 4 0.98%
IBM Corporation **7,650 5 0.94%
Hewlett-Packard Co. **7,000 6 0.86%
KLA-Tencor Corporation **6,200 7 0.76%
Total 141,988 13.87%77,750 9.55%
Employer
Number of
Employees Rank
Percentage of
Total
Employment
Number of
Employees Rank
Percentage of
Total
Employment
United Airlines 12,000 1 2.74%**
Genentech Inc. 11,000 2 2.51%8,800 1 2.60%
Facebook Inc. 7,091 3 1.62%**
Oracle Corp.6,781 4 1.55%5,642 2 1.66%
County of San Mateo 5,485 5 1.25%5,179 3 1.53%
Gilead Sciences Inc. 3,900 6 0.89%1,480 10 0.44%
Visa U.S.A. Inc.3,500 7 0.80%**
Electronics Arts Inc.2,367 8 0.54%2,000 6 0.59%
Roberto Half International Inc.1,790 9 0.41%**
You Tube LLC.1,700 10 0.39%**
Kaiser Permanente **3,790 4 1.12%
Mills-Peninsula Health Services **2,500 5 0.74%
United States Postal Service **1,964 7 0.58%
San Mateo Community College District **1,800 8 0.53%
SLAC National Accelerator Laboratory **1,650 9 0.49%
Total 55,614 12.70%34,805 10.28%
* Information not available
Source:
1 Silicon Valley Business Journal, July 27, 2018
2 County of Santa Clara Finance Department. FY2008-09 CAFR
3 San Francisco Business Times - 2018 Book of Lists and California Employment Development Department
4 Latest information available for principal employers in the County of San Mateo.
2017 4 2009
County of San Mateo 3
County of Santa Clara
Midpeninsula Regional Open Space District
Principal Employers
Most Current Year and Nine Years Ago
2018 2009
103
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Function
Office of the General Manager 3.00 3.00 3.00 4.00 4.00 4.00 5.00 6.00 8.00 8.00
Real Property 5.00 5.00 5.00 5.00 5.00 5.00 6.00 7.00 4.00 5.00
Plannning 13.50 13.50 14.00 14.00 14.00 14.00 14.00 14.00 10.50 11.50
Engineering & Construction N/A N/A N/A N/A N/A N/A N/A N/A 5.50 7.50
Public Affairs 8.00 8.00 8.00 8.00 9.00 9.00 11.00 12.00 8.00 8.00
Admininstration
Reception 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
Finance 3.25 3.25 3.25 3.25 3.25 4.75 4.75 5.25 9.25 9.25
Human Resources 2.00 2.00 2.00 2.50 3.50 3.50 5.50 7.00 7.00 7.00
Information Technology 1 1.00 1.00 1.00 1.00 2.00 2.50 2.50 5.50 7.50 7.50
Operations
Administration 6.50 6.50 6.00 6.00 6.00 6.00 6.00 6.00 N/A N/A
Patrol 23.00 23.00 28.00 28.00 28.00 28.00 31.00 32.00 N/A N/A
Land/Facilities Maintenance 20.00 20.00 26.00 26.00 26.00 26.00 28.30 30.30 N/A N/A
Resource Management 2 6.00 6.00 6.00 N/A N/A N/A N/A N/A N/A N/A
Land & Facilities N/A N/A N/A N/A N/A N/A N/A N/A 49.30 53.30
Visitor Services N/A N/A N/A N/A N/A N/A N/A N/A 41.90 41.90
General Counsel 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50 2.50
Natural Resources 2 N/A N/A N/A 8.00 8.00 8.00 9.00 10.00 11.00 12.00
Total 94.75 94.75 105.75 109.25 112.25 114.25 126.55 138.55 165.45 174.45
Source: Midpeninsula Regional Open Space District
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
1 In 2015, the GIS function was integrated into Information Technology from the Planning Department
2 In 2012, the Resource Management function under the Operations Department became the Natural Resources Department
During 2015, the District underwent a complete reorganization which become effective during FY 2016-17. As part of the
reorganization, the Planning Department was split with a new Engineering & Construction Department, a portion of Real
Property and Operations became the new Land & Facilities Department, and part of Public Affairs and Operations/Patrol
became the new Visitor Services Department.
Midpeninsula Regional Open Space District
Full-time Equivalent District Government Employees by Function
Last Ten Fiscal Years
104
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Function
General Manager
Board meetings 29 37 31 45 36 35 33 31 31 44
Resolutions adopted 37 50 41 56 20 39 61 61 40 46
Real Property
Acres preserved
Santa Clara County 693.74 204.25 547.04 492.99 16.30 152.01 100.41 107.50 83.28 178.18
San Mateo County 1,047.45 1,263.40 115.17 921.35 1,043.14 309.37 393.26 81.45 191.38 20.46
Public Affairs
Stewardship volunteer hours 8,854 9,849 11,314 11,843 11,232 13,579 14,354 15,839 17,440 16,088
Interpretation and education docent hours 3,875 3,305 5,433 4,669 5,559 4,718 5,828 4,462 4,697 4,320
Website visits 248,697 274,559 274,133 434,402 349,398 359,432 418,748 429,891 487,215 589,280
Operations
Bicycle Accident 41 25 22 36 37 30 20 26 19 37
Equestrian Accident - 2 1 1 2 - 1 2 - -
Hiking/Running Accident 49 21 18 16 16 22 20 14 37 40
Other first aid 4 10 15 25 24 15 25 26 23 31
Search & rescue 9 11 15 10 8 5 8 3 4 2
Vehicle Accident 9 8 11 16 15 14 19 14 17 50
Fire 7 6 5 7 8 16 9 10 9 13
HazMat - 3 3 - - 1 1 6 1 3
Subject Citation/Juvenile Contact Report 510 558 509 526 737 617 825 767 678 592
Parking Citation 474 386 434 527 621 584 700 645 836 870
Arrests 1 2 1 1 2 1 4 3 2 -
Day Permits 973 954 1,059 1,235 1,237 1,521 2,154 2,541 2,530 2,676
Multi-day permits 134 214 248 225 253 306 306 321 366 419
Camping permits 195 221 259 341 336 393 476 573 613 570
Source: Midpenninsula Regional Open Space District
Notes: Starting fiscal year (FY) 2015-16 the District changed from a fiscal year end date of March 31st to June 30th.
As a result, FY2015-16 is a fifteen (15) month period rather than a twelve (12) month period.
Midpeninsula Regional Open Space District
Operating Indicators by Function
Last Ten Fiscal Years
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Other Independent Auditor’s Reports
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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 governmental activities and each major
fund of Midpeninsula Regional Open Space District (the District) as of and for the year ended June
30, 2018, and the related notes to the financial statements, which collectively comprise the District’s
basic financial statements, and have issued our report thereon dated October 29, 2018.
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 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 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
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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.
October 29, 2018
San Jose, California
109
Russian Ridge Open Space Preserve by Jim Pravetz
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
RECYCLED PAPER