HomeMy Public PortalAboutAudit Report - District- FY02MIDPENINSULA REGIONAL
OPEN SPACE DISTRICT
Independent Auditor's Reports and
General -Purpose Financial Statements
For the Year Ended March 31, 2002
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
FOR THE YEAR ENDED MARCH 31, 2002
Table of Contents
.
Page(s)
Independent Auditor's Report
1
General -Purpose Financial Statements:
Combined Balance Sheet
2
Statement of Revenues, Expenditures and Changes in Fund Balance
Budget and Actual - General Fund 3
Notes to General -Purpose Financial Statements 4 - 11
Other Report:
Independent Auditor's Report on Compliance and on
Internal Control Over Financial Reporting Based on an
Audit of General -Purpose Financial Statements Performed
in Accordance with Government Auditing Standards 12
Macias, Gini & Company fir
Certified Public Accountants and
Management Consultants
Board of Directors
Midpeninsula Regional Open Space District
Partners Mt. Diablo Plaza
Kenneth A. Macias, Managing Partner 2175 N. California Boulevard
Ernest J. Gird Suite 620
Kevin J. O'Connell Walnut Creek, CA 94596-3565
Richard A. Green
925.274.0190
Jan A. Rosati
925.274.3819 FAX
James V. Godsey
www.maciasgini.com
INDEPENDENT AUDITOR'S REPORT
We have audited the accompanying combined balance sheet of Midpeninsula Regional Open Space District (the
District), as of March 31, 2002, and the related statement of revenues, expenditures and changes in fund balance —
budget and actual for the year then ended. These general-purpose financial statements are the responsibility of the
District's management. Our responsibility is to express an opinion on these general-purpose financial statements
based on our audit.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America
and die 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 general-purpose financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the general-purpose
fmancial statements. An audit also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audit
provides a reasonable basis for our opinion.
In our opinion, the general-purpose financial statements referred to above present fairly, in all material respects,
the financial position of the District as of March 31, 2002, and the results of its operations for the year then ended
in conformity with accounting principles generally accepted in the United States of America.
In accordance with Government Auditing Standards, we have also issued our report dated May 24, 2002 on our
consideration of the District's internal control over financial reporting and on our tests of its compliance with
certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed
in accordance with Government Auditing Standards and should be read in conjunction with this report in
considering the results of our audit.
MACIAS, GINI & COMPANY LLP
L. L.
Certified Public Accountants
Walnut Creek, California
May 24. 2002
Offices located throughout California
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GENERAL-PURPOSE FINANCIAL STATEMENTS
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
COMBINED BALANCE SHEET
MARCH 31, 2002
Account Groups
ASSETS
Cash and investments
Restricted cash and investments
Receivables:
Taxes
Interest
Other
Notes receivable
Prepaid items
Land
Structures and improvements
Equipment
Amount available in General Fund
Amount to be provided for retirement
of general long-term debt
TOTAL ASSETS
LIABILITIES AND FUND EQUITY
Liabilities:
Accounts payable
Accrued liabilities
Deposits
Deferred revenue
Promissory notes
Certificates of participation
Revenue bonds
Total liabilities
Fund Equity:
Investment in general fixed assets
Fund balance:
Reserved for:
Debt service
Notes receivable
Prepaid items
Unreserved, designated for:
Acquisition fund
Future capital purchases
Total fund equity
TOTAL LIABILITIES
AND FUND EQUITY
General
Fund
$ 35,186,733 $
3,951,688
4,432,405
287,787
2,826
275,255
14,161
General
Fixed
Assets
214,597,355
10,257,774
2,451,136
3,951,688
General
Long -Term
Debt
Total
(Memorandum
Only)
- $ 35,186,733
3,951,688
114,530,144
$ 44,150,855 $ 227,306,265 $ 118,481,832
$ 315,075 $
328,171
34,377
735,802
12,336,318
15,165,000
90,980,514
4,432,405
287,787
2,826
275,255
14.161
214,597,355
10,257,774
2,451,136
3,951,688
114,530,144
$ 389,938,952
315,075
328,171
34,377
735,802
12,336,318
15,165,000
90,980,514
1,413,425
227,306,265
3,951,688
275,255
14,161
20,097,500
18,398,826
118,481,832
119,895,257
227,306,265
3,951,688
275,255
14,161
20,097,500
18,398,826
42,737,430 227,306,265
270,043,695
$ 44,150,855 $ 227,306,265 $ 118,481,832 $ 389,938,952
See accompanying notes to general-purpose financial statements.
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE
BUDGET AND ACTUAL - GENERAL FUND
YEAR ENDED MARCH 31, 2002
Revenue:
General property tax
Other property taxes
Investment income
Grants
Donations
Rental income and other
Total revenue
Expenditures:
Salaries and benefits
Professional services
Vehicle expenditures
Insurance
Communications and publications
Site supplies and services
Utilities and communication
Other
Capital outlay:
Land
Structures and improvements
Equipment
Debt service:
Principal retirement
Interest and fiscal charges
Total expenditures
Excess (deficiency) of revenues over
(under) expenditures
Other financing sources:
Proceeds from promissory notes
Excess (deficiency) of revenues and other
financing sources over (under) expenditures
Fund balance, beginning of year
Fund balance, end of year
Budget
Actual
$ 16,328,000 $
198,000
1,427,700
3,943,000
803,300
22,700,000
5,200,550
763,600
196,900
267,100
159,000
288,110
176,210
438,475
20,097,500
1,255,800
356,250
1,801,790
4,354,400
17,367,281
204,320
1,692,197
2,399,000
3,000
1,027,212
22,693,010
5,021,464
521,512
189,620
256,049
157,917
295,040
171,040
398,362
3,675,746
753,817
361,862
1,801,790
4,354,383
Variance
$ 1,039,281
6,320
264,497
(1,544,000)
3,000
223,912
(6,990)
179,086
242,088
7,280
11,051
1,083
(6,930)
5,170
40,113
16,421,754
501.983
(5,612)
17
35,355,685
17,958,602
(12,655,685)
4,734,408
590,000
17,397,083
17,390,093
590,000
$ (12,655,685)
5,324,408
37,413,022
$ 42,737,430
See accompanying notes to general-purpose financial statements.
$ 17,980,093
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT °
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS
YEAR ENDED MARCH 31, 2002
NOTE A: ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization
The Midpeninsula Regional Open Space District (the District) was foamed in 1972 to acquire and preserve open
space land in the 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.
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; is able to impose its will on 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 general-purpose financial statements.
Fund Accounting
The accounts of the District are organized on the basis of one fund and account groups, each of which is considered a
separate accounting entity. All resources and operations of the District, including the Authority, are reported in the
General Fund. The District reports its fixed assets in the General Fixed Assets Account Group and reports its long-
term liabilities in the General Long -Term Debt Account Group.
Basis of Accounting
The records of the District are maintained on the modified accrual basis of accounting. Under this method, revenues,
including property taxes, are generally recognized in the period they become measurable and available, and
expenditures are generally recognized when the obligation is incurred, except for interest on long-term debt, which is
recognized as an expenditure when due. Substantially all revenues are susceptible to accrual.
Budgets and Budgetary Accounting
The Board of Directors of the District adopts an annual operating budget on or before March 31 for the ensuing
fiscal year, The Board of Directors may amend the budget by resolution during the fiscal year. All appropriations
lapse at the end of the fiscal year. The budget is presented on a basis consistent with accounting principles generally
accepted in the United States of America.
Investments
The District records investment transactions on the trade date. Investments are reported at fair value. Fair value is
defined as the amount that the District could reasonably expect to receive for an investment in a current sale between
a willing buyer and seller and is generally measured by quoted market prices.
General Fixed Assets
Land, structures, improvements and equipment purchased by the District are stated at cost in the General Fixed
Assets Account Group (Account Group). Donations of capital assets are stated at their estimated fair market value as
of the date received and are recorded as additions to the Account Group, however, are not recorded as revenue in the
General Fund as these types of donations do not represent spendable financial resources. Depreciation is not
recorded for capital assets.
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• MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED MARCH 31, 2002
Property Tax Levy, Collection and Maximum Rates
The State of California (State) Constitution Article XIIIA provides that the combined maximum property tax rate on
any given property may not exceed one percent of its assessed value unless voters have approved an additional
amount for general obligation debt. Assessed value is calculated at 100 percent of market value as defined by
Article XIIIA and may be increased by no more than two percent per year unless the property is sold or transferred.
The State Legislature has determined the method of distribution of receipts from the one percent tax levy among the
counties, cities, school districts and special districts.
The District receives property tax revenues from Santa Clara and San Mateo Counties. The Counties assess
properties and bill for the collection of property taxes as follows:
Secured Unsecured
Valuation dates March 1 March 1
Lien/Levy dates July 1 March 1
Due dates 50% on November 1 July 1
50% on February 1
Delinquent as of December 10 (for November) August 31
April 10 (for February)
Taxes are secured by liens on the property being taxed. The term "unsecured" refers to taxes on personal property
and not land and buildings. Supplemental property taxes are levied based on changes in assessed values between the
date of real property sales and new construction and the next normal assessment date.
Property tax revenues are recognized when measurable and available to finance current operations. Available means
collected within the current period or expected to be collected soon thereafter to be used to pay liabilities of the
current period (not to exceed 60 days).
Compensated Absences
Vacation pay is accrued when earned and is included in the General Fund as accrued liabilities. Sick leave is
recorded as an expenditure when paid.
Use of Estimates
The preparation of the general-purpose financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of the general-purpose financial statements, as
well as revenues and expenses during the reporting period. Actual results could differ from those estimates.
Total (Memorandum Only) Column
The total column in the combined balance sheet is captioned as "Total (Memorandum Only)" because it does not
represent consolidated financial information and is presented only to facilitate financial analysis. The column does
not represent information that reflects financial position or results of operations in accordance with accounting
principles generally accepted in the United States of America.
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED MARCH 31, 2002
NOTE B: CASH AND INVESTMENTS
The District's cash and investments consist of the following at March 31 2002:
Cash and investments
Restricted cash and investments
$ 35,186,733
3,951,688
Total cash and investments $ 39,138,421
Deposits
At March 31, 2002, the carrying amount of the District's deposits was $4,214,593 and the bank balance was
$4,522,714. The difference between the bank balance and the carrying amount represents outstanding checks and
deposits in transit. Of the bank balance, $100,000 was covered by federal depository insurance and $4,422,714 was
collateralized by the pledging financial institutions as required by Section 53652 of the California Government Code.
Under the California Government Code, a financial institution is required to secure deposits in excess of those
covered by federal depository insurance made by state or local governmental units by pledging securities held in the
form of an undivided collateral pool. The market value of the pledged securities in the collateral pool must equal at
least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to
secure public deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public
deposits. The collateral must be held at the pledging financial institution's trust department or other bank, acting as
the pledging financial institution's agent, in the District's name.
Investments
Statutes authorize the District to invest in the County of Santa Clara Treasurer's investment pool, obligations of the
U.S. Treasury or its agencies, certificates of deposit, bankers' acceptances, commercial paper and mutual funds
invested in U.S. Government securities. The District did not enter into any reverse repurchase agreements during the
year ended March 31, 2002.
Information is not available on whether the various mutual funds and the County of Santa Clara Treasurer's
investment pool in which the District has invested used, held or wrote derivative financial products during the year
ended March 31, 2002. The County of Santa Clara Treasurer's investment pool is subject to regulatory oversight by
the Treasury Oversight Committee, as required by California Government Code Section 27134. The fair value of the
District's position in the pool is the same as the value of the pool shares,
Provisions of the District's bond trust agreements require that certain restricted accounts be established. These
accounts are held by trustees for the repayment of debt and as reserves. These funds have been invested only as
permitted by specific state statutes and applicable resolutions or bond indentures. The cash equivalents and
investments held by trustees have been classified as restricted on the balance sheet because their use is limited by
bond covenants.
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS (CONTINUED)
YEAR. ENDED MARCH 31, 2002
Custodial Credit Risk
The District's investments are categorized below to give an indication of the level of custodial credit risk assumed by
the District at March 31, 2002, Category 1 includes investments that are insured or registered, or securities held by
the District or its agent in the District's name. Category 2 includes uninsured and unregistered investments, with the
securities held by the Counterparty's trust department or agent in the District's name. Category 3 includes uninsured
and unregistered investments, with securities held by the counterparty, or by its trust depat iment or agent, but not in
the District's name. There were no Category I or 3 investments at March 31, 2002.
The District's investments were classified as follows at March 31, 2002:
Category 2 Investments:
U.S. Government securities
Investments not subject to categorization:
County of Santa Clara Treasurer's investment pool
Mutual funds
Fair Value
$ 3,391,022
31,425,725
107,081
Total $ 34,923,828
NOTE C: NOTE RECEIVABLE
On December 17, 1997, the District sold 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 purchaser in the amount of $288,800 over 25
years at a rate of 10% per annum. Monthly principal and interest payments of $2,624 are due on the is` of each
month and late if not paid by the 10th, with the final payment scheduled on December 1, 2022. The outstanding
balance at March 31, 2002 is $275,255.
NOTE D: FIXED ASSETS
Changes in the General Fixed Assets Account Group for the year ended March 31, 2002, were as follows:
Balances Balances
April I, 2001 Additions Retirements March 31, 2002
Land $ 200,921,609 $ 13,675,746 $ $ 214,597,355
Structures & improvements 9,503,957 753,817 - 10,257,774
Equipment 2,147,939 361,862 58,665 2,451,136
$ 212,573,505 $ 14,791,425 $ 58,665 $ 227,306,265
The District received a land donation equal to an estimated fair market value of $10,000,000 during the fiscal year
2001/02. The donation came from the Peninsula Open Space Trust, the San Francisco Bay Area Program of the
California Coastal Conservancy, and the Wildlife Conservation Board, in the amounts of $5 million, $3 million, and
$2 million, respectively. The donation was recorded as an addition to the General Fixed Assets Account Group, but
was not reported in the General Fund, as the District did not receive any spendable resources as a result of the
donation.
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED MARCH 31, 2002
NOTE E: LONG-TERM DEBT
Changes in long-term debt for the year ended Match 31, 2002 is presented below.
Promissory Notes:
1995
Hosking Property
Aine Property
Lazenby Property
Corn Property
McKannay-Seimers Property
McKannay-Tate/A. Property
1993 Certificates of Participation
Revenue Bonds:
1996
1999
1999, Second Issue
Total
Balance
April 1, 2001
$ 11,200,000
500,000
108,197
54,141
770
11,863,108
15,645,000
29,938,005
30,949,288
29,195,932
90,083,225
$ 117,591,333
Additions
and Accretion Retirements
250,000
340,000
590,000
515,173
830,957
756,159
2,102,289
$ 2,692,289
$ 100,000
10,550
5,470
770
116,790
480,000
765,000
440,000
1,205,000
$ 1,801,790
Balance
March 31, 2002
$ 11,100,000
500,000
97,647
48,671
250,000
340,000
12,336,318
15,165,000
29,688,178
31,340,245
29,952,091
90,980,514
18,481,832
The following is a detail of the long-term debt of the District as of March 31, 2002:
Promissory Notes
▪ 1995 Notes, principal balance of $11,100,000, comprised of $955,000 of Serial Notes, bearing interest at
rates ranging from 6.15% to 7%, maturing annually from September 1, 2002 through September 1, 2009,
and $10,145,000 of 7% term notes due on September 1, 2014.
▪ The five land contract promissory notes aggregate to a total debt of $1,236,318, bearing interest at fixed
rates from 4.1% to 7%, and maturing at different intervals through January 10, 2012. The Hosking, Aine
and Lazenby Properties are collateralized by land and the McKannay Properties are unsecured.
1993 Certificates of Participation
' 1993 Certificates of Participation, includes serial certificates with a principal balance of $4,910,000,
bearing interest at rates ranging from 4.75% to 5.6%, maturing annually from September 1, 2002 through
September 1, 2009. These certificates also include $4,345,000 of 5.70% tenn certificates due on September
1, 2014 and $5,910,000 of 5.75% term certificates due on September 1, 2002.
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED MARCH 31, 2002
Revenue Bonds
• On July 24, 1996, the Authority on behalf of the District issued the 1996 Revenue Bonds, which have a
principal balance outstanding of $29,688,178. These bonds are comprised of $15,995,000 in current
interest bonds, bearing interest at rates ranging from 4.6% to 5.75%, and maturing annually from September
1, 2002 through September 1, 2012. This issue also includes $4,900,000 of current interest term bonds,
bearing interest at 5.9% due September 1, 2014 and $8,793,178 of capital appreciation bonds, bearing
interest at rates ranging from 6.2% to 6.3%, maturing annually from September 1, 2015 through September
1, 2026. Accretion on the capital appreciation bonds for the year ended March 31, 2002 was $515,173.
• On January 27, 1999, the Authority on behalf of the District issued the 1999 Revenue Bonds, first issue,
which has a principal balance outstanding of $31,340,245. These bonds are comprised of $14,960,000 of
current interest bonds, bearing interest at rates ranging from 3.75% to 4.625%, maturing annually from
September 1, 2002 through September 1, 2014. This issue also includes $16,380,245 capital appreciation
bonds, bearing interest at rates ranging from 5.2% to 5.4%, maturing annually from September 1, 2015
through September I, 2030. Accretion on the capital appreciation bonds for the year ended March 31, 2002
was $830,957. A portion of the proceeds was used to advance refund the 1992 Promissory Notes. On
March 31, 2002, the 1992 Promissory Notes considered defeased have an outstanding balance of
$6,230,000.
On August 30, 1999, the Authority on behalf of the District issued the 1999 Revenue Bonds, second issue,
which has a principal balance outstanding of $29,952,091. These bonds comprised of $10,935,000 current
interest bonds, beginning interest at rates ranging from 4.25% to 5.2% maturing annually from August 1,
2002 through August 1, 2012. This issue also includes $6,185,000 of current interest term bonds, bearing
interest at 5.25% due August 1, 2013 through August 1, 2017 and $12,832,091 capital appreciation bonds,
bearing interest at rates ranging from 6.2% to 6.35%, maturing annually from August I, 2018 through
August 1, 2031, Accretion on the capital appreciation bonds for the year ended March 31, 2002 was
$756,159. A portion of the proceeds was used to repay the 1990 Promissory Notes.
All debt is payable from limited ad valorem property taxes levied on all taxable property within the District. The
District has not pledged its full faith and credit of taxing power for payment of the debt, nor is the debt collateralized
by any District property, except for the Hosking, Aine and Lazenby Properties described above,
Maturities of long-term debt are as follows:
Year ending
Total Debt
March 31, Principal Interest Future Accretion Service
2003 $ 785,972 $ 4,277,083 $ 2,226,115 $ 7,289,170
2004 435,951 4,121,240 2,357,275 6,914,466
2005 608,235 3,982,399 2,496,207 7,086,841
2006 792,359 3,825,598 2,643,377 7,261,334
2007 1,002,854 3,649,642 2,799,264 7,451,760
2008-2012 10,970,390 14,735,359 16,678,316 42,384,065
2013-2017 22,482,560 5,335,692 21,407,440 49,225,692
2018-2022 24,361,712 615,926 19,568,288 44,545,926
2023-2027 25,495,094 14,024,906 39,520,000
2028-2032 31,546,705 - 5,648,295 37,195,000
$ 118,481,832 $ 40,542,939
$ 89,849,483 $ 248,874,254
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MIDPENINSULA REGIONAL OPEN SPACE•DISTRICT
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED MARCH 31, 2002
NOTE F: RENTAL INCOME
The District leases (rents) certain land and structures to others under operating leases with terms generally on a
month -to -month basis.. Rental income of $724,034 was received during the year ended March 31, 2002.
NOTE G: EMPLOYEES' RETIREMENT PLAN
Plan Description -- The District's defined benefits pension plan, Public Employee Retirement System (PERS)
provides retirement and disability benefits, annual cost -of -living adjustments, and death benefits to plan members
and beneficiaries. The PERS is part of the Miscellaneous portion of the California Public Employee Retirement
System (CalPERS), an agent multiple employer plan administered by CaIPERS, which acts as a common investment
and administrative agent for participating public employers within the State of California. A menu of benefit
provisions as well as other requirements are established by State statutes within the Public Employees' Retirement
Law. The District selects optional benefit provisions from the benefit menu by contracts with CaIPE'RS and adopts
those benefits through District resolution. CalPERS issues a separate comprehensive annual financial report. Copies
of the CalPERS' annual financial report may be obtained from the CalPERS Executive Office — 400 P Street —
Sacramento, CA 95814.
Funding Policy -- Active plan members in the PERS are required to contribute 7% of their annual covered salary,
which is currently paid by the District on behalf of its employees. The District is required to contribute the
actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and
assumptions used are those adopted by the CalPERS Board of Administration. The required employer contribution
rate for the fiscal year ended March 31, 2002 was 0.0%. The contribution requirements of the plan are established
by State statute and the employer contribution rate is established and may be amended by CalPERS.
Annual Pension Cost — For fiscal year ended March 31, 2002, the District's annual pension cost was $269,187 and
the District actually contributed $269,187. The required contribution for fiscal year ended March 31, 2002 was
determined as part of the June 30, 2000 actuarial valuation using the entry age normal actuarial cost method with the
contributions determined as a percent of pay. The actuarial assumptions included (a) 8.25% investment rate of return
(net of administrative expenses); (b) projected -salary increases that vary by duration of service; and (c) 2% cost -of -
living adjustment. Both (a) and (b) include an inflation component of 3.5%. The actuarial value of the District's
assets was determined using a technique that smoothes the effect of short-term volatility in the market value of
investments over a three-year period. The District's unfunded actuarial excess assets are being amortized as a level
of percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 2000 was 14
years.
Three -Year Trend Information for the Fund
Fiscal Year ending March 31,
Annual Percentage Net
Pension Of APC Pension
Cost (APC) Contributed Obligation
2000 $ 335,404 100%
2001 261,223 100%
2002 269,187 100%
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MIDPENINSULA REGIONAL OPEN SPACE DISTRICT
NOTES TO GENERAL-PURPOSE FINANCIAL STATEMENTS (CONTINUED)
YEAR ENDED MARCH 31, 2002
Regt
(A)
Entry Age (B)
Actuarial Actuarial Actuarial
Valuation Accrued Asset
Date * Liability Value
6/30/98
6/30/99
6/30/00
ed Supplementary Information
(C)
$ 5,578,369 $ 7,009,702
6,356,332 8,269,579
7,422,454 9,493,705
Unfunded
Actuarial
Accrued
Liability
(Excess Assets)
[(A) — (B)]
$ - (1,431,333)
(1,913,247)
(2,071,251)
(D)
Funded (E)
Ratio Covered
[(B) / (A)] Payroll
125.7% $ 2,508,891
130.1% 2,986,627
127.9% 3,271,912
(F)
Overfunded
Actuarial
Liability as a
Percentage of
Covered Payroll
[(C) / (E)1
(57.050%)
(64.060%)
(63.304%)
* There were no changes in actuarial assumptions since the prior year's actuarial valuation.
NOTE II: EXPENDITURES IN EXCESS OF APPROPRIATIONS
The site supplies and services expenditures exceeded the budget by $6,930 due to several unanticipated projects
which include re -roofing the "Ranch House" employee residence at Skyline Ridge Open Space Preserve and re-
roofing the Smith residence, which is tenant occupied. Capital outlay on equipment expenditures exceeded the
budget by $5,612 due mostly to the purchase of a 42" HP Designer Jet printer in anticipation of saving printing costs
in the long run.
NOTE I: RESERVATIONS AND DESIGNATIONS OF FUND EQUITY
Reserved fund balance represents that portion of fund balance, which is not available for appropriation for
expenditure or is legally segregated for a specific future use. Portions of the unreserved fund balance have been
designated for future acquisition of open space and for future capital purchases to be decided at a future date. Such
plans or intentions are subject to change and may or may not result in expenditures.
NOTE J: COMMITMENTS
During May 2000, the District and the County of Santa Clara (the County) entered into an agreement whereby the
District would operate and manage the Rancho San Antonio County Park (the Park). The park encompasses 165 -
acres owned by the County and serves as a gateway facility to the District's Rancho San Antonio Open Space
Preserve (the Preserve). The Preserve includes the Deer Hollow Farm, a homestead and educational center operated
by the City of Mountain View. Under the agreement, the District agreed to manage the Park for a term of ten years
and to ensure that Deer Hollow Farm receives funding for operations of no less than $50,000 per year. In return, the
County contributed $1,500,000 to the District for the purpose of acquiring open space.
NOTE K: RISK MANAGEMENT
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. The District manages and finances these risks by purchasing commercial
insurance. There have been no significant reductions in insurance coverage from the previous year, nor have settled
claims exceeded the District's commercial insurance coverage in any of the past three years.
NOTE L: CONTINGENCIES
The District has entered into numerous agreements, has properties that will require environmental remediation, and is
named in certain claims and litigation. In the opinion of management, after consultation with counsel, the liability, if
any, resulting therefrom will not have a material effect on the District's financial position.
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OTHER REPORT
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Macias,Gini & Company MP
Certified Public Accountants and
Managem,eni Consultants
Board of Directors
Midpeninsula Regional Open Space District
Partners Mt. Diablo Plaza'
Kenneth A. Macias, Managing Partner 2175 N. California Boulevard
Ernest J. Gird Suite 6210
Kevin J. O'Connell Walnut Creek, CA 94596-3565
Richard A. Green
925.274.0190
Jan A. Rosati
925.274.3819 FAX
James V. Godsey
www.macaasgini.com.
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE AND ON
INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN
AUDIT OF GENERAL-PURPOSE FINANCIAL STATEMENTS PERFORMED
IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
We have audited the general-purpose financial statements of Midpeninsuia Regional Open Space District (the
District) as of and for the year ended March 31, 2002, and have issued our report thereon dated May 24, 2002.
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.
Compliance
As part of obtaining reasonable assurance about whether the District's general-purpose financial statements are
free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts and grants, noncompliance with which could have a direct and material effect on the determination of
general-purpose financial statement amounts. However, providing an opinion on compliance with those provisions
was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests
disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
Internal Control over Financial Reporting
In planning and performing our audit, we considered the District's internal control over financial reporting in
order to determine our auditing procedures for the purpose of expressing our opinion on the general-purpose
financial statements and not to provide assurance on the internal control over financial reporting. Our
consideration of the internal control over financial reporting would not necessarily disclose all matters in the
internal control over financial reporting that might be material weaknesses. A material weakness is a condition in
which the design or operation of one or more of the internal control components does not reduce to a relatively low
level the risk that misstatements in amounts that would be material in relation to the general-purpose financial
statements being audited may occur and not be detected within a timely period by employees in the normal course
of performing their assigned functions. We noted no matters involving the internal control over financial reporting
and its operation that we consider to be material weaknesses.
This report is intended solely for the information and use of management and the District's Board of Directors and
is not intended to be and should not be used by anyone other than these specified parties.
MACIAS, GINI Sc COMPANY LLP
Certified Public Accountants
Walnut Creek, California
May 24, 2002
Offices located throughout California
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