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HomeMy Public PortalAboutAudit Report - District- FY99MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Financial Statements and Report of Independent Certified Public Accountants March 31, 1999 C C C) c; c Accountants and Management Consultants The US Member Firm of Grant Thornton International Grant Thornton It GRAM-THORNTONUAP Report of Independent Certified Public Accountants The Board of Directors Midpeninsula Regional Open Space District We have audited the accompanying general-purpose financial statements of the Midpeninsula Regional Open Space District (the "District") as of and for the year ended March 31, 1999. 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 generally accepted auditing standards. 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 financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall general-purpose 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 at March 31, 1999, and the results of operations for the year then ended in conformity with generally accepted accounting principles. Azt Z cp e Sari Jose, California May 21, 1999 150 Almaden Blvd. P.O. Box 6779 San Jose, CA 95113 Ted: 408 275-9000 Fax: 408 275-0582 v' Midpeninsula Regional Open Space District COMBINED BALANCE SHEET March 31, 1999 Account Groups ASSETS Cash, including interest -bearing deposits and cash equivalents Restricted cash and cash equivalents Unrestricted investments Restricted investments Property tax and other receivables Prepaid expenses Option for land/lease 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 Long-term debt Total liabilities Fund equity Investment in general fixed assets Fund balance - unrestricted Fund balance - restricted for land deposit Total fund equity TOTAL LIABILITIES AND FUND EQUITY See accompanying notes to financial statements. General Fund $ 23,215,124 $ 1,748,192 443,109 2,946,156 3,807,335 23,352 10,500,000 General General Fixed Long -Term Assets Debt 166,654,984 8,726,095 1,763,180 Total (Memorandum Only) $ 23,215,124 1,748,192 443,109 2,946,156 3,807,335 23,352 1^_,500,000 166,654,984 8,726,095 1,763,180 5,137,459 5,137,459 94,936,529 94,936,529 $ 42,683,268 $ 177,144,259 $ IC0,073,988 $ 319,901,515 $ 160,922 $ 184,590 29,825 327,101 702,438 177,144,259 31,480,830 10,500,000 41,980,830 177,144,259 $ 160,922 184,590 29,825 327,101 100,073,988 100,073,988 100,073,988 100,776,426 177,144,259 31,480,830 10,500,000 219,125,089 $ 42,683,268 $ 177,144 259 $ 100,073,988 $ 319,901,515 3 e 0 0 c C Midpeninsula Regional Open Space District STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE - BUDGET AND ACTUAL - GENERAL FUND For the year ended March 31, 1999 REVENUES General property tax State grants Other property taxes Interest Rental income and other Total EXPENDITURES Salaries and benefits Professional services Vehicle expenses Rent Site supplies and services Utilities and communications Other Acquisitions: Land Structures and improvements Equipment Debt service Principal retirement Interest Reserve fund used toward refunding Total Budget Actual Variance Favorable (Unfavorable) $11,957,000 $12,638,834 $ 681,834 465,000 793,988 328,988 185,000 143,936 (41,064) 900,000 1,317,218 417,218 965,000 1,155,440 190,440 14,472,000 16, 049,416 1,577,416 3,637,450 3,496,879 140,571 385,200 420,397 (35,197) 157,450 149,843 7,607 17,950 27,124 (9,174) 242,400 225,599 16,801 359,250 132,968 226,282 377,225 521,056 (143,831) '.574,500 4,237,955 7,336,545 871,250 621,868 249,382 51,000 169,932 (8,932) 2,027,100 2,002,055 25,045 4,440,400 4,865,192 (424,792) 642,391 (642,391) 24,251,175 17,513,259 6,737,916 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES (9,779,175) (1,463,843) 8,315,332 OTHER FINANCING SOURCES (USES) Proceeds from lease Proceeds from issuance of long-term debt, net Proceeds from refunding debt, net Payment to refunded debt escrow agent Total 32,000 (32,000) 21,716,473 21,716,473 7,129,275 7,129,275 (7.125,599) (7,125,599). 32,000 21120,149 21.688,149 REVENUES AND OTHER FINANCING SOURCES OVER (UNDER) EXPENDITURES (9,747,175) 20,256,306 30,003,481 Fund balance, April 1, 1998 Fund balance, March 31, 1999 See accompanying notes to financial statements. 21,724,524 21,724,524 $11,977,349 $41,980,8.30 $ 30,003,481 4 C C C C Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS March 31, 1999 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES 1. Organization The Midpeninsula Regional Open Space District (the "District") was formed 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 portion of San Mateo County was annexed to the District. The District annexed a small portion of the northern tip of Santa Cruz County in 1992. 2. Reporting Entity The District and the Midpeninsula Regional Open Space District Financing Authority (the "Authority") have a financial and operational relationship which meets the reporting entity definition criteria of Governmental Accounting Standards Board ("GASB") Statement No. 14, The Financial Reporting Entity, for inclusion of the Authority as a component unit of the District. Accordingly, the financial activities of the Authority have been included in the financial statements of the District. The following are those aspects of the relationship between the District and the Authority which satisfy GASB No. 14 criteria. Accountability 1. The Authority's Board of Directors was appointed by the District's Board of Directors, except for the member appointed by the Board of Supervisors of Santa Clara County. 2. The District is able to impose its will upon the Authority, based on the following: • All major financing arrangements, contracts, and other transactions of the Authority must have the consent of the District. • The District exercised significant influence over operations of the Authority. The District is the sole obligator for any obligations issued by the Authority. 3. The Authority provides specific financial benefits or imposes specific financial burdens on the District based upon the following: • Any deficits incurred by the Authority will be reflected in the payments of the District. • Any surpluses of the Authority revert to the District. Scope of Public Service The Authority is organized as a joint powers authority pursuant to the California Government Code. 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. The District intends to manage and occupy all properties financed by the Authority. 5 C CC C C C Midpeninsula Regional Open Space District NO FES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) Financial Presentation For financial presentation purposes, the Authority's financial activity has been blended, or combined, with the financial data of the District. The financial statements present the Authority's financial activity within the General Fund and the Account Groups. The -1-996 and 1999 Revenue Bonds issued by the Authority are included in the General Long -Term Debt Account Group. 3. Basis of Accounting The records of the District are maintained on the modified accrual basis of accounting. Under this method, revenues 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. 4. Investments Investments are stated at fair value. The type of investments made by the District are restricted by state law. 5.. 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 generally accepted accounting principles. 6. General Fixed Assets Land, structures, improvements, and equipment purchased by the District are stated at cost in the General Fixed Assets Account Group. Assets donated to the District are stated at their estimated fair market value as of the date received. Depreciation is not recorded for fixed assets, 7, Long-term Debt The principal portion of long-term debt is recorded as a liability in the General Long -Term Debt Account Group. 6 C' C C C C Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) 7. Property Tax Levy, Collection and Maximum Rates The State of California ("State") Constitution Article XIII A provides that the combined maximum property tax rate on any given property may not exceed one percent of its assessed value unless an additional amount for general obligation debt has been approved by voters. Assessed value is calculated at 100 percent of market value as defined by Article XIII A 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 other districts. The District receives property tax revenues from Santa Clara and San Mateo Counties. The Counties assess properties, bill for and collect property taxes as follows: Secured Unsecured Valuation dates March 1 Lien/Levy dates July 1 Due dates 50% on November 1 50% on February 1 Delinquent as of December 10 (for November) April 10 (for February) March 1 March 1 July 1 August 31 Property taxes are distributed to the District by the Counties following their collection. Unsecured taxes are levied on personal property other than real estate, land and buildings. These taxes are secured by liens on the property being taxed. Property tax revenue is recognized in accordance with GASB Interpretation 5, Property Tax Revenue Recognition in Governmental Funds, which states that such revenue he recorded when it becomes measurable and available. 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). 8. Compensated Absences Vacation pay is recorded as an expenditure in the year earned. Sick leave is recorded as an expenditure when paid. 7 c c 0 C Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE A - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued) 9. Use of Estimates In preparing financial statements in conformity with generally accepted accounting principles, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the -date of the financial statements, as well as revenues and expenses during the reporting period. Actual results could differ from those estimates. 10. Total (Memorandum Only) The column in the financial statements captioned "Total (Memorandum Only)" is presented for purposes of additional analysis and is not a required part of the basic financial statements. This information is not comparable to a consolidation and does not present financial position in conformity with generally accepted accounting principles. NOTE B - CHANGE IN ACCOUNTING PRINCIPLES Effective April 1, 1998, the District adopted Statement No. 27 of GASB, Accounting Standards for Pensions by State and Local Governmental Employers, which applies to employers with fiscal years beginning after June 15, 1997. GASB Statement No. 27 sets forth the criteria for recognition and measurement of pension expense or benefit and any related liability or asset related to the District's participation in the California Public Employees Retirement Systems (CaIPERS). GASB Statement No. 27 also requires certain disclosures as presented in Note H. Adoption of this principle had no impact on the District's fund balance. Effective April 1, 1998, the District adopted Statement No. 32 of GASB, Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans ("Section 457 Plans'). This statement requires employers to remove from the balance sheet, any assets and corresponding liabilities related to Section 457 Plans once the plan assets are transferred to a trust which is for the exclusive benefit of participants and their beneficiaries. The District did have in place such a trust held with ICMA Retirement Corporation for the Section 457 Plan on April 1, 1998, in accordance with an August 20, 1996 change to the Internal Revenue Code. Accordingly, the District has removed the plan assets and corresponding liability from the balance sheet. This change in accounting has no impact on the District's fund balance. 8 C' C C C C c F C C- C Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE C - CASH AND CASH EQUIVALENTS Cash and cash equivalents consist of the following at March 31, 1999: Deposits Cash on hand - unrestricted Cash in banks - restricted Pooled Funds Cash in Santa Clara County Treasury - unrestricted Cash in Santa Clara County Treasury - restricted 19,663 8,562 23,195,461 1,739,630 Cash balances held in banks are insured up to $100,000 by the Federal Depository Insurance Corporation. The Santa Clara County investment pool is subject to legal restrictions, and additional restrictions prescribed by the County. NOTE D - INVESTMENTS The District maintains certain restricted investments for purposes of satisfying the future requirements of its long-term debt. The District also maintains certain unrestricted investments that are held by Santa Clara County. All investments held are U.S. Government securities with a maturity date of August 31, 1999. All U.S. Government securities are insured or collateralized with securities held by the District or its agent in the District's name. The total fair value of the investments is $3,401,754 at March 31, 1999, which approximates their cost. NOTE E — OPTION FOR LAND/LEASE On March 10, 1999, the District entered into an Agreement for Option and Purchase of Real Property (an "Agreement") and advanced $10,500,000 to the seller in connection with that agreement. The $10,500,000 advance represents consideration for the District's exclusive option to purchase 805 acres of land (referred to as the "upper" portion of the property) for public open space. The District may exercise this option during a five-year period conditioned upon the occurrence of various events, which include the seller receiving approvals to develop adjoining property. The $10,500,000 also represents consideration for the District's nine-year lease of the 805 acres for open space purposes. The $10,500,000 is secured by a promissory note and deed of trust. The promissory note bears interest at 6% and matures on March 10, 2004 when the entire $10,500,000 plus interest must be remitted to the District should the District not exercise its option or should the seller decide to "unwind" the transaction. If the District exercises its option, $10,000,000 will remain with the seller as it represents the purchase price of the 805 acres. $500,000 will remain with the seller as a deposit on the lower portion described below. Should the seller develop the lower portion, the District may receive development refunds as high as $11,000,000, depending on the development density. 9 0 c c Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE E - OPTION FOR LAND/LEASE (continued) The District also received an option to purchase the leasehold property and an additional 260 -acre adjacent parcel known as the "lower" portion for an additional $14,500,000, for a total purchase price $25,000,000. The initial option expired as of March 31, 1999 and was extended to June 30, 1999 with an additional payment of $250,000. The $250,000 is not refundable, but will be applied toward the purchase of the property, if the option is exercised early. If the District ultimately purchases the property, it will be preserved in its natural condition and named the Bear Creek Open Space Preserve. The District had not exercised its option as of March 31, 1999. NOTE F - FIXED ASSETS Changes in the General Fixed Assets Account Group for the year ended March 31, 1999, were as follows: Land Structures and improvements Equipment NOTE G - LONG-TERM DEBT Balances April 1, 1998 $ 162,417,029 8,104,227 1,682,504 $ 172,203,760 Additions 4,237,955 621,868 169,932 5,029,755 Retirements 89,256 $ 89,256 Balances March 31, 1999 $ 166,654,984 8,726,095 1,763,180 $ 177,144,259 Long-term debt issued to acquire land, structures and improvements, and equipment is recorded in the General Long -Term Debt Account Group. Changes in the account group for the year ended March 31, 1999 were as follows: Long-term debt, April 1, 1998 Issuance of bonds payable Principal reductions through refunding Principal repayments Long-term debt, March 31, 1999 $ 79,758,026 29,663,017 (7,345,000) (2,002,055) $103,073,988 The following is a detail of the long-term debt of the District as of March 31, 1999: • Four notes payable aggregating debt of $700,770 bearing interest at fixed rates from 6% to 7% at March 31, 1999 and are collateralized by land. • 1990 Notes, principal balance of $12,615,000, bearing interest at rates ranging from 6.50% to 7.50%, maturing annually from September 1, 1995 through September 1, 2010. 10 C U U U U U U U v v Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE G - LONG-TERM DEBT (continued) • 1993 Certificates of Participation including Serial Certificates with a principal balance of $6,210,000, bearing interest at rates ranging from 2.90% to 5.6%, maturing annually from September 1, 1994 through September 1, 2009, This issue also includes $4,345,000 of 5.70% Term Certificates due on September 1, 2014 and $5,910,000 of 5.75% Term Certificates due on September 1, 2020. • 1995 Notes, principal balance of $11,400,000, comprised of $1,255,000 of Serial Notes, bearing interest at rates ranging from 5,75% to 7%, maturing annually from September 1, 1998 through September 1, 2009, and $10,145,000 of 7% term notes due on September 1, 2014, • 1996 Notes, principal balance of $29,230,201, including $18,095,000 of Current Interest Bonds, bearing interest at rates ranging from 3,9% to 5.75% maturing annually from September 1, 1997 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 $6,235,201 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, • 1999 Revenue Bonds of $29,663,017, including $15,775,000 of Current Interest Bonds, bearing interest at rates ranging from 3.7% to 4.6%, maturing annually from September 1, 2000 through September 1, 2014. This issue also includes $13,888,017 Capital Appreciation Bonds, bearing interest at rates ranging from 5.2% to 5.4%, maturing annually from September 1, 2015 through September 1, 2030. All notes are 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 or taxing power for payment of the notes nor are the notes collateralized by any District property, except for the four notes totaling $770,770 described above. Maturities of long-term debt are as follows: Year ending March 31, Principal Interest Total 2000 $ 1,848,213 $ 4,618,855 $ 6,467,068 2001 2,369,450 4,441,582 6,811,032 2002 2,601,789 4,306,956 6,908,745 2003 3,347,088 4,157,727 7,504,815 2004 3,113,226 3,961,349 7,074,575 Thereafter through 2030 86,794,222 45,997,128 132,791,350 $ 100,073,988 $ 67,483,597 $ 167,557,585 11 0 C Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE G - LONG-TERM DEBT (continued) A portion of the net proceeds of the 1999 Revenue Bonds was used to advance refund $7,345,000 of outstanding Promissory Notes originally issued in 1992. The advance refunding met the requirements of an in substance debt defeasance. The Promissory notes were defeased by placing funds in irrevocable trusts to provide for all future debt service payments on the old Promissory Notes. Accordingly, the trust account assets and the liability for defeased Promissory Notes are not included in the District's financial statements. The 1992 notes have been removed from the general long-term debt account group. The cash requirements necessary to service the old debt of $10,967,050 as compared with those related to the new debt of $19,041,509 result in an economic loss of $57,155. The primary purpose of the issuance of the 1999 Revenue Bonds was to generate enough cash flow to fund current land acquisitions. The goal of the District is to preserve as much open space property as possible. In order to finance the new acquisitions, refinancing part of the old debt was necessary. Thus, the economic loss equates to the additional cost of financing. NOTE H - EMPLOYEES' RETIREMENT PLAN Plan Description - The District's defined benefit 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 CalPERS, 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 contract with CalPERS 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 CaIPERS 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. 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 CaIPERS Board of Administration. The required employer contribution rate for fiscal 1998/99 was 3.1%. 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 1998/99, the District's annual pension cost was $338,599 and the District actually contributed $338,599. The required contribution for fiscal year 1998/99 was determined as part of the June 30, 1997 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 is being amortized as a level percentage of projected payroll on a closed basis. The remaining amortization period at June 30, 1997 was 17 years. 12 CD c C Midpeninsula Regional Open Space District NOTES TO FINANCIAL STATEMENTS (continued) March 31, 1999 NOTE H - EMPLOYEES' RETIREMENT PLAN (continued) Three -Year Trend Information for the Fund Fiscal Year ending 6/30/97 6/30/98 6/30/99 Valuation Date 6/30/95 6/30/96 6/30/97 Entry Age Normal Accrued Liability $ 3,749,211 4,715,902 5,078,750 $ Annual Percentage Pension of APC Cost (APC) _ Contributed 199,985 201,520 338,599 Required Supplementary Information Funded Status of Plan Actuarial Value of Assets $ 3,936,485 4,705,140 5,676,800 Unfunded/ (Overfunded) Liability (187,274) 10,762 (598,050) NOTE I - DEFERRED COMPENSATION PLAN Funded Ratio 100% 100% 100% Annual Covered Payroll 105.0% 99.8% 111.8% $ 2,530,402 2,361,398 2,41.3,032 Net Pension Obligation UALL As a To of Payroll (7.401%) 0.456% (24.784%) In 1988, the District established a deferred compensation plan for its employees in accordance with California Government Code Section 53212 and Internal Revenue Code Section 457. The plan, available to all District employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. All amounts under the ICMA Retirement Corporation plan are held in trust and, as such, are not reflected on the accompanying balance sheet as discussed in Note B. NOTE J - LEASE REVENUE The District leases certain land and structures to others under operating leases with terms generally on a month -to -month basis. Lease revenue of $607,180 was received during the year ended March 31, 1999. NOTE K - LITIGATION The District 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. 13 C C C C: C C SUPPLEMENTARY INFORMATION C 0 C C C San Jose, California May 21, 1999 Report of Independent Certified Public Accountants on Required Supplementary Information Board of Directors Midpeninsula Regional Open Space District Our audit was conducted for the purpose of forming an opinion on the general-purpose financial statements taken as a whole of the Midpeninsula Regional Open Space District ("District") as of and for the year ended March 31, 1999, which are presented in the preceding section of this report. The supplementary information on page 16 is not a required part of the general-purpose financial statements, but is supplementary information required by the Governmental Accounting Standards Board, We have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and presentation of the supplementary information. However, we did not audit the information and do not express an opinion on it. In addition, we do not provide assurance that the District is or will become Year 2000 compliant, that the District's Year 2000 remediation efforts will be successful in whole or in part, or that parties with which the District does business are or will become Year 2000 compliant. 15 C e C Midpeninsula Regional Open Space District YEAR 2000 SUPPLEMENTAL INFORMATION Year ended March 31, 1999 Year 2000 Compliance Program The District began addressing Y2K compliance in December 1998, by conducting an inventory of systems likely to be impacted by potential Y2K issues, and determining key tasks which needed to be implemented in order to assure that all systems would be compliant by the end of 1999. Following is a summary of tasks the District has either completed or is in the process of completing to accomplish Year 2000 compliance: 1. Assurance that software programs and vendors for mission critical functions (such as payroll, accounting, etc.) are Y2K compliant. 2. Determine that workstation an.d compliant. operating systems on server computers are 3. Determine that networking software is Y2K compliant. 4. Determine that the District's standard office suite is Y2K compliant. 5. Determine that other specialized software programs are Y2K compliant. 6. Assurance that District's telephone system is Y2K compliant. Completed. Received certification that critical programs or vendors are compliant: Timespan accounting software, CaIPERS reporting systems, ICMA Retirement Corporation (deferred compensation program), and AccuChex payroll system. Completed. All computer workstations have been upgraded to Windows 95, 98 or NT 4.0,and bios testing has been completed on each machine. To be completed by August 30 1999. LA.Ntastic 8.0 is Y2K compliant, and is in the process of being installed on each workstation and the server. Completed. The District has standardized its office suite to Microsoft Office 97, which is compliant, and loaded on all workstations. To be completed by August 30, 1999. Specialized software used in Planning for mapping and graphics (Adobe Illustrator and ArcView GIS software) is being assessed for compliance. Adobe Illustrator is compliant. Completed. The District upgraded its telephone system in July 1999 for Y2K compliance. SUPPLIERS, SERVICE PROVIDERS AND EQUIPMENT, AND ENVIRONMENTAL OPERATIONS Evaluate potential for impact from external providers' systems (banks, vendors, utility providers, etc.) and internal equipment (HVAC, security, fire alarm systems, etc.) To be completed by September 30, 1999. District has formed a Y2K Assessment Committee, which is presently meeting with various program groups for input on potential external and internal impacts. Once impacts are evaluated, compliance assurance will be delegated to appropriate staff, with compliance deadline of September 30, 1999. Upon completion of compliance, the Committee will issue detailed guidelines for staff on Y2K compliance issues both departmentally and District -wide, including a checklist for year-end procedures to assure a smooth transition from December 31, 1999, to January 1, 2000, Midpeninsula Regional Open Space District does not assert that it will be Y2K compliant with regard to computer systems and other electronic equipment, only that work is either completed or in process. 16 C 0 C c c E