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HomeMy Public PortalAbout20191120 - Agenda Packet - Board of Directors (BOD) - 19-29 SPECIAL MEETING BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT SPECIAL MEETING OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY Administrative Office 330 Distel Circle Los Altos, CA 94022 Wednesday, November 20, 2019 Special Meeting starts at 5:00 PM* Special Meeting starts at 7:00 PM* REVISED A G E N D A TELECONFERENCE NOTICE Pursuant to Government Code Section 54953, Subdivision (b), the Special meetings will include teleconference participation by Director Siemens from 69 Ellenwood Ave., Los Gatos, CA 95030. This Notice and Agenda will be posted at the teleconference location. Accessibility to and public comment from this address shall be provided as required by Government Code Section 54954(b)(3). TELECONFERENCE NOTICE Pursuant to Government Code Section 54953, Subdivision (b), the Special meetings will include teleconference participation by Director Kersteen-Tucker from 776 Buena Vista St. Moss, Beach, CA 94038. This Notice and Agenda will be posted at the teleconference location. Accessibility to and public comment from this address shall be provided as required by Government Code Section 54954(b)(3). 5:00 SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT ROLL CALL 1. Annual Bond Disclosure Training for the Board of Directors, Members of the Disclosure Working Group, and Contributors (R-19-159) Staff Contact: Andrew Taylor, Finance Manager General Manager’s Recommendation: Receive the annual training on Bond Disclosure obligations, responsibilities, and potential liabilities. No formal Board action required. 2. Fiscal Year 2019-20 (FY19) Annual Financial Report (19-150) Staff Contact: Andrew Taylor, Finance Manager General Manager’s Recommendations: Meeting 19-29 Rev. 1/3/19 1. Review and accept the Fiscal Year 2019-20 (FY19) Annual Financial Report. 2. Adopt a resolution approving the transfer of a total of $6 million from the General Fund Unassigned Fund balance as follows: a. $4.6 million to Committed for Infrastructure Fund; and b. $1.4 million to the Assigned Fund for Ongoing Capital Projects; And approving the transfer of $3 million from the Committed for Natural Disasters to the Committed for Capital Maintenance & Repair Fund 3. Approve updates to Board Policy 3.07, Fund Balance Policy, reflecting the changes noted above and to incorporate other important updates. ADJOURNMENT Time Certain – To Be Heard No Earlier Than 6:45 P.M. 6:45 SPECIAL MEETING OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY ROLL CALL 1. Acceptance of the Annual Financial Report of the Midpeninsula Regional Open Space District Financing Authority for Fiscal Year Ending June 30, 2019 (R-151) Staff Contact: Andrew Taylor, Finance Manager Controller’s Recommendation: Accept the Annual Financial Report. ADJOURNMENT 7:00 SPECIAL MEETING OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT ORAL COMMUNICATIONS The Board President will invite public comment on items not on the agenda. Each speaker will ordinarily be limited to three minutes; however, the Brown Act (Open Meeting Law) does not allow action by the Board of Directors on items not on the agenda. If you wish to address the Board, please complete a speaker card and give it to the District Clerk. Individuals are limited to one appearance during this section. ADOPTION OF AGENDA SPECIAL ORDERS OF THE DAY • Introduction of staff o Brian Lee, Date Administrator o Rachel Bu, Data Analyst I CONSENT CALENDAR All items on the Consent Calendar may be approved without discussion by one motion. Board members, the General Manager, and members of the public may request that an item be removed from the Consent Calendar during consideration of the Consent Calendar. 1. Approve November 13, 2019 Minutes Rev. 1/3/19 2. Award of Contract to Ecological Concerns, Inc., for Plant Maintenance at Eleven Project Restoration and Mitigation Sites, and Public Access Areas (R-19-152) Staff Contact: Amanda Mills, Resource Management Specialist II General Manager’s Recommendations: 1. Authorize the General Manager to enter into contract with Ecological Concerns, Inc., for a base contract price of $718,294 to maintain plants at eleven project sites for three years. 2. Authorize an allowance of $60,000 for additional watering events to be expended only if drought conditions occur. 3. Authorize a 10% contingency of $71,829 to be expended only if necessary, to cover unforeseen conditions, for a not-to-exceed total contract amount of $850,123. 3. Authorization to categorize property located at 330 Distel Circle, Los Altos (Santa Clara County APN: 170-04-051) as surplus property under the Surplus Land Act, to dispose of the property under the Surplus Land Act or, if applicable, to market 330 Distel Circle for sale (R-19-153) Staff Contact: Allen Ishibashi, Senior Real Property Agent General Manager’s Recommendations: 1. Determine that the recommended actions are categorically exempt from the California Environmental Quality Act, as set out in the report. 2. Adopt a Resolution declaring 330 Distel Circle, Los Altos to be surplus property, authorizing the General Manager to initiate the process of disposing the property pursuant to the Surplus Land Act, and authorizing the General Manager to initiate marketing of the property if the District does not negotiate a sale to a preferred buyer under the Surplus Land Act. BOARD BUSINESS The President will invite public comment on agenda items at the time each item is considered by the Board of Directors. Each speaker will ordinarily be limited to three minutes. Alternately, you may comment to the Board by a written communication, which the Board appreciates. 4. Selection of Basis of Design Repair Options for the Mount Umunhum Radar Tower at Sierra Azul Open Space Preserve (R-19-154) Staff Contact: Zachary Alexander, Capital Project Manager III, Engineering and Construction Department General Manager’s Recommendations: 1. Select the Long-Term Repair option or an alternate repair option for the Mount Umunhum radar tower. 2. Direct the General Manager to return to the Board of Directors with a recommended award of contract to develop construction documents for the Board-selected Basis of Design repair option. 5. Electric Bicycle Policy (R-19-155) Staff Contact: Matt Anderson, Chief Ranger, Visitor Services Department General Manager’s Recommendation: Review and provide feedback on options related to electric bicycle use on Midpeninsula Regional Open Space District lands and select one or more of the following options for further consideration and environmental review. 1. Limit class 1 and 2 electric bicycles to designated paved trails and roadways. 2. Allow class 1 electric bicycles on all paved and unpaved trails and roadways that allow bicycles and limit class 2 electric bicycles to designated paved trails and roadways. Rev. 1/3/19 3. Allow class 1 and 2 electric bicycles on all paved and unpaved trails and roadways that allow bicycles. The General Manager would return at a later date with environmental review findings for the Board of Directors to make a final decision and if required, a change to the District Land Use Regulations. INFORMATIONAL REPORTS – Reports on compensable meetings attended. Brief reports or announcements concerning activities of District Directors and staff; opportunity to refer public or Board questions to staff for information; request staff to report to the Board on a matter at a future meeting; or direct staff to place a matter on a future agenda. Items in this category are for discussion and direction to staff only. No final policy action will be taken by the Board. A. Committee Reports B. Staff Reports C. Director Reports ADJOURNMENT *Times are estimated and items may appear earlier or later than listed. Agenda is subject to change of order. In compliance with the Americans with Disabilities Act, if you need assistance to participate in this meeting, please contact the District Clerk at (650) 691-1200. Notification 48 hours prior to the meeting will enable the District to make reasonable arrangements to ensure accessibility to this meeting. Written materials relating to an item on this Agenda that are considered to be a public record and are distributed to Board members less than 72 hours prior to the meeting, will be available for public inspection at the District’s Administrative Office located at 330 Distel Circle, Los Altos, California 94022. CERTIFICATION OF POSTING OF AGENDA I, Jennifer Woodworth, District Clerk for the Midpeninsula Regional Open Space District (MROSD), declare that the foregoing agenda for the special meetings of the MROSD Board of Directors was posted and available for review on November 14, 2019, at the Administrative Offices of MROSD, 330 Distel Circle, Los Altos California, 94022. The agenda and any additional written materials are also available on the District’s web site at http://www.openspace.org. Jennifer Woodworth, MMC District Clerk R-19-159 Meeting 19-29 November 20, 2019 SPECIAL MEETING AGENDA ITEM 1 AGENDA ITEM Annual Bond Disclosure Training for the Board of Directors, Members of the Disclosure Working Group, and Contributors GENERAL MANAGER’S RECOMMENDATION Receive the annual training on Bond Disclosure obligations, responsibilities, and potential liabilities. No formal Board action required. SUMMARY Board Policy 3.06 “Initial and Continuing Disclosures for Bond Issuances” requires annual training on Bond Disclosure obligations, responsibilities, and potential liabilities of District staff and the Board of Directors (Board). This item meets the Bond Disclosure training requirement under Board Policy 3.06. DISCUSSION The Board adopted Policy 3.06 “Initial and Continuing Disclosures Relating to Bond Issuances” on April 1, 2015 and subsequently updated the language on March 22, 2017. This Board Policy states that: “Whenever the District makes statements or releases information relating to its finances to the public that are reasonably expected to reach investors and the trading markets (including, without limitation, all Listed Event Notices, statements in the audited Financial Statements, and other financial reports and statements of the District), the District is obligated to ensure that such statements and information are complete, true, and accurate in all material respects.” To ensure that the Board and key staff are fully aware and periodically reminded of the bond disclosure requirements, including the obligation noted above, Article I, section 1.01 (C) Training states: The Disclosure Coordinator shall arrange for annual disclosure training conducted by the District’s disclosure counsel with the assistance of the General Counsel, for the Board of Directors members, the Disclosure Working Group, and Contributors. Such training sessions shall include education on these Disclosure Procedures, the District’s disclosure obligations under applicable federal and state securities laws, and the disclosure responsibilities and potential liabilities of members of District staff and members of the Board of Directors. R-19-159 Page 2 On November 20, 2019, the District’s Disclosure Counsel, Jacquelynne Jennings from Schiff Hardin, will provide the annual training to the Board, the Disclosure Working Group (General Manager, Chief Financial Officer, Controller, and General Counsel), and the Disclosure Coordinator (Finance Manager). FISCAL IMPACT None. BOARD COMMITTEE REVIEW This agenda item was not previously reviewed by a Board Committee. PUBLIC NOTICE Notice was provided pursuant to the Brown Act. No additional notice is necessary. CEQA COMPLIANCE No compliance is required as this action is not a project under CEQA. NEXT STEPS The Bond Disclosure training is held annually, with the next training planned for the fall of 2020. Attachments: 1. Board Policy 3.06 – Initial and Continuing Disclosures Relating to Bond Issuances Responsible Manager: Stefan Jaskulak, Chief Financial Officer Prepared by: Andrew Taylor, Finance Manager Midpeninsula Regional Open Space District Board Policy Manual Initial and Continuing Disclosures Relating to Bond Issuances Policy 3.06 Chapter 3 – Fiscal Management Effective Date: 04/01/2015 Revised Date: 03/22/2017 Prior Versions: 04/01/2015 Attachments: A – List of Disclosure Documents, to be Amended as Necessary B – Listed Events C –Template of Information to be included in the Staff Report Transmitting Official Statement by General Manager to Board of Directors Board Policy 3.06 Page 1 of 7 Purpose Whenever the District makes statements or releases information relating to its finances to the public that are reasonably expected to reach investors and the trading markets (including, without limitation, all Listed Event Notices, statements in the audited Financial Statements, and other financial reports and statements of the District), the District is obligated to ensure that such statements and information are complete, true, and accurate in all material respects. The disclosure policies and procedures contained herein (the “Disclosure Procedures”) of the Midpeninsula Regional Open Space District (the “District”) are intended to ensure that the District’s disclosure documents (the “Disclosure Documents”), as listed on Attachment A to these Disclosure Procedures, are complete, true, and accurate in all material respects, and in compliance with applicable federal and state securities laws. Policy Article I: Key Participants and Responsibilities Section 1.01. Disclosure Working Group. (A) Composition. By adoption of these Disclosure Procedures, the District hereby establishes a disclosure working group (the “Disclosure Working Group”). The members of the Disclosure Working Group shall be the following: i. General Manager; ii. Chief Financial Officer iii. Controller; and iv. General Counsel. (B) Responsibilities. The Disclosure Working Group shall consult with the Financing Group (as defined in Section 1.03) and other interested parties as necessary or helpful. The Disclosure Working Group shall meet as often as necessary to fulfill its obligations, but not less than once per calendar year. Members of the Disclosure Working Group may participate in meetings by telephone. Attachment 1 Board Policy 3.06 Page 2 of 7 The Disclosure Working Group is responsible for: i. Reviewing and approving all preliminary and final official statements, private placement memoranda and remarketing memoranda relating to the District’s securities, together with any supplements, for which a continuing disclosure undertaking is required (each, an “Official Statement”) as further described in Article II, before such documents are released to the public; ii. Reviewing and approving the District’s Financial Statements (as defined and further described in Section 3.02 below); iii. Reviewing and approving any other Disclosure Documents before such documents are released; iv. Reviewing annually the District’s status and compliance with continuing disclosure undertakings including filings of Disclosure Documents and compliance with these Disclosure Procedures and the annual financial report as described in Article III below; v. Reviewing any other items referred to the Disclosure Working Group; and vi. Evaluating the effectiveness of these Disclosure Procedures and approving changes to these Disclosure Procedures as further described in Section 5.04 of this Policy. (C) Determination of Disclosure Document Status. Whether or not a particular document or other communication is a Disclosure Document shall be determined by the Disclosure Working Group. At its initial meeting, the Disclosure Working Group shall establish a list of the District’s recurring Disclosure Documents, which list shall be added to Attachment A to these Disclosure Procedures to the extent such documents are not already contained therein. The Disclosure Working Group shall update Attachment A to these Disclosure Procedures when appropriate. (D) Review and Approval. Following receipt of a Disclosure Document from the disclosure coordinator (the “Disclosure Coordinator”), the Disclosure Working Group shall review the Disclosure Document for accuracy and compliance with federal and state securities laws, direct questions tof the Disclosure Coordinator, and approve a substantially final form of the Disclosure Document, which approval may be evidenced by an email transmitted to the Disclosure Coordinator by the General Manager or his/her designee and a copy of which email shall be printed and maintained in the Deal File described in Section 5.01, or by such other written evidence. The Disclosure Coordinator shall consult with the District’s disclosure counsel to the extent the Disclosure Coordinator considers appropriate to perform his or her responsibilities. Section 1.02. Disclosure Coordinator. (A) Appointment. The Finance Manager is appointed as the Disclosure Coordinator. If the position of Finance Manager is vacant, the Chief Financial Officer, in consultation with the other members of the Disclosure Working Group, shall select and appoint the Disclosure Coordinator. (B) Responsibilities. The Disclosure Coordinator shall be responsible for: Attachment 1 Board Policy 3.06 Page 3 of 7 i. Serving as a “point person” for personnel to communicate issues or information that should be or may need to be included in any Disclosure Document, identifying District personnel that will assist in preparing and reviewing the Disclosure Documents (the “Contributors”); ii. Reviewing annually all continuing disclosure undertakings, preparing a checklist of updated information to be provided; iii. Recommending changes to these Disclosure Procedures to the Disclosure Working Group as deemed necessary or appropriate; iv. Communicating with third parties, including coordination with outside consultants assisting the District in preparing and disseminating Disclosure Documents to make sure that assigned tasks are completed timely, and that the filings are accurate and made timely; v. Soliciting “material” information (as defined for purposes of federal securities law) from District departments to prepare Disclosure Documents; vi. Monitoring compliance by the District with these Disclosure Procedures, including timely dissemination of the Annual Report and Listed Event filings, and maintaining records documenting the District’s compliance with these Disclosure Procedures; vii. Determining when Disclosure Documents are final and ready for review by the Disclosure Working Group to the extent required by these Disclosure Procedures; and viii. Identifying District personnel that should receive disclosure training, and ensuring compliance with training procedures described in Section 1.02(C). The Disclosure Coordinator is authorized to file or cause to be filed the following documents with the Municipal Securities Rulemaking Board (the “MSRB”), without prior review and approval of the Disclosure Working Group, but only after prior review and approval from the Chief Financial Officer: those Disclosure Documents that (i) the District is contractually obligated to file with the MSRB pursuant to written undertakings as a result of the occurrence of a Listed Event (as defined in Attachment B), or (ii) as a result of the failure to timely file the required annual financial report. (C) Training. The Disclosure Coordinator shall arrange for annual disclosure training conducted by the District’s disclosure counsel with the assistance of the General Counsel, for the Board of Directors members, the Disclosure Working Group, and Contributors. Such training sessions shall include education on these Disclosure Procedures, the District’s disclosure obligations under applicable federal and state securities laws, and the disclosure responsibilities and potential liabilities of members of District staff and members of the Board of Directors. Such training sessions may be conducted using a recorded presentation. Each member of the Board of Directors, and new members of the Finance Department shall be required to participate in disclosure training as part of his or her new member orientation. Section 1.03. Financing Group. Attachment 1 Board Policy 3.06 Page 4 of 7 General. The General Manager or his/her designee shall identify a Financing Group (the “Financing Group”) for each financing (the composition of which may differ for each financing), which shall include, at a minimum, the following individuals: i. Disclosure Working Group; ii. Disclosure Coordinator; iii. The District’s bond counsel and disclosure counsel; iv. The District’s financial advisor (if any); v. The District’s underwriter, placement agent, remarketing agent (as applicable); vi. The District’s dissemination agent (if any); vii. Such other such District staff as the General Manger or his/her designee determines to be appropriate; and viii. Such other consultants retained by the District as the General Manager or his/her designee determines to be appropriate. It is the District’s policy to establish continuing working relationships with professional advisors with expertise in the area of public finance and federal securities laws applicable to the issuance of securities by the District. Article II: Review and Approval of Official Statements Section 2.01. Responsibilities of Financing Group. The Financing Group shall prepare the Official Statement and confirm that the Official Statement: (a) has been reviewed and accurately states all information relating to the District, (b) confirm that any information in the Official Statement other than the information described in the previous clause (a) will be addressed by a closing certificate or opinion by an appropriate person, (c) contains a description of any failures of the District during the last five yars to comply with its continuing disclosure undertakings; and (d) is in substantially final form and is in a form ready to be “substantially final” by the Board of Directors, as evidenced by a Certificate executed and delivered by a member of the Financing Group pursuant to Rule 15c2-12, promulgated by the Securities and Exchange Commission. The Financing Group shall have at least one all-hands meeting or conference call to review the Official Statement. Section 2.02. Responsibilities of General Counsel. The General Counsel (or a designee) shall review the Official Statement and shall draft for the Official Statement descriptions of (i) any material current, pending or threatened litigation, (ii) any material settlements or court orders and (iii) any other legal issues that are material information for purposes of the Official Statement. Section 2.03. Responsibilities of Controller and Chief Financial Officer. The Controller and Chief Financial Officer shall review the Official Statement, identify any material difference in presentation of financial information from the Financial Statements and ensure there are no misstatements or Attachment 1 Board Policy 3.06 Page 5 of 7 omissions of material information in any sections that contain descriptions of information prepared by the Controller and/or Chief Financial Officer or other Contributors or of relevance to the finances of the District. In addition, the Controller and/or Chief Financial Officer shall determine whether the District’s then-available Financial Statements are appropriate to be included in the Official Statement and whether to seek the consent of the District’s auditor to include the Financial Statements in the Official Statement. Section 2.04. Review by Disclosure Working Group. Following receipt of the Official Statement from the Financing Group, the Disclosure Working Group shall evaluate the Official Statement for accuracy and compliance with federal and state securities laws, and shall, have an opportunity to ask questions of the Financing Group and of any Contributor or other person who reviewed or drafted any section of the Official Statement. The Disclosure Working Group may direct or request revisions and/or may instruct the Financing Group to solicit contributions from additional Contributors, as they deem necessary or appropriate. Section 2.05. Approval by Disclosure Working Group. Approval of the Official Statement by the Disclosure Working Group shall be evidenced by delivery of the Official Statement to the General Manager for docketing for a meeting of the Board of Directors as provided in Section 2.07. Section 2.06. Submission of Official Statements to Board of Directors for Approval. As part of the docketing process, the General Manager shall submit all Preliminary Official Statements to the Board of Directors for approval using a staff report that includes the information in the template attached as Attachment C to these Disclosure Procedures. The approval of an Official Statement by the Board of Directors shall be docketed as a new business matter and shall not be approved as a consent item. The Board of Directors shall undertake such review as deemed necessary, following consultation with the Controller, to fulfill the responsibilities of the Board of Directors under applicable federal and state securities laws. In this regard, the Controller shall consult with the District’s disclosure counsel to the extent necessary. Article III: Continuing Disclosure Filings Section 3.01. Overview. Under the continuing disclosure undertakings the District has entered into in connection with its debt offerings, the District is required each year to file Annual Reports with the Electronic Municipal Market Access (“EMMA”) system maintained by the MSRB in accordance with such undertakings. Such Annual Reports are required to include certain updated financial and operating information, and the District’s audited financial statements. The District is also required under its continuing disclosure undertakings to file notices of certain events (as summarized in Attachment B to these Disclosure Prodcedures) with EMMA. Section 3.02. Financial Statements. The Chief Financial Officer shall submit the District’s audited financial statements (“Financial Statements”), as they are available, to the Disclosure Working Group. The Disclosure Working Group shall review the audited Financial Statements according to these Disclosure Procedures and, when reviewed and approved for disclosure, shall transmit the audited Financial Statements to the Board of Directors. Attachment 1 Board Policy 3.06 Page 6 of 7 If the District does not have audited Financial Statements available in time to file the Annual Report, the Chief Financial Officer shall submit the District’s unaudited financial statements as provided in each specific continuing disclosure undertaking. Section 3.03. Annual Reports. The Disclosure Coordinator shall ensure that the preparation of the District’s Annual Report shall commence in enough time so that they are filed no later than 210 days following the end of the fiscal year of the District, or as otherwise required under each specific continuing disclosure undertaking. Before any Annual Report is submitted to EMMA, the Disclosure Coordinator shall review outstanding continuing disclosure undertakings, prepare a checklist of information to be updated, supervise the preparation of the Annual Report, and confer with the Disclosure Working Group as needed regarding the content and accuracy of any such report. Section 3.04. Disclosure of Listed Events. Pursuant to Rule 15c2-12(b)(5)(i)(C), the District is obligated to disclose to the MSRB notice of certain specified events with respect to the District’s securities (a “Listed Event”). Each member of the Disclosure Working Group shall notify the other members of the Disclosure Working Group if he or she becomes aware of the occurrence of any of the Listed Events listed in the District’s continuing disclosure undertakings. The Disclosure Working Group may meet to discuss the event and to determine, in consultation with disclosure counsel to the extent determined by the Disclosure Coordinator, whether a filing is required or is otherwise desirable. If such a filing is deemed necessary, the Disclosure Coordinator shall cause a notice of the Listed Event (a “Listed Event Notice”) that complies with Rule 15c2-12 to be prepared, and the Disclosure Coordinator shall file or cause to be filed the Listed Event Notice as required by Rule 15c2-12. Article IV: Public Statements Regarding Financial Information Section 4.01. Financial Information. Whenever the District makes statements or releases information relating to its finances to the public that are reasonably expected to reach investors and the trading markets (including, without limitation, all Listed Event Notices, statements in the audited Financial Statements, and other financial reports and statements of the District), the District is obligated to ensure that such statements and information are complete, true, and accurate in all material respects. The Chief Financial Officer shall have primary responsibility for ensuring that such financial statements and information are accurate and not misleading in any material respect. Article V: Miscellaneous Section 5.01. Documents to be Retained. The Disclosure Coordinator, working with the District Clerk as needed, shall be responsible for retaining records demonstrating compliance with these Disclosure Procedures. The Disclosure Coordinator shall retain an electronic or paper file (“Deal File”) for each Annual Report and notice of Listed Events filed or caused to be filed by the District. Each Deal File shall include final versions of Disclosure Documents, the transcript of proceedings prepared in connection with the issuance of financial instruments. The Deal File shall be maintained in a central depository for a period equal to the later of the date of maturity or defeasance of the securities referenced in the Disclosure Document. Section 5.02. Waivers. In addition to the General Manager’s authority to adopt an Administrative Procedure to make this Board Policy more specific, any provision of this Board Policy or any related administrative procedure may be waived at any time by the General Manager, with the written confirmation to the members of the Disclosure Working Group. This authority to waive a provision of this policy is triggered only if such waiver is necessary for timely and effective compliance with disclosure laws. Any waivers made under this provision shall be reported to the Board of Directors, with Attachment 1 Board Policy 3.06 Page 7 of 7 conforming revisions recommended for the Board’s consideration at the next update of this Board Policy and no later than within three months of implementation of such waiver. Attachment 1 Board Policy 3.06(a) Board Policy 3.06 ATTACHMENT A LIST OF DISCLOSURE DOCUMENTS, TO BE AMENDED AS NECESSARY 1. Preliminary and final official statements, private placement memoranda and remarketing memoranda relating to the District’s securities, together with any supplements. 2. Financial Statements. 3. Filings made by the District with the Municipal Securities Rulemaking Board, whether made pursuant to a continuing disclosure undertaking to which the District is a party or otherwise. 4. Press releases and other information distributed by or on behalf of the District for public dissemination to the extent that such releases are reasonably expected, in the determination of the Disclosure Working Group, to reach investors and the trading markets for municipal securities. 5. Rating agency presentations. 6. Postings on the investor information section of the District’s website, if any. 7. Such portions of the District’s published adopted annual budget as the Disclosure Working Group determines to be appropriate. 8. Any other communications that are reasonably expected, in the determination of the Disclosure Working Group, to reach investors and the trading markets for municipal securities. Amendments: [Date] Attachment 1 Board Policy 3.06(b) Board Policy 3.06 ATTACHMENT B LISTED EVENTS Occurrence of any of the following events require the District to make a filing on EMMA within ten (10) business days of their occurrence: 1. principal and interest payment delinquencies 2. unscheduled draws on debt service reserves reflecting financial difficulty 3. unscheduled draws on credit enhancements reflecting financial difficulty 4. substitution of credit or liquidity providers, or their failure to perform 5. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other events affecting the tax-exempt status of the security 6. tender offers 7. defeasances 8. rating changes 9. bankruptcy, insolvency, receivership or similar event of the obligated person The occurrence if any of the following events require the District to file a notice on EMMA within ten (10 days after their occurrence, if they are determined to be material by the Disclosure Working Group: 1. non-payment related defaults 2. modifications to the rights of security holders 3. bond calls 4. release, substitution or sale of property securing repayments of the securities 5. the consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms 6. appointment of a successor or additional trustee or the change of name of a trustee Attachment 1 Board Policy 3.06(d) Board Policy 3.06 ATTACHMENT C Information to be Included in the Staff Report Transmitting Official Statement by General Manager to Board of Directors Transmittal staff report shall include, but is not limited to, the following information: The attached Preliminary Official Statement has been reviewed and approved for transmittal to the Board by the District’s Disclosure Working Group. The distribution of the Preliminary Official Statement by the District is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the Preliminary Official Statement to include all facts that would be material to an investor in the Obligations. Material information is information that there is a substantial likelihood would have actual significance in the deliberations of the reasonable investor when deciding whether to buy or sell the Obligations. If the Board of Directors concludes that the Preliminary Official Statement includes all facts that would be material to an investor in the Obligations, it must adopt a resolution that authorizes staff to execute a certificate to the effect that the Preliminary Official Statement has been “deemed final.” The Securities and Exchange Commission (the “SEC”), the agency with regulatory authority over the District’s compliance with the federal securities laws, has issued guidance as to the duties of the elected body with respect to its approval of the Preliminary Official Statement. In its “Report of Investigation in the Matter of County of Orange, California as it Relates to the Conduct of the Members of the Board of Supervisors” (Release No. 36761 / January 24, 1996) (the “Release”), the SEC stated that, if a member of the elected body has knowledge of any facts or circumstances that an investor would want to know about prior to investing in the Obligations, whether relating to their repayment, tax-exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the Preliminary Official Statement. In the Release, the SEC stated that the steps that a member of the elected body take include becoming familiar with the Preliminary Official Statement and questioning staff and consultants about the disclosure of such facts. Section 1. Purpose of Financing. Section 2. Documents for Approval; Security for the Obligations. Section 3. Risks Relating to Repayment and Tax-Exempt Status of the Obligations. Section 4. Requested Approvals. Attachment 1 R-19-150 Meeting 19-29 November 20, 2019 SPECIAL MEETING AGENDA ITEM 2 AGENDA ITEM Fiscal Year 2019 Annual Financial Report GENERAL MANAGER’S RECOMMENDATIONS 1. Review and accept the Fiscal Year 2019-20 (FY19) Annual Financial Report. 2. Adopt a resolution approving the transfer of a total of $6 million from the General Fund Unassigned Fund balance as follows: a. $4.6 million to Committed for Infrastructure Fund; and b. $1.4 million to the Assigned Fund for Ongoing Capital Projects; And the transfer of $3 million from the Committed for Natural Disasters to the Committed for Capital Maintenance & Repair Fund 3. Approve updates to Board Policy 3.07, Fund Balance Policy, reflecting the changes noted above and to incorporate other important updates. SUMMARY Fiscal Year ending June 30, 2019 (FY19) expenditures totaled $92.7 million, which is 5% below the final adjusted budget of $97.8 million. The Board of Directors (Board) adopted the final adjusted budget on May 15, 2019 (R-19-55). Revenue for FY19 totaled $62.1 million, or 2% above the final projected revenue. An additional $13.8 million was drawn on Measure AA bond funding. The Unassigned Fund balance is approximately $6 million more than the minimum fund balance requirement of 30% of budgeted tax revenue. To ensure adequate funding for facility and other infrastructure needs, as well as costly maintenance repairs of District capital assets, the General Manager and Controller recommend a total of $6 million be transferred as follows: $4.6 million to the Committed for Infrastructure Fund and $1.4 million to the Assigned Fund for Ongoing Capital Projects. Furthermore, upon review of GASB Statement No. 54 (Fund Balance Reporting), as well as comments received from the Government Finance Officers Association during the GFOA feedback on best practices, a transfer of $3 million from the Committed for Natural Disasters Fund to the Committed for Capital Maintenance & Repair Fund is recommended. Under GASB Statement No. 54, committed fund balances should include amounts “that can be used only for the specific purposes determined by a formal action of the government’s highest level of decision- making authority”. In this context, the use of funds for a natural disaster is too broad to meet the GASB definition of a committed balance for a specific purpose. Staff consulted with the District’s external auditor who supports the recommendation under both GASB and GFOA best practices. R-19-150 Page 2 Compared to five years ago, the amount of infrastructure, structures, and improvements has more than doubled to over $49 million from $21 million. As the District continues to meet its Measure AA commitments by expanding its assets that require ongoing repair and future replacement, this transfer will provide a prudent level of reserves to fund future maintenance and replacement actions. In parallel, a provision has been added to the Committed for Capital Maintenance & Repair Fund stating that this fund may be used as a funding source for major capital repairs and repairs arising from natural disasters, and that assets include both built (trails, bridges, parking areas) and natural infrastructure (streams, forests, ponds). The recommended transfers of funds are listed below: Committed for Infrastructure Fund $4.6 million Assigned Fund for Ongoing Capital Projects $1.4 million Committed for Capital Maintenance & Repair Fund $3.0 million To align with the establishment of the Section 115 Trust for funding the District’s ongoing unfunded pension liability, a new restricted fund is added to the Fund Balance Policy (Attachment 3). DISCUSSION Revenues The estimated General Fund revenue for FY19 was $53.2 million. As of June 30, 2019, the District’s actual total General Fund revenue came to $54.0 million, which is 1.5% above the revenue estimate. In addition, Measure AA bond funds provided $13.8 million for capital improvement projects within the 25 portfolios. Expenditures The District ended the year with total expenditures of $92.7 million, which is approximately $5.1 million or 5.2% below the final adjusted budget. Excluding capital expenditures and debt service, total expenditures were $31.7 million, which is $2.7 million, or approximately 8% below the final adjusted budget. The District’s FY19 total expenditures remained within the approved budget. Expenditures by category are listed in Table 1A and by fund in Table 1B. Table 1A – District Budget & Expenditures by Category DISTRICT EXPENDITURES (All Fund) FY19 Adopted Budget FY19 Final Adjusted Budget FY19 Year- End Actuals $ Change from FY19 Final Adjusted Budget % Spent of FY19 Final Adjusted Budget Salaries and Benefits 24,107,256$ 23,968,256$ 23,626,895$ (341,361)$ 99% Services and Supplies 11,547,025$ 10,460,265$ 8,090,095$ (2,370,170)$ 77% Total Operating Expenditures 35,654,281$ 34,428,521$ 31,716,990$ (2,711,531)$ 92% Capital/Fixed Asset Expenditures 52,073,177$ 47,745,280$ 45,355,657$ (2,389,623)$ 95% Debt Service 15,670,990$ 15,670,990$ 15,670,988$ (2)$ 100% Total Non-Operating Expenditures 67,744,167$ 63,416,270$ 61,026,645$ (2,389,625)$ 96% TOTAL DISTRICT EXPENDITURES 103,398,448$ 97,844,791$ 92,743,635$ (5,101,156)$ 95% R-19-150 Page 3 Table 1B – District Budget & Expenditures by Fund Fund Balance Before budget adjustments, the General Fund Unassigned Fund Balance increased by $6.2 million from $16.3 million to $22.5 million. The District’s Fund Balance policy, as adopted by the Board of Directors on October 26, 2016, states that the District is required to maintain a minimum unassigned fund of 30% of budgeted tax revenues. The budgeted tax revenue for FY2020 is $52,055,000, requiring the District to maintain a minimum General Fund Unassigned Fund Balance of $15,616,500. The General Manager and Controller recommend a transfer of a total of $6 million from the Unassigned Fund Balance, and $3 million from the Committed for Natural Disasters to the following funds: Committed for Infrastructure Fund $4.6 million Assigned Fund for Ongoing Capital Projects $1.4 million Committed for Capital Maintenance & Repair Fund $3.0 million The recommended transfer of funds to Committed for Infrastructure will set aside additional reserve funds for the completion of the ongoing facility infrastructure projects at 5050 El Camino and the South Area Field Office (Cristich). The transfer from the Committed for Natural Disasters will align to best practice recommendations of the GFOA and the spirit of the definition of committed funds as outlined in GASB Statement No. 54, as well as provide reserves to maintain and repair the growing level of District capital assets, such as trails, parking areas and other infrastructure. After the proposed transfers, the General Fund Unassigned Fund Balance will be approximately $16.5 million, which is $0.9 million above the required $15,616,500 (30% of FY20 projected property tax revenues). A summary of the balances for all District funds as of June 30, 2019 is shown in Table 2: DISTRICT EXPENDITURES (By Fund) FY19 Adopted Budget FY19 Final Adjusted Budget FY19 Year-End Actuals $ Change from FY19 Final Adjusted Budget % Spent of FY19 Final Adjusted Budget Fund 10 - General Fund Operating 33,539,934$ 33,485,935$ 31,314,408$ (2,171,527)$ 94% Fund 20 - Hawthorn Fund 121,500$ 53,500$ 30,888$ (22,612)$ 58% Fund 30 - Measure AA Capital 14,826,024$ 12,660,082$ 10,871,866$ (1,788,216)$ 86% Fund 40 - General Fund Capital 39,240,000$ 35,974,284$ 34,855,485$ (1,118,799)$ 97% Fund 50 - Debt Service 15,670,990$ 15,670,990$ 15,670,988$ (2)$ 100% TOTAL DISTRICT EXPENDITURES 103,398,448$ 97,844,791$ 92,743,635$ (5,101,156)$ 95% R-19-150 Page 4 Table 2 – District Fund Balances (All Governmental Funds) Operating Expenditures Salaries and benefits ended the year at $20.0 million, or 4% below the final adjusted budget. This included a $2,000,000 contribution to the Section 115 Trust established as an investment vehicle to make prepayments towards the District’s unfunded pension liability. Salary savings were due to several vacancies during the course of the fiscal year. Expenditures for Services and Supplies were $8.1 million or 23% below budget primarily due to lower than budgeted spending in contract and outside services in most departments. In addition, a number of maintenance projects were deferred and re-budgeted in FY20. Fixed Assets and Capital Projects Capital projects ended the year at $10.4 million, or approximately 21% below the final adjusted budget. Capital project delays were associated with the following factors: • Permitting delays from regulatory agencies and local jurisdictions • Staff vacancies • Additional scope/tasks that extended the project schedule • Unpredictable weather patterns that delayed field/construction work • Difficulties securing quality contractors due to competitive construction market Land and Associated Costs During the FY19, the District purchased and preserved approximately 193 acres of open space land at a total cost of $2.3 million. Highlights of land additions include: • 190 acre Folger Property (Woodruff Redwoods), La Honda Creek Open Space Preserve • 1.87 acre Haight-Peery Property, El Sereno Open Space Preserve • 1.04 acre Cogliandro Property, Sierra Azul Open Space Preserve In addition to the land preservation, the District also acquired the underlying land associated with the purchase of the 5050 El Camino building. The total appraised value equaled the purchase price of $31.5 million, with the appraisal assigning a value of $20.1 million to the underlying land and $11.4 million to the building. Fund Balance as of 6/30/2019 Transfer Balance - proposed Minimum Required GF Unassigned Fund Balance Balance Above Minimum Required Nonspendable for prepaid expenditures 185,984$ 185,984$ N/A N/A Restricted for debt service 6,775,924$ 6,775,924$ N/A N/A Restricted for Measure AA Projects 37,944,253$ 37,944,253$ N/A N/A Restricted for Hawthorn maintenance 1,431,717$ 1,431,717$ N/A N/A Restricted for General Fund Capital Projects 8,254,539$ 8,254,539$ N/A N/A Committed for Equipment Replacement 3,000,000$ 3,000,000$ N/A N/A Committed for Natural Disasters 3,000,000$ (3,000,000)$ -$ N/A N/A General Fund Unassigned Fund 22,515,392$ (6,000,000)$ 16,515,392$ 15,616,500$ 898,892$ Committed for Capital Maintenance & Repairs 2,000,000$ 3,000,000$ 5,000,000$ N/A N/A Committed for Future Acquisitions & Capital Projects 3,000,000$ 3,000,000$ N/A N/A Committed for Promissory Note 600,000$ 600,000$ N/A N/A General Fund Infrastructure Reserve Fund 13,088,465$ 4,600,000$ 17,688,465$ N/A N/A Assigned for ongoing capital projects -$ 1,400,000$ 1,400,000$ N/A N/A 101,796,274$ -$ 101,796,274$ 15,616,500$ 898,892$ R-19-150 Page 5 Long-Term Debt and Debt Service Debt service expenses in FY19 totaled $15.7 million, consisting of $6.5 million in principal, $9.2 million in interest. The total also includes $3.8 million for debt service on Measure AA General Obligation bonds. Past Budget Performance Table 3 below presents a comparison of FY19 budget performance to the prior three fiscal years. The operating budget expenditures have historically ranged between 86% and 99% of the actual operating budget. The FY19 operating expenses include a one-time $2,000,000 CalPERS pre- payment towards the District’s unfunded pension liability. During FY19, there were a large number of vacancies due to the retirement of several positions, which generated larger than usual salary savings. Beginning in FY17, land acquisitions are funded through budget amendments at the time the Board considers the purchase. The new approach reflects the opportunistic nature of land purchases, which are not guaranteed until an offer is accepted, the purchase approved, and escrow closed. This combined with improved focus on project delivery should lead to a more predictable overall budget utilization rate over the longer term Table 3 – Past Performance Hawthorn Fund The FY19 expenditures from the Hawthorn Fund totaled $30,888, which is 42% below the final adjusted budget of $53,500 (Table 4). Roof repairs, vegetation management/clearing and basic ongoing maintenance were completed in FY19. Table 4 – Hawthorn Fund Budget and Expenditures The Hawthorn Endowment Fund balance as of June 30, 2019 is $1.60 million. DISTRICT EXPENDITURES FY16 FY17 FY18 FY19 Operating Expenses 98%94%90%90% Strategic Plan/Vision Plan N/A N/A N/A N/A Capital (CAPEX)66%99%79%79% Land & Assoc. Costs 71%101%92%92% Property Management 74%N/A N/A N/A Debt Service 98%112%102%100% TOTAL EXPENDITURES 86%99%90%97% Budget Category FY19 Adopted Budget FY19 Final Adjusted Budget FY19 Year- End Actuals $ Change from FY19 Final Adjusted Budget % Spent of FY19 Final Adjusted Budget Operating Expenses 38,500$ 53,500$ 30,888$ (22,612)$ 58% Capital Expenses 83,000$ -$ -$ -$ N/A HAWTHORN TOTAL 121,500$ 53,500$ 30,888$ (22,612)$ 58% R-19-150 Page 6 FISCAL IMPACT Approval of the proposed Fund Balance transfer results in a net-zero change to the General Fund, decreasing the General Fund Unassigned Fund by $6 million and increasing the total of the two committed funds (Infrastructure and Assigned for Ongoing Capital Projects) by the same total of $6 million. The $3 million transfer is also net-zero, increasing the Capital Maintenance & Repair Fund to $5 million and decreasing the Natural Disaster Fund to zero. Table 5 – Proposed Fiscal Impact BOARD COMMITTEE REVIEW There was no prior Board Committee review for this agenda item. PUBLIC NOTICE Public notice was provided as required by the Brown Act. No additional notice is required. CEQA COMPLIANCE This item is not a project subject to the California Environmental Quality Act. NEXT STEPS With acceptance of the audited financial statements, staff will work with Chavan & Associates to complete the Comprehensive Annual Financial Report (CAFR) distribution to the Board and District stakeholders, as well as submission to the Government Finance Officers Association award program. Attachments: 1. Annual Financial Report for the Fiscal Year Ending June 30, 2019 2. Resolution approving the transfer of funds into the Committed Capital Maintenance & Repairs Fund, Committed for Infrastructure and Assigned for Ongoing Capital Projects Fund 3. Revised Board Policy 3.07, Fund Balance Policy Responsible Department Head: Stefan Jaskulak, Chief Financial Officer/Director of Administrative Services Prepared by: Andrew Taylor, Finance Manager Fund Balance as of 6/30/2019 Transfer Balance - proposed Minimum Required GF Unassigned Fund Balance Balance Above Minimum Required General Fund Unassigned Fund 22,515,392$ (6,000,000)$ 16,515,392$ 15,616,500$ 898,892$ Committed for Capital Maintenance Fund 2,000,000$ 3,000,000$ 5,000,000$ N/A N/A Committed for Natural Disasters 3,000,000$ (3,000,000)$ -$ General Fund Infrastructure Reserve Fund 13,088,465$ 4,600,000$ 17,688,465$ N/A N/A Assigned for Ongoing Capital Projects -$ 1,400,000$ 1,400,000$ N/A N/A Comprehensive Annual Financial Report ————————————————————————————————————————————————————————— FISCAL YEAR ENDED JUNE 30, 2019 Managing nearly 65,000 acres of public open space land in 26 preserves across parts of San Mateo, Santa Clara and Santa Cruz counties Midpeninsula Regional Open Space District Attachment 1 Page Intentionally Left Blank Attachment 1 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 201 9 Midpeninsula Regional Open Space District Prepared by: Finance and Administrative Services Attachment 1 Page Intentionally Left Blank Attachment 1 Introductory Section Attachment 1 Page Intentionally Left Blank Attachment 1 Midpeninsula Regional Open Space District Santa Clara County Comprehensive Annual Financial Report For the Year Ended June 30, 2019 TABLE OF CONTENTS TITLE PAGE INTRODUCTORY SECTION Table of Contents......................................................................................................................... 1 Transmittal Letter ........................................................................................................................ 3 Board of Directors & Management.............................................................................................. 9 Organizational Chart .................................................................................................................... 10 Regional Map............................................................................................................................... 11 Achievement Award .................................................................................................................... 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 Net 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 Attachment 1 Midpeninsula Regional Open Space District Santa Clara County Comprehensive Annual Financial Report For the Year Ended June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022 November 20, 2019 Members of the Board of Directors and Midpen Constituents: The Comprehensive Annual Financial Report (CAFR) of the Midpeninsula Regional Open Space District (District) for the year ended June 30, 2019 is hereby submitted. The CAFR has been prepared by the Finance Department in compliance with the principles and standards for financial reporting promulgated by the Governmental Accounting Standards Board (GASB). The CAFR consists of District management’s representations concerning the finances of the District. Management assumes full responsibility for completeness, accuracy of data, and fairness of presentation, including all footnotes and disclosures, and believes the data presented is accurate in all material respects and is presented in a manner designed to fairly set forth the financial position and results of operations of the District. The District’s accounting records for governmental operations are maintained on a modified accrual basis, with the revenues being recorded when both measurable and available, and expenditures being recorded when the services or goods are received and the liabilities are incurred. District management has established a comprehensive framework of internal controls designed both to protect the District’s assets from loss, theft, or misuse; and to compile sufficiently reliable information for the preparation of the District’s financial statements in conformity with generally accepted accounting principles. Because the cost of internal controls should not outweigh their benefits, the District has designed its controls to provide reasonable, but not absolute, assurance that the financial statements will be free from material misstatement. The CAFR has been audited by the independent certified public accounting firm of Chavan & Associates, LLP. The independent certified public accounting firm has issued an unmodified opinion on the District’s financial statements for the year ended June 30, 2019. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the financial statements. This letter of transmittal serves as a complement to the MD&A and should be read in conjunction with it. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT PROFILE 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 the County of Santa Clara. In June 1976, the 3 Attachment 1 southern and eastern portions of the County of San Mateo were annexed to the District. The District annexed three parcels located in the northern tip of Santa Cruz County in 1992, but the 1% ad valorem property tax is not levied on this land for the benefit of the District. In September 2004, the District completed the Coastside Protection Program, which extended the District boundaries to the Pacific Ocean in the County of San Mateo County, from the southern borders of the City of Pacifica to the San Mateo/Santa Cruz County line. The District also does not receive any portion of the 1% ad valorem property tax for the Coastside area. The District’s jurisdiction encompasses over 550 square miles of land in the County of Santa Clara (approximately 200 square miles), the County of San Mateo (approximately 350 square miles) and the County of Santa Cruz County (approximately 2.6 square miles). The Counties of Santa Clara and San Mateo are referred to together as the “Counties.” As of the 2010 decennial census, approximately 720,000 people lived within the boundaries of the District. The District has preserved nearly 64,000 acres of public land and manages 26 open space preserves within its mission to acquire and preserve a regional greenbelt of open space land in perpetuity, protect and restore the natural environment, and provide opportunities for ecologically sensitive public enjoyment and education. On the rural San Mateo County Coast, the mission also includes to acquire and preserve in perpetuity agricultural land of regional significance, preserve the rural character, and encourage viable agricultural use of land resources. A seven-member Board of Directors (Board), elected by individual ward, establishes policies for the District. Specifically, the Board sets general operating objectives for the District, authorizes debt issuance, monitors financial and long-range planning, establishes policies governing conditions of employment, and sets policies to protect and enhance the natural and cultural resources of the District. Members of the Board of Directors are elected for staggered four-year terms. The Board appoints a General Manager to serve as the District’s chief executive officer. The General Manager provides direction and leadership to all District departments, and ensures that all District policies are implemented. The District is a legally separate and fiscally independent entity from other government agencies, which may also provide governmental services within the same geographic area. The CAFR includes all funds of the District. There are no separate or legal entities or component units included in the financial statements of the District, however the District does have a blended component unit included in its financial statements. In 1996, the District and Santa Clara County established the Midpeninsula Regional Open Space District Financing Authority (Authority) to help the District finance improvements by acquiring land to preserve and use as open space in cooperation with the District. The President of the District’s Board of Directors is also the Chairperson of the Authority. Three District Directors and a Supervisor from Santa Clara County are also on the Authority Board. In effect, the Authority operates in tandem with the District. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when considered from the broader perspective of the environment in which the District operates. State and Local Economy The California economy continues to out-perform the nation as a whole with steady growth. Many of the key economic indicators continue to contribute to a positive economic outlook: unemployment at historical lows, continuing growth in GDP, and stable inflation. In its most recent report for Fall 2019, Beacon Economics report shows that job growth in the South Bay area continues to expand at a rate much higher than the state average, with 4 Attachment 1 the flagship technology sector recording 3.7% job growth from August 2018 to August 2019 as compared to 1.8% for the state as a whole. The two main challenges to the Bay Area economy remain housing affordability and the lack of investment in aging infrastructure that is being further strained by population and job growth. Both Santa Clara and San Mateo Counties have been outperforming the California and U.S. economies in recent years and continue to do so. The Bureau of Economic Analysis reported a 2.9 percent growth in 2018 and 1.9 percent through the first three quarters of 2019. GDP growth for the Silicon Valley metropolitan area (San José- Sunnyvale-Santa Clara) increased by a significant 7.6 percent in 2017 (latest available data) compared to the average U.S. metro area growth of 2.1 percent. The District’s boundaries encompass a large swath of Silicon Valley, which continues to be the world’s premier location for the technology industry with a long culture of entrepreneurship and innovation. The District historically derives two-thirds of its general fund property tax revenue from Santa Clara County and one-third from San Mateo County (excluding the coastside). The real estate market in the both San Mateo and Santa Clara Counties continue to demonstrate strong demand in both the residential and commercial sectors. For Fiscal Year (FY) 2019-2020, the Santa Clara County Assessor’s Office reported that the assessment roll increased by 6.79 percent, to a total of $516 billion. Similarly, San Mateo County reported that the total value of assessed properties increased by 7.10 percent for FY 2019-20. Total assessments within the District’s boundaries increased by 7.9 percent for FY 2018-19. Over the past 10 years, the District’s general fund property tax revenues have increased by an annual average of 6.87 percent. The assessor’s office of both counties reported continued strength in the growth of assessed value with the 2019- 2020 property tax rolls. However, both assessors are signaling a note of caution as residential home prices start to flatten in face of the well-publicized affordability issues, as well as the potential impact of recent changes to federal tax laws. Commercial development is still strong, though may face headwinds from global trade uncertainties and the polarized national political climate heading into the 2020 elections. According to the Federal Reserve Bank of St. Louis, personal income levels as of 2017 (the most recent year for which county data is available) show per capita income of $98,032 for Santa Clara and $113,410 for San Mateo, which are significantly above $60,156 for the State and $51,869 for the nation. Employment growth remains strong with unemployment rates now at historic lows. According to the California Employment Development Department, the Bay-Peninsula region continues to have the lowest unemployment rate in the State and experienced the fastest job growth of any region in the State during the historic economic expansion beginning in July 2010. Unemployment rates in Santa Clara and San Mateo were 2.8 percent and 2.4 percent respectively as of June 2018, comparing to rates of 4.2 percent for the State and 4.0 percent for the nation. The strong job market spans all sectors, with particular strength in technology and construction. While the overall economic indicators remain positive, the District is continuing to develop prudent spending plans, providing the financial resources to deal with a potential recession. The aforementioned housing affordability crisis and tight labor market continue to present challenges for the hiring and retention of employees. Construction costs for capital projects are still increasing at a more rapid pace compared to the general inflation and the remote locale of District projects lead to a smaller pool of contractors willing to bid on projects. The District is addressing this issue through doing more in-house design/build and through greater outreach to the contractor community. 5 Attachment 1 Major Initiatives In the 2018-19 Fiscal Year, the District has achieved the completion of major projects and actions, including the following: ™ Opened Bear Creek Redwoods Preserve to the public in June 2019, improvements include: x New parking lot, vault toilet restroom, ADA pathway around Upper Lake, new bridge installation, and 6 miles of new and improved trails. Completed design, fabrication and installation of two interpretive signs for the new Alma College parking area and Upper Lake area. x Worked with GIS, Visitor Services, and Public Affairs to complete design, content, and web development of “Layers of History” online story map at www.openspace.org/bcrstory, educating the public on the area’s rich history, which reached over 800 users in two months. ™ Completed new section of Oljon Trail to provide a new loop trail opportunity from the parking lot and completed majority of the restoration of an eroded, unsustainable section of the Steam Donkey Trail, with poor access off Skyline Boulevard at El Corte de Madera Preserve. ™ Continued major actions to close a 0.6-mile gap in the San Francisco Bay Trail at Ravenswood Preserve and assisted the City of East Palo Alto in developing the adjacent Cooley Landing Park ™ Received Board approval of the District’s Climate Action Plan to meet the adopted Climate Change Goals of 20% reduction in operational greenhouse gas emissions from 2016 levels by 2022, 40% by 2030 and 80% by 2050. Began implementation of the plan by changing fuel tanks to renewable diesel, purchasing 100% renewable electricity for offices, acquiring electric bikes and UTV for field staff, and purchasing carbon offsets for business flights. Completed the 2018 Greenhouse Gas emissions inventory. Held initial talks on a carbon sequestration pilot project with the San Mateo Resources Conservation District ™ Continued the Highway 17 Wildlife and Regional Trail Crossings project, identifying and analyzing additional crossing alternatives in response to partner, stakeholder and public comments. Drafted the project study report and received Caltrans initial comments. Held meetings with project partners and stakeholders (Caltrans, San Jose Water Company, Committee for Green Foothills, National Wildlife Federation) and a 2 nd public meeting to receive input on the alternative wildlife crossings. ™ Constructed two new pedestrian bridges on the Stevens Creek Nature Trail in Monte Bello Preserve; removed a failing old bridge and restored the construction area. These bridges will allow the use of the Stevens Creek Nature Trail throughout the winter. ™ Continued implementation of critical Financial and Operational Sustainability Model Study recommendations to enhance the delivery of Measure AA and Vision Plan projects, including the launch of the Work Order & Asset Management System, as well as Project Central as a SharePoint solution for monitoring and managing District projects. ™ Leveraged the use of Measure AA bond funding through successful grant application totaling over $1.5 million. ™ Acquired 192.91 acres of open space lands valued at nearly $3 million. 6 Attachment 1 Relevant Financial Policies Budget Policy The District follows best practices in budgeting, including: assessment of constituent needs, development of long range plans, adherence to budget preparation and adopted procedures, monitoring of performance, and adjustment of the budget as required. The District budget is divided into four categories: Operating Budget, Capital Budget, Land and Associated Costs, and Debt Service. The budget is prepared and adopted on a cash-basis, whereas the annual financial statements are prepared on a modified accrual basis. The budget can be amended during the year, in accordance with the Board Budget and Expenditure Policy, which states that increases to any of the four budget categories must be approved by the Board. Investment Policy The District’s Investment Policy is adopted annually, in accordance with State law. The policy provides guidance and direction for the prudent investment of District funds to safeguard the principal of invested funds and achieve a return on funds while ensuring the liquidity needs of the District. The ultimate goal is to maximize the efficiency of the District’s cash management system, and to enhance the economic status of the District, while protecting its pooled cash. The investment of funds is governed by the California Government Code Section 53601 et seq., and by California Government Code Section 53630 et seq. Funds on deposit in banks must be federally insured or collateralized in accordance with the provisions of California Government Code Section 53630 et seq. Fund Balance Policy The Board of Directors adopted the Fund Balance Policy in 2014, and updated the Policy in 2016 to achieve the following goals: provide adequate funding to meet the District’s short-term and long-term plans; provide funds for unforeseen expenditures related to emergencies, such as natural disasters; strengthen the District’s financial stability against present and future uncertainties, such as economic downturns and revenue shortfalls; and maintain an investment-grade bond rating. This policy has been developed with the counsel of the District’s independent auditors, to meet the requirements of GASB 54. The components of the District fund balances are as follows: x Non-Spendable fund balance includes amounts that cannot be spent either because they are not in spendable form, e.g. prepaid insurance, or because of legal or contractual constraints. At all times, the District shall hold fund balance equal to the sum of its non-spendable assets. x Restricted fund balance includes amounts that are constrained for specific purposes, which are externally imposed by constitutional provisions, enabling legislation, creditors, or contracts. x Committed fund balance includes amounts that are constrained for specific purposes that are internally imposed by the District Board of Directors. Funds spent from committed funds shall be reimbursed from the general fund within two years. x Assigned fund balance includes amounts that are intended to be used for specific purposes that are neither restricted nor committed. Such amounts may be assigned by the General Manager if authorized by the Board of Directors to make such designations. Projects to be funded by assigned funds require the approval of the General Manager. Funds spent from assigned funds shall be reimbursed from the general fund within two years. x Unassigned fund balance includes amounts within the general fund which have not been classified within the above categories. The Board shall designate the minimum amount of unassigned fund balance, which is to be held in reserve in consideration of unanticipated events that could adversely affect the financial condition of the District and potentially jeopardize the continuation of necessary public services. The current minimum unassigned fund balance is 30% of the Budgeted General Fund Tax Revenue. 7 Attachment 1 Debt Management Policy The Board of Directors adopted a debt management policy on July 12, 2017. The stated purpose of the Debt Management Policy is to establish the overall parameters for issuing, structuring, and administering the debt of the District in compliance with applicable federal and State securities laws. The Debt Management Policy was developed in conjunction with the procedures for Initial and Continuing Disclosure Relating to Bond Issuances, with the latter ensuring that statements or releases of information to the public and investors relating to the finances of the District are complete, true, and accurate in all material respects. AWARDS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement to the District for its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018. This was the second year that the District received this prestigious national award. The Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting. To receive the award, the District must publish a Comprehensive Annual Financial Report that is easily readable and efficiently organized, and the contents of the report must conform to program standards and satisfy generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for one year. We believe that our current report continues to conform to the Certificate requirements, and we are submitting it to the GFOA for another award of the certificate. ACKNOWLEDGEMENTS The preparation of this Comprehensive Annual Financial Report could not have been completed without the efforts and contributions of its Finance staff, as well as other departments across the District. Management also wishes to acknowledge the invaluable assistance of Chavan & Associates, the District’s independent auditors who contributed to the preparation of this Comprehensive Annual Financial Report. Lastly, we wish to acknowledge the District’s Board of Directors for their continued interest and support of the District’s effort to improve and strengthen its financial operations and reporting. Respectfully submitted, Ana Ruiz Stefan Jaskulak General Manager Chief Financial Officer/ Director of Administrative Service 8 Attachment 1 Board of Directors & Management Executive Management Ana María Ruiz–General Manager Hilary Stevenson–General Counsel Mike Foster–Controller Susanna Chan–Assistant General Manager/Project Planning and Delivery Brian Malone–Assistant General Manager/Visitor and Field Services Stefan Jaskulak–Chief Financial Officer/Director of Administrative Services Mission Statement——————————————————————————––––––––––––—————————————————————————————— The mission of the Midpeninsula Regional Open Space District is to acquire and preserve a regional greenbelt of open space land in perpetuity, protect and restore the natural environment, and provide opportunities for ecologically sensitive public enjoyment and education. District Wards Left to right: Zoe Kersteen-Tucker, Curt Riffle, Yoriko Kishimoto, Jed Cyr, Karen Holman, Larry Hassett, Pete Siemens. ——————————————————————————––––––––––––————————————————————————————————Pete Siemens–Board President Ward 1: Cupertino, Los Gatos, Monte Sereno, Saratoga——————————————————————————––––––––––––———————————————————————————————— Yoriko Kishimoto–Board Treasurer Ward 2: Cupertino, Los Altos, Los Altos Hills, Palo Alto, Stanford, Sunnyvale ——————————————————————————––––––––––––———————————————————————————————— Jed Cyr Ward 3: Sunnyvale ——————————————————————————––––––––––––———————————————————————————————— Curt Riffle Ward 4: Los Altos, Mountain View ——————————————————————————––––––––––––————————————————————————————————Karen Holman–Board Vice President Ward 5: East Palo Alto, Menlo Park, Palo Alto, Stanford——————————————————————————––––––––––––———————————————————————————————— Larry Hassett Ward 6: Atherton, La Honda, Loma Mar, Menlo Park, Pescadero, Portola Valley, Redwood City, San Gregorio, Woodside——————————————————————————––––––––––––———————————————————————————————— Zoe Kersteen-Tucker–Board Secretary Ward 7: El Granada, Half Moon Bay, Montara, Moss Beach, Princeton, Redwood City, San Carlos, Woodside——————————————————————————––––––––––––———————————————————————————————— 9 Attachment 1 Organizational Chart Public Board of Directors ControllerGeneral Counsel General Manager Public Affairs Department Executive Assistant/ Deputy District Clerk District Clerk/Assistant to the General Manager Visitor and Field Services Assistant General Manager Finance and Administrative Services CFO-Director of Administrative Services Project Planning and Delivery Assistant General Manager Visitor Services Department Land and Facilities Department Natural Resources Department Planning Department Real Property Department Engineering and Construction Department Budget and Analysis Department Information Systems and Technology Department Finance Department Human Resources Department Midpen At-A-Glance Founded in 1972 63,927 Acres (as of June 2019) 243 Miles of Trails 26 Preserves 183 Full-Time Employees Over 2 Million Visitors Per Year $74.8 Million Budget 760,000 Residents 10 Attachment 1 Regional Map 11 Attachment 1 Achievement Award 12 Attachment 1 Financial Section 13 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 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 of the 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 major fund for Midpeninsula Regional Open Space District (the District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements The District’s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District, as of 14 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 1475 Saratoga Ave, Suite 180, San Jose, CA 95129 Tel: 408-217-8749 • E-Fax: 408-872-4159 info@cnallp.com •www.cnallp.com June 30, 2019, and the respective changes in financial position and for the year then ended in accordance with accounting principles generally accepted in the United States of America. 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 for the general fund, schedule of pension plan contributions, schedule of net pension liability proportionate share, schedule of contributions for postemployment benefits, and schedule of changes in net OPEB liability, as listed in the table of contents,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 introductory section,budgetary comparison information for the capital projects funds and the debt service fund,the schedule of program expenditures for the Measure AA Bond Program,and the statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of program expenditures for the Measure AA Bond Program 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 schedule of program expenditures for the Measure AA Bond Program is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section, budgetary comparison information for the capital projects funds and the debt service fund,and statistical sections included have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 15 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 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 Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 11, 2019 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. November 11, 2019 San Jose, California 16 Attachment 1 Management’s Discussion and Analysis 17 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 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, 2019. 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 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 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 2018-2019?” 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 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 August 2018 showed District-wide assessed values increasing by 7.3% (7.2% in Santa Clara and 7.4% in San Mateo). The District received 67% of its tax revenue from Santa Clara County and 33% from San Mateo County. Other financial highlights included: Tax revenue related to the GO bonds amounted to $5.2 million. Purchased $2.2 million in land and associated structures funded through Measure AA GO bond proceeds. Purchased a commercial office building and associated land for $31.5 million which will serve as the District’s new administrative headquarters. The District’s Section 115 irrevocable trust for pension liabilities held with the Public Agency Retirement Services (PARS)has a value of $2,531,030 at year end. Fully funded the District’s other postemployment benefits plan according to the actuarially determined contribution for current year, as noted in the schedule of contribution for postemployment benefits. The assets of the District exceeded liabilities at the close of the 2019 fiscal year by $367 million. Of this total net position, $351 million, or 96%, was the District’s net investment in capital assets (capital assets net of related debt). 19 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 REPORTING THE DISTRICT’S MOST SIGNIFICANT FUNDS Fund Financial Statements Fund financial reports provide detailed information about the District’s major funds. The District uses one operating fund, the General Fund, to account for a multitude of financial transactions, two capital project funds to account for capital projects, and one debt service fund to account for debt service payments. Governmental Funds The General Fund is a governmental fund type and is reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the District’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the future to finance educational programs. The relationship (or differences)between governmental activities (reported in the Statement of Net position and the Statement of Activities) and governmental funds is reconciled in the financial statements. THE DISTRICT AS A WHOLE Recall that the Statement of Net Position provides the perspective of the District as a whole.Table 1 provides a summary of the District’s net position as compared to last period: Percentage 2019 2018 Change Change As sets Current As sets 108,643,304$ 135,924,361$(27,281,057)$-20.07% Othe r No ncur rent As sets 562,532 637,906 (75,374) -11.82% Capi tal As sets 504,559,409 462,119,833 42,439,576 9.18% To tal As sets 613,765,245$ 598,682,100$15,083,145$ 2.52% To tal De ferred Out flows of Re sources 14,826,493$ 17,804,789$ (2,978,296)$ -16.73% Li abi lities Cur rent Li abi lities 16,695,948$ 14,219,357$ 2,476,591$ 17.42% No ncur rent Li abi lities 243,049,767 252,063,016 (9,013,249) -3.58% To tal Li abi lities 259,745,715$ 266,282,373$(6,536,658)$ -2.45% To tal De ferred Inf lows of Re sources 1,471,865$ 1,416,399$ 55,466$ 3.92% Ne t Posi ti on Ne t Investment in Capi tal As sets 351,151,768$ 312,120,869$39,030,899$ 12.51% Re stricted 8,207,641 7,252,294 955,347 13.17% Unr estricted 8,014,749 29,414,954 (21,400,205) -72.75% To tal Ne t Position 367,374,158$ 348,788,117$18,586,041$ 5.33% Ta bl e 1 - Summar y o f St at ement of Ne t Posi ti on Total net position increased by $18.6 million, as revenues exceeded expenditures. Current assets decreased due mostly to $45.3 million of capital expenditures. 20 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 Table 2 shows the changes in net position for 2019 as compared to period 2018. Percentage 2019 2018 Change Change Re ve nue s Program revenue s 3,442,075$ 3,189,096$ 252,979$ 7.93% Ge ne ral revenue s: Property taxe s 54,395,054 47,798,349 6,596,705 13.80% Investment earnings 3,627,639 1,045,124 2,582,515 247.10% Miscellane ous 1,874,272 1,152,611 721,661 62.61% To tal Re ve nue s 63,339,040 53,185,180 10,153,860 19.09% Program Expe ns es Land pr eservat ion 34,304,215 28,909,830 5,394,385 18.66% Int erest 10,448,784 8,193,228 2,255,556 27.53% Depr eciation - 2,398,894 (2,398,894) -100.00% To tal Expe ns es 44,752,999 39,501,952 5,251,047 13.29% Chang e in Net Posi ti on 18,586,041 13,683,228 4,902,813 35.83% Ad jus tment to Beginning Net Posi ti on - (1,898,023) 1,898,023 100.00% Begi nning Ne t Positi on 348,788,117 337,002,912 11,785,205 3.50% Endi ng Ne t Positi on 367,374,158$ 348,788,117$ 18,586,041$ 5.33% Ta bl e 2 - Summar y o f Chang es in Ne t Positi on 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 2018 Change Nonspendable for prepaid expenditure 185,984$ -$ -$ -$ 185,984$ 35,968$ 417% Restricted for debt service - - - 6,775,924 6,775,924 5,791,164 17% Restricted for Measure AA Projects - 37,944,253 - - 37,944,253 46,468,809 -18% Restricted for Hawthorne maintenance 1,431,717 - - - 1,431,717 1,466,982 -2% Restricted for capital projects - - 8,254,539 - 8,254,539 7,043,765 17% Restricted for pension 2,531,030 - - - 2,531,030 - 100% Committed for in frastructure 17,688,465 - - - 17,688,465 44,000,000 -60% Committed for equipment replacement 3,000,000 - - - 3,000,000 3,000,000 0% Committed for natural disasters - - - - - 3,000,000 -100% Committed for capital maintenance 5,000,000 - - - 5,000,000 2,000,000 150% Committed for future acquisitions and capital projects 3,000,000 - - - 3,000,000 3,000,000 0% Committed for promissory note 600,000 - - - 600,000 300,000 100% As signed for ongoing projects 1,400,000 - - - 1,400,000 - 100% Unassign ed 16,515,392 - - - 16,515,392 16,306,537 1% Total Fund Balance 51,352,588$37,944,253$ 8,254,539$ 6,775,924$104,327,304$132,413,225$-22% Ta ble 3 - Summary of Fund Balance (All Go vernmental Funds) 2019 Following the District’s thirty-year strategic plan, the Board of Directors committed a majority of the unassigned fund balance during fiscal year 2019 to reserves for infrastructure, equipment replacement and capital maintenance. See Note 1 in the notes to the basic financial statements of the audit report for a description of each commitment. 21 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 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 2019, the District revised its General Fund budget, which resulted in an decrease in budgeted expenditures of $122 thousand from the original to final budget. The revenue was revised from $51 million to $53 million due to increases in property taxes and interest earned from investments.A summary of the original and final budget is presented below: Percent Or iginal Budge t Fi nal Budge t Change Change Re ve nue s Property t axe s 48,122,000$ 48,919,000$ 797,000$ 1.66% Gr ant revenue s 191,000 191,000 - 0.00% Property manage me nt 1,221,124 1,043,000 (178,124) -14.59% Investment earnings 1,079,000 1,949,904 870,904 80.71% Ot he r revenue s 471,738 1,158,498 686,760 145.58% To tal Re ve nue s 51,084,862 53,261,402 2,176,540 4.26% Expe ndi tures Sal ar ies and e mpl oyee bene fits 22,930,309 23,155,369 225,060 0.97% Se rvices and s uppl ies 10,648,125 10,384,065 (264,060) -2.54% Capi tal outlay 83,000 - (83,000) -100.00% To tal Expe ns es 33,661,434 33,539,434 (122,000) -0.36% Ne t Chang e in F und B al anc e 17,423,428$ 19,721,968$ 2,298,540$ 13.19% Ta bl e 4 - Summar y o f Or iginal t o Fi nal B udg ets CAPITAL ASSETS Table 5 shows 2019 capital asset balances as compared to 2018. Percentage 2019 2018 Change Change Land 437,763,645$ 414,547,441$ 23,216,204$ 5.60% Co ns truction-in-Progress 16,193,374 8,596,297 7,597,077 88.38% St ructure and Impr ovements 18,059,730 7,320,057 10,739,673 146.72% Inf rastructure 29,542,214 28,512,084 1,030,130 3.61% Equi pme nt 1,113,614 989,551 124,063 12.54% Ve hi cles 1,886,832 2,154,403 (267,571) -12.42% To tal Capi tal As sets - Ne t 504,559,409$ 462,119,833$ 42,439,576$ 9.18% 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 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 LONG TERM LIABILITIES Table 6 summarizes the changes in long-term liabilities from 2019 to 2018. Percentage 2019 2018 Change Change Promissory Notes 38,899,934$ 39,769,276$ (869,342)$ -2.19% Bo nds 199,505,576 205,905,916 (6,400,340) -3.11% Ne t Pension Liabi lity 10,412,478 11,022,824 (610,346) -5.54% Ne t OP EB Li abi lity 1,862,277 1,845,000 17,277 0.94% Co mpe ns at ed Abs ences 2,368,387 1,723,930 644,457 37.38% To tal Lo ng-term Liabi lities 253,048,652$260,266,946$(7,218,294)$ -2.77% 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 fiscal year 2019-20 on June 26, 2019. This budget assumes $64.4 million in revenues and a growth in general fund property tax income of 7.75% over the prior year’s adopted budget. This budget funds $20.0 million of capital spending, of which $9.5 million is expected to qualify for reimbursement from Measure AA GO bond funds.General Fund operating expenditures are budgeted at $37.0 million, a 10.3% increase over the prior year’s budget. Debt service is budgeted at $17.7 million, with $7.3 million related to the Measure AA general obligation bonds. If all revenues, expenditures (including debt service) occur as budgeted, the District’s overall cash balances would increase by approximately $0.7 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 Attachment 1 Page Intentionally Left Blank 24 Attachment 1 Basic Financial Statements 25 Attachment 1 Page Intentionally Left Blank 26 Attachment 1 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 Attachment 1 Assets Current assets: Cash and investments 108,106,556$ Accounts receivable: Interest 158,943 Other 182,269 Taxes receivable 221 Other current assets 195,315 Total current assets 108,643,304 Noncurrent assets: Notes receivable 94,182 Un amortized issuance costs 468,350 Non-depreciable capital assets 453,957,019 Capital assets, net of depreciation 50,602,390 Total noncurrent assets 505,121,941 Total Assets 613,765,245$ Deferred Outflows of Resources OPEB adjustments 670,768$ Pension adjustments 4,760,025 Deferred loss on early retirement of long-term debt 9,395,700 Total Deferred Outflows of Resources 14,826,493$ Liabilities Current liabilities: Accounts payable 2,516,839$ Deposits payable 218,240 Payroll and other liabilities 1,580,921 Accrued interest 2,381,063 Current portion of long-term liabilities 9,998,885 Total current liabilities 16,695,948 Noncurrent liabilities: Long-term liabilities - net of current portion 243,049,767 Total Liabilities 259,745,715$ Deferred Inflows of Resources OPEB adjustments 92,510$ Pension adjustments 1,379,355 Total Deferred Outflows of Resources 1,471,865$ Net Position Net investment in capital assets 351,151,768$ Restricted for: Debt service 6,775,924 Hawthorne maintenance 1,431,717 Total restricted 8,207,641 Un restricted 8,014,749 Total Net Position 367,374,158$ Midpeninsula Regional Open Space District Statement of Net Position June 30, 2019 The notes to the financial statements are an integral part of this statement. 28 Attachment 1 Net (Expense) Capital Revenue and Charges for Grants and Changes in Expenses Services Contributions Net Position Governmental activities: Land preservation 34,304,215$ 2,360,364$ 1,081,711$ (30,862,140)$ Interest and fiscal charges 10,448,784 - - (10,448,784) Total governmental activities 44,752,999$ 2,360,364$ 1,081,711$ (41,310,924) General revenues and special item: Property taxes 54,395,054 Investment earnings 3,627,639 Other revenues 1,912,125 Special item - loss on disposal of capital assets (37,853) Total general revenues and special item 59,896,965 Change in net position 18,586,041 Net position beginning 348,788,117 Net position ending 367,374,158$ Midpeninsula Regional Open Space District Statement of Activities For the Fiscal Year Ended June 30, 2019 Program Revenues The notes to the financial statements are an integral part of this statement. 29 Attachment 1 Page Intentionally Left Blank 30 Attachment 1 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 Attachment 1 Measure AA GF Capital Debt Total General Capital Projects Service Governmental Fund Projects Fund Fund Fund Funds Assets Cash and investments 51,295,862$ 41,130,060$ 8,904,710$ 6,775,924$ 108,106,556$ Receivables: Interest 158,943 - - - 158,943 Other 182,269 - - - 182,269 Taxes receivable 221 - - - 221 Other current assets 195,315 - - - 195,315 Due from other funds 4,565,422 2,786,475 - - 7,351,897 Notes receivable 94,182 - - - 94,182 Total Assets 56,492,214$ 43,916,535$ 8,904,710$ 6,775,924$ 116,089,383$ Liabilities Liabilities: Accounts payable 770,967$ 1,450,793$ 295,079$ -$ 2,516,839$ Deposits payable 218,240 - - - 218,240 Due to other funds 2,475,316 4,521,489 355,092 - 7,351,897 Payroll and other liabilities 1,580,921 - - - 1,580,921 Total Liabilities 5,045,444 5,972,282 650,171 - 11,667,897 Deferred Inflows of Resources Unavailable revenues 94,182 - - - 94,182 Fund Balance Nonspendable: Prepaid expenditures 185,984 - - - 185,984 Restricted for: Debt service - - - 6,775,924 6,775,924 Measure AA capital projects - 37,944,253 - - 37,944,253 Hawthorne maintenance 1,431,717 - - - 1,431,717 Capital projects - - 8,254,539 - 8,254,539 Pension 2,531,030 - - - 2,531,030 Committed for: Infrastructure 17,688,465 - - - 17,688,465 Equipment replacement 3,000,000 - - - 3,000,000 Capital maintenance 5,000,000 - - - 5,000,000 Future acquisitions and capital projects 3,000,000 - - - 3,000,000 Promissory note 600,000 - - - 600,000 Assigned for: Ongoing Projects 1,400,000 - - - 1,400,000 Unassigned 16,515,392 - - - 16,515,392 Total Fund Balance 51,352,588 37,944,253 8,254,539 6,775,924 104,327,304 Total Liabilities, Deferred Inflows of Resources, and Fund Balance 56,492,214$ 43,916,535$ 8,904,710$ 6,775,924$ 116,089,383$ Balance Sheet Midpeninsula Regional Open Space District June 30, 2019 Governmental Funds The notes to the financial statements are an integral part of this statement. 32 Attachment 1 Total fund balance - governmental funds 104,327,304$ 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 524,853,989$ Accumulated depreciation (20,294,580) 504,559,409 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.94,182 The difference between OPEB plan assumptions and estimates versus actuals are not included in the plan's actuarial study until the next fiscal year and are reported as deferred outflows or inflows of resources in the statement of net position.578,258 The difference between pension plan assumptions and estimates versus actuals are not included in the plan's actuarial study until the next fiscal year and are reported as deferred outflows or inflows of resources in the statement of net position.3,380,670 Interest payable on long-term debt does not require the use of current financial resources and, therefore, is not reported in the governmental funds.(2,381,063) 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 25,567,399$ Issuance cost (468,350) (25,099,049) 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.9,395,700 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 179,090,000$ Net pension liability 10,412,478 Promissory notes 33,748,111 Compensated absences 2,368,387 Net OPEB liability 1,862,277 (227,481,253) Total net position - governmental activities 367,374,158$ Midpeninsula Regional Open Space District Balance Sheet to the Statement of Net Position June 30, 2019 Reconciliation of the Governmental Funds The notes to the financial statements are an integral part of this statement. 33 Attachment 1 Measure AA GF Capital Debt Total General Capital Projects Service Governmental Fund Projects Fund Fund Fund Funds Revenues: Property taxes 49,156,904$ -$ -$ 5,238,150$ 54,395,054$ Grant income 460,842 620,869 - - 1,081,711 Property management 2,360,364 - - - 2,360,364 Investment earnings 1,403,878 1,726,441 399,613 118,773 3,648,705 Other revenues 640,850 - - - 640,850 Total revenues 54,022,838 2,347,310 399,613 5,356,923 62,126,684 Expenditures: Current: Land preservation: Salaries and employee benefits 20,727,559 368,306 - - 21,095,865 Services and supplies 8,086,707 2,054 1,334 - 8,090,095 Capital outlay - 10,501,506 34,854,151 - 45,355,657 Debt service: Principal - - - 6,480,000 6,480,000 Interest - - - 9,190,988 9,190,988 Total expenditures 28,814,266 10,871,866 34,855,485 15,670,988 90,212,605 Excess (deficiency) of revenues over (under) expenditures 25,208,572 (8,524,556) (34,455,872) (10,314,065) (28,085,921) Other financing sources (uses): Transfers in 1,481,755 - 37,148,401 11,298,825 49,928,981 Transfers out (48,447,226) - (1,481,755) - (49,928,981) Total other financing sources (uses)(46,965,471) - 35,666,646 11,298,825 - Net changes in fund balance (21,756,899) (8,524,556) 1,210,774 984,760 (28,085,921) Fund balance beginning 73,109,487 46,468,809 7,043,765 5,791,164 132,413,225 Fund balance ending 51,352,588$ 37,944,253$ 8,254,539$ 6,775,924$ 104,327,304$ Midpeninsula Regional Open Space District Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Fiscal Year Ended June 30, 2019 The notes to the financial statements are an integral part of this statement. 34 Attachment 1 Total net change in fund balance - governmental funds (28,085,921)$ 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 45,355,657$ Depreciation expense (2,878,228) Loss on disposal of capital asset (37,853) 42,439,576 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.(21,066) 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.(481,593) 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: Repayment of bond principal 5,280,000 Repayment of promissory notes principal 1,200,000 6,480,000 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.(845,123) 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 1,216,967 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.(644,457) 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.(1,595,570) 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.123,228 Change in net position of governmental activities 18,586,041$ Midpeninsula Regional Open Space District Statement of Revenues, Expenditures and Changes in Fund Balance For the Fiscal Year Ended June 30, 2019 Reconciliation of the Governmental Funds to the Statement of Activities The notes to the financial statements are an integral part of this statement. 35 Attachment 1 Page Intentionally Left Blank 36 Attachment 1 Notes to Financial Statements 37 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 (such as cash)are received before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements (such as qualified expenditures)are met are recorded as liabilities from unearned revenue. Unavailable 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 of resources as unavailable 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.The District resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. 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. 40 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. 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. 41 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 Income approach -This approach converts future amounts (such as cash flows) into a current discounted amount. Each of these valuation techniques requires inputs to calculate a fair value. Observable inputs have been maximized in fair value measures, and unobservable inputs have been minimized. 3.Prepaid Expenditures The District has the option of reporting expenditures in governmental funds for prepaid items either when purchased or during the benefiting period. The District has chosen to report the expenditure during the benefiting period. 4.Capital Assets Capital assets, which include land, buildings and improvements, furniture, equipment, and construction in progress, are reported in the government-wide financial statements. 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 acquisition value at the time of acquisition plus ancillary charges,if any. 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 of 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 8.Fund Balance Classifications In accordance with Government Accounting Standards Board 54,Fund Balance Reporting and Governmental Fund Type Definitions, the District classifies governmental fund balances as follows: Nonspendable fund balance includes amounts that cannot be spent either because it is not in spendable form or because of legal or contractual constraints. Restricted fund balance includes amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation. Committed fund balances includes amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority and does not lapse at period-end. Committed fund balances were imposed by the District’s Board of Directors 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: $17.7 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 Capital maintenance: $5 million; amounts committed to reserve for future capital repairs and maintenance. o Future acquisitions and capital projects: $3 million; amounts committed to reserve for future capital acquisitions. o Promissory Note: $0.6 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. 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 44 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 District’s California Public Employees’ Retirement System (CalPERS) 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. 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. For this report, the following time frames were used: Valuation Date (VD) ....................................... June 30, 2017 Measurement Date (MD) ................................ June 30, 2018 Measurement Period (MP) .............................. July 1, 2017 to June 30, 2018 45 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, and OPEB expense,information about the fiduciary net position of the District’s Retiree Benefits Plan (the OPEB Plan)and additions to/deductions are based on the when they are due and payable in accordance with the benefit terms for the measurement period included in the OPEB plan’s actuarial reports. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost. Valuation Date June 30, 2017 Measurement Date June 30, 2018 Measurement Period July 1, 2017 to June 30, 2018 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. 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 that has legal obligations to perform future asset retirement activities related to 46 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 its tangible capital assets should recognize a liability based on the guidance in this Statement. As of June 30, 2019, this Statement did not have an 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. As of June 30, 2019, this Statement did not have an impact on the District’s financial statements. J.Upcoming Accounting and Reporting Changes 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 financial statements for periods beginning after December 15, 2019. Earlier application is encouraged. The District is in the process of determining the impact this Statement will have on the financial statements. 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 47 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. GASB Statement No. 90, Majority Equity Interests -an Amendment of GASB Statements No. 14 and No. 61 The objectives of this Statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. This Statement also requires that a component unit in which a government has 100 percent equity interest account for its assets, deferred outflows of resources, liabilities, and deferred inflows of resources at acquisition value at the date the government acquired a 100 percent equity interest in the component unit. The requirements of this Statement are effective for financial statements for periods beginning after December 15, 2018. The requirements should be applied retroactively, except for the provisions related to (1) reporting a majority equity interest in a component unit and (2) reporting a component unit if the government acquires a 100 percent equity interest. Those provisions should be applied on a prospective basis. The District doesn’t believe this statement will have a significant impact on the District’s financial statements. GASB Statement No. 91, Conduit Debt Obligations The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement also clarifies the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitment and voluntary commitments extended by issuers and arrangements associated with the debt obligations; and improving required note disclosures. The requirements of this Statement are effective for financial statements for periods beginning after December 15, 2020. Earlier application is encouraged. The District doesn’t believe this statement will have a significant impact on the District’s financial statements. 48 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 NOTE 2 -CASH AND INVESTMENTS Summary of Cash and Investments The following summarizes deposits as of June 30, 2019: Cash and Cash Equivalents Av aila ble Cash and Investments for Operations Restricted Total Cash Deposits: Cash in Banks 1,573,758$ 33,810$ 1,607,568$ Cash with Fiscal Age nt - 2,531,030 2,531,030 Petty Cash 1,832 - 1,832 Total Cash Deposits 1,575,590 2,564,840 4,140,430 Investments: Calif ornia Local Age ncy Investment Fund 6,543,761 - 6,543,761 CalTRUST - 1,604,339 1,604,339 Brokerage Ac counts/Cash with Fiscal Age nts 16,313,616 51,761,334 68,074,950 Santa Clara County Pool 22,693,716 5,049,360 27,743,076 Total Investments 45,551,093 58,415,033 103,966,126 Total Cash and Investments 47,126,683$ 60,979,873$ 108,106,556$ 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 30,2019,the District’s bank balances exceeded FDIC coverage by $1,582,879. Fair Value Measurements GASB 72 established a hierarchy of inputs to the valuation techniques above. This hierarchy has three levels: Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted market prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other than quoted prices that are not observable Level 3 inputs are unobservable inputs, such as a property valuation or an appraisal. 49 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 The District has the following investments with recurring fair value measurements as of June 30, 2019: 12 Months 13 - 24 25 - 60 More Than Rating Fair Value or Less Months Months 60 Months Money Market Accounts n/a 3,135,774$ n/a 3,135,774$ -$ -$ -$ 3.02% Municipal Bonds AAA/A-13,649,234 Level 2 2,835,666 7,038,659 1,847,521 1,927,388 13.13% Corp/Gov Bonds AAA/A-37,953,286 Level 1 14,603,548 20,936,928 2,412,810 - 36.51% LAIF n/a 6,543,761 Level 2 6,543,761 - - - 6.29% CalTrust A+f 1,604,339 Level 2 - - 1,604,339 - 1.54% Santa Clara County Pool n/a 27,743,076 Level 2 16,384,182 4,096,442 7,262,452 - 26.68% U.S. Obligations AA+/A-13,336,656 Level 1 10,189,733 3,146,923 - - 12.83% Total Investments 103,966,126$ 53,692,664$ 35,218,952$ 13,127,122$ 1,927,388$ 100.00% Input Level Concen- trationsInvestment Type Maturities 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, 2019, these investments had an average maturity date of less than one year. 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, 2019, these investments had an average maturity date of 2 to 5 years. 50 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2019, the District had $1,726,564 held by Zions bank as trustee, pledged to the payment or security of its outstanding bond issues. The District also had $5,049,360 held by the County during the period which was pledged to the payment or security of its outstanding bonds. All transactions associated with debt service were administered by the Bank or County. 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, 2019 was $1,604,339. Restricted for Measure AA Bond Projects As of June 30, 2019, the District had $41,130,060 held by Zions bank as trustee, pledged to specific projects related to the acquisition of property to protect and preserve natural open space lands, constructions of public access improvements and recreation and capital enhancements to open space lands to restore disturbed natural areas back to their original condition and function. Restricted for Staffing Facilities As of June 30, 2019, the District had $8,904,710 held by Zions bank as trustee, pledged to finance portion of the cost of acquiring and improving staffing facilities for use by the District. Restricted for Historic Picchetti Reserve As of June 30, 2019, the District had $33,810 held with Wells Fargo, pledged for upkeep on the Picchetti Ranch brick winery building and farm complex. Restricted Cash with Fiscal Agent For the year ended June 30, 2019, the District had a balance of $2,531,030 in a Public Agency Retirement Services (PARS) Pension Rate Stabilization Program (PRSP) 115 irrevocable trust for pensions. Participating agencies maintain oversight of investment management and control over the risk tolerance level. Assets in the plan can be accessed to offset unexpected rate increases or be used as a rainy day fund related to their pension plan (CalPERS). These assets are not dedicated to providing plan benefits to plan participants and are not directly used to pay benefits until such time as the District transfers the funds from the PARS trust to the pension plan (CalPERS). The trust restricts the use of the assets to be used solely for pension related expenses. 51 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 $8.6 billion and $97.6 billion, respectively as of June 30, 2019, 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 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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.Investments 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, 2019: Fu nd Due from Other Fu nds Due to Other Fu nds General Fund 4,565,422$ 2,475,316$ Measure AA Capital Projects Fund 2,786,475 4,521,489 GF Capital Projects Fund - 355,092 Total 7,351,897$ 7,351,897$ At June 30, 2019, interfund transfers consisted of the following: Fu nd Tra nsfer In Tra nsfer Out General Fund 1,481,755$ 48,447,226$ GF Capital Projects Fund 37,148,401 1,481,755 Debt Service Fund 11,298,825 - Total 49,928,981$ 49,928,981$ 53 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2019 was $94,182. NOTE 5 -CAPITAL ASSETS AND DEPRECIATION Capital asset activity for the period ended June 30, 2019 is shown below: Balance Deletions/Balance Capital Assets June 30, 2018 Ad ditions Ad justments June 30, 2019 No n-depreciable: Land 414,547,441$ 23,216,204$ -$ 437,763,645$ Construction in P rogress 8,596,297 10,805,611 (3,208,534) 16,193,374 Total Non-Depreciable 423,143,738 34,021,815 (3,208,534) 453,957,019 Depreciable: Structure and Improvements 16,644,608 11,560,143 - 28,204,751 Infrastructure 32,640,168 2,158,478 - 34,798,646 Equipment 2,333,457 319,326 - 2,652,783 Ve hicles 5,007,778 504,429 (271,417) 5,240,790 Total Depreciable 56,626,011 14,542,376 (271,417) 70,896,970 Less Accumulated Depreciatio n fo r: Structure and Improvements (9,324,551) (820,470) - (10,145,021) Infrastructure (4,128,084) (1,128,348) - (5,256,432) Equipment (1,343,906) (195,263) - (1,539,169) Ve hicles (2,853,375) (734,147) 233,564 (3,353,958) Total Accumulated Depreciation (17,649,916) (2,878,228) 233,564 (20,294,580) Total Depreciable Capital Assets - Net 38,976,095 11,664,148 (37,853) 50,602,390 Total Capital Assets - Net 462,119,833$ 45,685,963$ (3,246,387)$ 504,559,409$ 54 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 NOTE 6 -LONG-TERM LIABILITIES The following is a summary of the changes in long-term liabilities for the period ended June 30, 2019: Begin ning Ending Due Within Long-term Liabilitie s Balance Ad ditions Deductions Balance One Year Promissory Notes (Direct Borrowings): Current Interest 25,439,999$ -$ 1,200,000$ 24,239,999$ 1,285,000$ Capital Appreciation 6,580,602 - - 6,580,602 - Accreted in terest 2,445,917 481,593 - 2,927,510 - Unamortized Premium 5,302,758 - 150,935 5,151,823 - Subtotal Promissory Notes 39,769,276 481,593 1,350,935 38,899,934 1,285,000 Bonds: Current Interest 184,370,000 - 5,280,000 179,090,000 7,830,000 Unamortized Bond Premium 21,535,916 - 1,120,340 20,415,576 - Subtotal Bonds 205,905,916 - 6,400,340 199,505,576 7,830,000 Net P ension Liabilit y 11,022,824 7,773,136 8,383,482 10,412,478 - Net OP EB Liabilit y 1,845,000 1,192,555 1,175,278 1,862,277 - Compensated Absences 1,723,930 1,528,342 883,885 2,368,387 883,885 Total Long-term Liabilit ies 260,266,946$ 10,975,626$ 18,193,920$ 253,048,652$ 9,998,885$ Compensated absences,other postemployment benefits and pension liabilities are paid by the fund for which the employee worked. Promissory Notes 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.The notes are secured by limited ad valorem property taxes levied upon all taxable property in the District. 55 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. The notes are secured by limited ad valorem property taxes levied upon all taxable property in the District. 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. There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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.The bonds are secured by ad valorem property taxes levied by the District. There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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 of 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. 56 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. 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. The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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. The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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.The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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 $455,462.The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 57 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 The following schedule summarizes the District’s outstanding promissory notes and bonds as of June 30, 2019: Origin al Begin ning Ending Long Term Debt Issue Balance Additions Retirements Balance Promisso ry Notes (Direct Bo rro wi ngs): Hunt Note 1,500,000$ 1,500,000$ -$ -$ 1,500,000$ 2012 Refunding Note Current Int.15,790,000 2,124,999 - 395,000 1,729,999 2012 Refunding Note Cap Apprec.15,474,708 6,580,602 - - 6,580,602 2015 Refunding Note 23,630,000 21,815,000 - 805,000 21,010,000 Subtotal Promisso ry Notes 56,394,708 32,020,601 - 1,200,000 30,820,601 Bo nds: 2011 Lease Revenue 20,500,000 930,000 - 180,000 750,000 2015A General Obliga tion Bonds 40,000,000 40,000,000 - - 40,000,000 2015B General Obliga tion Bonds 5,000,000 3,350,000 - 890,000 2,460,000 2016 Refunding Bond 57,410,000 53,845,000 - 3,410,000 50,435,000 2017 Refunding Bond 25,025,000 25,025,000 - - 25,025,000 2017 Parity Bond 11,220,000 11,220,000 - 800,000 10,420,000 2018 General Obliga tion Bonds 50,000,000 50,000,000 - - 50,000,000 Subtotal Bo nds 209,155,000 184,370,000 - 5,280,000 179,090,000 Accreted Interest: 2012 Refunding Note 2,445,917 481,593 - 2,927,510 Subtotal Accreted Interest 2,445,917 481,593 - 2,927,510 Unamo rtized Bond Premium 26,838,674 - 1,271,275 25,567,399 Total Long Term Debt 265,549,708$ 245,675,192$ 481,593$ 7,751,275$ 238,405,510$ The promissory notes future debt service requirements as of June 30,2019 were as follows: Year Ending June 30,Prin cipal Remaining Ac cretion Interest Total 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 1,170,000 - 825,750 1,995,750 2025-2029 6,825,000 - 3,163,875 9,988,875 2030-2034 12,946,057 6,728,490 1,309,000 20,983,547 2035-2039 2,739,544 2,298,400 35,125 5,073,069 Total Debt Service 30,820,601$ 9,026,890$ 9,548,125$ 49,395,616$ 58 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 The bonds future debt service requirements as of June 30, 2019 were as follows: Year Ending June 30,Prin cipal Remaining Ac cretion Interest Total 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 7,375,000 - 6,239,763 13,614,763 2025-2029 40,435,000 - 25,216,740 65,651,740 2030-2034 23,170,000 - 17,528,670 40,698,670 2035-2039 41,710,000 - 11,255,601 52,965,601 2040-2044 20,745,000 - 5,566,500 26,311,500 2045-2049 17,135,000 - 1,459,100 18,594,100 Total Debt Service 179,090,000$-$ 95,330,863$ 274,420,863$ Amortization of the deferred loss on early retirement of long-term debt for the fiscal period ended June 30, 2019 was as follows: Begin ning Balance 10,240,823$ Am ortization (845,123) Ending Balance 9,395,700$ 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 $1,988,147 was received during the period ended June 30, 2019. 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 members are eligible for non-industrial disability benefits after 10 years of service. The death benefit is 59 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2019, are summarized as follows: Ti er 1 PEPRA Bene fit formul a 2.5% @ 5 5 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 rat es 8.000% 6.250% Re qui red e mpl oyer contribution rat es 10.609% 6.842% Mi scel lane ous Employees Covered –At June 30, 2019, 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. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2019, the District reported net pension liabilities for its proportionate shares of the net pension liability as follows: Miscella neous Proportio nate Share of Net Pensio n Liability/(Asset) $ 10,412,478 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, 2018,and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017 using standard procedures. The District’s proportion of the net pension liability was 60 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2018 and 2019 was as follows: Miscellaneo us Proportion - June 30, 2018 0.27962% Proportion - June 30, 2019 0.27629% Change - Increase/(Decrease)-0.00333% For the fiscal year ended June 30, 2019,the District recognized pension expense of $2,685,156. At fiscal year June 30, 2019, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferre d Outflo ws of Reso urces Deferre d Inflo ws of Reso urces Changes of As sumptions 1,187,053$ 290,924$ Differences between Expected and Ac tual Exp erience 399,508 135,950 Differences between Projected and Ac tual Investment Earnings 51,477 - Differences between Employer's Contributions and Proportionate Share of Contributions 899,679 262,985 Change in Employer's Proportion 864,101 689,495 Pension Contributions Made Subsequent to Measurement Date 1,358,206 - To tal 4,760,025$ 1,379,355$ The District reported $1,358,206 as deferred outflows of resources related to contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ended June 30,2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: 1,373,936$ 881,007 (138,824) (93,654) 2,022,465$ 2020 To tal 2021 2022 2023 Deferre d Outflo ws / (Inflo ws ) of Reso urces Fi scal Ye ar En ding June 30: 61 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 Actuarial Assumptions -The total pension liabilities in the June 30, 2017 actuarial valuations were determined using the following actuarial assumptions: Va luat ion Date June 30, 2017 Me as ur ement Dat e June 3 0, 2 018 Ac tuar ial Co st Me thod Ent ry-Age No rmal Co st Method Ac tuar ial As sumptions: Discount Rate 7.15% Inf lation 2.50% Payr oll Gr owth 2.75% Projected Sal ar y Inc rease (1) Investment Rate of Return 7.15% (2) Mo rtality (3) (1) Var ies by age and s ervice (2) Net of pens ion plan investment expens es, inc ludi ng inf lation (3) Derived us ing Cal PERS' me mbe rship dat a for al l 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 stress test results are presented in a detailed report that can be obtained from the CalPERS’ website. The long-term expected rate of return on pension plan investments was determined using a building- block method in which 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 rounded 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-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. 62 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. As sumed As set Real Return Real Return As set Class (a)Allo cation Years 1 - 10 (b)Years 11+ (c) Global Equity 50.00%4.80% 5.98% Fixe d Income 28.00%1.00% 2.62% Inflation Sensitive 0.00%0.77% 1.81% Priv ate Equity 8.00%6.30% 7.23% Real Estate 13.00%3.75% 4.93% Liquidity 1.00%0.00%-0.92% Total 100.00% (a) In the System's CAFR, Fixe d Income is included in Glo bal Debt Securities; Liquidity Liq uidity is included in Short-term Investments; Inflation As sets are in cluded in both Glo bal Equity Securities and Global Debt Securities. (b) An expected in flation of 2.0% used for this period. (c) An expected in flation of 2.92% 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 19,423,155$ Current 7.15% Net Pension Liabilit y 10,412,478$ 1% Increase 8.15% Net Pension Liabilit y 2,974,312$ 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Minimum Age:Retirement under CalPERS 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 $617,768. Total contributions included in the measurement period were $412,000. The actuarially determined contribution for the measurement period was $624,000. The District’s contributions were 4.95%of covered payroll during the measurement period June 30, 2018 (reporting period June 30, 2019). Employees are not required to contribute to the plan. 64 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2018 Actuarial Co st Metho d:Entry age normal, level precentage of payroll Amo rt izatio n Perio d:10.2 years Asset Valuatio n Metho d:Investment ga in s and lo ses spread over 5 year rollin g 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, Terminatio n CalPERS 1997-2015 experience study Mo rt ality Improvement Post-retirement mortalit y projected fully generational wit h Society of Ac tuaries Scale MP -2017 Healthcare Participatio n fo r Future 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. 65 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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% Net OPEB Liability -The District's net OPEB liability was measured as of June 30, 2018 (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, 2019 (reporting date). The following summarizes the changes in the net OPEB liability during the year ended June 30, 2019, for the measurement date of June 30, 2018: Fi scal Ye ar Ended June 30, 2019 (Measurement Date June 30, 2017) To tal OPEB Liability Plan Fi duciary Net Po sitio n Net OPEB Liability (Asset) Balance at June 30,2018 5,111,000$ 3,266,000$ 1,845,000$ Service cost 321,153 - 321,153 Interest in Total OPEB Liabilit y 361,203 - 361,203 Employer contributions - 412,000 (412,000) Ac tual investment in come - 259,143 (259,143) Ad ministrative expenses - (6,064) 6,064 Benefit payments (162,000) (162,000) - Net changes 520,356 503,079 17,277 Balance at June 30, 2019 5,631,356$ 3,769,079$ 1,862,277$ Covered Employee Payroll 13,550,000$ Total OPEB Liabilit y as a % of Covered Employee Payroll 41.56% Plan Fid. Net Position as a % of Total OPEB Liabilit y 66.93% Service Cost as a % of Covered Employee Payroll 2.37% Net OP EB Liabilit y as a % of Covered Employee Payroll 13.74% 66 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 Deferred Inflows and Outflows of Resources -At June 30, 2019, 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 - 92,510 Change in assumptions - - OP EB contribution subsequent to measurement date 670,768 - To tals 670,768$ 92,510$ Of the total amount reported as deferred outflows of resources related to OPEB, $670,768 resulting from District contributions subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of the net OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended June 30, 2020 (28,277)$ 2021 (28,277) 2022 (28,277) 2023 (7,679) 2024 - Thereafter - To tal (92,510)$ OPEB Expense -The following summarizes the OPEB expense by source during the year ended June 30, 2019, for the measurement date of June 30, 2018: Service cost 321,153$ Interest in TOL 361,203 Expected in vestment in come (220,756) Difference between actual and expected earnings (28,277) Ad ministrative expenses 6,064 OPEB Ex pense 439,387$ The following summarizes changes in the net OPEB liability as reconciled to OPEB expense during the year ended June 30, 2019, for the measurement date of June 30,2018: 1,862,277$ (1,845,000) 17,277 Changes in deferred outflows 10,110 Employer contributions and im plic t subsidy 412,000 OPEB Ex pense 439,387$ Net OP EB lia bilit y ending Net OP EB lia bilit y beginin g Change in net OP EB lia bilit y 67 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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: (1% Decrease )6.75%(1% Increase ) Net OP EB Liabilit y (Asset)2,705,950$ 1,862,277$ 1,170,860$ 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: (1% Decrease )4.25%(1% Increase ) Net OP EB Liabilit y (Asset)1,632,015$ 1,862,277$ 2,171,385$ 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Litigation 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, 2019. Commitments As of June 30, 2019, the District had remaining commitments of $4,522,563 towards construction and other contracts. These commitments are not liabilities of the District’s until services or goods have been rendered/received. The expected date of completion is between December 2021 and June 2028. 70 Attachment 1 Required Supplementary Information 71 Attachment 1 Page Intentionally Left Blank 72 Attachment 1 REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY SCHEDULES This schedule presents a comparison of the original budget,final budget and actual revenues and expenditures for General Fund. The schedule presents the difference between the final budget and actuals. PENSION SCHEDULES These schedules present information that shows the District's proportionate share of the pension liability in the cost sharing pools,actuarial information,and contributions.The proportionate share information is useful in determining the District's liability on relation to all other entities in the pool. POSTEMPLOYMENT BENEFIT SCHEDULES These schedules present information that shows the District's total other postemployment benefits (OPEB),plan fiduciary net position, and contributions related to retiree healthcare benefits provided by the District. 73 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes 48,122,000$ 48,919,000$ 49,156,904$ 237,904$ Grant income 191,000 191,000 460,842 269,842 Property management 1,221,124 1,043,000 2,360,364 1,317,364 Investment earnings 1,079,000 1,949,904 1,403,878 (546,026) Other revenues 471,738 1,158,498 640,850 (517,648) Total revenues 51,084,862 53,261,402 54,022,838 761,436 Expenditures: Current Salaries and employee benefits 22,930,309 23,155,369 20,727,559 2,427,810 Services and supplies 10,648,125 10,384,065 8,086,707 2,297,358 Capital outlay 83,000 - - - Total expenditures 33,661,434 33,539,434 28,814,266 4,725,168 Excess (deficiency) of revenues over (under) expenditures 17,423,428 19,721,968 25,208,572 5,486,604 Other financing sources (uses): Transfers in - - 1,481,755 1,481,755 Transfers out (14,529,135) (14,529,135) (48,447,226) (33,918,091) Total other financing sources (uses)(14,529,135) (14,529,135) (46,965,471) (32,436,336) Net change in fund balance 2,894,293 5,192,833 (21,756,899) (26,949,732) Fund balance beginning 73,109,487 73,109,487 73,109,487 - Fund balance ending 76,003,780$ 78,302,320$ 51,352,588$ (26,949,732)$ The District employs budget control by object codes and by individual appropriation accounts.Budgets are prepared on the modified accrual basis of accounting in accordance with accounting principles generally accepted in the Un ited States of America as prescribed by the Governmental Accounting Standards Board.The budgets are revised during the year by the Board of Directors to provide for revised priorities.Expenditures cannot legally exceed appropriations by major object code. The originally adopted and final revised budgets for the General Fund are presented as Required Supplementary Information. The basis of budgeting is the same as GAAP.Transfers out exceeded budget as noted above because of the transfer to GF Capital Projects Fund for the District's new building purchase. Budgeted Amounts Midpeninsula Regional Open Space District Budget to Actual (GAAP) For the Fiscal Year Ended June 30, 2019 Schedule of Revenues, Expenditures and Changes in Fund Balance General Fund 74 Attachment 1 Miscellaneous Plan Plan Measurement Date 2014 2015 2016 2017 2018 Fiscal Year Ended 2015 2016 2017 2018 2019 Contractually Required Contributions 1,461,069$ 1,358,520$ 1,514,352$ 1,763,650$ 1,358,184$ Contributions in Relation to Contractually Required Contributions 1,343,244 4,788,977 2,529,862 1,783,789 1,358,206 Contribution Deficiency (Excess)117,825$ (3,430,457)$(1,015,510)$ (20,139)$ (22)$ Covered Payroll 8,994,979$ 9,862,578$ 11,834,150$ 12,802,887$ 15,311,826$ Contributions as a % of Covered Payroll 14.93%48.56%21.38%13.93%8.87% Notes to Schedule: Valuation Date:June 30, 2017 Assumptions Used:Entry Age Method used for Actuarial Cost Method Level Percentage of Payroll and Direct Rate Smoothing 3.8 Years Remaining Amortization Period Inflation Assumed at 2.5% Investment Rate of Returns set at 7.15% Fiscal year 2015 was the first year of implementation, therefore only five years are shown. The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016 and then decreased from 7.65% to 7.15% in fiscal year 2018. The CalPERS mortality assumptions was adjusted in fiscal year 2019. Midpeninsula Regional Open Space District Schedule of Pension Plan Contributions June 30, 2019 CalPERS mortality table based on CalPERS' experience and include 15 years of projected ongoing mortality improvement using 90 percent of Scale MP 2016 published by the Society of Actuaries. 75 Attachment 1 Miscellaneous Plan Plan Measurement Date 2014 2015 2016 2017 2018 Fiscal Year Ended 2015 2016 2017 2018 2019 Proportion of Net Pension Liability 0.39847%0.41627%0.29137%0.27962%0.27629% Proportionate Share of Net Pension Liability 9,848,203$ 11,420,126$10,121,906$11,022,824$10,412,478$ Covered Payroll 8,448,635$ 8,994,979$ 9,862,578$ 11,834,150$12,802,887$ Proportionate Share of NPL as a % of Covered Payroll 116.57%126.96%102.63%93.14%81.33% Plan's Fiduciary Net Position as a % of the TPL 81.15%79.23%80.93%82.04%84.37% Fiscal year 2015 was the first year of implementation, therefore only five years are shown. The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016 and then decreased from 7.65% to 7.15% in fiscal year 2018. The CalPERS mortality assumptions was adjusted in fiscal year 2019. June 30, 2019 Schedule of Net Pension Liability Proportionate Shares Midpeninsula Regional Open Space District 76 Attachment 1 Fiscal Year Ended 2018 2019 Actuarially determined contribution (ADC)609,000$ 624,000$ Less: actual contribution in relation to ADC (412,000) (670,768) Contribution deficiency (excess)197,000$ (46,768)$ Covered employee payroll 12,802,887$ 13,550,000$ Contrib. as a % of covered employee payroll 3.22%4.95% Notes to Schedule: Assumptions and Methods Valuation Date: Measurement Date: Actuarial Cost Method: Amor tization Period: Asset Valuation Method: Actuarial Assumptions: Discount Rate 6.75% General Inflation 2.75% Payroll Increases Medical Trend PEMHCA Minimum Increases 4.25% Mortality Improvement Other Notes There were not changes in benefit terms. There were no changes in trend rates.. The discount rate decreased from 7.0% to 6.5% in fiscal year 2019. Midpeninsula Regional Open Space District Schedule of Contributions for Postemployment Benefits June 30, 2019 June 30, 2017 Aggregate - 3% Merit - CalPERS 1997-2015 experience study June 30, 2018 Entry age normal, level precentage of payroll Investment gains and loses spread over 5 year rolling period 10.2 years GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018. Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported. Non-medicare - 7.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Medicare - 6.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Mortality, Retirement, Disability, Termination Healthcare Participation for Future Retirees Currently covered: 90% Currently waived: 60% Post-retirement mortality projected fully generational with Society of Actuaries Scale MP-2017 CalPERS 1997-2015 experience study 77 Attachment 1 Fiscal Year Ended 2018 2019 Total OPEB liability Service cost 313,000$ 321,153$ Interest 326,000 361,203 Changes of benefit terms - - Differences between expected and actual experience - - Changes of assumptions - - Benefit payments (113,000) (162,000) Implicit subsidy fullfilled - - Net change in Total OPEB Liability 526,000 520,356 Total OPEB Liability - beginning 4,585,000 5,111,000 Total OPEB Liability - ending 5,111,000$ 5,631,356$ Plan fiduciary net position Employer contributions 513,000$ 412,000$ Employer implict subsidy - - Employee contributions - - Net investment income 287,000 259,143 Difference between estimated and actual earnings - - Benefit payments (113,000) (162,000) Implicit subsidy fullfilled - - Other - - Administrative expense (1,000) (6,064) Net change in plan fiduciary net position 686,000 503,079 Plan fiduciary net position - beginning 2,580,000 3,266,000 Plan fiduciary net position - ending 3,266,000$ 3,769,079$ Net OPEB liability (asset)1,845,000$ 1,862,277 Plan fiduciary net position as a percentage of the total OPEB liability 63.90%66.93% Covered Employee Payroll 11,834,150$ 12,802,887$ Net OPEB liability as a percentage of covered employee payroll 15.59%14.55% Total OPEB liability as a percentage of covered employee payroll 43.19%43.99% Other Notes There were not changes in benefit terms. There were no changes in trend rates.. The discount rate decreased from 7.0% to 6.5% in fiscal year 2019. GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018. Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported. Midpeninsula Regional Open Space District Schedule of Changes in Net OPEB Liability June 30, 2019 78 Attachment 1 Supplementary Information 79 Attachment 1 Page Intentionally Left Blank 80 Attachment 1 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. BOND 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 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes -$ -$ -$ -$ Grant income - - - - Property management - - - - Investment earnings - - 399,613 399,613 Other revenues - - - - Total revenues - - 399,613 399,613 Expenditures: Current Salaries and employee benefits - - - - Services and supplies 880,900 4,700 1,334 3,366 Capital outlay 38,359,100 35,999,584 34,854,151 1,145,433 Total expenditures 39,240,000 36,004,284 34,855,485 1,148,799 Excess (deficiency) of revenues over (under) expenditures (39,240,000) (36,004,284) (34,455,872) 1,548,412 Other financing sources (uses): Transfers in 3,294,050 3,294,050 37,148,401 33,854,351 Transfers out - - (1,481,755) (1,481,755) Total other financing sources (uses)3,294,050 3,294,050 35,666,646 32,372,596 Net change in fund balance (35,945,950) (32,710,234) 1,210,774 33,921,008 Fund balance beginning 7,043,765 7,043,765 7,043,765 - Fund balance ending (28,902,185)$ (25,666,469)$ 8,254,539$ 33,921,008$ Budgeted Amounts 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, 2019 82 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes -$ -$ -$ -$ Grant income 1,042,040 937,604 620,869 (316,735) Property management - - - - Investment earnings - - 1,726,441 1,726,441 Other revenues - - - - Total revenues 1,042,040 937,604 2,347,310 1,409,706 Expenditures: Current Salaries and employee benefits 1,176,946 866,386 368,306 498,080 Services and supplies 18,000 18,000 2,054 15,946 Capital outlay 13,631,078 11,745,696 10,501,506 1,244,190 Total expenditures 14,826,024 12,630,082 10,871,866 1,758,216 Excess (deficiency) of revenues over (under) expenditures (13,783,984) (11,692,478) (8,524,556) 3,167,922 Other financing sources (uses): Transfers in - - - - Transfers out - - - - Total other financing sources (uses)- - - - Net change in fund balance (13,783,984) (11,692,478) (8,524,556) 3,167,922 Fund balance beginning 46,468,809 46,468,809 46,468,809 - Fund balance ending 32,684,825$ 34,776,331$ 37,944,253$ 3,167,922$ Budgeted Amounts 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, 2019 83 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes 5,733,551$ 5,733,551$ 5,238,150$ (495,401)$ Grant income - - - - Property management - - - - Investment earnings 940,000 940,000 118,773 (821,227) Other revenues - - - - Total revenues 6,673,551 6,673,551 5,356,923 (1,316,628) Expenditures: Debt service: Principal 15,670,990 15,670,990 6,480,000 9,190,990 Interest - - 9,190,988 (9,190,988) Total expenditures 15,670,990 15,670,990 15,670,988 2 Excess (deficiency) of revenues over (under) expenditures (8,997,439) (8,997,439) (10,314,065) (1,316,626) Other financing sources (uses): Transfers in 11,320,585 11,320,585 11,298,825 (21,760) Transfers out - - - - Total other financing sources (uses)11,320,585 11,320,585 11,298,825 (21,760) Net change in fund balance 2,323,146 2,323,146 984,760 (1,338,386) Fund balance beginning 5,791,164 5,791,164 5,791,164 - Fund balance ending 8,114,310$ 8,114,310$ 6,775,924$ (1,338,386)$ Budgeted Amounts 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, 2019 84 Attachment 1 Expenditures Expenditures from from July 1, 2018 Inception through through Project No.Project Description June 30, 2019 June 30, 2019 20005 New Trail Easement - SFPUC, Ravenswood (MAA 2-2)(22,603)$ A -$ -$ 20088 POST Hendry's Creek Restoration (MAA 22-1)(41,330) B - - 20101 Lysons Property ( 17-1 MAA )(27,059) C - - 20102 Lobner Demolition (MAA 17-2)(128,760)C - - 20109 Riggs Property Appraisal - (3-1 MAA)(6,500) D - - 20110 Purisima Creek Uplands Lot line Adjustment (3-1 MAA)(13,000) D - - 20112 Conservation Easement Upper Alpine Ranch Area (15-1 MAA)(8,695) E - - 20113 Preservation of Upper Los Gatos Creek Watershed (22-1 MAA)(5,000) B - - 20114 Land Conservation Opportunities MAA 25-1 (Burtons )(150) F - - 30503 ECDM Trail Improvements (MAA 4-4)(3,930) G - - 30904 Mindego Area - Mindego Hill Trail (MAA 9-4)(34,196) H - - 31309 Mt Um Bald Mtn Staging to Summit Trail (MAA 23-2)(17,646) I - - 31310 Mt Um Summit Restor & Improv (MAA 23-4)(79,491) I - - 31311 Mt Um Trail Overlook & Bridges (MAA 23-5)(243) I - - 31500 Measure AA Project 11-1 (728) J - - 65101 PCR Harkins Bridge Replacement (MAA 3-4)(108,788)D - - 65201 Lower Stevens Canyon Hiking Bridge (MAA 17-4)(103,187)C - - 80016 ECdM Creek Watershed Protection Program (MAA 4-3)(45,507) G - - 80029 Pond DR05 Repair (MAA 7-5)(150,682)K - - 80037 Mindego Grazing Infrastructure (MAA 9-1)(135,748)H - - 80038 LHC Grazing Infrastructure - McDonald Ranch Fencing (MAA 5-2)(178,850)L - - AA01 Miramontes Ridge - Gateway to San Mateo Coast - (52,915.00) - AA02 Bayfront Habitat Protection & Public Access Partnerships 22,603 A 1,327,008.00 2,046,671 AA03 Purisima Creek Redwoods: Purisma-to Sea Trail, Watershed/Graze 128,288 D 160,306.00 1,270,676 AA04 El Corte de Madera Creek: Bike Trail & Water Quality 49,437 G 306,910.00 886,868 AA05 La Honda Creek - Upper Recreation Area 178,850 L 17,055.00 2,428,759 AA06 Hawthorn Public Access Improvements - 18,112.00 26,602 AA07 Driscoll Ranch Public Access, Wildlife Protection, Grazing 150,682 K 121,948.00 12,161,434 AA08 La Honda/Russian Ridge: Upper San Gregorio Watershed - 2,153,910.00 2,153,910 AA09 Russian Ridge: Public Recreation, Grazing & Wildlife Protection 169,944 H 77,512.00 319,467 AA10 Coal Creek: Reopen Alpine Road for Trail Use - 144,173.00 166,122 AA11 Rancho San Antonio: Interpretive Improvements, Refurbishing 728 J 3,025.00 33,264 AA15 Regional: Redwood Protection & Salmon Fishery Conservation 8,695 E 14,500.00 3,033,050 AA17 Regional: Complete Upper Stevens Creek Trail 259,006 C 275,086.00 2,055,333 AA18 South Bay Foothills: Saratoga-to-Sea Trail & Wildlife Corridor - 3,850.00 3,850 AA19 El Sereno Dog Park & Connections - 52,977.00 480,242 AA20 South Bay Foothills: Wildlife Passage/Ridge Trail Improvements - 193,367.00 390,203 AA21 CR:Pub Recreation Proj - 4,848,581.00 8,275,686 AA22 Cathedral Oaks Public Access & Conservation 46,330 B 368,992.00 1,077,895 AA23 Mt Um Pub Access/Intrep 97,380 I 852,369.00 22,934,442 AA24 Rancho de Guadalupe Family Recreation - (14,900.00) 1,591,996 AA25 Loma Prieta Area Public Access 150 F - 410,150 Total MAA Bond Project Expenditures - 10,871,866 61,746,620 Reimbursements from Grants, Contributions, and Other Funds - (620,869) (3,315,613) Total MAA Bond Project Expenditures - Net Reimbursements -$ 10,250,997$ 58,431,007$ During fiscal ye ar ending June 30, 2019,the District realigned pre-existing project numbers eligible for Measure AA (MAA)funding with the Measure AA projects numbers (MAA)for ease of project review.Letters in adjustment column indicate the transfer of expenses between project numbers.Prior expenditure balances related to appraisals and land surveys in MAA01 "Miramontes Ridge -Gateway to San Mateo Coast"and MAA24 “Sierra Azul:Rancho de Guadalupe Family Recreation Projects”were removed as the transactions failed to materialize. Adjustments Midpeninsula Regional Open Space District Measure AA Bond Program Schedule of Program Expenditures June 30, 2019 85 Attachment 1 Midpeninsula Regional Open Space District Notes to Supplementary Information June 30, 2019 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, 2019, the District has acquired and / or preserved over 1,700 acres of land with $24 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 year,the Committee’s findings will be presented to the Board at a public meeting and will be posted on the District’s website. NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basis of accounting utilized in preparation of this report may differ from accounting principles generally accepted in the United States of America. Accordingly, the accompanying program statement is not intended to present the financial position and the results of operations in conformity with accounting principles generally accepted in the United States of America.Expenditures incurred with Measure AA Bond proceeds are recorded on a modified accrual basis of accounting. Under the modified accrual basis of accounting, revenue is recognized when it is measureable and available. Similarly,expenses are recognized when they are incurred, not when they are paid. 86 Attachment 1 Statistical Information 87 Attachment 1 Page Intentionally Left Blank 88 Attachment 1 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 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Governmental activities Net investment in capital assets 225,092$ 236,546$ 245,393$ 259,638$ 268,869$ 278,611$ 276,395$ 308,601$ 312,121$ 351,152$ Restricted 1,417 1,408 1,568 2,731 4,327 2,566 5,786 4,571 7,252 8,207 Unrestricted 30,450 28,142 42,738 36,919 37,951 39,948 39,280 23,831 29,415 8,015 Total Net Position 256,959$ 266,096$ 289,699$ 299,288$ 311,147$ 321,125$ 321,461$ 337,003$ 348,788$ 367,374$ 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, FY 2015-16 is a fifteen (15) month period rather than a twelve (12) month period. Midpeninsula Regional Open Space District Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 90 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Expenses Governmental activities Land preservation 13,254$ 13,768$ 14,312$ 19,338$ 17,930$ 19,478$ 26,080$ 21,783$ 28,910$ 34,304$ Interest and fiscal charges 6,208 6,739 7,483 7,273 7,163 7,202 9,752 8,327 8,193 10,449 Depreciation 715 882 806 840 1,095 1,232 1,311 1,585 2,399 - Loss on refunding of debt 381 - - - - - - - - - Total governmental activities expenses 20,558 21,389 22,601 27,451 26,188 27,912 37,143 31,695 39,502 44,753 Program Revenues Governmental Activities Charges for Services 911 1,241 1,320 1,381 1,422 1,437 1,636 1,479 1,576 2,360 Grants and Contributions 659 1,393 1,453 913 1,901 953 1,194 651 1,613 1,082 Land donations 2,259 17 13,928 3,890 - - - - - - Total governmental activities program revenues 3,829 2,651 16,701 6,184 3,323 2,390 2,830 2,130 3,189 3,442 Net (expense)/revenue - governmental activities (16,729) (18,738) (5,900) (21,267) (22,865) (25,522) (34,313) (29,565) (36,313) (41,311) General Revenues and Other Changes in Net Position Governmental Activities Property taxes 27,631 27,269 28,737 30,270 32,433 35,082 44,980 43,861 47,798 54,395 Investment earnings - 294 375 288 138 202 648 463 1,045 3,628 Use of money and property 80 - - - - - - - - - Miscellaneous 216 311 394 298 182 216 810 784 1,153 1,874 Total governmental activities 27,927 27,874 29,506 30,856 32,753 35,500 46,438 45,108 49,996 59,897 Change in Net Position Governmental activities 11,198 9,136 23,606 9,589 9,888 9,978 12,125 15,543 13,683 18,586 Prior period adjustments - - - - 1,971 - (11,790) - (1,898) - Total Changes in Net Position 11,198$ 9,136$ 23,606$ 9,589$ 11,859$ 9,978$ 335$ 15,543$ 11,785$ 18,586$ 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, FY 2015-16 is a fifteen (15) month period rather than a twelve (12) month period. Starting FY 2018-19 depreciation expenses were allocated to land preservation. Midpeninsula Regional Open Space District Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 91 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 General fund Reserved 579$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved, designated in 15,657 - - - - - - - - - Unreserved, reported in 12,678 - - - - - - - - - Nonspendable - - - - - - - 55 36 186 Restricted - 731 - - 1,702 1,702 1,971 1,971 1,467 3,963 Committed - - - - - 20,400 35,400 35,400 42,300 29,288 Assigned - - - - 5,000 - - - - 1,400 Unassigned - 26,156 41,782 37,513 34,453 21,330 16,848 23,872 29,306 16,515 Total General Fund 28,914$ 26,887$ 41,782$ 37,513$ 41,155$ 43,432$ 54,219$ 61,298$ 73,109$ 51,352$ All other governmental funds Reserved 1,417$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Restricted - 1,408 1,568 1,634 1,621 - 26,894 9,539 59,304 52,975 Total all other governmental funds 1,417$ 1,408$ 1,568$ 1,634$ 1,621$ -$ 26,894$ 9,539$ 59,304$ 52,975$ 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, FY 2015-16 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 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 REVENUES Property taxes 27,631$ 27,269$ 28,737$ 30,270$ 32,433$ 35,082$ 44,980$ 43,861$ 47,798$ 54,395$ Grant income 659 1,393 1,453 913 1,901 953 1,194 651 1,613 1,082 Property management 911 955 1,320 1,381 1,422 1,438 1,636 1,479 1,576 2,360 Investment earnings 80 294 375 288 150 216 666 480 1,064 3,649 Other 224 551 240 146 145 241 644 609 348 641 Land donation 2,258 17 13,928 - - - - - - - TOTAL REVENUE 31,763 30,479 46,053 32,998 36,051 37,930 49,120 47,080 52,399 62,127 EXPENDITURES Land Preservation 13,070 13,682 13,996 18,713 17,303 18,272 28,965 25,807 28,226 29,186 Capital outlay 18,557 11,596 27,190 9,611 8,231 8,445 18,901 19,961 16,440 45,356 Debt service: Principal and advance refunding escrow 2,900 3,301 4,457 2,843 2,999 3,145 4,367 5,193 6,392 6,480 Interest and fiscal charges 4,919 4,786 5,355 6,034 5,859 5,749 6,478 7,190 6,597 9,191 TOTAL EXPENDITURES 39,446 33,365 50,998 37,201 34,392 35,611 58,711 58,152 57,655 90,213 EXCESS (DEFICIT) OF REVENUES OVER EXPENDITURES (7,683) (2,886) (4,945) (4,203) 1,659 2,319 (9,591) (11,072) (5,256) (28,086) OTHER FINANCING SOURCES AND USES Transfers in 7,829 7,974 9,827 8,877 8,858 8,894 12,146 15,839 9,409 49,929 Transfers out (7,829) (7,974) (9,827) (8,877) (8,858) (8,894) (12,146) (15,839) (9,409) (49,929) 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 - - - - - - - - - - NET CHANGES IN FUND BALANCES (7,683)$ (2,036)$ 15,055$ (4,203)$ 1,659$ 657$ 37,691$ (10,285)$ 61,575$ (28,086)$ Capitalized capital outlay expenditures 18,557 11,596 28,306 13,501 7,486 7,906 18,222 20,265 17,411 45,355 Debt Service as a percentage of noncapital expenditures 37.43%37.15%43.24%37.46%32.92%32.10%26.79%32.69%32.28%34.93% 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, FY 2015-16 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 Attachment 1 Fiscal Year Secured State Board Unsecured Total before Rdv. Increment Total after Rdv. Increment Total Direct Tax Rate 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% 2019 188,007,378 8,646 10,266,764 198,282,788 191,359,437 1.00% Fiscal Year Secured State Board Unsecured Total before Rdv. Increment Total after Rdv. Increment Total Direct Tax Rate 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% 2019 85,236,395 2,658 2,756,478 87,995,531 79,176,299 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, FY 2015-16 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 Attachment 1 Fiscal Year General Property Tax Levy Other Overlapping Governments Open Space District Total General Property Tax Levy Other Overlapping Governments Open Space District Total 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 2019 1.00000 0.17126 0.00180 1.17306 1.00000 0.09240 0.00180 1.09420 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, FY 2015-16 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 $8,109,918,455, which is 3.60% of the District’s total assessed valuation. 4 Fiscal Year 2015-16 was the first year in which ad valorem property taxes authorized by Measure AA were levied. Midpeninsula Regional Open Space District Property Tax Rates Direct and Overlapping1 Property Tax Rates Last Ten Fiscal Years County of Santa Clara (Tax Rate Area 6-001) 2 County of San Mateo (Tax Rate Area 9-001) 3 95 Attachment 1 Taxpayer Taxable Assessed Valuation Rank Percentage of Total Assessed Valuation Taxable Assessed Valuation Rank Percentage of Total Assessed Valuation Board of Trustees, Leland Stanford Jr. University 6,609,910$ 1 2.48%4,249,763$ 1 2.66% Google Inc.5,351,042 2 1.39%436,617 7 0.27% Campus Holdings Inc. 3,504,317 3 1.22%** Apple Computer Inc. 1,226,952 4 0.49%659,212 2 0.41% Hibscus Properties LLC 1,107,164 5 *** Sobrato Interests 1,063,697 6 0.31%** Lockheed Missiles and Space Co. Inc.890,576 7 0.39%558,761 3 0.35% Yahoo Holdings Inc.656,370 8 *416,320 8 0.26% Oracle Corp. 638,903 9 0.25%530,234 4 0.33% Richard T. Spieker, Trustee 616,741 10 *** Menlo & Juniper Networks LLC 612,073 11 0.24%** Applied Materials Inc.531,041 12 0.19%414,549 9 0.26% Facebook Inc.490,838 13 *** Intuitive Surgical Inc.490,801 14 *** Peninsula Innovation Partnersh LLC 471,036 15 *** CW SPE LLC 459,732 16 *** Woodland Park Property Owner LLC 418,738 17 *** 441 Real Estate LLC 406,680 18 *** Network Appliance Inc. 383,803 19 0.20%464,314 6 0.29% LinkedIn Corporation 376,325 20 *** VII Pac Shores Investors LLC **506,399 5 0.32% Arden Realty LP **372,904 11 0.23% HCP Life Science REIT Inc.**316,304 14 0.20% Wells REIT II-University Circle LP **310,934 15 0.19% SPF Mathilda LLC **277,440 16 0.17% Silicon Valley CA I LLC **259,131 17 0.16% Westport Office Park LLC **254,372 18 0.16% Spansion LLC **229,155 19 0.14% Loral Space & Communications, Inc.**210,131 20 0.13% Hewlett Packard Co.**317,777 13 0.20% Symantec Corporation **376,878 10 0.24% Sun Microsystems Inc. **355,400 12 0.22% Total 26,306,739$ 7.16%11,516,595$ 7.19% * 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 2010Fiscal Year 2019 96 Attachment 1 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% 2019 3,365,744 1,532,834 3,348,991 99.5%1,524,259 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, FY 2015-16 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 Attachment 1 Fiscal Year General Obligation Bonds Debt Service Monies Available Total Taxable Assessed Value Percentage of Taxable AV 1 Per Capita 2 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 2019 102,880 6,776 96,104 270,535,736 0.036%* *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, FY 2015-16 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 Attachment 1 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 2010 -$ 65,049$ 52,204$ 663$ 5,755$ 123,671$ 160,376,725$ 0.077% 0.113%916$ 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%** 2019 102,880 750 75,460 25,567 33,749 238,406 270,535,736 0.088%** *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, FY 2015-16 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) 99 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Assessed Valuation: Assessed value subject to debt levy 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$270,535,736$ Total assessed valuation 160,376,725 159,777,663 162,250,428 169,774,177 183,976,034 195,005,584 214,740,668 231,940,459 250,718,954 270,535,736 Debt Applicable to Limitation: Total debt 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 2,194 5,785 - Total debt applicable to limitation 123,671 123,019 140,539 138,952 140,159 136,564 177,259 179,757 239,890 - Legal Debt Margin: Bonded debt limit (15% AV)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 40,580,360 Debt applicable to limitation 123,671 123,019 140,539 138,952 140,159 136,564 177,259 179,757 239,890 - Legal debt margin 23,932,838$ 23,843,630$ 24,197,025$ 25,327,175$ 27,456,246$ 29,114,274$ 32,033,841$ 34,611,312$ 37,367,953$ 40,580,360$ 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, FY 2015-16 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) 100 Attachment 1 Fiscal Year Population 1 Personal Income 2 (in millions) Per Capita Personal Income 2 Median Age 3 School Enrollment 4 County Unemployment Rate 5 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% 2019 1,954,286 ***267,224 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 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% 2019 774,485 ***94,234 2.4% * 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, FY 2015-16 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 Attachment 1 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 and County of Santa Clara. 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 4 2009 102 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function Office of the General Manager 3.00 3.00 4.00 4.00 4.00 5.00 6.00 8.00 8.00 8.00 Real Property 5.00 5.00 5.00 5.00 5.00 6.00 7.00 4.00 5.00 5.00 Plannning 13.50 14.00 14.00 14.00 14.00 14.00 14.00 10.50 11.50 10.50 Engineering & Construction N/A N/A N/A N/A N/A N/A N/A 5.50 7.50 7.50 Public Affairs 8.00 8.00 8.00 9.00 9.00 11.00 12.00 8.00 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 4.75 4.75 5.25 9.25 9.25 10.25 Human Resources 2.00 2.00 2.50 3.50 3.50 5.50 7.00 7.00 7.00 7.00 Information Technology 1 1.00 1.00 1.00 2.00 2.50 2.50 5.50 7.50 7.50 7.50 Operations Administration 6.50 6.00 6.00 6.00 6.00 6.00 6.00 N/A N/A N/A Patrol 23.00 28.00 28.00 28.00 28.00 31.00 32.00 N/A N/A N/A Land/Facilities Maintenance 20.00 26.00 26.00 26.00 26.00 28.30 30.30 N/A N/A N/A Resource Management 2 6.00 6.00 N/A 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 49.30 53.30 56.30 Visitor Services N/A N/A N/A N/A N/A N/A N/A 41.90 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 8.00 8.00 8.00 9.00 10.00 11.00 12.00 12.00 Total 94.75 105.75 109.25 112.25 114.25 126.55 138.55 165.45 174.45 177.45 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 103 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function Land: Number of preserves 26 26 26 26 26 26 26 26 26 26 Acreage: Santa Clara County 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 33,630.26 San Mateo County 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 29,854.41 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)(1,802.88)(1,802.88) Total 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 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 3 3 Visitor Center 2 2 2 2 2 2 2 2 2 2 Vehicles & Equipment: Patrol vehicles 32 35 37 39 41 38 37 42 36 34 Service vehicles 3 3 3 3 5 8 10 13 10 11 Maintenance vehicles 5 6 8 9 13 16 19 25 29 31 Administrative vehicles n/a n/a n/a n/a n/a n/a n/a n/a 13 13 Motorcycles/ATVs/Electric bicycles 13 13 13 13 13 13 13 13 27 27 Bulldozers/excavators/tractors 16 17 17 20 21 21 23 23 20 23 Dump trucks 3 4 4 4 4 5 5 5 4 6 Water Truck 1 1 2 2 2 2 2 2 2 2 Trailers n/a n/a n/a n/a n/a n/a n/a n/a 25 27 Chippers/mowers 2 2 2 2 4 4 5 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 104 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function General Manager Board meetings 37 31 45 36 35 33 31 31 44 32 Resolutions adopted 50 41 56 20 39 61 61 40 46 47 Real Property Acres preserved Santa Clara County 204.25 547.04 492.99 16.30 152.01 100.41 107.50 83.28 178.18 2.11 San Mateo County 1,263.40 115.17 921.35 1,043.14 309.37 393.26 81.45 191.38 20.46 190.00 Public Affairs Stewardship volunteer hours 9,849 11,314 11,843 11,232 13,579 14,354 15,839 17,440 16,088 15,910 Interpretation and education docent hours 3,305 5,433 4,669 5,559 4,718 5,828 4,462 4,697 4,320 4,438 Website visits 274,559 274,133 434,402 349,398 359,432 418,748 429,891 487,215 589,280 524,387 Operations Bicycle Accident 25 22 36 37 30 20 26 19 37 13 Equestrian Accident 2 1 1 2 - 1 2 - - 1 Hiking/Running Accident 21 18 16 16 22 20 14 37 40 11 Other first aid 10 15 25 24 15 25 26 23 31 13 Search & rescue 11 15 10 8 5 8 3 4 2 2 Vehicle Accident 8 11 16 15 14 19 14 17 50 15 Fire 6 5 7 8 16 9 10 9 13 4 HazMat 3 3 - - 1 1 6 1 3 1 Subject Citation/Juvenile Contact Report 558 509 526 737 617 825 767 678 592 405 Parking Citation 386 434 527 621 584 700 645 836 870 375 Arrests 2 1 1 2 1 4 3 2 - 2 Day Permits 954 1,059 1,235 1,237 1,521 2,154 2,541 2,530 2,676 2,417 Multi-day permits 214 248 225 253 306 306 321 366 419 361 Camping permits 221 259 341 336 393 476 573 613 570 571 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 105 Attachment 1 Page Intentionally Left Blank 106 Attachment 1 Other Independent Auditor’s Reports 107 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 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 To the Board of Directors of the Midpeninsula Regional Open Space District Los Altos,California We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of Midpeninsula Regional Open Space District (the District)as of and for the year ended June 30, 2019,and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 11, 2019. 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 District’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies.Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,and grant agreements, noncompliance with which could have a direct and 108 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 1475 Saratoga Ave, Suite 180, San Jose, CA 95129 Tel: 408-217-8749 •E-Fax: 408-872-4159 info@cnallp.com •www.cnallp.com 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 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 District’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 District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. November 11, 2019 San Jose, California 109 Attachment 1 Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022-1404 650-691-1200 info@openspace.org openspace.org PRINTED ON POST CONSUMER WASTE PAPER Russian Ridge Open Space Preserve by Jim Mosher Photos on front cover: Top photo: Purisima Creek Redwoods Open Space Preserve by Maila Pinlacperez Second row, left to right: Russian Ridge Open Space Preserve by Rosalina Calderon; Rancho San Antonio Open Space Preserve by Selwyn Quan; Russian Ridge Open Space Preserve by Karl Kohl Attachment 1 Resolutions/2019/19-__FundTransfers 1 RESOLUTION NO. 19-___ RESOLUTION OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT APPROVING THE TRANSFER OF FUNDS FROM THE GENERAL FUND UNASSIGNED FUND BALANCE INTO THE COMMITTED FOR INFRASTRUCTURE RESERVE FUND, THE COMMITTED FOR CAPITAL MAINTENANCE FUND, AND THE COMMITTED FOR FUTURE ACQUISITION/CAPITAL PROJECTS FUND WHEREAS, the Unassigned Fund Balance of the Midpeninsula Regional Open Space District is $22,515,392 as of June 30, 2019; and WHEREAS, per the Fund Balance Policy as adopted by the Board of Directors on October 26, 2016, the minimum required Unassigned Fund Balance of the Midpeninsula Regional Open Space District is $15,616,500 as of July 1, 2019; and WHEREAS, the District issued the 2017 Parity Bonds to finance the acquisition and renovation of the South Area Office and the renovation of the new Administrative Office; and WHEREAS, given the construction market and inflation, the District is anticipated to incur increased future construction and maintenance costs for capital projects and assets; and WHEREAS, the District expects to require further funding in order to continue its program of land acquisition, and construction and maintenance of capital projects; and WHEREAS, the General Manager recommends allocating unassigned funds from the General Fund Unassigned Fund Balance in order to increase the Committed for Infrastructure Reserve Fund for acquisition of a new administrative office and renovation of staff facilities; the Assigned for Ongoing Capital Projects Fund to provide financing for ongoing capital projects; and transferring the balance of the Committed for Natural Disasters Fund to the Committed for Capital Maintenance & Repair Fund for the future costs to be incurred for the maintenance, repair and replacement of District assets. NOW, THEREFORE, the Board of Directors of the Midpeninsula Regional Open Space District does resolve as follows: SECTION ONE. The following transfers are approved and the General Manager or designee is authorized to implement said transfers as follows: $4,600,000 from the General Fund Unassigned Fund Balance to the Committed for Infrastructure Reserve Fund, $3,000,000 from the Committed for Natural Disasters to the Committed for Capital Maintenance & Repair Fund, and $1,400,000 from the General Fund Unassigned Fund Balance to the Assigned Fund for Ongoing Capital Projects. * * * * * * * * * * * * * * * * * * * * ATTACHMENT 2 PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional Open Space District on _____, 2019, at a regular meeting thereof, by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: APPROVED: Secretary Board of Directors President Board of Directors APPROVED AS TO FORM: General Counsel I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify that the above is a true and correct copy of a resolution duly adopted by the Board of Directors of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly held and called on the above day. District Clerk Midpeninsula Regional Open Space District Board Policy Manual Fund Balance Policy in Accordance with GASB Statement No. 54 Policy 3.07 Chapter 3 – Fiscal Management Effective Date: 11/25/14 Revised Date: 11/20/201906/27/2018 Prior Versions: 11/25/14, 10/26/16, 06/27/2018 Board Policy 3.07 Page 1 of 3 Purpose The following policy is created and approved by the Board of Directors in order to [1] provide adequate funding to meet the District’s short-term and long-term plans, [2] provide funds for unforeseen expenditures related to emergencies such as natural disasters, [3] strengthen the financial stability of the District against present and future uncertainties such as economic downturns and revenue shortfalls, and [4] maintain an investment-grade bond rating. This policy has been developed, with the counsel of the District auditors, to meet the requirements of GASB 54. This policy identifies the required components of fund balance, the level of management authorized to approve or change target balances in each fund, the amounts that the District will strive to maintain in each fund, and the conditions under which fund balances may be spent, reimbursed and reviewed. Policy The components of District fund balance are as follows: Non-Spendable fund balance includes amounts that cannot be spent either because they are not in spendable form, e.g. prepaid insurance, or because of legal or contractual constraints. At all times, the District shall hold fund balance equal to the sum of its non-spendable assets. Restricted fund balance includes amounts that are constrained for specific purposes which are externally imposed by constitutional provisions, enabling legislation, creditors, or contracts. Individual funds will be identified by the General Manager and Controller and the amounts set based on legal or contractual requirements. Funds may only be spent as specified by contract or as externally directed. The continuing need for each fund and the amount reserved will be reviewed annually. Committed fund balance includes amounts that are constrained for specific purposes that are internally imposed by the District Board of Directors. Individual funds and target amounts will be established by the Board. Committed funds may include but are not limited to: Capital Maintenance, Equipment Replacement, Infrastructure, Natural Disasters, and Promissory Note. Projects to be funded by committed funds require the approval of the Board. The continuing need Attachment 3 Board Policy 3.07 Page 2 of 3 for each fund and the amount reserved will be reviewed annually. Any changes require the approval of two-thirds of the Board. Assigned fund balance includes amounts that are intended to be used for specific purposes that are neither restricted nor committed. Such amounts may be assigned by the General Manager if authorized by the Board of Directors to make such designations. Projects to be funded by assigned funds require the approval of the General Manager. The continuing need for each fund and the amount reserved will be reviewed annually. Unassigned fund balance includes amounts within the general fund, which have not been classified within the above categories. The minimum amount of unassigned fund balance is calculated as 30% of the Budgeted General Fund Tax Revenue. This minimum unassigned fund balance is to be held in reserve in consideration of unanticipated events that could adversely affect the financial condition of the District and jeopardize the continuation of necessary public services. Any spending from this minimum general fund reserve requires the approval of the Board. Any such spending will be reimbursed within two years. If such reimbursement exceeds 5% of the Budgeted General Fund Tax Revenue, the Board may decide to limit the reimbursement at 5% and extend the reimbursement period beyond two years, as needed. The minimum reserve amount calculation will be reviewed annually as part of the annual budget process. The specific reserve funds are as follows: Restricted Funds [1] Retiree Healthcare Plan Fund: established in 2008 with a $1.9 million contribution to the California Employers’ Retiree Benefit Trust; all withdrawals per Board-approved plan; amount of annual contribution authorized by the Board as part of the annual budget. [2] Hawthorns Fund: established in 2011 with a $2.0 million endowment from the Woods Family Trust, to provide stewardship funding for the Hawthorns property in Portola Valley; amount to be withdrawn each year authorized by the Board as part of the annual budget. [3] Section 115 Trust: established in 2018 with an initial deposit of $500,000 to provide an alternative investment vehicle to pre-fund the District’s unfunded pension liabilities. Additional contributions to the trust fund will be authorized by the Board. Committed Funds [1] Capital Maintenance Fund: Implementation of the 2011 Strategic Plan, 2014 Vision Plan, and Measure AA projects will require District assets to be in good working order; annual maintenance costs for existing District assets are anticipated. Funding for such capital maintenance expenditures is not available from general obligation bonds under Measure AA. This fund may also serve as a funding source for needed repairs to District built and natural infrastructure (including, but not limited to trails, streams, ponds and other natural infrastructure) arising from natural disasters. The General Manager will recommend, and the Board may authorize, an initial reserve amount associated with maintenance of a particular improvement. The amount to be Attachment 3 Board Policy 3.07 Page 3 of 3 withdrawn each year for the Capital Maintenance Fund will be authorized by the Board as part of the annual budget. [2] Equipment Replacement Fund: Implementation of District projects requires corresponding purchase and replacement of field and office equipment and vehicles. The General Manager will recommend, and the Board may authorize, an initial reserve amount associated with equipment replacement needs. The amount to be withdrawn each year for the Equipment Replacement Fund will be authorized by the Board as part of the annual budget. [3] Infrastructure Fund: Implementation of the 2011 Strategic Plan, 2014 Vision Plan, and Measure AA projects will require expansion of field and office facilities beginning in fiscal 2016. The amount to be withdrawn each year for the Infrastructure Fund will be authorized by the Board as part of the annual budget. [4] Natural Disaster Fund: The District must be prepared to undertake emergency expenditures required to respond quickly to a major fire, earthquake or flood. The General Manager will recommend, and the Board may authorize an initial reserve amount to prepare for natural disasters. All withdrawals from the Natural Disaster Fund require the approval of the General Manager. [45] Promissory Note Sinking Fund: The District has the Hunt Promissory Note, an interest only loan with a balloon principal payment due in FY2022/23. The General Manager will recommend, and the Board may authorize an initial reserve amount, with annual contributions continuing through FY2022/23. The amount to be withdrawn from the Promissory Note Fund (anticipated in FY2022/23; intended for the principal balloon payment) will be authorized by the Board as part of the annual budget. Once the principal has been paid and the Promissory Note is retired, this paragraph may be administratively removed from the Policy. Assigned Funds [1] Assigned Fund for Ongoing Capital Projects: NoneRepresents unspent prior year fiscal encumbrances rolled forward as a funding source for ongoing capital projects. Attachment 3 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT FINANCING AUTHORITY R-19-151 Meeting 19-29 November 20, 2019 AGENDA ITEM 1 AGENDA ITEM Acceptance of the Annual Financial Report of the Midpeninsula Regional Open Space District Financing Authority for Fiscal Year Ending June 30, 2019 CONTROLLER’S RECOMMENDATION Accept the Annual Financial Report. DISCUSSION In May 1996, the Midpeninsula Regional Open Space District (District) and Santa Clara County established the Financing Authority with the purpose of providing financing assistance to the District to fund the acquisition and preservation of open space land and to finance public capital improvements. The current members of the Financing Authority are President Pete Siemens, Director Yoriko Kishimoto, Director Larry Hassett, Director Jed Cyr, and Santa Clara County Supervisor Joe Simitian. Accordingly, the District and the Financing Authority are accounted as one blended unit for financial statement purposes. On November 11, 2019, the District’s independent auditors, Chavan & Associates, LLP., issued its report on the District’s financial statements for the fiscal year ending June 30, 2019 (Attachment 1). Through June 30, 2019, the District has sold six series of Financing Authority bonds, with a total par value of $199.6 million. A summary of the six financings is shown in Table 1 below. Excluding the 2007 Bonds, which raised no new money and only refinanced existing Financing Authority bonds, the District has issued $140.5 million (net) of Financing Authority bonds, funding $77 million of new land acquisitions and repaying $60 million of prior public and private debt, which had been issued at higher interest rates and for shorter maturities. Table 1: District Financings Issuance Par Amount TIC* Purpose 1996 Bonds $29.9 M 6.25% $11M Land + pay-off 1988 Notes 1999-1 Bonds $29.7 M 5.26% $21M Land + pay-off 1992 Notes 1999-2 Bonds $28.4 M 5.93% $15M Land + pay-off 1990 Notes 2004 Bonds $31.9 M 4.99% $10M Land + pay-off 1993 Certificates of Participation 2007 Bonds $59.2 M 4.57% Pay-off 1996 & 1999-2 Notes 2011 Bonds $20.5 M 5.60% Purchase $20M of Land * TIC = Total Interest Cost, including all costs of issuance R-19-151 Page 2 Only a small piece of one Financing Authority bond issue remained outstanding on June 30, 2019, with a total outstanding balance of $0.93 million, repayable through 2022. The interest cost of these outstanding Financing Authority bonds is 4.00%. A summary of the activity on the Financing Authority bonds in fiscal 2018 is shown below. Table 2: FY2018-19 Financing Authority Activity ($ thousands) Balance June 30, 2018 Principal Paid Balance June 30, 2019 Interest Paid FY19 2011 Bonds $930 $180 $750 $33.60 There are no plans to issue additional debt through the Financing Authority. FISCAL IMPACT No unbudgeted fiscal impacts are associated with this item. BOARD COMMITTEE REVIEW This item was not previously reviewed by a Board Committee. PUBLIC NOTICE Notice was provided pursuant to the Brown Act. No additional notice is necessary. CEQA COMPLIANCE No compliance is required as this action is not a project under the California Environmental Quality Act. NEXT STEPS An annual report will be provided until the bonds are paid in full (last payment is September 1, 2021). Attachment 1. District’s Financial Statements for the Fiscal Year ended June 30, 2019. Responsible Department Head: Stefan Jaskulak, Chief Financial Officer Prepared by: Andrew Taylor, Finance Manager Comprehensive Annual Financial Report ————————————————————————————————————————————————————————— FISCAL YEAR ENDED JUNE 30, 2019 Managing nearly 65,000 acres of public open space land in 26 preserves across parts of San Mateo, Santa Clara and Santa Cruz counties Midpeninsula Regional Open Space District Attachment 1 Page Intentionally Left Blank Attachment 1 Comprehensive Annual Financial Report Fiscal Year Ended June 30, 201 9 Midpeninsula Regional Open Space District Prepared by: Finance and Administrative Services Attachment 1 Page Intentionally Left Blank Attachment 1 Introductory Section Attachment 1 Page Intentionally Left Blank Attachment 1 Midpeninsula Regional Open Space District Santa Clara County Comprehensive Annual Financial Report For the Year Ended June 30, 2019 TABLE OF CONTENTS TITLE PAGE INTRODUCTORY SECTION Table of Contents......................................................................................................................... 1 Transmittal Letter ........................................................................................................................ 3 Board of Directors & Management.............................................................................................. 9 Organizational Chart .................................................................................................................... 10 Regional Map............................................................................................................................... 11 Achievement Award .................................................................................................................... 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 Net 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 Attachment 1 Midpeninsula Regional Open Space District Santa Clara County Comprehensive Annual Financial Report For the Year Ended June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022 November 20, 2019 Members of the Board of Directors and Midpen Constituents: The Comprehensive Annual Financial Report (CAFR) of the Midpeninsula Regional Open Space District (District) for the year ended June 30, 2019 is hereby submitted. The CAFR has been prepared by the Finance Department in compliance with the principles and standards for financial reporting promulgated by the Governmental Accounting Standards Board (GASB). The CAFR consists of District management’s representations concerning the finances of the District. Management assumes full responsibility for completeness, accuracy of data, and fairness of presentation, including all footnotes and disclosures, and believes the data presented is accurate in all material respects and is presented in a manner designed to fairly set forth the financial position and results of operations of the District. The District’s accounting records for governmental operations are maintained on a modified accrual basis, with the revenues being recorded when both measurable and available, and expenditures being recorded when the services or goods are received and the liabilities are incurred. District management has established a comprehensive framework of internal controls designed both to protect the District’s assets from loss, theft, or misuse; and to compile sufficiently reliable information for the preparation of the District’s financial statements in conformity with generally accepted accounting principles. Because the cost of internal controls should not outweigh their benefits, the District has designed its controls to provide reasonable, but not absolute, assurance that the financial statements will be free from material misstatement. The CAFR has been audited by the independent certified public accounting firm of Chavan & Associates, LLP. The independent certified public accounting firm has issued an unmodified opinion on the District’s financial statements for the year ended June 30, 2019. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the financial statements. This letter of transmittal serves as a complement to the MD&A and should be read in conjunction with it. MIDPENINSULA REGIONAL OPEN SPACE DISTRICT PROFILE 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 the County of Santa Clara. In June 1976, the 3 Attachment 1 southern and eastern portions of the County of San Mateo were annexed to the District. The District annexed three parcels located in the northern tip of Santa Cruz County in 1992, but the 1% ad valorem property tax is not levied on this land for the benefit of the District. In September 2004, the District completed the Coastside Protection Program, which extended the District boundaries to the Pacific Ocean in the County of San Mateo County, from the southern borders of the City of Pacifica to the San Mateo/Santa Cruz County line. The District also does not receive any portion of the 1% ad valorem property tax for the Coastside area. The District’s jurisdiction encompasses over 550 square miles of land in the County of Santa Clara (approximately 200 square miles), the County of San Mateo (approximately 350 square miles) and the County of Santa Cruz County (approximately 2.6 square miles). The Counties of Santa Clara and San Mateo are referred to together as the “Counties.” As of the 2010 decennial census, approximately 720,000 people lived within the boundaries of the District. The District has preserved nearly 64,000 acres of public land and manages 26 open space preserves within its mission to acquire and preserve a regional greenbelt of open space land in perpetuity, protect and restore the natural environment, and provide opportunities for ecologically sensitive public enjoyment and education. On the rural San Mateo County Coast, the mission also includes to acquire and preserve in perpetuity agricultural land of regional significance, preserve the rural character, and encourage viable agricultural use of land resources. A seven-member Board of Directors (Board), elected by individual ward, establishes policies for the District. Specifically, the Board sets general operating objectives for the District, authorizes debt issuance, monitors financial and long-range planning, establishes policies governing conditions of employment, and sets policies to protect and enhance the natural and cultural resources of the District. Members of the Board of Directors are elected for staggered four-year terms. The Board appoints a General Manager to serve as the District’s chief executive officer. The General Manager provides direction and leadership to all District departments, and ensures that all District policies are implemented. The District is a legally separate and fiscally independent entity from other government agencies, which may also provide governmental services within the same geographic area. The CAFR includes all funds of the District. There are no separate or legal entities or component units included in the financial statements of the District, however the District does have a blended component unit included in its financial statements. In 1996, the District and Santa Clara County established the Midpeninsula Regional Open Space District Financing Authority (Authority) to help the District finance improvements by acquiring land to preserve and use as open space in cooperation with the District. The President of the District’s Board of Directors is also the Chairperson of the Authority. Three District Directors and a Supervisor from Santa Clara County are also on the Authority Board. In effect, the Authority operates in tandem with the District. FACTORS AFFECTING FINANCIAL CONDITION The information presented in the financial statements is perhaps best understood when considered from the broader perspective of the environment in which the District operates. State and Local Economy The California economy continues to out-perform the nation as a whole with steady growth. Many of the key economic indicators continue to contribute to a positive economic outlook: unemployment at historical lows, continuing growth in GDP, and stable inflation. In its most recent report for Fall 2019, Beacon Economics report shows that job growth in the South Bay area continues to expand at a rate much higher than the state average, with 4 Attachment 1 the flagship technology sector recording 3.7% job growth from August 2018 to August 2019 as compared to 1.8% for the state as a whole. The two main challenges to the Bay Area economy remain housing affordability and the lack of investment in aging infrastructure that is being further strained by population and job growth. Both Santa Clara and San Mateo Counties have been outperforming the California and U.S. economies in recent years and continue to do so. The Bureau of Economic Analysis reported a 2.9 percent growth in 2018 and 1.9 percent through the first three quarters of 2019. GDP growth for the Silicon Valley metropolitan area (San José- Sunnyvale-Santa Clara) increased by a significant 7.6 percent in 2017 (latest available data) compared to the average U.S. metro area growth of 2.1 percent. The District’s boundaries encompass a large swath of Silicon Valley, which continues to be the world’s premier location for the technology industry with a long culture of entrepreneurship and innovation. The District historically derives two-thirds of its general fund property tax revenue from Santa Clara County and one-third from San Mateo County (excluding the coastside). The real estate market in the both San Mateo and Santa Clara Counties continue to demonstrate strong demand in both the residential and commercial sectors. For Fiscal Year (FY) 2019-2020, the Santa Clara County Assessor’s Office reported that the assessment roll increased by 6.79 percent, to a total of $516 billion. Similarly, San Mateo County reported that the total value of assessed properties increased by 7.10 percent for FY 2019-20. Total assessments within the District’s boundaries increased by 7.9 percent for FY 2018-19. Over the past 10 years, the District’s general fund property tax revenues have increased by an annual average of 6.87 percent. The assessor’s office of both counties reported continued strength in the growth of assessed value with the 2019- 2020 property tax rolls. However, both assessors are signaling a note of caution as residential home prices start to flatten in face of the well-publicized affordability issues, as well as the potential impact of recent changes to federal tax laws. Commercial development is still strong, though may face headwinds from global trade uncertainties and the polarized national political climate heading into the 2020 elections. According to the Federal Reserve Bank of St. Louis, personal income levels as of 2017 (the most recent year for which county data is available) show per capita income of $98,032 for Santa Clara and $113,410 for San Mateo, which are significantly above $60,156 for the State and $51,869 for the nation. Employment growth remains strong with unemployment rates now at historic lows. According to the California Employment Development Department, the Bay-Peninsula region continues to have the lowest unemployment rate in the State and experienced the fastest job growth of any region in the State during the historic economic expansion beginning in July 2010. Unemployment rates in Santa Clara and San Mateo were 2.8 percent and 2.4 percent respectively as of June 2018, comparing to rates of 4.2 percent for the State and 4.0 percent for the nation. The strong job market spans all sectors, with particular strength in technology and construction. While the overall economic indicators remain positive, the District is continuing to develop prudent spending plans, providing the financial resources to deal with a potential recession. The aforementioned housing affordability crisis and tight labor market continue to present challenges for the hiring and retention of employees. Construction costs for capital projects are still increasing at a more rapid pace compared to the general inflation and the remote locale of District projects lead to a smaller pool of contractors willing to bid on projects. The District is addressing this issue through doing more in-house design/build and through greater outreach to the contractor community. 5 Attachment 1 Major Initiatives In the 2018-19 Fiscal Year, the District has achieved the completion of major projects and actions, including the following: ™ Opened Bear Creek Redwoods Preserve to the public in June 2019, improvements include: x New parking lot, vault toilet restroom, ADA pathway around Upper Lake, new bridge installation, and 6 miles of new and improved trails. Completed design, fabrication and installation of two interpretive signs for the new Alma College parking area and Upper Lake area. x Worked with GIS, Visitor Services, and Public Affairs to complete design, content, and web development of “Layers of History” online story map at www.openspace.org/bcrstory, educating the public on the area’s rich history, which reached over 800 users in two months. ™ Completed new section of Oljon Trail to provide a new loop trail opportunity from the parking lot and completed majority of the restoration of an eroded, unsustainable section of the Steam Donkey Trail, with poor access off Skyline Boulevard at El Corte de Madera Preserve. ™ Continued major actions to close a 0.6-mile gap in the San Francisco Bay Trail at Ravenswood Preserve and assisted the City of East Palo Alto in developing the adjacent Cooley Landing Park ™ Received Board approval of the District’s Climate Action Plan to meet the adopted Climate Change Goals of 20% reduction in operational greenhouse gas emissions from 2016 levels by 2022, 40% by 2030 and 80% by 2050. Began implementation of the plan by changing fuel tanks to renewable diesel, purchasing 100% renewable electricity for offices, acquiring electric bikes and UTV for field staff, and purchasing carbon offsets for business flights. Completed the 2018 Greenhouse Gas emissions inventory. Held initial talks on a carbon sequestration pilot project with the San Mateo Resources Conservation District ™ Continued the Highway 17 Wildlife and Regional Trail Crossings project, identifying and analyzing additional crossing alternatives in response to partner, stakeholder and public comments. Drafted the project study report and received Caltrans initial comments. Held meetings with project partners and stakeholders (Caltrans, San Jose Water Company, Committee for Green Foothills, National Wildlife Federation) and a 2 nd public meeting to receive input on the alternative wildlife crossings. ™ Constructed two new pedestrian bridges on the Stevens Creek Nature Trail in Monte Bello Preserve; removed a failing old bridge and restored the construction area. These bridges will allow the use of the Stevens Creek Nature Trail throughout the winter. ™ Continued implementation of critical Financial and Operational Sustainability Model Study recommendations to enhance the delivery of Measure AA and Vision Plan projects, including the launch of the Work Order & Asset Management System, as well as Project Central as a SharePoint solution for monitoring and managing District projects. ™ Leveraged the use of Measure AA bond funding through successful grant application totaling over $1.5 million. ™ Acquired 192.91 acres of open space lands valued at nearly $3 million. 6 Attachment 1 Relevant Financial Policies Budget Policy The District follows best practices in budgeting, including: assessment of constituent needs, development of long range plans, adherence to budget preparation and adopted procedures, monitoring of performance, and adjustment of the budget as required. The District budget is divided into four categories: Operating Budget, Capital Budget, Land and Associated Costs, and Debt Service. The budget is prepared and adopted on a cash-basis, whereas the annual financial statements are prepared on a modified accrual basis. The budget can be amended during the year, in accordance with the Board Budget and Expenditure Policy, which states that increases to any of the four budget categories must be approved by the Board. Investment Policy The District’s Investment Policy is adopted annually, in accordance with State law. The policy provides guidance and direction for the prudent investment of District funds to safeguard the principal of invested funds and achieve a return on funds while ensuring the liquidity needs of the District. The ultimate goal is to maximize the efficiency of the District’s cash management system, and to enhance the economic status of the District, while protecting its pooled cash. The investment of funds is governed by the California Government Code Section 53601 et seq., and by California Government Code Section 53630 et seq. Funds on deposit in banks must be federally insured or collateralized in accordance with the provisions of California Government Code Section 53630 et seq. Fund Balance Policy The Board of Directors adopted the Fund Balance Policy in 2014, and updated the Policy in 2016 to achieve the following goals: provide adequate funding to meet the District’s short-term and long-term plans; provide funds for unforeseen expenditures related to emergencies, such as natural disasters; strengthen the District’s financial stability against present and future uncertainties, such as economic downturns and revenue shortfalls; and maintain an investment-grade bond rating. This policy has been developed with the counsel of the District’s independent auditors, to meet the requirements of GASB 54. The components of the District fund balances are as follows: x Non-Spendable fund balance includes amounts that cannot be spent either because they are not in spendable form, e.g. prepaid insurance, or because of legal or contractual constraints. At all times, the District shall hold fund balance equal to the sum of its non-spendable assets. x Restricted fund balance includes amounts that are constrained for specific purposes, which are externally imposed by constitutional provisions, enabling legislation, creditors, or contracts. x Committed fund balance includes amounts that are constrained for specific purposes that are internally imposed by the District Board of Directors. Funds spent from committed funds shall be reimbursed from the general fund within two years. x Assigned fund balance includes amounts that are intended to be used for specific purposes that are neither restricted nor committed. Such amounts may be assigned by the General Manager if authorized by the Board of Directors to make such designations. Projects to be funded by assigned funds require the approval of the General Manager. Funds spent from assigned funds shall be reimbursed from the general fund within two years. x Unassigned fund balance includes amounts within the general fund which have not been classified within the above categories. The Board shall designate the minimum amount of unassigned fund balance, which is to be held in reserve in consideration of unanticipated events that could adversely affect the financial condition of the District and potentially jeopardize the continuation of necessary public services. The current minimum unassigned fund balance is 30% of the Budgeted General Fund Tax Revenue. 7 Attachment 1 Debt Management Policy The Board of Directors adopted a debt management policy on July 12, 2017. The stated purpose of the Debt Management Policy is to establish the overall parameters for issuing, structuring, and administering the debt of the District in compliance with applicable federal and State securities laws. The Debt Management Policy was developed in conjunction with the procedures for Initial and Continuing Disclosure Relating to Bond Issuances, with the latter ensuring that statements or releases of information to the public and investors relating to the finances of the District are complete, true, and accurate in all material respects. AWARDS The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement to the District for its Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2018. This was the second year that the District received this prestigious national award. The Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting. To receive the award, the District must publish a Comprehensive Annual Financial Report that is easily readable and efficiently organized, and the contents of the report must conform to program standards and satisfy generally accepted accounting principles and applicable legal requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for one year. We believe that our current report continues to conform to the Certificate requirements, and we are submitting it to the GFOA for another award of the certificate. ACKNOWLEDGEMENTS The preparation of this Comprehensive Annual Financial Report could not have been completed without the efforts and contributions of its Finance staff, as well as other departments across the District. Management also wishes to acknowledge the invaluable assistance of Chavan & Associates, the District’s independent auditors who contributed to the preparation of this Comprehensive Annual Financial Report. Lastly, we wish to acknowledge the District’s Board of Directors for their continued interest and support of the District’s effort to improve and strengthen its financial operations and reporting. Respectfully submitted, Ana Ruiz Stefan Jaskulak General Manager Chief Financial Officer/ Director of Administrative Service 8 Attachment 1 Board of Directors & Management Executive Management Ana María Ruiz–General Manager Hilary Stevenson–General Counsel Mike Foster–Controller Susanna Chan–Assistant General Manager/Project Planning and Delivery Brian Malone–Assistant General Manager/Visitor and Field Services Stefan Jaskulak–Chief Financial Officer/Director of Administrative Services Mission Statement——————————————————————————––––––––––––—————————————————————————————— The mission of the Midpeninsula Regional Open Space District is to acquire and preserve a regional greenbelt of open space land in perpetuity, protect and restore the natural environment, and provide opportunities for ecologically sensitive public enjoyment and education. District Wards Left to right: Zoe Kersteen-Tucker, Curt Riffle, Yoriko Kishimoto, Jed Cyr, Karen Holman, Larry Hassett, Pete Siemens. ——————————————————————————––––––––––––————————————————————————————————Pete Siemens–Board President Ward 1: Cupertino, Los Gatos, Monte Sereno, Saratoga——————————————————————————––––––––––––———————————————————————————————— Yoriko Kishimoto–Board Treasurer Ward 2: Cupertino, Los Altos, Los Altos Hills, Palo Alto, Stanford, Sunnyvale ——————————————————————————––––––––––––———————————————————————————————— Jed Cyr Ward 3: Sunnyvale ——————————————————————————––––––––––––———————————————————————————————— Curt Riffle Ward 4: Los Altos, Mountain View ——————————————————————————––––––––––––————————————————————————————————Karen Holman–Board Vice President Ward 5: East Palo Alto, Menlo Park, Palo Alto, Stanford——————————————————————————––––––––––––———————————————————————————————— Larry Hassett Ward 6: Atherton, La Honda, Loma Mar, Menlo Park, Pescadero, Portola Valley, Redwood City, San Gregorio, Woodside——————————————————————————––––––––––––———————————————————————————————— Zoe Kersteen-Tucker–Board Secretary Ward 7: El Granada, Half Moon Bay, Montara, Moss Beach, Princeton, Redwood City, San Carlos, Woodside——————————————————————————––––––––––––———————————————————————————————— 9 Attachment 1 Organizational Chart Public Board of Directors ControllerGeneral Counsel General Manager Public Affairs Department Executive Assistant/ Deputy District Clerk District Clerk/Assistant to the General Manager Visitor and Field Services Assistant General Manager Finance and Administrative Services CFO-Director of Administrative Services Project Planning and Delivery Assistant General Manager Visitor Services Department Land and Facilities Department Natural Resources Department Planning Department Real Property Department Engineering and Construction Department Budget and Analysis Department Information Systems and Technology Department Finance Department Human Resources Department Midpen At-A-Glance Founded in 1972 63,927 Acres (as of June 2019) 243 Miles of Trails 26 Preserves 183 Full-Time Employees Over 2 Million Visitors Per Year $74.8 Million Budget 760,000 Residents 10 Attachment 1 Regional Map 11 Attachment 1 Achievement Award 12 Attachment 1 Financial Section 13 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 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 of the 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 major fund for Midpeninsula Regional Open Space District (the District), as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements The District’s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the District’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and each major fund of the District, as of 14 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 1475 Saratoga Ave, Suite 180, San Jose, CA 95129 Tel: 408-217-8749 • E-Fax: 408-872-4159 info@cnallp.com •www.cnallp.com June 30, 2019, and the respective changes in financial position and for the year then ended in accordance with accounting principles generally accepted in the United States of America. 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 for the general fund, schedule of pension plan contributions, schedule of net pension liability proportionate share, schedule of contributions for postemployment benefits, and schedule of changes in net OPEB liability, as listed in the table of contents,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 introductory section,budgetary comparison information for the capital projects funds and the debt service fund,the schedule of program expenditures for the Measure AA Bond Program,and the statistical sections are presented for purposes of additional analysis and are not a required part of the basic financial statements. The schedule of program expenditures for the Measure AA Bond Program 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 schedule of program expenditures for the Measure AA Bond Program is fairly stated, in all material respects, in relation to the basic financial statements as a whole. The introductory section, budgetary comparison information for the capital projects funds and the debt service fund,and statistical sections included have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. 15 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 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 Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 11, 2019 on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control over financial reporting and compliance. November 11, 2019 San Jose, California 16 Attachment 1 Management’s Discussion and Analysis 17 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 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, 2019. 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 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 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 2018-2019?” 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 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 August 2018 showed District-wide assessed values increasing by 7.3% (7.2% in Santa Clara and 7.4% in San Mateo). The District received 67% of its tax revenue from Santa Clara County and 33% from San Mateo County. Other financial highlights included: Tax revenue related to the GO bonds amounted to $5.2 million. Purchased $2.2 million in land and associated structures funded through Measure AA GO bond proceeds. Purchased a commercial office building and associated land for $31.5 million which will serve as the District’s new administrative headquarters. The District’s Section 115 irrevocable trust for pension liabilities held with the Public Agency Retirement Services (PARS)has a value of $2,531,030 at year end. Fully funded the District’s other postemployment benefits plan according to the actuarially determined contribution for current year, as noted in the schedule of contribution for postemployment benefits. The assets of the District exceeded liabilities at the close of the 2019 fiscal year by $367 million. Of this total net position, $351 million, or 96%, was the District’s net investment in capital assets (capital assets net of related debt). 19 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 REPORTING THE DISTRICT’S MOST SIGNIFICANT FUNDS Fund Financial Statements Fund financial reports provide detailed information about the District’s major funds. The District uses one operating fund, the General Fund, to account for a multitude of financial transactions, two capital project funds to account for capital projects, and one debt service fund to account for debt service payments. Governmental Funds The General Fund is a governmental fund type and is reported using an accounting method called modified accrual accounting, which measures cash and all other financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the District’s general government operations and the basic services it provides. Governmental fund information helps determine whether there are more or fewer financial resources that can be spent in the future to finance educational programs. The relationship (or differences)between governmental activities (reported in the Statement of Net position and the Statement of Activities) and governmental funds is reconciled in the financial statements. THE DISTRICT AS A WHOLE Recall that the Statement of Net Position provides the perspective of the District as a whole.Table 1 provides a summary of the District’s net position as compared to last period: Percentage 2019 2018 Change Change As sets Current As sets 108,643,304$ 135,924,361$(27,281,057)$-20.07% Othe r No ncur rent As sets 562,532 637,906 (75,374) -11.82% Capi tal As sets 504,559,409 462,119,833 42,439,576 9.18% To tal As sets 613,765,245$ 598,682,100$15,083,145$ 2.52% To tal De ferred Out flows of Re sources 14,826,493$ 17,804,789$ (2,978,296)$ -16.73% Li abi lities Cur rent Li abi lities 16,695,948$ 14,219,357$ 2,476,591$ 17.42% No ncur rent Li abi lities 243,049,767 252,063,016 (9,013,249) -3.58% To tal Li abi lities 259,745,715$ 266,282,373$(6,536,658)$ -2.45% To tal De ferred Inf lows of Re sources 1,471,865$ 1,416,399$ 55,466$ 3.92% Ne t Posi ti on Ne t Investment in Capi tal As sets 351,151,768$ 312,120,869$39,030,899$ 12.51% Re stricted 8,207,641 7,252,294 955,347 13.17% Unr estricted 8,014,749 29,414,954 (21,400,205) -72.75% To tal Ne t Position 367,374,158$ 348,788,117$18,586,041$ 5.33% Ta bl e 1 - Summar y o f St at ement of Ne t Posi ti on Total net position increased by $18.6 million, as revenues exceeded expenditures. Current assets decreased due mostly to $45.3 million of capital expenditures. 20 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 Table 2 shows the changes in net position for 2019 as compared to period 2018. Percentage 2019 2018 Change Change Re ve nue s Program revenue s 3,442,075$ 3,189,096$ 252,979$ 7.93% Ge ne ral revenue s: Property taxe s 54,395,054 47,798,349 6,596,705 13.80% Investment earnings 3,627,639 1,045,124 2,582,515 247.10% Miscellane ous 1,874,272 1,152,611 721,661 62.61% To tal Re ve nue s 63,339,040 53,185,180 10,153,860 19.09% Program Expe ns es Land pr eservat ion 34,304,215 28,909,830 5,394,385 18.66% Int erest 10,448,784 8,193,228 2,255,556 27.53% Depr eciation - 2,398,894 (2,398,894) -100.00% To tal Expe ns es 44,752,999 39,501,952 5,251,047 13.29% Chang e in Net Posi ti on 18,586,041 13,683,228 4,902,813 35.83% Ad jus tment to Beginning Net Posi ti on - (1,898,023) 1,898,023 100.00% Begi nning Ne t Positi on 348,788,117 337,002,912 11,785,205 3.50% Endi ng Ne t Positi on 367,374,158$ 348,788,117$ 18,586,041$ 5.33% Ta bl e 2 - Summar y o f Chang es in Ne t Positi on 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 2018 Change Nonspendable for prepaid expenditure 185,984$ -$ -$ -$ 185,984$ 35,968$ 417% Restricted for debt service - - - 6,775,924 6,775,924 5,791,164 17% Restricted for Measure AA Projects - 37,944,253 - - 37,944,253 46,468,809 -18% Restricted for Hawthorne maintenance 1,431,717 - - - 1,431,717 1,466,982 -2% Restricted for capital projects - - 8,254,539 - 8,254,539 7,043,765 17% Restricted for pension 2,531,030 - - - 2,531,030 - 100% Committed for in frastructure 17,688,465 - - - 17,688,465 44,000,000 -60% Committed for equipment replacement 3,000,000 - - - 3,000,000 3,000,000 0% Committed for natural disasters - - - - - 3,000,000 -100% Committed for capital maintenance 5,000,000 - - - 5,000,000 2,000,000 150% Committed for future acquisitions and capital projects 3,000,000 - - - 3,000,000 3,000,000 0% Committed for promissory note 600,000 - - - 600,000 300,000 100% As signed for ongoing projects 1,400,000 - - - 1,400,000 - 100% Unassign ed 16,515,392 - - - 16,515,392 16,306,537 1% Total Fund Balance 51,352,588$37,944,253$ 8,254,539$ 6,775,924$104,327,304$132,413,225$-22% Ta ble 3 - Summary of Fund Balance (All Go vernmental Funds) 2019 Following the District’s thirty-year strategic plan, the Board of Directors committed a majority of the unassigned fund balance during fiscal year 2019 to reserves for infrastructure, equipment replacement and capital maintenance. See Note 1 in the notes to the basic financial statements of the audit report for a description of each commitment. 21 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 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 2019, the District revised its General Fund budget, which resulted in an decrease in budgeted expenditures of $122 thousand from the original to final budget. The revenue was revised from $51 million to $53 million due to increases in property taxes and interest earned from investments.A summary of the original and final budget is presented below: Percent Or iginal Budge t Fi nal Budge t Change Change Re ve nue s Property t axe s 48,122,000$ 48,919,000$ 797,000$ 1.66% Gr ant revenue s 191,000 191,000 - 0.00% Property manage me nt 1,221,124 1,043,000 (178,124) -14.59% Investment earnings 1,079,000 1,949,904 870,904 80.71% Ot he r revenue s 471,738 1,158,498 686,760 145.58% To tal Re ve nue s 51,084,862 53,261,402 2,176,540 4.26% Expe ndi tures Sal ar ies and e mpl oyee bene fits 22,930,309 23,155,369 225,060 0.97% Se rvices and s uppl ies 10,648,125 10,384,065 (264,060) -2.54% Capi tal outlay 83,000 - (83,000) -100.00% To tal Expe ns es 33,661,434 33,539,434 (122,000) -0.36% Ne t Chang e in F und B al anc e 17,423,428$ 19,721,968$ 2,298,540$ 13.19% Ta bl e 4 - Summar y o f Or iginal t o Fi nal B udg ets CAPITAL ASSETS Table 5 shows 2019 capital asset balances as compared to 2018. Percentage 2019 2018 Change Change Land 437,763,645$ 414,547,441$ 23,216,204$ 5.60% Co ns truction-in-Progress 16,193,374 8,596,297 7,597,077 88.38% St ructure and Impr ovements 18,059,730 7,320,057 10,739,673 146.72% Inf rastructure 29,542,214 28,512,084 1,030,130 3.61% Equi pme nt 1,113,614 989,551 124,063 12.54% Ve hi cles 1,886,832 2,154,403 (267,571) -12.42% To tal Capi tal As sets - Ne t 504,559,409$ 462,119,833$ 42,439,576$ 9.18% 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 Attachment 1 Midpeninsula Regional Open Space District Management’s Discussion and Analysis For the Fiscal Year Ended June 30, 2019 LONG TERM LIABILITIES Table 6 summarizes the changes in long-term liabilities from 2019 to 2018. Percentage 2019 2018 Change Change Promissory Notes 38,899,934$ 39,769,276$ (869,342)$ -2.19% Bo nds 199,505,576 205,905,916 (6,400,340) -3.11% Ne t Pension Liabi lity 10,412,478 11,022,824 (610,346) -5.54% Ne t OP EB Li abi lity 1,862,277 1,845,000 17,277 0.94% Co mpe ns at ed Abs ences 2,368,387 1,723,930 644,457 37.38% To tal Lo ng-term Liabi lities 253,048,652$260,266,946$(7,218,294)$ -2.77% 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 fiscal year 2019-20 on June 26, 2019. This budget assumes $64.4 million in revenues and a growth in general fund property tax income of 7.75% over the prior year’s adopted budget. This budget funds $20.0 million of capital spending, of which $9.5 million is expected to qualify for reimbursement from Measure AA GO bond funds.General Fund operating expenditures are budgeted at $37.0 million, a 10.3% increase over the prior year’s budget. Debt service is budgeted at $17.7 million, with $7.3 million related to the Measure AA general obligation bonds. If all revenues, expenditures (including debt service) occur as budgeted, the District’s overall cash balances would increase by approximately $0.7 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 Attachment 1 Page Intentionally Left Blank 24 Attachment 1 Basic Financial Statements 25 Attachment 1 Page Intentionally Left Blank 26 Attachment 1 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 Attachment 1 Assets Current assets: Cash and investments 108,106,556$ Accounts receivable: Interest 158,943 Other 182,269 Taxes receivable 221 Other current assets 195,315 Total current assets 108,643,304 Noncurrent assets: Notes receivable 94,182 Un amortized issuance costs 468,350 Non-depreciable capital assets 453,957,019 Capital assets, net of depreciation 50,602,390 Total noncurrent assets 505,121,941 Total Assets 613,765,245$ Deferred Outflows of Resources OPEB adjustments 670,768$ Pension adjustments 4,760,025 Deferred loss on early retirement of long-term debt 9,395,700 Total Deferred Outflows of Resources 14,826,493$ Liabilities Current liabilities: Accounts payable 2,516,839$ Deposits payable 218,240 Payroll and other liabilities 1,580,921 Accrued interest 2,381,063 Current portion of long-term liabilities 9,998,885 Total current liabilities 16,695,948 Noncurrent liabilities: Long-term liabilities - net of current portion 243,049,767 Total Liabilities 259,745,715$ Deferred Inflows of Resources OPEB adjustments 92,510$ Pension adjustments 1,379,355 Total Deferred Outflows of Resources 1,471,865$ Net Position Net investment in capital assets 351,151,768$ Restricted for: Debt service 6,775,924 Hawthorne maintenance 1,431,717 Total restricted 8,207,641 Un restricted 8,014,749 Total Net Position 367,374,158$ Midpeninsula Regional Open Space District Statement of Net Position June 30, 2019 The notes to the financial statements are an integral part of this statement. 28 Attachment 1 Net (Expense) Capital Revenue and Charges for Grants and Changes in Expenses Services Contributions Net Position Governmental activities: Land preservation 34,304,215$ 2,360,364$ 1,081,711$ (30,862,140)$ Interest and fiscal charges 10,448,784 - - (10,448,784) Total governmental activities 44,752,999$ 2,360,364$ 1,081,711$ (41,310,924) General revenues and special item: Property taxes 54,395,054 Investment earnings 3,627,639 Other revenues 1,912,125 Special item - loss on disposal of capital assets (37,853) Total general revenues and special item 59,896,965 Change in net position 18,586,041 Net position beginning 348,788,117 Net position ending 367,374,158$ Midpeninsula Regional Open Space District Statement of Activities For the Fiscal Year Ended June 30, 2019 Program Revenues The notes to the financial statements are an integral part of this statement. 29 Attachment 1 Page Intentionally Left Blank 30 Attachment 1 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 Attachment 1 Measure AA GF Capital Debt Total General Capital Projects Service Governmental Fund Projects Fund Fund Fund Funds Assets Cash and investments 51,295,862$ 41,130,060$ 8,904,710$ 6,775,924$ 108,106,556$ Receivables: Interest 158,943 - - - 158,943 Other 182,269 - - - 182,269 Taxes receivable 221 - - - 221 Other current assets 195,315 - - - 195,315 Due from other funds 4,565,422 2,786,475 - - 7,351,897 Notes receivable 94,182 - - - 94,182 Total Assets 56,492,214$ 43,916,535$ 8,904,710$ 6,775,924$ 116,089,383$ Liabilities Liabilities: Accounts payable 770,967$ 1,450,793$ 295,079$ -$ 2,516,839$ Deposits payable 218,240 - - - 218,240 Due to other funds 2,475,316 4,521,489 355,092 - 7,351,897 Payroll and other liabilities 1,580,921 - - - 1,580,921 Total Liabilities 5,045,444 5,972,282 650,171 - 11,667,897 Deferred Inflows of Resources Unavailable revenues 94,182 - - - 94,182 Fund Balance Nonspendable: Prepaid expenditures 185,984 - - - 185,984 Restricted for: Debt service - - - 6,775,924 6,775,924 Measure AA capital projects - 37,944,253 - - 37,944,253 Hawthorne maintenance 1,431,717 - - - 1,431,717 Capital projects - - 8,254,539 - 8,254,539 Pension 2,531,030 - - - 2,531,030 Committed for: Infrastructure 17,688,465 - - - 17,688,465 Equipment replacement 3,000,000 - - - 3,000,000 Capital maintenance 5,000,000 - - - 5,000,000 Future acquisitions and capital projects 3,000,000 - - - 3,000,000 Promissory note 600,000 - - - 600,000 Assigned for: Ongoing Projects 1,400,000 - - - 1,400,000 Unassigned 16,515,392 - - - 16,515,392 Total Fund Balance 51,352,588 37,944,253 8,254,539 6,775,924 104,327,304 Total Liabilities, Deferred Inflows of Resources, and Fund Balance 56,492,214$ 43,916,535$ 8,904,710$ 6,775,924$ 116,089,383$ Balance Sheet Midpeninsula Regional Open Space District June 30, 2019 Governmental Funds The notes to the financial statements are an integral part of this statement. 32 Attachment 1 Total fund balance - governmental funds 104,327,304$ 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 524,853,989$ Accumulated depreciation (20,294,580) 504,559,409 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.94,182 The difference between OPEB plan assumptions and estimates versus actuals are not included in the plan's actuarial study until the next fiscal year and are reported as deferred outflows or inflows of resources in the statement of net position.578,258 The difference between pension plan assumptions and estimates versus actuals are not included in the plan's actuarial study until the next fiscal year and are reported as deferred outflows or inflows of resources in the statement of net position.3,380,670 Interest payable on long-term debt does not require the use of current financial resources and, therefore, is not reported in the governmental funds.(2,381,063) 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 25,567,399$ Issuance cost (468,350) (25,099,049) 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.9,395,700 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 179,090,000$ Net pension liability 10,412,478 Promissory notes 33,748,111 Compensated absences 2,368,387 Net OPEB liability 1,862,277 (227,481,253) Total net position - governmental activities 367,374,158$ Midpeninsula Regional Open Space District Balance Sheet to the Statement of Net Position June 30, 2019 Reconciliation of the Governmental Funds The notes to the financial statements are an integral part of this statement. 33 Attachment 1 Measure AA GF Capital Debt Total General Capital Projects Service Governmental Fund Projects Fund Fund Fund Funds Revenues: Property taxes 49,156,904$ -$ -$ 5,238,150$ 54,395,054$ Grant income 460,842 620,869 - - 1,081,711 Property management 2,360,364 - - - 2,360,364 Investment earnings 1,403,878 1,726,441 399,613 118,773 3,648,705 Other revenues 640,850 - - - 640,850 Total revenues 54,022,838 2,347,310 399,613 5,356,923 62,126,684 Expenditures: Current: Land preservation: Salaries and employee benefits 20,727,559 368,306 - - 21,095,865 Services and supplies 8,086,707 2,054 1,334 - 8,090,095 Capital outlay - 10,501,506 34,854,151 - 45,355,657 Debt service: Principal - - - 6,480,000 6,480,000 Interest - - - 9,190,988 9,190,988 Total expenditures 28,814,266 10,871,866 34,855,485 15,670,988 90,212,605 Excess (deficiency) of revenues over (under) expenditures 25,208,572 (8,524,556) (34,455,872) (10,314,065) (28,085,921) Other financing sources (uses): Transfers in 1,481,755 - 37,148,401 11,298,825 49,928,981 Transfers out (48,447,226) - (1,481,755) - (49,928,981) Total other financing sources (uses)(46,965,471) - 35,666,646 11,298,825 - Net changes in fund balance (21,756,899) (8,524,556) 1,210,774 984,760 (28,085,921) Fund balance beginning 73,109,487 46,468,809 7,043,765 5,791,164 132,413,225 Fund balance ending 51,352,588$ 37,944,253$ 8,254,539$ 6,775,924$ 104,327,304$ Midpeninsula Regional Open Space District Statement of Revenues, Expenditures and Changes in Fund Balance Governmental Funds For the Fiscal Year Ended June 30, 2019 The notes to the financial statements are an integral part of this statement. 34 Attachment 1 Total net change in fund balance - governmental funds (28,085,921)$ 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 45,355,657$ Depreciation expense (2,878,228) Loss on disposal of capital asset (37,853) 42,439,576 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.(21,066) 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.(481,593) 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: Repayment of bond principal 5,280,000 Repayment of promissory notes principal 1,200,000 6,480,000 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.(845,123) 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 1,216,967 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.(644,457) 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.(1,595,570) 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.123,228 Change in net position of governmental activities 18,586,041$ Midpeninsula Regional Open Space District Statement of Revenues, Expenditures and Changes in Fund Balance For the Fiscal Year Ended June 30, 2019 Reconciliation of the Governmental Funds to the Statement of Activities The notes to the financial statements are an integral part of this statement. 35 Attachment 1 Page Intentionally Left Blank 36 Attachment 1 Notes to Financial Statements 37 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 (such as cash)are received before revenue recognition criteria have been satisfied. Grants and entitlements received before eligibility requirements (such as qualified expenditures)are met are recorded as liabilities from unearned revenue. Unavailable 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 of resources as unavailable 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.The District resources are allocated to and accounted for in individual funds based upon the purpose for which they are to be spent and the means by which spending activities are controlled. 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. 40 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. 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. 41 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 Income approach -This approach converts future amounts (such as cash flows) into a current discounted amount. Each of these valuation techniques requires inputs to calculate a fair value. Observable inputs have been maximized in fair value measures, and unobservable inputs have been minimized. 3.Prepaid Expenditures The District has the option of reporting expenditures in governmental funds for prepaid items either when purchased or during the benefiting period. The District has chosen to report the expenditure during the benefiting period. 4.Capital Assets Capital assets, which include land, buildings and improvements, furniture, equipment, and construction in progress, are reported in the government-wide financial statements. 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 acquisition value at the time of acquisition plus ancillary charges,if any. 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 of 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 8.Fund Balance Classifications In accordance with Government Accounting Standards Board 54,Fund Balance Reporting and Governmental Fund Type Definitions, the District classifies governmental fund balances as follows: Nonspendable fund balance includes amounts that cannot be spent either because it is not in spendable form or because of legal or contractual constraints. Restricted fund balance includes amounts that are constrained for specific purposes which are externally imposed by providers, such as creditors or amounts constrained due to constitutional provisions or enabling legislation. Committed fund balances includes amounts that are constrained for specific purposes that are internally imposed by the government through formal action of the highest level of decision making authority and does not lapse at period-end. Committed fund balances were imposed by the District’s Board of Directors 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: $17.7 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 Capital maintenance: $5 million; amounts committed to reserve for future capital repairs and maintenance. o Future acquisitions and capital projects: $3 million; amounts committed to reserve for future capital acquisitions. o Promissory Note: $0.6 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. 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 44 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 District’s California Public Employees’ Retirement System (CalPERS) 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. 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. For this report, the following time frames were used: Valuation Date (VD) ....................................... June 30, 2017 Measurement Date (MD) ................................ June 30, 2018 Measurement Period (MP) .............................. July 1, 2017 to June 30, 2018 45 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, and OPEB expense,information about the fiduciary net position of the District’s Retiree Benefits Plan (the OPEB Plan)and additions to/deductions are based on the when they are due and payable in accordance with the benefit terms for the measurement period included in the OPEB plan’s actuarial reports. Investments are reported at fair value, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost. Valuation Date June 30, 2017 Measurement Date June 30, 2018 Measurement Period July 1, 2017 to June 30, 2018 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. 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 that has legal obligations to perform future asset retirement activities related to 46 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 its tangible capital assets should recognize a liability based on the guidance in this Statement. As of June 30, 2019, this Statement did not have an 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. As of June 30, 2019, this Statement did not have an impact on the District’s financial statements. J.Upcoming Accounting and Reporting Changes 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 financial statements for periods beginning after December 15, 2019. Earlier application is encouraged. The District is in the process of determining the impact this Statement will have on the financial statements. 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 47 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. GASB Statement No. 90, Majority Equity Interests -an Amendment of GASB Statements No. 14 and No. 61 The objectives of this Statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. This Statement also requires that a component unit in which a government has 100 percent equity interest account for its assets, deferred outflows of resources, liabilities, and deferred inflows of resources at acquisition value at the date the government acquired a 100 percent equity interest in the component unit. The requirements of this Statement are effective for financial statements for periods beginning after December 15, 2018. The requirements should be applied retroactively, except for the provisions related to (1) reporting a majority equity interest in a component unit and (2) reporting a component unit if the government acquires a 100 percent equity interest. Those provisions should be applied on a prospective basis. The District doesn’t believe this statement will have a significant impact on the District’s financial statements. GASB Statement No. 91, Conduit Debt Obligations The objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This Statement also clarifies the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitment and voluntary commitments extended by issuers and arrangements associated with the debt obligations; and improving required note disclosures. The requirements of this Statement are effective for financial statements for periods beginning after December 15, 2020. Earlier application is encouraged. The District doesn’t believe this statement will have a significant impact on the District’s financial statements. 48 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 NOTE 2 -CASH AND INVESTMENTS Summary of Cash and Investments The following summarizes deposits as of June 30, 2019: Cash and Cash Equivalents Av aila ble Cash and Investments for Operations Restricted Total Cash Deposits: Cash in Banks 1,573,758$ 33,810$ 1,607,568$ Cash with Fiscal Age nt - 2,531,030 2,531,030 Petty Cash 1,832 - 1,832 Total Cash Deposits 1,575,590 2,564,840 4,140,430 Investments: Calif ornia Local Age ncy Investment Fund 6,543,761 - 6,543,761 CalTRUST - 1,604,339 1,604,339 Brokerage Ac counts/Cash with Fiscal Age nts 16,313,616 51,761,334 68,074,950 Santa Clara County Pool 22,693,716 5,049,360 27,743,076 Total Investments 45,551,093 58,415,033 103,966,126 Total Cash and Investments 47,126,683$ 60,979,873$ 108,106,556$ 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 30,2019,the District’s bank balances exceeded FDIC coverage by $1,582,879. Fair Value Measurements GASB 72 established a hierarchy of inputs to the valuation techniques above. This hierarchy has three levels: Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted market prices for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in markets that are not active, or other than quoted prices that are not observable Level 3 inputs are unobservable inputs, such as a property valuation or an appraisal. 49 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 The District has the following investments with recurring fair value measurements as of June 30, 2019: 12 Months 13 - 24 25 - 60 More Than Rating Fair Value or Less Months Months 60 Months Money Market Accounts n/a 3,135,774$ n/a 3,135,774$ -$ -$ -$ 3.02% Municipal Bonds AAA/A-13,649,234 Level 2 2,835,666 7,038,659 1,847,521 1,927,388 13.13% Corp/Gov Bonds AAA/A-37,953,286 Level 1 14,603,548 20,936,928 2,412,810 - 36.51% LAIF n/a 6,543,761 Level 2 6,543,761 - - - 6.29% CalTrust A+f 1,604,339 Level 2 - - 1,604,339 - 1.54% Santa Clara County Pool n/a 27,743,076 Level 2 16,384,182 4,096,442 7,262,452 - 26.68% U.S. Obligations AA+/A-13,336,656 Level 1 10,189,733 3,146,923 - - 12.83% Total Investments 103,966,126$ 53,692,664$ 35,218,952$ 13,127,122$ 1,927,388$ 100.00% Input Level Concen- trationsInvestment Type Maturities 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, 2019, these investments had an average maturity date of less than one year. 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, 2019, these investments had an average maturity date of 2 to 5 years. 50 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2019, the District had $1,726,564 held by Zions bank as trustee, pledged to the payment or security of its outstanding bond issues. The District also had $5,049,360 held by the County during the period which was pledged to the payment or security of its outstanding bonds. All transactions associated with debt service were administered by the Bank or County. 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, 2019 was $1,604,339. Restricted for Measure AA Bond Projects As of June 30, 2019, the District had $41,130,060 held by Zions bank as trustee, pledged to specific projects related to the acquisition of property to protect and preserve natural open space lands, constructions of public access improvements and recreation and capital enhancements to open space lands to restore disturbed natural areas back to their original condition and function. Restricted for Staffing Facilities As of June 30, 2019, the District had $8,904,710 held by Zions bank as trustee, pledged to finance portion of the cost of acquiring and improving staffing facilities for use by the District. Restricted for Historic Picchetti Reserve As of June 30, 2019, the District had $33,810 held with Wells Fargo, pledged for upkeep on the Picchetti Ranch brick winery building and farm complex. Restricted Cash with Fiscal Agent For the year ended June 30, 2019, the District had a balance of $2,531,030 in a Public Agency Retirement Services (PARS) Pension Rate Stabilization Program (PRSP) 115 irrevocable trust for pensions. Participating agencies maintain oversight of investment management and control over the risk tolerance level. Assets in the plan can be accessed to offset unexpected rate increases or be used as a rainy day fund related to their pension plan (CalPERS). These assets are not dedicated to providing plan benefits to plan participants and are not directly used to pay benefits until such time as the District transfers the funds from the PARS trust to the pension plan (CalPERS). The trust restricts the use of the assets to be used solely for pension related expenses. 51 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 $8.6 billion and $97.6 billion, respectively as of June 30, 2019, 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 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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.Investments 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, 2019: Fu nd Due from Other Fu nds Due to Other Fu nds General Fund 4,565,422$ 2,475,316$ Measure AA Capital Projects Fund 2,786,475 4,521,489 GF Capital Projects Fund - 355,092 Total 7,351,897$ 7,351,897$ At June 30, 2019, interfund transfers consisted of the following: Fu nd Tra nsfer In Tra nsfer Out General Fund 1,481,755$ 48,447,226$ GF Capital Projects Fund 37,148,401 1,481,755 Debt Service Fund 11,298,825 - Total 49,928,981$ 49,928,981$ 53 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2019 was $94,182. NOTE 5 -CAPITAL ASSETS AND DEPRECIATION Capital asset activity for the period ended June 30, 2019 is shown below: Balance Deletions/Balance Capital Assets June 30, 2018 Ad ditions Ad justments June 30, 2019 No n-depreciable: Land 414,547,441$ 23,216,204$ -$ 437,763,645$ Construction in P rogress 8,596,297 10,805,611 (3,208,534) 16,193,374 Total Non-Depreciable 423,143,738 34,021,815 (3,208,534) 453,957,019 Depreciable: Structure and Improvements 16,644,608 11,560,143 - 28,204,751 Infrastructure 32,640,168 2,158,478 - 34,798,646 Equipment 2,333,457 319,326 - 2,652,783 Ve hicles 5,007,778 504,429 (271,417) 5,240,790 Total Depreciable 56,626,011 14,542,376 (271,417) 70,896,970 Less Accumulated Depreciatio n fo r: Structure and Improvements (9,324,551) (820,470) - (10,145,021) Infrastructure (4,128,084) (1,128,348) - (5,256,432) Equipment (1,343,906) (195,263) - (1,539,169) Ve hicles (2,853,375) (734,147) 233,564 (3,353,958) Total Accumulated Depreciation (17,649,916) (2,878,228) 233,564 (20,294,580) Total Depreciable Capital Assets - Net 38,976,095 11,664,148 (37,853) 50,602,390 Total Capital Assets - Net 462,119,833$ 45,685,963$ (3,246,387)$ 504,559,409$ 54 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 NOTE 6 -LONG-TERM LIABILITIES The following is a summary of the changes in long-term liabilities for the period ended June 30, 2019: Begin ning Ending Due Within Long-term Liabilitie s Balance Ad ditions Deductions Balance One Year Promissory Notes (Direct Borrowings): Current Interest 25,439,999$ -$ 1,200,000$ 24,239,999$ 1,285,000$ Capital Appreciation 6,580,602 - - 6,580,602 - Accreted in terest 2,445,917 481,593 - 2,927,510 - Unamortized Premium 5,302,758 - 150,935 5,151,823 - Subtotal Promissory Notes 39,769,276 481,593 1,350,935 38,899,934 1,285,000 Bonds: Current Interest 184,370,000 - 5,280,000 179,090,000 7,830,000 Unamortized Bond Premium 21,535,916 - 1,120,340 20,415,576 - Subtotal Bonds 205,905,916 - 6,400,340 199,505,576 7,830,000 Net P ension Liabilit y 11,022,824 7,773,136 8,383,482 10,412,478 - Net OP EB Liabilit y 1,845,000 1,192,555 1,175,278 1,862,277 - Compensated Absences 1,723,930 1,528,342 883,885 2,368,387 883,885 Total Long-term Liabilit ies 260,266,946$ 10,975,626$ 18,193,920$ 253,048,652$ 9,998,885$ Compensated absences,other postemployment benefits and pension liabilities are paid by the fund for which the employee worked. Promissory Notes 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.The notes are secured by limited ad valorem property taxes levied upon all taxable property in the District. 55 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. The notes are secured by limited ad valorem property taxes levied upon all taxable property in the District. 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. There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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.The bonds are secured by ad valorem property taxes levied by the District. There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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 of 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. 56 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. 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. The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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. The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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.The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 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 $455,462.The bonds are secured by the District’s share of the general 1% ad valorem property tax levied in the District.There is no remedy to the District for default beyond the security provided in the indenture and debt reserves established. 57 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 The following schedule summarizes the District’s outstanding promissory notes and bonds as of June 30, 2019: Origin al Begin ning Ending Long Term Debt Issue Balance Additions Retirements Balance Promisso ry Notes (Direct Bo rro wi ngs): Hunt Note 1,500,000$ 1,500,000$ -$ -$ 1,500,000$ 2012 Refunding Note Current Int.15,790,000 2,124,999 - 395,000 1,729,999 2012 Refunding Note Cap Apprec.15,474,708 6,580,602 - - 6,580,602 2015 Refunding Note 23,630,000 21,815,000 - 805,000 21,010,000 Subtotal Promisso ry Notes 56,394,708 32,020,601 - 1,200,000 30,820,601 Bo nds: 2011 Lease Revenue 20,500,000 930,000 - 180,000 750,000 2015A General Obliga tion Bonds 40,000,000 40,000,000 - - 40,000,000 2015B General Obliga tion Bonds 5,000,000 3,350,000 - 890,000 2,460,000 2016 Refunding Bond 57,410,000 53,845,000 - 3,410,000 50,435,000 2017 Refunding Bond 25,025,000 25,025,000 - - 25,025,000 2017 Parity Bond 11,220,000 11,220,000 - 800,000 10,420,000 2018 General Obliga tion Bonds 50,000,000 50,000,000 - - 50,000,000 Subtotal Bo nds 209,155,000 184,370,000 - 5,280,000 179,090,000 Accreted Interest: 2012 Refunding Note 2,445,917 481,593 - 2,927,510 Subtotal Accreted Interest 2,445,917 481,593 - 2,927,510 Unamo rtized Bond Premium 26,838,674 - 1,271,275 25,567,399 Total Long Term Debt 265,549,708$ 245,675,192$ 481,593$ 7,751,275$ 238,405,510$ The promissory notes future debt service requirements as of June 30,2019 were as follows: Year Ending June 30,Prin cipal Remaining Ac cretion Interest Total 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 1,170,000 - 825,750 1,995,750 2025-2029 6,825,000 - 3,163,875 9,988,875 2030-2034 12,946,057 6,728,490 1,309,000 20,983,547 2035-2039 2,739,544 2,298,400 35,125 5,073,069 Total Debt Service 30,820,601$ 9,026,890$ 9,548,125$ 49,395,616$ 58 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 The bonds future debt service requirements as of June 30, 2019 were as follows: Year Ending June 30,Prin cipal Remaining Ac cretion Interest Total 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 7,375,000 - 6,239,763 13,614,763 2025-2029 40,435,000 - 25,216,740 65,651,740 2030-2034 23,170,000 - 17,528,670 40,698,670 2035-2039 41,710,000 - 11,255,601 52,965,601 2040-2044 20,745,000 - 5,566,500 26,311,500 2045-2049 17,135,000 - 1,459,100 18,594,100 Total Debt Service 179,090,000$-$ 95,330,863$ 274,420,863$ Amortization of the deferred loss on early retirement of long-term debt for the fiscal period ended June 30, 2019 was as follows: Begin ning Balance 10,240,823$ Am ortization (845,123) Ending Balance 9,395,700$ 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 $1,988,147 was received during the period ended June 30, 2019. 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 members are eligible for non-industrial disability benefits after 10 years of service. The death benefit is 59 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2019, are summarized as follows: Ti er 1 PEPRA Bene fit formul a 2.5% @ 5 5 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 rat es 8.000% 6.250% Re qui red e mpl oyer contribution rat es 10.609% 6.842% Mi scel lane ous Employees Covered –At June 30, 2019, 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. Pension Liabilities, Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2019, the District reported net pension liabilities for its proportionate shares of the net pension liability as follows: Miscella neous Proportio nate Share of Net Pensio n Liability/(Asset) $ 10,412,478 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, 2018,and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2017 using standard procedures. The District’s proportion of the net pension liability was 60 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2018 and 2019 was as follows: Miscellaneo us Proportion - June 30, 2018 0.27962% Proportion - June 30, 2019 0.27629% Change - Increase/(Decrease)-0.00333% For the fiscal year ended June 30, 2019,the District recognized pension expense of $2,685,156. At fiscal year June 30, 2019, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: Deferre d Outflo ws of Reso urces Deferre d Inflo ws of Reso urces Changes of As sumptions 1,187,053$ 290,924$ Differences between Expected and Ac tual Exp erience 399,508 135,950 Differences between Projected and Ac tual Investment Earnings 51,477 - Differences between Employer's Contributions and Proportionate Share of Contributions 899,679 262,985 Change in Employer's Proportion 864,101 689,495 Pension Contributions Made Subsequent to Measurement Date 1,358,206 - To tal 4,760,025$ 1,379,355$ The District reported $1,358,206 as deferred outflows of resources related to contributions subsequent to the measurement date that will be recognized as a reduction of the net pension liability in the year ended June 30,2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: 1,373,936$ 881,007 (138,824) (93,654) 2,022,465$ 2020 To tal 2021 2022 2023 Deferre d Outflo ws / (Inflo ws ) of Reso urces Fi scal Ye ar En ding June 30: 61 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 Actuarial Assumptions -The total pension liabilities in the June 30, 2017 actuarial valuations were determined using the following actuarial assumptions: Va luat ion Date June 30, 2017 Me as ur ement Dat e June 3 0, 2 018 Ac tuar ial Co st Me thod Ent ry-Age No rmal Co st Method Ac tuar ial As sumptions: Discount Rate 7.15% Inf lation 2.50% Payr oll Gr owth 2.75% Projected Sal ar y Inc rease (1) Investment Rate of Return 7.15% (2) Mo rtality (3) (1) Var ies by age and s ervice (2) Net of pens ion plan investment expens es, inc ludi ng inf lation (3) Derived us ing Cal PERS' me mbe rship dat a for al l 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 stress test results are presented in a detailed report that can be obtained from the CalPERS’ website. The long-term expected rate of return on pension plan investments was determined using a building- block method in which 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 rounded 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-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. 62 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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. As sumed As set Real Return Real Return As set Class (a)Allo cation Years 1 - 10 (b)Years 11+ (c) Global Equity 50.00%4.80% 5.98% Fixe d Income 28.00%1.00% 2.62% Inflation Sensitive 0.00%0.77% 1.81% Priv ate Equity 8.00%6.30% 7.23% Real Estate 13.00%3.75% 4.93% Liquidity 1.00%0.00%-0.92% Total 100.00% (a) In the System's CAFR, Fixe d Income is included in Glo bal Debt Securities; Liquidity Liq uidity is included in Short-term Investments; Inflation As sets are in cluded in both Glo bal Equity Securities and Global Debt Securities. (b) An expected in flation of 2.0% used for this period. (c) An expected in flation of 2.92% 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 19,423,155$ Current 7.15% Net Pension Liabilit y 10,412,478$ 1% Increase 8.15% Net Pension Liabilit y 2,974,312$ 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Minimum Age:Retirement under CalPERS 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 $617,768. Total contributions included in the measurement period were $412,000. The actuarially determined contribution for the measurement period was $624,000. The District’s contributions were 4.95%of covered payroll during the measurement period June 30, 2018 (reporting period June 30, 2019). Employees are not required to contribute to the plan. 64 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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, 2018 Actuarial Co st Metho d:Entry age normal, level precentage of payroll Amo rt izatio n Perio d:10.2 years Asset Valuatio n Metho d:Investment ga in s and lo ses spread over 5 year rollin g 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, Terminatio n CalPERS 1997-2015 experience study Mo rt ality Improvement Post-retirement mortalit y projected fully generational wit h Society of Ac tuaries Scale MP -2017 Healthcare Participatio n fo r Future 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. 65 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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% Net OPEB Liability -The District's net OPEB liability was measured as of June 30, 2018 (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, 2019 (reporting date). The following summarizes the changes in the net OPEB liability during the year ended June 30, 2019, for the measurement date of June 30, 2018: Fi scal Ye ar Ended June 30, 2019 (Measurement Date June 30, 2017) To tal OPEB Liability Plan Fi duciary Net Po sitio n Net OPEB Liability (Asset) Balance at June 30,2018 5,111,000$ 3,266,000$ 1,845,000$ Service cost 321,153 - 321,153 Interest in Total OPEB Liabilit y 361,203 - 361,203 Employer contributions - 412,000 (412,000) Ac tual investment in come - 259,143 (259,143) Ad ministrative expenses - (6,064) 6,064 Benefit payments (162,000) (162,000) - Net changes 520,356 503,079 17,277 Balance at June 30, 2019 5,631,356$ 3,769,079$ 1,862,277$ Covered Employee Payroll 13,550,000$ Total OPEB Liabilit y as a % of Covered Employee Payroll 41.56% Plan Fid. Net Position as a % of Total OPEB Liabilit y 66.93% Service Cost as a % of Covered Employee Payroll 2.37% Net OP EB Liabilit y as a % of Covered Employee Payroll 13.74% 66 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 Deferred Inflows and Outflows of Resources -At June 30, 2019, 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 - 92,510 Change in assumptions - - OP EB contribution subsequent to measurement date 670,768 - To tals 670,768$ 92,510$ Of the total amount reported as deferred outflows of resources related to OPEB, $670,768 resulting from District contributions subsequent to the measurement date and before the end of the fiscal year will be included as a reduction of the net OPEB liability in the year ended June 30, 2020. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year Ended June 30, 2020 (28,277)$ 2021 (28,277) 2022 (28,277) 2023 (7,679) 2024 - Thereafter - To tal (92,510)$ OPEB Expense -The following summarizes the OPEB expense by source during the year ended June 30, 2019, for the measurement date of June 30, 2018: Service cost 321,153$ Interest in TOL 361,203 Expected in vestment in come (220,756) Difference between actual and expected earnings (28,277) Ad ministrative expenses 6,064 OPEB Ex pense 439,387$ The following summarizes changes in the net OPEB liability as reconciled to OPEB expense during the year ended June 30, 2019, for the measurement date of June 30,2018: 1,862,277$ (1,845,000) 17,277 Changes in deferred outflows 10,110 Employer contributions and im plic t subsidy 412,000 OPEB Ex pense 439,387$ Net OP EB lia bilit y ending Net OP EB lia bilit y beginin g Change in net OP EB lia bilit y 67 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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: (1% Decrease )6.75%(1% Increase ) Net OP EB Liabilit y (Asset)2,705,950$ 1,862,277$ 1,170,860$ 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: (1% Decrease )4.25%(1% Increase ) Net OP EB Liabilit y (Asset)1,632,015$ 1,862,277$ 2,171,385$ 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Attachment 1 Midpeninsula Regional Open Space District Notes to the Basic Financial Statements June 30, 2019 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 Litigation 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, 2019. Commitments As of June 30, 2019, the District had remaining commitments of $4,522,563 towards construction and other contracts. These commitments are not liabilities of the District’s until services or goods have been rendered/received. The expected date of completion is between December 2021 and June 2028. 70 Attachment 1 Required Supplementary Information 71 Attachment 1 Page Intentionally Left Blank 72 Attachment 1 REQUIRED SUPPLEMENTARY INFORMATION BUDGETARY SCHEDULES This schedule presents a comparison of the original budget,final budget and actual revenues and expenditures for General Fund. The schedule presents the difference between the final budget and actuals. PENSION SCHEDULES These schedules present information that shows the District's proportionate share of the pension liability in the cost sharing pools,actuarial information,and contributions.The proportionate share information is useful in determining the District's liability on relation to all other entities in the pool. POSTEMPLOYMENT BENEFIT SCHEDULES These schedules present information that shows the District's total other postemployment benefits (OPEB),plan fiduciary net position, and contributions related to retiree healthcare benefits provided by the District. 73 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes 48,122,000$ 48,919,000$ 49,156,904$ 237,904$ Grant income 191,000 191,000 460,842 269,842 Property management 1,221,124 1,043,000 2,360,364 1,317,364 Investment earnings 1,079,000 1,949,904 1,403,878 (546,026) Other revenues 471,738 1,158,498 640,850 (517,648) Total revenues 51,084,862 53,261,402 54,022,838 761,436 Expenditures: Current Salaries and employee benefits 22,930,309 23,155,369 20,727,559 2,427,810 Services and supplies 10,648,125 10,384,065 8,086,707 2,297,358 Capital outlay 83,000 - - - Total expenditures 33,661,434 33,539,434 28,814,266 4,725,168 Excess (deficiency) of revenues over (under) expenditures 17,423,428 19,721,968 25,208,572 5,486,604 Other financing sources (uses): Transfers in - - 1,481,755 1,481,755 Transfers out (14,529,135) (14,529,135) (48,447,226) (33,918,091) Total other financing sources (uses)(14,529,135) (14,529,135) (46,965,471) (32,436,336) Net change in fund balance 2,894,293 5,192,833 (21,756,899) (26,949,732) Fund balance beginning 73,109,487 73,109,487 73,109,487 - Fund balance ending 76,003,780$ 78,302,320$ 51,352,588$ (26,949,732)$ The District employs budget control by object codes and by individual appropriation accounts.Budgets are prepared on the modified accrual basis of accounting in accordance with accounting principles generally accepted in the Un ited States of America as prescribed by the Governmental Accounting Standards Board.The budgets are revised during the year by the Board of Directors to provide for revised priorities.Expenditures cannot legally exceed appropriations by major object code. The originally adopted and final revised budgets for the General Fund are presented as Required Supplementary Information. The basis of budgeting is the same as GAAP.Transfers out exceeded budget as noted above because of the transfer to GF Capital Projects Fund for the District's new building purchase. Budgeted Amounts Midpeninsula Regional Open Space District Budget to Actual (GAAP) For the Fiscal Year Ended June 30, 2019 Schedule of Revenues, Expenditures and Changes in Fund Balance General Fund 74 Attachment 1 Miscellaneous Plan Plan Measurement Date 2014 2015 2016 2017 2018 Fiscal Year Ended 2015 2016 2017 2018 2019 Contractually Required Contributions 1,461,069$ 1,358,520$ 1,514,352$ 1,763,650$ 1,358,184$ Contributions in Relation to Contractually Required Contributions 1,343,244 4,788,977 2,529,862 1,783,789 1,358,206 Contribution Deficiency (Excess)117,825$ (3,430,457)$(1,015,510)$ (20,139)$ (22)$ Covered Payroll 8,994,979$ 9,862,578$ 11,834,150$ 12,802,887$ 15,311,826$ Contributions as a % of Covered Payroll 14.93%48.56%21.38%13.93%8.87% Notes to Schedule: Valuation Date:June 30, 2017 Assumptions Used:Entry Age Method used for Actuarial Cost Method Level Percentage of Payroll and Direct Rate Smoothing 3.8 Years Remaining Amortization Period Inflation Assumed at 2.5% Investment Rate of Returns set at 7.15% Fiscal year 2015 was the first year of implementation, therefore only five years are shown. The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016 and then decreased from 7.65% to 7.15% in fiscal year 2018. The CalPERS mortality assumptions was adjusted in fiscal year 2019. Midpeninsula Regional Open Space District Schedule of Pension Plan Contributions June 30, 2019 CalPERS mortality table based on CalPERS' experience and include 15 years of projected ongoing mortality improvement using 90 percent of Scale MP 2016 published by the Society of Actuaries. 75 Attachment 1 Miscellaneous Plan Plan Measurement Date 2014 2015 2016 2017 2018 Fiscal Year Ended 2015 2016 2017 2018 2019 Proportion of Net Pension Liability 0.39847%0.41627%0.29137%0.27962%0.27629% Proportionate Share of Net Pension Liability 9,848,203$ 11,420,126$10,121,906$11,022,824$10,412,478$ Covered Payroll 8,448,635$ 8,994,979$ 9,862,578$ 11,834,150$12,802,887$ Proportionate Share of NPL as a % of Covered Payroll 116.57%126.96%102.63%93.14%81.33% Plan's Fiduciary Net Position as a % of the TPL 81.15%79.23%80.93%82.04%84.37% Fiscal year 2015 was the first year of implementation, therefore only five years are shown. The CalPERS discount rate was increased from 7.5% to 7.65% in fiscal year 2016 and then decreased from 7.65% to 7.15% in fiscal year 2018. The CalPERS mortality assumptions was adjusted in fiscal year 2019. June 30, 2019 Schedule of Net Pension Liability Proportionate Shares Midpeninsula Regional Open Space District 76 Attachment 1 Fiscal Year Ended 2018 2019 Actuarially determined contribution (ADC)609,000$ 624,000$ Less: actual contribution in relation to ADC (412,000) (670,768) Contribution deficiency (excess)197,000$ (46,768)$ Covered employee payroll 12,802,887$ 13,550,000$ Contrib. as a % of covered employee payroll 3.22%4.95% Notes to Schedule: Assumptions and Methods Valuation Date: Measurement Date: Actuarial Cost Method: Amor tization Period: Asset Valuation Method: Actuarial Assumptions: Discount Rate 6.75% General Inflation 2.75% Payroll Increases Medical Trend PEMHCA Minimum Increases 4.25% Mortality Improvement Other Notes There were not changes in benefit terms. There were no changes in trend rates.. The discount rate decreased from 7.0% to 6.5% in fiscal year 2019. Midpeninsula Regional Open Space District Schedule of Contributions for Postemployment Benefits June 30, 2019 June 30, 2017 Aggregate - 3% Merit - CalPERS 1997-2015 experience study June 30, 2018 Entry age normal, level precentage of payroll Investment gains and loses spread over 5 year rolling period 10.2 years GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018. Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported. Non-medicare - 7.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Medicare - 6.5% for 2019, decreasing to an ultimate rate of 4.0% in 2076 and later years Mortality, Retirement, Disability, Termination Healthcare Participation for Future Retirees Currently covered: 90% Currently waived: 60% Post-retirement mortality projected fully generational with Society of Actuaries Scale MP-2017 CalPERS 1997-2015 experience study 77 Attachment 1 Fiscal Year Ended 2018 2019 Total OPEB liability Service cost 313,000$ 321,153$ Interest 326,000 361,203 Changes of benefit terms - - Differences between expected and actual experience - - Changes of assumptions - - Benefit payments (113,000) (162,000) Implicit subsidy fullfilled - - Net change in Total OPEB Liability 526,000 520,356 Total OPEB Liability - beginning 4,585,000 5,111,000 Total OPEB Liability - ending 5,111,000$ 5,631,356$ Plan fiduciary net position Employer contributions 513,000$ 412,000$ Employer implict subsidy - - Employee contributions - - Net investment income 287,000 259,143 Difference between estimated and actual earnings - - Benefit payments (113,000) (162,000) Implicit subsidy fullfilled - - Other - - Administrative expense (1,000) (6,064) Net change in plan fiduciary net position 686,000 503,079 Plan fiduciary net position - beginning 2,580,000 3,266,000 Plan fiduciary net position - ending 3,266,000$ 3,769,079$ Net OPEB liability (asset)1,845,000$ 1,862,277 Plan fiduciary net position as a percentage of the total OPEB liability 63.90%66.93% Covered Employee Payroll 11,834,150$ 12,802,887$ Net OPEB liability as a percentage of covered employee payroll 15.59%14.55% Total OPEB liability as a percentage of covered employee payroll 43.19%43.99% Other Notes There were not changes in benefit terms. There were no changes in trend rates.. The discount rate decreased from 7.0% to 6.5% in fiscal year 2019. GASB 75 requires a schedule of contributions for the last ten fiscal years, or for as many years as are available if less than ten years are available. GASB 75 was adopted as of June 30, 2018. Actuarially determined contribution rates are calculated as of June 30, two years prior to the end of the fiscal year in which contributions are reported. Midpeninsula Regional Open Space District Schedule of Changes in Net OPEB Liability June 30, 2019 78 Attachment 1 Supplementary Information 79 Attachment 1 Page Intentionally Left Blank 80 Attachment 1 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. BOND 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 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes -$ -$ -$ -$ Grant income - - - - Property management - - - - Investment earnings - - 399,613 399,613 Other revenues - - - - Total revenues - - 399,613 399,613 Expenditures: Current Salaries and employee benefits - - - - Services and supplies 880,900 4,700 1,334 3,366 Capital outlay 38,359,100 35,999,584 34,854,151 1,145,433 Total expenditures 39,240,000 36,004,284 34,855,485 1,148,799 Excess (deficiency) of revenues over (under) expenditures (39,240,000) (36,004,284) (34,455,872) 1,548,412 Other financing sources (uses): Transfers in 3,294,050 3,294,050 37,148,401 33,854,351 Transfers out - - (1,481,755) (1,481,755) Total other financing sources (uses)3,294,050 3,294,050 35,666,646 32,372,596 Net change in fund balance (35,945,950) (32,710,234) 1,210,774 33,921,008 Fund balance beginning 7,043,765 7,043,765 7,043,765 - Fund balance ending (28,902,185)$ (25,666,469)$ 8,254,539$ 33,921,008$ Budgeted Amounts 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, 2019 82 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes -$ -$ -$ -$ Grant income 1,042,040 937,604 620,869 (316,735) Property management - - - - Investment earnings - - 1,726,441 1,726,441 Other revenues - - - - Total revenues 1,042,040 937,604 2,347,310 1,409,706 Expenditures: Current Salaries and employee benefits 1,176,946 866,386 368,306 498,080 Services and supplies 18,000 18,000 2,054 15,946 Capital outlay 13,631,078 11,745,696 10,501,506 1,244,190 Total expenditures 14,826,024 12,630,082 10,871,866 1,758,216 Excess (deficiency) of revenues over (under) expenditures (13,783,984) (11,692,478) (8,524,556) 3,167,922 Other financing sources (uses): Transfers in - - - - Transfers out - - - - Total other financing sources (uses)- - - - Net change in fund balance (13,783,984) (11,692,478) (8,524,556) 3,167,922 Fund balance beginning 46,468,809 46,468,809 46,468,809 - Fund balance ending 32,684,825$ 34,776,331$ 37,944,253$ 3,167,922$ Budgeted Amounts 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, 2019 83 Attachment 1 Variance with Final Budget Actual Positive - Original Final (GAAP Basis)(Negative) Revenues: Property taxes 5,733,551$ 5,733,551$ 5,238,150$ (495,401)$ Grant income - - - - Property management - - - - Investment earnings 940,000 940,000 118,773 (821,227) Other revenues - - - - Total revenues 6,673,551 6,673,551 5,356,923 (1,316,628) Expenditures: Debt service: Principal 15,670,990 15,670,990 6,480,000 9,190,990 Interest - - 9,190,988 (9,190,988) Total expenditures 15,670,990 15,670,990 15,670,988 2 Excess (deficiency) of revenues over (under) expenditures (8,997,439) (8,997,439) (10,314,065) (1,316,626) Other financing sources (uses): Transfers in 11,320,585 11,320,585 11,298,825 (21,760) Transfers out - - - - Total other financing sources (uses)11,320,585 11,320,585 11,298,825 (21,760) Net change in fund balance 2,323,146 2,323,146 984,760 (1,338,386) Fund balance beginning 5,791,164 5,791,164 5,791,164 - Fund balance ending 8,114,310$ 8,114,310$ 6,775,924$ (1,338,386)$ Budgeted Amounts 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, 2019 84 Attachment 1 Expenditures Expenditures from from July 1, 2018 Inception through through Project No.Project Description June 30, 2019 June 30, 2019 20005 New Trail Easement - SFPUC, Ravenswood (MAA 2-2)(22,603)$ A -$ -$ 20088 POST Hendry's Creek Restoration (MAA 22-1)(41,330) B - - 20101 Lysons Property ( 17-1 MAA )(27,059) C - - 20102 Lobner Demolition (MAA 17-2)(128,760)C - - 20109 Riggs Property Appraisal - (3-1 MAA)(6,500) D - - 20110 Purisima Creek Uplands Lot line Adjustment (3-1 MAA)(13,000) D - - 20112 Conservation Easement Upper Alpine Ranch Area (15-1 MAA)(8,695) E - - 20113 Preservation of Upper Los Gatos Creek Watershed (22-1 MAA)(5,000) B - - 20114 Land Conservation Opportunities MAA 25-1 (Burtons )(150) F - - 30503 ECDM Trail Improvements (MAA 4-4)(3,930) G - - 30904 Mindego Area - Mindego Hill Trail (MAA 9-4)(34,196) H - - 31309 Mt Um Bald Mtn Staging to Summit Trail (MAA 23-2)(17,646) I - - 31310 Mt Um Summit Restor & Improv (MAA 23-4)(79,491) I - - 31311 Mt Um Trail Overlook & Bridges (MAA 23-5)(243) I - - 31500 Measure AA Project 11-1 (728) J - - 65101 PCR Harkins Bridge Replacement (MAA 3-4)(108,788)D - - 65201 Lower Stevens Canyon Hiking Bridge (MAA 17-4)(103,187)C - - 80016 ECdM Creek Watershed Protection Program (MAA 4-3)(45,507) G - - 80029 Pond DR05 Repair (MAA 7-5)(150,682)K - - 80037 Mindego Grazing Infrastructure (MAA 9-1)(135,748)H - - 80038 LHC Grazing Infrastructure - McDonald Ranch Fencing (MAA 5-2)(178,850)L - - AA01 Miramontes Ridge - Gateway to San Mateo Coast - (52,915.00) - AA02 Bayfront Habitat Protection & Public Access Partnerships 22,603 A 1,327,008.00 2,046,671 AA03 Purisima Creek Redwoods: Purisma-to Sea Trail, Watershed/Graze 128,288 D 160,306.00 1,270,676 AA04 El Corte de Madera Creek: Bike Trail & Water Quality 49,437 G 306,910.00 886,868 AA05 La Honda Creek - Upper Recreation Area 178,850 L 17,055.00 2,428,759 AA06 Hawthorn Public Access Improvements - 18,112.00 26,602 AA07 Driscoll Ranch Public Access, Wildlife Protection, Grazing 150,682 K 121,948.00 12,161,434 AA08 La Honda/Russian Ridge: Upper San Gregorio Watershed - 2,153,910.00 2,153,910 AA09 Russian Ridge: Public Recreation, Grazing & Wildlife Protection 169,944 H 77,512.00 319,467 AA10 Coal Creek: Reopen Alpine Road for Trail Use - 144,173.00 166,122 AA11 Rancho San Antonio: Interpretive Improvements, Refurbishing 728 J 3,025.00 33,264 AA15 Regional: Redwood Protection & Salmon Fishery Conservation 8,695 E 14,500.00 3,033,050 AA17 Regional: Complete Upper Stevens Creek Trail 259,006 C 275,086.00 2,055,333 AA18 South Bay Foothills: Saratoga-to-Sea Trail & Wildlife Corridor - 3,850.00 3,850 AA19 El Sereno Dog Park & Connections - 52,977.00 480,242 AA20 South Bay Foothills: Wildlife Passage/Ridge Trail Improvements - 193,367.00 390,203 AA21 CR:Pub Recreation Proj - 4,848,581.00 8,275,686 AA22 Cathedral Oaks Public Access & Conservation 46,330 B 368,992.00 1,077,895 AA23 Mt Um Pub Access/Intrep 97,380 I 852,369.00 22,934,442 AA24 Rancho de Guadalupe Family Recreation - (14,900.00) 1,591,996 AA25 Loma Prieta Area Public Access 150 F - 410,150 Total MAA Bond Project Expenditures - 10,871,866 61,746,620 Reimbursements from Grants, Contributions, and Other Funds - (620,869) (3,315,613) Total MAA Bond Project Expenditures - Net Reimbursements -$ 10,250,997$ 58,431,007$ During fiscal ye ar ending June 30, 2019,the District realigned pre-existing project numbers eligible for Measure AA (MAA)funding with the Measure AA projects numbers (MAA)for ease of project review.Letters in adjustment column indicate the transfer of expenses between project numbers.Prior expenditure balances related to appraisals and land surveys in MAA01 "Miramontes Ridge -Gateway to San Mateo Coast"and MAA24 “Sierra Azul:Rancho de Guadalupe Family Recreation Projects”were removed as the transactions failed to materialize. Adjustments Midpeninsula Regional Open Space District Measure AA Bond Program Schedule of Program Expenditures June 30, 2019 85 Attachment 1 Midpeninsula Regional Open Space District Notes to Supplementary Information June 30, 2019 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, 2019, the District has acquired and / or preserved over 1,700 acres of land with $24 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 year,the Committee’s findings will be presented to the Board at a public meeting and will be posted on the District’s website. NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The basis of accounting utilized in preparation of this report may differ from accounting principles generally accepted in the United States of America. Accordingly, the accompanying program statement is not intended to present the financial position and the results of operations in conformity with accounting principles generally accepted in the United States of America.Expenditures incurred with Measure AA Bond proceeds are recorded on a modified accrual basis of accounting. Under the modified accrual basis of accounting, revenue is recognized when it is measureable and available. Similarly,expenses are recognized when they are incurred, not when they are paid. 86 Attachment 1 Statistical Information 87 Attachment 1 Page Intentionally Left Blank 88 Attachment 1 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 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Governmental activities Net investment in capital assets 225,092$ 236,546$ 245,393$ 259,638$ 268,869$ 278,611$ 276,395$ 308,601$ 312,121$ 351,152$ Restricted 1,417 1,408 1,568 2,731 4,327 2,566 5,786 4,571 7,252 8,207 Unrestricted 30,450 28,142 42,738 36,919 37,951 39,948 39,280 23,831 29,415 8,015 Total Net Position 256,959$ 266,096$ 289,699$ 299,288$ 311,147$ 321,125$ 321,461$ 337,003$ 348,788$ 367,374$ 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, FY 2015-16 is a fifteen (15) month period rather than a twelve (12) month period. Midpeninsula Regional Open Space District Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 90 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Expenses Governmental activities Land preservation 13,254$ 13,768$ 14,312$ 19,338$ 17,930$ 19,478$ 26,080$ 21,783$ 28,910$ 34,304$ Interest and fiscal charges 6,208 6,739 7,483 7,273 7,163 7,202 9,752 8,327 8,193 10,449 Depreciation 715 882 806 840 1,095 1,232 1,311 1,585 2,399 - Loss on refunding of debt 381 - - - - - - - - - Total governmental activities expenses 20,558 21,389 22,601 27,451 26,188 27,912 37,143 31,695 39,502 44,753 Program Revenues Governmental Activities Charges for Services 911 1,241 1,320 1,381 1,422 1,437 1,636 1,479 1,576 2,360 Grants and Contributions 659 1,393 1,453 913 1,901 953 1,194 651 1,613 1,082 Land donations 2,259 17 13,928 3,890 - - - - - - Total governmental activities program revenues 3,829 2,651 16,701 6,184 3,323 2,390 2,830 2,130 3,189 3,442 Net (expense)/revenue - governmental activities (16,729) (18,738) (5,900) (21,267) (22,865) (25,522) (34,313) (29,565) (36,313) (41,311) General Revenues and Other Changes in Net Position Governmental Activities Property taxes 27,631 27,269 28,737 30,270 32,433 35,082 44,980 43,861 47,798 54,395 Investment earnings - 294 375 288 138 202 648 463 1,045 3,628 Use of money and property 80 - - - - - - - - - Miscellaneous 216 311 394 298 182 216 810 784 1,153 1,874 Total governmental activities 27,927 27,874 29,506 30,856 32,753 35,500 46,438 45,108 49,996 59,897 Change in Net Position Governmental activities 11,198 9,136 23,606 9,589 9,888 9,978 12,125 15,543 13,683 18,586 Prior period adjustments - - - - 1,971 - (11,790) - (1,898) - Total Changes in Net Position 11,198$ 9,136$ 23,606$ 9,589$ 11,859$ 9,978$ 335$ 15,543$ 11,785$ 18,586$ 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, FY 2015-16 is a fifteen (15) month period rather than a twelve (12) month period. Starting FY 2018-19 depreciation expenses were allocated to land preservation. Midpeninsula Regional Open Space District Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) (amounts expressed in thousands) 91 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 General fund Reserved 579$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Unreserved, designated in 15,657 - - - - - - - - - Unreserved, reported in 12,678 - - - - - - - - - Nonspendable - - - - - - - 55 36 186 Restricted - 731 - - 1,702 1,702 1,971 1,971 1,467 3,963 Committed - - - - - 20,400 35,400 35,400 42,300 29,288 Assigned - - - - 5,000 - - - - 1,400 Unassigned - 26,156 41,782 37,513 34,453 21,330 16,848 23,872 29,306 16,515 Total General Fund 28,914$ 26,887$ 41,782$ 37,513$ 41,155$ 43,432$ 54,219$ 61,298$ 73,109$ 51,352$ All other governmental funds Reserved 1,417$ -$ -$ -$ -$ -$ -$ -$ -$ -$ Restricted - 1,408 1,568 1,634 1,621 - 26,894 9,539 59,304 52,975 Total all other governmental funds 1,417$ 1,408$ 1,568$ 1,634$ 1,621$ -$ 26,894$ 9,539$ 59,304$ 52,975$ 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, FY 2015-16 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 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 REVENUES Property taxes 27,631$ 27,269$ 28,737$ 30,270$ 32,433$ 35,082$ 44,980$ 43,861$ 47,798$ 54,395$ Grant income 659 1,393 1,453 913 1,901 953 1,194 651 1,613 1,082 Property management 911 955 1,320 1,381 1,422 1,438 1,636 1,479 1,576 2,360 Investment earnings 80 294 375 288 150 216 666 480 1,064 3,649 Other 224 551 240 146 145 241 644 609 348 641 Land donation 2,258 17 13,928 - - - - - - - TOTAL REVENUE 31,763 30,479 46,053 32,998 36,051 37,930 49,120 47,080 52,399 62,127 EXPENDITURES Land Preservation 13,070 13,682 13,996 18,713 17,303 18,272 28,965 25,807 28,226 29,186 Capital outlay 18,557 11,596 27,190 9,611 8,231 8,445 18,901 19,961 16,440 45,356 Debt service: Principal and advance refunding escrow 2,900 3,301 4,457 2,843 2,999 3,145 4,367 5,193 6,392 6,480 Interest and fiscal charges 4,919 4,786 5,355 6,034 5,859 5,749 6,478 7,190 6,597 9,191 TOTAL EXPENDITURES 39,446 33,365 50,998 37,201 34,392 35,611 58,711 58,152 57,655 90,213 EXCESS (DEFICIT) OF REVENUES OVER EXPENDITURES (7,683) (2,886) (4,945) (4,203) 1,659 2,319 (9,591) (11,072) (5,256) (28,086) OTHER FINANCING SOURCES AND USES Transfers in 7,829 7,974 9,827 8,877 8,858 8,894 12,146 15,839 9,409 49,929 Transfers out (7,829) (7,974) (9,827) (8,877) (8,858) (8,894) (12,146) (15,839) (9,409) (49,929) 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 - - - - - - - - - - NET CHANGES IN FUND BALANCES (7,683)$ (2,036)$ 15,055$ (4,203)$ 1,659$ 657$ 37,691$ (10,285)$ 61,575$ (28,086)$ Capitalized capital outlay expenditures 18,557 11,596 28,306 13,501 7,486 7,906 18,222 20,265 17,411 45,355 Debt Service as a percentage of noncapital expenditures 37.43%37.15%43.24%37.46%32.92%32.10%26.79%32.69%32.28%34.93% 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, FY 2015-16 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 Attachment 1 Fiscal Year Secured State Board Unsecured Total before Rdv. Increment Total after Rdv. Increment Total Direct Tax Rate 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% 2019 188,007,378 8,646 10,266,764 198,282,788 191,359,437 1.00% Fiscal Year Secured State Board Unsecured Total before Rdv. Increment Total after Rdv. Increment Total Direct Tax Rate 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% 2019 85,236,395 2,658 2,756,478 87,995,531 79,176,299 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, FY 2015-16 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 Attachment 1 Fiscal Year General Property Tax Levy Other Overlapping Governments Open Space District Total General Property Tax Levy Other Overlapping Governments Open Space District Total 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 2019 1.00000 0.17126 0.00180 1.17306 1.00000 0.09240 0.00180 1.09420 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, FY 2015-16 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 $8,109,918,455, which is 3.60% of the District’s total assessed valuation. 4 Fiscal Year 2015-16 was the first year in which ad valorem property taxes authorized by Measure AA were levied. Midpeninsula Regional Open Space District Property Tax Rates Direct and Overlapping1 Property Tax Rates Last Ten Fiscal Years County of Santa Clara (Tax Rate Area 6-001) 2 County of San Mateo (Tax Rate Area 9-001) 3 95 Attachment 1 Taxpayer Taxable Assessed Valuation Rank Percentage of Total Assessed Valuation Taxable Assessed Valuation Rank Percentage of Total Assessed Valuation Board of Trustees, Leland Stanford Jr. University 6,609,910$ 1 2.48%4,249,763$ 1 2.66% Google Inc.5,351,042 2 1.39%436,617 7 0.27% Campus Holdings Inc. 3,504,317 3 1.22%** Apple Computer Inc. 1,226,952 4 0.49%659,212 2 0.41% Hibscus Properties LLC 1,107,164 5 *** Sobrato Interests 1,063,697 6 0.31%** Lockheed Missiles and Space Co. Inc.890,576 7 0.39%558,761 3 0.35% Yahoo Holdings Inc.656,370 8 *416,320 8 0.26% Oracle Corp. 638,903 9 0.25%530,234 4 0.33% Richard T. Spieker, Trustee 616,741 10 *** Menlo & Juniper Networks LLC 612,073 11 0.24%** Applied Materials Inc.531,041 12 0.19%414,549 9 0.26% Facebook Inc.490,838 13 *** Intuitive Surgical Inc.490,801 14 *** Peninsula Innovation Partnersh LLC 471,036 15 *** CW SPE LLC 459,732 16 *** Woodland Park Property Owner LLC 418,738 17 *** 441 Real Estate LLC 406,680 18 *** Network Appliance Inc. 383,803 19 0.20%464,314 6 0.29% LinkedIn Corporation 376,325 20 *** VII Pac Shores Investors LLC **506,399 5 0.32% Arden Realty LP **372,904 11 0.23% HCP Life Science REIT Inc.**316,304 14 0.20% Wells REIT II-University Circle LP **310,934 15 0.19% SPF Mathilda LLC **277,440 16 0.17% Silicon Valley CA I LLC **259,131 17 0.16% Westport Office Park LLC **254,372 18 0.16% Spansion LLC **229,155 19 0.14% Loral Space & Communications, Inc.**210,131 20 0.13% Hewlett Packard Co.**317,777 13 0.20% Symantec Corporation **376,878 10 0.24% Sun Microsystems Inc. **355,400 12 0.22% Total 26,306,739$ 7.16%11,516,595$ 7.19% * 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 2010Fiscal Year 2019 96 Attachment 1 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% 2019 3,365,744 1,532,834 3,348,991 99.5%1,524,259 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, FY 2015-16 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 Attachment 1 Fiscal Year General Obligation Bonds Debt Service Monies Available Total Taxable Assessed Value Percentage of Taxable AV 1 Per Capita 2 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 2019 102,880 6,776 96,104 270,535,736 0.036%* *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, FY 2015-16 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 Attachment 1 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 2010 -$ 65,049$ 52,204$ 663$ 5,755$ 123,671$ 160,376,725$ 0.077% 0.113%916$ 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%** 2019 102,880 750 75,460 25,567 33,749 238,406 270,535,736 0.088%** *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, FY 2015-16 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) 99 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Assessed Valuation: Assessed value subject to debt levy 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$270,535,736$ Total assessed valuation 160,376,725 159,777,663 162,250,428 169,774,177 183,976,034 195,005,584 214,740,668 231,940,459 250,718,954 270,535,736 Debt Applicable to Limitation: Total debt 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 2,194 5,785 - Total debt applicable to limitation 123,671 123,019 140,539 138,952 140,159 136,564 177,259 179,757 239,890 - Legal Debt Margin: Bonded debt limit (15% AV)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 40,580,360 Debt applicable to limitation 123,671 123,019 140,539 138,952 140,159 136,564 177,259 179,757 239,890 - Legal debt margin 23,932,838$ 23,843,630$ 24,197,025$ 25,327,175$ 27,456,246$ 29,114,274$ 32,033,841$ 34,611,312$ 37,367,953$ 40,580,360$ 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, FY 2015-16 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) 100 Attachment 1 Fiscal Year Population 1 Personal Income 2 (in millions) Per Capita Personal Income 2 Median Age 3 School Enrollment 4 County Unemployment Rate 5 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% 2019 1,954,286 ***267,224 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 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% 2019 774,485 ***94,234 2.4% * 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, FY 2015-16 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 Attachment 1 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 and County of Santa Clara. 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 4 2009 102 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function Office of the General Manager 3.00 3.00 4.00 4.00 4.00 5.00 6.00 8.00 8.00 8.00 Real Property 5.00 5.00 5.00 5.00 5.00 6.00 7.00 4.00 5.00 5.00 Plannning 13.50 14.00 14.00 14.00 14.00 14.00 14.00 10.50 11.50 10.50 Engineering & Construction N/A N/A N/A N/A N/A N/A N/A 5.50 7.50 7.50 Public Affairs 8.00 8.00 8.00 9.00 9.00 11.00 12.00 8.00 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 4.75 4.75 5.25 9.25 9.25 10.25 Human Resources 2.00 2.00 2.50 3.50 3.50 5.50 7.00 7.00 7.00 7.00 Information Technology 1 1.00 1.00 1.00 2.00 2.50 2.50 5.50 7.50 7.50 7.50 Operations Administration 6.50 6.00 6.00 6.00 6.00 6.00 6.00 N/A N/A N/A Patrol 23.00 28.00 28.00 28.00 28.00 31.00 32.00 N/A N/A N/A Land/Facilities Maintenance 20.00 26.00 26.00 26.00 26.00 28.30 30.30 N/A N/A N/A Resource Management 2 6.00 6.00 N/A 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 49.30 53.30 56.30 Visitor Services N/A N/A N/A N/A N/A N/A N/A 41.90 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 8.00 8.00 8.00 9.00 10.00 11.00 12.00 12.00 Total 94.75 105.75 109.25 112.25 114.25 126.55 138.55 165.45 174.45 177.45 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 103 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function Land: Number of preserves 26 26 26 26 26 26 26 26 26 26 Acreage: Santa Clara County 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 33,630.26 San Mateo County 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 29,854.41 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)(1,802.88)(1,802.88) Total 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 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 3 3 Visitor Center 2 2 2 2 2 2 2 2 2 2 Vehicles & Equipment: Patrol vehicles 32 35 37 39 41 38 37 42 36 34 Service vehicles 3 3 3 3 5 8 10 13 10 11 Maintenance vehicles 5 6 8 9 13 16 19 25 29 31 Administrative vehicles n/a n/a n/a n/a n/a n/a n/a n/a 13 13 Motorcycles/ATVs/Electric bicycles 13 13 13 13 13 13 13 13 27 27 Bulldozers/excavators/tractors 16 17 17 20 21 21 23 23 20 23 Dump trucks 3 4 4 4 4 5 5 5 4 6 Water Truck 1 1 2 2 2 2 2 2 2 2 Trailers n/a n/a n/a n/a n/a n/a n/a n/a 25 27 Chippers/mowers 2 2 2 2 4 4 5 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 104 Attachment 1 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Function General Manager Board meetings 37 31 45 36 35 33 31 31 44 32 Resolutions adopted 50 41 56 20 39 61 61 40 46 47 Real Property Acres preserved Santa Clara County 204.25 547.04 492.99 16.30 152.01 100.41 107.50 83.28 178.18 2.11 San Mateo County 1,263.40 115.17 921.35 1,043.14 309.37 393.26 81.45 191.38 20.46 190.00 Public Affairs Stewardship volunteer hours 9,849 11,314 11,843 11,232 13,579 14,354 15,839 17,440 16,088 15,910 Interpretation and education docent hours 3,305 5,433 4,669 5,559 4,718 5,828 4,462 4,697 4,320 4,438 Website visits 274,559 274,133 434,402 349,398 359,432 418,748 429,891 487,215 589,280 524,387 Operations Bicycle Accident 25 22 36 37 30 20 26 19 37 13 Equestrian Accident 2 1 1 2 - 1 2 - - 1 Hiking/Running Accident 21 18 16 16 22 20 14 37 40 11 Other first aid 10 15 25 24 15 25 26 23 31 13 Search & rescue 11 15 10 8 5 8 3 4 2 2 Vehicle Accident 8 11 16 15 14 19 14 17 50 15 Fire 6 5 7 8 16 9 10 9 13 4 HazMat 3 3 - - 1 1 6 1 3 1 Subject Citation/Juvenile Contact Report 558 509 526 737 617 825 767 678 592 405 Parking Citation 386 434 527 621 584 700 645 836 870 375 Arrests 2 1 1 2 1 4 3 2 - 2 Day Permits 954 1,059 1,235 1,237 1,521 2,154 2,541 2,530 2,676 2,417 Multi-day permits 214 248 225 253 306 306 321 366 419 361 Camping permits 221 259 341 336 393 476 573 613 570 571 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 105 Attachment 1 Page Intentionally Left Blank 106 Attachment 1 Other Independent Auditor’s Reports 107 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 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 To the Board of Directors of the Midpeninsula Regional Open Space District Los Altos,California We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, the financial statements of the governmental activities and each major fund of Midpeninsula Regional Open Space District (the District)as of and for the year ended June 30, 2019,and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 11, 2019. 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 District’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be material weaknesses or significant deficiencies.Given these limitations, during our audit we did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts,and grant agreements, noncompliance with which could have a direct and 108 Attachment 1 CHAVAN &ASSOCIATES,LLP CERTIFIED PUBLIC ACCOUNTANTS 1475 Saratoga Ave, Suite 180, San Jose, CA 95129 Tel: 408-217-8749 •E-Fax: 408-872-4159 info@cnallp.com •www.cnallp.com 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 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 District’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 District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. November 11, 2019 San Jose, California 109 Attachment 1 Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022-1404 650-691-1200 info@openspace.org openspace.org PRINTED ON POST CONSUMER WASTE PAPER Russian Ridge Open Space Preserve by Jim Mosher Photos on front cover: Top photo: Purisima Creek Redwoods Open Space Preserve by Maila Pinlacperez Second row, left to right: Russian Ridge Open Space Preserve by Rosalina Calderon; Rancho San Antonio Open Space Preserve by Selwyn Quan; Russian Ridge Open Space Preserve by Karl Kohl Attachment 1 November 13, 2019 Board Meeting 19-28 SPECIAL AND REGULAR MEETING BOARD OF DIRECTORS MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Administrative Office 330 Distel Circle Los Altos, CA 94022 Wednesday, November 13, 2019 DRAFT MINUTES SPECIAL MEETING – STUDY SESSION Vice-President Holman called the special meeting of the Midpeninsula Regional Open Space District to order at 5:01 p.m. ROLL CALL Members Present: Jed Cyr, Larry Hassett, Karen Holman, Zoe Kersteen-Tucker, Yoriko Kishimoto, Pete Siemens, and Curt Riffle Members Absent: None Staff Present: General Manager Ana Ruiz, General Counsel Hilary Stevenson, Assistant General Manager Susanna Chan, Assistant General Manager Brian Malone, District Clerk/Assistant to the General Manager Jennifer Woodworth, Planning Manager Jane Mark, Senior Planner Tina Hugg District Clerk Jennifer Woodworth confirmed with President Siemens that there is a meeting agenda posted at his location, that the location is reasonably accessible to the public, such that any member of the public could participate, and that no members of the public are currently at the teleconference location that would like to participate in the public comment portion of the meeting. 1. Historic Preservation Training (R-19-142) Ruth Todd and Christina Dikas of Page & Turnbull, District consultants, provided training on historic resources, including outlining federal, state, and local rules and regulations, providing an overview of how historic resources are evaluated and understood, and requirements affecting historic structures related to significance and integrity. Director Riffle inquired regarding whether a chestnut grove could be considered historic. Meeting 19-28 Page 2 Ms. Dikas commented that orchards are typically evaluated with associated buildings and considered historic as part of a larger cultural landscape or historic district. Ms. Todd described various treatment options and tools that may be used to preserve, rehabilitate, restore, or reconstruct historic properties. Director Holman requested additional information related to “repairing in kind.” Ms. Todd reported that Page & Turnbull will be providing training for staff shortly regarding preservation approaches and sensitivities when maintaining historic resources. Additionally, Ms. Todd suggested creating a list of prequalified contractors that are qualified to complete this type of work. Director Hassett inquired if it is possible to have a historic structure delisted from a historic registry. Ms. Dikas and Ms. Todd reported that for a potential delisting of structures the following should be reviewed: the context and evaluation at the time a structure was originally listed, any changes to the structure since the historic listing, and the amount of time a structure has been listed as a historic structure. Director Riffle inquired regarding how to address differing opinions between owners of historic properties and local agencies that regulate them when determining whether a structure is historic. Ms. Todd commented on the need to evaluate the rarity and significance of a structure in the context of a variety of constraints, including competing opinions on a structure’s historic significance. Director Kishimoto inquired regarding the level of maintenance required for a historic structure, such as arrested decay, etc. Ms. Todd reported that arrested decay is a recognized preservation method, but it could lead to an accusation of demolition by neglect and advised the District to work with their attorney on this topic. Director Kersteen-Tucker suggested addressing in a potential historic structures policy the District’s coastal mission to preserve the rural character of the area and how this may be achieved through historic structures. Director Siemens suggested including the use of benign neglect as a preservation option in any proposed historic structures policy. Director Holman commented on the inability to mitigate the loss of a historic structure. Ms. Dikas suggested that under CEQA it is suggested that historic structures be fully documented before demolition as a potential mitigation measure. Director Holman commented on the high quality of building materials in historic structures and suggested using the materials to help maintain historic structures. Meeting 19-28 Page 3 Public comments opened at 6:55 p.m. No speakers present. Public comments closed at 6:55 p.m. Director Holman suggested using a project as a case study to better understand the topic. Planning Manager Jane Mark reported on the process used by Santa Clara County to receive a landmark designation for a historic structure, which would allow for additional grant funding but would add requirements for certain structure repairs. No Board action required. Vice-President adjourned the special meeting of the Midpeninsula Regional Open Space District to order at 7:06 p.m. REGULAR MEETING Vice-President Holman called the regular meeting of the Midpeninsula Regional Open Space District to order at 7:10 p.m. ROLL CALL Members Present: Jed Cyr, Larry Hassett, Karen Holman, Zoe Kersteen-Tucker, Yoriko Kishimoto, Pete Siemens, and Curt Riffle Members Absent: None Staff Present: General Manager Ana Ruiz, General Counsel Hilary Stevenson, Assistant General Manager Susanna Chan, Assistant General Manager Brian Malone, District Clerk/Assistant to the General Manager Jennifer Woodworth, Planning Manager Jane Mark, Finance Manager Andrew Taylor, Budget & Analysis Manager Carmen Narayanan, Land & Facilities Manager Michael Jurich, Human Resources Manager Candice Basnight ORAL COMMUNICATIONS No speakers present. ADOPTION OF AGENDA Motion: Director Kishimoto moved, and Director Cyr seconded the motion to adopt the agenda. ROLL CALL VOTE: 7-0-0 SPECIAL ORDERS OF THE DAY Meeting 19-28 Page 4 • Introduction of staff o John Holback, Open Space Technician o Bernard Fahey, Open Space Technician CONSENT CALENDAR Public comment opened at 7:19 p.m. No speakers present. Public comment closed at 7:19 p.m. Director Riffle reported he is recusing himself for Item 6 due to his remote interest based on his employment at the Peninsula Open Space Trust. Motion: Director Riffle moved, and Director Kersteen-Tucker seconded the motion to approve the Consent Calendar, with the exception of Item 6. ROLL CALL VOTE: 7-0-0 1. Approve October 23, 2019 Minutes 2. Claims Report 3. Proposed purchase of the Chet Gallaway Property as an addition to El Corte de Madera Creek Open Space Preserve in unincorporated San Mateo County (Assessor’s Parcel Number 081-100-050). (R-19-143) General Manager’s Recommendations: 1. Determine that the recommended actions are categorically exempt from the California Environmental Quality Act, as set out in this report. 2. Adopt a resolution authorizing the purchase of the Chet Gallaway property and amending the Fiscal Year 2019-20 budget accordingly. 3. Adopt the Preliminary Use and Management Plan, as set out in the staff report. 4. Withhold dedication of the Property as public open space. 4. Change order approval and approval of an Addendum to the Project Initial Study/Mitigated Negative Declaration for the Ravenswood Bay Trail Connection Project located at Ravenswood Open Space Preserve for additional trail paving work (R-19-144) General Manager’s Recommendations: 1. Adopt a Resolution approving an Addendum to the 2016 Initial Study and Mitigated Negative Declaration in accordance with the California Environmental Quality Act. 2. Authorize a contract change order in the amount of $301,318 with Granite Rock Company of Watsonville, California to pave additional segments of the Bay Trail as part of the Ravenswood Bay Trail Connection Project. 3. Authorize an approximate 10% construction contingency of $30,000 to cover unforeseen conditions related to the paving effort, for a not-to-exceed total contract amount of $4,382,474. Meeting 19-28 Page 5 5. Contract Award to Grassroots Ecology to Protect and Restore Natural Resources through Service-Learning (R-19-145) General Manager’s Recommendation: Authorize the General Manager to enter into a four-year agreement with Grassroots Ecology of Palo Alto, California to provide service-learning events for an amount not to exceed $295,417, a portion of which is reimbursable through an existing grant. 6. Resolution to accept grant funding from the California Natural Resources Agency for the proposed future purchase of the Gordon Ridge property. (R-19-135) Director left the dais and room at 7:21 p.m. General Manager’s Recommendation: Adopt a resolution by roll call vote authorizing the General Manager to execute a funding agreement with the California Natural Resources Agency for the proposed future purchase of the Gordon Ridge property as an addition to Tunitas Creek Open Space Preserve. Motion: Director Kishimoto moved, and Director Hassett seconded the motion to approve the General Manager’s recommendation. ROLL CALL VOTE: 6-0-0 (Director Riffle recused) Director Riffle returned to the dais at 7:22 p.m. BOARD BUSINESS 7. Budget Amendments for Quarter 1 to the Fiscal Year ending June 30, 2020 (R-19- 146) Budget & Analysis Manager Carmen Narayanan presented the staff report. The members of the Board thanked staff for the clear and concise report and for their efforts on this item. Public comments opened at 7:29 p.m. No speakers present. Public comments closed at 7:29 p.m. Motion: Director Siemens moved, and Director Kishimoto seconded the motion to adopt a resolution approving the proposed Quarter 1 budget amendments (revenues and expenses) to the adopted budget for Fiscal Year ending June 30, 2020. VOTE: 7-0-0 Meeting 19-28 Page 6 8. Approval of Salary Adjustments and Revised Employment Agreement for Board Appointee Controller (R-19-147) 9. Approval of Salary Adjustments and Revised Employment Agreement for Board Appointee General Counsel (R-19-156) 10. Approval of Salary Adjustments and Revised Employment Agreement for Board Appointee General Manager (R-19-157) Human Resources Manager Candice Basnight presented the staff report summarizing the process used by the Board and Board Appointee Evaluation Committee to complete the evaluation process. Public comments opened at 7:32 p.m. No speakers present. Public comments closed at 7:32 p.m. The members of the Board commented on the outstanding performances by all three appointees. Motion: Director Kersteen-Tucker moved, and Director Holman seconded the motion to approve the following actions as recommended by the Board Appointee Evaluation Committee. Controller Board Appointee Evaluation Committee’s Recommendations: As a result of the Board’s evaluation of the performance of the District’s Board Appointees for Fiscal Year 2018-19, the Board Appointee Evaluation Committee recommends the following compensation adjustments for the Controller for Fiscal Year 2019-20: Adjust the Controller’s base salary upward to $46,877, plus a one-time merit pay bonus of $2,344. The Board Appointee Evaluation Committee recommends the adoption of a resolution approving the salary adjustments set out in Recommendations and authorizing the Board President to execute a revised Board Appointee Employment Agreement. General Counsel Board Appointee Evaluation Committee’s Recommendations: As a result of the Board’s evaluation of the performance of the District’s Board Appointees for Fiscal Year 2018-19, the Board Appointee Evaluation Committee recommends the following compensation adjustments for the General Counsel for Fiscal Year 2019-20: Adjust the General Counsel’s base salary upward to $225,500, plus a one-time merit pay bonus of $11,275. The Board Appointee Evaluation Committee recommends the adoption of a resolution approving the salary adjustments set out in Recommendations and authorizing the Board President to execute a revised Board Appointee Employment Agreement. General Manager Board Appointee Evaluation Committee’s Recommendations: As a result of the Board’s evaluation of the performance of the District’s Board Appointees for Fiscal Year 2018-19, the Meeting 19-28 Page 7 Board Appointee Evaluation Committee recommends the following compensation adjustments for the General Manager for Fiscal Year 2019-20: Adjust the General Manager’s base salary upward to $247,500, plus a one-time merit pay bonus of $12,375. The Board Appointee Evaluation Committee recommends the adoption of a resolution approving the salary adjustments set out in Recommendations and authorizing the Board President to execute a revised Board Appointee Employment Agreement. VOTE: 7-0-0 INFORMATIONAL REPORTS A. Committee Reports Director Hassett reported the Real Property Committee met on November 12, 2019 and visited the Tabachnik property, which the Board will be considering in January. Director Cyr reported the Planning and Natural Resources Committee met on October 28, 2019 to discuss a proposed amendment to the Mindego Ranch Use and Management Plan and receive public feedback on proposed changes to the grazing policy. B. Staff Reports Finance Manager Andrew Taylor reported on the annual tour of Measure AA projects taken by the Bond Oversight Committee. Assistant General Manager Brian Malone reported on tree removal along Page Mill Road by PG&E. General Manager Ana Ruiz reported on recent tour of District agricultural tenant properties, tour for Board members to Lehigh Quarry, Cloverdale tours for members of the District’s legislative delegation. Additionally, she recently presented to the Executive Board for the Peninsula Open Space Trust (POST) regarding current and future District projects. C. Director Reports The Board members submitted their compensatory reports. Director Hassett and Cyr thanked staff for their tour of the Ravenswood Bay Trail construction site. Director Cyr reported on a recent meeting with Santa Clara Supervisor Susan Ellenberg and his attendance at the Saratoga-to-the-Sea groundbreaking event. Director Riffle reported on the upcoming meeting of the La Honda Creek Public Access Working Group tour that will be looking at potential locations for public access and parking lots. Meeting 19-28 Page 8 Director Kersteen-Tucker commended staff on their support of the recent tour of Stevens Canyon Ranch. Director Kersteen-Tucker suggested inviting representatives from POST to present to the Board of Directors. Vice-President Holman reported on her recent meetings with Santa Clara County Supervisors Mike Wassermann and Cindy Chavez. ADJOURNMENT Vice-President Holman adjourned the regular meeting of the Board of Directors of the Midpeninsula Regional Open Space District into closed session at 8:02 p.m. CLOSED SESSION Vice-President Holman called the closed session of the Midpeninsula Regional Open Space District to order at 8:10 p.m. ROLL CALL Members Present: Jed Cyr, Larry Hassett, Karen Holman, Zoe Kersteen-Tucker, Yoriko Kishimoto, Pete Siemens, and Curt Riffle Members Absent: None Staff Present: General Manager Ana Ruiz, General Counsel Hilary Stevenson Public comments opened at 8:10 p.m. No speakers present. Public comments closed at 8:10 p.m. 1. PUBLIC EMPLOYEE PERFORMANCE EVALUATION. Government Code Section 54957(b)(1) Title of Employee: General Counsel General Manager President Siemens left the meeting at 9:35 p.m. ADJOURNMENT Vice-President Holman adjourned the meeting of the Board of Directors of the Midpeninsula Regional Open Space District at 9:50 p.m. ________________________________ Jennifer Woodworth, MMC District Clerk Rev. 1/3/18 R-19-152 Meeting 19-29 November 20, 2019 AGENDA ITEM 2 AGENDA ITEM Award of Contract to Ecological Concerns, Inc., for Plant Maintenance at Eleven Project Restoration and Mitigation Sites, and Public Access Areas GENERAL MANAGER’S RECOMMENDATIONS 1. Authorize the General Manager to enter into contract with Ecological Concerns, Inc., for a base contract price of $718,294 to maintain plants at eleven project sites for three years. 2. Authorize an allowance of $60,000 for additional watering events to be expended only if drought conditions occur. 3. Authorize a 10% contingency of $71,829 to be expended only if necessary, to cover unforeseen conditions, for a not-to-exceed total contract amount of $850,123. SUMMARY The Midpeninsula Regional Open Space District (District) installs native plant nursery stock at habitat restoration sites and public use areas to enhance natural resource values and the visitor experience, and mitigation sites to fulfill permit requirements for newly constructed projects. Native plant revegetation is a critical step in reestablishing normal ecological function in areas previously disturbed by former land use practices that occurred prior to District purchase or due to the completion of capital improvement projects, such as new public access trails and parking areas. The recommended contract will authorize Ecological Concerns, Inc., to maintain and monitor approximately 4,135 plants at 11 locations: seven (7) mitigation sites, one (1) restoration site, and three (3) public use areas in District preserves. The scope of work includes watering installed plants, weeding, and maintaining plant protection devices in compliance with project permits, mitigation measures, and project design criteria. Additionally, Ecological Concerns, Inc., will monitor and report annually on the survival of installed nursery plants and success of non-native plant species treatments. When necessary, Ecological Concerns, Inc., will plant additional nursery stock to replace plantings that do not survive to meet the success criteria for each site outlined in Mitigation Monitoring Programs (MMPs) or Vegetation Restoration Plans. This work will be completed for a total base amount of $718,294. In addition, the General Manager recommends an allowance in the amount of $60,000 for additional watering in the event of drought and a 10% contingency of $71,829, for a total not-to-exceed contract amount of $850,123. The Fiscal Year 2019-20 (FY20) budget includes sufficient funds to cover expenditures through June 30, 2020. Funds to complete the contract work in future years will be proposed as part of the annual Budget process. R-19-152 Page 2 DISCUSSION Capital and operational projects that affect the natural environment have the potential to impact native species and/or the jurisdictional areas regulated by the California Department of Fish and Wildlife (CDFW) and/or U.S. Army Corps of Engineers (USACE). California Environmental Quality Act (CEQA) mitigation measures and/or regulatory permits often require biological surveys, documentation, and mitigation of potential impacts to natural resources, including native plant restoration to reestablish normal ecological function. As part of a successful revegetation effort, installed plants require three to five years of maintenance (e.g. watering and weeding) before they are established well enough to survive on their own. The following tasks are included under the recommended three-year agreement to maintain revegetation sites through the plant establishment period: • Water newly installed native plants; • Weed plant basins and the surrounding project area; • Maintain browse protection and tree shelters around plants to discourage browsing by wildlife, or application of browse deterrent product; • Monitor survival of plants; • Replace installed plants, if survival rates fall below success criteria, as dictated by permit requirements and the Mitigation Monitoring Program/Vegetation Restoration Plan; and • Report to the District on an annual basis. The following projects require installation of native plant nursery stock to be compliant with permit conditions, fulfill mitigation requirements for project impacts, and improve the natural environment and visitor experience (Table 1). These projects are also in accordance with the District’s Natural Resource Management policies and practices to restore construction sites or degraded areas to more natural conditions, and to enhance the visitor experience for ecologically sensitive recreation: Table 1: Revegetation projects requiring maintenance under this contract Project Site # Site Name Open Space Preserve Project Type Project Site Size Project Description 1 Mount Umunhum Summit Sierra Azul Restoration 2 acres Restore constructed summit to natural and aesthetic conditions 2 Mount Umunhum Road Sierra Azul Mitigation 500 ft² CEQA mitigation for road construction 3 Mount Umunhum Trail Sierra Azul Mitigation 8,700 ft² Permit requirements for Mount Umunhum Trail bridges 4 Woods Trail Sierra Azul Mitigation 12,000 ft² Permit requirements for Mount Umunhum Trail bridges 5 Bald Mountain Parking Lot Sierra Azul Preserve Entrance Improvement 5,000 ft² Originally planted in 2014 during drought, requires additional years of planting and plant establishment 6 Tree Farm Bear Creek Redwoods Mitigation 2.32 acres Permit requirements for the new public access parking lot 7 Mud Lake Bear Creek Redwoods Mitigation 1,900 ft2 Permit conditions for installation of new culvert 8 Stevens Creek Nature Trail Monte Bello Mitigation 1,535 ft² Permit conditions for bridge and trail improvements R-19-152 Page 3 Project Site # Site Name Open Space Preserve Project Type Project Site Size Project Description 9 Harkins Bridge Purisima Creek Redwoods Mitigation 9,000 ft² Permit conditions for new bridge 10 Mindego Gateway and Donor's Circle Russian Ridge Preserve Entrance Improvement 16,000 ft² Originally planted in 2013 during drought, requires additional years of planting and plant establishment 11 Sears Ranch La Honda Creek Preserve Entrance Improvement 5,000 ft² Planted in 2017 around newly constructed parking lot, requires additional years of planting and plant establishment Land and Facilities staff are not available to perform this work due to ongoing commitments for both Measure AA projects as well as daily operations and maintenance activities. Although volunteer labor is available to support Natural Resources projects when appropriate, due to the logistics of this project (such as remote site locations) and expertise needed (monitoring reports and application of browse deterrent products), the tasks included in this contract are not suitable for District volunteers. Contractor Selection A Request for Bids (RFB) was sent to contractors, local builders’ exchanges, and posted on the District website on September 23, 2019. Six firms attended a mandatory pre-bid tour on October 10, 2019. Two addenda were issued. Three proposals were received with results shown below. AREA ONE – Sierra Azul OSP Sites #1-5 Bidder Location Total Base Bid Percent Difference from Cost Estimate of $488,925 Confluence Restoration 1 Santa Cruz, CA $455,925 -6.75% Ecological Concerns, Inc. Santa Cruz, CA $457,242 -6.48% Hanford ARC Petaluma, CA $694,800 +42.1% AREA TWO – Bear Creek Redwoods OSP Sites #6-7 Bidder Location Total Base Bid Percent Difference from Cost Estimate of $115,950 Ecological Concerns, Inc. Santa Cruz, CA $92,413 -20.3% Confluence Restoration Santa Cruz, CA $100,361 -13.4% Hanford ARC Petaluma, CA $194,641 +67.8% AREA THREE – Skyline Area Preserves Sites #8-11 Bidder Location Total Base Bid Percent Difference from Cost Estimate of $210,325 Ecological Concerns, Inc. Santa Cruz, CA $168,639 -19.8% Hanford ARC Petaluma, CA $365,573 +73.8% 1 The bid provided by Confluence Restoration was deemed by the District as not responsive. R-19-152 Page 4 As required by state law, the District awards contracts to the lowest responsible bidder submitting a responsive proposal based on the information contained in the bid. Here, although Confluence Restoration submitted the apparent low bid for Area 1: Sierra Azul Open Space Preserve Sites, several required items were missing from their bid proposal, including a non- collusion affidavit, disclosure form, list of subcontractors, statement of experience, qualifications checklist, and licenses. Consequently, the District deemed the bid provided by Confluence Restoration to be not responsive. Ecological Concerns, Inc., of Santa Cruz, CA, was determined to be the lowest responsible and responsive bidder. Ecological Concerns, Inc., has experience installing and maintaining revegetation sites in remote natural areas of the San Francisco Bay Area/Santa Cruz Mountains/Central California. The base cost for these services will not exceed $718,294 over the 3-year period. In addition, the General Manager recommends an allowance in the amount of $60,000 for additional water events in case of drought and a 10% contingency, if necessary, to cover unforeseen conditions, of $71,829, for a total not-to-exceed total contract amount of $850,123. The contingency will only be authorized for additional plantings if sites fall below ecological or regulatory permit success criteria, additional invasive species treatment if target species do not respond as predicted to treatment or environmental factors (e.g. weather conditions that favor invasive species), and/or vandalism to planting areas (e.g. browsing barriers). FISCAL IMPACT There are sufficient funds to cover the recommended action through June 30, 2020. Funds to complete the contract work in future years will be proposed as part of the annual Budget process. The majority of the recommendation ($692,294 of base costs) will be used for operating projects in FY20 through FY23. A small portion of the recommendation ($26,000 of base costs) will be applied to three Measure AA projects in FY20 and FY21, summarized in the table below. Attachment 2 provides a detailed outline of the scope and fiscal impact of the recommendation. The recommendation covers 11 work sites and a blend of operating and capital projects in Fund 10 - General Fund Operating and Fund 30 - Measure AA Capital (Table 2). Table 2: Measure AA Funded Projects Project Site # Site Name Open Space Preserve Project Type MAA # FY20 FY21 Project Total 1 Mount Umunhum Summit Sierra Azul Restoration MAA23-004 $9,000 $9,000 $18,000 7 Mud Lake Bear Creek Redwoods Mitigation MAA21-008 $1,600 $0 $1,600 8 Stevens Creek Nature Trail Monte Bello Mitigation MAA17 -004 $6,400 $0 $6,400 TOTAL $17,000 $9,000 $26,000 BOARD COMMITTEE REVIEW This item was not previously reviewed by a Board committee. R-19-152 Page 5 PUBLIC NOTICE Public notice was provided as required by the Brown Act. Public notice was sent to the Resource Management and Invasive Species interested parties lists by postal or electronic mail. CEQA COMPLIANCE The Environmental Impact Report (EIR) prepared for the District’s IPM Program, which the Board of Directors (Board) approved on December 10, 2014 (R-14-148), analyzed the vegetation management activities in the recommended contract. On February 27, 2019, the Board approved an addendum to the Final EIR for the IPM Program (R-19-11). District staff have incorporated the associated mitigation measures and BMPs from the environmental review documents into the project and the contract documents. NEXT STEPS Upon approval by the Board, the General Manager will execute an agreement with Ecological Concerns, Inc., to maintain the eleven project sites through the plant establishment period over the next 3 years. Some sites may require up to an additional two years to finalize establishment. District staff will report all invasive species work to the Board via the annual Integrated Pest Management Report. Natural Resource staff will continue to work with Engineering and Construction, Land and Facilities, and the Planning Departments to design projects to avoid and/or minimize the impacts of capital and operational projects and reduce the amount of required future mitigation work. Attachment 1.Project Locations 2. Summary of scope and fiscal impact for the recommendation Responsible Department Head: Kirk Lenington, Natural Resources Department Prepared by: Amanda Mills, Resource Management Specialist II Coty Sifuentes-Winter, Senior Resource Management Specialist Contact Person: Amanda Mills, Resource Management Specialist II Graphics prepared by: Francisco Lopez, GIS Technician P A C I F I C O C E A N CLOVERDALE COASTAL RANCH BUTANO STATE PARK PORTOLA REDWOODS STATE PARK PESCADERO CREEK COUNTY PARK CASTLE ROCK STATE PARK SANBORN COUNTY PARK LOCH LOMOND RECREATION AREA ALMADEN QUICK- SILVER COUNTY PARK JASPER RIDGE RESERVE HUDDART COUNTY PARK BAIR ISLAND ECOLOGICAL RESERVE CRYSTAL SPRINGS WATERSHED (SFPUC) DON EDWARDS NATIONAL WILDLIFE REFUGE San Jose Los Gatos Santa Clara Milpitas Fremont Los Altos Mountain View Palo Alto Redwood City San Mateo ÄÆ84 San M a t e o C o . Alamed a C o . ÄÆ82 ÄÆ101 ÄÆ280 ÄÆ9 ÄÆ35 ÄÆ17 ÄÆ85 ÄÆ17 ÄÆ280 ÄÆ82 ÄÆ680 ÄÆ880 ÄÆ237 ÄÆ1 ÄÆ84 ÄÆ92 ÄÆ35 WINDY HILL LA HONDA CREEK COAL CREEK RUSSIAN RIDGE SKYLINE RIDGE LONG RIDGE SARATOGA GAP RANCHO SAN ANTONIO LOS TRANCOS MONTE BEL LO FREMONT OLDER EL CORTE DE MADERA CREEK PURISIMA CREEK REDWOODS MIRAMONTES RIDGE TEAGUE HI L L PULGAS RIDGE RAVENSWOOD STEVENS CREEK SHOREL INE NATURE AREA TUNITAS CREEK BEAR CREEK REDWOODS SIERRA EL SERENO AZUL FOOTHI LLS PICCHETTI RANCH ST. JOSEPH'S HI L L ÄÆ87 FELTON STATION AREA 1 - SIERRA AZUL OPEN SPACE PRESERVE SITES Site 1. Mount Umunhum Summit Restoration Site Site 2. Mount Umunhum Road Mitigation Site Site 3. Mount Umunhum Trail Mitigation Site Site 4. Woods Trail Mitigation Site Site 5. Bald Mountain Parking Lot AREA 2 - BEAR CREEK REDWOODS OPEN SPACE PRESERVE SITES Site 6. Bear Creek Redwoods Tree Farm Mitigation Site Site 7. Mud Lake Mitigation Site AREA 3 -SKYLINE AREA PRESERVE SITES Site 8. Monte Bello OSP, Stevens Creek Nature Trail Mitigation Site Site 9. Purisima Creek OSP, Harkins Bridge Mitigation Site Site 10. Russian Ridge OSP, Mindego Gateway Parking Lot Site 11. La Honda Creek OSP, Sears Ranch Parking Lot 3 5 2 1 4 6 8 9 10 11 7 Midpeninsula Regional Open Space District (Midpen) 11/6/2019 Attachment 1: Location Map Pa t h : G : \ P r o j e c t s \ a _ D i s t r i c t w i d e \ N a t u r a l _ R e s o u r c e s \ M i t i g a t i o n _ R e s t o r a t i o n S i t e s \ M i t i g a t i o n R e s t o r a t i o n S i t e s _ 2 0 1 9 0 9 0 6 . m x d Cr e a t e d B y : f l o p e z 0 52.5 MilesI MROSD Preserves Private Property While the District strives to use the best available digital data, these data do not represent a legal survey and are merely a graphic illustration of geographic features. Other Protected Lands District Boundary Sphere of Influence !#Mitigation/Restoration Site ATTACHMENT 2 Project Site #Site Name Open Space Preserve Project Type Project Site Size Project Description FY20 (Jan-June) FY21 (July-June) FY22 (July-June) FY23 (July-Dec) Project Total 1 Mount Umunhum Summit Sierra Azul Restoration 2 acres 56,642$ 101,040$ 101,040$ 44,398$ 303,120$ 9,000 9,000 - - 18,000 2 Mount Umunhum Road Sierra Azul Mitigation 500 ft²5,590 11,178 11,178 5,589 33,535 3 Mount Umunhum Trail Sierra Azul Mitigation 8,700 ft²11,299 11,844 11,844 545 35,532 4 Woods Trail Sierra Azul Mitigation 12,000 ft²11,175 14,324 14,324 3,149 42,972 5 Bald Mountain Parking Lot Sierra Azul Preserve Entrance Improvement 5,000 ft²5,189 9,617 8,569 708 24,083 6 Tree Farm Bear Creek Redwoods Mitigation 2.32 acres 9,929 19,773 19,773 9,844 59,319 7 Mud Lake Bear Creek Redwoods Mitigation 1,900 ft2 9,643 10,746 10,560 545 31,494 1,600 - - - 1,600 8 Stevens Creek Nature Trail Monte Bello Mitigation 1,535 ft²8,853 13,653 13,653 3,808 39,967 6,400 - - - 6,400 9 Harkins Bridge Purisima Creek Redwoods Mitigation 9,000 ft²9,643 14,652 11,180 545 36,020 10 Mindego Gateway and Donor's Circle Russian Ridge Preserve Entrance Improvement 16,000 ft²6,171 32,108 19,532 5,009 62,820 11 Sears Ranch La Honda Creek Preserve Entrance Improvement 5,000 ft² Restore constructed summit to natural and aesthetic conditions Planting (Fund 30 Measure AA Capital) Mitigation requirements for road construction Permit requirements for Mount Umunhum Trail bridges Permit requirements for Mount Umunhum Trail bridges Originally planted in 2014 during drought, requires additional years of planting and plant establishment Permit requirements for the new parking lot for opening the preserve to the public Permit conditions for installation of new culvert Planting (Fund 30 Measure AA Capital) Permit conditions for bridge and trail improvements Planting (Fund 30 Measure AA Capital) Permit conditions for new bridge Originally planted in 2013 during drought, requires additional years of planting and plant establishment Planted in 2017 around newly constructed parking lot, requires additional years of planting and plant establishment 3,188 10,072 7,480 2,692 23,432 Subtotal (Fund 10 General Fund Operating)137,322$ 249,007$ 229,133$ 76,832$ 692,294$ Subtotal (Fund 30 Measure AA Capital)17,000$ 9,000$ -$ -$ 26,000$ Grand Total (excluding contingency and allowance)154,322$ 258,007$ 229,133$ 76,832$ 718,294$ Page 1 of 2 ATTACHMENT 2 PROJECT SITE #1 MAA17-004 Stevens Creek Nature Trail Bridges, Monte Bello Prior Year Actuals FY20 Adopted FY21 Projected TOTAL MAA17 Regional: Complete Upper Stevens Creek Trail Portfolio Allocation:$7,760,000 Budget $418,641 $34,401 $0 $453,042 Life-to-Date Spent (as of 11/04/19):($2,223,886) Spent-to-Date (as of 11/04/19):($418,641)($16,814)$0 ($435,455)Encumbrances: ($279,947) Encumbrances: $0 $0 $0 $0 Ecological Concerns, Inc. Contract:($6,400) Ecological Concerns, Inc. Contract:$0 ($6,400)$0 ($6,400)Portfolio Balance Remaining (Proposed):$5,249,767 Budget Remaining (Proposed):$0 $11,187 $0 $11,187 PROJECT SITE #7 MAA21-008 Bear Creek Redwoods - Ponds Restoration and Water Rights Prior Year Actuals FY20 Adopted FY21 Projected TOTAL MAA21 Portfolio Allocation:$17,478,000 Budget $188,877 $393,393 $0 $582,270 Life-to-Date Spent (as of 11/04/19):($8,659,875) Spent-to-Date (as of 11/04/19):($188,877)($30,811)$0 ($219,688)Encumbrances: ($886,338) Encumbrances: $0 ($93,819)$0 ($93,819)Ecological Concerns, Inc. Contract:($1,600) Ecological Concerns, Inc. Contract:$0 ($1,600)$0 ($1,600)Portfolio Balance Remaining (Proposed):$7,930,187 Budget Remaining (Proposed):$0 $267,163 $0 $267,163 PROJECT SITE #8 MAA23-004 Mt. Umunhum Summit Restoration, Parking & Landing Zone Prior Year Actuals FY20 Adopted FY21 Projected TOTAL MAA23 Portfolio Allocation:$27,972,000 Budget ($10,431,679)$35,000 $30,000 ($10,366,679)Life-to-Date Spent (as of 11/04/19):($22,989,518) Spent-to-Date (as of 11/04/19):$10,431,679 ($5,856)$0 $10,425,823 Encumbrances: ($7,074) Encumbrances: $0 ($8,860)$0 ($8,860)Ecological Concerns, Inc. Contract:($9,000) Ecological Concerns, Inc. Contract:$0 ($9,000)($9,000)($18,000)Portfolio Balance Remaining (Proposed):$4,966,408 Budget Remaining (Proposed):$0 $11,284 $21,000 $32,284 Page 2 of 2 R-19-153 Meeting 19-29 November 20, 2019 AGENDA ITEM 3 AGENDA ITEM Authorization to categorize property located at 330 Distel Circle, Los Altos (Santa Clara County APN: 170-04-051) as surplus property under the Surplus Land Act, to dispose of the property under the Surplus Land Act or, if applicable, to market 330 Distel Circle for sale. GENERAL MANAGER’S RECOMMENDATIONS 1.Determine that the recommended actions are categorically exempt from the California Environmental Quality Act, as set out in the report. 2. Adopt a Resolution declaring 330 Distel Circle, Los Altos to be surplus property, authorizing the General Manager to initiate the process of disposing the property pursuant to the Surplus Land Act, and authorizing the General Manager to initiate marketing of the property if the District does not negotiate a sale to a preferred buyer under the Surplus Land Act. SUMMARY The Midpeninsula Regional Open Space District (District) purchased the office building at 5050 El Camino Real, Los Altos on February 1, 2019 as its new administrative office building; therefore, the current administrative office building located at 330 Distel Circle, Los Altos will no longer be needed for District purposes after 5050 El Camino Real is ready for occupancy. Selling the current administrative office building has been anticipated and incorporated into the District’s financial model for its facility needs. Proceeds from the sale of 330 Distel Circle are anticipated to offset costs related to the purchase and/or repurposing of the new 5050 El Camino Real office building. In order to proceed with a sale, the District, as a public agency, must first declare the property as surplus property and comply with requirements under the California Surplus Land Act. This item is coming to the full Board of Directors at this time given the interest received by potential buyers for the property and the lead time required to comply with the California Surplus Land Act. BACKGROUND The District had been evaluating options to address the lack of sufficient administrative office space to meet ongoing and long-term business needs since 2015, as the organization began to undergo significant internal restructuring to accelerate project delivery, expand public service delivery, and ensure sufficient resources to manage public land and access facilities. The current 12,120 square foot administrative office building located at 330 Distel Circle in Los Altos (Current AO) is no longer sufficient to house the staff needed to expedite these accomplishments. R-19-153 Page 2 As an interim measure, the District has been leasing 7,964 square feet of additional office space with an annual cost approaching $437,000. In July 2017, the Board adopted a resolution to enter into a purchase and sale agreement for the 39,010 square foot office building located at 5050 El Camino Real, Los Altos CA (R-17-90). Escrow closed on the office property on February 1, 2019 and the District’s architect is in the process of developing construction documents for the required renovation (New AO). Based on the current timeframe, the New AO will be ready for occupancy in the spring of 2022. The Current AO will not be needed for District purposes after the New AO is complete. The District purchased the Current AO in 1990 (R-90-25) for $1,875,000, or $155 per square foot. The circumstances of the Current AO purchase in 1990 were very similar to the situation in which the New AO was purchased. While evaluating whether to build a new administrative office on land owned by the City of Mountain View or entering into a long-term lease, the Current AO at 330 Distel Circle became available, and the District was able to purchase the property. In addition, the District was able to initially lease out extra space in the Current AO until the space was needed for District staff. The purchase and ownership of 330 Distel Circle has served the District well over the last 29 years. California Surplus Land Act The District will follow the Surplus Land Act (Cal. Gov’t Code §§52240-55259) in disposing of this property, as it is no longer needed for District purposes and is not held by the District for the purpose of exchange. The disposal process under the Surplus Land Act requires the District to notify certain entities, including schools and housing agencies (“Preferred Buyers”), of the availability of the surplus property, and wait at least 60 days for a Preferred Bu yer to notify the District of an interest to negotiate a purchase of the property. If a Preferred Buyer notifies the District of its intention to purchase, the District is obligated to negotiate with said entity for a minimum of 90 days. If the District does not reach agreement with a Preferred Buyer, the District may sell the property to any other entity (Non-Preferred Buyer). If a sale is made to a Non- Preferred Buyer, the District must ensure that if 10 or more residential units are constructed on the property, at least 15% of the units must be affordable to low-income households (accomplished through deed restriction). This requirement is consistent with the affordable housing requirements established in the City of Los Altos’s zoning code. DISCUSSION The District’s goal is to maximize the sale proceeds from the sale of the Current AO. Despite the Current AO not being on the market, several private developers and one local government agency have expressed interest in purchasing the Current AO. Although the New AO will not be ready until the spring of 2022, it may be to the District’s advantage to begin the Surplus Land Act process in order to gauge the interest and the true value of the Current AO. The certainty of knowing the true market value of the Current AO and possibly entering into a sale contract prior to moving into the New AO is valuable for financial planning purposes. In addition, there are indications and feelings that the overall office market may be flattening and slowing. Under the Surplus Land Act, District staff will notify Preferred Buyers of the Current AO’s availability, and if the District receives a response from a Preferred Buyer, the District will R-19-153 Page 3 engage in the required 90-days of good faith negotiations with Preferred Buyers. District staff will present offers and negotiated terms from Preferred Buyers to the Board for consideration. If the District does not receive notice from any Preferred Buyers, or cannot reach a deal, then placing the Current AO on the open market would be considered, and any and all offers received would be presented to the Board for review and consideration. If a deal is reached, the close of escrow would not occur until the District has moved into the New AO. FISCAL IMPACT In 2017, the District issued Parity Bonds to help offset the acquisition cost and improvement costs for the New AO and the improvement costs for the New South Area Office located at 240 Crisitch Lane in Campbell. After the sale of 330 Distel Circle, the District Controller will evaluate the most beneficial use of the final sales proceeds and make a recommendation to the Board, which may include redeeming a portion or all of the outstanding balance of the 2017 Parity Bonds. BOARD COMMITTEE REVIEW This item was not previously reviewed by a Board Committee. PUBLIC NOTICE Public notice of this Agenda Item was provided as required by the Brown Act. CEQA COMPLIANCE Project Description The Project consists of designating the office property at 330 Distel Circle in Los Altos as Surplus Property under the California Surplus Land Act and completing the required steps under the Surplus Land Act to sell the property to either a Preferred or Non-Preferred Buyer. CEQA Determination The District concludes that this project will not have a significant effect on the environment. It is exempt from the California Environmental Quality Act (CEQA) under Article 19, Section 15312 Surplus Government Property Sales as follows: The office property is no longer needed for District administrative purposes, is not located in an area of statewide, regional or area-wide concern as identified in the CEQA Guidelines, and the District will complete the required steps to notify Preferred Buyers under the California Surplus Land Act to sell the property. NEXT STEPS The table below identifies the anticipated timeline. Sale Process Target Dates Designate 330 Distel Circle, Los Altos as Surplus Property November 2019 60-day Notice to Preferred Buyers December 2019-January 2020 90-day Negotiation with Preferred Buyers (if triggered) February 2020-April 2020 Place Property on the Open Market (if needed) May 2020 Close Escrow Spring 2022 R-19-153 Page 4 Attachments: 1. Resolution declaring the real property at 330 Distel Circle, Los Altos, California, to be surplus, authorizing the General Manager to initiate the process of disposing of the property pursuant to the Surplus Land Act, and authorizing the General Manager to initiate marketing of the property if the District does not negotiate a sale of the property to a preferred buyer under the Surplus Land Act 2.Map Responsible Department Head: Michael Williams, Real Property Department Manager Prepared by: Allen Ishibashi, Senior Real Property Agent Attachment 1 Resolutions/2019/R-19-__330DistelCircleSurplus 1 RESOLUTION 19-__ RESOLUTION OF THE BOARD OF DIRECTORS OF THE MIDPENINSULA REGIONAL OPEN SPACE DISTRICT DECLARING THE REAL PROPERTY AT 330 DISTEL CIRCLE, LOS ALTOS, CALIFORNIA TO BE SURPLUS, AUTHORIZING THE GENERAL MANAGER TO INITIATE THE PROCESS OF DISPOSING OF THE PROPERTY PURSUANT TO THE SURPLUS LAND ACT, AND AUTHORIZING THE GENERAL MANAGER TO INITIATE MARKETING OF THE PROPERTY IF THE DISTRICT DOES NOT NEGOTIATE A SALE OF THE PROPERTY TO A PREFERRED BUYER UNDER THE SURPLUS LAND ACT WHEREAS, the Midpeninsula Regional Open Space District (“District”) is a special district organized and operating under California Public Resources Code §5500 et seq.; and WHEREAS, the District owns the real property located at 330 Distel Circle, Los Altos, CA (Santa Clara County Assessor Parcel Number 170-04-051) (“Subject Property” or “Surplus Property”), which was used as the District’s administrative office; and WHEREAS, on February 1, 2019, the District acquired real property located at 5050 El Camino Real, Los Altos, CA (Santa Clara County Assessor Parcel Number 170-04-054) for future relocation of its administrative office; and WHEREAS, the Subject Property is no longer necessary for District purposes, and the District desires to initiate the process of disposing of the Subject Property. WHEREAS, pursuant to California Public Resources Code section 5540, the District may dispose of real property necessary to the full exercise of its powers, provided that such property is not dedicated and used for park or open space purposes; and WHEREAS, pursuant to California Public Resources Code section 5563, if, in the opinion of the Board, any land or property owned by the District, becomes unnecessary for the purposes of the District, the Board may sell such lands or property, or interest therein; and WHEREAS, the Surplus Land Act (Cal. Gov’t Code §55240), prescribes a process by which public agencies notify certain Preferred Buyers of the availability of property that is determined to be no longer necessary for the agency’s use, and provides a procedure for negotiations with Preferred Buyers before the property can be sold on the open market; and WHEREAS, the disposition of the Subject Property as surplus property is exempt from environmental review pursuant to Section 15312 (Class 12 – Surplus Government Property Sales) of the California Environmental Quality Act Guidelines. Attachment 1 Resolutions/2019/R-19-__330DistelCircleSurplus 2 NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of Midpeninsula Regional Open Space District (District) as follows: 1. The property at 330 Distel Circle, Los Altos, California (Santa Clara County Assessor Parcel Number 170-04-051) is declared to be surplus property and should be sold for fair market value, pursuant to state law and in a manner that will yield the highest revenue for the District. 2. The General Manager or designee is authorized to initiate and conduct all noticing and other requirements under the Surplus Land Act. 3. If a Preferred Entity provides the District with notice of interest to negotiate the purchase of the Surplus Property, the General Manager is directed to report back to the Board, with recommendations concerning the appropriate District response. 4. If no agreement is reached with a Preferred Entity for the purchase of the Surplus Property, the General Manager is authorized to undertake all actions necessary for, or incidental to, locating a buyer for the Surplus Property. * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * PASSED AND ADOPTED by the Board of Directors of the Midpeninsula Regional Open Space District on ________, 2019, at a regular meeting thereof, by the following vote: AYES: NOES: ABSTAIN: ABSENT: ATTEST: APPROVED: Secretary Board of Directors President Board of Directors APPROVED AS TO FORM: General Counsel I, the District Clerk of the Midpeninsula Regional Open Space District, hereby certify that the above is a true and correct copy of a resolution duly adopted by the Board of Directors of the Midpeninsula Regional Open Space District by the above vote at a meeting thereof duly held and called on the above day. District Clerk LOS ALTOS MOUNTAIN VIEW El C a m i n o R e a l Current Administrative Office 330 Distel Circle, Los Altos New Administrative Office 5050 El Camino, Los Altos Leases Space 4984 El Camino Real, Los Altos Midpeninsula Regional Open Space District (Midpen) 10/22/2019 Administrative Office Buildings Pa t h : G : \ P r o j e c t s \ a _ D i s t r i c t w i d e \ A O _ B u i l d i n g \ A O _ O f f i c e s \ A O _ O f f i c e s _ A e r i a l _ 2 0 1 9 1 0 1 5 . m x d Cr e a t e d B y : f l o p e z 0 500250 FeetI While the District strives to use the best available digital data, these data do not represent a legal survey and are merely a graphic illustration of geographic features. District Administrative Office Lease Space Attachment 2 R-19-155 Meeting 19-29 November 20, 2019 AGENDA ITEM 4 AGENDA ITEM Selection of Basis of Design Repair Options for the Mount Umunhum Radar Tower at Sierra Azul Open Space Preserve GENERAL MANAGER’S RECOMMENDATIONS 1. Select the Long-Term Repair option or an alternate repair option for the Mount Umunhum radar tower. 2. Direct the General Manager to return to the Board of Directors with a recommended award of contract to develop construction documents for the Board-selected Basis of Design repair option. SUMMARY The purpose of the Mount Umunhum Radar Tower 2019-20 Repair Project (Repair Project) is to carry out the Board of Director’s (Board) policy to “Retain and Seal” the structure. On September 12, 2018, the Board approved the Repair Project goals, criteria, and scope of work. At that same meeting, the Board authorized the General Manager to issue a Request for Proposals to complete a structural, safety, and hazardous materials assessment of the radar tower, and develop conceptual recommendations for short-term and long-term repair options (R-18- 105). On January 23, 2019, the Board authorized the General Manager to enter into contract with Wiss, Janney, Elstner Associates, Inc., (WJE) to complete this work (R-19-09). The radar tower assessment results, conceptual repair options, and associated costs are outlined in the attached Basis of Design (BOD) report (report was first made publicly available on November 13, 2019 for early review). Once the Board reviews and selects a repair option, staff will return to the Board with a recommended award of contract to develop the construction documents. BACKGROUND In 1986, the Midpeninsula Regional Open Space District (District) acquired the former Almaden Air Force Station (Almaden AFS) and all of its remaining facilities on Mount Umunhum and Mount Thayer with the intent to restore the area and provide public access (R-86-20). In December 2009, the United States Congress appropriated $3.2 million for the identification, evaluation, and remediation of hazardous materials and site cleanup at the former Almaden AFS site, which included abatement of the Mount Umunhum radar tower. In 2011, the United States Army Corp of Engineers completed the removal of at-risk and peeling lead-containing paint from the exterior of the radar tower, as well as removal of unstable lead-containing paint and other hazardous materials from the interior. In 2014, following the federally-funded remediation R-19-155 Page 2 project, the District completed site demolition and landform restoration at the former Almaden AFS site (R-12-90). Through this work, the District restored much of the natural mountaintop, leaving only the radar tower. Recent History Interim Repair – January 2015 On January 28, 2015, the Board authorized short-term interim structural repairs to the radar tower prior to making a final decision on the future disposition of the structure (R-15-09). The Interim Repair Project included: repairs to the first floor caused by the Loma Prieta earthquake; sealing all first floor openings to prevent the public from entering the structure; and “collapse prevention” repairs required by the County of Santa Clara (County) to allow for public access to the exterior perimeter of the structure as part of the summit grand opening. The Interim Repair Project received final signoff and approval from the County in July 2016. With these Interim Repairs completed, the District moved forward with the summit improvements and opened Mount Umunhum to the public in September 2017. The repairs were designed to be short-term and last at least five years. Retain and Seal – June 2016 On May 10, 2016, the County Board of Supervisors listed the radar tower on the County Heritage Resource Inventory. Given this action and implications on the future disposition of the radar tower, the Board approved the Retain and Seal option for the structure on June 8, 2016 (R- 16-75). The Retain and Seal approach effectively calls for the sealing and stabilization of the structure, with no visitor access to the interior. Conservation Easement – December 2017 On December 13, 2017, the Board authorized the Quitclaim of a Cultural Conservation Easement (conservation easement) to protect and preserve the Mount Umunhum Summit in perpetuity (R- 17-131). The conservation easement permits the following as it pertains to the radar tower and its future repairs: “To repair and maintain the Tower, consistent with the District’s approved Retain and Seal option and to any degree required by the County of Santa Clara, based on its general health and safety regulatory authority, or based on the structure’s status on the County’s Heritage Resource Inventory, or as needed in the District’s discretion for nature resource management, health and safety purposes, provided in all cases that the Tower is not expanded in footprint or height or use.” Exterior Remediation Project – February 2018 Following winter storm events in 2017, flakes of paint from the exterior of the radar tower were observed within the immediate vicinity surrounding the radar tower. To ensure public health and safety, staff immediately closed the area around the radar tower to public access. Simultaneously, the District hired Hazard Management Services, Inc., (HMS) in November 2017 to collect and test samples from the exterior of the radar tower. The collected samples contained low levels of lead, and one sample contained trace amounts of asbestos. Soil samples collected adjacent to the radar tower, however, did not contain hazard levels for heavy metal contamination, including lead. On February 14, 2018, the Board authorized funding for the Mount Umunhum Radar Tower Exterior Remediation Project, and approved a contract with PARC Environmental to complete R-19-155 Page 3 the removal of all remaining paints and coatings from the exterior four walls of the structure (R- 18-18). The Project was completed in May 2018, with two hazardous materials testing firms confirming that all paints had been completely removed from the exterior four faces of the structure. Exterior Assessment Project – July 2018 Following the removal of all exterior paints and coatings, small pieces of aggregate (as large as 1.5 inches in width) were observed around the perimeter of the radar tower. Due to this, the area around the radar tower was fenced off from public access and has been designated a hard-hat required area. Additionally, the closure of the East Summit, Summit Stairs, and Mt. Umunhum Trail from the Summits Stairs to the trailhead shelter remained in effect until a covered pedestrian walkway was installed along the southern face of the radar tower in June 2019. The covered walkway provides protection from falling debris and allows public access to the East Summit from the Summer Shelter. On July 31, 2018, the District entered into a contract with ZFA Structural Engineers (ZFA) to perform a limited assessment of the radar tower to evaluate the integrity of the exterior concrete walls given the observations of aggregate pieces at the base of the tower. The assessment aimed to determine if the newly exposed concrete walls posed a threat of imminent collapse. ZFA conducted visual observations and hammer tests on the walls to identify concrete and rebar deterioration. The strength and chemical composition of the concrete was determined by extracting and testing core samples. The test results demonstrated the walls to be structurally sound, however, the final report recommended surface repairs of the walls to provide safe public access around the exterior of the radar tower. Findings from ZFA’s structural assessment were limited to the exterior walls, and did not provide information on other locations of damage or water intrusion that could lead to continued deterioration of the exterior exposed concrete. In order to provide a long-term repair recommendation to address the deteriorating exterior walls, it was determined that a comprehensive assessment of the entire structure would be required. Comprehensive Repair Project Criteria Approval – September 2018 On September 12, 2018, the Board approved the Repair Project goals, criteria, and scope of work (refer below to the section on Project Goals for details) (R-18-105). The Board-approved scope of work for the Project called for a comprehensive assessment of the radar tower and the development of recommended short and long-term repairs that achieve Board direction. 2019-20 Repair Project – January 2019 On January 23, 2019, the Board authorized the General Manager to enter into a contract with WJE to complete a structural, safety, and hazardous materials assessment of the radar tower, and develop conceptual recommendations for short-term and long-term repair options. The 2019 assessment was designed to build upon the findings and recommendations from the prior exterior assessment completed by ZFA. The WJE project team was selected through a Request for Proposals (RFP) process. The team has prior experience with similar concrete military buildings of historic interest, and expertise in the field of structural engineering and concrete structure evaluation, making WJE a well-qualified and experienced firm to complete the assessment and provide recommended repair options. R-19-155 Page 4 DISCUSSION The purpose of the Mount Umunhum Radar Tower Repair Project is to carry out Board policy to “Retain and Seal” the structure over the longer term consistent with the Board-approved project goals and criteria. A 2019 assessment of the radar tower to document existing conditions and identify locations of damage was recently completed. The following issues, which emerged since completing the short-term interim repairs in 2016, were evaluated as part of the 2019 assessment: • Water intrusion • Wildlife entry through small openings • Presence of remnant lead and asbestos • Concrete spalling • Roof integrity Project Goals The Board approved the following project goals in September 2018 to guide the 2019 assessment work and the development of recommended repair options: • Ensure public and worker safety around the radar tower • Avoid future contamination concerns • Reduce (or eliminate) future need to enter building • Protect workers if/when ingress is needed • Avoid wildlife trappings and other resource impacts • Reopen a pathway to the east summit • Supports the retain and seal option previously approved by the Board of Directors Repair Project Scope of Work WJE reviewed existing documents and performed comprehensive inspections, tests, and assessments on the radar tower. Findings from the assessments have been summarized in a Basis of Design (BOD) report that includes recommended repairs, schematic plans, and cost estimates. The BOD contains conceptual short-term and long-term repair recommendations that achieve the Board-approved project goals. The BOD was developed utilizing findings from the assessment of the structure, which included inspections and documentation of the exterior walls, interior, roof, hazardous materials, drainage, and overall safety and access. The BOD outlines recommended repairs for the following elements of the radar tower: a) Exterior Doors b) Interior Hazards c) Exterior Concrete Walls d) Roof and Drainage System e) Roof Repairs f) Roof Fall Protection g) Exterior Wall Openings h) Hazardous Material R-19-155 Page 5 Below is a discussion of the short and long-term repair options for each element: a) Exterior Door Repair (General Site Improvements) The existing entry doors on the east and west elevations of the structure are degraded and require maintenance or replacement in order to provide a long-term solution. Option 1 – Maintain Exterior Doors • Install weather stripping, new locks, and paint the existing doors and frames. Option 2 – Install New Doors. • Install new doors that will provide greater weather resistance and improve the security and safety of the structure. • Engineers Estimate: $5,724 • 30-50 Year Estimated Lifespan b) Interior Hazards Repair (General Site Improvements) The WJE interior assessment identified a number of hazards within the radar tower. The existing conditions include damaged plywood floor opening cover plates, miscellaneous debris, missing and damaged guardrails, and the presence of lead containing paint and asbestos containing materials. Option 1 - Short-Term Interior Repairs • Replace damaged plywood floor opening covers, covering holes in the 5th floor metal mezzanine and replacing missing and damaged interior stair guardrails. Option 2 – Long-Term Interior Repairs • Remove all non-essential equipment and debris from the interior of the structure, replace all plywood floor covers with steel plates, and abate all interior hazardous materials. • Engineers Estimate: $20,136 • 30-50 Year Estimated Lifespan c) Exterior Concrete Wall Repair Recommendations Significant damage has been documented throughout all elevations of the exterior concrete walls. Damage includes large cracks, voids, spalls, exposed and rusting rebar, and loosely consolidated concrete. Falling concrete pieces have been observed, necessitating the closure of the immediate area around the structure to public access. Repairs are required to address the most significant areas of damage before longer-term repairs can be completed. Base-Level Concrete Wall Repairs Prior to implementing either option below, base-level repairs are required to address the most significant damage documented on the exterior concrete walls. • Remove damaged concrete sections and patch large concrete cracks, voids, spalls, and delaminations, and clean or replace exposed corroded and rusting rebar. The Base Wall Repairs do not allow for the application or installation of a waterproof coating on the exterior walls. Wall Repairs Option 1 or 2 are required to provide a waterproof exterior. R-19-155 Page 6 • Engineers Estimate: $301,936 • 5-10 Year Estimate Lifespan Additional Repairs Required for Long-Term Retain and Seal Option 1 – Patch and Coat • Remove minor shallow lose and damaged surface concrete, and patch and coat the exterior walls with a new thin layer of concrete. The new concrete layer will be prepared and treated with a waterproofing elastomeric coating. The Base-Level Repairs are a prerequisite to this option. • Engineers Estimate: $698,603 • 30-40 Year Estimate Lifespan Option 2 – Stucco Cladding Between Pilasters • Install a wire lath and stucco coating between the structural pilasters. The stucco coating will be prepared and treated with a waterproofing elastomeric coating. The Base-Level Repairs are a prerequisite to this option. • Engineers Estimate: $1,112,564 • 40 Year Estimate Lifespan d) Roof Drainage System Repair Recommendations The existing roof drainage system was capped and no longer functions, causing the concrete roof to deteriorate with cracks and failed expansion joints, allowing for water intrusion into the interior of the structure. A new roof drainage system is required to direct water away from the interior of the structure. Option 1 – Retain Existing Drainage • Retain and the repair the existing roof drainage system and install a new outlet into an existing exterior storm water drainage catch basin. Inspect the underside of the roof from the 5th floor mezzanine to identify and repair damage to the roof slab and concrete support columns. • Engineers Estimate: $201,588 • 30-50 Year Estimate Lifespan Option 2 – Replace in Kind • Replace the entire roof drain system in kind and install a new outlet into an existing exterior storm water drainage catch basin. Inspect the underside of the roof from the 5th floor mezzanine to identify and repair damage to the roof slab and concrete support columns. • Engineers Estimate: $201,588 • 30-50 Year Estimate Lifespan Option 3 – Gutter and Downspout • Abandon the existing floor drain and internal drainage system. Install a new perimeter gutter, downspout and outlet into an existing storm water drainage catch basin. Inspect the underside of the roof from the 5th floor mezzanine to identify and repair damage to the roof slab and concrete support columns. A long-term roof repair option, below, would be required to re-direct surface flow towards the perimeter gutter system. R-19-155 Page 7 • Engineers Estimate: $201,588 • 30-50 Year Estimate Lifespan e) Roof Repair Options The geometry and large number of cracks and protrusions through the roof make the use of a fluid-applied and self-adhering waterproof member challenging. A waterproofed roof is required to direct water away from the interior of the structure. Option 1 - Short-Term Targeted Maintenance Repairs & Water Management • Perform targeted monitoring and maintenance repairs where water leakage is occurring on the interior underside of the roof and on roof exterior expansion joints and cracks. This strategy requires scheduled monitoring to document and address water intrusion to prevent further deterioration of the roof and interior of the structure. • Engineers Estimate: $114,318 • 5-10 Year Estimate Lifespan Option 2 – Long-Term Single Ply Roofing Membrane • Install a new single ply waterproof membrane over the existing concrete roof, secured to light gauge metal frame anchored to the existing roof slab and pedestal. All existing penetrations through the roof and pedestal will need to be removed in order to install the new waterproof membrane. The new single-ply roof ran be sloped towards existing roof drains or a new perimeter roof gutter drainage system. • Engineers Estimate: $255,120 • 20-30 Year Estimate Lifespan Option 3 – Long-Term Buried Roofing Membrane • Remove the existing original concrete roof and waterproof membrane and replace with a new hot rubberized asphalt waterproof membrane and concrete roof top. All existing penetrations through the roof and pedestal will need to be removed in order to install the new waterproof membrane. Hazardous materials in the existing roof will need to be abated prior to removal. • Engineers Estimate: $491,698 • 30-40 Year Estimate Lifespan f) Roof Fall Protection Repair Recommendations All individuals accessing the roof must complete fall protection training and wear fall protection personal protective equipment. The roof currently has two fall protection anchor points, limiting the number of individuals that may access the roof at any given time. The installation of new fall protection infrastructure will facilitate roof monitoring and maintenance activities. Option 1 – Fall Protection Arrest Anchors • Install Cal/OSHA compliant fall arrest anchors on the central concrete pedestal. The anchors will allow more maintenance workers to access the roof at a given time. Access would remain restricted to individuals certified in fall protection personal protective equipment. • Engineers Estimate: $35,424 R-19-155 Page 8 • 40 Year Estimate Lifespan Option 2 – Fall Protection Guardrail • Install a perimeter Cal/OSHA compliant guardrail. A guardrail would eliminate the fall protection personal protection equipment training and use requirement facilitating roof monitoring and maintenance activities. • Engineers Estimate: $89,866 • 40 Year Estimate Lifespan g) Exterior Wall Opening Repair Recommendations The existing galvanized steel wall opening cover plates do not provide a waterproof seal, and require continual monitoring to ensure wildlife protection measures are intact and working. Improvements to the exterior wall opening covers will improve waterproofing and ventilation within the structure. Option 1 – Maintain Existing Openings • Apply a new protective coating over the existing metal cover plates and construct a water collection basin within the interior window and door frames to collect and direct water to the exterior of the structure. • Engineers Estimate: $39,535 • 20 Year Estimate Lifespan Option 2 –Ventilation Louvers • Install new ventilation louvers at select exterior openings. An evaluation of ventilation needs would be conducted in order to determine the appropriate louver locations. Openings that are not required for ventilation would be permanently sealed. Wildlife exclusion measures would be installed over the exterior of the louver systems. • Engineers Estimate: $60,631 • 40 Year Estimate Lifespan Option 3 – Ventilation Louvers and Protective Hood • Install exterior sheet metal hoods over the Option 2 louvers to provide greater weather protection. Wildlife exclusion measures would be installed over the exterior opening of the protective hoods. • Engineers Estimate: $83,116 • 40 Year Estimate Lifespan h) Hazardous Material Assessment A hazardous materials assessment of the interior and exterior of the structure was completed by SCA Environmental in April 2019 confirming the presence of asbestos-containing materials on the roof, within the exterior concrete, and within the first, second, fourth and fifth interior floors. Lead containing paint was confirmed to be present on all interior floors. All water inside the structure is assumed to be hazardous and is removed yearly to prevent contamination of the surrounding landscape. Currently, individuals entering the structure wear personal protective equipment including a respirator. Further removal of hazardous materials from the interior and exterior of the structure will reduce the amount of ongoing monitoring and maintenance required and the level of personal protection equipment for R-19-155 Page 9 individuals entering the structure. Hattin Construction Management Inc., provided the engineers estimate for each recommended repair item and ongoing maintenance cost. The estimates for both repair and ongoing maintenance utilize 2020 costs. The repair items and their associated estimated cost and lifespan are summarized below. The recommended ongoing maintenance and repairs schedule for each repair item is summarized in Attachment 2. Repair Item Engineers Estimate Estimated Lifespan General Site Improvements $38,538 30-50 Years Base Exterior Wall Repairs $301,936 5-10 Years Exterior Wall Repairs – Option 1 $698,603 30-40 Years Exterior Wall Repairs – Option 2 $1,112,564 40 Years Drainage Repairs – All Options $201,588 30-50 Years Short-Term Roof Repairs – Option 1 $114,318 5-10 Years Long-Term Roof Repairs – Option 2 $255,120 20-30 Years Long Term Roof Repairs – Option 3 $491,698 30-40 Years Fall Protection – Option 1 $35,424 40 Years Fall Protection – Option 2 $89,866 40 Years Wall Opening Repairs – Option 1 $39,535 20 Years Wall Opening Repairs – Option 2 $60,631 40 Years Wall Opening Repairs – Option 3 $83,116 40 Years Hazardous Abatement $200,000 Indefinitely Bundled Repair Options Base Repairs The Base Repairs option includes recommended short-term repairs that address the most significant areas of damage. The lifespan for this option is approximately 5-10 years before additional significant repairs are required. Ongoing monitoring and maintenance activities are required to address water intrusion through the roof, and the deterioration and spalling of the exterior concrete walls. The area immediately surrounding the radar tower may initially be reopened to public access following the completion of base exterior concrete repairs. However, due to anticipated deterioration of the exterior walls, closures would likely be re-instated within 5-10 years, or exterior concrete repairs would need to be repeated to keep the area open to public access. If periodic repairs to the deteriorating concrete are not completed, a covered, permanent pedestrian walkway would be required to provide safe access to the Eastern Summit. Below is a list of the repairs that are included under this option: Repair Cost Lifespan (years) Base Concrete Wall Repairs $301,936 5-10 Drainage Repairs – Option 1 $201,588 30-50 Short-Term Roof Repairs – Option 1 $114,318 5-10 Base Wall Opening Repairs – Option 1 $39,535 20 Base Fall Protection Repairs – Option 1 $35,424 40 General Site Improvements Repairs $38,538 30-50 TOTAL $731,339 R-19-155 Page 10 The Base Repairs option would incur the following ongoing monitoring and maintenance costs: Activity Cost Recurrence Ongoing Staff Monitoring & Maintenance $100,000 Yearly Roof Inspection & Repairs $114,318 Every 5 Years Hazardous Materials Cleanup $10,000 Yearly 10-Year Monitoring & Maintenance Cost $1,328,636 20-Year Monitoring & Maintenance Cost $2,657,272 Total Base Repairs + 20-Year Maintenance Costs: $3,388,661 Mid-Level Repairs The Mid-Level Repairs build upon the Base Repairs option and includes both short-term and long-term repairs. Long-term repairs to the exterior walls reduce ongoing cleanup costs, and reopen the area immediately surrounding the radar tower to public access. Ongoing monitoring and maintenance of the interior and roof will be required to address water intrusion and the potential release of hazardous containing materials. The Mid-Level Repairs achieve a majority of the Board-approved project goals, however, future contamination concerns and a need to enter the building for on-going monitoring remain. Below is a list of the repairs that are included under this option: Repair Cost Lifespan (years) Base Concrete Repairs $301,936 --- Concrete Repair – Option 1 $698,603 30-40 Drainage Repairs – Option 2 $201,588 30-50 Short-Term Roof Repairs - Option 1 $114,318 5-10 Wall Opening Repair - Option 2 $60,631 40 Base Fall Protection Repair - Option 1 $35,424 40 General Site Improvements $38,538 30-50 TOTAL $1,451,038 The Mid-level Repairs option would incur the following ongoing monitoring and maintenance costs: Activity Cost Recurrence Ongoing Staff Monitoring & Maintenance $10,000 Yearly Application of Elastomeric Exterior Overcoat $60,000 Every 5 Years Application of New Elastomeric Exterior Coating $118,500 Every 20 Years Roof Inspection & Repairs $114,318 Every 5 Years Hazardous Materials Cleanup $10,000 Yearly 10-Year Monitoring & Maintenance Cost $448,636 20-Year Monitoring & Maintenance Cost $1,041,454 Total Mid-Level Repairs + 20-Year Maintenance Costs: $2,492,492 R-19-155 Page 11 Long-Term Repairs The long-term repairs option includes all recommended long-term repairs for all elements. Long-term repairs to the exterior walls and roof greatly reduce the need for ongoing monitoring and maintenance. The abatement of hazardous materials significantly reduces the requirement for individuals to wear personal protective equipment while inside the structure and eliminates monitoring and cleanup activities to address the possible release of hazardous materials from the structure. Below is a list of the repairs that are included under this option: Repair Cost Lifespan (years) Base Concrete Repairs $301,936 --- Concrete Repair - Option 1 $698,603 30-40 Drainage Repairs – Option 3 $201,588 30-50 Long-Term Roof Repair - Option 2 $255,120 20-30 Wall Opening Repair - Option 3 $83,116 40 Fall Protection Repair - Option 2 $89,866 40 General Site Improvements $38,538 30-50 Hazardous Materials Abatement $200,000 Indefinite TOTAL $1,868,767 The Long-Term Repairs option requires the least amount of ongoing monitoring and maintenance, namely the following: Activity Cost Recurrence Ongoing Staff Monitoring & Maintenance $10,000 Yearly Application of Elastomeric Exterior Overcoat $60,000 Every 5 Years Application of New Elastomeric Exterior Coating $118,500 Every 20 Years 10-Year Monitoring & Maintenance Cost $220,000 20-Year Monitoring & Maintenance Cost $498,500 Total Long-Term Repairs + 20-Year Maintenance Costs: $2,367,267 Retain Existing Condition, No Repairs Completed In its current state, WJE estimates that there is very little chance of a large-scale collapse of the radar tower within the next 100 years if no action is taken to address the current conditions. However, increased rates of deterioration of the exterior walls are expected over time, which will likely produce larger pieces of falling debris from the structure. A permanent covered pedestrian walkway will need to be constructed in order to provide safe public access to the East Summit. Additionally, the presence of hazardous materials located on the exterior walls and inside the structure would require ongoing monitoring, potential mitigation, and cleanup efforts to prevent discharge into the surrounding landscape. Currently the District spends roughly $100,000 yearly on monitoring and maintenance of the structure, which would increase over time as the frequency of deterioration increases. General Manager’s Recommendation The Repair Project aims to meet the Board-approved project goals and criteria. An analysis of how each repair option achieves the project purpose is included as Attachment 3. Based on the analysis, the Long-Term Repairs option achieves all of the Project goals and criteria. While it R-19-155 Page 12 has the highest initial capital cost, it is the most economical option when factoring the ongoing monitoring and maintenance cost over a 20-year lifespan. For these reasons, the General Manager recommends selecting the Long-Term Repairs option for the radar tower. FISCAL IMPACT The FY2019-20 budget includes $223,750 for the Mount Umunhum Radar Tower 2019-20 Repair Project #VP23-001. The recommended action has no direct fiscal impact at this time. However, future implementation activities will have a fiscal impact. The FY2019-20 budget includes sufficient funds to cover project costs through the end of the fiscal year. Funding for future years budgets will be proposed as part of the annual Budget and Action Plan process. Staff have investigated grant funding opportunities for the Project. Local grant opportunities to cover portions of the construction costs may be available through the Santa Clara County Historical Heritage Grant Program. To be eligible for this grant program, the project must involve a locally designated historic landmark protected by a city or County historic preservation ordinance. The radar tower is currently listed on the County’s Heritage Resource Inventory and is therefore eligible to apply for historic landmark status. However, substantial restrictions can apply to structures that are granted landmark status, such as requiring all future proposed repairs and alterations to be reviewed and approved by the County through a small project review process (per Santa Clara County Ordinance Section C17-17). Applying for landmark status for the radar tower may limit District control over the type or extant of future repairs required for the structure. Staff will consult with the County during the construction document development process to determine the level of review and permitting required for the selected repair option. Other grant opportunities at the State and National level are limited and very competitive with a low likelihood of award due to the large and competitive application pool. A significant investment in limited District staff time and resources would be required to apply for and administer these grants. BOARD COMMITTEE REVIEW Given the level of Board interest, this item is coming to the full Board. The Board approved the project goals and scope of work for the Repair Project at the September 12, 2018 regular meeting and authorized the General Manger to release a Request for Proposals to complete the assessment (R-18-105). The Board authorized the General Manager to enter into contract with WJE at the January 23, 2019 regular meeting to prepare a Basis of Design (R19-09). PUBLIC NOTICE Public notice was provided as required by the Brown Act. Notices were also sent to interested parties on the Mount Umunhum mailing list. CEQA COMPLIANCE On August 30, 2010 the Board approved in the Initial Study/Mitigated Negative Declaration (IS/MND) for the Almaden AFS Structure Abatement Project, which included an evaluation of potential repairs and work on the exterior of the radar tower (R-10-102). In addition, on October 17, 2012 the Board adopted the Mount Umunhum Environmental Restoration and Public Access R-19-155 Page 13 Project Environmental Impact Report, which included an analysis of the Retain and Seal option for the radar tower (R-12-104). The assessment and repair of the radar tower is consistent with the project evaluated in the existing environmental review. No new significant environmental effects or substantial increase in the severity of previously identified effects would result from this project beyond what was analyzed in the existing CEQA documents. NEXT STEPS Pending Board selection of repair elements/options, the General Manager will return to the Board with a recommended award of contract for the development of construction documents. Future Board review and input are anticipated to occur as follows: • Board award of contract to complete the construction plans and permits for the Board- approved Basis of Design repair elements – Winter 2019 • Board award of a construction contract for the repair work - Summer 2020 Attachment: 1. Mount Umunhum Radar Tower Assessment Project Basis of Design – WJE November 2019 2. Ongoing Recommended Maintenance and Repairs Matrix 3. Repair Option Project Goal Matrix Responsible Department Head: Scott Reeves, Acting Engineering and Construction Department Manager Prepared by: Zachary Alexander, Capital Project Manager III, Engineering and Construction Department MOUNT UMUNHUM RADAR TOWER Condition Assessment and Recommendations Sierra Azul Open Space Preserve Santa Cruz Mountains, California Final Report November 13, 2019 WJE No. 2018.0484 Prepared for: Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022 Prepared by: Wiss, Janney, Elstner Associates, Inc. 2000 Powell Street, Suite 1650 Emeryville, California 94608 510.428.2907 tel | 510.428.0456 fax Attachment 1 MOUNT UMUNHUM RADAR TOWER Condition Assessment and Recommendations Sierra Azul Open Space Preserve Santa Cruz Mountains, California Brian E. Kehoe, SE #3398 Associate Principal Aaron Weiss, Architect Senior Associate California Licensed Architect: C-35656 Final Report November 13, 2019 WJE No. 2018.0484 Prepared for: Midpeninsula Regional Open Space District 330 Distel Circle Los Altos, California 94022 Prepared by: Wiss, Janney, Elstner Associates, Inc. 2000 Powell Street, Suite 1650 Emeryville, California 94608 510.428.2907 tel | 510.428.0456 fax Attachment 1 TABLE OF CONTENTS Executive Summary ...................................................................................................................................... 2 Background ................................................................................................................................................... 2 Discussion ..................................................................................................................................................... 4 Deferred Repairs ....................................................................................................................................... 4 Walls ......................................................................................................................................................... 5 Wall Openings ........................................................................................................................................... 6 Roof ........................................................................................................................................................... 7 Potential Interior Hazards .......................................................................................................................... 8 Exterior Doors ........................................................................................................................................... 9 Site ............................................................................................................................................................. 9 Basis of Design ............................................................................................................................................. 9 Site Conditions .......................................................................................................................................... 9 Exterior Doors ......................................................................................................................................... 10 Option 1 - Maintain in Existing Configuration .................................................................................... 10 Option 2 - Replace with New Doors .................................................................................................... 10 Potential Interior Hazards ........................................................................................................................ 11 Concrete Wall Repair .............................................................................................................................. 11 Base Wall Repairs ............................................................................................................................... 11 Option 1 - Patch and Coat .................................................................................................................... 13 Option 2 - Stucco Cladding Between Pilasters .................................................................................... 13 Roof Repairs ............................................................................................................................................ 14 Base Roof Repairs ............................................................................................................................... 14 Short-Term Targeted Maintenance Repairs and Water Management ................................................. 15 Long-Term Roofing System ................................................................................................................ 16 Fall Protection ......................................................................................................................................... 18 Wall Openings ......................................................................................................................................... 19 Option 1 - Maintain in Existing Configuration .................................................................................... 19 Option 2 - Selective Ventilation and Closure of Openings ................................................................. 20 Option 3 - Improved Weather Protection of Openings ........................................................................ 20 Building Description ................................................................................................................................... 21 Site ........................................................................................................................................................... 21 Building ................................................................................................................................................... 22 Walls .................................................................................................................................................... 23 Roof ..................................................................................................................................................... 24 Interior ................................................................................................................................................. 28 Site Observations ........................................................................................................................................ 28 Concrete Walls ........................................................................................................................................ 29 Wall Interiors........................................................................................................................................... 34 Wall Openings ......................................................................................................................................... 36 Roof ......................................................................................................................................................... 36 Interior ..................................................................................................................................................... 38 Exterior Doors ......................................................................................................................................... 41 Hazardous Materials ................................................................................................................................ 42 Site ........................................................................................................................................................... 42 Appendix A: Hazardous Materials Survey by SCA Environmental ............................................................ A Appendix B: Opinion of Probable Construction Cost by Hattin Construction Management ...................... B Appendix C: Results of Exterior Walls Survey ........................................................................................... C Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 2 MOUNT UMUNHUM RADAR TOWER Condition Assessment and Recommendations Sierra Azul Open Space Preserve Santa Cruz Mountains, California EXECUTIVE SUMMARY Wiss, Janney, Elstner Associates, Inc. (WJE) has been engaged by the Midpeninsula Regional Open Space District (District) to perform a structural and waterproofing evaluation of the former radar tower at the top of Mount Umunhum. This report provides our preliminary assessment of the building’s present condition and recommendations to better seal the building against water intrusion and mitigate ongoing deterioration of the concrete structure. In its current condition, several potential safety hazards exist at the radar tower, including loose concrete on the exterior walls and roof. Mitigation of some of these hazards is discussed further in this report and recommended to be completed prior to allowing public access at the area immediately adjacent to the radar tower. For the strategy of retain and seal that has been selected by the District, additional measures should be implemented to preserve the existing building and minimize future deterioration. In addition to the safety hazards, remediation of the water intrusion into the building through the walls and roof is recommended to mitigate further deterioration and to prevent the growth of mold or other materials that may propagate in the presence of moisture and stagnant air. BACKGROUND The Mount Umunhum radar tower is an 85-foot tall concrete building constructed from 1958 to 1962 as part of the Almaden Air Force Station. The radar tower building supported a large radar antenna (Figure 1) at the roof and operated from 1962 until 1980 when it was decommissioned and the radar antenna at the top of the building was removed. The building is located at the top of Mount Umunhum (Figure 2 through Figure 4) at an elevation of approximately 3,490 feet above sea level in what is now part of the District’s Sierra Azul Open Space Preserve. The site is exposed to harsh weather conditions including high wind speeds and freezing temperatures in the winter. The building has received limited maintenance since its decommissioning in 1980. The District acquired the site in 1986, but the radar tower has remained closed to the public due to hazardous materials and contamination at the former Air Force Station. Federal funding allowed for the removal of fuel -based hazardous materials in the mid-1990s. A survey of hazardous building materials performed by IHI Environmental in 2010 identified a number of asbestos- and lead-containing materials within the building which were recommended to be properly remediated. Additional Federal funding allowed for the removal of loose and peeling lead-containing paint on the exterior and interior of the radar tower in 2011. Limited abatement of hazardous materials was performed as recommended in 2011 by the Army Corps of Engineers and IHI Environmental provided monitoring of the abatement, however asbestos and lead hazards remain at the building. All of the Air Force Station buildings and structures except for the radar tower were removed in 2013. The radar tower was listed on the Santa Clara County Heritage Resource Inventory in 2016 and the District Board of Directors (District Board) approved a “Retain and Seal” option for the long-term treatment of the radar tower, intended to reduce the incidence of water intrusion into the building in an effort to increase its longevity. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 3 In July of 2016 an Interim Radar Tower Repair Project was completed, including short-term repairs focused on sealing openings to limit water and wildlife intrusion, removing unstable roof debris, and ground-level concrete repair. Landscaping and drainage improvements were also installed in 2017, including installation of the pathway around the tower. The Mount Umunhum Environmental Restoration and Public Access Project opened both the east and west mountain summits to public access, including around the radar tower site, in September of 2017. In November of 2017, flakes of paint and concrete debris found on the ground adjacent to the radar tower tested positive for lead and asbestos, respectively. The area surrounding the radar tower, including the pathway to the east summit, was fenced off to prevent public access due to potential health and safety concerns. In June of 2018, all remaining paint was removed from the exterior of the building and further testing identified asbestos in some exterior concrete patching materials. Figure 1. Historic photo of Mount Umunhum radar tower facing east. Photo courtesy of Midpeninsula Open Space District. Figure 2. Recent exterior view of the radar tower facing east. Figure 3. Aerial photo of the radar tower, facing north. Figure 4. Photo of the radar tower, facing west. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 4 Since the complete removal of the exterior paint, concrete debris as wide as 1.5 inches has been observed on the ground around the base of the building and the area surrounding the building remains closed to the public. A survey of the exterior concrete walls was performed by ZFA Structural Engineers in July of 2018 to determine the extent of deterioration and provide recommendations on improving the future performance of the concrete walls. Several alternative methods for addressing the concrete deterioration were presented. The District engaged WJE to further evaluate the radar tower and provide repair recommendations that meet the following District Board approved criteria: • Supports the Board-approved “Retain and Seal” option • Ensures public and worker safety around the radar tower • Avoids future contamination concerns • Reduces (or eliminates) future need to enter building • Protects workers if/when ingress is needed • Avoids wildlife trappings and other resource impacts • Reopens a visitor pathway to the east summit At the request of the District, the Discussion and Basis of Design sections are presented first. The Basis of Design provides recommendations to meet the District Board approved criteria. The characteristics of the building and site observations are presented in the Building Description and Site Observation sections that follow the Discussion and Basis of Design sections. DISCUSSION There is widespread evidence of water leakage through the roof, concrete walls, and at the wall openings , and previous repairs at the exterior and staining at the interior suggest long-term leakage at these areas. Although some past repairs to the exterior walls and roof have been completed, the current poor condition of the exterior surfaces of the concrete and corroded steel surfaces at the walls and roof are not suitable as a substrate for paint, fluid-applied, or adhered waterproofing membranes for mitigating moisture intrusion, and would require significant surface repair and patching for use as a sound substrate for an adhered membrane. Deferred Repairs In its current state, the radar tower will continue to deteriorate if no efforts are made to remediate the observed conditions at the building enclosure. Continued deterioration of the walls and roof will allow additional water into the building which will cause further deterioration, likely increasing the rate of deterioration over time. The increased rate of deterioration can significantly increase the amount of repairs that will be necessary in the future. Some of the potential impacts of delaying repairs are discussed below. Collapse Potential - There is very little chance of large-scale collapse of the radar tower in the next one hundred years even if no action is taken to address the current conditions. The structure is very robust as an unused structure that was designed to support heavy equipment that is no longer present. The building is also constructed of reinforced concrete, which is somewhat tolerant of moderate exposure to moisture, so the structural framing is anticipated to continue to support the floors and roof even with further deterioration. Risks to the Public - The existing fencing around the radar tower, if maintained, is expected to provide adequate protection to the public from debris that may fall from the radar tower as the roof and concrete walls continue to deteriorate. Both of these conditions are likely to allow small pieces of concrete or other Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 5 debris to fall to the ground around the radar tower. As deterioration of the concrete walls and roof progresses, the size of the debris that may fall from the structure will likely increase, but larger pieces will not be transported as far from the radar tower by the wind as smaller pieces, and therefore will not increase the public hazard. Eventually, corroded steel elements from the roof are likely to become detached due to deterioration and be transported off the roof due to winds. A covered walkway along the south side should be able to provide adequate protection to the public against falling debris, at least for the immediate future. Eventually, the size of debris that may become dislodged will exceed the capacity of the walkway to provide protection. It should be noted that due to the conditions at the site, a covered walkway would need to be designed as a permanent structure, capable to resisting high winds and it would also need to extend beyond the building to the east and west by at least half of the length of the structure in each direction to protect against falling debris that may be wind-blown. Hazardous Materials Contamination - Most of the identified hazardous materials are located within the interior of the radar tower. Since the openings in the exterior walls are minimal and the doors for access into the building are opened infrequently, the potential for release of hazardous materials to the exterior of the radar tower will be negligible in the long term even with no repairs or abatement. The asbestos- containing concrete materials on the exterior walls however will gradually deteriorate and could produce airborne particles, particularly from the radar pedestal on the roof that is already significantly deteriorated. Small amounts of this concrete have likely been released already, and the amount will increase over time as the concrete continues to deteriorate. All concrete debris from the building will need to be treated as potentially containing asbestos and will need to be cleaned up on a regular basis using appropriate handling and disposal procedures. The falling debris would need to be cleaned up by personnel that have asbestos awareness training, with no other precautions. The frequency of the cleanup is hard to judge, but would probably be required at least once per year to start and would likely need to be more frequent as the deterioration of the concrete accelerates. SCA Environmental does not believe that the minor amounts of falling concrete debris would pose a threat of exposure to the public. Some materials that are part of the roofing system are also asbestos-containing and will also eventually deteriorate and become detached, creating a potential for release. Risks to Maintenance Personnel - Existing plywood covers at floor openings in areas that may be exposed to water that leaks through the walls or wall openings are the items most likely to deteriorate into an unsafe condition in the near future if repairs to the building enclosure are delayed. Decay of the plywood could weaken these to a condition where they are unable to support the weight of a person that may inadvertently step on them. Walls Recent complete removal of the exterior paint may have increased what was likely pre-existing, long-term leakage condition through the concrete wall openings, joints, cracks, and voids due to poor concrete consolidation. Removal of the existing coating has uncovered some of the underlying areas of poorly consolidated concrete and some of the exposed reinforcing steel that has since started to corrode. The areas of most extensive voids and loose concrete due to poor consolidation were observed to occur in the portions of the walls directly above the third through fifth floor slabs. The surface voids and loose concrete are in large part due to poor construction quality of the original concrete that resulted in areas of incomplete concrete consolidation. Based on our observations, the concrete for the walls was cast on top of the floor slabs one story level at a time. This led to the formwork for the walls above the third floor being over 15 feet high. Concrete placed into tall, narrow formwork can become segregated as it drops into the formwork, meaning that the cement paste and aggregate do not stay adequately mixed without the Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 6 application of proper vibration. The voiding observed shows that the larger aggregate particles have only marginal amounts of cement paste surrounding them, which is consistent with the segregation that would occur with tall formwork if the concrete was not properly vibrated during placement. Although acoustic hammer sounding of the walls identified localized delaminations, many areas of visually rough and poorly consolidated concrete were otherwise sound and remain well bonded to the wall. These rough surfaces however are not conducive to providing an adequate substrate for the installation of a waterproofing coating. Repairs are needed to protect the concrete from further deterioration due to corrosion of the embedded reinforcing steel, and to prevent moisture intrusion into the building. The most extensive concrete deterioration occurs at the pilasters, where large surface voids are present and corroded reinforcing steel is exposed, and along the perimeter roof edge beam where it protrudes past the face of the wall below. In addition, crack and spall repairs are needed at various locations at the exterior walls where rebar is exposed or corroding, and significant shallow surface patching of rough, but otherwise sound, concrete would also be required to be repaired to provide a substrate for a coating to resist water penetration through the concrete walls. An alternative approach is to abandon the concrete walls as a substrate for a waterproofing coating and install a mechanically attached cladding system between the pilasters, such as cement plaster (stucco), which is not reliant on a smooth concrete substrate for reliable performance, and would provide a suitable substrate for a waterproofing coating. This alternative would include limited structural repairs to the concrete walls (between pilasters), only where necessary, and would perform more extensive concrete spall and rough surface repairs at the pilasters to prepare the surface for a waterproofing coating. These two approaches are discussed in the Basis of Design section below. Other materials that could be applied to the exterior surfaces of the walls to protect the existing concrete were evaluated such as concrete, metal panels, and polymer fibers; however these other materials would be more costly to install or would significantly alter the exterior appearance. Wall Openings The existing openings in the exterior walls other than two of the ground level doors have been infilled with either concrete or steel plates. Where steel plates have been installed, a small gap exists around the perimeter that allows ventilation and prevents wildlife intrusion into the building, but these gaps also allow water infiltration due to wind-driven rain. Three strategies can be considered for improving the weather resistance of the existing openings; likely a combination of multiple strategies should be selectively applied to the openings across the entire building. First, the openings can be maintained in their current condition while providing a new system to collect and discharge rain water that may enter through the existing steel plate assemblies. Second, the steel plates at openings can be replaced with louvers to allow air movement but reduce water intrusion and prevent wildlife intrusion. Thirdly, select openings could be permanently sealed to prevent water and wildlife intrusion. Strategies two and three discussed above alter the existing ventilation capacity of the wall openings. The ventilation requirements for the unoccupied building are minimal ; however application of these strategies across all of the wall openings should include an evaluation of the ventilation requirements for the entire building. Selection of specific repair strategies at individual openings should be coordinated to maintain adequate passive ventilation in the building for safe access by maintenance personnel , and to minimize water intrusion. Sheet metal hoods could be added to any of the above strategies at locations that originally had hoods and provide additional weather protection to active louvers. Alternately, there may be cost savings by locating and configuring active louvers in the openings in the most efficient layout to satisfy the ventilation Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 7 requirements while reducing the potential for water intrusion. Application of these strategies to the radar tower, as three repair options, are discussed in the Basis of Design section below. Roof Conditions at the roof present multiple challenges for both interim repairs and installation of a long -term roofing system. In addition to the generally deteriorated, rough, weathered and poorly consolidated concrete surfaces, numerous corroded penetrations, obstructions, and other objects exposed at the roof significantly complicate the surface preparation and geometry of repairs. These combined conditions present significant challenges for the use of fluid-applied and self-adhering waterproofing membranes that might otherwise be an economical interim solution to leakage at the roof until long-term, low-maintenance repairs can be installed. A fluid-applied membrane was previously applied to the wearing slab, suggesting past leakage, but it is heavily deteriorated and is no longer effective. Based on the District’s stated goals to retain and seal the building and to reduce the necessary maintenance, the District should consider whether items protruding from the roof that complicate roofing repairs can be removed. Although the radar tower is listed on the Santa Clara County Heritage Resource Inventory, it is only intended to be viewed by the public from the ground level; not accessed from the interior or viewed from the roof. Removal of these abandoned items would significantly simplify the design of the new roof and therefore would also likely reduce the construction cost and necessary maintenance of the system. The presence of the existing built-up waterproofing membrane beneath the wearing slab creates another challenge for the design of new roofing systems that are overlaid on top of the wearing slab, especially for adhered membranes, either sheet or fluid-applied. There is likely some amount of moisture trapped within the assembly due to natural exposure and ongoing leakage. This entrapped moisture could weaken the adhesion of new adhered membranes, or could cause condensation, corrosion or biological growth if the roof design does not adequately address this condition. Due to the significant amount of surface preparation that would be required and the possibility for moisture to be trapped within the existing roof assembly, the installation of a new fluid-applied membrane was not considered as a viable option to meet the project’s stated goals. These conditions and limitations apply to any roofing systems that relies on adhesion to the existing concrete substrates, including modified bitumen membranes, single -ply membranes and spray- applied foam roofing. While mechanically attaching some of these systems directly to the existing concrete substrates may be possible, achieving a suitable system would be difficult, likely requiring installation of a cover or substrate board, predrilling fasteners, and removing the numerous obstructions at the roof to be flush with the roof deck. These factors led to considering methods of abandoning the existing concrete as a substrate and providing a new substrate suitable for new roofing, as described in the next section. An additional advantage of this approach is the ability to envelop the smaller obstructions within the new assembly, reducing the need to remove them to be completely flush with the roof deck. The District has asked WJE to provide additional information about the possible use of spray foam roofing systems, such as Durafoam, for the Radar Tower roof. As discussed above, the poor condition of the existing concrete substrates, and the presence of the existing built-up waterproofing membrane beneath the wearing slab are not conducive to the use of any adhered roofing systems, includin g spray foam roofing, without significant surface preparation or substrate construction. If the concrete surface was sufficiently repaired and prepared, or a new substrate was constructed that is suitable to receive an adhered roofing system, and it is determined that moisture that may be trapped within the existing roofing assembly will not degrade the bond of an adhered system, there are other adhered sheet, or fluid-applied roofing membranes that offer significant advantages over spray foam roofing, especially regarding overall durability and required maintenance, which are important priorities of the District for this project. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 8 Some additional drawbacks of using a spray foam roofing system at the Radar Tower include: • The up-front material costs can be high, and installers often attempt to cut corners, • They require a highly skilled contractor to install correctly, • The market share for spray foam roofing is small, and skilled contractors are limited, • There are limitations on the weather conditions (including wind speed) under which they can be installed, • Any moisture trapped in the substrate, or contaminants on the substrate will affect the bond of the roofing, • They are vulnerable to puncture or damage from foot traffic, hail, wind-driven debris and birds, • On low-slope applications, their irregular surface can inhibit drainage and cause ponding and premature deterioration, • It is recommended that they be inspected twice annually due to their limited durability, • It is recommended that they be inspected for damage after high wind events, • They require recoating every 8 to 10 years. Due to the significant exposure to high wind, the new roof design should provide adequate attachment for all components of the roof system. The existing roof lacks a functioning drainage system since the existing drainage plumbing was reportedly disconnected and sealed with grout. The Interim Repair Project Construction Drawings initially included reestablishment of roof drainage; however the notes and details showing this work are crossed out and were apparently removed from the project. The work would have included cutting the roof drainage pipes at ground level and routing them through the south wall onto a concrete splash block at grade. Further evaluation will be required to determine the feasibility of reestablishing drainage through the existing roof drains and plumbing for either short-term or long-term use. It could not be determined if the roof drainage plumbing is also sealed just below the roof drains to prevent the plumbing from completely filling with water. Any repair strategy for the roof system will require occasional access to the roof for inspection and maintenance, annually at a minimum. The current roof system does not have a fall protection or guardrail system that is compliant with Cal/OSHA regulations since the original perimeter railing system was removed. The current procedure for roof access requires trained personnel to provide adequate rigging to attach lifelines. As the roof continues to deteriorate, the availability of adequate, safe attachment points for lifelines will diminish. An appropriate system should be installed at the roof level to allow for safe access to the roof for periodic inspection and maintenance. One option would be the installation of new perimeter guardrails, which would likely require strengthening of the existing steel brackets that supported the original rails. The replacement guardrail should utilize more durable materials than the original wood guardrail. Alternately, since access to the roof is expected to be minimal, fall protection anchors can be installed on the roof around the concrete pedestal and a small guardrail system can be installed around the roof hatch to protect people from the fall hazard as they travel from the roof hatch at the edge of the roof to the central concrete pedestal to attach to the fall protection anchors. Potential Interior Hazards Several hazardous conditions exist at the interior of the radar tower, including the presence of hazardous materials, missing or damaged guardrails, openings in the existing floors, and the presence of abandoned equipment and debris. The District currently has restrictions in place for accessing the building interior, and these restrictions seem appropriate given the extent of the existing hazards. Since frequent interior access or occupancy is not anticipated, short-term remedial measures should address safety for periodic Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 9 maintenance use and implementing the interior and roof repairs. Fall hazards at the interior are limited to the stairs and the openings in the floors. Comprehensive remediation of the hazardous materials and removal of debris would be recommended as part of a long-term program. Exterior Doors Due to the remote location of the radar tower, the public use of the site, and the unoccupied condition of the building, site and building security and protection against vandalism are important project goals. In addition to re-application of an anti-graffiti coating along the base of the exterior walls after they are repaired, further improvements to the security of the entry doors may include additional heavy -duty locks added to the existing doors. Site The wood benches around the building are located very close to the exterior walls, which will make it difficult to install any concrete patching, coating, or other finishes on the portion of the wall obstructed by the benches. Since this occurs at the base of the walls, the omission of a new coating or finish at these location would not result in a condition where concrete spalling would cause a safety hazard, and would be unlikely to cause significant water intrusion. The existing removable bollards between the parking area and the radar tower are susceptible to sand and other debris falling into the gap between the bollard and the sleeve embedded in the concrete, making the bollards difficult to remove. If the existing bollards are to remain, we recommend that on a monthly basis the bollards be removed, the surfaces of the bollards be wiped to remove adhered debris, and the inside of the sleeves be cleaned of debris. We recommend replacing the removable bollards with a different style of removable bollard that will be easier to operate and will require less maintenance. BASIS OF DESIGN The intent of the following proposed repairs is to follow the District’s decision to retain and seal the radar tower building. The recommended strategies address the conditions identified during our evaluation, which are described in detail in the later Building Description and Site Observations sections. The proposed repairs are intended to allow safe access by the public around the exterior of the building, mitigate water intrusion into the building, and provide safe occasional access into the building for maintenance purposes. Since the building will receive only periodic maintenance, the proposed repairs also intend to minimize ongoing maintenance needs. A preliminary cost estimate for the base repairs and various options was provided by our cost estimating sub consultant and is included in Appendix B. Site Conditions Replace the two removable bollards with a bollard system that is tolerant of exposure to sand and debris. A foldable bollard system, similar to that used along the roadway to the peak of Mount Umunhum (Figure 5) would appear to be easier to operate and would be less likely to become jammed with debris. Replacement bollards would be expected to last at least 30 years. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 10 Figure 5. Foldable bollard used on Mt. Umunhum Road. Exterior Doors Option 1 - Maintain in Existing Configuration The doors can be maintained in their existing configuration. We recommend performing the following repairs at the two remaining doors to improve their weather resistance. Given that the existing doors appear to be stainless steel, if they are coated with a high performance coating, they would be expected to last more than 50 years, with overcoating of the high performance coating after 20 years, and removal and replacement of the coating after 40 years. This repair option includes: • Install weather stripping at the doors. o Install gaskets around the door perimeter (all four sides). o Install a door sweep at the bottom edge of the door. o Modify the threshold to engage the gasket/sweep at the bottom edge of the door. • Provide new heavy duty door locks. • Prepare and paint the steel doors to protect them from corrosion. Advantages Disadvantages • Lower cost • Performance improvements may be limited Option 2 - Replace with New Doors To improve the functionality of the doors, the existing doors can be removed and replaced with new security doors. Installation of the new doors will include a new frame for the doors including thresholds and weather seals around the perimeter. The new doors should include internal locks and panic hardware on the interior. Replacement doors will likely be non-stainless steel, but would also be coated with a high performance coating. Replacement doors would be expected to last at least 50 years, with overcoa ting of the high performance coating after 20 years, and removal and replacement of the high performance coating after 40 years. Advantages Disadvantages • Improved weather resistance • Improved security and safety • Higher cost Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 11 Potential Interior Hazards Short-term repairs at the interior focus on providing safe access to the floors of the building for occasional maintenance access into the building, including replacing missing and damaged handrails and addressing existing holes in the floors. Long-term repairs are intended to eliminate hazardous materials and implement additional measures as recommended for securing the radar tower. Access to the roof for maintenance and repair is discussed in the Roof section above. Short-Term Repairs • Review the existing plywood covers at floor openings to identify and repair any that may be damaged due to exposure to moisture. • Cover holes in fifth floor mezzanine floor with steel plates, or restrict access to the mezzanine. • Replace missing or damaged stair guardrails. Long-Term Repairs • Remove all non-essential equipment and debris from the interior. • Replace plywood covers at floor openings with steel plate covers. • Abate hazardous materials, including asbestos and lead-based paint. Concrete Wall Repair The existing walls have numerous areas with surface voids due to poor consolidation, loose concrete, and exposed reinforcing steel. Some of these locations are susceptible to allowing small pieces of concrete or aggregate to become dislodged and fall, creating a potential safety hazard. The surface voids expose reinforcing steel, which has started to corrode. This will lead to more concrete spalling or becoming dislodged as the corrosion progresses. The proposed repair design includes a base level of repairs to address the most significant areas of deterioration at the pilasters, perimeter roof edge beam at the top of the walls, and exterior wall surfaces. Additional surface repairs or over-cladding of the exterior wall surfaces between the pilasters and at the perimeter roof edge beam are necessary to mitigate the falling hazard and to provide an adequate substrate for application of a waterproof elastomeric wall coating. We considered several options for over cladding of the concrete walls including additional concrete, metal panels, and adhered fiberglass sheets. Each of these options were judged to have a significant negative impact on the appearance of the radar tower and would likely be more expensive than the options discussed below. The wall coating will also provide a protective layer over the asbestos-containing patching material in the concrete walls and mortar for the concrete block wind screens to limit further deterioration and damage due to water intrusion. Base Wall Repairs At a minimum, we recommend performing the following repairs at the walls to address the most significant areas of distress using common concrete repair procedures. Schematic details for these repairs are provided in Figure 6 through Figure 8. These repairs will be needed regardless of which other repair strategies for the remaining portions of the wall are selected. The base exterior concrete repairs are intended to address the conditions of significant concrete deterioration including the pilasters that provide a significant portion of the load-carrying capacity of the walls. The base repairs are likely to allow the structure to remain standing without collapse for at least one hundred years. Implementing only the base repairs, without Options 1 or 2, however does not allow for the installation of an elastomeric coating on the walls. The lack of coating on the walls will lead to continued moisture penetration into the building, resulting in standing water and deterioration of the floors and interior. WJE recommends the following base wall repairs: • Repair large cracks, voids, spalls, and delaminations at pilasters, at the perimeter roof edge beam along the top of the walls, and at portions of the exterior walls with deep voids. These repairs should Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 12 include all locations where the reinforcing steel is exposed and any other location where the depth of the spall or void exceeds 1 inch. o Remove loose or delaminated concrete and sawcut the perimeter of the repair area. o Chip out the concrete to allow access around the exposed reinforcing steel. o Clean the corrosion and apply a protective coating to the exposed steel. o Supplement severely corroded or missing reinforcing steel with new reinforcing steel. o Patch the concrete spalls using an appropriate concrete repair mortar. • Coat concrete walls and pilasters with an elastomeric coating. • Re-apply an anti-graffiti coating on the lower portion of the walls, similar to what currently exists at the building. Figure 6. Base concrete pilaster repair. Figure 7. Base perimeter roof edge beam repair. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 13 Figure 8. Base deep concrete void or spall repair. Option 1 - Patch and Coat This option repairs the surface of the exterior concrete walls between the pilasters to be suitable to receive an elastomeric waterproofing coating. Selection of an appropriate repair material for this option is critical since the depth of the patches will be very thin in some locations. This repair option maintains the original concrete surface profile of the entire building. The elastomeric coating would be expected to be overcoated every 5 to 7 years and removed and replaced after about 20 years. The concrete patching would last 30 to 40 years as long as the elastomeric coating is maintained. This repair option includes: • Repair shallow rough and poorly consolidated concrete at walls. o Remove loose concrete and roughen surface to receive concrete repair mortar. o Patch concrete for smooth, well-bonded finish. Advantages Disadvantages • Maintains the original concrete surface • Creates a surface that can receive a waterproofing coating • Significant surface patching and preparation will be required • Potential for additional concrete spalling in areas not patched Option 2 - Stucco Cladding Between Pilasters This option allows the existing rough surface to remain and installs mechanically attached 3-coat cement plaster (stucco) system (thickness of about 1 inch) on the walls between the concrete pilasters as a substrate for an elastomeric waterproofing coating (Figure 9). The finish of the stucco surface should be smooth to match the texture of a formed concrete surface; however crack control joints needed in the stucco and sealant joints needed between the stucco and the pilasters will be visible deviations from the current appearance. The elastomeric coating would be expected to be overcoated every 5 to 7 years and removed and replaced after about 20 years. The stucco cladding would last at least 40 years as long as the elastomeric coating is maintained, and the sealant would need to be replaced after about 20 years. This repair option includes: • Install mechanically fastened metal lath and 3-coat stucco on the exterior walls between pilasters, and below the perimeter roof edge beam. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 14 • Install horizontal control joints at the bottom of each floor slab level (top of each story wall), and intermediate horizontal control joints at the mid-height of the fourth and fifth floor walls. Figure 9. Wall repair option using a mechanically attached stucco system applied to the walls. Advantages Disadvantages • Does not require extensive surface patching at concrete walls • Provides a uniform surface for coating • Provides a secondary layer of protection to limit the amount of water than can penetrate to the reinforcing steel and cause corrosion • Requires installation of joints to control stucco cracking • More costly Roof Repairs Short-term or interim repairs at the roof could be implemented to mitigate some of the water intrusion but unfortunately the effectiveness of these repairs are limited by the poor condition and complex configuration of concrete and steel substrates. Targeted maintenance repairs and water management strategies are described as a short-term or interim measures to reduce or manage ongoing leakage until a long-term roofing system can be designed and installed. Given the District’s stated goal to reduce ongoing maintenance, and the various challenges described in the Roof Discussion section above, we feel that there are two primary long-term roofing strategies, discussed in detail below. Base repairs will be needed in addition to implementing either the short-term or long-term strategies, including the installation of a fall protection system to allow periodic inspection, maintenance and repairs. Base Roof Repairs At a minimum, we recommend performing the following repairs at the roof regardless of which other repair strategies are elected: • Reestablish roof drainage. There are three possible approaches to reestablishing roof drainage: o Option 1: Reroute the existing roof drainage plumbing at the first floor to discharge at a splash block or other appropriate site drainage infrastructure to the southeast of the building. Further evaluation will be required to confirm that the existing drains and plumbing are in suitable condition, and to determine what anticipated service life may remain in the existing drainage plumbing system. This evaluation may determine that replacement of the roof drains is necessary, but the existing plumbing can be retained and Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 15 repaired, that this is only a short-term strategy and new plumbing should be installed when a new roof is installed at the building, or possibly that the existing plumbing cannot be reused at all. The service life for reusing the existing plumbing will depend on the findings of a more detailed evaluation of the condition of the existing plumbing. Advantages Disadvantages • Minimal scope can be implemented at any time (if feasible) • Significantly less expensive than other options • Requires evaluation of existing plumbing for reuse • May be determined to be a short- term solution • May not be feasible • Plumbing leakage would introduce water into the building o Option 2: Replace the four existing roof drains and pipes with new plumbing. The general configuration would match the existing layout, with a similar discharge at the southeast corner of the building onto a splash block or existing site drainage infrastructure. New plumbing would be expected to last more than 50 years with periodic maintenance. Advantages Disadvantages • Significantly extends the expected service life • Likely the most expensive of the three options • Plumbing leakage would introduce water into the building o Option 3: An alternate roof drainage strategy could utilize gutters and external downspouts. Gutters and downspouts may be designed and installed in a way to minimize the aesthetic impact on the structure. The use of an externally-plumbed drainage system would be dependent on the new roof design providing new slope towards the roof perimeter. Gutters and external downspouts would be expected to last about 30 years, with maintenance and repair at 10 year intervals. Advantages Disadvantages • Likely less expensive than Option 2 • Visible at the exterior of the structure • Remove the aluminum sheet shielding from the underside of the roof slab to observe the condition of the slab for locations of water intrusion and possible structural damage. Inspect the structural slab soffit and repair damage. • The vertical surfaces (walls) of the concrete pedestal should be patched and coated with elastomeric coating. Short-Term Targeted Maintenance Repairs and Water Management A strategy that may be economical in the short-term is to monitor and manage water intrusion, performing targeted maintenance repairs where leakage is specifically occurring. This strategy is unlikely to eliminate leakage or prevent further deterioration of exposed materials at the roof, and the steel framing beneath areas where leakage persists will continue to deteriorate. This strategy will also require more maintenance activity by District staff, which is inconsistent with the project’s stated long-term goals, but this strategy is offered Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 16 as an achievable short-term or interim goal. Maintenance at the roof should be performed annually, at a minimum with any strategy, and possibly more frequently with this strategy. This strategy also assumes that the surface membrane on top of the wearing slab is the membrane to be maintained since the original roofing membrane is concealed beneath the wearing slab and cannot be maintained. Some of the existing sealants used beneath the surface membrane contain asbestos and will need to be contained to prevent deterioration. This repair strategy includes: • Review leakage at the underside of the roof slab (after removal of the aluminum sheet shielding) to diagnose specific locations where water may be entering. • Observe and document leakage through the roof during (and after) rainstorms. Maintain a leak log to track leakage and target areas where active leakage is originating. • Perform targeted maintenance above areas where leakage is occurring with chemical-injection, sealant, sheet membranes, sheet metal, and possibly fluid-applied membranes, as appropriate. Performance of repairs may be limited by poor surface conditions and limited surface preparation. Follow-up repairs should be anticipated. • Reseal expansion joints to encourage surface drainage and limit water penetration. • Seal open gaps and joints around penetrations, pitch pockets, hatches and other rooftop items across the entire roof. Long-Term Roofing System For a long-term strategy, the existing membranes should be abandoned or removed, and a new waterproofing membrane should be installed. Two strategies for a new membrane are described below. Option 1: Single-Ply Roofing Membrane over New Roof Framing. This option abandons the concrete and steel surfaces as waterproofing membrane substrates and installs new light gauge metal framing and exterior sheathing with a single-ply membrane that is adhered, or both mechanically fastened and adhered to the sheathing. Single-ply membranes are durable and generally require minimal maintenance. As the roof is fully exposed to the sun, and will have minimal foot traffic, a membrane that is especially resistant to ultraviolet radiation should be selected. A durable single-ply roof membrane would be expected to last about 20 to 30 years with annual inspections and maintenance. Although the new roof framing alters the roofing assembly, the additional framing will not significantly impact the appearance of the roof from the ground. This repair strategy includes: • Remove rooftop penetrations and obstructions where possible. o Detach items that can be removed without damage. o Cut penetrating items close to flush with the top surface of the wearing slab or concrete pedestal. • Coordinate the height of new and existing rooftop items to remain with the increased height of the new roof deck. o Remove the roof hatch and reconfigure roof access with a new roof hatch to accommodate the new (increased) height of the roof deck. o Coordinate location of fall protection anchors and guardrail height with height of new roof deck. • Install light gauge metal framing with exterior sheathing to create a new sloped roof deck across the entire roof, including above the concrete pedestal. Ventilate the new cavity between the sheathing and wearing slab, or fill the cavity with closed-cell spray foam insulation for an unvented system. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 17 • Conceal remaining rooftop penetrations and obstructions within the new roof deck assembly, or with box-outs where the penetration or obstruction is taller than the level of the new roof deck (sheathing). Protect existing materials with a separation layer, and fill cavity with closed-cell spray foam insulation to minimize the risk of condensation within the assembly. • Slope new roofing to the location of existing roof drains and integrate with new drains. Alternately, the roof deck could be sloped towards the roof perimeter to utilize gutters and downspouts. Advantages Disadvantages • Abandons deteriorated concrete and steel surfaces • Simplifies geometry of roofing details • Tolerant of moisture that may be trapped within the existing roof assembly • Likely less expensive than Option 2 • Roofing membrane is fully exposed to environment and will deteriorate due to UV exposure • Requires removal of rooftop penetrations Option 2: Buried Roofing Membrane This option would remove and replace the concrete wearing slab and original built-up roofing membrane with a hot rubberized asphalt (HRA) membrane with a new concrete wearing slab for protection. Additionally, a similar HRA membrane with concrete wearing slab would be installed on top of the concrete pedestal after removal of obstructions and surface patching and preparation. This strategy is likely significantly more expensive than the single-ply membrane in Option 1, but offers greater protection of the roofing membranes from solar exposure with new wearing slabs . Some of the existing materials that will be removed contain asbestos, so special procedures will be needed for safe removal and disposal of the debris. The condition of the underlying structural slab is not known and will need to be investigated to confirm the viability of this approach after removal of the aluminum sheets on the underside of the roof and removal of the existing built-up membrane. The strategy outlined below includes installation of an HRA membrane on top of the concrete pedestal which will require significant concrete repair work. It would also be possible to install a single-ply membrane on new light gauge metal framing and exterior sheathing, similar to that described above in Option 1, at the concrete pedestal as a cost saving measure. A buried HRA membrane would be expected to last about 30 to 40 years with annual inspections and minimal maintenance. This repair strategy includes: • Remove concrete wearing slab and underlying roofing assembly to expose the structural concrete slab. o Inspect the top of the structural slab and repair damage. • Repair rough, delaminated and spalled concrete on both horizontal and vertical surfaces at the concrete pedestal. • Remove rooftop penetrations and obstructions where possible. o Detach items that can be removed without damage. o Cut penetrating items flush with the top surface of the structural slab or concrete pedestal. • Prepare remaining rooftop penetrations and obstructions for integration with HRA membrane by sand blasting steel. • Install HRA membrane with new concrete wearing slab on horizontal roof surfaces. o Integrate HRA membrane with new roof drains in original locations. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 18 • Remove corrosion from steel that is exposed above the roof and coat with a high performance coating system. Advantages Disadvantages • HRA is durable, and will be protected by a topping slab • Condition of structural roof slab will require investigation • Significant concrete repair will be required at the concrete pedestal in order to use HRA there • Removal and replacement of the topping slab adds significant expense Fall Protection As part of the base roof repairs, install fall protection measures to prevent the exposure of maintenance workers on the roof to fall hazards. This can be accomplished in several ways: • Option 1: Install dedicated rooftop fall arrest anchors meeting Cal/OSHA requirements into the side of the concrete pedestal at a minimum of six locations. Install a Cal/OSHA-compliant guardrail system around the existing roof hatch. Because the pedestal is composed of concrete with trace amounts of asbestos, the anchors will need to be installed using a drill with a built-in vacuum or using wet drilling methods. Fall arrest anchors would be expected to last at least 40 years. Rooftop fall anchors are an inexpensive option that is relatively easy to install. Installing these would provide safe access for ongoing short-term maintenance work as well as for the long-term roof construction project. Advantages Disadvantages • Less expensive than Option 1 • Relatively easy to install • Requires less maintenance than Option 1 • Less convenient for maintenance workers to wear harnesses and safety lanyard • Option 2: Install a guardrail system around the entire roof to match the original guardrail system configuration, but using more durable materials than the original wood framing. A metal guardrail with a high performance coating would be expected to last at least 40 years, with overcoating of the high performance coating every 20 years. Advantages Disadvantages • More convenient for maintenance works to access the roof without harnesses and safety lanyards • Likely requires strengthening of existing guardrail supports • The guardrail will require periodic maintenance • More expensive Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 19 Wall Openings The final design for this approach could take a variety of forms with varying impact to the appearance of the building exterior. For the purpose of presenting a basis for design for consideration, three conceptual options are presented below, however other permutations for the wall openings are possible. Option 1 - Maintain in Existing Configuration This option maintains all wall openings in their current configuration and adds a system to collect and discharge water that currently leaks through the openings. There is a range of fluid-applied waterproofing membrane products that could be used to construct the water collection basins described below. Many of these products require slope to prevent water from ponding on them, which can cause them to deteriorate more quickly. Other products can tolerate ponding water, but are generally more expensive. The less expensive fluid-applied waterproofing products that may deteriorate from ponding water would be expected to require overcoating every 5 to 7 years, and would likely require complete replacement within 20 years. The more durable fluid-applied waterproofing products would be expected to last 20 years, or possibly longer, with minimal maintenance. It is possible to provide slope at the water collection basins, and a cost analysis during design of this repair option would help inform the most appropriate combination of slope and waterproofing products to minimize both the cost and maintenance of this option. This repair option includes: • Remove corrosion and apply a protective coating to the steel frames at openings. • Install water collection and drainage systems at each area of wall openings where leakage occurs. o Construct a water collection basin with a perimeter curb of sufficient height to collect and discharge water. Assume 4 to 8 inches for most openings. Sheet metal pans can be used at smaller openings located above the floor levels. Provide slope to drain where possible. o Construct wood and sheet metal baffles at the interior that serve to collect wind-driven rain and limit how far it can penetrate into the building interior, directing it into the collection basin. o Extend collection basin a sufficient distance past opening jambs, and towards the building interior to collect water that may bypass baffles. Assume 2 to 4 feet for largest openings. o Install a waterproofing membrane within the collection basin, and up and over the perimeter curbs. Extend the waterproofing membrane through the gap beneath the steel plate that closes the opening, including a metal flashing with a drip edge at the exterior, if possible. Consider a fluid-applied waterproofing membrane due to the complex geometry at the opening sill where the closure plates are anchored to the steel frame. o Depending on the extent of actual water penetration at each opening, drains and plumbing to the exterior storm drainage system on the east side of the building may also be added at the larger or more exposed locations. Advantages Disadvantages • Likely less expensive than other more involved options • Retains existing ventilation, without the need to evaluate the building ventilation requirements • May allow a moderate amount of leakage past the collection system • Some amount of water will likely remain within the collection basins (due to lack of positive slope), evaporating into the building over time • Waterproofing membranes will require maintenance, and may deteriorate prematurely due to the ponding water Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 20 Option 2 - Selective Ventilation and Closure of Openings This option evaluates the ventilation requirements for the building and installs louvers where needed for ventilation, and replaces the steel plates at the other openings with watertight infills. This option prioritizes reduced maintenance and construction cost. Aluminum louvers would be expected to last more than 40 years, and any sealants use to install them would need to be replaced after about 20 years. The durability of the watertight infills would depend on their specific construction, but they would generally be expected to last at least 40 years, with overcoating of the elastomeric coating every 5 to 7 years, removal and replacement of the elastomeric coating after about 20 years, and replacement of sealant after about 20 years. This repair option includes: • Evaluate building ventilation and hazardous materials requirements to determine appropriate treatment for each wall opening and overall ventilation of the building. • Remove all steel plates at wall openings. • Install aluminum ventilation louvers with animal screens where needed for ventilation. • Infill openings that are not required for ventilation with concrete, light gauge metal framing and stucco, or steel plates without a gap at the perimeter to create watertight assemblies. • Coordinate the locations of ventilation louvers and opening infills to optimize the ventilation requirements and to minimize potential maintenance and leakage. Advantages Disadvantages • Reduces maintenance by concentrating potential leakage at louvers, while other openings will be sealed watertight • Requires evaluation of ventilation requirements Option 3 - Improved Weather Protection of Openings This option is similar to Option 2, except that louvers with sheet metal hoods, and aluminum windows are installed to match the general appearance and configuration of original openings, as shown in Figure 1, but upgrade the weather protection where feasible. Aluminum louvers would be expected to last more than 40 years, and any sealants use to install them would need to be replaced after about 20 years. Aluminum windows with a high performance coating would be expected to last more than 40 years, with replacement of the gaskets and sealant required after about 20 years. The durability of the watertight infills would depend on their construction, but they would generally be expected to last at least 40 years, with overcoating of the elastomeric coating every 5 to 7 years, removal and replacement of the elastomeric coating after about 20 years, and replacement of sealants after about 20 years. This repair option includes: • Evaluate building ventilation and hazardous materials requirements to determine appropriate treatment for each wall opening. • Coordinate locations for ventilation louvers, hoods and windows with configuration of original openings. • Remove all steel plates at wall openings. Optionally, where hoods are to be installed but additional ventilation is not needed, the existing steel plates could remain. • Install aluminum ventilation louvers and sheet metal hoods with animal screens similar in appearance and configuration to original louvers and hoods, adapted to meet the current ventilation requirements. • The ventilation evaluation may determine that only some of the original louvers are required to provide sufficient ventilation. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 21 • At equipment hoist openings that originally had removable hollow metal panels, install new watertight permanent infill panels similar in appearance to the original hollow core metal panels to fully close off access openings. Advantages Disadvantages • Reduces maintenance by concentrating potential leakage at louvers, while other openings will be sealed watertight • Reduced potential for leakage at louvers by protecting them with sheet metal hoods Increased cost BUILDING DESCRIPTION WJE reviewed available documents including previous construction, condition survey and repair projects at the building. Specifically, we reviewed the following documents: • Request for Qualifications and Proposals for Processional Structural/Engineering Design Services for the Mount Umunhum radar tower Assessment, Midpeninsula Regional Open Space District, undated including Attachments A through O. • Original construction drawings, FD Radar Facilities FPS 24/24, Indenco Engineers, Inc., July 1959. • Civil and landscaping drawings, Mount Umunhum Summit Project, Restoration Design Group, July 2016. • Architectural and structural drawings for Mount Umunhum Interim Tower Repair Project, Grossmann Design Group and Rutherford + Chekene Structural Engineers, July 2014. • Evaluation Report: Mount Umunhum Radar Tower Exterior Analysis Project , by ZFA Structural Engineers, October 17, 2018. The original construction drawings provide significant detail on the overall building configuration and construction, and our visual observations, discussed below in the Site Observations section, suggest that the structural and architectural features of the existing building matches them closely. The following description includes information, dimensions and other details obtained from the reviewed original construction drawings. Site The building is located along a ridge connecting the east and west peaks of the mountain. The building is fully exposed in all directions and experiences very high winds, powerful storms and freezing winter temperatures. A pedestrian pathway extends from the parking area at the west of the building, to a lookout at the east mountain peak, to the southeast of the building (Figure 10). The pathway consists of compacted resin pavement and extends around the perimeter of the building with several wood benches installed adjacent to each side of the building (Figure 11). Four bollards along the edge of the sidewalk block vehicular access to the pathway from the parking area. The middle two bollards are removable to allow authorized access. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 22 Figure 10. Pathway (arrow) from parking area to east peak lookout adjacent to the building. Figure 11. Wood bench installed close to exterior wall. Building The radar tower is about 85-feet tall and 60-feet square in plan with three structural bays in each direction. The exterior concrete walls are 10 inches thick, with structural bays delineated by 30-inch wide pilasters that protrude 8 inches from the exterior face of the walls at the column lines and corners (four per elevation). There are four interior columns that are 36-inches square at the first floor and 32-inches square above the second floor (Figure 12). The interior columns support concrete waffle slab floors. The walls are shown to be reinforced with two curtains of reinforcing steel (Figure 13). There are five concrete floors and a sixth level, which is a steel-framed mezzanine above the fifth floor. Figure 12. Partial second floor plan from original drawings showing pilasters at the sides and corner (red arrows) and interior column (green arrow). Figure 13. Partial cross section from original structural drawings showing exterior wall reinforcing. The structural roof slab is specified to be an 8-inch thick slab with beams and an integral concrete pedestal that projects 39 inches above the top of the structural roof slab (Figure 14). The pedestal supported the radar antenna. The structural slab is topped with a built-up waterproofing membrane assembly and a 3-inch thick Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 23 concrete topping slab that is divided into four section with expansion joints. The roofing membrane and topping slab terminate at the sides of the concrete pedestal. Figure 14. Cross section through roof slab showing concrete pedestal. Walls The exterior concrete walls have a variety of openings that served as windows, vents, louvers and removable panels for hoisting equipment (Figure 15). All of these openings have been closed off with steel plates or filled with concrete. The steel plates nearly fill the opening, allowing some ventilation (and moisture intrusion) into the building around their perimeter (Figure 16). Mesh installed in the perimeter gaps prevents wildlife intrusion. Reportedly some of these covers date from the building’s operational period in the 1970s, but most were added in 2011 and 2016. At the top of the concrete walls, the roof slab extends past the exterior face of the walls creating a beam at the roof edge with a drip formed at the bottom edge. At the ground level, there are three single doors at the east wall and a double door at the west, all with covered exterior entryways (wind screens) constructed of concrete block walls and reinforced concrete slab roofs (Figure 17). There are a variety of small metal items embedded in, or protruding from, the exterior of the concrete walls including abandoned pipes, brackets, inserts, bolts, and other unknown items (Figure 18), as well as a newer stacked dipole repeater antenna at the building’s northeast corner. Figure 15. Typical opening in concrete wall, closed with steel plate. Figure 16. Interior of similar opening in concrete wall with gap around steel plate perimeter. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 24 Figure 17. Covered exterior entryway around main entry door on west elevation. Note the spall at the edge of the roof slab. Figure 18. Steel fixture attached to concrete wall. Roof The roof of the building is dominated by a dodecagonal (12-sided) concrete pedestal (Figure 19) in the center that extends 3.25 feet above the surface of the main (lower) roof surface and directly supported the radar antenna. This pedestal is shown on the original drawings to be integral with the roof slab. A multitude of embedded or otherwise attached supports, pipes and plates associated with the former antenna protrude from the top of the pedestal (Figure 20). The main roof also has pipe penetrations around the antenna pedestal, some of which serve as a conduit through the full roof assembly, as well as eye bolts and concrete curbs at the roof edge (Figure 21 and Figure 22). There is an access hatch (Figure 23) at the southeast corner, a larger equipment hatch near the northeast corner, and a large piece of mechanical equipment (Figure 24) supported directly on the wearing slab near the south edge. Figure 19. Concrete pedestal that once supported the radar antenna, facing northwest. Figure 20. Steel plates, pipes, conduit, and other penetrations at the top of the concrete pedestal. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 25 Figure 21. Various pipe penetrations, conduit in a pitch-pocket, and visible sealant repairs at the expansion joint. Photo facing north. Figure 22. Curb with counterflashing at roof edge, facing north. Figure 23. Roof hatch near east edge of roof, facing southeast. Figure 24. Rooftop equipment, facing southwest. As depicted on the drawings, the perimeter of the roof originally had wood guardrails supported by steel brackets (Figure 25). The wood guardrails were possibly modified into metal guardrails (Figure 26) before being eventually removed in 2015 due to safety concerns. Figure 25. Perimeter brackets for supporting guardrail. Figure 26. Apparently metal guardrail that was present circa 2013. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 26 The main roofing assembly (outside of the concrete pedestal) is shown to be constructed (bottom to top) of an 8-inch-thick structural slab, a vapor barrier, 1-inch thick rigid insulation, a built-up roofing membrane, 1 inch of sand, and a 3-inch thick concrete wearing slab (Figure 27). The original built-up roofing membrane extends up the face of the concrete pedestal where it terminates behind a counterflashing set into the concrete (Figure 28 and Figure 29). The concrete pedestal does not appear to have any waterproofing provisions and was likely sheltered by the base of the radar antenna until it was removed in 1980. Figure 27. Roof edge detail from original drawings showing the basic configuration of the structural slab, waterproofing, topping slab, and wood guardrail. Figure 28. Counterflashing at concrete pedestal. Note the single-ply membrane flashing that was later added, and has failed. The roof is divided into quadrants by perpendicular expansion joints in the wearing slab (Figure 30) that do not extend through the structural slab (Figure 31). There is a roof drain (Figure 32) in the center of each quadrant, however the drain pipe was reportedly disconnected and sealed with grout to prevent animal intrusion. All four roof drains had plants growing out of them at the time of our observation. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 27 Figure 29. Roof-wall base flashing detail at concrete pedestal from original drawings. Figure 30. Wearing slab expansion joint formed from folded copper sheet that was originally covered by sealant. Note that the other three joints in the slab were concealed by more modern repair sealant. Figure 31. Roof expansion joint detail from the original drawings. Figure 32. One of four area drains with plants growing out of the drain. A utility trench (Figure 33 and Figure 34) extending beneath the south end of the east wall is visible in photographs from 2013, prior to construction of the site pathway surrounding the building. This location is assumed to be where the roof drainage plumbing was reportedly disconnected and sealed with grout. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 28 Figure 33. Utility trenches at the southeast corner of the Radar Tower in 2013. Photo facing northwest. Figure 34. Utility trench beneath the south end of the east elevation in 2013, prior to construction of the site pathway. Photo facing west. Interior The interior of the building has had minimal maintenance or modification since it was decommissioned in 1980. Nearly all of the furnishings and movable fixtures, and most of the other salvageable equipment and materials have been removed, but many of the partitions, ductwork, conduit, and finishes remain (Figure 35). Most of the floors are open, with some partitions remaining on the lower floors and abandoned and deteriorated HVAC equipment on some of the upper floors. There is a vertical utility shaft at the southeast corner of the building that extends the full height of the building, and a stair tower and freight elevator along the northern portion of the east wall. The fifth floor has a steel-framed mezzanine with a metal grate floor (Figure 36). There is presently no electrical power available in the building. Figure 35. The building interior has remaining wood-framed partitions, furring and some abandoned HVAC equipment. Figure 36. Steel-framed mezzanine at the fifth floor. SITE OBSERVATIONS WJE performed site investigations on March 29, April 22, and April 23, 2019, to document existing conditions at the radar tower. Our environmental consultant, SCA Environmental, accessed the building and roof on April 3, 2019, during which time samples of various materials inside the building and on the roof were taken and subsequently tested for the presence of hazardous materials. Our investigation focused Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 29 on the building enclosure, condition of the exterior surfaces of the concrete walls and roof, and limited interior areas relating to railings and accessibility for future maintenance considerations. An unmanned aerial vehicle (drone) was used to photograph the radar tower exterior on March 29, 2019. The photos were used to develop a three-dimensional image of the radar tower and to allow for visual examination of areas that are not easily accessible by other means. On April 22 and 23, 3019, an aerial lift was used to access the exterior concrete walls at most of the east, west and south elevations, and at limited areas at the west side of the north elevation. General conditions were noted, and the concrete was acoustically sounded with a hammer to identify concealed delaminations and voids. The interior of the building and roof were accessed by WJE on April 22, 2019, with the assistance of District staff. The exterior walls, wall openings, roof slab, floor slabs, stairs and mezzanine were observed from the interior to document water leakage and potential hazards to maintenance personnel. The southeast portion of the roof was accessed to document conditions that require repair or will impact roofing designs. Concrete Walls The exterior surface of the concrete walls have an anti-graffiti coating on all four elevations up to a height of approximately 16 feet above the exterior grade. Above this level, the concrete walls are currently uncoated. The surfaces of the concrete are generally rough, weathered, and have numerous areas of poorly consolidated concrete with exposed aggregate, surface voids due to poor consolidation (honeycombing/rock pockets) (Figure 37 and Figure 38). Some areas have little or no concrete cover over reinforcing steel, with corrosion staining and spalls visible at these locations (Figure 39 and Figure 40). Also observed were debris embedded in the concrete from the original construction including pieces of wood and a cigarette lighter (Figure 41 and Figure 42). WJE sounded the surface of the concrete to identify areas of loose concrete. Areas of surface voids and loose concrete are indicated on elevation sketches for each wall, which are provided in Appendix C. Figure 37. Poorly consolidated concrete. Figure 38. Concrete with a rough surface and areas of poor consolidation. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 30 Figure 39. Corroded reinforcing steel with minimal concrete cover. Figure 40. Reinforcing steel with little to no cover. Figure 41. Piece of wood embedded in the concrete wall on the east elevation. Figure 42. Cigarette lighter embedded in the concrete wall on the south elevation. Areas of poor consolidation of the concrete are typically concentrated at the base of the walls immediately above the second through fourth floor slabs (Figure 43 and Figure 44). At these locations horizontal construction joints between the slab and wall concrete placements contain a key (a small formed ridge of concrete along the top of the top of the slab along and within the thickness of the wall to enhance the mechanical bond between the separately-placed slab and wall). At numerous locations, the poorly consolidated concrete extends sufficiently deep into the wall’s thickness to expose the reinforcing steel. Acoustic hammer sounding suggested a majority of the concrete adjacent to the visible areas of poorly consolidated concrete with pockets of exposed aggregate are structurally sound, with aggregate well - bonded to the wall, despite their appearance and localized small areas of loose aggregate. Some of these areas of poor consolidation appear to have been modified at some time in the past, by the addition of a trowel applied patch material, possibly following initial concrete placement. These patches were identifiable by their surface finish and coloration, which distinctly differ from the cast -in-place concrete wall (Figure 43). Some of these patches appear to be delaminating from the concrete substrate. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 31 Figure 43. Poorly consolidated concrete above the horizontal construction joint above the floor slab with a smooth patch area above. Figure 44. Poorly consolidated concrete above the horizontal construction joint above the floor slab revealing the joint key and reinforcing steel (arrows). Diagonal cracks were observed at multiple locations on the exterior walls. At the first floor on the east side, previously patched cracks were observed between window and door openings (Figure 45) that likely formed during the Loma Prieta Earthquake in 1989, whose epicenter was only 5 miles to the southeast. The most significant of these cracks were present until about 2014 when they were repaired and the adjacent window and door openings were infilled with concrete (Figure 46). Figure 45. Cracks visible at east elevation (arrows). (Photo taken in 2013 by WJE) Figure 46. Repaired cracks and infilled openings at east elevation. The concrete pilasters have experienced significantly more frequent and severe concrete spalling than the surface of the walls. This spalling has exposed corroded reinforcing steel. Most of the spalling at the horizontal reinforcing is the result of inadequate concrete cover over the horizontal reinforcing (Figure 47 and Figure 48). Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 32 Figure 47. Concrete spalling on face of pilaster due to inadequate concrete cover. Figure 48. Concrete spalling on side of pilaster due to inadequate concrete cover. In other locations where the vertical reinforcing is exposed, spalling occurs in areas of poor concrete consolidation on the sides and corners of the pilasters between the vertical reinforcing bars and the finished exterior concrete surface (Figure 49 and Figure 50). Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 33 Figure 49. Poorly consolidated concrete on the side and corner of the pilaster. Note exposure of reinforcement steel (arrow). Figure 50. Poorly consolidated concrete on the sides and corner of the pilaster. Note exposure of reinforcement steel (arrow). Significant concrete spalling has occurred along the perimeter beam along the edge of the roof slab, which it protrudes from the exterior face of the walls, exposing the wall and roof slab reinforcing steel in places (Figure 51 and Figure 52). Smaller concrete spalls that are not associated with corroded reinforcing are also present, primarily along the bottom of the perimeter roof edge beam at the drip (Figure 53 and Figure 54). Figure 51. Concrete spalling and exposed reinforcing along the perimeter roof edge beam. Figure 52. Concrete spalling and exposed reinforcing along the perimeter roof edge beam. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 34 Figure 53. Small concrete spalls along the bottom edge of perimeter roof edge beam. Figure 54. Small concrete spall along the bottom edge of perimeter roof edge beam. Several of the concrete block wind screens were also observed to have some spalling (Figure 55). Spalling of the concrete slab forming the roof of the wind screens was also observed (Figure 56). Figure 55. Spalling of concrete block wall of wind screen Figure 56. Spalling of concrete slab at top of roof of wind screen. Wall Interiors There is widespread evidence of leakage through the concrete walls in the form of efflorescence stains at the interior of the walls and on the floor where puddles appear to routinely form based on staining patterns (Figure 57 and Figure 58). Efflorescence stains are common along the base of the interior of the concrete walls immediately surrounding the construction joint between the floor slab and wall above. These areas also tend to correlate to the pattern of poorly consolidated concrete at the exterior, which is particularly susceptible to water absorption and intrusion. Efflorescence stains were also noted in areas at the underside of floor slabs where puddles that form on top of the floor slab leak down through the slab (Figure 59). Areas of peeling paint were observed on the interior face of the exterior walls (Figure 60). At several locations Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 35 reinforcing steel is exposed and observed to be corroded along the base of the wall (Figure 61 and Figure 62), Figure 57. Efflorescence stains at interior of concrete walls. Figure 58. Efflorescence stains in utility shaft at southeast building corner, facing east. Figure 59. Efflorescence visible on the underside of the third floor slab where water leaks into the building and through the slab. Figure 60. Peeling paint on the inside face of the exterior wall. Figure 61. Exposed reinforcing steel observed along the base of the wall (arrows). Figure 62. Exposed reinforcing steel observed along the base of the wall (arrows). Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 36 Wall Openings The galvanized steel plates that cover the wall openings are generally in good to fair condition (Figure 63) however some of the original steel frames embedded into the concrete wall around openings that they are attached to are corroded, with corrosion staining below and adjacent to some openings at the interior (Figure 64). The ventilation gap around the perimeter of these plates allows water to enter the building with no means to collect and discharge it. There was standing water on the floor in several locations below these openings at the time of our visit. Figure 63. Galvanized steel plate with light oxidation and corroded steel frame. Figure 64. Water and corrosion staining below wall penetration. Spalling of the concrete was observed on the exterior adjacent to several of the openings. At some locations spalls expose corroded reinforcing steel (Figure 65), but at most locations there is poorly consolidated concrete adjacent to the steel frames (Figure 66). Figure 65. Concrete spalling and exposed reinforcing steel (arrow) adjacent to infilled window opening. Figure 66. Voids in concrete due to poor consolidation adjacent to window opening. Roof Overall, the roof is in poor condition with multiple areas of damaged concrete and widespread surface corrosion of exposed steel embedments, penetrations and anchorages. The concrete at the pedestal is heavily Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 37 weathered with areas of exposed aggregate and reinforcing steel, spalls and what appears to be delamination of previous concrete repairs. The built-up roofing membrane is concealed beneath the wearing slab and could not be observed. Single- ply membrane flashings have been added around the concrete pedestal and roof hatches (Figure 67), and a fluid-applied waterproofing coating has been applied to the wearing slab over the entire main roof area (Figure 68) and onto these single-ply flashings (Figure 69). There is also evidence of waterproofing repairs at underlying cracks in the concrete wearing slab, and spray foam in many joints and gaps at penetrations and flashings. There are grasses and moss growing along many joints, cracks and gaps at the roof, including plants growing out of all four roof drains (Figure 32). Figure 67. Single-ply membrane flashing (black), spray foam (yellow), and fluid-applied coating (white) at roof equipment hatch. Figure 68. White traffic coating on main roof, facing east. Note the darker stripes where underlying cracks were treated. Figure 69. Damaged counterflashing at concrete pedestal showing single-ply membrane flashing (black sheet, damaged), fluid-applied coating (white), and original built-up flashing (black residue adhered to interior surface of single-ply flashing, arrow). The concrete pedestal was likely protected by the radar antenna, relying on the mass of the concrete as the waterproofing. It does not appear to have a membrane integrated into the assembly. Large areas on the top surface and on the edges have extensive concrete spalling (Figure 70 and Figure 71). Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 38 Figure 70. Concrete spalling and corroded steel plates on the top surface of the concrete pedestal. Figure 71. Concrete spalling along the edge of the concrete pedestal. Interior Roof drainage plumbing visible beneath the roof slab (Figure 72) runs from the four original roof drains to the utility shaft at the southeast corner of the building where it descends to the ground floor (Figure 73). The plumbing stack originally exited the building in the utility trench that extends beneath the south end of the east wall, but the pipe was reportedly disconnected and sealed with grout. The drainage plumbing has surface corrosion in many areas. Figure 72. Cast iron drainage plumbing with widespread corrosion running into the utility shaft at the southeast corner (arrow). Photo facing south. Figure 73. Cast iron drainage plumbing stack in utility shaft. Photo facing southeast. The ceiling beneath the roof is finished with aluminum sheets originally used as shielding (Figure 74), limiting direct observation of the underside of the structural slab. These aluminum sheets are generally oxidized, indicating long-term exposure to moisture, and there are signs of leakage at multiple areas throughout the ceiling including staining, heavier corrosion and efflorescence at the aluminum sheeting and adjacent materials (Figure 75). Several steel beams which serve to anchor steel rods extending through the roof slab that are visible at the underside of the roof have surface corrosion (Figure 76). Although the aluminum sheets prevent direct observation of the roof slab, the presence of staining of the aluminum sheets Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 39 indicates water leakage through the roof slab and some degree of corrosion of the reinforcing steel within the roof slab is likely. The steel-framed stair structure has surface corrosion in limited areas and many of the railings are deteriorated, corroded, or missing (Figure 77 and Figure 78). Some stair railings have been supplemented with wood railings attached with tie wire and are not of sufficient strength to reasonably perform as a guardrail (Figure 79). Figure 74. Aluminum sheets installed beneath the roof slab are noted as radar shielding in the construction drawings. Figure 75. Efflorescence deposits around penetration in concrete roof slab, with aluminum sheets in foreground. Figure 76. Surface corrosion on steel beam clamp. Figure 77. Surface corrosion on metal stair handrail. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 40 Figure 78. Missing guardrail. Figure 79. Partially missing handrail with temporary wood railing. The guardrails at the mezzanine above the fifth floor also show signs of corrosion (Figure 80). The soffit of the fifth floor slab exhibits staining and discoloration along exposed portions of the reinforcing steel (Figure 81). Figure 80. Corrosion of guard rails at the mezzanine. Figure 81. Corrosion staining of reinforcing steel at the soffit of the fifth floor (arrows) Several abandoned openings (former mechanical penetrations) in the floor slabs are covered with metal plates which may date to the building’s decommissioning, but most floor openings are covered with plywood fastened to the floor, reportedly installed in 2016. The metal plates typically have surface corrosion (Figure 82), and the wood covers are generally in fair condition (Figure 83), though ongoing deterioration of these wood covers should be expected given the indications of moisture intrusion throughout the building. The metal grate floor of the fifth-floor mezzanine has a number of rectangular holes (Figure 84) that someone could be injured by stepping into, and generally has surface corrosion (Figure 85). Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 41 Figure 82. Corroded metal plate covering opening in floor. Figure 83. Plywood covering openings in floor. Figure 84. Rectangular holes in the mezzanine floor grating are large enough to accidentally step through. Figure 85. Surface corrosion at mezzanine floor grating below concrete pedestal at roof above. Exterior Doors Originally, there were three exterior single-leaf metal outswing doors in the east wall of the building, and a larger double-leaf outswing door opening in the center of the west wall. The two northern doors in the east wall have been removed and the openings filled with concrete. The southern door at the east wall remains (Figure 86). The door at the west is shown as a double-leaf outswing door in the original construction drawings, but currently consists of fixed metal plates that close the opening, with a single access door at the northern side (Figure 87). We are not aware of the date for this modification. The paint has been removed from the two remaining exterior doors, exposing bare steel. Based on the absence of surface corrosion, the doors are assumed to be constructed of stainless steel. Both doors appear to be relatively secure and resistant to tampering, and have key-operated locks. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 42 Figure 86. Steel door at south of east wall. Figure 87. The west door was originally a double-leaf door, but appears to have been modified and has only a small access door in a larger metal plate. Hazardous Materials On April 3, 2019, WJE’s hazardous materials consultant, SCA Environmental (SCA), performed a survey of materials within the building, as well as on the building exterior, to assess the presence of hazardous materials, including asbestos, lead, and PCBs. A copy of their report is attached as Appendix A. Table 1 summarizes the locations where their testing identified detectable levels of asbestos and lead. A fire door at the elevator mechanical room is also suspected to contain asbestos within the core of the door. The specific locations of the materials are provided in the SCA report. Table 1. Hazardous Materials Type of Material Location Hazard Electrical wiring with black canvas sheathing First floor interior Asbestos Black tar at circuit breaker support First floor interior Asbestos Tan paint on concrete masonry Second floor interior Asbestos Off-white dust on the floors Fourth and fifth floor interior Asbestos Green roof coating over black roofing tar Roof Asbestos Black roofing tar under roof flashing Roof Asbestos Grey caulking Roof Asbestos Concrete pedestal for radar antenna Roof Asbestos Grey mortar for concrete masonry units First floor exterior Asbestos Off-white paint on walls and equipment All floors Lead Green paint on walls All floors Lead Yellow paint on handrails Stairs Lead Gray paint on concrete slab First floor exterior Lead Work activities within the building, on the roof, and at the building exterior will require special handling when the materials identified as hazardous are to be affected in addition to the District’s current requirements for personal protective equipment. Site The pathway from the parking area to the building has a row of four steel pipe bollards along the sidewalk to the west of the building to restrict vehicle access. The two central bollards are set into steel sleeves in Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page 43 the concrete sidewalk and can be removed (Figure 88 and Figure 89). Removing these bollards can be difficult due to sand and debris that collects between the bollard and the sleeve. The wood benches adjacent to the building are constructed of a single large timber that is in close proximity to the building wall and the ground (Figure 90). Most of the benches are located with a gap of about 1 inch between the bench and the exterior wall of the tower. The timber benches are supported by wood bases that are reportedly well anchored to a concrete foundation below, and may be difficult or impossible to remove without damaging the benches. Figure 88. Bollards along the sidewalk. Arrows indicate the two removable bollards. Figure 89. Base of removable bollard. Note sand in the recess adjacent to the bollard sleeve (arrow). Figure 90. Wood benches are very close to the concrete walls. Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page A APPENDIX A: HAZARDOUS MATERIALS SURVEY BY SCA ENVIRONMENTAL Attachment 1 1 Lakeside Drive, Suite 215 • Oakland, CA 94612 • (510) 645-6200 320 Justin Drive • San Francisco, CA 94112 • (415) 882-1675 Oakland • San Francisco April 18, 2019 Mr. Brian Kehoe, SE Wiss, Janney, Elstner Associated, Inc. (WJE) 2000 Powell Street, Suite 1650 Emeryville, CA 94608 bkehoe@wje.com Re: Non-destructive Pre-renovation Hazardous Materials Survey Mount Umunhum Radar Tower, 17000 Mt. Umunhum Road Los Gatos, CA 95030 SCA Project No.: B-12936 Dear Mr. Kehoe: As requested, SCA Environmental, Inc. (SCA) completed a non-destructive pre-renovation survey at the above- referenced site in Los Gatos, CA on April 3, 2019 as part of the future planned renovations. A picture of the building is shown below: Sampling was limited to materials expected to be impacted by the renovations. Sampling was conducted by Mr. Dan Leung, CIH, CSP, a Cal/OSHA Certified Asbestos Consultant (CAC #07-4175) and a California Department of Public Health Certified Lead Inspector/Assessor (CDPH #7329). Reservoirs Environmental, Inc. (REI), an NVLAP-accredited laboratory in Denver, CO, completed bulk asbestos and lead analyses. McCampbell Analytical (McCampbell), a ELAP-accredited laboratory in Pittsburg, CA completed the bulk polychlorinated biphenyl (PCB) analysis. Prior to any renovations or demolition, the National Emission Standard for Hazardous Air Pollutants (NESHAP) mandated by the Environmental Protection Agency (EPA) and locally enforced by the Bay Area Air Quality Management District (BAAQMD) require that all buildings be inspected for asbestos-containing materials (ACM) and materials subject to damage or which will be made friable, be removed. Attachment 1 Summary Report – Non-destructive Pre-renovation Hazmat Survey Mt. Umunhum Radar Tower, 17000 Mt Umunhum Road, Los Gatos, CA 95030 SCA Project No. B-12936 Page 2 Methodology Asbestos sampling was performed in a fashion designed to minimize exposure of the surveyor or others to airborne asbestos fibers. Samples were typically removed from the substrate utilizing a knife or hollow drill bit bored through a wet sponge; the sample material was then placed into an airtight plastic vial. The vial's exterior was decontaminated with a wet sponge, and a unique sample I.D. written on the vial. The vial was then stored in a plastic bag. Sample substrates were patched with a high-temperature caulking compound, where required. Samples of suspect materials were collected using triplicate sampling procedures, where applicable. Under these procedures, the first sample is analyzed. If it tests positive for asbestos (>1%), the analysis is suspended for further samples of that material. If the first sample tests only trace positive (between 0.1 to 1%), or negative, then the second and third samples are analyzed sequentially, in order to determine the possible presence of asbestos, as applicable. If all three samples test negative, the material is considered as non-asbestos. If one or more samples test "trace" positive (<1%), the material is considered to be trace positive. If one or more samples are positive for asbestos, the material is considered positive. All asbestos samples collected were submitted to REI for analysis by polarized light microscopy with dispersion staining (DS/PLM). The Bay Area Air Quality Management District's (BAAQMD), the Federal Environmental Protection Agency's (EPA), and California Environmental Protection Agency's (Cal/EPA) regulations all specify the DS/PLM method. Asbestos Standards ACM is defined by EPA regulations as those substances containing greater than 1% asbestos. The BAAQMD and the Cal/EPA provide local enforcement of these regulations. Friable ACM with greater than 1% asbestos needs to be disposed of as asbestos waste. Prior to demolition of a building, the BAAQMD requires abatement of friable ACM, as well as non-friable ACM that may become friable during demolition (practically, this means all non-friable ACM). Federal Occupational Safety and Health Administrations (OSHA) regulations, locally enforced by CAL/OSHA, defines ACM as substances that contain greater than 1% asbestos. Cal/OSHA also mandates special training, medical exams, personal protective equipment and record keeping for employees working with ACM. If a material contains less than 1% asbestos but more than 0.1% asbestos, the material may be disposed of as non-ACM, but the Cal/OSHA requirements would still have to be followed regarding workers' protection and Contractor licensing. "Trace" materials are currently regulated in California and require the following: • Removal using wet methods; • Prohibition of removal using abrasive saws or methods which would aerosolize the material; • Prompt clean-up of the impacted zone, using HEPA-filtered vacuums, as applicable; • Employer registration by Cal/OSHA for removal quantities exceeding 100 sq. ft. per year; and • Cal/OSHA Carcinogen Registration by the Demolition or Abatement Contractor impacting such materials. Lead Standards Since elemental lead is a suspect carcinogen and known teratogen and neurotoxic in high doses, lead-containing materials need to be identified prior to the on-set of demolition activities. Using combinations of engineering controls and personal protective equipment, lead-containing materials can be remediated safely. Several sources of applicable standards are listed as follows: 1. Lead exposures in the workplace are regulated by Cal/OSHA, which has certain regulatory requirements for identifying and controlling potential lead exposures. Currently applicable regulations for the construction industry have been adopted by Cal/OSHA (8 CCR 1532.1) from the Federal OSHA Attachment 1 Summary Report – Non-destructive Pre-renovation Hazmat Survey Mt. Umunhum Radar Tower, 17000 Mt Umunhum Road, Los Gatos, CA 95030 SCA Project No. B-12936 Page 3 regulations. The current OSHA 8-hour Permissible Exposure Level (PEL) for lead is 50 µg/m3. 2. Current EPA and Cal/EPA regulations do not require LBP to be removed prior to demolition, unless loose and peeling. Provided that the paints are securely adhered to the substrates (i.e., non-flaking or non- peeling), disposal of intact demolition debris can generally be handled in California as non-hazardous and non-RCRA waste. The applicable standards for lead are tabulated below: Agent Total Threshold Level Concentration (TTLC) Wet-Weight Standard (mg/kg)1 Soluble Threshold Level Concentration (STLC) Standard (mg/l)1 CalOSHA Standard for Occupational Safety Lead 1000 5 Any detectable levels; spot abatement required from coated metals before torching/welding In California, loose and peeling LCP or other wastes require characterization and testing for leachability. Disposal requirements are outlined as follows: Lead Disposal Standards Standards TTLC Concentations 1000 mg/kg Condition Total Pb (mg/kg) STLC Pb (mg/L) TCLP Pb (mg/L) Non-haz waste CalHaz (Non-RCRA) Fed Haz (RCRA) 1a <50 (a1)NA Yes no no no III 1b <100 (a2)NA Yes no no no III 2a <5 <5 Yes (c)no no no III or II (d) 2b >5 <5 no Yes no no I 2c >5 >5 no Yes Yes Yes I 2d (b)<5 >5 no no Yes Yes I 3a <5 <5 No Yes No no I 3b >5 <5 no Yes no no I 3c >5 >5 no Yes Yes Yes I 3d (b)<5 >5 no no Yes Yes I 4 any any >5 no no Yes Yes I (a1) 50 = 10 x 5 (STLC for Pb). Per WET method, impossible to exceed STLC even if 100% soluble. (a2) 100 = 20 x 5 (TCLP for Pb). Per TCLP method, impossible to exceed STLC even if 100% soluble. (b) Physically impossible due to the stronger acid used in WET than TCLP. (c) Landfills will likely require documentation that TCLP is <5, even though TCLP is almost always less than WET. (d) Landfill dependent, function of permit, landfill liner, or landfill policy Classification and Disposal of Inorganic Lead Wastes in California Classifications Stabilization Required Landfill Class 50 to <1000 >1000 Leachable Lead 5 mg/L Test Methods & Results 3. The major definitions of LCP or lead-coated surfaces are listed as follows: a. California Department of Public Health (CDPH) defines LBP as paint that contains either >0.5% by weight of lead, or >1 mg/cm2. b. Consumer Product Safety Commission (CPSC) prohibits the manufacturing of paint that contains more than 90 ppm of lead. Note that adherence to CalOSHA's Construction Lead Standard is required for all paint with any measurable lead content. Attachment 1 Summary Report – Non-destructive Pre-renovation Hazmat Survey Mt. Umunhum Radar Tower, 17000 Mt Umunhum Road, Los Gatos, CA 95030 SCA Project No. B-12936 Page 4 4. Lead is on the "Proposition 65" list, given its toxic potential in causing reproductive hazards. 5. California Department of Public Health (CDPH) requires the use of Certified Lead Workers and Supervisors for lead abatement projects at public buildings with a greater than 20 years expected life or whenever work is completed specifically to abate Lead-Based Paint. The CDPH certification requirements do not apply to this facility; however, dust controls and personnel protection are still required under 17 CCR Sections 35001 through 36100. Results Asbestos analyses by polarized light microscopy (PLM) analytical methods found the following results: Asbestos-Containing: Nine (9) suspect materials were confirmed to contain asbestos that may be impacted by the renovation activities, and are listed below: Material ID Asbestos Materials Description EL-1 Electrical wiring with black canvas sheathing (thin gauge) EL-5 Black circuit breaker supports (-) w/black tar (+) WL-10 16”x8” Off-white painted (-) w/tan compound (+) on concrete masonry unit (CMU) wall (-) w/gray mortar (tr) DUST-13 Dust/debris on floors (Multi-colored paint (-), off-white compound (+) and gray concrete (-)) RF-15 Beige (-)/yellow (-)/ green (+)/gray (-) roof coating over black roofing tars (+) RFMAS-17 Black roofing tars/mastic under roof flashing CAULK-18 Gray caulking (-) along expansion joints w/black tars/mastic (+) WL-21 16”x8” Red concrete masonry unit (CMU) wall (-) w/gray mortar (+) CONC-19 Gray concrete (tr) radar pedestal Note: (+) = Asbestos; (tr) = Trace Asbestos (<1%); (-) = Non-asbestos Assumed Asbestos-Containing: One (1) suspect material was assumed to contain asbestos that may be impacted by the renovation activities, and will require further destructive testing. These materials are listed below: Material ID Asbestos Materials Description FIREDOOR- AAA1 Fire-rated core in firedoor Non-Asbestos: Several suspect materials that may be impacted by the renovation activities were tested or visually determined negative for asbestos, as listed below: Material ID Non-asbestos Materials Description EL-2-1,2 Electrical wiring with black canvas sheathing (medium gauge) EL-3-1 Electrical wiring with off-white canvas sheathing (thin gauge) EL-4-1,2 Light gray/black paper behind circuit breakers EL-6-1 Pink circuit breaker supports EL-7-1 Black circuit breaker supports PAINT-8-1,2,3 Off-white paint on concrete walls and equipment GASKET-9-1 Black rubber gasket at access port of water tank FLEX-11-1,2 Black flex connector between duct connections CAULK-12-1,2,3 Residual beige interior caulking around window openings VAPBAR-14-1,2 Black felts and tar vapor barrier under gray mortar bed RF-16-1,2 Beige canvas under roof reglet STAIR-20-1,2,3 Gray concrete steps and landing CONC-22-1,2,3 Gray concrete perimeter walls PAINT-23-1,2,3 Beige elastomeric exterior paint on walls in divots, cracks and behind benches Attachment 1 Summary Report – Non-destructive Pre-renovation Hazmat Survey Mt. Umunhum Radar Tower, 17000 Mt Umunhum Road, Los Gatos, CA 95030 SCA Project No. B-12936 Page 5 Lead: Paint samples collected from the interior and exterior were found to contain lead ranging from 254 to 203,819 ppm. Dust control procedures are required during demolition of painted elements to comply with the CalOSHA regulations under 8 CCR 1532.1. Torching and welding on coated items require prior spot-abatement, as required by CalOSHA. Polychlorinated Biphenyls (PCB): The levels of PCB in various caulking were found to be below or at detection (below the TTLC of 50 ppm) in the following suspect materials tested: Material ID Material Description of Suspect PCB Tested CAULK-12 Residual beige interior caulking around window openings CAULK-18 Gray caulking along expansion joints Please contact me if you have any questions. Sincerely, SCA ENVIRONMENTAL, INC. Dan Leung, CIH, CSP, CAC, CDPH Vice President (415) 867-9544 dleung@sca-enviro.com Table 1. Materials Matrix Report Figures 1 – 2. Sample Location Diagrams Attachments: 1. Asbestos Laboratory Report 2. Lead Laboratory Report 3. PCB Laboratory Report Attachment 1 SCA Project No. B-12936 Surveyed April 3, 2019 Sub-sample #First Floor Second Floor Third Floor Fourth floor Fifth Floor Mezzanine Stairs Roof Exterior Material ID Material Description A B C Asbestos? Positive. Trace. Assumed. Negative UN I T S (L F , S F , EA ) In t e i r o r In t e r i o r In t e r i o r In t e r i o r In t e r i o r In t e r i o r St a i r s Ro o f Ex t e r i o r TO T A L (+ / - 1 5 % ) ASBESTOS EL-1 Electrical wiring with black canvas sheathing (thin gauge)45% CH LF 100 100 EL-5 Black circuit breaker supports (-) w/black tar (+)ND 40% CH SF 100 50 150 WL-10 16”x8” Off-white painted (-) w/tan compound (+) on concrete masonry unit (CMU) wall (-) w/gray mortar (tr)4% CH in cpd 0.58% CH in mortar ND SF 1200 700 1900 DUST-13 Dust/debris on floors (Multi-colored paint (-), off-white compound (+) and gray concrete (-))6% CH NA NA SF 500 500 500 500 500 800 3300 RF-15 Beige (-)/yellow (-)/ green (+)/gray (-) roof coating over black roofing tars (+) 5% CH in coating; 5% in tar NA NA SF 4900 4900 RFMAS-17 Black roofing tars/mastic under roof flashing 35% CH NA SF 160 160 CAULK-18 Gray caulking (-) along expansion joints w/black tars/mastic (+)35% CH NA NA LF 150 150 WL-21 16”x8” Red concrete masonry unit (CMU) wall (-) w/gray mortar (+)0.83% CH ND 1.5% CH SF 400 400 CONC-19 Gray concrete (tr) radar pedestal ND ND 0.58% CH Trace SF 750 750 ASSUMED ASBESTOS (Destructive Testing Required to Confirm) FIREDOOR-AAA1Fire-rated core in firedoor Assumed EA 1 1 NON-ASBESTOS EL-2 Electrical wiring with black canvas sheathing (medium gauge)ND ND LF 100 100 EL-3 Electrical wiring with off-white canvas sheathing (thin gauge)ND LF 100 100 EL-4 Light gray/black paper behind circuit breakers ND ND SF 100 20 120 EL-6 Pink circuit breaker supports ND SF 100 100 EL-7 Black circuit breaker supports ND SF 50 50 PAINT-8 Off-white paint on concrete walls and equipment ND ND ND SF 2500 1800 1800 1800 1800 1800 320 11820 GASKET-9 Black rubber gasket at access port of water tank ND EA 1 1 FLEX-11 Black flex connector between duct connections ND ND EA 2 6 8 CAULK-12 Residual beige interior caulking around window openings ND ND ND LF 300 300 300 300 300 1500 VAPBAR-14 Black felts and tar vapor barrier under gray mortar bed ND ND SF 100 100 200 RF-16 Beige canvas under roof reglet ND ND LF 160 160 STAIR-20 Gray concrete steps and landing ND ND ND SF 800 800 CONC-22 Gray concrete perimeter walls ND ND ND SF 12800 12800 PAINT-23 Beige elastomeric exterior paint on walls in divots, cracks and behind benches ND ND ND SF 2560 2560 PCBs PPM CAULK-12 Residual beige interior caulking around window openings 1.3 LF 300 300 300 300 300 1500 CAULK-18 Gray caulking along expansion joints <0.50 LF 150 150 LEAD PPM OW-1 Off-white paint on walls and equipment 254 SF PNQ PNQ PNQ PNQ PNQ PNQ PNQ PNQ GR-2 Green paint on walls 2,027 SF PNQ PNQ PNQ PNQ PNQ PNQ PNQ PNQ YW-3 Yellow paint on handrails 203,819 SF PNQ PNQ GY-4 Gray paint on exterior porch 5,526 SF PNQ PNQ Notes: PNQ = Present, not quantified; CH = Chrysotile; ND = Not detected; NA = Not analyzed Table 1: Materials Matrix Report-MPROSD, Mt. Umunhum Radar Tower, 17000 Mt. Umunhum Road, Los Gatos, CA Positive Negative Attachment 1 EL-1-1 EL-2-1 EL-3-1 EL-4-1 EL-5-1 EL-6-1 EL-7-1 PAINT-8-1 GASKET-9-1 WL-10-1 FLEX-11-1 CAULK-12-1 WL-10-2 EL-5-2 DUST-13-1 EL-4-2 CAULK-12-2 El-2-2 FLEX-11-2 DUST-13-2 VAPBAR-14-1 CAULK-12-3 VAPBAR-14-2 DUST-13-3 WL-10-3 PAINT-8-2 STAIR-20-2 PAINT-8-3 STAIR-20-1 STAIR-20-3 OW-1 GR-2 YW-3 CAULK-12-3 Figure 1. Sample Location Diagram MPROSD, Mt Umunhum Radar Tower Interior SCA Proj. #: B-12936 April 3, 2019 Attachment 1 RF-15-1 RF-15-2 RF-15-3 RF-16-1 RF-16-2 RFMAS-17-1 RFMAS-17-2 CAuLK-18-1 CONC-19-1 CONC-19-2 CONC-19-3 CAULK-18-2 CAULK-18-3 WL-21-1 PAINT-23-1 CONC-22-1 PAINT-23-2 CONC-22-2 WL-21-2 CONC-22-3 WL-21-3 PAINT-23-3 GY-4 Figure 2. Sample Location Diagram MPROSD, Mt Umunhum Radar Tower Exterior and Roof SCA Proj. #: B-12936 April 3, 2019 Attachment 1 Summary Report – Non-destructive Pre-renovation Hazmat Survey Mt. Umunhum Radar Tower, 17000 Mt Umunhum Road, Los Gatos, CA 95030 SCA Project No. B-12936 Page 6 Attachment 1 Asbestos Laboratory Report Attachment 1 Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\Lab\Reservoirs Environmental QA Manual.doc Subcontract Number:NA Laboratory Report:RES 432245-1 Project # / P.O. # B12936 Project Description:Mt. Umunhum Radar Tower RES 432245-1 Sincerely, is the job number assigned to this study. This report is considered highly confidential and the sole property of the customer. Reservoirs Environmental, Inc. will not discuss any part of this study with personnel other than those of the client. The results described in this report only apply to the samples analyzed. This report must not be used to claim endorsement of products or analytical results by NVLAP or any agency of the U.S. Government. This report shall not be reproduced except in full, without written approval from Reservoirs Environmental, Inc. Samples will be disposed of after sixty days unless longer storage is requested.If you have any questions about this report, please feel free to call 303-964-1986. Jeanne Spencer President April 12, 2019 Dear Customer, Reservoirs Environmental, Inc.is an analytical laboratory accredited for the analysis of Industrial Hygiene and Environmental matrices by the National Voluntary Laboratory Accreditation Program (NVLAP),Lab Code 101896-0 for Transmission Electron Microscopy (TEM)and Polarized Light Microscopy (PLM) analysis and the American Industrial Hygiene Association (AIHA),Lab ID 101533 - Accreditation Certificate #480 for Phase Contrast Microscopy (PCM) analysis. This laboratory is currently proficient in both Proficiency Testing and PAT programs respectively. Reservoirs Environmental, Inc.has analyzed the following samples for asbestos content as per your request. The analysis has been completed in general accordance with the appropriate methodology as stated in the attached analysis table. The results have been submitted to your office. SCA Environmental, Inc. 320 Justin Drive San Fransisco CA 94112 Dan Leung P: 303-964-1986 F: 303-477-4275 5801 Logan Street, Suite 100 Denver, CO 80216 Page 1 of 1 1-866-RESI-ENV www.reilab.com Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 1000EL-1-1 Green resinous wire wrapA 5 ND 3025Off white fibrous wire wrap w/ dark gray resinous materialB 95 45 Chrysotile 0100EL-2-1 White fibrous materialA 1 ND 1000Dark gray resinous wire wrapB 49 ND 2080Off white wire wrap w/ dark gray resinous materialC 50 ND 2080EL-2-2 Tan fibrous wire wrap w/ black resinous materialA 10 ND 1000Black resinous wire wrapB 90 ND 595EL-3-1 Light gray/red/green fibrous wire wrapA 45 ND 100Clear resinous wire wrapB 55 ND 595EL-4-1 Gray fibrous material w/ yellow resinous materialA 100 ND 1585EL-4-2 Black fibrous materialA 100 ND 1585EL-5-1 Black fibrous materialA 100 ND 600EL-5-2 Black fibrous tarA 100 40 Chrysotile TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 1 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 3565EL-6-1 Pink fibrous resinous materialA 100 ND 6535EL-7-1 Black fibrous resinous materialA 100 ND 1000PAINT-8-1**White/multi-colored paintA 35 ND 1000Gray granular materialB 65 ND 1000PAINT-8-2 White/multi-colored paint w/ green compoundA 100 ND 1000PAINT-8-3 White/multi-colored paint w/ green compoundA 100 ND 1000GASKET-9-1 Black resinous materialA 100 ND 1000WL-10-1 Green/multi-colored paintA TR ND 960Tan compoundB TR 4 Chrysotile 1000Gray cinder blockC 40 ND 1000Gray granular materialD 60 ND TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 2 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 1000WL-10-2 Black/multi-colored paintA 15 ND 1000Gray cinder blockB 25 ND 1000Tan gray plasterC 60 TR Chrysotile 0.58 Point Count 1000WL-10-3 White/multi-colored paintA 15 ND 1000Gray/red cinder blockB 85 ND 5050FLEX-11-1 Black resinous material w/ white fibrous material & gray paint A 100 ND 1000FLEX-11-2 White paint w/ yellow resinous materialA 2 ND 5050Black resinous material w/ white fibrous materialB 98 ND 1000CAULK-12-1 Green/gray paintA 5 ND 9010Off white resinous materialB 95 ND 8515CAULK-12-2 Off white-gray resinous materialA 100 ND TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 3 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 1000CAULK-12-3 Green paintA 5 ND 8515Gray-off white resinous materialB 95 ND 940DUST-13-1**Off white compoundA 2 6 Chrysotile 964Off white compoundB 2 ND 1000White multi-colored paint w/ multi-colored debrisC 10 ND 1000Gray granular debrisD 86 ND DUST-13-2**Not Analyzed per Client Request. DUST-13-3**Not Analyzed per Client Request. 1000VAPBAR-14-1 White paintA 1 ND 1000Black multi-layered tarB 35 ND 2575Black multi-layered feltC 64 ND TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 4 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 1000VAPBAR-14-2 Black tar w/ white paintA 10 ND 1000Light gray granular materialB 15 ND 2080Black feltC 35 ND 1000Gray plasterD 40 ND 1000RF-15-1 Tan resinous materialA 5 ND 1000Yellow resinous materialB 5 ND 950Green resinous materialC 10 5 Chrysotile 1000Gray resinous materialD 30 ND 950Black fibrous tarE 50 5 Chrysotile RF-15-2 Not Analyzed per Client Request. RF-15-3 Not Analyzed per Client Request. 1090RF-16-1 Off white tape w/ silver/gray resinous materialA 100 ND 2080RF-16-2 Off white tape w/ silver/gray resinous materialA 100 ND TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 5 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 650RFMAS-17-1 Gray/black fibrous tarA 100 35 Chrysotile RFMAS-17-2 Not Analyzed per Client Request. 1000CAULK-18-1 Gray resinous materialA 50 ND 650Black fibrous tarB 50 35 Chrysotile CAULK-18-2 Not Analyzed per Client Request. CAULK-18-3 Not Analyzed per Client Request. 1000CONC-19-1**Off white/multi-colored granular resinous materialA 40 ND 1000Gray granular materialB 60 ND 1000CONC-19-2**Gray cementitious materialA 100 ND 1000CONC-19-3**Gray cementitious materialA 100 TR Chrysotile 0.58 Point Count TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 6 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 1000STAIR-20-1 Dark gray plasterA 15 ND 1000White/gray paint/multi-colored paint w/ white resinous material B 35 ND 1000Gray granular materialC 50 ND 1000STAIR-20-2 White/gray/multi-colored paintA 15 ND 1000Gray granular materialB 85 ND 1000STAIR-20-3**Gray granular materialA 40 ND 1000Gray/gray paintB 60 ND 1000WL-21-1 Brown cinder blockA 40 ND 1000Gray granular materialB 60 TR Chrysotile 0.83 Point Count 1000WL-21-2 Clear resinous materialA 3 ND 1000Brown cinder blockB 25 ND 1000Gray granular materialC 72 ND TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 7 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 1000WL-21-3**Gray granular materialA 25 TR Chrysotile 1.50 Point Count 1000Brown granular materialB 75 ND 1000CONC-22-1 Clear resinous materialA 5 ND 1000Gray cementitious materialB 95 ND 1000CONC-22-2 Tan-gray cementitious materialA 35 ND 1000Dark gray granular material w/ clear resinous materialB 65 ND 1000CONC-22-3**Clear resinous materialA 2 ND 1000Gray granular materialB 98 ND 1000PAINT-23-1 Clear resinous materialA 10 ND 1000Off white granular materialB 90 ND 1000PAINT-23-2 Clear resinous materialA 25 ND 1000Off white granular materialB 75 ND TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 8 of 9 Attachment 1 RES Job Number: Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Turnaround: Date Samples Analyzed: RES 432245-1 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 05, 2019 Standard April 08, 2019 - April 12, 2019 TABLE: PLM BULK ANALYSIS, PERCENTAGE COMPOSITION BY VOLUME Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\LAB\Reservoirs Environmental QA Manual.doc RESERVOIRS ENVIRONMENTAL INC. NVLAP Lab Code 101896-0 Client Sample Number L A Y E R Mineral Method:EPA 600/R-93/116 - Short Report, Bulk Physical Description Sub Part (%) Visual Estimate (%) ND=None Detected TR=Trace, <1% Visual Estimate Trem/Act=Tremolite/Actinolite Non Asbestos Fibrous Components (%) Non- Fibrous Components (%) Asbestos Content 1000PAINT-23-3 Clear resinous materialA 50 ND 1000Off white granular materialB 50 ND Analyst / Data QAAnalystAnalystAnalystAnalyst TEM Analysis recommended for organically bound material (i.e. floor tile) if PLM results are <1%. **Sample contains non-asbestiform serpentine aggregate as part of the matrix components. P: 303-964-1986 F: 303-477-4275 1-866-RESI-ENV www.reilab.com 5801 Logan Street, Suite 100, Denver, CO 80216 Page 9 of 9 Attachment 1 Attachment 1 Attachment 1 Attachment 1 Attachment 1 Summary Report – Non-destructive Pre-renovation Hazmat Survey Mt. Umunhum Radar Tower, 17000 Mt Umunhum Road, Los Gatos, CA 95030 SCA Project No. B-12936 Page 7 Attachment 2 Lead Laboratory Report Attachment 1 Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\Lab\Reservoirs Environmental QA Manual.doc Laboratory Code: RES Subcontract Number: NA Laboratory Report: RES 432224-1 Project # / PO #: B12936 Project Description: RES 432224-1 Sincerely, April 9, 2019 Dear Customer, Reservoirs has analyzed the following sample(s) using Atomic Absorption Spectroscopy (AAS) / Inductively Coupled Plasma - Mass Spectrometry (ICP-MS) per your request. Reported sample results were not blank corrected. The analysis has been completed in general accordance with the appropriate methodology as stated in the analysis table. Results have been sent to your office. property of the customer. Reservoirs Environmental, Inc. will not discuss any part of this study with personnel other than those authorized by the client. The results described in this report only apply to the samples analyzed. This report shall not be reproduced except in full, without written approval from Reservoirs Environmental, Inc. Samples will be disposed of after sixty days unless longer storage is requested. If you should have any questions about this report, please feel free to call me at 303-964-1986. Reservoirs Environmental, Inc. is an analytical laboratory accredited for the analysis of Industrial Hygiene and Environmental matrices by the American Industrial Hygiene Association, Lab ID 101533 - Accreditation Certificate #480. The laboratory is currently proficient in both IHPAT & ELPAT programs respectively. is the job number assigned to this study. This report is considered highly confidential and the sole Mt. Umunhum Radar Tower San Fransisco CA 94112 320 Justin Drive Dan Leung SCA Environmental, Inc. Jeanne Spencer President P: 303-964-1986 F: 303-477-4275 5801 Logan Street, Suite 100 Denver, CO 80216 Page 1 of 2 1-866-RESI-ENV www.reilab.com Attachment 1 Reservoirs Environmental, Inc. Reservoirs Environmental QA Manual Effective April 2, 2018 Q:\QAQC\Lab\Reservoirs Environmental QA Manual.doc RES Job Number:RES 432224-1 Client: Client Project Number / P.O.: Client Project Description: Date Samples Received: Analysis Type: Turnaround: Date Samples Analyzed: Client Reporting LEAD ID Number Limit CONCENTRATION (mg/kg)(mg/kg) 0.59 254 0.66 2,027 0.65 203,819 0.63 5,526 Standard RESERVOIRS ENVIRONMENTAL, INC. 5801 Logan St., Suite 100 Denver CO 80216 TABLE ANALYSIS: LEAD IN BULK Analyst / Data QA:___________________________ April 9, 2019 SCA Environmental, Inc. B12936 Mt. Umunhum Radar Tower April 5, 2019 REI CHEMISTRY SOP / USEPA SW846 3050B/6020A-M * Unless otherwise noted, all quality control samples are performed within specifications established by the laboratory. OW-1 GR-2 YW-3 GY-4 P: 303-964-1986 F: 303-477-4275 5801 Logan Street, Suite 100 Denver, CO 80216 Page 2 of 2 1-866-RESI-ENV www.reilab.com Attachment 1 Attachment 1 Attachment 1 Summary Report – Non-destructive Pre-renovation Hazmat Survey Mt. Umunhum Radar Tower, 17000 Mt Umunhum Road, Los Gatos, CA 95030 SCA Project No. B-12936 Page 8 Attachment 3 PCB Laboratory Report Attachment 1 WorkOrder: Report Created for:SCA Environmental, Inc. 1 Lakeside Drive, Suite 215 Oakland, CA 94612 Project Contact:Dan Leung Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY Project P.O.: Project Received:04/04/2019 Analytical Report reviewed & approved for release on 04/10/2019 by: Yen Cao 1904245 The report shall not be reproduced except in full, without the written approval of the laboratory. The analytical results relate only to the items tested. Results reported conform to the most current NELAP standards, where applicable, unless otherwise stated in the case narrative. Analytical Report 1534 Willow Pass Rd. Pittsburg, CA 94565 ♦ TEL: (877) 252-9262 ♦ FAX: (925) 252-9269 ♦ www.mccampbell.com CA ELAP 1644 ♦ NELAP 4033 ORELAP Project Manager McCampbell Analytical, Inc. "When Quality Counts" Page 1 of 9 Attachment 1 Glossary of Terms & Qualifier Definitions Client:SCA Environmental, Inc. Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY WorkOrder:1904245 McCampbell Analytical, Inc.1534 Willow Pass Road, Pittsburg, CA 94565-1701 Toll Free Telephone: (877) 252-9262 / Fax: (925) 252-9269 http://www.mccampbell.com / E-mail: main@mccampbell.com"When Quality Counts" Glossary Abbreviation %D Serial Dilution Percent Difference 95% Interval 95% Confident Interval DF Dilution Factor DI WET (DISTLC) Waste Extraction Test using DI water DISS Dissolved (direct analysis of 0.45 µm filtered and acidified water sample) DLT Dilution Test (Serial Dilution) DUP Duplicate EDL Estimated Detection Limit ERS External reference sample. Second source calibration verification. ITEF International Toxicity Equivalence Factor LCS Laboratory Control Sample MB Method Blank MB % Rec % Recovery of Surrogate in Method Blank, if applicable MDL Method Detection Limit ML Minimum Level of Quantitation MS Matrix Spike MSD Matrix Spike Duplicate N/A Not Applicable ND Not detected at or above the indicated MDL or RL NR Data Not Reported due to matrix interference or insufficient sample amount. PDS Post Digestion Spike PDSD Post Digestion Spike Duplicate PF Prep Factor RD Relative Difference RL Reporting Limit (The RL is the lowest calibration standard in a multipoint calibration.) RPD Relative Percent Deviation RRT Relative Retention Time SPK Val Spike Value SPKRef Val Spike Reference Value SPLP Synthetic Precipitation Leachate Procedure ST Sorbent Tube TCLP Toxicity Characteristic Leachate Procedure TEQ Toxicity Equivalents TZA TimeZone Net Adjustment for sample collected outside of MAI's UTC. WET (STLC)Waste Extraction Test (Soluble Threshold Limit Concentration) Page 2 of 9 Attachment 1 Glossary of Terms & Qualifier Definitions Client:SCA Environmental, Inc. Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY WorkOrder:1904245 McCampbell Analytical, Inc.1534 Willow Pass Road, Pittsburg, CA 94565-1701 Toll Free Telephone: (877) 252-9262 / Fax: (925) 252-9269 http://www.mccampbell.com / E-mail: main@mccampbell.com"When Quality Counts" Analytical Qualifiers A The reported value is determined using a "single point" calibration by GC-ECD as allowed by the method. a4 Reporting limits raised due to the sample's matrix prohibiting a full volume extraction. h4 Sulfuric acid permanganate (EPA 3665) cleanup. Page 3 of 9 Attachment 1 Analytical Report McCampbell Analytical, Inc.1534 Willow Pass Road, Pittsburg, CA 94565-1701 Toll Free Telephone: (877) 252-9262 / Fax: (925) 252-9269 http://www.mccampbell.com / E-mail: main@mccampbell.com"When Quality Counts" Client:SCA Environmental, Inc. Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY Date Received:4/4/19 14:25 Date Prepared:4/4/19 WorkOrder:1904245 Extraction Method:SW3540C/3630C Analytical Method:SW8082 Unit:mg/kg Polychlorinated Biphenyls (PCBs) Aroclors w/ Soxhlet Extraction and Silica Gel Clean-up CAULK- 12 1904245-001A Solid 04/03/2019 GC23 04081918.d 175749 Analytes Result Qualifiers DF Date AnalyzedRL Client ID Lab ID Matrix Date Collected Instrument Batch ID Aroclor1016 ND 0.50 1 04/08/2019 13:59 Aroclor1221 ND 0.50 1 04/08/2019 13:59 Aroclor1232 ND 0.50 1 04/08/2019 13:59 Aroclor1242 ND 0.50 1 04/08/2019 13:59 Aroclor1248 ND 0.50 1 04/08/2019 13:59 Aroclor1254 1.3 A 0.50 1 04/08/2019 13:59 Aroclor1260 ND 0.50 1 04/08/2019 13:59 PCBs, total 1.3 0.50 1 04/08/2019 13:59 Surrogates REC (%)Limits Analytical Comments:a4,h4Analyst(s):LT Decachlorobiphenyl 94 70-130 04/08/2019 13:59 CAULK- 18 1904245-002A Solid 04/03/2019 GC23 04081919.d 175749 Analytes Result DF Date AnalyzedRL Client ID Lab ID Matrix Date Collected Instrument Batch ID Aroclor1016 ND 0.50 1 04/08/2019 14:14 Aroclor1221 ND 0.50 1 04/08/2019 14:14 Aroclor1232 ND 0.50 1 04/08/2019 14:14 Aroclor1242 ND 0.50 1 04/08/2019 14:14 Aroclor1248 ND 0.50 1 04/08/2019 14:14 Aroclor1254 ND 0.50 1 04/08/2019 14:14 Aroclor1260 ND 0.50 1 04/08/2019 14:14 PCBs, total ND 0.50 1 04/08/2019 14:14 Surrogates REC (%)Limits Analytical Comments:a4,h4Analyst(s):LT Decachlorobiphenyl 98 70-130 04/08/2019 14:14 CA ELAP 1644 • NELAP 4033ORELAP Page 4 of 9 Attachment 1 Quality Control Report McCampbell Analytical, Inc.1534 Willow Pass Road, Pittsburg, CA 94565-1701 Toll Free Telephone: (877) 252-9262 / Fax: (925) 252-9269 http://www.mccampbell.com / E-mail: main@mccampbell.com"When Quality Counts" Client:SCA Environmental, Inc. Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY Date Analyzed:4/4/19 - 4/5/19 Date Prepared:4/4/19 WorkOrder:1904245 BatchID:175749 Analytical Method:SW8082 Unit:mg/kg Sample ID:MB/LCS/LCSD-175749 Instrument:GC23 Matrix:Solid Extraction Method:SW3540C/3630C QC Summary for SW8082 Analyte MB Result MDL RL SPK Val MB SS %REC MB SS Limits Aroclor1016 ND 0.050 0.050 --- Aroclor1221 ND 0.050 0.050 --- Aroclor1232 ND 0.050 0.050 --- Aroclor1242 ND 0.050 0.050 --- Aroclor1248 ND 0.050 0.050 --- Aroclor1254 ND 0.050 0.050 --- Aroclor1260 ND 0.050 0.050 --- PCBs, total ND N/A 0.050 --- Surrogate Recovery Decachlorobiphenyl 0.045 0.050 91 70-130 Analyte LCS Result LCSD Result SPK Val LCS %REC LCSD %REC LCS/LCSD Limits RPD RPD Limit Aroclor1016 0.12 0.11 0.15 78 76 70-130 2.67 20 Aroclor1260 0.12 0.13 0.15 81 89 70-130 9.40 20 Surrogate Recovery Decachlorobiphenyl 0.051 0.053 0.050 102 105 70-130 3.43 20 CA ELAP 1644 • NELAP 4033ORELAP Page 5 of 9 Attachment 1 McCampbell Analytical, Inc. 1534 Willow Pass Rd Pittsburg, CA 94565-1701 (925) 252-9262 CHAIN-OF-CUSTODY RECORD Page Lab ID Matrix Collection Date Hold Requested Tests (See legend below) Report to: Dan Leung 1 Lakeside Drive, Suite 215 Oakland, CA 94612 415-378-4188 FAX:(510) 839- 6200 PO: 04/04/2019 Client ID Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY WorkOrder:1904245 1 of 1 Date Logged: Date Received:04/04/2019 1 2 3 4 5 6 7 8 9 10 11 12 SCA Environmental, Inc. Bill to: Accounts Payable SCA Environmental, Inc. 1 Lakeside Drive, Suite 215 Oakland, CA 94612 Requested TAT:10 days; ClientCode:SCAO Email:dleung@sca-enviro.com; labreports99@gm EDF EQuIS Email HardCopy ThirdParty pgervasio@scaehs.com Excel J-flagWriteOn cc/3rd Party: WaterTrax Detection Summary Dry-Weight A1904245-001 Solid 4/3/2019 00:00CAULK- 12 A1904245-002 Solid 4/3/2019 00:00CAULK- 18 Prepared by: Tina Perez NOTE: Soil samples are discarded 60 days after results are reported unless other arrangements are made (Water samples are 30 days). Hazardous samples will be returned to client or disposed of at client expense. Comments: 8082_Soxhlet_SG_Solid1 2 3 4 5 6 7 8 9 10 Test Legend: 11 12 Project Manager:Angela Rydelius Page 6 of 9 Attachment 1 Lab ID Client ID Collection Date & Time Date Logged: TATMatrixTest Name Containers /Composites WORK ORDER SUMMARY Work Order:1904245 Comments: Client Name:SCA ENVIRONMENTAL, INC.Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY QC Level:LEVEL 2 HoldDe- chlorinated SubOutBottle & Preservative 4/4/2019 Sediment Content EDF EQuIS Email HardCopy ThirdPartyExcel J-flagWriteOn Dan LeungClient Contact: dleung@sca-enviro.com; labreports99@gmail.comContact's Email: WaterTrax McCampbell Analytical, Inc.1534 Willow Pass Road, Pittsburg, CA 94565-1701 Toll Free Telephone: (877) 252-9262 / Fax: (925) 252-9269 http://www.mccampbell.com / E-mail: main@mccampbell.com"When Quality Counts" 1904245-001A CAULK- 12 4/3/2019 5 daysSolidSW8082 (PCBs w/ Soxhlet Extraction & SG CU) 1 100ml White Cap 1904245-002A CAULK- 18 4/3/2019 5 daysSolidSW8082 (PCBs w/ Soxhlet Extraction & SG CU) 1 100ml White Cap 1 of 1Page - STLC and TCLP extractions require 2 days to complete; therefore, all TATs begin after the extraction is completed (i.e., One-day TAT yields results in 3 days from sample submission). NOTES: - MAI assumes that all material present in the provided sampling container is considered part of the sample - MAI does not exclude any material from the sample prior to sample preparation unless requested in writing by the client. Page 7 of 9 Attachment 1 Page 8 of 9 Attachment 1 Sample Receipt Checklist McCampbell Analytical, Inc.1534 Willow Pass Road, Pittsburg, CA 94565-1701 Toll Free Telephone: (877) 252-9262 / Fax: (925) 252-9269 http://www.mccampbell.com / E-mail: main@mccampbell.com"When Quality Counts" Client Name:SCA Environmental, Inc. WorkOrder №:1904245 Date Logged:4/4/2019 Logged by:Tina PerezMatrix:Solid Carrier:Client Drop-In Shipping container/cooler in good condition?Yes No Custody seals intact on shipping container/cooler?Yes No NA Samples Received on Ice?Yes No Chain of custody present?Yes No Chain of custody signed when relinquished and received?Yes No Chain of custody agrees with sample labels?Yes No Samples in proper containers/bottles?Yes No Sample containers intact?Yes No Sufficient sample volume for indicated test?Yes No NAAll samples received within holding time?Yes No NASample/Temp Blank temperature Yes No NAWater - VOA vials have zero headspace / no bubbles? pH acceptable upon receipt (Metal: <2; Nitrate 353.2/4500NO3: <2; 522: <4; 218.7: >8)? Yes No NA Temp: Chain of Custody (COC) Information Yes NoSample IDs noted by Client on COC? Yes NoDate and Time of collection noted by Client on COC? Yes NoSampler's name noted on COC? Sample Receipt Information Sample Preservation and Hold Time (HT) Information Sample labels checked for correct preservation?Yes No Project:B12936; WJE MT UMUNHUM RADAR TOWER SVY Comments: pH tested and acceptable upon receipt (200.8: ≤2; 525.3: ≤4; 530: ≤7; 541: <3; 544: <6.5 & 7.5)? Yes No NA UCMR Samples: Free Chlorine tested and acceptable upon receipt (<0.1mg/L)?Yes No NA Date and Time Received:4/4/2019 14:25 Received by:Tina Perez COC agrees with Quote?Yes No NA Page 9 of 9 Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page B APPENDIX B: OPINION OF PROBABLE CONSTRUCTION COST BY HATTIN CONSTRUCTION MANAGEMENT Attachment 1 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT MT UMUNHUM RADAR TOWER REPAIR Los Gatos, CA Opinion of Probable Construction Cost Conceptual Cost Estimate Prepared for : Wiss Janney Elstner Associates, Inc. July 11, 2019 by: HATTIN CONSTRUCTION MANAGEMENT, INC. 300 Frank H. Ogawa Plaza, Suite 239 Oakland, CA 94102 Telephone: (510) 832-5800 Fax: (510) 832-5900 www.hattincm.com Attachment 1 MROSD Mount Umunhum Radar Tower Repair Page 1 of 2 07/11/19 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT MOUNT UMUNHUM RADAR TOWER REPAIR Los Gatos, CA ESTIMATE OF PROBABLE CONSTRUCTION COST EXECUTIVE SUMMARY Introduction: This Conceptual Design Cost Estimate represents the probable construction cost of Midpeninsula Regional Open Space District – Mount Umu nhum Radar Tower Repair, Los Gatos, CA. Considering that the drawings are preliminary design submittal, certain components, which may be required as part of this project may not be shown or mentioned in this estimate. Allowances have been made when detail description of equipment, work definition, or quantities are not available. Material pricing and labor costs are obtained from historical cost data and similar projects. Mechanical and electrical costs are based similar projects. The unit costs include material, labor, and subcontractor's markup, and are based on the design level of documents received. Project Descriptions: Repair of Radar Tower in Mount Umunhum, Los Gatos, CA – The scope includes several Options. Documents Received as a Basis of Cost Estimate: The following documentation was used in preparation of this estimate: ♦ Preliminary Drawings S1 thru S6. Exclusions: The following items are excluded: ♦ Change Order Contingency ♦ Land Cost ♦ Cost of money ♦ Offsite Utilities & Connection Fees ♦ Professional Consultants’ and Construction Management fees ♦ Administrative costs ♦ Fees for testing construction materials ♦ Plan checks and inspection ♦ Permits ♦ Legal and financing costs ♦ Furnishings, furniture, and equipment (FFE) ♦ Relocation costs, if required ♦ Contractor off-hours and compressed time work schedule, if required ♦ Escalation beyond that stated. ♦ LEED Possible Additional Cost Items: Items that may change the Estimate of Probable Construction Cost include, but are not limited to, the following: ♦ Modifications to the scope of work, drawings, specifications included in this estimate ♦ Unforeseen conditions ♦ Construction phasing requirements Attachment 1 MROSD Mount Umunhum Radar Tower Repair Page 2 of 2 07/11/19 ♦ Excessive contract and general conditions, and restrictive technical specifications ♦ Equipment, material, systems or product that cannot be obtained from at least three different sources ♦ Delays beyond the projected schedule ♦ Any other non-competitive bid situations ♦ Any addenda, changes not included in the basis of estimates. Escalation: Escalation of 6% up to midpoint of construction is included in the estimate, assumed at 18 months from June 16, 2019 at the rate of 4% per annum. ESTIMATING ASSUMPTIONS AND COMMENTS General: a. Material prices are at 2nd Quarter 2019 level; include taxes and contractor’s markups. b. Labor cost is based on prevailing wages. c. Work to be done during normal business hours. d. This estimate can vary due to change in scope. e. Quantities were obtained as shown on the drawings. f. Allowances are provided for items not shown in the drawings and are anticipated to be part of the estimate. g. Installation cost, supervision, and coordination for material and equipment are included in the estimate. h. General conditions assumed at 20% include mobilization, insurance, office personnel costs, dust control, and other items not mentioned in General requirements. i. Design Contingency/Estimating Contingency is assumed at 25% due to the level of drawings used in the estimate. ESTIMATE OF PROBABLE CONSTRUCTION COST The estimated Probable Construction Costs reflects the anticipated cost of the MROSD Mount Umu nhum Radar Radio Tower in Los Gatos, CA. This estimate is based on a competitive open bid process with a recommended five or more bids from reputable general contractors, and a minimum of three bids for all subcontracted items. Cost of materials, labor, equipment or services furnished by others, and the contractors' or vendors' methods of determining prices are determined by market and/or economic conditions. Hence, the Estimator cannot and does not guarantee that proposals, bids or actual project costs will not vary from this Estimate of Probable Construction Cost. This Estimate of Probable Construction Cost is exclusive of all costs associated with changes, modifications or addenda to the drawings and/or specifications subsequent to the preparation of this estimate. Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 1 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Gross Area (SF) MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Lead Estimator:EEV Type of Estimate: CONCEPTUAL ESTIMATE Date:6/17/2019Revised:7/11/2019 ITEM DESCRIPTION TOTAL AREA (SF) SUMMARY OF PROBABLE CONSTRUCTION COST % Hattin Construction Management, Inc. Project and Construction Management Services 300 Frank H. Ogawa Plaza, Suite 239 Oakland, CA 94102 Telephone: (510)832-5800 - Fax: (510)832-5900 1 SITEWORK & STAIRS 38,538$ 2 CONCRETE WALL CONCRETE REPAIR - BASE 301,936$ WALL CONCRETE REPAIR - OPTION 1 698,603$ WALL CONCRETE REPAIR - OPTION 2 1,112,564$ 3 THERMAL & MOISTURE PROTECTION ROOF REPAIR - BASE 210,588$ SHORT TERM REPAIR 114,318$ LONG TERM REPAIR - OPTION 1 255,120$ LONG TERM REPAIR - OPTION 2 491,698$ ROOF FALL PROTECTION (GUARDRAIL) - OPTION 1 89,866$ ROOF FALL PROTECTION - OPTION 2 35,424$ WALL OPENING REPAIR - OPTION 1 39,535$ WALL OPENING REPAIR - OPTION 2 60,631$ WALL OPENING REPAIR - OPTION 3 83,116$ Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 2 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 SITEWORK & STAIRS Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: Replace (E) Bollards, Exterior Steel Doors, & Stair Handrails 01 General Requirements Included in the General Conditions below. General Requirements -$ 02 Existing Conditions Sitework & Interior Repairs 2 EA 1,650.00$ 3,300$ 1 EA 1,535.00$ 1,535$ 1 EA 1,535.00$ 1,535$ 108 LF 100.00$ 10,800$ Infill openings w/ 12" x 24" metal grating 14 EA 250.00$ 3,500$ Existing Conditions 20,670$ TOTAL DIRECT COST 20,670$ General Conditions/General Requirements 20.0%$4,134 SUBTOTAL 24,804$ General Contractor's Overhead & Profit 10.0%$2,480 SUBTOTAL 27,284$ Historic Preservation Factor 5.0%$1,364 Design Contingency/Estimating Contingency 25.0%$6,821 SUBTOTAL 35,470$ 6.0%$2,128 SUBTOTAL 37,598$ Bonds 2.5%$940 38,538$ Remove two (2) existing bollards & replace w/ foldable bollards Remove & replace steel handrail from 1st floor level to 5th floor levels TOTAL PROBABLE BID DAY CONSTRUCTION COST - SITEWORK & STAIRS Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Remove & replace single steel door on east side @ 1st floor level Remove & replace single steel door on west side @ 1st floor level Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 3 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 WALL CONCRETE REPAIR - BASE Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below. General Requirements -$ 03 CONCRETE 2,028 LF $ 35.00 70,980 1,582 SF $ 7.50 11,865 1,582 SF $ 50.00 79,100 CONCRETE 161,945$ TOTAL DIRECT COST 161,945$ General Conditions/General Requirements 20.0%$32,389 SUBTOTAL 194,334$ General Contractor's Overhead & Profit 10.0%$19,433 SUBTOTAL 213,767$ Historic Preservation Factor 5.0%$10,688 Design Contingency/Estimating Contingency 25.0%$53,442 SUBTOTAL 277,898$ 6.0%$16,674 SUBTOTAL 294,571$ Bonds 2.5%$7,364 301,936$ Repair large cracks, voids, spalls, & delaminations at pilasters, the thickened roof slab edge along tops of the walls, & selected portions Remove loose or delaminated concrete & sawcut the perimeter of the repair area, assume all pilaster edges require repair Clean the corrosion & apply a protective coating to the exposed steel, allow Patch the concrete spalls using an appropriate repair mortar, allow Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) TOTAL PROBABLE BID DAY CONSTRUCTION COST -WALL CONCRETE REPAIRS - BASE Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 4 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 WALL CONCRETE REPAIR - OPTION 1 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below. General Requirements -$ 03 CONCRETE Repair shallow rough & poorly consolidated concrete at walls using the following procedures 7,320 SF $ 10.00 73,200 7,320 SF $ 25.00 183,000 23,700 SF $ 5.00 118,500 CONCRETE 374,700$ TOTAL DIRECT COST 374,700$ General Conditions/General Requirements 20.0%$74,940 SUBTOTAL 449,640$ General Contractor's Overhead & Profit 10.0%$44,964 SUBTOTAL 494,604$ Historic Preservation Factor 5.0%$24,730 Design Contingency/Estimating Contingency 25.0%$123,651 SUBTOTAL 642,985$ 6.0%$38,579 SUBTOTAL 681,564$ Bonds 2.5%$17,039 698,603$ Patch & Coat; Repair the surface of the exterior concrete wall between pilasters to be suitable to receive an elastomeric Remove loose concrete & roughen surface to receive concrete repair mortar, allow 20% of total wall area Surface patch concrete for smooth, well bonded finish Coat concrete walls & pilasters w/ elastomeric coating Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) TOTAL PROBABLE BID DAY CONSTRUCTION COST -WALL CONCRETE REPAIRS - OPTION 1 Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 5 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 WALL CONCRETE REPAIR - OPTION 2 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: Stucco Cladding between Pilasters 01 General Requirements Included in the General Conditions below. General Requirements -$ 09 FINISHES 18,930 SF $ 25.00 473,250 832 LF $ 5.00 4,160 164 LF $ 5.00 820 Coat stucco & conc. pilasters w/ elastomeric coating 23,700 SF 5.00$ 118,500 FINISHES 596,730$ TOTAL DIRECT COST 596,730$ General Conditions/General Requirements 20.0%$119,346 SUBTOTAL 716,076$ General Contractor's Overhead & Profit 10.0%$71,608 SUBTOTAL 787,684$ Historic Preservation Factor 5.0%$39,384 Design Contingency/Estimating Contingency 25.0%$196,921 SUBTOTAL 1,023,989$ 6.0%$61,439 SUBTOTAL 1,085,428$ Bonds 2.5%$27,136 1,112,564$ Install mechanically fastened metal lath & 3-coat on the exterior walls between pilasters. Install horizontal control joints at the bottom of each floor slab level Install intermediate horizontal control joints at the 4th & 5th floors Installs mechanically attached 3-coat cement plaster (stucco) system (thickness of about ¾") on the walls between the concrete pilasters as a substrate for an elastomeric waterproofing coating Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) TOTAL PROBABLE BID DAY CONSTRUCTION COST -WALL CONCRETE REPAIRS - OPTION 2 Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 6 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 ROOF REPAIR - BASE Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below. General Requirements -$ 07 Thermal & Moisture Protection 4 EA 1,000.00$ 4,000$ 3,630 SF 5.00$ 18,150$ Inspect the structural slab soffit & repair damage, allow 25% 908 SF 100.00$ 90,800$ Thermal & Moisture Protection 112,950$ TOTAL DIRECT COST 112,950$ General Conditions/General Requirements 20.0%$22,590 SUBTOTAL 135,540$ General Contractor's Overhead & Profit 10.0%$13,554 SUBTOTAL 149,094$ Historic Preservation Factor 5.0%$7,455 Design Contingency/Estimating Contingency 25.0%$37,274 SUBTOTAL 193,822$ 6.0%$11,629 SUBTOTAL 205,452$ Bonds 2.5%$5,136 210,588$ Base Roof Repairs Remove and replace (e) roof drains & plumbing w/in the building to the storm drainage system on the east side of the building Remove aluminum sheet shielding from underside of the roof slab to observe the condition of the slab for locations of water intrusion & possible structural damage TOTAL PROBABLE BID DAY CONSTRUCTION COST - ROOF BASE REPAIR Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 7 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 SHORT TERM REPAIR Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below. General Requirements -$ 07 Thermal & Moisture Protection Short -Term Target Maintenance Repairs & Water Management 3,630 SFRoo 10.00$ 36,300$ Perform follow-up repairs, allow 50% of initial repair 1 LS 15,000.00$ 15,000$ 94 LF 10.00$ 940$ 3,630 SFRoo 2.50$ 9,075$ Thermal & Moisture Protection 61,315$ TOTAL DIRECT COST 61,315$ General Conditions/General Requirements 20.0%$12,263 SUBTOTAL 73,578$ General Contractor's Overhead & Profit 10.0%$7,358 SUBTOTAL 80,936$ Historic Preservation Factor 5.0%$4,047 Design Contingency/Estimating Contingency 25.0%$20,234 SUBTOTAL 105,217$ 6.0%$6,313 SUBTOTAL 111,530$ Bonds 2.5%$2,788 114,318$ Targeted Maintenance Repairs & Water Management Perform targeted maintenance above areas where leakage is occurring possibly w/ fluid-applied membranes, as appropriate, allow 100% of roof area Re-seal expansion joints to encourage surface drainage & limit water penetration Seal open gaps & joints around penetrations, pitch pockets, hatches, & other roof flop items across the entire roof, allow TOTAL PROBABLE BID DAY CONSTRUCTION COST - SHORT TERM REPAIR Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 8 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 LONG TERM REPAIR - OPTION 1 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: Single- Ply Membrane over (N) Roof Membrane Abandon the concrete and steel surface as membrane substrates & install (n) light gauge metal framing & sheathing w/ a single ply membrane that is adhered, or both mechanically fastened & adhered to the sheathing. 01 General Requirements Included in the General Conditions below. General Requirements -$ 07 Thermal & Moisture Protection Remove roof top penetrations & obstructions where possible 1 EA $ 1,000.00 1,000$ 3,630 SF $ 3.00 10,890$ -$ 2 EA $ 3,500.00 7,000$ 16 HRS $ 150.00 2,400$ 3,630 SF $ 15.00 54,450$ 60 SF $ 20.00 1,200$ Install single-ply roofing membrane 3,630 SF $ 15.00 54,450$ 3,630 SF $ 1.50 5,445$ Thermal & Moisture Protection 136,835$ TOTAL DIRECT COST 136,835$ General Conditions/General Requirements 20.0%$27,367 SUBTOTAL 164,202$ General Contractor's Overhead & Profit 10.0%$16,420 SUBTOTAL 180,622$ Historic Preservation Factor 5.0%$9,031 Design Contingency/Estimating Contingency 25.0%$45,156 SUBTOTAL 234,809$ 6.0%$14,089 SUBTOTAL 248,897$ Bonds 2.5%$6,222 255,120$ Coordinate the height of new & existing rooftop items to remain w/ increased height of the (n) roof deck Cut penetrating items flush with the top surface of the wearing slab or concrete pedestal, allow Detach (e) equipment that can be removed w/o damage Remove the roof hatch & reconfigure roof access; replace roof hatch to accommodate the new (increased) height of the roof deck TOTAL PROBABLE BID DAY CONSTRUCTION COST - LONG TERM REPAIR OPTION 1 Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Coordinate location of fall protection anchors & height guardrails w/ height of (n) roof deck Install light gauge metal framing w/ exterior sheathing to create a (n) sloped roof deck across the entire roof including above the concrete pedestal; ventilate the cavity between the sheathing & wearing slab Conceal remaining roofrop penetrations & obstructions w/in the (n) roof deck assembly or w/ box-outs where the penetrations or obstruction is taller than the level of the (n) roof deck (sheathing); protect (e) materials w/ a separation layer, ( fill cavity w/ closed-cell spray foam insulation to minimize the risk of condensation w/in the assembly Slope (n) roofing to the location of (e) roof drains & integrate w/ (n) drains Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 9 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 LONG TERM REPAIR - OPTION 2 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: Buried Roofing Membrane Remove & replace the concrete wearing slab & original built-up roofing w/ hot rubberized asphalt w/ a (n) concrete wearing slab protection 01 General Requirements Included in the General Conditions below. General Requirements -$ 07 Thermal & Moisture Protection 2,510 SF $ 7.50 18,825$ 1 LS $ 15,000.00 15,000$ 1,570 SF $ 80.00 125,600$ 3,630 SF $ 1.50 5,445$ Detach items that can be removed w/o damage 3 EA $ 500.00 1,500$ 3,630 SF $ 3.00 10,890$ 3 EA $ 500.00 1,500$ 2,510 SF $ 25.00 62,750$ 3,630 SF $ 2.50 9,075$ 450 SF $ 5.00 2,250$ 3,630 SFRo $ 3.00 10,890$ Thermal & Moisture Protection 263,725$ TOTAL DIRECT COST 263,725$ General Conditions/General Requirements 20.0%$52,745 SUBTOTAL 316,470$ General Contractor's Overhead & Profit 10.0%$31,647 SUBTOTAL 348,117$ Historic Preservation Factor 5.0%$17,406 Design Contingency/Estimating Contingency 25.0%$87,029 SUBTOTAL 452,552$ 6.0%$27,153 SUBTOTAL 479,705$ Bonds 2.5%$11,993 491,698$ Install HRA membrane w/ (n) concrete wearing slab on horizontal roof surface Integrate HRA membrane w/ (n) roof drains in original locations, allow roof area TOTAL PROBABLE BID DAY CONSTRUCTION COST - LONG TERM REPAIR OPTION 2 Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Install elastomeric coating on vertical surface (wall) of concrete pedestal Remove corrosion from steel that is exposed above the roof & coat w/ high performance coating system, allow Repair rough, delaminated, & spalled concrete on both horizontal & vertical surfaces at the concrete pedestal, allow 50% of area for repair Remove roof top penetrations & obstructions where possible, allow Cut penetrating items flush with the top surface of the wearing slab or concrete pedestal, allow Prepare remaining rooftop penetrations & obstruction for integration into HRA membrane by sand blasting steel Remove concrete wearing slab & underlying roofing assembly to expose then structure concrete slab Inspect the top of the structural slab & repair damage, allow Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 10 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 ROOF FALL PROTECTION REPAIRS - OPTION 1 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below.See General Conditions/General Requirements below General Requirements -$ 07 Thermal & Moisture Protection 241 LF 200.00$ 48,200$ Thermal & Moisture Protection 48,200$ TOTAL DIRECT COST 48,200$ General Conditions/General Requirements 20.0%$9,640 SUBTOTAL 57,840$ General Contractor's Overhead & Profit 10.0%$5,784 SUBTOTAL 63,624$ Historic Preservation Factor 5.0%$3,181 Design Contingency/Estimating Contingency 25.0%$15,906 SUBTOTAL 82,711$ 6.0%$4,963 SUBTOTAL 87,674$ Bonds 2.5%$2,192 89,866$ Install a guardrail system around the entire roof Install a guardrail system around the entire roof to match the original guardrail system configuration, but using more durable materials than ther original wood framing TOTAL PROBABLE BID DAY CONSTRUCTION COST -ROOF FALL PROTECTION REPAIRS OPTION 1 Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 11 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 ROOF FALL PROTECTION REPAIRS - OPTION 2 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below. General Requirements -$ 07 Thermal & Moisture Protection 6 EA 1,500.00$ 9,000$ 40 LF 250.00$ 10,000$ Thermal & Moisture Protection 19,000$ TOTAL DIRECT COST 19,000$ General Conditions/General Requirements 20.0%$3,800 SUBTOTAL 22,800$ General Contractor's Overhead & Profit 10.0%$2,280 SUBTOTAL 25,080$ Historic Preservation Factor 5.0%$1,254 Design Contingency/Estimating Contingency 25.0%$6,270 SUBTOTAL 32,604$ 6.0%$1,956 SUBTOTAL 34,560$ Bonds 2.5%$864 35,424$ Install dedicated rooftop fall arrest anchors meeting CAL/OSHA requirement into the side of the concrete pedestal; install anchors using a drill w/ built-in vacuum or use wet-drilling methods to contain amount of asbestos traced from concrete pedestal Install dedicated rooftop fall arrest anchors meeting CAL/OSHA requirement into the side of the concrete pedestal Install CAL/OSHA compliant guardrail system around the (e) roof hatch TOTAL PROBABLE BID DAY CONSTRUCTION COST -ROOF FALL PROTECTION REPAIRS OPTION 2 Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 12 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 WALL OPENING REPAIRS - OPTION 1 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: Maintain in (e) configuration. Maintain all wall openings in their current configuration & adds a system to collect & discharge water that currently leaks through the opening 01 General Requirements Included in the General Conditions below. General Requirements -$ 07 Thermal & Moisture Protection 147 SF 15.00 2,205 Thermal & Moisture Protection 2,205$ 09 Finishes Remove corrosion & paint steel frames at openings 410 LF 10.00 4,100 Finishes 4,100$ 15 Mechanical 140 LF 65.00 9,100 128 LF 25.00 3,200 65 LF 40.00 2,600 Mechanical 14,900$ TOTAL DIRECT COST 21,205$ General Conditions/General Requirements 20.0%$4,241 SUBTOTAL 25,446$ General Contractor's Overhead & Profit 10.0%$2,545 SUBTOTAL 27,991$ Historic Preservation Factor 5.0%$1,400 Design Contingency/Estimating Contingency 25.0%$6,998 SUBTOTAL 36,388$ 6.0%$2,183 SUBTOTAL 38,571$ Bonds 2.5%$964 39,535$ TOTAL PROBABLE BID DAY CONSTRUCTION COST -WALL OPENING REPAIRS - OPTION 1 Add drains & plumbing to the exterior storm drainage system on the east side of the building at the larger or more exposed locations, depending on the extent of actual water penetration at each opening, allow Install water collection & drainage systems at each area of wall,openings where leakage occurs - assume 4" - 8" for most openings Extend collection basin a sufficient distance past opening jambs & towards the building interior to collect water; assume 2 - 4 feet for most opening Install a waterproofing membrane w/in the collection basin & up and over the perimeter curbs; extend the waterproofing through the beneath the opening closure plate including a metal flashing w/ a drip edge if possible Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 13 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 WALL OPENING REPAIRS - OPTION 2 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below. General Requirements -$ 05 Metals Remove all steel plates at wall openings 348 SF 5.00 1,740 Metals 1,740$ 08 Openings 118 SF 85.00 10,030 Openings 10,030$ 09 Finishes 230 SF 25.00 5,750 Finishes 5,750$ 15 Mechanical 100 HRS 150.00 15,000 Mechanical 15,000$ TOTAL DIRECT COST 32,520$ General Conditions/General Requirements 20.0%$6,504 SUBTOTAL 39,024$ General Contractor's Overhead & Profit 10.0%$3,902 SUBTOTAL 42,926$ Historic Preservation Factor 5.0%$2,146 Design Contingency/Estimating Contingency 25.0%$10,732 SUBTOTAL 55,804$ 6.0%$3,348 SUBTOTAL 59,153$ Bonds 2.5%$1,479 60,631$ TOTAL PROBABLE BID DAY CONSTRUCTION COST -WALL OPENING REPAIRS - OPTION 2 Install ventilation louvers w/ animal screens where needed for ventilation Infill openings that are not required for ventilation w/ concrete, light gauge metal framing and stucco, or steel plates to create watertight assemblies, assume light gauge framing & stucco Selective Ventilation & Closure of Openings. Evaluate the ventilation requirements for the building and & install louvers where needed for ventilation , & replaces the steel plates at the other openings w/ water tight infills that do not necessarily match the historic appearance & configuration of the building Evaluate building ventilation & hazardous materials requirements to determine appropriate treatment for each wall & overall ventilation of the building, assume total exterior walls Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 14 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 WALL OPENING REPAIRS - OPTION 3 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: 01 General Requirements Included in the General Conditions below. General Requirements -$ 05 Metals 230 SF 5.00 1,150 Metals 1,150$ 07 Thermal & Moisture Protection 44 LF 100.00 4,400 Thermal & Moisture Protection 4,400$ 08 Openings 118 SF 85.00 10,030 Openings 10,030$ 09 Finishes 230 SF 50.00 11,500 Finishes 11,500$ 15 Mechanical 100 HRS 150.00 15,000 10 LOC 250.00 2,500 Mechanical 17,500$ TOTAL DIRECT COST 44,580$ General Conditions/General Requirements 20.0%$8,916 SUBTOTAL 53,496$ General Contractor's Overhead & Profit 10.0%$5,350 SUBTOTAL 58,846$ Historic Preservation Factor 5.0%$2,942 Design Contingency/Estimating Contingency 25.0%$14,711 SUBTOTAL 76,499$ Restore to original appearance. Similar to Option 2 except that louvers, sheet metal hoods, & aluminum windows are installed to match the general appearance & configuration of original openings as shown in Figure 1, but upgrade the weather protection where feasible Install sheet metal hoods at the louvered openings to provide improved resistance to wind-driven rainventilation louvers w/ animal screens where needed for ventilation Evaluate building ventilation & hazardous materials requirements to determine appropriate treatment for each wall & overall ventilation of the building, assume total exterior walls Coordinate locations for ventilation louvers & hoods w/ configuration of historic openings, allow Remove all steel plates at wall openings; optionally (e) plates can remain where additional ventilation is not needed where hoods are to be installed Install ventilation louvers w/ animal screens similar in appearance & configuration to original hoods, adapted to meet the current ventilation requirements Install (n) watertight permanent infill panels similar in appearance to the original hollow core metal panels to fully close off access openings that originally had removable hollow metal panels for equipment access Attachment 1 Mt. Umunhum Revised Concept Estimate_07.11.19 Printed: 7/11/2019 HATTIN CM Page 15 of 15 MIDPENINSULA REGIONAL OPEN SPACE DISTRICT Estimate:Conceptual MOUNT UMUNHUM RADAR TOWER REPAIR HCM Job Number:2019-047 Los Gatos, CA Date:6/17/2019 WALL OPENING REPAIRS - OPTION 3 Revised:7/11/2019 Hattin Construction Management, Inc.AREA :SF Estimator:EEV/ARB Div.Description Qty Unit Cost Extension Total Description: Restore to original appearance. Similar to Option 2 except that louvers, sheet metal hoods, & aluminum windows are installed to match the general appearance & configuration of original openings as shown in Figure 1, but upgrade the weather protection where feasible 6.0%$4,590 SUBTOTAL 81,089$ Bonds 2.5%$2,027 83,116$ Escalation up to midpoint of construction (18 months from June 12, 2019 @ 4%/year) TOTAL PROBABLE BID DAY CONSTRUCTION COST -WALL OPENING REPAIRS - OPTION 3 Attachment 1 Mount Umunhum Radar Tower Condition Assessment and Recommendations November 13, 2019 Page C APPENDIX C: RESULTS OF EXTERIOR WALLS SURVEY Attachment 1 D ABC 1 SCALE: 1/16" = 1'-0" WEST ELEVATION 2 SCALE: 1/16" = 1'-0" SOUTH ELEVATION +0'-0" T.O. 1st FLR +14'-0" T.O. 2nd FLR +26'-0" T.O. 3rd FLR +43'-6" T.O. 4th FLR 84'-6" H.P. ROOF +61'-0" T.O. 5th FLR 4 123 +0'-0" T.O. 1st FLR +14'-0" T.O. 2nd FLR +26'-0" T.O. 3rd FLR +43'-6" T.O. 4th FLR +61'-0" T.O. 5th FLR 84'-6" H.P. ROOF 60'-3" 20'-112"20'-0"20'-112" 14 ' - 0 " 12 ' - 0 " 17 ' - 6 " 17 ' - 6 " 23 ' - 6 " 60'-3" 20'-112"20'-0"20'-112" 14 ' - 0 " 12 ' - 0 " 17 ' - 6 " 17 ' - 6 " 23 ' - 6 " Plotted: 7/15/2019 4:55 PM by Gregoire, Quentin File Name: P:\2018\2018.0xxx\2018.0484.0 - MOUNT UMUNHUM RADAR TOWER (BEK)\5 Construction Documents\1 Drawings\Sheets\2018_0484_0-S5.dwg A B 1 2 3 5 C D © Co p y r i g h t 2 0 1 9 A l l r i g h t s r e s e r v e d . N o p a r t o f t h i s d o c u m e n t m a y b e r e p r o d u c e d i n a n y f o r m o r b y a n y m e a n s w i t h o u t pe r m i s s i o n f r o m W i s s , J a n n e y , E l s t n e r A s s o c i a t e s , I n c . ( W J E ) . W J E d i s c l a i m s a n y r e s p o n s i b i l i t y f o r i t s u n a u t h o r i z e d u s e . Sheet Title Sheet No. Date Scale Checked Proj. No.Project Drawn 4 THIS SHEET PLOTS FULL SIZE AT 11x17 (INCHES) 0 1/2" 1"Wiss, Janney, Elstner Associates, Inc. 2915 Premiere Parkway, Suite 100 Duluth, Georgia 30097 770.923.9822 tel | 770.232.9044 fax www.wje.com ENGINEERS ARCHITECTS MATERIALS SCIENTISTS   MOUNT UMUNHUM RADAR TOWER Project Address, Proj City, ST ZIP ELEVATION 1 & 2 2018.0484.0 Value QAG BEK As Noted 1 Attachment 1 A DCB 1 SCALE: 1/16" = 1'-0" EAST ELEVATION 2 SCALE: 1/16" = 1'-0" NORTH ELEVATION +0'-0" T.O. 1st FLR +14'-0" T.O. 2nd FLR +26'-0" T.O. 3rd FLR +43'-6" T.O. 4th FLR 84'-6" H.P. ROOF +61'-0" T.O. 5th FLR 4 123 +0'-0" T.O. 1st FLR +14'-0" T.O. 2nd FLR +26'-0" T.O. 3rd FLR +43'-6" T.O. 4th FLR +61'-0" T.O. 5th FLR 84'-6" H.P. ROOF +75'-5" T.O. MEZZANINE 60'-3" 20'-112"20'-0"20'-112" 14 ' - 0 " 12 ' - 0 " 17 ' - 6 " 17 ' - 6 " 14 ' - 5 " 60'-3" 20'-112" 23 ' - 6 " 20'-112"20'-0" 17 ' - 6 " 17 ' - 6 " 14 ' - 0 " 9' - 1 " 12 ' - 0 " Plotted: 7/15/2019 4:56 PM by Gregoire, Quentin File Name: P:\2018\2018.0xxx\2018.0484.0 - MOUNT UMUNHUM RADAR TOWER (BEK)\5 Construction Documents\1 Drawings\Sheets\2018_0484_0-S6.dwg A B 1 2 3 5 C D © Co p y r i g h t 2 0 1 9 A l l r i g h t s r e s e r v e d . N o p a r t o f t h i s d o c u m e n t m a y b e r e p r o d u c e d i n a n y f o r m o r b y a n y m e a n s w i t h o u t pe r m i s s i o n f r o m W i s s , J a n n e y , E l s t n e r A s s o c i a t e s , I n c . ( W J E ) . W J E d i s c l a i m s a n y r e s p o n s i b i l i t y f o r i t s u n a u t h o r i z e d u s e . Sheet Title Sheet No. Date Scale Checked Proj. No.Project Drawn 4 THIS SHEET PLOTS FULL SIZE AT 11x17 (INCHES) 0 1/2" 1"Wiss, Janney, Elstner Associates, Inc. 2915 Premiere Parkway, Suite 100 Duluth, Georgia 30097 770.923.9822 tel | 770.232.9044 fax www.wje.com ENGINEERS ARCHITECTS MATERIALS SCIENTISTS   MOUNT UMUNHUM RADAR TOWER Project Address, Proj City, ST ZIP ELEVATION 3 & 4 2018.0484.0 Value QAG BEK As Noted 2 Attachment 1 ATTACHMENT 2: ONGOING MAINTENANCE SCHEDULE Ongoing Maintenance The BOD outlines recommended ongoing maintenance and repairs for all recommended short and long-term repair items. Repair Item Action Frequency General Site Improvements Replace Security Bollards 30 Years General Site Improvements Overcoat Entry Doors 20 Years General Site Improvements New Entry Door Coating 40 Years Base Exterior Wall Repairs Ongoing Monitoring & Repairs Yearly Exterior Wall Repairs – Option 1 Elastomeric Overcoating 5-7 Years Exterior Wall Repairs – Option 1 New Elastomeric Coating 20 Years Exterior Wall Repairs – Option 2 Elastomeric Overcoating 5-7 Years Exterior Wall Repairs – Option 2 New Elastomeric Coating 20 Years Base Roof Repairs Targeted Maintenance & Repairs 10 Years Short-Term Roof Repairs – Option 1 Ongoing Monitoring & Repairs Yearly Long-Term Roof Repairs – Option 2 Ongoing Monitoring Yearly Long Term Roof Repairs – Option 3 Ongoing Monitoring Yearly Wall Opening Repairs – Option 1 Ongoing Monitoring & Repairs Yearly Wall Opening Repairs – Option 2 Elastomeric Overcoating 5-7 Years Wall Opening Repairs – Option 2 New Elastomeric Coating 20 Years Wall Opening Repairs – Option 3 Elastomeric Overcoating 5-7 Years Wall Opening Repairs – Option 3 New Elastomeric Coating 20 Years Fall Protection – Option 1 Overcoat Guardrails 20 Years Fall Protection – Option 2 Ongoing Monitoring & Repairs Yearly ATTACHMENT 3: REPAIR OPTION PROJECT GOAL MATRIX Repair Option Ensure public and worker safety around the radar tower Avoid future contamination concerns Reduce (or eliminate) future need to enter building Protect workers if/when ingress is needed Avoid wildlife trappings and other resource impacts Reopen a pathway to the east summit Supports the retain and seal option previously approved by the Board Base Repair Short-Term Protection, No Long-Term Exterior Protection No Hazardous Material Removal Required Ongoing Monitoring & Maintenance Fall Safety Improvements, Interior Hazardous Materials Remain Existing Wildlife Screens Remain, Roof Openings Remain Temporarily Reopen Uncovered Pathway Partial Achievement Mid-level Repair Wall Repairs Eliminate Falling Debris Hazard No Hazardous Material Removal Reduced Ongoing Monitoring & Maintenance Fall Safety Improvements, Interior Hazardous Materials Remain New Wildlife Screens, Roof Openings Not Permanently Sealed Reopen Uncovered Pathway Partial Achievement Long- Term Repair Wall Repairs Eliminate Falling Debris Hazard Hazardous Materials Removed Minimal Ongoing Monitoring & Maintenance Fall Safety Improvements, Hazardous Materials Removed New Wildlife Screens, Roof Openings Permanently Sealed Reopen Uncovered Pathway Full Achievement No Repairs Restricted Public Access & Staff PPE Requirements No Hazardous Material Removal Required Ongoing Monitoring & Maintenance Interior Fall Hazards and Hazardous Materials Remain Existing Wildlife Screens Remain, Roof Openings Remain Covered Walkway Remains Partial Achievement Does not achieve project goal without requiring substantial ongoing actions Partially achieves project goal and/or requires additional ongoing actions Fully achieves project goal and/or requires minimal ongoing actions ATTACHMENT 3: REPAIR OPTION PROJECT GOAL MATRIX Repair Option Ensure public and worker safety around the radar tower Avoid future contamination concerns Reduce (or eliminate) future need to enter building Protect workers if/when ingress is needed Avoid wildlife trappings and other resource impacts Reopen a pathway to the east summit Supports the retain and seal option previously approved by the Board Base Repair Short-Term Protection, No Long-Term Exterior Protection No Hazardous Material Removal Required Ongoing Monitoring & Maintenance Fall Safety Improvements, Interior Hazardous Materials Remain Existing Wildlife Screens Remain, Roof Openings Remain Temporarily Reopen Uncovered Pathway Partial Achievement Mid-level Repair Wall Repairs Eliminate Falling Debris Hazard No Hazardous Material Removal Reduced Ongoing Monitoring & Maintenance Fall Safety Improvements, Interior Hazardous Materials Remain New Wildlife Screens, Roof Openings Not Permanently Sealed Reopen Uncovered Pathway Partial Achievement Long- Term Repair Wall Repairs Eliminate Falling Debris Hazard Hazardous Materials Removed Minimal Ongoing Monitoring & Maintenance Fall Safety Improvements, Hazardous Materials Removed New Wildlife Screens, Roof Openings Permanently Sealed Reopen Uncovered Pathway Full Achievement No Repairs Restricted Public Access & Staff PPE Requirements No Hazardous Material Removal Required Ongoing Monitoring & Maintenance Interior Fall Hazards and Hazardous Materials Remain Existing Wildlife Screens Remain, Roof Openings Remain Covered Walkway Remains Partial Achievement Does not achieve project goal without requiring substantial ongoing actions Partially achieves project goal and/or requires additional ongoing actions Fully achieves project goal and/or requires minimal ongoing actions Rev. 1/3/18 R-19-155 Meeting 19-29 November 20, 2019 AGENDA ITEM 5 AGENDA ITEM Electric Bicycle Policy GENERAL MANAGER’S RECOMMENDATIONS Review and provide feedback on options related to electric bicycle use on Midpeninsula Regional Open Space District lands and select one or more of the following options for further consideration and environmental review. 1.Limit class 1 and 2 electric bicycles to designated paved trails and roadways. 2. Allow class 1 electric bicycles on all paved and unpaved trails and roadways that allow bicycles and limit class 2 electric bicycles to designated paved trails and roadways. 3. Allow class 1 and 2 electric bicycles on all paved and unpaved trails and roadways that allow bicycles. The General Manager would return at a later date with environmental review findings for the Board of Directors to make a final decision and if required, a change to the District Land Use Regulations. SUMMARY Over the last few years, sales of electric bicycles have grown steadily across the country. Electric bicycles include both electric road bicycles and electric mountain bicycles. The Midpeninsula Regional Open Space District (District) currently prohibits the use of electric bicycles unless they function as an Other Power-Driven Mobility Device (OPDMD) for a person with a mobility disability. Local advocacy groups have reached out to land managers to promote the technology, benefits, and compatible use of electric bicycles. The District has seen an increase in requests from the public to allow electric bicycle use. The General Manager recommends reviewing the potential options for allowing electric bicycles and selecting one or more options to analyze the potential environmental impacts under the California Environmental Quality Act and to conduct any additional research, as directed by the Board, for further consideration at a later date. BACKGROUND When electric bicycles (e-bikes) were introduced, most municipal and regional park and open space agencies, including the District and Federal land management agencies (i.e. National Park System, National Wildlife Refuge System, Bureau of Land Management) categorized them as motorized vehicles and prohibited them on trails along with traditional motorized vehicles and devices like scooters and motorcycles. R-19-155 Page 2 In 2014, the Board updated its Land Use Regulations (R-14-06), which included the enactment of Section 409.9, prohibiting the possession or use of e-bikes on trails unless the trail was designated for such use. Currently there are no trails or locations designated for e-bike use on District lands. However, under the District’s Other Power-Driven Mobility Devices (OPDMD) policy and consistent with the Americans with Disabilities Act (ADA), e-bikes are authorized for persons with a mobility disability where bicycles are allowed, including narrow-width unpaved trails. In recent years, e-bike advocates have worked with manufacturers and land managers to improve relations and general acceptance of e-bikes. The American e-bike manufacturers led a successful effort to create three categories of e-bikes, including electric mountain bikes (eMTBs). This classification system was accepted by all manufacturers and has been adopted by 22 states, including California in 2016, when this classification system was incorporated into the California Vehicle Code (CVC). This classification system places strict requirements on e-bike design and capabilities along with a distinction between an electric bicycle and motorized bicycles/mopeds. These new laws prompted many local agencies to revisit and revise their policies for e-bike use on bike paths and trails, as they are no longer categorized as motorized vehicles. District Board Policy 4.07 – Trail Use prohibits the use of motorized vehicles and sets guidelines for designating trails appropriate for bicycle use. It also sets a guideline target use designation of 60% to 65% multi use trails (including bicycles). Of the 244 miles of trails open to the public, 157 miles (64%) are open to bicycles. While the District does not currently allow e-bikes, there is no signage specifically prohibiting e-bike use on preserves. The prohibition of e-bikes is listed on the District website. DISCUSSION In response to an increase in questions and calls from preserve visitors and trail patrollers about e-bike use, and in recognition of the growing popularity and sale of e-bikes, a 2018 District Leadership Academy group researched and analyzed District and peer agency e-bike policies and experiences. The findings of this analysis reflect an opportunity for the Board to reassess the District’s e-bike policy. The most recent Board review of the District Land Use Regulations occurred in 2014, when a clarification in the language was included regarding the prohibition of motorized devices. Subsequently in 2016, the State of California adopted a new classification system that no longer categorizes e-bikes as a motorized device. Given this change, and the recognition that e-bikes appeal to a growing demographic with physical limitations and represent an opportunity to reduce emissions along bicycle commute routes, many agencies like the District are reviewing their e-bike policy. E-Bike Description Section 312.5 of the California Vehicle Code (CVC) defines an e-bike as having fully operable pedals and an electric motor of less than 750 watts. American e-bike manufacturers created a classification system that designates three categories of e-bikes: class 1, class 2, and class 3. This classification system and model legislation has been adopted by 22 states, including California. (see Attachment 1). Below are descriptions for each class of e-bike. • Class 1 electric bicycle: a “low speed pedal-assisted bicycle” with an electric motor that provides assistance only when the rider is pedaling, up to 20 mph. R-19-155 Page 3 • Class 2 electric bicycle: a “low speed throttle-assisted bicycle” that may be propelled exclusively with an electric motor (without pedaling) up to 20 mph. • Class 3 electric bicycle: a “speed pedal-assisted electric bicycle” with an electric motor that provides assistance only when the rider is pedaling, up to 28 mph. CVC section 21207.5 (b) prohibits the use of class 3 e-bikes on recreational trails and paths unless the public agency with jurisdiction chooses to permit them and provides that a public agency may prohibit class 1 and 2 e-bikes on trails within the agency’s jurisdiction. Electric Mountain Bike (eMTB) Description Many bicycle manufacturers make e-bikes, but not all make a electric mountain bikes or the eMTB version. An eMTB is functionally different from an e-bike (which is intended primarily for use on paved or improved surfaces) in that an eMTB is designed for the rigors of trail use. Typically outfitted with mountain-bike-specific technology, such as disc brakes, suspension, and a wide gear range, eMTBs like all e-bikes are electric-powered (not gas-powered), quiet, and emissions-free. Most eMTBs from major manufacturers are also categorized as class 1 electric bikes. Sales Trends and User Profile Sales of eMTBs has grown steadily over the last few years, particularly in Europe. In general, the overall e-bike category in the U.S. has grown about 450% since 2013, with year-over-year growth averaging around 50%.1 Sales data reflect that most e-bikes sold are in the class 1 category. The only difference between class 1 and class 2 is that with a class 2, the electric motor can be used exclusively to power the bicycle using a throttle; in other words, pedaling is not required. Over the last couple of years, inquiries from the public and staff regarding District policy on e- bikes, and more specifically eMTBs, have increased. Most of the people contacting the District are local riders transitioning from a regular mountain bike to an eMTB due to age or physical limitations and are looking for opportunities to extend their enjoyment for riding on District preserves. Advocates, such as PeopleForBikes, promote that e-bikes and eMTBs are designed to be as safe as traditional bikes, do not compromise consumer safety, and benefit bicyclists who may be discouraged from riding a traditional bicycle due to limited physical fitness, age, disability, or convenience. Regional Policies and Feedback from Peer Agency Survey As with any type of interruptive technology, the increase in e-bike use has not come without controversy and debate among public land managers, trail users, and eMTB advocates. Locally, there is mixed support and varying restrictions on its use. Many restrictions have not been updated since the CVC updated the definition of e-bikes and are based on laws and definitions of 1 People for Bikes, eMTB Land Manager Handbook R-19-155 Page 4 motorized vehicles or devices. Personal perceptions and philosophical objections are another basis for restricting e-bikes. Thirteen local and regional park agencies were surveyed by the Leadership Academy group in 2018, including California State Parks; Cities of East Palo Alto, Palo Alto, Menlo Park, and San Jose; Counties of Santa Clara, Marin, and Sonoma; East Bay Regional Parks District; Marin Municipal Water District; Santa Clara Valley Open Space Authority; and Soquel Demonstration Forest (CalFire) on their policies and experiences with e-bikes. (see Attachment 2). Many of the agencies are currently reviewing their policies or have recently amended them. • Eight of the agencies allow e-bikes on paved roadways and paths, while four do not. (Option 1). • All agencies treat class 1 and class 2 e-bikes the same (Option 2). • Four agencies (Santa Clara and San Mateo County Parks, State Parks and Santa Clara Open Space Authority) allow them on unpaved roads, trails and paths, while eight agencies do not (Option 3). Survey results from peer agencies related to e-bike use are summarized below. Top Three Concerns: 1. Trail User Experiences / Potential User Conflicts • Although there is a perceived conflict where e-bikes are allowed, very few complaints have been received by other user groups. • Biggest issue reported is the exceedance of speed limits (this is also a common complaint with non-electric MTB use in general) • There appears to be a disconnect between perceptions and reality of e-bike use. • E-bike usage has been minimal to date. 2. Potential for Trail Condition Impacts • Although peer agencies raised concerns about potential trail condition impacts (different wear patterns and soil displacement because e-bikes are heavier), no increase in trail maintenance was reported and few trail condition issues were noted. • Biggest issue reported: illegal trails (also a common complaint with MTB in general). 3. Potential for Natural Resource Impacts • Although peer agencies raised concerns about the potential for natural resource impacts, no specific issues were reported. • No formal studies have been completed to date. Reasons cited for policies that do not allow e-bikes: o Unknown Environmental Impacts o Non-compatible use o Classified by local ordinance or policy as motorized devices o Increased need for emergency medical response o Concern about batteries sparking a fire o Concerns raised by organizations and communities R-19-155 Page 5 Benefits of allowing e-bike use o Accessibility (e.g. a majority of e-bike users at EBRPD are over 50 years old) o Adapt to evolving technologies and ways of enjoying open space o Increasing level of public interest and use o E-bikes are generally accepted and go unnoticed after use is allowed o May allow more people to bike to preserves o Consistency with neighboring land management agencies E-bike Use on Federal Lands - National Park System (NPS), National Wildlife Refuge System (NWRS), Bureau of Land Management (BLM) On August 29, 2019 the Secretary of the Interior issued executive order #3376, directing all federal land management agencies to revise their rules and regulations to allow e-bikes where other types of bicycles are allowed (see Attachment 3). The overarching purpose behind this order was to “increase recreational opportunities for all Americans, especially those with physical limitations and to encourage the enjoyment of lands and waters managed by the Department of Interior” and to “simplify and unify regulation of e-bikes on federal lands managed by the Department.” Department of Interior land management agencies were given a 30-day timeframe to submit a summary of policy changes in response to the order and a timeline to seek public comment. All Department Directors have complied with the directive and have issued orders establishing policy changes allowing e-bikes where traditional bicycles have been allowed and prohibited them in other locations. Perception vs Reality A perception of negative trail impacts related to ebike use was cited by some land managers as a concern. In 2015, the International Mountain Bicycling Association (IMBA) conducted a study designed to compare the relative levels of soil displacement and erosion between traditional mountain bicycles, electric mountain bicycles (eMTBs), and traditional off-road motorcycles. Results show that soil displacement and tread disturbance from class 1 eMTB and traditional mountain bicycles were not significantly different (statistically) and are much less compared to a gasoline-powered motorcycle use (see Attachment 4). Many visitors with a negative perception of eMTBs tend to think of them more like a motorcycle than a bicycle. Two separate intercept studies conducted in 2017 in Colorado by Jefferson County Colorado Open Space and PeopleForBikes/Bicycle Product Suppliers Association reported similar findings regarding perceptions. Most people who demo-ed an eMTB reported a positive experience and their perceptions of eMTBs changed for the better (see Attachments 5 and 6). However, the PeopleforBikes study also noted that many of those who demo-ed an eMTB believe that eMTBs, because of their motor, belong on motorized trails. FISCAL IMPACT The FY19-20 adopted budget includes sufficient funds in the Visitor Services operating budget to cover the onetime costs related to replacing or updating signs if the Board chooses option 3. Options 1 and 2 are not anticipated to incur costs other than staff time to update District information and change the Land Use Regulations. No new signage would be required. R-19-155 Page 6 BOARD COMMITTEE REVIEW This item was not previously reviewed by a Board Committee. PUBLIC NOTICE Public notice was provided as required by the Brown Act. CEQA COMPLIANCE District staff will conduct CEQA review to evaluate the potential environmental impacts, if any, of the option(s) selected by the Board that merit further consideration and evaluation. NEXT STEPS District staff will conduct CEQA review of the selected Board option(s) and any additional research, as directed by the Board. The findings and any additional information will be presented to the Board at a later date for a final decision. Depending on the final decision, changes to the District Land Use Regulations and/or signage may be required. Attachments 1. California’s E-Bike Law 2. Table of Peer Agencies Policies 3. Secretary of the Interior Order No. 3376 - Electric Bikes 4. IMBA e-bike Environmental Impact Study 5. Jefferson County Co. Open Space Survey 6. PeopleforBikes eMTB Intercept Survey 7. Written Public Comments submitted prior to noon on November 14, 2019 Responsible Department Head: Brian Malone, Assistant General Manager Prepared by: Matt Anderson, Chief Ranger, Visitor Services Department Contributing Analysis provided by: Leadership Academy Project Team: Jen Williams, Volunteer Program Manager Hayley Edmonston, Management Analyst 1 Cody Fickes, Lead Open Space Technician Jeff Smith, Ranger Electronically Distributed To Law Enforcement Visit our Web Site—http://www.dmv.ca.gov LAW ENFORCEMENT INFORMATION MEMO MEMO: 16-02 SUBJECT: NEW LAWS CONCERNING ELECTRIC BICYCLES Memo Date: February 10, 2016 JUSTICE AND GOVERNMENT LIAISON BRANCH • COMMUNICATION PROGRAMS DIVISION • © 2016 STATE OF CALIFORNIA, DEPARTMENT OF MOTOR VEHICLES. ALL RIGHTS RESERVED. Purpose To provide information to law enforcement regarding new laws establishing three classes of electric bicycles and changes in the definition of a motorized bicycle. Background Prior law defined a motorized bicycle or moped as a two or three-wheeled device with pedals, or powered solely by electrical energy, and an automatic transmission and a motor that is capable of reaching a maximum speed of 30 miles per hour (MPH). New Information Effective January 1, 2016, Assembly Bill 1096 makes the following changes to the California Vehicle Code: §312.5 defines an electric bicycle as having fully operable pedals and an electric motor of less than 750 watts. Class 1 electric bicycles are assisted by a motor-pedal device; class 2 bicycles have a throttle-assist device. Neither shall be capable of providing assistance once the bicycle reaches the speed of 20 MPH. The class 3 electric bicycle has a motor-pedal device that shall cease to provide assistance when it reaches 28 MPH and will have a speedometer. §406 defines a motorized bicycle or moped as a two or three wheeled device with fully operative pedals for human propulsion, or having no pedals if powered solely by electrical energy, with an automatic transmission and a motor producing less than four gross brake horsepower that is incapable of exceeding 30 MPH. §12804.9 excludes all classes of electric bicycles described in California Vehicle Code §312.5 from being defined as a Class M2 vehicle. §21113(f) allows a transit development board to adopt ordinances to restrict or specify the use of electric bicycles on property controlled by or used by the board. §21113(g) allows a public agency, such as the Regents of the University of California and the Trustees of the California State University, to adopt rules to restrict or specify the conditions for the use of electric bicycles on public property under the jurisdiction of that agency. §21207.5 prohibits the use of class 3 electric bicycles on a bicycle path or trail, bikeway, bicycle lane, equestrian trail, or hiking or recreational trail, unless it is within or adjacent to a roadway or unless the local authority or governing body of a public agency having jurisdiction over the trail permits. In addition, a local authority or governing body of a public agency having jurisdiction over a trail described above may prohibit class 1 and 2 electric bicycles on that trail. Attachment 1 Electronically Distributed To Law Enforcement Visit our Web Site—http://www.dmv.ca.gov New Information (Cont.) §21213 prohibits a person less than 16 years of age from operating a class 3 electric bicycle. A person shall not operate a class 3 electric bicycle or ride as a passenger upon a street, bikeway, bicycle path or trail, unless that person is wearing a properly fitted, fastened, and approved bicycle helmet, which further applies to a passenger while in a restraining seat or trailer attached to the bicycle. §24016 requires electric bicycles to meet the following criteria:  Comply with equipment and manufacturing requirements adopted by the United States Consumer Product Safety Commission.  The electric mo tor must disengage or cease to function when the brakes are applied. Additionally, operators are subject to the following criteria:  A person operating an electrical bicycle is not subject to financial responsibility, driver license, registration, and lice nse plate requirements.  A person shall not tamper with or modify an electric bicycle to change the speed capability unless the person appropriately replaces the manufacturer label indicating the classification change. Contact Questions regarding the infor mation contained in this memo or changes to the e-mail distribution list may be directed to the Justice and Government Liaison Branch at (916) 657-7732 or via e-mail at jaglaw@dmv.ca.gov. RICO RUBIONO, Deputy Director Communication Programs Division Attachment 1 Attachment No. 2 Regional Policies Thirteen local and regional, park agencies were surveyed including California State Parks, Cities of East Palo Alto, Palo Alto, Menlo Park, and San Jose. Counties of Santa Clara, Marin, Sonoma. East Bay Regional Parks District, Marin Municipal Water District, Santa Clara Valley Open Space Authority, Soquel Demonstration Forest (CalFire). Eight of the agencies allow ebikes on paved roadways and paths, four do not. Four agencies allow them on natural roads, trails and paths, eight do not. One agency is in the process of allowing class 1 and 2 on paved surfaces and considering class 1 and 2 for unpaved trails. Agency Allow on Paved Trails Allow on Unpaved Trails Comments California State Parks* Yes Yes Class 1 and 2 only where bikes are permitted. Individual units can have different rules. City of East Palo Alto* No No They are in the process of amending their municipal code to allow e-bikes on paved bicycle paths which includes a section of the Bay Trail south of Bay Rd which is managed by the City of Palo Alto. City of Palo Alto* No No Currently only allow e-bikes under ADA but will consider amending ordinance to be consistent with neighboring agencies for Bay Trail management. City of Menlo Park* Yes No Allows all classes of e-bikes on paved trails, including Bay Trail. City of San Jose Yes No Class 1 and 2 only where bikes are permitted East Bay Regional Parks District Yes No Allows all classes of e-bikes on selected paved trails only. Marin County Parks and Open Space Policy being revised to allow class 1 and 2 e-bikes on paved bicycle and multi-use pathways. Class 3 allowed only on roadways and parking lots. Considering study to allow class 1 and 2 on unpaved trails. Marin Municipal Water District No No Have formed a citizens advisory committee to provide a citizen perspective on the potential usage of e-bikes on MMWD’s watershed lands. San Mateo County Parks * Yes Yes Class 1 and 2 only where bikes are allowed. However, allowed bicycle use is limited. Santa Clara County Parks* Yes Yes Class 1 and 2 only where bikes are permitted, paved and unpaved. Santa Clara Valley OSA * Yes Yes No formal policy for or against, do not see a lot of them. Gathering more info to make policy recommendation. Considering class 1, possibly 2. No class 3. Sonoma County Parks Yes No Class 1 and 2 only where bikes are permitted Soquel State Demonstration Forest (CalFire) No No Does not allow e-bikes. * These agencies manage lands with local and regional trail connections to District lands THE SECRETARY OF THE INTERIOR WASHINGTON ORDER NO . 3 3 7 6 Subject: Increasing Recreational Opportunities through the use of Electric Bikes Sec . 1 Purpose. This Order is intended to increase recreational opportunities for all Americans , especially those with physical limitations , and to encourage the enjoyment of lands and waters managed by the Department of the Interior (Department). This Order simplifies and unifies regulation of electric bicycles ( e-bikes) on Federal lands managed by the Department and also decreases regulatory burden. Sec. 2 Authorities. This Order is issued under the authority of section 2 of Reorganization Plan No. 3 of 1950 (64 Stat. 1262), as amended , as well as other relevant statutes. Sec. 3 Background. Bicycling is an excellent way for visitors to Federal lands to experience America ' s rich natural heritage. Bicycling has been popular in America since the early nineteenth century. Since then, innovation in the design and production of bicycles has dramatically increased mechanical efficiency , opening bicycling to a greater number of people in a larger number of environmental and geographical conditions. A relatively recent addition to the design of some bicycles is a small electric motor which can provide an electric power assist to the operation of the bicycle. Reducing the physical demand to operate a bicycle has expanded access to recreational opportunities , particularly to those with limitations stemming from age, illness, disability or fitness , especially in more challenging environments , such as high altitudes or hilly terrain. While e-bikes are operable in the same manner as other types of bicycles and in many cases they appear virtually indistinguishable from other types of bicycles, the addition of a small motor has caused regulatory uncertainty regarding whether e-bikes should be treated in the same manner as other types of bicycles or, alternatively, considered to be motor vehicles. This uncertainty must be clarified . To resolve this uncertainty the Consumer Product Safety Act (Act) provides useful guidance. That Act defines a "low-speed electric bicycle" to include a "two-or three-wheeled vehicle with fully operable pedals and an electric motor ofless than 750 watts (1 h.p ,), whose maximum speed on a paved level surface, when powered solely by such a motor while ridden by an operator who weighs 170 pounds, is less than 20 mph", subjecting these low-speed e-bikes to the same consumer product regulations as other types of bicycles (15 U.S.C. § 2085). A majority of States have essentially followed this definition in some form. Uncertainty about the regulatory status of e-bikes has led the Federal land management agencies to impose restrictive access policies treating e-bikes as motor vehicles , often inconsistent with State and local regulations for adjacent areas . The possibility that in some cases e-bikes can be propelled solely through power provided by the electric motor, a function often used in short duration by older Attachment No. 3 2 or disabled riders as an assist, has contributed to confusion about e-bike classification. Further, Federal regulation has not been consistent across the Department and has served to decrease access to Federally owned lands bye-bike riders. Sec. 4 Policy. Consistent with governing laws and regulations: a) For the purpose ofthis Order, "e-bikes" shall mean "low-speed electric bicycle" as defined by 15 U.S.C. § 2085 and falling within one of the following classifications: i) "Class 1 electric bicycle" shall mean an electric bicycle equipped with a motor that provides assistance only when the rider is pedaling, and that ceases to provide assistance when the bicycle reaches the speed of 20 miles per hour; ii) "Class 2 electric bicycle" shall mean an electric bicycle equipped with a motor that may be used exclusively to propel the bicycle , and that is not capable of providing assistance when the bicycle reaches the speed of 20 miles per hour; and iii) "Class 3 electric bicycle" shall mean an electric bicycle equipped with a motor that provides assistance only when the rider is pedaling, and that ceases to provide assistance when the bicycle reaches the speed of28 miles per hour. b) E-bikes shall be allowed where other types of bicycles are allowed; and c) E-bikes shall not be allowed where other types of bicycles are prohibited. Sec. 5 Implementation. I direct the Assistant Secretaries for Fish and Wildlife and Parks, Land and Minerals Management, and Water and Science, as appropriate, to do the following: a) Within 14 days of the date of this Order, unless otherwise prohibited by law or regulation: i) To the extent existing regulations allow, adopt a Bureau/Service-wide policy that conforms to the policy set forth in Sec. 4 of this Order; ii) Amend or rescind any prior written policies as appropriate; iii) Instruct the Director, Fish and Wildlife Service (FWS) to develop a proposed rule to revise 50 CFR § 25.12 and any associated regulations to be consistent with this Order, add a definition fore-bikes consistent with 15 U .S.C. § 2085, and expressly exempt all e-bikes as defined in Sec. 4a from falling under the definition of off-road vehicle; iv) Instruct the Director, National Park Service (NPS) to develop a proposed rule to revise 36 CFR § 1.4 and any associated regulations to be consistent with this Order, add a definition fore-bikes consistent with 15 U.S.C. § 2085, and expressly exempt all e-bikes as defined in Sec. 4a from the definition of motor vehicles; Attachment No. 4 3 v) Instruct the Director, Bureau of Land Management (BLM) to develop a proposed rule to revise 43 CFR § 8340.0 -5 and any associated regulations to be consistent with this Order, add a definition fore-bikes consistent with 15 U.S.C. § 2085 , and expressly exempt all e-bikes as defined in Sec. 4a from the definition of off-road vehicles or motorized vehicles; and vi) Instruct the Commissioner, Bureau of Reclamation (BOR) to develop a proposed rule to revise 43 CFR § 420.5 and any associated regulations to be consistent with this Order, add a definition fore-bikes consistent with 15 U.S.C. § 2085, and expressly exempt all e-bikes as defined in Sec. 4a from the definition of off-road vehicles . b) Within 30 days of the date of this Order, submit a report to the Secretary including: i) A summary of the policy changes enacted in response to this Order; ii) A summary of any laws or regulations that prohibit the full adoption of the policy described by this Order; and iii) A timeline to seek public comment on changing any regulation described above. c) Within 30 days of the date of this Order, provide appropriate public guidance regarding the use of e-bikes on public lands within units of the National Park System, National Wildlife Refuge System, lands managed by BLM, and lands managed by BOR. Sec. 6 Effect of the Order. This Order is intended to improve the internal management of the Department. This Order and any resulting reports or recommendations are not intended to, and do not create any right or benefit, substantive or procedural, enforceable at law or equity by a party against the United States, its departments, agencies, instrumentalities or entities, its officers or employees, or any other person. To the extent there is any inconsistency between the provisions of this Order and any Federal laws or regulations, the laws or regulations will control. Sec. 7 Expiration Date. This Order is effective immediately. It will remain in effect until its provisions are implemented and completed, or until it is amended, superseded, or revoked. Secretary of the Interior Date: AUG 2 9 201 9 Attachment No. 4 PREPARED FOR: Bicycle Product Suppliers Association PREPARED BY: The International Mountain Bicycling Association Trail Solutions Program PO Box 20280 Boulder, CO 80308 SOLUTIONSTRAIL Attachment No. 4 A  Comparison  of  Environmental  Impacts  from   Mountain  Bicycles,  Class  1  Electric  Mountain   Bicycles,  and  Motorcycles:     Soil  Displacement  and  Erosion  on  Bike-­‐Optimized   Trails  in  a  Western  Oregon  Forest     2 Table  of  Contents   Abstract  ...................................................................................................................................................  3   Introduction  ...........................................................................................................................................  5   What is an eMTB?  ..........................................................................................................................................  5   What's Needed  ................................................................................................................................................  6   Where to Start  .................................................................................................................................................  6   IMBA’s Role in Studying eMTBs  ..............................................................................................................  7   Study Goals  ......................................................................................................................................................  7   Study Hypotheses  .........................................................................................................................................  7   Study Area  ..............................................................................................................................................  9   Test Trail  ..........................................................................................................................................................  10   Study Methods  ...................................................................................................................................  12   Site Preparation  ............................................................................................................................................  12   Controlled Variables  ...................................................................................................................................  12   Cross-Sectional Area “CSA” Measurements  ...................................................................................  13   Condition Class Assessment (“CCA”)  ................................................................................................  14   Data Analysis  ................................................................................................................................................  15   Study Results  .....................................................................................................................................  16   Change in Tread Surface  ..........................................................................................................................  16   Class 1 eMTBs vs. Traditional Mountain Bicycles  .........................................................................  18   ANOVA & Tukey HSD Test  .......................................................................................................................  19   Condition Class Assessment  .................................................................................................................  20   Discussion  ..........................................................................................................................................  21   Study Limitations  .........................................................................................................................................  21   Access Implications for Land Managers  ...........................................................................................  21   Conclusion  ..........................................................................................................................................  23   Appendix A: Throttle Test  .............................................................................................................  24   Throttle Observations: Mini Test  ..........................................................  Error!  Bookmark  not  defined.   Appendix B: Literature Review  ...................................................................................................  25   Literature Cited  ..................................................................................................................................  27     Attachment No. 3 3 Abstract In the fall of 2015, under contract with the Bicycle Product Suppliers Association (BPSA), with counsel from a field of recreation management experts, and through a review of existing studies of erosional impacts from trail users, the International Mountain Bicycling Association (IMBA) conducted a scientifically controlled field study designed to measure relative levels of soil displacement and erosion resulting from traditional mountain bicycles, electric mountain bicycles (eMTBs), and traditional off-road motorcycles (i.e. dirt bikes). The observations were compiled in controlled environmental conditions, with each type of bike making multiple passes on separated sections of the same trail within a single test site. IMBA developed these hypotheses for this small initial study: • Soil displacement and erosion caused by mountain biking will be consistent with existing studies showing relatively low impact as with other types of non-motorized travel on this type trail (a bike-optimized trail also considered a sustainable trail) and this set of local conditions. • Soil displacement and erosion from Class 1 eMTBs will likely fall somewhere between those caused by mountain bikes and motorcycles. It is expected that they will much more closely resemble those of mountain bikes. • It is expected that Class 1 eMTBs may lead to greater soil displacement under certain conditions, such as through turns, including bermed turns; on ascents and descents; and where there are abrupt changes in trail conditions. Results from the field experiment show that, under this set of conditions, soil displacement and tread disturbance from Class 1 eMTBs1 and traditional mountain bikes were not significantly different, and both were much less than those associated with a gasoline-powered motorcycle. Understanding the potential resource impacts of trail-based recreation is a necessary and important first step for formulating management strategies. This is especially important for new types of recreational pursuits, such as the fast emerging power-assisted vehicles like eMTBs. Additional research is needed to further assess the range of environmental and social impacts for successful eMTB use on public lands. Mountain bicycling is a solely muscle-powered activity, and is thus regulated as a non-motorized use, along with hiking, trail running, and horseback riding. eMTBs are not entirely muscle- powered. IMBA recognizes that eMTBs, particularly Class 1 eMTBs, are substantially different from other motorized uses, and may warrant a separate category and new management strategies. IMBA does not have an advocacy interest in this Class 1 eMTB study, but is leading this study 1 A “Class 1 electric bicycle,” or “low-speed pedal-assisted electric bicycle,” is a bicycle equipped with a motor that provides assistance only when the rider is pedaling, and that ceases to provide assistance when the bicycle reaches the speed of 20 miles per hour. Attachment No. 3 4 as a respected partner of land management agencies; to further knowledge about recreational trails; and to inform future discussions with members, chapters, land mangers, the bike industry, and other user groups. Attachment No. 3 5 Introduction The emergence of electric bicycles, commonly known as e-bikes, is a rapidly growing component of the bicycle market in the US (MacArthur and Kobel, 2014). As a transportation option, they represent an opportunity to reduce vehicle use and emissions, as well as the physical barriers to cycling. For use on trails, they present similar opportunities to reduce barriers to cycling but, as a new use, present new challenges for trail management. While already popular in Europe, the use of eMTBs is on the rise in North America, and their increased presence is sparking controversy within the trail user community. Electric mountain bikes are generally defined as motorized vehicles for the purposes of trail use on federal lands, with states and municipalities expected to make their own decisions. All trail users affect the trail surface and surrounding environment, especially when trails are poorly constructed. Those impacts range from vegetation loss to soil erosion, and related water quality problems. However, there is no evidence that traditional mountain bicycling causes greater environmental impact than other recreational trail uses. In fact, current research suggests that mountain bicycling impacts are similar to hiking, and less damaging than equestrian and motorized users. There have been no studies of the environmental impacts of eMTBs specifically, but there exist numerous studies on the impacts of both mountain bicycles and off-road motorcycles, which provide a basis for developing research protocols. One could speculate that the impacts of eMTBs on trails would fall somewhere between the two modes, but this is a rather wide span, particularly regarding soil displacement under certain trail conditions, e.g., turn exits, steep grades, and/or non-cohesive soils. The lack of existing data may contribute to poor trail management decisions that may either unnecessarily ban eMTBs from trails or allow them where their impacts will be disproportionate to their use. An understanding of how eMTBs affect the environment and trail management is needed so that land managers and the communities that support them can make informed access decisions. The purpose of this study was not to decide whether eMTBs should be regulated as bicycles or motorcycles, or whether they are appropriate for shared-use on non-motorized trails. These decisions are for land managers to make in consultation with their recreation community. This report provides an understanding of some of physical impacts to trails associated with this use, and how these might differ from those associated with traditional mountain bicycles. What is an eMTB? A Class 1 eMTB is an e-bike that can be pedaled under human power alone as well as pedaled with the assistance of a battery-powered electric motor. eMTBs are capable of and primarily designed for off-road use, with wider, lugged tires, a sturdier frame, and front or dual suspension Attachment No. 3 6 systems. State traffic codes and regulations apply to transportation routes (e.g. streets and bike paths) only and have no bearing on recreational routes (e.g. singletrack trails), so it is up to land management agencies at each level of government to define their own rules and regulations regarding eMTB use. The current definition of eMTBs defines them as motorized vehicles for the purposes of recreational trail use on federal lands, with states and municipalities looking to federal agencies for guidance. However, states and municipalities generally have greater flexibility in defining trail access than federal agencies. What's Needed An understanding of how eMTBs affect the environment and trail management is needed so that land managers and the communities that support them can make informed decisions about trail design, construction, and management. In order to achieve a better understanding of the impacts of eMTBs on the trail landscape, several factors need to be studied: • Test Riding: Comparison of eMTBs alongside mountain bicycles and motorcycles helps understand how eMTBs perform and are used on trails, what the experience is, and how that might affect other trail users. • Test Trails: It is likely that impacts to trails are somewhere between mountain bikes and motorcycles, but this is unknown. Test trails are needed to understand and measure the effects on trails directly and to the surrounding environment. Future efforts should focus on developing and testing eMTB-specific trails. • Special considerations for trail design, construction, and maintenance o Grade, turns, jumps, and trail direction are some of the trail design and management characteristics that could be affected. o Weight: eMTBs are considerably heavier than mountain bicycles but as technologies improve, weight may become less and less of a factor and may ultimately be indistinguishable from regular mountain bicycles. o Ascending trails: eMTBs make ascending even very steep and technical trails easier. Power and ability to keep weight over rear wheel can help to maintain traction. • How the trail experience is similar to and differs from mountain bicycling Empirical study is the best way to understand the impacts and make reasonable assertions regarding environmental and social effects. Where to Start There are a host of potential environmental impacts to the landscape from any trail user, from soil erosion to the spread of invasive species and wildlife impacts. For this initial study, it was important to select a project suitable for the scope and that would provide meaningful initial data Attachment No. 3 7 for future studies. Soil displacement and erosion were selected as the best choice for this first small-scale study. “Soil erosion is the single most important, managerially significant trail degradation indicator.” (Jewell & Hammitt, 2000) IMBA’s Role in Studying eMTBs IMBA has an interest in continuing to deliver best practices in trail construction and management. IMBA does not directly gain from this study. A cursory look at IMBA’s eMTB user survey, along with the comments on blog posts and magazine articles, suggests that IMBA risk the ire of a share of its members in engaging in this study. While eMTBs are motorized, they most closely resemble traditional mountain bicycles and have the potential to impact mountain bicyclists more than other users. As such, IMBA has an obligation to provide information to land managers, its members, and trail communities in managing and creating experiences appropriate for this evolving use. As the leader in trail design, construction, and management, IMBA possesses the requisite set of skills to provide technical assistance to study the effects of eMTBs on trails. Likewise, IMBA’s role in providing user management resources to land managers makes it imperative that IMBA take a leadership role in identifying conflicts and opportunities presented by the advent and evolution of eMTBs. Study Goals The goals of the study are to: • Further IMBA’s overall knowledge base regarding trail design, trail construction, and environmental impacts related to mountain biking and other trail uses. • Provide an objective analysis of the physical impacts of Class 1 eMTBs relative to traditional mountain bikes and traditional dirt bikes by measuring soil displacement after hundreds of passes on a controlled course. • Gather information regarding possible social impacts associated with Class 1 eMTBs. • Provide land managers with data and analysis to assist them in making informed decisions regarding appropriate access. • Create a baseline of data about the impacts of Class 1 eMTBs, which will inform what types of additional studies are warranted. Study Hypotheses • Soil displacement and erosion caused by mountain biking will be consistent with existing studies showing relatively low impact as with other types of non-motorized travel on this Attachment No. 3 8 type of trail (a bike-optimized trail is also considered a sustainable trail) and this set of local conditions. • Soil displacement and erosion from Class 1 eMTBs will likely fall somewhere between those caused by mountain bikes and motorcycles. It is expected that they will much more closely resemble those of mountain bikes. • It is expected that Class 1 eMTBs may lead to greater soil displacement under certain conditions, such as through turns, including bermed turns; on ascents and descents; and where there are abrupt changes in trail conditions. Attachment No. 3 9 Study Area The study took place on existing trails on Bureau of Land Management (BLM) lands in Northwest Oregon. The BLM and IMBA have a regional assistance agreement to cooperate in trail related planning, design, and research. The test trail sections were on low-use bike- optimized trails, designed and constructed using IMBA best management practices, with short sections of former extraction roads used to create short loops for each mode. Topography of the test site is generally north-facing aspect with moderate slopes ranging from 20-50%, at elevations ranging from 2,100-2,300 feet (640-700 m). Average rainfall is 80 inches per year (203 cm), with a temperate climate characterized by wet winter and spring, and dry summer months. Soils in the area are well draining, comprised of volcanic Zygore gravelly loams, with parent material of volcanic ash over colluvium derived from basalt and andesite. (NRCS, 2016.) Prior to testing, soils were consistently very dry across the test site, the area having experienced lower than average spring precipitation. The vegetation is typical of Western Cascade foothills, dominated by a Douglas fir-Western hemlock forest community, with Western red cedar, red alder, and big leaf maple also common. Understory is comprised primarily of Oregon grape (Mahonia sp), salal (Gaultheria shallon), and sword fern (Polystichum minutum); with grasses and blackberry (Rubus discolor and R. ursinus) dominating along open roadbeds. Attachment No. 3 10 Figure 1. Study Area: BLM Managed Lands near Sandy, Oregon. BLM lands are shown in yellow. Test Trail The section of trail was selected for several reasons: • It has several bermed turns and runs, connected by an old access road up the middle. This was used to break the trail into short loop sections that have similar conditions for testing of each mode efficiently. • It sees relatively low use, compared with most other trails in the area, meaning closures during testing periods were accomplished with minimal impact to users. • IMBA staff designed and constructed the trails and were familiar with the terrain and soil conditions. • Vehicle access is restricted, so it was unlikely that any unauthorized users, especially motorized users, would access the trail. • Trail users are accustomed to the sounds of motorized machinery (in this case, dirt bikes) and trail closures for trail construction. • The test site was not visible from trail closure points at intersections. No warranty is made by the Bureau of Land Management as to the accuracy, reliability or completeness of these data for individual or aggregate use with other data. Original data were compiled from various sources. This information may not meet National Map Accuracy Standards. This product was developed through digital means and may be updated without notification. For internal use only. Scale 1: March 18, 2016 https://webmaps.blm.gov/Geocortex/Html5Viewer/index.html?viewer=rmpwo_interactive_map 63,999 Miles 0 2.02 BLM Lands - Mt Hood Area Plan Boundary Lands managed under separate RMPs Lands managed under the RMPWO Township and Range Sections County Boundary Resource Area Boundary Coastline Waterbodies Perennial Lake / Reservoir Intermittent Lake Swamp / Marsh Estuary Playa Areas Stream/Rivers, Other (Canal Ditch, Spillway, etc.) Wash Wetlands Highways - Large Scale Interstate US Highway State Highway Unknown Jurisdiction Highway Ramps, Frontage Roads, Spurs, Connectors Land Ownership Bureau of Land Management U.S. Forest Service National Park Service U.S. Fish and Wildlife Service Bureau of Indian Affairs Other Federal State Local Government Private/Unknown Attachment No. 3 11 The trail was closed during preparation and testing. Trail construction warning and temporary closure signs were placed at access points to this trail section and at key decision points within the trail system in order to restrict use outside of test laps. Given the potential for controversy regarding eMTBs among the mountain bicycling community, care was taken in not disclosing the location of the test site prior to and during field testing to avoid tampering with the test site. Attachment No. 3 12 Study Methods Site Preparation • Test trails were along the same section of trail, with no intersections. • Test loops ranged from 1900 to 3100 feet (~600 to 950 m) in length, comprised of a contour singletrack descending section, with rollers, dips, and a bermed turn. Singletrack trail sections were connected into loops using an old roadbed. Each roadbed climb had two at-grade steep turns (20-25% grade) and a straight run at 12-15% grade. • Ten permanent sample sites were set up on each loop to observe and record cross- sectional areas (CSA). Seven sample sites were established on each singletrack section, with three sample sites on each roadbed section. • Sample sites were paired to match trail conditions for each loop (e.g. each had sample sites at comparable locations on bermed turns, road bed climbs, trail grade, tread texture, etc.). Sample sites were selected to capture a range of trail conditions. o Two plastic survey stakes (16” x 2”) were placed at each sample location, perpendicular to the trail tread, 51.2 inches (130 cm) apart (the span of the CSA measurement tool), as measured from the center of the stake head. Stakes were placed into the ground so that the head was flush with the surface. Efforts were made to keep stake heads as close to level as possible, in some cases meaning that part of the head of the stake was countersunk. o Each stake was identified with the sample site number and a letter indicating whether it was on the uphill (“A”) or downhill (“B”) side of the tread. For roadbed locations, or where uphill and downhill was not obvious, the left side marker (as one faced the trail in the direction of travel for the test) was labeled as “uphill” (“A”). o In order to ensure that the sampling location could be relocated in the event of tampering or other damage to the placement of the markers, survey marker locations were measured from reference tree markers (round pre-numbered aluminum tags, affixed to trees using aluminum nails). The distance (to 0.1 cm) and bearing to two tree markers was recorded for each survey marker location. Controlled Variables To the extent feasible given the study scope, effort was made to control for environmental, equipment, and rider variables. Environmental variables controlled across sample sites include: • Soil type • Soil moisture • Vegetation type and canopy cover • Level of use • Tread texture and surface stability Attachment No. 3 13 • Trail feature (e.g. roller, dip, insloped turn) • Trail grade Equipment and rider variables controlled: • Wheel size (for MTB and Class 1 eMTB) • Tire make and model (for MTB and Class 1 eMTB) • Tire pressure (for MTB and Class 1 eMTB) • Rider skill and weight Cross-Sectional Area “CSA” Measurements • A CSA tool was created to allow for consistent, replicable measurements at each sample station (Figure 2). The CSA tool was placed at a fixed height on the uphill side, at 30 cm above the survey marker surface. The downhill side was adjusted in height until level along the horizontal. • Three levels were monitored (1 horizontal axis and 2 vertical axes) throughout the sampling to maintain consistent measurements. Measurements were replicable to +/-1 mm at each interval. Figure 2: Layout of trail transect and formula for calculating CSA. (From: (Cole, 1983) • CSA was measured at each sampling station. Vertical measurements were captured using the CSA tool at 10 cm intervals across the trail tread, up to 120 cm from the uphill side fixed marker. • Measurements were taken at 0 (prior to test), 50, 100, 200, and 500 laps for Class 1 eMTB and mountain bike modes. Motorcycle mode was measured at 0, 50, 100, and 200 laps. • Motorcycle laps were discontinued after 200 laps due to concerns regarding tread damage. Attachment No. 3 14 • All test riders were advanced to expert riders and were asked to ride as they normally would. • CSA measurements and photos were taken at 0, 50, 100, 200, and 500 laps. • Soil moisture was captured at each sample location twice daily during testing (in the morning and afternoon) using a HydroSense soil moisture meter (volumetric water content measured at 6-12 cm depth). • Additional observations captured include disturbance area and condition class along the entire tread (not just at sample sites). Figure 3. CSA measurements along the test trail loops at permanent sampling stations. Condition Class Assessment (“CCA”) A CCA was used to assess the overall impact of experimental treatments along the full length of each trail segment (not exclusively at sampling sites). CCAs are commonly used in trail assessments to provide rapid, qualitative evaluations of site conditions. Classes were modified to reflect the range of disturbance conditions at this test site. (Jewell & Hammitt, 2000; J. L. Marion & Leung, 2001) Condition'Class'Assessment Description Depth,(loose, soil),,cm Trench, depth,,cm CC1 no,to,minimal,disturbance,,not,visibly,different,from,start,condition <0.5 <0.5 CC2 minor,disturbance,,less,than,half,tread,width,,noticable,soil/litter, movement 0.5C2 <0.5 CC3 moderate,disturbance,,greater,than,half,of,tread,width,,noticable,soil, movement,,loose,soil,evident 2.0C4.0 0.5C2.0 CC4 high,disturbance,,loose,soil,common,throughout,tread,,accumulation, evident,,some,trenching/breaking,tread,evident 4.0C6.0 2.0C4.0 CC5 severe,disturbance,,trenching,and,piling,of,soil >6cm >4.0 Attachment No. 3 15 Data Analysis • Data preparation: Any soil movement or change in the tread surface is important to capture, not just soil loss. Loose soil is often pushed to the side such that no change in total CSA would be measured, but this loose soil is available for erosion. Total change in soil surface is used, whether an increase or decrease was recorded (absolute value of change from 0-lap measurement). • For group pairs, t-tests (two-sample and Welch) were used to compare sample means. Analysis of Variance (ANOVA) was used to compare sample groups, with a Tukey Honest Significant Difference test (Tukey HSD) as a post-hoc test to determine significance for group pairs. • Data were transformed as needed to meet test assumptions. • Data analysis was conducted using R (The R Foundation, version 2.15.1). Attachment No. 3 16 Study Results This small study represents a very limited set of site and user conditions, the results of which may or may not be replicated in other locations and test conditions. No broad conclusions should be made from the observations presented. Change in Tread Surface One way to visualize soil movement (displacement and/or erosion) is to show a profile of trail sample sites. In order to compare paired sites (sample sites with similar trail conditions: slope, grade, texture, and feature), only the change in tread surface is shown and absolute values are used so that both soil increases and decreases can be illustrated, as any soil movement was important to capture. This allows for side-by-side comparison of sample sites by trail condition. A few selected sample sites are shown below (Figures 4-6). Figure 4. Trail profiles at 0 and 500 laps (200 laps for motorcycle). These show change in tread surface from the 0 lap measurement. For the motorcycle, you can see both trenching and piling of soil material as soil is displaced side-to-side and pushed downslope. These are from comparable sample sites on the roadbed. The sample site illustrated in Figure 4 is for a short steep climb on a roadbed. Under these site conditions, the mountain bicycle and Class 1 eMTB show similar soil movement (low), while the the motorcycle showed much greater soil displacement and erosion (large dip). The motorcycle engages a throttle for propulsion that moves the wheels even in the event of a loss of traction. This can lead to considerable soil movement, as is seen in Figure 4. !16$ !14$ !12$ !10$ !8$ !6$ !4$ !2$ 0$ 2$ 4$ V0$V1$V2$V3$V4$V5$V6$V7$V8$V9$V10$V11$ Ch a n g e ' i n ' t r e a d ' s u r f a c e , ' c m ' Tread'cross'sec4on,'ver4cal'measurements'at'10'cm'intervals' Roadbed'climb' 0$laps$ Mountain$Bike$ eMTB$ Motorcycle*$ Attachment No. 3 17 Figure 5. Trail profiles at 0 and 500 laps (0 and 200 for motorcycle). These show change in tread surface from the 0 lap measurement. Measurements taken at 10 cm intervals across each sample site, perpendicular to the trail. Greater soil displacement is seen for the Class 1 eMTB than for the mountain bicycle (some tread holes were observed forming), but much less than for the motorcycle. These are from comparable sample locations at the upper leg of a bermed turn. The sample site illustrated in Figure 5 is at a berm entrance, in the descending direction. Under these site conditions, the mountain bicycle showed the least amount of soil movement and the Class 1 eMTB showed slightly greater soil movement (both at 500 laps). However, both modes represent relatively little soil movement compared to the motorcycle (at 200 laps). As in Figure 4, there is a large dip in the tread, showing soil loss at the tread center from the motorcycle. All modes are likely braking while approaching a turn, though the inslope of the berm allows users to carry more speed than in other kinds of turns (e.g. switchbacks). In this situation, the combination of approaching speed and the mass of the vehicle could be affecting the soil movement differently: The Class 1 eMTB could allow users to approach the turn more quickly leading to greater soil movement upon braking and/or simply the weight difference (approximately 8 kg/20 lbs) could be sufficient to produce this result. Similarly, but on a much greater scale, the motorcycle can both approach the turn more quickly and has a much greater mass than either the Class 1 eMTB or the mountain bike (motorcycle weight plus protective equipment is roughly 250 lbs; engine output ranges approximately 100-200 times that of the potential output for this 350W Class 1 eMTB motor). !5# !4# !3# !2# !1# 0# 1# 2# V0#V1#V2#V3#V4#V5#V6#V7#V8#V9#V10#V11# Ch a n g e ' i n ' t r e a d ' s u r f a c e , ' c m ' Tread'cross'sec4on,'ver4cal'measurements'at'10'cm'intervals' Berm'entrance' 0#Laps# Mountain#Bike# eMTB# Motorcycle*# Attachment No. 3 18 Figure 6. Sample site: Exit from bermed turn, descending direction The sample site illustrated in Figure 6 is for an exit from a bermed turn, in the descending direction. Under these site conditions, all modes show little soil movement. A typical wheeled user under these trail conditions would be simply rolling through the site, using little to no braking and no pedaling or throttle engagement. With a durable tread, as was the case for this study, no soil movement was measurable under these user conditions (simply rolling along the tread). Class 1 eMTBs vs. Traditional Mountain Bicycles Because the motorcycle was only tested to 200 laps, a direct comparison could not be made with the Class 1 eMTBs and mountain bicycles at 500 laps. However, this data point still provides valuable information for the study. While the average change in tread surface across all 10 sample sites was greater for Class 1 eMTBs than for mountain bicycles, there was considerable site to site variability, especially for mountain bicycle sites, as shown by the error bars in Figure 7. When comparing Class 1 eMTBs to mountain bicycles, a simple t-test could be used for analysis (Table 1). Table 1. Comparison of average change in tread surface for Class 1 eMTBs and mountain bicycles at 200 and 500 laps using Two Sample t-test. There was no significant difference between the modes (α=0.05) at either 200 or 500 laps. pair laps t p(value eMTB(MTB 200 0.3638 0.7202 eMTB(MTB 500 (1.1122 0.2807 !5# !4# !3# !2# !1# 0# 1# 2# V0#V1#V2#V3#V4#V5#V6#V7#V8#V9#V10#V11# Ch a n g e ' i n ' t r e a d ' s u r f a c e , ' c m ' Tread'cross'sec4on,'ver4cal'measurements'at'10cm'intervals' Berm'exit' 0#Laps# Mountain#Bike# eMTB# Motorcycle*# Attachment No. 3 19 In considering average change in tread surface by mode after 200 laps, a difference between motorcycle impacts and those associated with Class 1 eMTBs and mountain bicycles is readily apparent (Figure 8). However, there is high variability among the motorcycle group of sample sites (note the span of error bars for “DB200”), as some sites experienced large amounts of soil displacement and rutting, while others showed little to no soil movement. ANOVA and Tukey HSD Test An analysis of variance (ANOVA) was conducted to determine if there was a significant difference between groups where more than two groups are compared, in this case: Change in tread surface for motorcycle, Class 1 eMTB, and mountain bicycle after 200 laps. Data were log transformed in order to meet test assumptions. The ANOVA showed that there was a significant difference between groups (F=5.822, p-value=0.0079), but this test cannot show which groups were different. The Tukey HSD Test is a post-hoc test, used following the ANOVA to identify which groups had significant differences. This test revealed that there was a significant difference between change in tread surface from motorcycles (DB) and that of both Class 1 eMTBs and traditional mountain bicycles (MTB) (p=0.0173 and p=0.0169, respectively; see Table 2). There was no significant difference between Class 1 eMTBs and mountain bicycles (p=0.9999). 0" 50" 100" 150" 200" 250" 300" 350" MTB$200$eMTB$200$DB$200$ Change$in$tread$surface$area$a6er$200$ laps$by$each$mode$(cm2)$ Figure 8. Average change in tread surface (absolute value) per sample site transect (cm2) after 200 laps. Error bars represent 95% confidence intervals. Attachment No. 3 20 Table 2. Tukey HSD Test results following significant ANOVA result. Fields highlighted in blue show significant results by mode pairs.   Condition Class Assessment Figure 9. Tread disturbance by mode, after 500 passes. Total represents any disturbance (CC2 or greater; CC1 is no noticeable disturbance and is not included here). 0%# 10%# 20%# 30%# 40%# 50%# 60%# 70%# 80%# 90%# total#CC2#CC3#CC4#or#5# %" D i s t u r b a n c e " Mountain#Bike# eMTB# Motorcycle# lower&&&&&&&&upper eMTB,DB&,0.9931 ,1.8282 ,0.1580 0.0173 MTB,DB&&&,0.9976 ,1.8327 ,0.1625 0.0168 MTB,eMTB&,0.0045 ,0.8396 0.8306 0.9999 &&Difference& in&means&&&& p,value& (adjusted)Mode&pair 95%&Confidence&Interval Attachment No. 3 21 Discussion All trail users affect the trail surface and surrounding environment, especially when trails are poorly constructed. Those impacts range from vegetation loss to soil erosion, water-quality degradation, and disruption of wildlife. However, there is no evidence that mountain bicycling causes greater environmental impact than other recreational trail uses. In fact current research suggests that mountain bicycling impacts are similar to hiking, and less damaging than equestrian and motorized users. An emerging body of research suggests that when it comes to impacts to soils, water quality, and vegetation, the primary issue is not the type of user, but the way the trail is designed and constructed. IMBA conducted a small trail impact study that measured soil displacement and erosion from traditional mountain bicycles, Class 1 eMTBs, and motorcycles under the same environmental conditions on separated sections of the same trail, within a single test site. Analysis of data from this small-scale field experiment showed support for the hypotheses. Some differences between the impacts of Class 1 eMTBs and mountain bicycles were observed, particularly at turns and grade changes. However, the soil displacement measured in this study was not significantly different (statistically) from that associated with mountain bicycles, and was much less than that associated with motorcycle use. Electric-powered mountain bikes (eMTBs) are a new category of recreational use on public lands, a hybrid of muscle and electric power that falls between traditional motorized and non-motorized uses. Defining eMTBs as new category of recreation access will minimize impacts on access for mountain bikes and protect against an increase of motorized use on non-motorized trails. Study Limitations This was a small study, under a limited set of environmental and trail conditions, and user behavior. This study does not, and should not be interpreted to represent consensus on the environmental impacts of Class 1 eMTB. However, it is a first step in better understanding the physical impacts to tread surfaces from their use, and how these impacts may be similar to or different from other two-wheeled uses. Environmental impacts are only part of understanding how a new use, like eMTBs, on public lands may affect the environment, user management, and experiences for other trail users. Social and regulatory factors may be of greater importance in determining appropriate use and should also be studied. Access Implications for Land Managers IMBA strongly recommends that trail management decisions for any recreational user have a foundation in science. The impact of mountain bicycling on trails and the environment has been a leading management concern since the activity’s inception. Mountain bicyclists know acutely the experience of arbitrary decision-making based upon anecdotal observations of user behaviors Attachment No. 3 22 and environmental impacts. As a new use, eMTBs will likely face similar scrutiny. Perception of impacts – both social and environmental – is an issue that Class 1 eMTBs face, in part because there are relatively few eMTBs currently on trails. Trail users and land managers have limited opportunity to observe and interact with this new use and may assume the worst in terms of impacts. Land managers should not just weigh environmental impacts, but should honestly address the social factors that also contribute to access decisions. While the environmental impacts of a particular trail use are an important consideration in management, social and regulatory factors also play a critical role. For good or bad, access is not based upon a hierarchy of environmental impacts. Equestrian use has much greater environmental impacts than mountain bicycling, but it is managed quite differently for social, historical, and regulatory reasons. It is important to keep this in mind when evaluating this new use. Attachment No. 3 23 Conclusion This study found that the impacts from Class 1 eMTBs and traditional mountain bicycles were not significantly different, while motorcycles led to much greater soil displacement and erosion. Observations suggest that Class 1 eMTBs may lead to more displacement under certain trail conditions. More research is needed before conclusions can be drawn regarding the environmental impacts of Class 1 eMTBs as compared with traditional mountain bicycles. Understanding the potential resource impacts of Class 1 eMTBs is a necessary and important first step for formulating management strategies. Additional research is needed to further assess the range of environmental and social impacts for successful Class 1 eMTB use on public lands. IMBA’s initial study suggests that, with conscientious management and attention to trail design, Class 1 eMTBs may have the potential to offer a beneficial use of public lands with acceptable impacts. Attachment No. 3 24 Appendix A: Throttle Observations: Mini Test This was a very limited test to begin to understand the differences between pedal-assist and throttle eMTBs. • Modes: MTB, pedal-assist eMTB, throttle-assist eMTB • Pedal/throttle assist eMTBs at highest power setting • Steep uphill: 40-45% grade over 4.5 m • All modes start from full stop 4 m before grade change • 50 laps each MTB vs. Pedal-Assist: Greater area of disturbance, but less depth. Throttle: Much greater area of disturbance, equal depth to Pedal-Assist. • Most impact at crest of climb 0" 2000" 4000" 6000" 8000" 10000" 12000" MTB"Pedal0Assist"Thro8le" So i l % d i s t u r b a n c e , % c m 3 % Total%disturbance%by%mode% Attachment No. 3 25 Appendix B: Literature Review A literature review was conducted in developing the methods for this study. While no studies have looked at the effects of eMTBs explicitly, there have been numerous studies of mountain bicycles and motorcycles, presumably encompassing the range of potential environmental impacts associated with eMTBs. Other studies characterizing soil displacement and erosion in general, regardless of use, also informed the study design. • Wilson & Seney, 1994 – Erosion from experimentally applied mountain bicycling and motorcycles (also horses and hikers) on trails in Montana. Used existing trails, varying slopes, in wet conditions and dry. Applied rainfall to assess wet conditions and immediately following user passes to assess erosion. (Wilson & Seney, 1994) • Thurston & Reader, 2001 – Impacts of experimentally applied mountain bicycling on vegetation and soils in a deciduous forest (also hikers). Not on existing trails, but on designated tracks on varying slopes, applied varying user passes (25 to 1000), then measured vegetation and soil compaction. Assessed recovery after 1 year. (Thurston & Reader, 2001) • White et al, used point measurement of max incision and width in their observational study. ‘Cessford (1995a) discussed ecological impacts and presented several astute observations, though the majority of his conclusions were derived from other forms of recreation, such as hiking and off-road motorcycling. His most notable inference was that mountain bikes will generate the most torque during uphill travel, but considerably less pressure on the trail in comparison to other users when moving downhill, although degradation is possible “in extremely wet conditions, on uncompacted surfaces, or due to poor braking practices”’ (Gordon R. Cessford, 1995; White, Waskey, Brodehl, & Foti, 2006) • Existing mountain bicycle studies show greatest erosion at turns and on steep downhills. (Goeft and Alder, 2001; White, 2006). For motorcycles, turns are also an area of higher erosion, as are uphills. Check other citations for additional information. (Goeft & Alder, 2001; White et al., 2006) • All uses have greatest potential to cause damage to soils and vegetation in wet conditions. (B. J. Marion & Wimpey, 2007) • Olive & Marion (2009) – Variable CSA approach. Observational study, but methods useful. (Olive & Marion, 2009) • Wallin and Hardin 1996 – trail erosion using rainfall simulator. Insufficient resources for this study, but worth exploring for a future study to test under varying soil moisture conditions. (Wallin & Harden, 1996) • SA MTB study (Clement, 2010) – used CSA method to monitor and assess mountain bicycling trails in South Australia for Mountain Bike Australia. These trails were building using BMPs for mountain bicycling trails. CSA for 20 randomly placed points along each of two trails (under different soil and rainfall conditions). (Clement, 2010) Attachment No. 3 26 • USFS comparison of trail erosion evaluation methods ranked CC Assessments highest overall when combining training required, efficiency, accuracy, precision, and management utility. (Jewell & Hammitt, 2000) • 2nd and 3rd ranked methods: census of erosional events and CSA (tied with Max Incision Post-construction). – CSA probably best for experiment versus an observational study. CSA –highest precision and accuracy, but low efficiency. • Cross-Sectional Area Method: “Soil erosion is the single most important, managerially significant trail degradation indicator. The cross-sectional method is probably the most frequently used, replicable method for monitoring purposefully located trail segments. This method may also be applied to systematically sampled locations for monitoring entire trail systems. The erosion or deposition of soil can be measured with very high precision and accuracy with this method. …. it involves a number of assumptions, including ability to relocate the fix points precisely, reference line elevated above surrounding vegetation, the line is kept taut, a level is used for the vertical measurements, the taut line is repositioned the same height above the fixed points, vertical measurements are taken at the same interval, and the vertical measurements are taken starting from the same side. For these reasons, training is the single most important factor in the proper application of this method. Adequate training is costly and thus a major limiting factor for managers.” (Jewell & Hammitt, 2000) Attachment No. 3 27 Literature Cited Clement, S. (2010). Monitoring and Assessing the Long- term Environmental and Use Impacts on Selected Mountain Bike Trails in South Australia. Adelaide, South Australia. Cole, D. N. (1983). Assessing and Monitoring Backcountry Trail Conditions (No. INT-303). Ogden, UT. Goeft, U., & Alder, J. (2001). Sustainable Mountain Biking: A Case Study from the Southwest of Western Australia. Journal of Sustainable Tourism, 9(3), 193–211. doi:10.1080/09669580108667398 Gordon R. Cessford. (1995). Off-Road Impacts of Mountain Bikes: A Review and Discussion. Department of Conservation. Wellington, New Zealand. Retrieved from http://www.mountainbike.co.nz/politics/doc/impacts/index.htm Jewell, M. C., & Hammitt, W. E. (2000). Assessing Soil Erosion on Trails  : A Comparison of Techniques (No. RMRS-P-15-Vol-5). Marion, B. J., & Wimpey, J. (2007). Environmental Impacts of Mountain Biking: Science Review and Best Practices. Managing. Marion, J. L., & Leung, Y. (2001). Trail Resource Impacts and An Examination of Alternative Assessment Techniques. Journal of Park and Recreation Administration, 19(3), 17–37. Olive, N. D., & Marion, J. L. (2009). The influence of use-related, environmental, and managerial factors on soil loss from recreational trails. Journal of Environmental Management, 90(3), 1483–1493. doi:http://dx.doi.org/10.1016/j.jenvman.2008.10.004 Thurston, E., & Reader, R. J. (2001). Impacts of Experimentally Applied Mountain Biking and Hiking on Vegetation and Soil of a Deciduous Forest. Environmental Management, 27(3), 397–409. doi:10.1007/s002670010157 Wallin, T. R., & Harden, C. P. (1996). Estimating Trail-Related Soil Erosion in the Humid Tropics: Jatun Sacha, Ecuador, and La Selva, Costa Rica. Ambio, 25(8), 517–522. Retrieved from http://www.jstor.org/stable/4314532 White, D. D., Waskey, M. T., Brodehl, G. P., & Foti, P. E. (2006). A Comparative Study of Impacts to Mountain Bike Trails in Five Common Ecological Regions of the Southwestern U . S . Journal of Park and Recreation Administration, 24(2), 21–42. Wilson, J. P., & Seney, J. P. (1994). EROSIONAL IMPACT OF HIKERS, HORSES, MOTORCYCLES, AND OFF-ROAD BICYCLES ON MOUNTAIN TRAILS IN MONTANA. Mountain Research and Development, 14(1), 77–88. Attachment No. 3 28 Attachment No. 3 Summary of JCOS e-bike Study Findings to Date 10/15/2017 Eight events in five locations: Crown Hill Park, North Table Mountain Park, Matthews/Winters Park, Apex Park and Lair o’ the Bear Park Visitor Intercept Survey n= 375 65% of park visitors are unable to detect the presence of a Class 1 e-bike. Acceptance of Class 1 e-bikes by trail type: YES 26% NO 65% NOT SURE 9% Ability to detect an e-bike? yes, all types 36% paved only 34% natural surface only 2% no 14% not sure 14% Acceptance by Trail Type Attachment 5 Summary of Pre- and Post-demo Survey: n = 92 65% of participants indicated the demo changed their perception of e-bikes. Overall, demo improved acceptance. Overall, demo reduced uncertainty. YES 65% NO 32% NOT SURE 3% Did demo change perception? ALL 35% PAVED 15% MTN 2% NO 7% NOT SURE 41% Approve use by trail type BEFORE ALL 46% PAVED 20% MTN 4% NO 10% NOT SURE 20% Approve use by trail type AFTER Attachment 5 Overview In April 2017, a study was conducted by the national non-profit bicycling advocacy group PeopleForBikes, with support from the industry association the Bicycle Product Suppliers Association to provide the Bureau of Land Management information that could guide decision- making about where, when, and how to manage e-MTBs. The study took place at four trailheads in the Fruita, CO area – one that provides access to motorized recreation (or “motorized” trail: Rabbit Valley), and three that provide access to non- motorized recreation (or “non-motorized” trails: 18 Road, Lunch Loops, Kokopelli). Specifically the study sought to answer the following questions: •What is your familiarity with, perception of, support of, and perceived benefits and barriers of eMTBs? •What would the social impacts be at the cycling areas that do not allow e-bike use if trails were opened for e-bike use? •Would people who currently do not use BLM bike trails start using those trails if e-bikes were allowed? Methodology Survey questions – one for the motorized trail users (http://bit.ly/2oZk2ew), and one for the non- motorized trail users (http://bit.ly/2qqTNiU) – were developed in partnership with the BLM, City of Fruita, PeopleForBikes, and the International Mountain Bicycling Association. These ten-minute intercept surveys were conducted among those local to and those visiting trails in Fruita, CO. The interview locations and timing (i.e. sampling plan) were designed to yield a representative sample of trail users: •Trailheads where motorized vehicles (including eMTBs) are not permitted and where they are permitted; •Visitors to the area and local residents; •Weekday and weekend users; and •Demographics (e.g., age, gender, etc.) The study was conducted on the following days and times: •Motorized trail: o Saturday, April 8, 2017, from 8 a.m. – 6 p.m. o Sunday, April 9, 2017, from 8 a.m. – 6 p.m. o An eMTB demo was also hosted at the Rabbit Valley trailhead on both days of the survey. The demo was advertised for Sunday, but not for Saturday so that answers could be judged independently of whether a respondent visited the trailhead specifically to try an eMTB. The demo was for Class 1 eMTBs only, defined as “a bicycle equipped with a motor that provides assistance only when the rider is pedaling, and that ceases to provide assistance when the bicycle reaches the speed of 20 miles per hour.” (Note: 20 mph is not the average speed, but the maximum speed at which the motor will work.) •Non-motorized trails: o Wednesday, April 5, 2017, from 5 – 8 p.m. Attachment No. 6 PeopleForBikes / Bicycle Product Suppliers Association eMTB Intercept Study April 2017 o Saturday, April 8, 2017, from 8 – 11 a.m. The following number of interviews was conducted at each trailhead: • Rabbit Valley: 64 surveys • 18 Road: 55 surveys • Lunch Loops: 38 surveys • Kokopelli: 19 surveys Top-Level Takeaways • Education and experience are important, i.e. it is difficult to formulate an educated opinion of eMTBs without first seeing and riding one. Riding an e-MTB changes perceptions from the negative or neutral, to neutral or positive. • Messaging is key. One of the main concerns with allowing eMTBs on non-motorized trails is that someone’s favorite trail may become too crowded and their experience will be diminished. If eMTB access changes, communicating why and where the changes are being made will dissipate some of the concerns. With the appropriate level of outreach and education, the social impact of allowing eMTBs on non-motorized trails can be minimal. Specific outreach to mountain biking advocates, in particular, may help build support and collaboration around revised access. • More research on the relative trail impacts of eMTBs vs. standard MTBs is needed, and more research on the actual attitude changes before and after a demo (instead of asking participants to self report after). • A short-term pilot test to allow eMTB access on non-motorized trails along with data collection may provide the necessary information to consider revised eMTB access. Topline Findings Familiarity with, perception of, support of, and perceived benefits and barriers of e-MTBs: • Familiarity with eMTBs: o Just under one-third of respondents reported high familiarity with eMTBs. o Fruita “locals” are particularly familiar with eMTBs. o Those who report high familiarity with eMTBs, and users at non-motorized trailheads are particularly concerned about conflict and trail damage. • Perception of eMTBs: o Generally, people at the motorized trailhead are more positive about eMTBs than non-motorized trail users. o For those who demo’d an eMTB, nearly all reported a positive experience and 62% reported that it changed their perceptions about eMTBs for the better. (Note: These results are consistent with findings from Jefferson County, CO that 71% of demo participants reported a change in their perceptions of eMTBs after trying one.) o Trail users estimated that eMTBs go 18-20 MPH. o On a scale of 1-10 (1 = traditional MTB; 10 = dirt bike), users at the motorized trailhead rated an eMTB on average a 3.5; users at the non-motorized trailheads rated an eMTB a 4.9. • Support for eMTBs: o Nearly all motorized trail users agree that eMTBs should be permitted on motorized trails, especially those who have ridden an eMTB. o Motorized trail users are especially likely to be supportive of policies that support e- MTB access to non-motorized trails. o About 40% of users surveyed at non-motorized trails believe that eMTBs should be allowed on non-motorized trails and 26% support policies toward that end. Attachment No. 7 o Those who have ridden an eMTB are especially favorable to revised eMTB access to non-motorized trails. o IMBA members and advocates are less likely to agree that e-MTBs should be allowed on non-motorized trails • Perceived benefits and barriers of e-MTBs: o Many of those surveyed consider two key benefits of eMTBs: encouraging new mountain bikers/getting more people outside and extending someone’s ability to mountain bike into older age. o Some benefits of eMTBs that were listed are that they are quiet, simulate a MTB trail experience, require just as much work as a regular MTB, and have similar trail impacts as traditional MTBs. o The main barriers cited, in answer to whether or eMTBs should be allowed on non- motorized trails are that eMTBs might require higher rates of rescue, decrease healthy lifestyles, jeopardize MTB access victories by blurring the lines between non- motorized and motorized travel; and that there are enough motorized trail areas to satisfy eMTB riders. What would the social impacts be at the cycling areas that do not allow e-bike use if trails were opened for e-bike use? • Those that do not want eMTBs to be allowed on non-motorized trails primarily say that it is because eMTBs are motorized. • The top concerns about e-MTBs include crowding, trail damage, and potential user conflict. Would people who currently do not use BLM bike trails start using those trails if e-bikes were allowed? • Nearly all non-motorized trail users would continue to use the trails if eMTBs were permitted. • Almost 40% of non-motorized trail users think that eMTBs should be allowed on those trails, especially those who have ridden an eMTB. Conclusion When someone has demo’d an eMTB, their perceptions of a Class 1 eMTB improve, and they realize that an eMTB is more similar to a traditional mountain bike than a dirt bike. However, many of those who demo’d an eMTB believe that eMTBs, because of their motor, belong on motorized trails. This does not preclude the fact that many people who have ridden an eMTB believe that they have similar social and environmental impacts as a regular bike, but people are still concerned about trail crowding and user conflict. If Class 1 eMTB to a non-motorized trail is desired, this access should be preceded by a pilot project on a few selected trails, accompanied with proper signage, education, and user etiquette information. In response to the concerns expressed in this study, the following should be noted: • Trail crowding will occur with or without eMTBs. The solution is not to restrict access, but to build more trails. • User conflict will occur with or without eMTBs. eMTBs allow someone to climb a trail faster, although concerns are only expressed in terms of downhill speeds. • Technology cannot be blamed for some riders going riding a trail that they are not fit or skilled enough to ride. This also occurs with or without eMTBs. Attachment No. 7 Appendix 1: Selected Feedback from Surveys Chosen quotes from “Advice to Land Managers:” • I think non-motorized trails should be non-motorized, without exception. There are plenty of motorized trails for eMTBs to use. • eMTBs should be allowed on specific trails separate from MTBs and hikers. • Open selected trails to e-bikes, clearly mark which trails are open to e-bikes, and solicit feedback from trail users. • I worry about the speed of the bikes and how that might impact the perception and experience of other users. • Allow Class 1eMTBs on non-motorized. • I do not like the idea of assist and motors on trails where motors are not allowed. I am however excited about e-bikes for my parents to ride around the neighborhood. • Ride one before you judge them. • Let them on, they’re the same as a regular bike. • Signage, guidelines, education. • Limit them to some trails, directional only. • Make more trails in general. • Consider same techniques as when designating trails for hikers, horses, and bikes. • Expand singletrack-style motorized friendly trails similar to many in the Crested Butte area. • Study effects on trail degradation. Chosen quotes from users who demo’d an eMTB: • No noise! • It's fast. • It was really impressive how it kicks in. I really like how there are different power levels. • Super fun through a steep up hill. • This was great! I'd love to do it again, but don't think there are a lot of opportunities, I'd worry about changing the nature of the multi-use trails that I already use if eMTBs were allowed, and the cost feels a little high for me to add as a new hobby. But I could totally see myself renting at a riding destination. • Lots of fun. Had a great time riding. Takes time to get used to. • Will consider buying one. • It was great how easy it was to get moving. • It was not as easy as I thought it would be! • I never once peeled out like a motorcycle, even when I attempted to. • Great way for the family to ride together. • Not suitable for MTB trails. • Safer and more than expected. • Worried about losing motivation for regular biking. • I didn’t know that you had to pedal a Class 1 eMTB to engage the motor. • There needs to be delineation between eMTBs and mountain bikes on some trails. • Range and speed were impressive. • I thought they would feel more like a motorcycle it was just like my trail bike. • Now I understand why they are appealing to many. Chosen quotes from users of non-motorized trails when asked for reasons to allow eMTBs on non-motorized trails (note: when asked why not to allow eMTBs on non-motorized trails, the answer was resoundingly “because they are motorized.”): Attachment No. 7 • They get people outside. • Class 1 eMTBs are like bikes and are ok on trails. • As long as the user is respectful to others and respects the trails. • eMTBs help provide a little extra power to get over obstacles for someone who may not be able to ride. • There is still a lot of research that needs to be done, but there are certain riders that would greatly benefit from e-bikes. • As long as eMTB riders aren't presenting a danger to themselves or others than why not? • I'm old and need help going uphill. • They are mostly human powered. • They are only faster going up and people go fast down all the time so I think its about the same. • Without significant noise or speed increase I don't see any difference from traditional bikes. Attachment No. 7 Appendix 2: Demographics Motorized trail users Non-motorized trail users % Who mountain bike weekly or more often 78% 87% Average # of years mountain biking 13.92 15.08 % Involved in mountain bike advocacy 45% 43% % IMBA members 28% 23% % Local 27% 42% % Male 78% 69% % White/Caucasian 94% 90% Average Age 40 39 Attachment No. 7 Overview In April 2017, a study was conducted by the national non-profit bicycling advocacy group PeopleForBikes, with support from the industry association the Bicycle Product Suppliers Association to provide the Bureau of Land Management information that could guide decision- making about where, when, and how to manage e-MTBs. The study took place at four trailheads in the Fruita, CO area – one that provides access to motorized recreation (or “motorized” trail: Rabbit Valley), and three that provide access to non- motorized recreation (or “non-motorized” trails: 18 Road, Lunch Loops, Kokopelli). Specifically the study sought to answer the following questions: •What is your familiarity with, perception of, support of, and perceived benefits and barriers of eMTBs? •What would the social impacts be at the cycling areas that do not allow e-bike use if trails were opened for e-bike use? •Would people who currently do not use BLM bike trails start using those trails if e-bikes were allowed? Methodology Survey questions – one for the motorized trail users (http://bit.ly/2oZk2ew), and one for the non- motorized trail users (http://bit.ly/2qqTNiU) – were developed in partnership with the BLM, City of Fruita, PeopleForBikes, and the International Mountain Bicycling Association. These ten-minute intercept surveys were conducted among those local to and those visiting trails in Fruita, CO. The interview locations and timing (i.e. sampling plan) were designed to yield a representative sample of trail users: •Trailheads where motorized vehicles (including eMTBs) are not permitted and where they are permitted; •Visitors to the area and local residents; •Weekday and weekend users; and •Demographics (e.g., age, gender, etc.) The study was conducted on the following days and times: •Motorized trail: o Saturday, April 8, 2017, from 8 a.m. – 6 p.m. o Sunday, April 9, 2017, from 8 a.m. – 6 p.m. o An eMTB demo was also hosted at the Rabbit Valley trailhead on both days of the survey. The demo was advertised for Sunday, but not for Saturday so that answers could be judged independently of whether a respondent visited the trailhead specifically to try an eMTB. The demo was for Class 1 eMTBs only, defined as “a bicycle equipped with a motor that provides assistance only when the rider is pedaling, and that ceases to provide assistance when the bicycle reaches the speed of 20 miles per hour.” (Note: 20 mph is not the average speed, but the maximum speed at which the motor will work.) •Non-motorized trails: o Wednesday, April 5, 2017, from 5 – 8 p.m. Attachment No. 6 o Saturday, April 8, 2017, from 8 – 11 a.m. The following number of interviews was conducted at each trailhead: • Rabbit Valley: 64 surveys • 18 Road: 55 surveys • Lunch Loops: 38 surveys • Kokopelli: 19 surveys Top-Level Takeaways • Education and experience are important, i.e. it is difficult to formulate an educated opinion of eMTBs without first seeing and riding one. Riding an e-MTB changes perceptions from the negative or neutral, to neutral or positive. • Messaging is key. One of the main concerns with allowing eMTBs on non-motorized trails is that someone’s favorite trail may become too crowded and their experience will be diminished. If eMTB access changes, communicating why and where the changes are being made will dissipate some of the concerns. With the appropriate level of outreach and education, the social impact of allowing eMTBs on non-motorized trails can be minimal. Specific outreach to mountain biking advocates, in particular, may help build support and collaboration around revised access. • More research on the relative trail impacts of eMTBs vs. standard MTBs is needed, and more research on the actual attitude changes before and after a demo (instead of asking participants to self report after). • A short-term pilot test to allow eMTB access on non-motorized trails along with data collection may provide the necessary information to consider revised eMTB access. Topline Findings Familiarity with, perception of, support of, and perceived benefits and barriers of e-MTBs: • Familiarity with eMTBs: o Just under one-third of respondents reported high familiarity with eMTBs. o Fruita “locals” are particularly familiar with eMTBs. o Those who report high familiarity with eMTBs, and users at non-motorized trailheads are particularly concerned about conflict and trail damage. • Perception of eMTBs: o Generally, people at the motorized trailhead are more positive about eMTBs than non-motorized trail users. o For those who demo’d an eMTB, nearly all reported a positive experience and 62% reported that it changed their perceptions about eMTBs for the better. (Note: These results are consistent with findings from Jefferson County, CO that 71% of demo participants reported a change in their perceptions of eMTBs after trying one.) o Trail users estimated that eMTBs go 18-20 MPH. o On a scale of 1-10 (1 = traditional MTB; 10 = dirt bike), users at the motorized trailhead rated an eMTB on average a 3.5; users at the non-motorized trailheads rated an eMTB a 4.9. • Support for eMTBs: o Nearly all motorized trail users agree that eMTBs should be permitted on motorized trails, especially those who have ridden an eMTB. o Motorized trail users are especially likely to be supportive of policies that support e- MTB access to non-motorized trails. o About 40% of users surveyed at non-motorized trails believe that eMTBs should be allowed on non-motorized trails and 26% support policies toward that end. Attachment No. 6 o Those who have ridden an eMTB are especially favorable to revised eMTB access to non-motorized trails. o IMBA members and advocates are less likely to agree that e-MTBs should be allowed on non-motorized trails • Perceived benefits and barriers of e-MTBs: o Many of those surveyed consider two key benefits of eMTBs: encouraging new mountain bikers/getting more people outside and extending someone’s ability to mountain bike into older age. o Some benefits of eMTBs that were listed are that they are quiet, simulate a MTB trail experience, require just as much work as a regular MTB, and have similar trail impacts as traditional MTBs. o The main barriers cited, in answer to whether or eMTBs should be allowed on non- motorized trails are that eMTBs might require higher rates of rescue, decrease healthy lifestyles, jeopardize MTB access victories by blurring the lines between non- motorized and motorized travel; and that there are enough motorized trail areas to satisfy eMTB riders. What would the social impacts be at the cycling areas that do not allow e-bike use if trails were opened for e-bike use? • Those that do not want eMTBs to be allowed on non-motorized trails primarily say that it is because eMTBs are motorized. • The top concerns about e-MTBs include crowding, trail damage, and potential user conflict. Would people who currently do not use BLM bike trails start using those trails if e-bikes were allowed? • Nearly all non-motorized trail users would continue to use the trails if eMTBs were permitted. • Almost 40% of non-motorized trail users think that eMTBs should be allowed on those trails, especially those who have ridden an eMTB. Conclusion When someone has demo’d an eMTB, their perceptions of a Class 1 eMTB improve, and they realize that an eMTB is more similar to a traditional mountain bike than a dirt bike. However, many of those who demo’d an eMTB believe that eMTBs, because of their motor, belong on motorized trails. This does not preclude the fact that many people who have ridden an eMTB believe that they have similar social and environmental impacts as a regular bike, but people are still concerned about trail crowding and user conflict. If Class 1 eMTB to a non-motorized trail is desired, this access should be preceded by a pilot project on a few selected trails, accompanied with proper signage, education, and user etiquette information. In response to the concerns expressed in this study, the following should be noted: • Trail crowding will occur with or without eMTBs. The solution is not to restrict access, but to build more trails. • User conflict will occur with or without eMTBs. eMTBs allow someone to climb a trail faster, although concerns are only expressed in terms of downhill speeds. • Technology cannot be blamed for some riders going riding a trail that they are not fit or skilled enough to ride. This also occurs with or without eMTBs. Attachment No. 6 Appendix 1: Selected Feedback from Surveys Chosen quotes from “Advice to Land Managers:” • I think non-motorized trails should be non-motorized, without exception. There are plenty of motorized trails for eMTBs to use. • eMTBs should be allowed on specific trails separate from MTBs and hikers. • Open selected trails to e-bikes, clearly mark which trails are open to e-bikes, and solicit feedback from trail users. • I worry about the speed of the bikes and how that might impact the perception and experience of other users. • Allow Class 1eMTBs on non-motorized. • I do not like the idea of assist and motors on trails where motors are not allowed. I am however excited about e-bikes for my parents to ride around the neighborhood. • Ride one before you judge them. • Let them on, they’re the same as a regular bike. • Signage, guidelines, education. • Limit them to some trails, directional only. • Make more trails in general. • Consider same techniques as when designating trails for hikers, horses, and bikes. • Expand singletrack-style motorized friendly trails similar to many in the Crested Butte area. • Study effects on trail degradation. Chosen quotes from users who demo’d an eMTB: • No noise! • It's fast. • It was really impressive how it kicks in. I really like how there are different power levels. • Super fun through a steep up hill. • This was great! I'd love to do it again, but don't think there are a lot of opportunities, I'd worry about changing the nature of the multi-use trails that I already use if eMTBs were allowed, and the cost feels a little high for me to add as a new hobby. But I could totally see myself renting at a riding destination. • Lots of fun. Had a great time riding. Takes time to get used to. • Will consider buying one. • It was great how easy it was to get moving. • It was not as easy as I thought it would be! • I never once peeled out like a motorcycle, even when I attempted to. • Great way for the family to ride together. • Not suitable for MTB trails. • Safer and more than expected. • Worried about losing motivation for regular biking. • I didn’t know that you had to pedal a Class 1 eMTB to engage the motor. • There needs to be delineation between eMTBs and mountain bikes on some trails. • Range and speed were impressive. • I thought they would feel more like a motorcycle it was just like my trail bike. • Now I understand why they are appealing to many. Chosen quotes from users of non-motorized trails when asked for reasons to allow eMTBs on non-motorized trails (note: when asked why not to allow eMTBs on non-motorized trails, the answer was resoundingly “because they are motorized.”): Attachment No. 6 • They get people outside. • Class 1 eMTBs are like bikes and are ok on trails. • As long as the user is respectful to others and respects the trails. • eMTBs help provide a little extra power to get over obstacles for someone who may not be able to ride. • There is still a lot of research that needs to be done, but there are certain riders that would greatly benefit from e-bikes. • As long as eMTB riders aren't presenting a danger to themselves or others than why not? • I'm old and need help going uphill. • They are mostly human powered. • They are only faster going up and people go fast down all the time so I think its about the same. • Without significant noise or speed increase I don't see any difference from traditional bikes. Attachment No. 6 Appendix 2: Demographics Motorized trail users Non-motorized trail users % Who mountain bike weekly or more often 78% 87% Average # of years mountain biking 13.92 15.08 % Involved in mountain bike advocacy 45% 43% % IMBA members 28% 23% % Local 27% 42% % Male 78% 69% % White/Caucasian 94% 90% Average Age 40 39 Attachment No. 6 Public Comments received prior to noon on November 14, 2019 Attachment 7 Attachment 7 From:Matthew Anderson To: Cc:Brian Malone; Jennifer Woodworth Subject:RE: Pete Siemens - Ward 1 - Board Contact Form Date:Friday, October 4, 2019 7:24:21 AM Attachments:image001.png image002.jpg Dear Ms. Holden, Thank you for your feedback and observations. Saint Joseph’s hill is a very popular and challenging ride up or down for Mt. bikes however e-bikes are not currently permitted there or on any District lands. The trail is signed to encourage riders to use caution on the steeper sections and there is personal responsibility for riders to ride within their ability. Rangers do provide patrols of the area and use radar guns to enforce the speed limit. E-bikes have become very popular and with that popularity many local, state and Federal land management agencies, including Midpen have begun to revisit their rules and regulations. Many that had prohibited them as motorized vehicles are now allowing them where bicycles are permitted with the overall mission to increase recreational opportunities for all Americans. Our review of our e-bike policy will be presented to Midpen's Board of Directors on Wednesday, November 20 at 7 pm. The presentation will be held at our office at 330 Distel Circle, Los Altos. Please feel free to attend and provide your comments. You can find out more about the meetings here: https://www.openspace.org/about-us/board-meetings   Sincerely,     Matt Anderson Chief Ranger Badge # 1050 manderson@openspace.org Midpeninsula Regional Open Space District 330 Distel Circle, Los Altos, CA 94022 P: Direct (650) 625-6557 P: Main (650) 625-1200 C:(408)209-5902 www.openspace.org     From:   Sent: Wednesday, October 2, 2019 6:55 AM To: web <web@openspace.org>; Clerk <clerk@openspace.org>; General Information <info@openspace.org> Subject: Pete Siemens - Ward 1 - Board Contact Form EXTERNAL Name *barbara holden Select a Choice *Pete Siemens - Ward 1 Attachment 7 Attachment 7 Attachment 7 From:General Information To:Brian Malone; Jane Mark Cc:Matthew Anderson; Ada@openspace.org Subject:Fw: Electric Mountain Bikes Date:Monday, March 25, 2019 2:20:42 PM FYI. Thank you, Jordan McDaniel Public Affairs Administrative Assistant Midpeninsula Regional Open Space District 330 Distel Circle, Los Altos, CA 94022 P: (650) 691-1200 F: (650) 691-0485 www.openspace.org | twitter: @mrosd From: General Information Sent: Monday, March 25, 2019 2:17 PM To: David Wilfinger Subject: Re: Electric Mountain Bikes Hi David, Thank you for your email and feedback regarding the use of e-bikes on District trails. In compliance with the Americans with Disabilities Act, people with mobility-related disabilities are allowed to use Other Power-Driven Mobility Devices (OPDMD), including e-bikes, on District trails where bike use is permitted. The OPDMD policy was approved by the District’s Board of Directors to establish guidelines for use of OPDMDs on District Preserves and describes the verification process for users. While the use of e-bikes is allowed by people with mobility disabilities on District trails where bikes are permitted, the policy restrictions on general e-bike use are in place to ensure that their use does not pose a significant safety risk due to greater uphill speeds, impact the Preserve’s sensitive natural resources, or fundamentally alter Preserve user’s expectation of a non-motorized visitor experience. For more information about the District’s policy you can read the OPDMD Board Report, Policy and Assessment Factors here.   Thanks again for reaching out to us and sharing your perspective. I will share your feedback with appropriate staff for review. If you are interested in being added to our biking interested parties email list, please let us know. You would get notified of upcoming meetings regarding e-bikes and more general bike issues. If you have any further questions or feedback please feel free to contact Midpen's American Disabilities Act Coordinator and Planning Manager, Jane Mark, at adacoordinator@openspace.org or call (650) 691-1200.   Thank you, Jordan McDaniel Public Affairs Administrative Assistant Midpeninsula Regional Open Space District 330 Distel Circle, Los Altos, CA 94022 P: (650) 691-1200 F: (650) 691-0485 www.openspace.org | twitter: @mrosd Attachment 7 From: David Wilfinger Sent: Monday, March 25, 2019 2:02 PM To: General Information Subject: Electric Mountain Bikes Hello, On Sunday I received a written warning by a ranger in Montebello Open Space Preserve for riding my electric mountain bike on a trail open to bicycles. I was surprised and at first could not believe it when the ranger told me that electric mountain bikes are not permitted anywhere in the midpeninsula open space district. I honestly was not aware that I was doing anything wrong. Following up I did some online research and found blog entries that stated that the topic of allowing electric bikes has already been brought to the attention of the open space district’s administration. I can understand that there are concerns regarding electric bikes on bike trails because of potential conflicts between hikers, other bikers, and electric bike riders. However I have been riding a class 1 electric bike for a while and have not once encountered any problems with other trail users because of the type of bike. Riding this MTB I have the exact same footprint as someone on a regular mountain bike. I do not ride faster, I do not require more space and I do not cause more damage to the trails as anyone else. All a class 1 electric MTB does is adding a little extra push when I am paddling. Without noticing the battery pack, one would not know I am riding an electric MTB. The reason why I am riding such a bike is not speed. Due to the support it provides it allows me to go on different trails with more elevation change. Using an electric bike I can ride directly from my home at sea level into the preserves around skyline boulevard and do not have to take my car first to get up on the mountains. Also I do not go on trails that exceed my skill level, just because I have an electric motor that supports me. After some research online I find that over the last years many areas have permitted electric bikes, I hope that the midpeninsula open space district can follow their example. I am aware that the rapid development in the area of electric recreational vehicles requires some restrictions – I also would not want to see all latest gadgets being used on the trails. Therefore I propose allowing a certain group of electric supported bikes on the trails. The state of California introduced a good qualification system for electric bicycles, I would propose permitting class 1 electric bikes on bicycle trails in the open space district. As stated above, those have the same footprint and behave similar to standard mountain bikes (see for example https://currentebikes.com/ebike-classes-california/). I was born in Austria where people love to ride their bikes on the mountains. In Austria there is a peaceful co- existence between electric mountain bikes and standard MTBs. This works because there are strict rules that define which types of electric bikes are allowed to use bicycle infrastructure (watts, maximum speed). I am convinced that California regulations allow the same co-existence here. Please let me know if this topic is already in a decision-making process and if there is a way for me to support this process. Thank you for the great work you do on the open space district. I really enjoy spending my time there! Best, David Wilfinger Attachment 7 -- Cupertino Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 Attachment 7 every trail entrance had a conspicuous No E-Bikes/No Pedal Assist sign. Please look to other trail organizations, such as the Central Oregon Trail Association (I’m sure there are more), to learn more about problems with low-powered, motorized vehicles on trails designed for non-powered use. Thank you for your consideration, and also for your part in supervising the wonderful open spaces in the Bay Area where I’m privileged to refresh mind and body every week. Marian Goldeen Attachment 7 Attachment 7 next to the trail, drives wildlife and other trail users out of the area, and, worst of all, teaches kids that the rough treatment of nature is okay (it's NOT!). What's good about THAT? To see exactly what harm mountain biking does to the land, watch this 5-minute video: http://vimeo.com/48784297. In addition to all of this, it is extremely dangerous: https://mjvande.info/mtb dangerous.htm . For more information: https://mjvande.info/mtbfaq.htm . The common thread among those who want more recreation in our parks is total ignorance about and disinterest in the wildlife whose homes these parks are. Yes, if humans are the only beings that matter, it is simply a conflict among humans (but even then, allowing bikes on trails harms the MAJORITY of park users -- hikers and equestrians -- who can no longer safely and peacefully enjoy their parks). The parks aren't gymnasiums or racetracks or even human playgrounds. They are WILDLIFE HABITAT, which is precisely why they are attractive to humans. Activities such as mountain biking, that destroy habitat, violate the charter of the parks. Even kayaking and rafting, which give humans access to the entirety of a water body, prevent the wildlife that live there from making full use of their habitat, and should not be allowed. Of course those who think that only humans matter won't understand what I am talking about -- an indication of the sad state of our culture and educational system. Attachment 7 Attachment 7 Attachment 7 From: To:Matthew Anderson Subject:Re: FW: For review - draft response: Open the Bike path to Electric Bikes Date:Saturday, September 7, 2019 3:57:08 PM Attachments:image005.png EXTERNAL Thanks Matthew I love that area and have been riding them for over twenty years at least once or twice a month minimum all year around. But over time my knee are wearing out, and I had stopped biking both as commuter and for recreation. Since I have gotten an ebike, I have gotten my bike mobility back and I do ride lot more than before. However I do miss all my favorite trails that are part of the mid peninsula open space reserve. Now I have to go to any California state park which are 45 to an hour away just to ride my mountain e-bike. Ironic that skyline ridge is only 15 minutes away from my house. Looking forward so that I can get back on those trails. Please include me in all notification, presentation or any town hall meetings You can reach me at Pejman Khosropour If u need any other information please let me know Cheers Pejman On Fri, Sep 6, 2019, 3:02 PM Matthew Anderson <manderson@openspace.org> wrote: Hello Pejman, Thank you for your continual interest in electric bikes on trails in Midpeninsula Regional Open Space District (Midpen) preserves. Your email was forwarded to me for a response. I am currently evaluating Midpen policies and ordinances related to the use of e-bikes (class 1, 2, &3) on Midpen lands. I hope to present to the Board of Directors and receive direction by the end of the year. Your participation and comments at the future policy presentation would be welcome. Attachment 7 If you would like to be included in the notification list for this presentation, please let us know and your name and contact information can be added to the interested parties list. On another note, Midpen allows e-bikes for individuals with disabilities under the 2015 Other Power-Driven Mobility Devices Policy which can be found on our website: https://www.openspace.org/sites/default/files/Policy_4.10_Other_Power- Driven_Mobility_Devices.pdf Regards, Matt Anderson Chief Ranger/Visitor Services Manager Matt Anderson Chief Ranger Badge # 1050 manderson@openspace.org Midpeninsula Regional Open Space District 330 Distel Circle, Los Altos, CA 94022 P: Direct (650) 625-6557 P: Main (650) 625-1200 C:(408)209-5902 www.openspace.org From: Pejman Khosropour Sent: Thursday, September 5, 2019 11:07 AM To: General Information <info@openspace.org>; Ana Ruiz <aruiz@openspace.org> Subject: Open the Bike path to Electric Bikes Attachment 7 EXTERNAL Hi Open Space Reseve. I like to know if there are future plans to open to Mid Pennusila Open space reserved Bike Path to Class 1 Electric Bike? If not how do we go about file a petition to do so. Please let me know Thanks Pejman Attachment 7 Attachment 7 brakes (on both e-bikes and non-electric bikes). The rules of common courtesy (as well as the speed limits within the preserves) will result in the vast majority of mountain bikers riding responsibly and sharing the trails without additional user conflicts - the same result as with prior improvements in mountain biking technology. The State of California identifies three classes of e-bikes. Class 1 (Pedal assist) and Class 2 (Throttle operated) are allowed on all bicycle paths in the state (unless otherwise restricted by the local land use manager) and are considered as bicycles in the vehicle code (and not as motorized vehicles - even though an electric motor is included in the bicycle mechanism). The County of Santa Clara has allowed Class 1 & 2 e-bikes in all of their preserves and on all trails open to bicycles. California State Parks and the Department of the Interior (US Park Service/BLM) have allowed e-bikes on bicycle trails as well. I am not aware of any major conflicts that have occurred in these areas as a result of these policy decisions, and would assume that the majority of e-bike riders have been riding responsibly, the same as with non-electric mountain bikes. As e-bikes are a new technology, it is understood that some people may be concerned with potentially higher speeds and a possible increase in trail use conflicts or damage to natural resources. However, mountain bike technology has been improving for decades (allowing faster speeds and ease of riding over rougher terrain) and this is simply another step in that forward trajectory. From my perspective (as a trail user for the past three plus decades), we will not see a substantial increase in trail user conflicts or damage to natural resources if e-bikes are operated responsibly in open space preserves. The formal authorization of pedal assisted e-bike use in MROSD preserves by your Board will allow continued enjoyment of open spaces by people who are aging, injured, or otherwise in need of some additional assistance in climbing. Please consider allowing pedal assisted e-bikes in MROSD preserves. Thank you, R. Adams Attachment 7 Attachment 7 From:Matthew Anderson To:Mike Kahn Cc:Jennifer Woodworth Subject:FW: Volunteer comments/ Board email - Ebikes Date:Wednesday, November 6, 2019 9:48:46 AM From: Strether Smith < Sent: Tuesday, November 5, 2019 3:32 PM To: Jennifer Williams <jwilliams@openspace.org> Subject: Re: Fyi..,ss Outside: Riding an E-Bike Is Not Cheating EXTERNAL I am going to try to get there too.. although the few times I have gone I always have wound up pissed.. Please make sure that I know about it. FYI... Here is a note I sent to Jed: Jed, I have swapped a couple of notes with Jen and she tells me that the E- bike issue will be discussed by the board soon. I thought that you might like to hear my spin on the issue. First, they are already out there. In the past few weeks I have seen 3 in district preserves. All have been in pedal assist mode and were riding responsibly. I am in favor of allowing these bikes. It allows users that might not otherwise be able to (like me who would have one if it were not for balance issues). They also would allow wimps to enjoy the preserves in a new way. The question is how to regulate them. A possibility is to only allow bikes that fall in a "capability type" (1, 2, or 3). However, I think that it will be impossible to restrict them based on this. There are too many makes and too many variations. Some would be fine but others are not. Attachment 7 To illustrate the problem, my neighbor just bought an electric "bike" that is more motorcycle than bike. It has "vestigial" pedals that are obviously to used only in desperation. It will go 50 mph. It has a switch that makes it "class 3" but who would use it? It was obviously designed to be a rule cheater. Fortunately, he has no intention of riding it off road.. but others might. So, how do you keep this monster out of the preserves? Is there a reasonable (and simple) rule based on bike type that is easily applied by the rangers and VTPs? I don't think so. I think the only rule you can use is the one you have already: 15 mph speed limit. In the end, that is really all that matters from a rider and other-user standpoint. Thanks for all you do.. It is appreciated. ..ss Strether Smith Attachment 7