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HomeMy WebLinkAbout0004_2_Measure A Report - Exhibit A - Final ReportCentury City Los Angeles Newport Beach Oakland Sacramento San Diego San Francisco Walnut Creek Woodland Hills www.mgocpa.com Macias Gini & O’Connell LLP 4675 MacArthur Court, Suite 600 Newport Beach, CA 92660 1 Independent Accountant’s Report On Applying Agreed-Upon Procedures The Board of Commissioners Riverside County Transportation Commission Riverside, California We have performed the procedures enumerated below, which were agreed to by the Riverside County Transportation Commission (RCTC), solely to assist RCTC in determining whether the City of Lake Elsinore, California (the City), was in compliance with the Measure A Local Streets and Roads Program grant terms and conditions for the fiscal year ended June 30, 2016. The City's management is responsible for the compliance with the grant terms and conditions of the Measure A Local Streets and Roads Program. This agreed-upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. The sufficiency of these procedures is solely the responsibility of those parties specified in the report. Consequently, we make no representation regarding the sufficiency of the procedures described below; either for the purpose for which this report has been requested, or for any other purpose. Our procedures and related findings are as follows: 1. Review the 2009 Measure A (Ordinance 02-001) compliance requirements. Western County jurisdictions are required to participate in the Transportation Uniform Mitigation Fee (TUMF) program and in the Multi-Species Habitat Conservation Plan (MSHCP), which are administered by the Western Riverside Council of Governments (WRCOG) and the Western Riverside County Regional Conservation Authority (RCA), respectively. Coachella Valley jurisdictions are required to participate in the TUMF program administered by the Coachella Valley Association of Governments (CVAG). Indicate participation in TUMF and/or MSHCP programs. Finding: No exceptions were noted as a result of applying this procedure. The City participates in the TUMF program administered by WRCOG and the MSHCP administered by RCA. 2. Obtain from RCTC the approved Five-Year Capital Improvement Plan (CIP) for the fiscal year. Finding: No exceptions were noted as a result of applying this procedure. 3. Obtain from the jurisdiction a detail general ledger and balance sheet for the fiscal year. a. Identify the amount of Measure A cash and investments recorded at the end of the fiscal year. Compare amount to Measure A fund balance and provide an explanation for any differences greater than 25% of fund balance. Finding: Measure A cash and investments were $936,072 at June 30, 2016. The difference between Measure A cash and investments of $936,072 and fund balance of $1,125,781 was $189,709, or 16.9% of the fund balance. 2 b. Identify any amounts due from other funds. Finding: There were no amounts due from other funds at June 30, 2016. c. Identify the components of ending fund balance for the Measure A activity (e.g., nonspendable, restricted, assigned, committed, unassigned) and [for County only] by geographic area. Finding: The ending fund balance for Measure A activity was restricted in the amount of $1,125,781 at June 30, 2016. d. Identify the existence of any restatement of Measure A fund balance; inquire of management as to the reason for any restatement and provide a summary of the restatement items. Finding: We noted no restatement of the Measure A fund balance reported at June 30, 2015. 4. Obtain an operating statement for the Measure A activity for the fiscal year, including budget amounts; include the operating statement as an exhibit to the report. a. Review the revenues in the operating statement. i. Inquire of management as to what fund is used to record Measure A revenues received from RCTC and identify what the total revenues were for the fiscal year. Finding: The City accounts for Measure A revenues in its Measure A Fund (Fund # 112). The City recorded total revenues in the amount of $1,182,808 for the fiscal year ended June 30, 2016 (refer to Exhibit A). ii. Obtain from RCTC a listing of Measure A payments to the jurisdiction. Compare the Measure A sales tax revenues recorded by the jurisdiction to the listing of payments made by RCTC. Finding: We identified a variance of $5,631 between the Measure A revenues recorded by the City and the RCTC Measure A payment schedule. The difference is due to a fiscal year 2015 clean-up adjustment payment from RCTC, in the amount of $28,850, recorded by the City in fiscal year 2016, and a fiscal year 2016 clean-up adjustment payment by RCTC in the amount of $34,481 to be recorded by the City in fiscal year 2017. The following schedule summarizes these differences. RCTC City of Lake Elsinore Measure A revenues recorded 1,168,641$ 1,163,010$ 2015 clean-up adjustment payment - (28,850) 2016 clean-up adjustment payment - 34,481 Measure A revenues reconciled 1,168,641$ 1,168,641$ iii. Obtain from the jurisdiction an interest allocation schedule for the fiscal year. 3 1. Identify the allocation amount of interest income to Measure A activity and what the amount of interest income was for the fiscal year. If no interest was allocated, inquire of management as to reason for not allocating interest income. Finding: The City allocated interest in the amount of $10,018 to Measure A activity for the fiscal year ended June 30, 2016. b. Review the expenditures in the operating statement. i. Inquire of management as to what fund is used to record Measure A expenditures and what the total expenditures were for the fiscal year. Finding: The City accounts for Measure A expenditures in its Measure A Fund (Fund #112). The City recorded total Measure A expenditures in the amount of $987,327 for the fiscal year ended June 30, 2016 (refer to Exhibit A). ii. Select expenditures for testing that comprise at least 20% of the total Measure A expenditures. Finding: The City recorded Measure A expenditures in the amount of $987,327. We selected expenditures in the amount of $209,418 or 21.2%, for testing. 1. For the expenditures selected for testing, compare the dollar amount listed on the general ledger to the supporting documentation. Finding: No exceptions were noted as a result of applying this procedure. 2. For the expenditures selected for testing, review the Five-Year CIP and note if the project is included in the Five-Year CIP and is an allowable cost. Finding: The expenditures selected for testing were included in the Five-Year CIP and were allowable costs. No exceptions were noted as a result of applying this procedure. iii. Inquire of management as to the nature of any transfers in or out recorded in the Measure A Fund. For any transfers out, determine if nature of transfer out was included in the Five-Year CIP. Finding: Per discussion with City management, the City recorded transfers out of the Measure A Fund in the amount of $499,865 to the Total Road Improvement Program (TRIP) Debt Service Fund and $487,462 to the CIP Fund. The transfer to the TRIP Debt Service Fund represents debt service on the 2014A Certificates of Participation (COPs) that is included on the Five-Year CIP. The transfer to the CIP Fund is for projects included in the Five-Year CIP. iv. Inquire of management as to the amount of general or non-project-related indirect costs, if any, included in expenditures. If indirect costs exceed 8% of Measure A revenue, inquire of management as to the basis for indirect costs charged to Measure A. If indirect costs are identified, determine if such costs are included in the Five-Year CIP. Finding: Per discussion with City management, there were no general or non-project-related indirect costs allocated to the Measure A Fund for the fiscal year ended June 30, 2016. 4 v. Inquire of management as to the amount of debt service expenditures recorded in the Measure A fund. Finding: Per discussion with City management, the City recorded transfers out of the Measure A Fund in the amount of $499,865 to the TRIP Debt Service Fund. This transfer represents debt service on the 2014A COPs that is included on the Five-Year CIP. 1. For cities with advance funding agreements with RCTC, compare debt service expenditures to Measure A payments withheld by RCTC. Finding: There was no advance funding agreement with RCTC noted. 2. For cities with other indebtedness, determine if such costs are included in the Five-Year CIP. Finding: The City recorded Debt Service expenditures on the 2014A COPs totaling $499,865 that is included in the Five-Year CIP. 5. Compare the budgeted expenditures to actual amounts; inquire of management as to the nature of significant budget variances. Finding: The following schedule compares budgeted expenditures to actual amounts. Budget Actual Variance Transfers out 1,166,183$ 987,327$ 178,856$ Per discussion with City management, projects not yet started or not yet completed are to continue into fiscal year 2017. 6. Obtain from RCTC a listing of jurisdictions who participate in the Western County or Coachella Valley TUMF programs. a. If the jurisdiction is a participant in the TUMF program, select at least one disbursement for validation as to the amount remitted to WRCOG or CVAG, as applicable. Finding: We selected one disbursement in the amount of $186,333. The payment selected for testing indicated that TUMF was collected and remitted to WRCOG, as required. b. Indicate the total amount of TUMF fees collected and remitted during the fiscal year. Finding: The total amount of TUMF fees collected and remitted during the fiscal year ended June 30, 2016, was $2,362,183. 7. Obtain from RCTC a listing of jurisdictions who participate in the Western County MSHCP program. a. If the jurisdiction is a participant in the MSHCP program, select at least one disbursement for validation as to the amount remitted to RCA, as applicable. 5 Finding: We selected one disbursement in the amount of $32,428. The payment selected for testing indicated that MSHCP was collected and remitted to RCA, as required. b. Inquire of management as to the existence of any fees collected in prior years and not remitted to RCA as of the end of the fiscal year. Finding: Per discussion with City management, there were no fees collected in prior years and not remitted to RCA as of the end of the fiscal year. c. Indicate the total amount of MSHCP fees collected and remitted during the fiscal year. Finding: The total amount of MSHCP fees collected and remitted during the fiscal year ended June 30, 2016, were $68,134 and 68,178, respectively. The difference of $44 was due to fees in the amount of $44 being remitted but uncollected. The fees have been billed by Accounts Receivable. 8. Obtain from RCTC the Maintenance of Effort (MOE) base year requirement, including supporting detail of the calculations for the City, and the carryover amount allowed as of the beginning of the fiscal year. a. Obtain from the City a calculation of its current year MOE amount in the format similar to its base year calculation. Attach a copy of the calculation worksheet provided by the City as an exhibit to the report. Finding: No exceptions were noted as a result of applying this procedure. Refer to Exhibit B for a copy of the City’s MOE calculation. b. Compare the current year MOE amounts from the General Fund to the general ledger. Finding: No exceptions were noted as a result of applying this procedure. c. Review the General Fund general ledger to determine if there were any transfers in to fund any MOE amounts. Finding: No transfers in were noted as a result of applying this procedure. d. Compare the amount of current year MOE expenditures to the MOE base requirement and add any excess to, or subtract any deficiency from, the carryover amount. Finding: We noted that current year MOE expenditures of $3,395,420 were greater than the MOE base requirement of $960,771 resulting in an excess MOE of $2,434,649 for the fiscal year ended June 30, 2016. e. If the amount of discretionary funds spent is less than the MOE base requirement (MOE deficiency), determine the amount of any prior year MOE carryover using the information obtained from RCTC, and reduce the MOE deficiency by any available MOE carryover to determine an adjusted current year expenditure amount. Finding: No exceptions were noted as a result of applying this procedure. The City’s discretionary funds spent during the fiscal year ended June 30, 2016 exceeded the MOE base year requirement. The City’s MOE carryover at June 30, 2016 is calculated as follows: 6 MOE excess at July 1, 2015 5,649,772$ Current year MOE expenditures 3,395,420 Less: MOE base year requirement (960,771) MOE excess for the fiscal year ended June 30, 2016 2,434,649 MOE excess at June 30, 2016 8,084,421$ We were not engaged to and did not conduct an examination, the objective of which would be the expression of an opinion on the City’s compliance with the grant terms and conditions of the Measure A Local Streets and Roads Program. Accordingly, we do not express such an opinion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you. This report is intended solely for the information and use of the Board of Commissioners and management of RCTC and the City Council and management of the City of Lake Elsinore and is not intended to be and should not be used by anyone other than these specified parties. Newport Beach, California December 27, 2016 Exhibit A 7 CITY OF LAKE ELSINORE, CALIFORNIA Measure A Operating Statement For the Fiscal Year Ended June 30, 2016 (Unaudited) Budget Actual Variance Revenues: Measure A 1,159,000$ 1,163,010$ 4,010$ GASB 31 - 9,780 9,780 Investment earnings - 10,018 10,018 Total revenues 1,159,000 1,182,808 23,808 Expenditures: Transfers out 1,166,183 987,327 178,856 Excess (deficiency) of revenues over (under) expenditures (7,183)$ 195,481$ 202,664$ Exhibit BFY 2015-2016 ACTUAL EXPENDITURES FOR THE 16/17 BASE CALCULATION RECAPPROJECT DESCRIPTION FY 15/16 TOTAL COST GENERAL FUNDGENERAL FUNDSTATE COUNTY MEASURE AMEASURE ACITY CITY CITY CITY CITY OTHER OTHERCONSTRUCTION: Fund 100 Fund 105 Fund 110 Gas Tax Fund 111 TUMF Fund 112 Measure A Fund 113 TDA Article 3 Fund 121 Total Road Improvement Program Fund 130 LLMD Fund 135 LLMD-1 Fund 155 NPDES Fund 204 Signal Fund 205 TIF Fund 605 Public Improvement In-Lieu Fund 606 Mobile Air Source Polution #4227 I-15/ RAILROAD CANYON ULTIMATE INTERCHANGE PHASE 1 87,423$ -$ 39,297$ -$ -$ 48,125$ -$ -$ #Z10015 I-15/STATE ROUTE 74 INTERCHANGE 5,670 5,670 MAINTENANCE:#Z10001 ANNUAL CITYWIDE CURB, GUTTER, & SIDEWALK IMP 16,636 16,636 #Z10004 ANNUAL CITYWIDE TRAFFIC STRIPING PROGRAM 54,586 43,674 10,912 #Z10005 ANNUAL CITYWIDE SIDEWALK PROGRAM 21,333 21,333 #Z10008 CITYWIDE PAVEMENT REHABILITATION PROGRAM 2,857,056 117,341 2,739,714 #Z10010 ANNUAL CITYWIDE SIDEWALK IMPROVEMENTS 36,335 - 36,335 #Z10014 ANNUAL CITYWIDE SLURRY SEAL PROGRAM 235,674 235,674 FUND 100 MAINTENANCE 3,356,123 3,356,123 FUND 110 MAINTENANCE 1,525,214 1,525,214 FUND 111 MAINTENANCE 19,268 19,268 FUND 112 MAINTENANCE 495,302 495,302 FUND 113 MAINTENANCE - - FUND 121 MAINTENANCE 814,650 814,650 FUND 130 MAINTENANCE 1,357,375 1,357,375 FUND 135 MAINTENANCE 214,183 214,183 FUND 155 MAINTENANCE 143,858 143,858 FUND 204 MAINTENANCE 805 805 FUND 205 MAINTENANCE 119,319 119,319 FUND 211 MAINTENANCE - FUND 605 MAINTENANCE 3,967 3,967 FUND 606 MAINTENANCE 6,000 6,000 ADMINISTRATIVE OVERHEAD NOT ALLOCATED TO SPECIFIC PROJECT(S):Expenditure Totals 11,370,774$ 3,356,123$ 39,297$ 1,568,888$ 19,268$ 987,327$ -$ 3,554,364$ 1,357,375$ 214,183$ 143,858$ 805$ 119,319$ 3,967$ 6,000$ Deductions for Special Consideration (Deductions Must Also Be Included in Project Expenditures Above): TOTAL PROJECT COSGENERAL FUNDGENERAL FUNDConstruction:-$ -$ -$ Maintenance:-$ -$ -$ Engineering/Administrative Overhead Not Allocated to Specific Projects: $ - $ - $ - Total Deductions-$ -$ -$ Total GF Expenditures3,356,123$ 39,297$ Less: Deductions- - MOE Base Year 3,356,123$ 39,297$ MOE base year requirement960,771 MOE excess for fiscal year ended June 30, 20162,434,649$ FUNDING BREAKDOWNCITY OF LAKE ELSINORE, CALIFORNIAMOE CalculationFor the Fiscal Year Ended June 30, 2016(Unaudited) 8