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HomeMy WebLinkAboutItem No. 05 Western Riverside County Regional Conservation AuthorityCity Council Agenda Report City of Lake Elsinore 130 South Main Street Lake Elsinore, CA 92530 www.lake-elsinore.org File Number: ID# 17-351 Agenda Date: 9/26/2017 Status: PassedVersion: 1 File Type: InformationalIn Control: City Council / Successor Agency Agenda Number: 5) Western Riverside County Regional Conservation Authority Independent Accountant's Report for the Fiscal Year 2015-2016 Receive and file. Page 1 City of Lake Elsinore Printed on 6/28/2022 REPORT TO CITY COUNCIL To:Honorable Mayor and Members of the City Council From:Grant Yates, City Manager Prepared by: Nancy Lassey, Finance Administrator Approved by:Jason Simpson, Assistant City Manager Date:September 26, 2017 Subject:Western Riverside County Regional Conservation Authority Independent Accountant’s Report For the Fiscal Year 2015-2016 Recommendation Receive and file the Western Riverside County Regional Conservation Authority Independent Accountant’s Report for the Fiscal Year 2015-2016. Background and Discussion On an annual basis, the Western Riverside County Regional Conservation Authority (RCA) enlists an independent auditing firm to visit City Hall and perform agreed-upon procedures to determine if the City is in compliance with the collection and remittance of fees collected for the Multiple Species Habitat Conservation Plan (MSHCP). The auditing firm typically reviews the City’s documents and reports related to the receipt of MSHCP fees and remittance of fees to RCA for the Fiscal Year. The Independent Accountant’s Report for the Fiscal Year 2015-2016 provided to the City from the auditing firm, Vavrinek, Trine, Day & Co., LLP, presents the purpose, procedures followed, and findings of their audit and delivers favorable results. Fiscal Impact No fiscal impact. Exhibits A: RCA Independent Accountant’s Report for FY 2015-2016 Western Riverside County Regional Conservation Authority Independent Accountants' Report on Applying Agreed -Upon Procedures for the City of Lake Elsinore For the Year Ended June 30, 2016 ur,r,4.1 Vavrinek, Trine, Day & Co., LLP Certified Public Accountants INDEPENDENT ACCOUNTANTS' REPORT ON APPLYING AGREED -UPON PROCEDURES To the Board of Directors Western Riverside County Regional Conservation Authority We have performed the procedures enumerated in Attachment A, which were agreed to by the management of the Western Riverside County Regional Conservation Authority (RCA) (the specified parties) solely to assist you in determining that Multiple Species Habitat Conservation Plan (MSHCP) fees were collected and remitted by the City of Lake Elsinore (City) in accordance with the MSHCP Implementing Agreement and the Joint Exercise of Powers Agreement (JPA creating the RCA dated January 27, 2004) for the fiscal year ending June 30, 2016. The City's management is responsible for the collection and remittance of MSHCP fees. The sufficiency of these procedures is solely the responsibility of the management of the RCA. Consequently, we make no representation regarding the sufficiency of the procedures described in Attachment A either for the purpose for which this report has been requested or for any other purpose. The procedures and associated findings are listed in Attachment A. This agreed -upon procedures engagement was conducted in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an audit or review, the objective of which would be the expression of an opinion or conclusion, respectively, on the collection and remittance of MSHCP fees. Accordingly, we do not express such an opinion or conclusion. 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 management and the Board of the Western Riverside County Regional Conservation Authority and is not intended to be, and should not be, used by anyone other than those specified parties. Riverside, Cak f6rnia, June 14, 2017 19340 Jesse Lane, Suite 260 Riverside, CA 92508 Tel: 951.367.3000 www.vtdcpa.com Fax: 951 367.3010 WESTERN RIVERSIDE COUNTY REGIONAL CONSERVATION AUTHORITY AGREED -UPON PROCEDURES AND FINDINGS — CITY OF LAKE ELSINORE FOR THE YEAR ENDED JUNE 30, 2016 ATTACHMENT A The procedures and associated findings are as follows: 1. Obtain any updates to each Member Agency's ordinance for collection of the Multiple Species Habitat Conservation Plan (MSHCP) fees. Findings — No updates were made by the City. We obtained Ordinance No. 1124 which established the development mitigation fee for funding the preservation of ecosystems in accordance with the MSHCP. 2. Upon obtaining the updates, determine if the ordinance is in accordance with the MSHCP Implementing Agreement and Joint Powers Agreement. Findings — The RCA prepared a model ordinance for the member agencies to be in accordance with the MSHCP Implementing Agreement and JPA. The City ordinance was in agreement with the model ordinance except for the following: • Section 1.I of the City ordinance was not included in the model ordinance which states, "The fee set forth herein does not reflect the entire cost of the lands which need to be acquired in order to implement the MSHCP and mitigate the impact caused by new development. Additional revenues will be required from other sources. The City Council finds that the benefit to each development project is greater than the amount of the fee to be paid by the project." • Section 1.J of the model ordinance was not included in the City ordinance. • Section 11 of the model ordinance requires prior approval by the RCA before granting local development fee credits or waivers, whereas Section 11 of the City ordinance gives the RCA a cooperative role and audit power in granting the fee credits or waivers. 3. Determine if fees on the building permits are collected in accordance with the Member Agency ordinance. Findings — The City ordinance stated that the MSHCP fee must be collected prior to the issuance of the permit. We inspected 51 permits as described in procedure 5. No exceptions were found as a result of this procedure. 4. Obtain the schedule of fees collected on the building permits for the year ended June 30, 2016. Findings — We obtained the schedule from the City identifying the total amounts collected for building permits for the year ended June 30, 2016 was $66,450. These amounts were remitted to the RCA between February 10, 2016 and July 8, 2016. 2 WESTERN RIVERSIDE COUNTY REGIONAL CONSERVATION AUTHORITY AGREED -UPON PROCEDURES AND FINDINGS — CITY OF LAKE ELSINORE FOR THE YEAR ENDED JUNE 30, 2016 ATTACHMENT A Obtain a listing of building permits issued during the year ended June 30, 2016. Identify the new construction and commercial permits. Select for testing 10% of the new construction or commercial building permits, selecting no less than 25 permits or 100% of permits if total permits issued is less than 25. Findings — We obtained the population of 4,285 issued permits for the period from July 1, 2015 through June 30, 2016. From the listing, we identified new construction and commercial permits (identified through the "app" code of "SFR", "INDS", "GRAD", "IP", "SEVT", "STOR", and "ALTC"), identifying a total of 506 permits issued during the year. We haphazardly selected 51 (10%) permits for inspection. Our sample consisted of the following: • Six building permits were subject to the MSHCP fee. ■ Two building permits were exempt under Section 10.13 of the City ordinance as rehabilitation, remodeling, or minor additions to an existing Development Project. • 43 building permits under Section 4.0 of the City's Resolution No. 2004-11 under various development agreements executed and effective prior to the City's adoption of the MSHCP fee ordinance in July 2004, as follows: o The City asserted 16 permits were exempt under the Laing-CP Lake Elsinore LLC development agreement dated December 2002 (development agreement) and the amended and restated developer agreement dated August 2004. The amendment prohibits the imposition of any assessment or fee applicable to the development, except as provided in Section 13.1 of the agreement. The City asserted the MSHCP fee does not meet the requirements of Section 13.1. This matter is currently under review with the RCA, City and legal counsels. o The City asserted 17 permits were exempt under the Pardee-Grossman/Cottonwood Canyon development agreement dated July 1990 (development agreement), the amended developer agreement dated January 2010, and Planning Commission Resolution (resolution) 2009-11 dated February 2009. The original development agreement expired July 9, 2010 and was amended in January 2010 to extend through July 1, 2030. The resolution found that the subdivision was exempt from the MSHCP fee. This matter is currently under review with the RCA, City and legal counsels. o The City asserted five permits were exempt under a Settlement Agreement and Memorandum of Understanding dated February 2004 between the County of Riverside, Pacific Clay Products, Inc., Castle & Cooke Lake Elsinore Outlet Centers, Inc., Castle & Cooke Corona, Inc., Gateway Business Park, LLC, and Murdock Alberhill Ranch Limited Partnership. o The City asserted five permits were exempt under the Rialto Development Corporation development agreement dated June 1990 (development agreement) and the First and Second Memorandum of Understanding (MOU) with White Rock Acquisition Company, LP dated November 2003 and April 2006 (in relation to Rialto development agreement). The Second MOU stipulates that the MSHCP fees for the Development Area have been satisfied. As such, the City asserted the MSHCP fee is not applicable. This matter is currently under review with the RCA, City and legal counsels. We made inquiries of City personnel, inspected building permits and other documentation to support the granting of the exemptions under the City ordinance. Except for the matters currently under review, no exceptions were found as a result of this procedure. WESTERN RIVERSIDE COUNTY REGIONAL CONSERVATION AUTHORITY AGREED -UPON PROCEDURES AND FINDINGS — CITY OF LAKE ELSINORE FOR THE YEAR ENDED JUNE 30, 2016 ATTACHMENT A 6. Recalculate the fees collected by the Member Agency on building permits to determine if they are correct and if the correct amounts have been remitted to the RCA. If fees are incorrect, determine the fees that should have been collected and remitted. Findings — For the sample selected in procedure 5 above, the building permit fees were recalculated and agreed to the amount collected and remitted without exception. 7. Determine if fees collected on building permits were remitted on a timely basis to the RCA. Findings — Per the JPA dated January 27, 2004, all development mitigation fees must be remitted to the RCA within 90 days of the earlier of the date they were collected or should have been collected. No exceptions were found as a result of this procedure. 8. Determine additional amounts, if any, which should be returned to the Member Agency for building permits. Findings — None identified as a result of this procedure. 9. If amounts are due to the RCA on building permits, calculate interest owed, based on the RCA's Resolution No. 07-04 adopted on September 10, 2007, using the interest rate paid by Riverside County Treasury on amounts held by the County. Findings — Not applicable. 10. Obtain a list of all infrastructure and civic contracts awarded by the member Agency during the fiscal year. Findings — We obtained a listing of 20 infrastructure and civic contracts awarded by the City during the fiscal year ended June 30, 2016. 11. Select a sample of 10% of the infrastructure and civic contracts for testing, selecting no less than three contracts, or 100% of contracts if the total number of contracts is less than three. Findings — We haphazardly selected three infrastructure and civic contracts from the list provided. 12. Compute the amount of MSHCP contributions on the infrastructure and civic contracts that should have been remitted. Findings — The City asserted that each of the three contracts selected was exempt. We inspected the contracts, project descriptions, and other supporting documentation summarized as follows: Citywide Pavement Rehabilitation Phase 3, Slurry Seal Phase 2 — The City asserted this project was exempt under Section 1.A.2 of RCA's fee collection and remittance policy as a safety and maintenance project, as defined in Section 7 of the MSHCP. The project consisted of the rehabilitation of various streets within the City's area. The Contractor's scope of work included surface preparation via localized dig -outs (selective removal and replacement of failed asphaltic concrete pavement on multiple streets, slurry seal on most streets), restriping, and re -installation of pavement legends, limit lines, and crosswalks. No exceptions were found as a result of this procedure. WESTERN RIVERSIDE COUNTY REGIONAL CONSERVATION AUTHORITY AGREED -UPON PROCEDURES AND FINDINGS — CITY OF LAKE ELSINORE FOR THE YEAR ENDED JUNE 30, 2016 ATTACHMENT A Parking Lot and Sidewalk Construction of Rosetta Canyon Sports Park Phase II —The City asserted this project was exempt under Section 1.A.2 of RCA's fee collection and remittance policy as a safety and maintenance project, as defined in Section 7 of the MSHCP. The project consisted of the rehabilitation of Rosetta Canyon Sports Park. The Contractor's scope of work included asphalt paving, concrete paving, parking lot painting, vehicle wheel stops, etc., and did not involve any new construction on undeveloped land. The RCA has asserted the project was not exempt as the City previously developed 8 acres of the approximately 22 acres of the park. Fees due would be based on the portion of the project related to the previously undeveloped portions of the park, which cannot be calculated as of the date of this report. As such, this matter is currently under review between the City, the RCA, and legal counsels. Citywide Pavement Rehabilitation Phase 4 — The City asserted this project was exempt under Section 1.A.2 of RCA's fee collection and remittance policy as a safety and maintenance project, as defined in Section 7 of the MSHCP. The project was for the rehabilitation of Lakeshore Drive - Manning to Poe, Lakeshore Drive - Spring Street to Lake Point Park, Poe Street - Lakeshore to Limited. The contract consisted of the surface preparation via localized dig -outs (selective removal and replacement of failed asphaltic concrete pavement), restriping, and re -installation of pavement legends, limit lines, and crosswalks. No exceptions were found as a result of this procedure. 13. Determine if the MSHCP contributions on the infrastructure and civic contracts were remitted to the RCA within 90 days of contract award. Findings — Not applicable. 14. Determine additional amounts on infrastructure and civic contracts, if any, which should be remitted to the RCA or returned to the Member Agency. Findings — Not applicable. 15. If additional amounts are due to the RCA on infrastructure and civic contracts, calculate interest owed, using the interest rate paid by Riverside County Treasury on amounts held by the County. Findings — Not applicable.