LAFCO

Central Valley Cemetery District Service Area Plan

Local Agency Formation Commissions · imperial-msr-2016-central-valley-cemetery-district-service-area-plan · Msr · 2016-01-01

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Executive Officer LOCAL AGENCY FORMATION COMMISSION Jurg Heuberger, CEP E R OUN EXECUTIVE OFFICER'S REPORT To The Local Agency Formation Commission TO: Commissioner MARIA NAVA-FROELICH [City] Commissioner [Supervisor] MICHAEL KELLEY(Chair) Commissioner JASON JACKSON [City] Commissioner RAY CASTILLO [Supervisor] [Public] Commissioner DAVID WEST (Vice-Chair) Alt Commissioner JACK TERRAZAS [Supervisor] Alt Commissioner JIM PREDMORE [City] Alt Commissioner RALPH MENVIELLE [Public] REPORT DATE: May 1, 2016 FROM: Jurg Heuberger, AICP, CEP, Executive Outcore PROJECT: Central Valley Cemetery District (CVCD) Sphere of Influence (SOI) update and Service Area Plan (SAP)/Municipal Services Review (MSR) HEARING DATE: May 26, 2016 TIME: 9:05 AM AGENDA ITEM NO: 16 HEARING LOCATION: El Centro City Council Chambers, 1275 Main Street, El Centro, CA RECOMMENDATION(S) EXECUTIVE OFFICER BY THE (In Summary & Order) OPTION #1: Approve the proposed Sphere of Influence (SOI) and the Service Area Plan/MSR update as presented by the Executive Officer. OPTION #2: Approve the proposed Sphere of Influence (SOI) and Service Area Plan/MSR update as requested with modifications, following the hearing by the Commission. OPTION # 3: Continue the hearing for not to exceed 70 days, (end date August 15, 2016). OPTION # 4: Deny the Sphere of Influence and Service Area Plan update, and provide direction to the District and EO for corrections. 1122 STATE STREET, SUITE D, EL CENTRO, CA 92243 (760)-353-4115 www.iclafco.com e-mail: jurgh@iclafco.com An equal opportunity employer Project Data: DATA & FACTS: Project ID CVCD 1-16 Project Name: Central Valley Cemetery District Sphere of Influence and Service Area Plan Update (SAP)/MSR Applicant/Proponent: Central Valley Cemetery District Application Type: LAFCO requested update Application Filed: N/A (LAFCO Direction) Certificate of Filing: N/A Area/Size: See Plan Location/Legal: Maps of the District Boundary and the SOI are included in this report. Population: NA Proposed Project: Service Area Plan (SAP) / Municipal Services Review (MSR) Update. MSR/SAP: The most recent version of the Central Valley Cemetery District MSR/SAP is 2006. TAX AGREEMENT: Board of Supervisors Action: N/A City Resolution: N/A (will be required upon notification by LAFCO) Tax Split: N/A CEQA: LAFCO Lead Agency: Documentation: Exempt JH\DEB\S\LAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\EO Report Central Valley Cemetery District SAP Update 5 1 16.docx ANALYSIS Legal Requirements (Historical information): l: Cortese-Knox-Hertzberg Reorganization Act of 2000 (CKH), also referred to as Government Code 56000 et Seq., provides the legal basis for the requirement of the Sphere of Influence and the Service Area Plan or Municipal service Review (MSR) being considered within the scope of this hearing. G.C. § 56425 (a) states in part; "In order to carry out its purposes and responsibilities for planning and shaping the logical and orderly development and coordination of local governmental agencies so as to advantageously provide for the present and future needs of the county and its communities, the commission shall develop and determine the sphere of influence of each local governmental agency with the county and enact policies designed to promote the logical and orderly development of areas within the sphere." G.C. § 56425 (b - i) provide the frame work within which the Commission may approve the sphere of influence and the process that needs to be followed. G.C. § 56425 (e) states in part; "In determining the sphere of influence of each local agency, the commission shall consider and prepare a written statement of its determination with respect to each of the following: The present and planned land uses in the area. (1) The present and probable need for public facilities and services in the area. (2) The present capacity of public facilities and adequacy of public services that the agency provides (3) or is authorized to provide. The existence of any social or economic communities' of interest in the area if the commission (4) determines that they are relevant to the agency. G.C. § 56425 (f) is a critical new section that changed the parameters of the prior review insofar that this section now requires that; "Upon determination of a sphere of influence, the commission shall adopt that sphere, and shall review and update, as necessary, the adopted sphere not less than once every five years". There appears to be a misconception that the agencies will have to prepare a full new plan every five years, however the intent here is to "review" the prior plan and to amend it if necessary. If there have been significant changes, or if there has been explosive growth, then certainly the amendment will be much more comprehensive. G.C. § 56428 (a) provides the mechanism for anyone to file a request with the executive officer for an amendment to the sphere of influence. It states in part; "Any person or local agency may file a written request with the Executive Officer requesting amendments to a sphere of influence or urban service area adopted by the commission..." Again there may be some confusion in this area as there have been numerous questions about the "limitations" of the sphere and the process to amend. It appears clear that the mandate is to review the plan at least every five years but there is no apparent restriction on the number of times that it may be amended nor is there a restriction on who can request such an amendment, there is only a process that needs to be followed. It goes without saying however that for an amendment to work it need the consensus of the City/District, the County and the Commission. Just as there are provisions for the addition of areas to a sphere of influence there are provisions for a process to remove an area from an approved sphere boundary. This is found in G.C. 56429. In addition to the SOI process G.C. § 56430 (a - d) now addresses the requirement for the review of municipal services which in our case has been referred to for nearly a decade as the Service Area Plan (SAP). JHIDEBIS ILAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\EO Report Central Valley Cemetery District SAP Update 5 1 16 docx G.C. § 56430 (a) states; "In order to prepare and to update spheres of influence in accordance with Section 56425, the Commission shall conduct a service review of the municipal services provide in the county or other appropriate area designated by the commission. The commission shall include in the area designated for service review the county, the region, the sub region, or any other geographic area as its appropriate for an analysis of the service or service to be reviewed and shall prepare a written statement of its determination with respect to each of the following: 1) Infrastructure needs or deficiencies. 2) Growth and population projections for the affected area. 3) Financing constraints and opportunities. 4) Cost avoidance opportunities. Opportunities for rate restructuring. 5) Opportunities for shared facilities 6) 7) Governmental structure options, including advantages and disadvantages of consolidation or reorganization of service providers. Evaluation of management efficiencies 8) 9) Local accountability and governance." G.C. § 56430 (d) also required that the Office of Planning and Research of the State, in consultation with the commissions, and the California Association of LAFCO's and other governmental agencies, SHALL prepare a comprehensive set of guidelines for service reviews by July 1, 2001. Since these guidelines are voluminous a full text copy is not attached to the report however there is a PDF copy on the CD rom that has been provided to each commissioner and every interested party. Furthermore, the Executive Officer has urged the various entities to utilize the "draft final" version as a guide to preparing the SOI and SAP. II: The PLAN as submitted: The District is a Cemetery District that provides a limited service to areas within Imperial County. The review in this case as is/was the case in a number of other smaller districts pursuant to the direction of LAFCO focused primarily on the financial viability of the District. Insofar as this is a limited purpose District the services provided appear to be and have been provided adequately for the most part. The financials for the District as per the attached also show that it is financially stable. District Approvals: III: The District will need to accept the LAFCO approval of the SOI/MSR/SAP via a resolution to include any and all recommendations. IV: CEQA: It is argued and it is the Executive Officers opinion that the Service Area Plan fit within one or more "exemptions" under the provisions of CEQA, not the least of which is the possible determination that this process is "not a project". JH\DEB\S\LAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\EO Report Central Valley Cemetery District SAP Update 5 1 16 docx ٧: Analysis by the Executive Officer / Determinations by the COMMISSION: G.C. § 56425 (e) states in part; "In determining the sphere of influence of each local agency, the Commission shall consider and prepare a written statement of its determination with respect to each of the following: The present and planned land uses in the area. (1) The present and probable need for public facilities and services in the area. (2) The present capacity of public facilities and adequacy of public services that the agency provides (3) or is authorized to provide. The existence of any social or economic communities of interest in the area if the commission (4) determines that they are relevant to the agency. Proposed findings by the Commission: 1) The present land use within the boundaries of the proposed SOI/SAP includes urban and predominately agricultural. The District provides only Cemetery related services. 2) Currently the services provided are according to the audited financial information being supplied in a financially stable and adequate manner. (See audited financial information attached). There are no known social or economic communities of interest relevant to this review. 3) VI: Public Notice: Public notice for the proposed project hearing before the Imperial County Local Agency Formation Commission has been given, according to Section § 56427. Notice was issued in the form of a publication in the IV Press at least twenty-one (21) days prior or said hearing, and posted on our webpage. VII: Report: In accordance with Section § 56665, the Executive Officer has prepared a report, and presented said report to your Commission and to any public member requesting such report. In addition, a copy of said report has been issued to the Central Valley Cemetery District and any party requesting a copy. VIII: Conflict of Interest Statement: To date (at the writing of this report, May 1, 2016) no Commissioner has indicated that there is any conflict of interest with regard to this project, nor has any Commissioner reported any communications with the Applicant, Proponent or Opponent. The Commissioners will be asked to declare that during and prior to the public hearing. The Executive Officer does not have any type of known conflict of interest or financial gain as a result of this project and owns no property in the vicinity. JH\DEB\S \LAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\EO Report Central Valley Cemetery District SAP Update 5 1 16 docx EXECUTIVE OFFICERS RECOMMENDATION RECOMMENDATION: It is the recommendation of the Executive Officer that LAFCO conduct a public hearing and consider all information presented in both written and oral form. The Executive Officer then recommends, assuming no significant public input warrants to the contrary, that LAFCO take the following action: 1: Certify that the Service Area Plan is exempt from CEQA. 110 Make the finding that this Sphere of Influence and Service Area Plan (SAP)/ Municipal Service Review (MSR) is in substantial compliance with the provisions of the Cortese-Knox-Hertzberg Reorganization Act of 2000 and the Imperial LAFCO Policy and Procedures. III: Make the findings pursuant to Government Code Section § 56425 that: The Service Area Plan has been reviewed by the Executive Officer and the Commission and the District has the capacity and ability to provide services within the area. b. The Service Area Plan for the District shows it to be operating its service in a financially sound manner. The Sphere of Influence currently adopted remains adequate for the District and no annexations or changes to the boundary have occurred since the prior SAP review. IV: The Commission finds that, the present land uses within the boundaries of the District are urban and predominately agricultural and the District provides only Cemetery related services. The Commission finds that, there are no known social or economic communities of interest in the areas. Since there have been no protests received, the Commission adopts and approves the current Sphere of V: Influence Boundary as previously reviewed and approved. LAFCO Policy: The proposed Sphere of Influence and Service Area Plan appears to be consistent with the Cortese-Knox- Hertzberg Reorganization Act of 2000, the Imperial LAFCO Policies and Procedures and the County of Imperial General Plan (Chapter IV. B. of LAFCO's Policies, Standards and Procedures). Furthermore, the District has (according to the Service Area Plan) the ability to supply the necessary public service, and has assured LAFCO that it has the capacity to service the areas. NOTE: All "cc" submittals are the Executive Officer's Report only. Attachments are generally too voluminous and are only supplied on CD. Information about the project may also be found on the LAFCO web page at www.iclafco.com. Central Valley Cemetery District CC: ATTACHMENTS: EXHIBIT A - Audited Financial Information EXHIBIT B - Current Sphere of Influence Boundary Map JH\DEB\S.\LAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\EO Report Central Valley Cemetery District SAP Update 5 1 16 docx EXHIBIT A Audited Financial Information CVCD 1-16 CENTRAL VALLEY CEMETERY DISTRICT FINANCIAL STATEMENTS (WITH INDEPENDENT AUDITOR'S REPORT) AS OF AND FOR THE YEAR ENDED JUNE 30, 2015 <math display="block">\, \, \, \, \, \, \, \, \, \, \, \, \, \, \, \, \, \, \, </math> + 7.1 E Opened. George J. Woo Certified Public Accountant INDEPENDENT AUDITOR'S REPORT To the Board of Directors Central Valley Cemetery District El Centro, California I have audited the accompanying financial statements of Central Valley Cemetery District, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively compromise the financial statements. Management's Responsibility for the Financial Statements 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 My responsibility is to express an opinion on these financial statements based on my audit. I conducted the audit in accordance with auditing standards generally accepted in the United States of America and the State Controller's minimum audit requirements for California Special District. Those standards require that I 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 entity'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 entity's internal control. Accordingly I express no such -1 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. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. 1085 State Street • El Centro, California 92243 • (760) 337-5555 • Fax 337-8796 E-mail address gjwcpa@sbcglobal.ñel Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the governmental and non-expendable trust fund of Central Valley Cemetery District as of June 30, 2015, and the changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America as well as accounting systems prescribed by the State Controller's Office and state regulations governing special districts. Other Matters Accounting principles generally accepted in the United States of America require that the management's discussion and analysis on pages 3 through 8 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. I 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 my inquiries, the basic financial statements, and other knowledge I obtained during my audit of the basic financial statements. I do not express an opinion or provide any assurance on the information because the limited procedures do not provide me with sufficient evidence to express an opinion or provide any assurance. - I woo October 13, 2015 CENTRAL VALLEY CEMETARY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2015 The discussion and analysis of the financial performance of the Central Valley Cemetery District (the "District") provides an overview of the District's financial activities for the year ended June 30, 2015. The intent of this discussion and analysis is to look at the District's financial performance as a whole, users of these financial statements should read this discussion. Financial Highlights The assets of the District exceeded its liabilities at the close of the 2014-2015 fiscal year by $4,608,823 (Net Assets) an increase of $76,509. Unrestricted Net Assets are $ 3,568,429 a decrease of $ 257,432 in Unrestricted Net Assets. The District's non-expendable trust assets exceeded its liabilities at the close of the fiscal year $ 1,213,974 during the current fiscal year, an increase of $ 9,810 in comparison to prior year. As of June 30, 2015, the District's governmental funds reported total ending fund balance of $3,838,829, an increase of $12,868 in comparison with the prior year. See further discussion in Financial Analysis of the District's Funds on Page 5. Overview of the Financial Statements The Discussion and analysis is intended to serve as an introduction to the District's basic financial statements. These statements are organized so that readers can understand the District as a financial whole or as an entire operating entity. The District's basic financial statements are comprised of two components: 1) Government-wide financial statements and fund financial statements and 2) Notes to the financial statements. This report also contains other supplementary information in addition to the financial statements themselves. 1. Government-wide Financial Statements The government-wide financial statements are designed to provide readers with a broad overview of the District's finances, in a manner similar to a private-sector business. The Statement of Net Assets presents information on all of the Districts assets and liabilities, with the difference between the two reported as net assets. Over time, increases and decreases in net assets may serve as a useful indicator of whether the financial position of the District is improving or deteriorating. CENTRAL VALLEY CEMETARY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2015 The statement of activities presents information showing how the Districts net assets changed during the most recent fiscal year. All changes in net assets are reported as soon as revenues and expenses reported in this statement for some items, will only result in cash inflows and outflows in future fiscal years. Both the Statement of Net Assets and the Statement of Activities distinguishes between activities that are primarily financed with taxes and revenues (governmental activities). The District's governmental activities include general government and public service activities. 2. Fund Financial Statements Governmental funds are used to account for activities that are similar in nature to the governmental activities in the government-wide financial statements. However, unlike the government wide financial statements, the governmental fund financial statements focus on near-term inflows and outflows of spendable resources available at the end of the fiscal year. Such information may be used in evaluating Central Valley Cemetery District's near-term financing requirements and available resources. Because the focus of governmental funds is narrower than that of the government- wide financial statements, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. This will allow readers to get a better understanding of the long-term impact of the government's near-term financing decisions. Both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures and changes in fund balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities. The basic governmental fund financial statements and the government-wide financial statements are presented on pages 9 through 11 of this report. Fiduciary funds are used to account for resources held by the endowment care fund, the purpose of which is to provide for the long term care of the District's grounds and maintenance. Endowment care principle is restricted for use by law, only the income earned from the principle may be used for long-term care. The basic fiduciary fund statements are presented on pages 12 through 14. CENTRAL VALLEY CEMETARY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2015 3. Notes to the Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in both government-wide and fund financial statements. The notes to the financial statements are presented on pages 15 through 23 of this report. Government-wide Financial Analysis Net assets may serve over time as a useful indicator of a government's financial position. In the case of the District, assets exceeded liabilities by $ 4,608,823 (see Table 1) at the close of the current fiscal year an increase of $ 76,509 as compared with the prior year. A portion of the Districts net assets, $ 1,040,394, reflects its investments in capital assets (e.g. land, structures and improvements, vehicles, furniture and equipment). The District uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. During the current fiscal year, the District designated a total of $ 350,000 as restricted net assets. The remaining balance of total net assets is $ 3,218,429, which is considered unrestricted and may be used by the District. At the end of the current fiscal year, the District as a whole and for its governmental activities reported positive balances in net assets. Table 1 - District's Net Assets For the Years Ended June 30, 2015 and 2014 Governmental Activities 2015 2014 Current Assets and Other Assets 3,838,829 $ 4,089,298 Capital Assets 1,040,394 706,353 Total Assets 4,879,223 4,795,651 Current and Other Liabilities 270,400 263,337 Total Liabilities 270,400 263,337 Net Assets Invested in Capital Assets, Net of Related Debt 1,040,394 706,353 Restricted 350,000 -0- Unrestricted 3,218,429 3,825,861 Total Net Assets 4,608,823 $ 4,532,314 CENTRAL VALLEY CEMETARY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2015 As shown in Table 2, the District's net assets increased by $ 76,509 during the current fiscal year and increased by $ 559,901 in the prior year. Table 2 – District's Changes in Net Assets For the Years Ended JUNE 30, 2015 and 2014 Governmental Activities 2015 2013 Revenues Revenues Program Charges for Services $ 411,474 351,592 S General Revenues Property Taxes 658,374 682,261 Adjustment for Fair Value of Investments 146,074 (214,588) Interest 44.070 114,662 Total Revenue 899,330 1,294,589 Expenses Personal Services 410,419 391,645 Material and Services 383,359 383,681 Depreciation 30,967 32,312 Total Expenses 825,067 773,413 Increase in net assets before transfers 74,263 521,176 Transfers in 2,246 38,725 Increase in Net Assets 76,509 559,901 Governmental Activities Governmental activities increased the District's net assets by $ 76,509 for fiscal year June 30, 2015 as compared with a increase of $ 559,901 in the prior year. Key elements of this decrease are due to the fact that during the year the fair value of investments decreased $ 214,588. Other factors are noted below: Total revenue for the District's governmental activities decreased 30% in comparison with the prior period. CENTRAL VALLEY CEMETARY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2015 Total expenses for governmental activities increased 7% in comparison with the prior period. Financial Analysis of the Government's Funds As noted earlier, the District uses fund accounting to ensure and demonstrate compliance with finance related legal requirements. Governmental Funds The focus of the District's governmental funds is to provide information on near- term inflows, outflows, and balances of spendable resources. Such information is useful in assessing the District's financing requirements. In particular, unreserved fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year. At June 30, 2015, the District's governmental funds reported a total fund balance of $4,608,823 a 2% increase in comparison with the prior year. The General Fund is the only operating fund of the District. As of June 30, 2015, unreserved fund balance of the General Fund was $ 3,568,429. As a measure of the General Funds' liquidity, it may be helpful to compare both unreserved fund balance and fund balance to total fund expenditures. Unreserved fund balance represents 433% of total General Fund expenditures. Revenues for governmental functions totaled $ 899,330 for the fiscal year ended June 30, 2015, a decrease of $ 395,259 compared with the prior year. General Fund Budgetary Highlights The District did not amend its original budget after it was adopted by the board. For a budget to actual comparison see page 11. Capital Assets. As of June 30, 2015, the District's investment in capital assets for its governmental activities amounted to $ 1,040,394 (net of accumulated depreciation). The investments in capital assets are land, structures and improvements, vehicles, furniture and equipment. CENTRAL VALLEY CEMETARY DISTRICT MANAGEMENT'S DISCUSSION AND ANALYSIS JUNE 30, 2015 Table 3 – The District's Capital Assets (Net of accumulated depreciation) As of As of June 30, 2014 Additions Reclassify Depreciation June 30, 2015 Automobiles $ 13,754 $ -0- $ 5,324) $ -0- ($ 8,430 Buildings and 88,003 195,960 Structures 72,741 (6,817) 349,887 Machinery and Equipment 48,514 -0- -0- (17,069) 31,445 193,198 Land -0- -0- -0- 193,198 362,884 169,048 (72,741) (1,757) Improvements 457,434 Total $365,008 $ 706,353 $ -0- ($30,967) 1,040,394 Current year's depreciation expense for the fiscal year ended June 30, 2015 is $ 30,967. Requests for Information This financial report is designed to provide our citizens, creditors and investors with a general overview of the District's finances and to demonstrate the District's accountability for the money it receives. If you have any questions about this report or need additional financial information, you may contact Mr. Charles L. Jernigan, Superintendent, at (760) 352-1468. FINANCIAL SECTION CENTRAL VALLEY CEMETERY DISTRICT STATEMENT OF NET ASSETS AND GOVERNMENTAL FUND BALANCE SHEET AS OF JUNE 30, 2015 General Statement Fund of Net Assets Adjustments ASSETS Cash and investments $ 3,452,131 $ 3,452,131 -0- S Cash and investments-restricted 350,000 350,000 Prepaid insurance 36,698 36,698 Capital assets, net of accumulated depreciation -0- 1,040,394 1,040,394 $ 3,838,829 $ 1,040,394 4,879,223 $ LIABILITIES AND FUND EQUITY LIABILITIES Accounts payable $ 8,784 $ $ -0- 8,784 Pension payable 29,537 -0- 29,537 Compensated absences payable 232,079 -0- 232,079 270,400 $ $ -0- 270,400 FUND BALANCE / NET ASSETS Fund balance - restricted 350,000 (350,000) -0- Fund balance - unrestricted 3,218,429 (3,218,429) -0- 3,568,429 (3,568,429) -0- $ 3,838,829 $ (3,568,429) $ 270,400 Net Assets Investments in capital assets, net of accumulated depreciation and related debt -0- 1,040,394 1,040,394 Restricted -0- 350,000 350,000 Unrestricted -0- 3,218,429 3,218,429 Total net assets -0- 4,608,823 4,608,823 $ $ $ The notes to financial statements are an integral part of these statements. CENTRAL VALLEY CEMETERY DISTRICT STATEMENT OF ACTIVITIES AND GOVERNMENTAL FUND REVENUES. EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE FISCAL YEAR ENDED JUNE 30, 2015 General Statement Fund Adjustments of Activities Expenditures/expenses Capital Improvements 365,008 $ (365,008) $ -0- $ Personal Services 410,419 -0- 410,419 Materials and Services 383,681 -0- 383,681 Depreciation -0- 30,967 30,967 Total expenditures 1,159,108 (334,041) 825,067 Revenues Charges for Services 381,874 381,874 -0- Net Expense (334,041) (777, 234) (443, 193) General Revenues Adjustment for Fair Value of Investments (214,588) -0- (214,588) Property Taxes 658,374 -0- 658,374 Interest 44,070 -0- 44,070 Operating transfers in 31,846 -0- 31,846 Total general revenues and transfers 519,702 -0- 519,702 Excess of Revenues & Transfers in Over Expenditures and Transfers Out (257,532) 334,041 76,509 Change in Net Assets -0- -0- -0- Fund Balance July 1, 2014 3,825,961 706,353 4,532,314 Fund Balance June 30, 2015 $ 3,568,429 $ 1,040,394 $ 4,608,823 The notes to financial statements are an integral part of these statements CENTRAL VALLEY CEMETERY DISTRICT STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES-BUDGET AND ACTUAL - GENERAL FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Variance - Favorable (Unfavorable) Budget Actual Revenues 155,737 Property Taxes 502,637 658,374 $ S $ 70,899 44,070 Interest Income (26,829) 423,926 411,474 Cemetery Revenue (12,452) Adjustment for Fair Value of Investments -0- (214,588) (214,588) 997,462 899,330 (98, 132) Expenditures Advertising -0- 30,196 (30, 196) 4,000 Bank Charges 4,133 (133) 137,962 Capital Improvements 365,008~ (227,046) 1,360 Clothing and Personal Supplies 4,000 2,640 10,000 11,054 Communications (1,054) Employee Benefits and Retirement 63,000 44,515 18,485 Fuel 25,000 13,407 11,593 Household Expense 3,500 1,000 2,500 Insurance 90,000 90,850 (850) Legal and Accounting 10,000 8,876 1,124 Maintenance - Building and Grounds 35,000 52,193 (17,193) Maintenance - Equipment 60,000 10,288 49,712 Memberships 2,000 1,190 810 Miscellaneous Expenses 4,000 40 3,960 Office Expense 15,000 9,605 5,395 Payroll Expenses 42,000 37,960 4,040 Safety Training 3,000 206 2,794 Salaries 400,000 410,419~ (10,419) Supplies 60,000 51,264 8,736 Info Technology -0- 10,000 10,000 Transportation and Travel 1,000 155 845 Utilities 18,000 14,109 3,891 997,462 1,159,108 (161,646) Excess of Revenues Over Expenditures -0- (259,778) (259,778) Other Financing Sources: Operating Transfers In (Out) -0- 2,246 2,246 Excess of Revenues and Other Financing Sources Over Expenditures -0- (257,532) (257,532) Fund Balance July 1 3,825,961 3,825,961 -0- Fund Balance June 30 $ 3,825,961 $ 3,568,429 (257,532) $ The notes to financial statements are an integral part of these statements CENTRAL VALLEY CEMETERY DISTRICT STATEMENT OF NET ASSETS NON-EXPENDABLE TRUST FUND AS OF JUNE 30, 2015 ASSETS Cash & Investments 1,213,974 $ 1,213,974 $ LIABILITIES AND NET ASSETS Net Assets Restricted 1,213,974 $ 1,213,974 $ The notes to financial statements are an integral part of these statements CENTRAL VALLEY CEMETERY DISTRICT STATEMENT OF CHANGES IN NET ASSETS NON-EXPENDABLE TRUST FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Additions: 12,056 $ Investment Income and Appreciation Endowment Care Principle 29,600 Total Additions 41,656 Deductions: Operating Transfers Out 31,846 Total Deductions 31,846 Change in Net Assets 9,810 Net Assets - July 1, 2014 1,204,164 Net Assets - June 30, 2015 1,213,974 $ The notes to financial statements are an integral part of these statements CENTRAL VALLEY CEMETERY DISTRICT STATEMENT OF CASH FLOWS NON-EXPENDABLE TRUST FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2015 Cash Flows from Operating Activities Cash received from endowment care principle 29,600 $ Interest Income and investment appreciation 12,056 Net Cash Provided by Operating Activities 41,656 Cash Flows from Capital and Related Financing Activities Operating Transfers Out 31,846 Net cash used by capital and financing activities 31,846 Increase in Cash and Cash Equivalents 9,810 Cash and Cash Equivalents - Beginning of Year 1,204,164 Cash and Cash Equivalents - End of Year 1,213,974 $ Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating Income $ 9,810 Adjustments to Reconcile Operating Income to Net Cash Provided by Operating Activities: -0- Net Cash Provided by Operating Activities $ 9,810 The notes to financial statements are an integral part of these statements CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES General The Central Valley Cemetery District was formed in 1948 under the Health and Safety Code of the State of California. The District was formed for the purpose of selling plots and maintaining their locations. The District has three locations, including Evergreen Cemetery in El Centro, Terrace Park Cemetery in Holtville, and Imperial Cemetery in Imperial. The District is governed by a Board of Trustees consisting of three members who are elected or appointed for terms of four years. The accounting policies of the Central Valley Cemetery District conform to accounting principles generally accepted in the United States of America. The following is a summary of such significant policies. Implementation of Governmental Accounting Standards Board Statements Government-wide Financial Statements The statement of net assets and statement of activities display information about the primary government (the District). These statements include the financial activities of the overall government. The statement of activities presents a comparison between direct expenses and program revenues for the District's governmental activities. Direct expenses are those that are specifically associated with a program or function and; therefore, are clearly identifiable to a particular function. Program revenues include 1) charges paid by the recipients of goods or services offered by the programs and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular program revenues, including all taxes, are presented instead as general revenues. When both restricted and unrestricted net assets are available, restricted resources are used only after the unrestricted resources are depleted. Fund Financial Statements The accounts of the District are organized on the basis of funds and account groups, each of which is considered a separate entity. CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 The District reports only one governmental fund: NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) The General Fund is used to account for all revenues and expenditures necessary to carry out basic governmental activities of the District. The General Fund accounts for public service activities. Reporting Entity The financial statements consist only of the funds of the District. The District has no oversight responsibility for any other governmental entity since no other entities are considered to be controlled or dependent on the District. Fund Accounting The accounts of the District are organized on the basis of funds and account groups, each of which is considered a separate entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise all of its assets, liabilities, fund equity, revenues, and expenditures, as appropriate. Governmental Fund The General Fund is the general operating fund of the District. It is used to account for all financial resources except those required to be accounted for in another fund. Fiduciary Fund The endowment care fund is a fiduciary fund which is classified as a non- expendable trust fund. The purpose of this fund is to account for those financial resources which are designated to provide a source of income to be sued to ensure ongoing maintenance of the District's cemetery sites. Cash and Cash Equivalents Cash is considered to be cash on hand and cash in bank. All short-term investments that are highly liquid are considered to be cash equivalents. Cash equivalents are readily convertible to known amounts of cash, and at the day of purchase have an original maturity of three months or less. CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES (Continued) Basis of Accounting The accounting records are maintained on the modified accrual basis of accounting. Revenues are recognized when they become measurable and available as net current assets. Expenditures are recognized when the related fund liability is incurred. Interfund Transactions During the course of operations transactions may occur between funds for goods or services rendered. These transactions create receivables and payables which are classified as "due from other fund" or "due to other fund". All other interfund transactions are reported as operating transfers. Capital Assets Capital assets, including infrastructure, are recorded at historical costs or at estimated historical cost if historical cost is not available. Contributed fixed assets are valued at their estimated fair market value on the date contributed. Capital assets include public domain (infrastructure) general fixed assets and equipment. The District defines capital assets as assets with initial, individual costs of more than $ 2,500 and an estimated useful life in excess of one year. Capital assets used in operations are depreciated or amortized (assts under capital leases) using the straight-line method over the lesser of the capital lease period or their estimated useful lives in the government-wide statements. Maintenance and repairs are charged to operations when incurred. Betterments and Major improvements which significantly increase values, change capacities or extend useful lives are capitalized. Upon sale or retirement of fixed assets, the cost and related accumulated depreciation are removed form the respective accounts and any resulting gain or loss is included in the results of operations. The estimated useful lives are as follows: Buildings and Improvement 40 years Machinery and Equipment 5-15 years CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 2. CAPITAL ASSETS A summary of changes in capital assets follows: Beginning Ending Balance Additions Balance Reclassify Automobiles 26,620 $ $ -0- -0- S 26,620 376,661 Buildings and structures 195,960 72,741 645,362 Machinery and Equipment 410,231 -0- -0- 410,231 Land 193,198 -0- -0- 193,198 371,170 Improvements (72,741) 169,048 467,477 1,377,880 365,008 1,742,888 -0- Less Accumulated Depreciation (671,527) (30,967) -0- (702,494) Total Capital Assets $ 706,353 $ 334,041 $ 1,040,394 -0- Depreciation expense for the fiscal year ended June 30, 2015 was $ 30,967. NOTE 3. BUDGETS The District prepares a budget annually. Upon adoption by the Board of Trustees the budget is filed with the Board of Supervisors of the County of Imperial. Appropriations expire at the end of the fiscal year. NOTE 4. DEPOSITS AND INVESTMENTS California Government Code 53601 authorizes the District to invest in obligations of the U.S. Treasury or its agencies, obligations of the State of California and any local agency, corporate bonds rated AAA by Standard and Poor, certificates of deposit or other interest bearing deposits of insured financial institutions and other investments as my be allowed by law. Deposits - At year-end, the carrying amount of the District's deposits was $ 1,473,520 and the bank balance was $ 1,459,881. The bank balance is classified into three categories of credit risk: CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 4. DEPOSITS AND INVESTMENTS (Continued) 1. Insured or collateralized with securities held by the District or by its agent in the District's name. 2. Collateralized with securities held by the pledging financial institution's trust department or agent in the District's name. 3. Uncollateralized. (This includes any bank balance that is collateralized with securities held by their pledging financial institution, or by its trust department or agent but not in the District's name.) Classification of Bank Balance by Credit Risk: Categories 2 Total Deposits $1,568,941 $1,568,941 0 Investments - The District's investments are classified into three categories of credit risk: 1. Insured or registered, or securities held by the District or its agent in the District's name. 2. Uninsured and unregistered, with securities held by the counterparty's trust department or agent in the District's name. 3. Uninsured and unregistered, with securities held by the counterparty, or by its trust department or agent but not in the District's name. Non-categorized: Investments in LAIF are not categorized, as Governmental Accounting Standards do not require categorization of investment pools managed by another agency. CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 4 DEPOSITS AND INVESTMENTS (Continued) Classification of investments by credit risk: Categories Not Carrying Fair 2 3 Categorized Amount Value Securities of Federal Government Agencies $ 229,856 $-0- $ -0- $ -0- $ 229,856 $ 229,856 Taxable Bonds 1,449,307 -0- -0- -0- 1,449,307 1,449,307 Certificates of Deposit 288,411 -0- -0- -0- 288,411 288,411 Money Market Fund 676,231 -0- -0- -0- 676,231 676,231 $ 2,643,805 -0- 2,643,805 -0- -0- 2,643,805 County Investment Pool 844,059 844,059 844,059 Local Agency Investment Fund (LAIF) 54,721 54,721 54,721 $3,542,585 $ 3,542,585 Investments are reported at fair value, which is defined as the amount at which a financial instrument could be exchanged in a current transaction between willing parties other than a forced or liquidation sale. The District is a member of an external investment pool. The Treasurer of Imperial County receives funds from the District and pools them with other funds and invests these funds in a variety of instruments including Certificates of Deposit and Government Agency instruments. The funds are recorded at fair value and interest earnings are allocated quarterly based on the average balance of the invested amount for the quarter. The District has individual investments with a variety of financial institutions and investment firms. These investments are reported at fair value, which was obtained from statements provided by the institutions. Any adjustments to fair value have been recorded to income or expense, depending on the nature of the necessary adjustment. CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 4. DEPOSITS AND INVESTMENTS (Continued) Total Cash and Investment Summary: Total Governmental Activities – Cash & Investments $ 3,802,131 Total Non-Expendable Trust Fund – Cash & Investments 1,213,974 Total Cash and Investments $ 5,016,105 Total Demand Deposits $ 1,473,520 Total Cash and Investments 3,542,585 Total Cash and Investments $ 5,016,105 NOTE 5. PENSION PLAN The District funds a defined contribution pension plan for its employees. The plan is a money purchase pension plan administered by Principal Financial which was adopted by the Board of Trustees with an effective date of July 1, 1986. Prior to adopting this plan, the District had a defined benefit pension plan which was established during July of 1974. The plan assets of the defined benefit plan were transferred to the defined contribution plan at its inception. Employees are eligible for coverage once they have attained age 21 and have completed a year of service with the District. No employees who have met the eligibility requirements shall be excluded. Subsequent to the balance sheet date, the District contributed an amount equal to 10% of participants' compensation. The District's pension contribution for the fiscal year ended June 30, 2015 is $ 32,641 or 10% of eligible employees' compensation of $ 326,406. CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 6. COMPENSATED ABSENCES A total of 15 to 20 days of vacation per year may be accumulated by each employee, with no maximum limit. Sick leave accumulates one day per month, however, there is a limit to the amount of payout for unused sick leave upon voluntary termination or retirement. The District accrues a liability for compensated absences which meet the following criteria: The District's obligation relating to employees' rights to receive compensation for future absences is attributable to employees' services already rendered. 2. The obligation relates to rights that vest or accumulate. Payment of the compensation is probable. The amount can be reasonably estimated. In accordance with the above criteria the District has accrued a liability which has been earned, but not taken by District employees. The liability has been recorded in the General Fund because it is possible that the liability will be liquidated with expendable available financial resources. NOTE 7. OPERATING TRANSFERS The interest generated by the Endowment Fund is used for the maintenance and preservation of the cemetery grounds and plots. At the end of each year, the total interest earned during the fiscal year is transferred to the General Fund. This is accomplished via an operating transfer. NOTE 8. RISK MANAGEMENT The government is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; and natural disasters for which the government carries commercial insurance. CENTRAL VALLEY CEMETERY DISTRICT NOTES TO FINANCIAL STATEMENTS JUNE 30, 2015 NOTE 9. RESTRICTED FUND BALANCE / NET ASSETS During the current fiscal year, the District designated a portion of fund balance / net assets as reserved for the following purposes: Reserved for expansion and special projects $ 150,000 Reserved for unanticipated non budget significant events 200,000 Balance June 30, 2015 350,000 NOTE 10. SUBSEQUENT EVENTS The management of the District have reviewed the results of operations for the period of time from its year end June 30, 2015 through October 13, 2015 the date the combined financial statements were available to be issued, and have determined that no adjustments are necessary to the amounts reported in the accompanying combined financial statements nor have any subsequent events occurred, the nature of which would require disclosure. EXHIBIT B Current Sphere of Influence Boundary Map CVCD 1-16 Riverside County R9E _____R10E R11E R12E R13E R14E R15E R16E 3 R17E SERT SHORES OLTON SEA BEACH T9S Y t A O A OMBAY BEACH SALTON TLOS S T115 T12S County Diego San T15S T18S T17S R17E R16E w RISE R14E RISE International Border -- Mexico R11E R10E R9E Central Valley Cemetery District local agency formation commission EXHIBIT 4