LAFCO

Riverview Cemetery District Service Area Plan

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

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Executive Officer OCAL AGENCY FORMATION COMMISSION Jurg Heuberger, CEP EXECUTIVE OFFICER'S REPORT To The Local Agency Formation Commission TO: Commissioner [Supervisor] MARIA NAVA-FROELICH [City] Commissioner MICHAEL KELLEY(Chair) Commissioner JASON JACKSON [City] Commissioner RAY CASTILLO [Supervisor] [Public] Commissioner DAVID WEST (Vice-Chair) [Supervisor] Alt Commissioner JACK TERRAZAS Alt Commissioner JIM PREDMORE [City] [Public] Alt Commissioner RALPH MENVIELLE REPORT DATE: May 1, 2016 FROM: Jurg Heuberger, AICP, CEP, Executive Officer PROJECT: Riverview Cemetery District (RCD 1-16) Sphere of Influence (SOI) update and Service Area Plan (SAP)/Municipal Services Review (MSR) HEARING DATE: TIME: 8:50 AM May 26, 2016 AGENDA ITEM NO: 13 HEARING LOCATION: El Centro City Council Chambers, 1275 Main Street, El Centro, CA RECOMMENDATION(S) BY THE EXECUTIVE OFFICER (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). Deny the Sphere of Influence and Service Area Plan update, and provide OPTION # 4: 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 RCD 1-16 Riverview Cemetery District Sphere of Influence and Service Area Plan Project Name: Update (SAP)/MSR Applicant/Proponent: Riverview Cemetery District LAFCO requested update Application Type: Application Filed: N/A (LAFCO Direction) Certificate of Filing: N/A See Plan Area/Size: 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 Riverview 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: Exempt Documentation: JH\DEB\S\LAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\1 EO Report Riverview Cemetery District SAP Update 5 1 16 docx ANALYSIS Legal Requirements (Historical information): 1: 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). JH\DEB\S\LAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\1 EO Report Riverview 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. 5) Opportunities for rate restructuring. 6) Opportunities for shared facilities 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 services to a large portion of Imperial County. The review in this case 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. The financials for the District as per the attached also show that it is financially stable. III: District Approvals: 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\1 EO Report Riverview Cemetery District SAP Update 5 1 16 docx Analysis by the Executive Officer / Determinations by the COMMISSION: V: 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 residential, but remains predominately agricultural. The District provides only Cemetery related services and provides no other 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). 3) There are no known social or economic communities of interest relevant to this review. 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 Riverview 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. JHNDEB\S:\LAFCO\Executive Officer Reports\2016\05 26 16 Hearing EO Reports\1 EO Report Riverview 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. 11: 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. 111: Make the findings pursuant to Government Code Section § 56425 that: a. 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. c. 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 predominately agricultural with urban and the services are strictly for providing Cemetery related functions. The Commission finds that, there are no known social or economic communities of interest in the areas. V: Since there have been no protests received, the Commission adopts and approves the current Sphere of 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. CC: Riverview Cemetery District 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\1 EO Report Riverview Cemetery District SAP Update 5 1 16 docx EXHIBIT A Audited Financial Information RCD 1-16 12 RIVERVIEW CEMETERY DISTRICT FINANCIAL STATEMENTS WITH INDEPENDENT AUDITOR'S REPORT AS OF AND FOR THE FISCAL YEAR ENDED JUNE 30, 2015 10 100 29 30 34 N George J. Woo Certified Public Accountant ... INDEPENDENT AUDITOR'S REPORT Board of Directors Riverview Cemetery District Brawley, California I have audited the accompanying financial statements of the Riverview Cemetery District (the "District"), the business-type activities and the private purpose trust fund, as of and for the year ended June 30, 2015, and the related notes to the financial statements, which collectively compromise the District's basic 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 Districts. 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 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.net Opinion In my opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the business-type activities and the private purpose trust fund of the District as of June 30, 2015, and the respective changes in financial position and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United State 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 Unites States of America require that the management's discussion and analysis on pages 3 through 6 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 the 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 we 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 us with sufficient evidence to express an opinion or provide any assurance. - Juso November 19, 2015 Riverview Cemetery District Management's Discussion and Analysis For the fiscal year ended June 30, 2015 The following section of the annual financial report of the Riverview Cemetery District (the District) includes an overview and analysis of the District's financial position and activities for the year ended June 30, 2015. This discussion and analysis, as well as the basic financial statements which it accompanies, is the responsibility of the Management of the District. Introduction to the Basic Financial Statements This annual report consists of a series of financial statements, prepared in accordance with the Governmental Accounting Standards Board Statements. This reporting format is designed to improve the usefulness of the report to the primary users of these basic financial statements. The District presents its basic financial statements using the economic resources measurement focus and accrual basis of accounting. As a Governmental Activity, the District's basic financial statements include a Statement of Net Assets, a Statement of Revenues, Expenses and Changes in Net Assets; and a Statement of Cash Flows. Notes to the basic financial statements, required supplementary information, including this section, support these statements. All sections must be considered together to obtain a complete understanding of the financial position and results of operations of the District. Statement of Net Assets: The statement of Net Assets includes all assets and liabilities of the District with the difference between the two reported as net assets. Assets and liabilities are reported at their book value, on an accrual basis, as of June 30, 2015. This statement also identifies major categories of restrictions on the net assets of the District. Statement of Revenues, Expenses and Changes in Net Assets: The statement of Revenues, Expenses and Changes in Net Assets presents the revenues earned and expenses incurred by the District during the year ended June 30, 2015, on an accrual basis. Statement Cash Flows: The statement of Cash Flows presents the changes in the District's cash and cash equivalents for the year ended June 30, 2015, summarized by operating, capital and noncapital financing, and investing activities. The statement is prepared using the direct method of reporting cash flows and, therefore, presents gross rather than net amounts for the year's activities. Riverview Cemetery District Management's Discussion and Analysis For the fiscal year ended June 30, 2015 Condensed Financial Position Information: The following condensed financial information provides an overview of the District's financial position for the fiscal years ended June 30: 2015 2014 Assets: Capital assets - net 823,297 S $ 809,861 Other assets 1,467,114 1,404,294 Total assets 2,290,411 2,214,155 Liabilities: Long – term debt 89,258 122,016 Other liabilities 78,492 50,381 Total liabilities 167,750 172,397 Net assets: Invested in utility plant, Net of related debt 701,281 656,650 Restricted for trust 885,377 845,272 Unrestricted 536,003 539,836 Total Net Assets $ 2,122,661 $ 2,041,758 a) Net Assets Net assets, the difference between assets and liabilities, increased $80,973 or 4% from July 1, 2014 to June 30, 2015. This increase mainly consists of $41,689 from operating income and $40,105 from capital contributions and $5,669 from investment income. b) Capital Assets Net capital assets, which is made up of property, building and equipment, net of accumulated depreciation increased $ 13,436. c) Other Assets Other assets consist of cash, investments, interest receivable and inventories. Other assets increased $ 62,820. Cash and investments increased $ 85,320 during the fiscal year. Riverview Cemetery District Management's Discussion and Analysis For the fiscal year ended June 30, 2015 d) Other Liabilities Other liabilities consist of accounts payable, accrued payroll, accrued interest payable accrued compensated absences, and current portion of long-term debt. Other liabilities increased by $ 28,111. Summary of Operations and Changes in Net Assets The increase in the District's net assets for fiscal year 2015 was $80,903 or 4%. This table summarizes the District's fiscal year activity. 2015 2014 Operating Revenues: Current services 246,857 285,299 $ $ Property taxes 207,042 191,254 453,899 Total operating revenues 476,553 Operating expenses: Salaries and employee benefits 237,607 219,341 Services and supplies 136,560 164,847 Depreciation 38,043 35,479 Total operating expenses 412,210 419,667 Operating income 41,689 56,886 Nonoperating revenues (expenses): Interest income 4,620 5,876 Investment income - net 1049 -0- Interest expense (6,560) (8,078) Total nonoperating revenues (891) (2,202) Capital Contributions 40,105 44,789 Change in net assets 80,903 99,473 Total net assets, beginning of year 2,041,758 1,942,285 Total net assets, end of year $ 2,122,661 $ 2,041,758 Riverview Cemetery District Management's Discussion and Analysis For the fiscal year ended June 30, 2015 a) Operating Revenues During fiscal year 2015, operating revenues decreased $ 22,654 or 4%. b) Operating Expenses Operating expenses consist of salaries, benefits, services and supplies, and depreciation. During the fiscal year, operating expenses (including depreciation) decreased $7,457 or 2%. c) Nonoperating Revenues and Expenses Nonoperating revenues and expenses consist of interest income and interest expense. During the fiscal year ended June 30, 2015, nonoperating revenues (expenses) decreased by $1,311. d) Capital Contribution Capital contributions are amounts paid by each purchaser of a burial plot to be used for the perpetual care of the cemetery grounds. Capital contributions during fiscal year ended June 30, 2015 were $ 40,105. A decrease of $ 4,684 from the prior fiscal year. e) Restricted Resources It is the District's policy to first apply unrestricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. Requests for Information If you have any questions about this report or need additional financial information, you may contact Ms. Carrie L. Perryman, Manager, at (760) 344-4921 or by mail at Post Office Box 597, Brawley, CA 92227. RIVERVIEW CEMETERY DISTRICT STATEMENT OF NET ASSETS AS OF JUNE 30, 2015 Business Private Type Purpose Acitivity Trust Fund Total ASSETS Current Assets Cash and investments $ 411,727 $ 1,050,449 $ 1,462,176 Interest receivable 486 383 869 Inventory 4,069 -0- 4,069 Total Current Assets 416,282 1,050,832 1,467,114 Capital assets Land 533,727 -0- 533,727 Other capital assets - net of accumulated depreciation 289,570 -0- 289,570 Total capital assets 823,297 -0- 823,297 Total Assets $ 1,239,579 $ 1,050,832 $ 2,290,411 LIABILITIES Current Liabilities Accounts payable $ 36,354 $ $ -0- 36,354 Accrued payroll 1,993 -0- 1,993 Accrued interest payable 2,517 -0- 2,517 Accrued compensated absences 4,870 -0- 4,870 Current portion of long-term debt 32,758 -0- 32,758 Total current liabilities 78,492 -0- 78,492 Long-term debt Loan payable, net of current portion 89,258 -0- 89,258 Total long term-debt 89,258 -0- 89,258 Total liabilities 167,750 -0- 167,750 NET ASSETS Invested in capital assets. net of related debt 701,281 -0- 701,281 Restricted: Trust -0- 885,377 885,377 Unrestricted 370,548 165,455 536,003 Total net assets $ 1,071,829 $ 1,050,832 $ 2,122,661 SEE ACCOMPANYING ACCOUNTANT'S AUDIT REPORT AND NOTES TO FINANCIAL STATEMENTS RIVERVIEW CEMETERY DISTRICT STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED JUNE 30, 2015 Business Private Type Purpose Acitivity Trust Fund Total Operating revenues Current services $ 246,857 $ -0- $ 246,857 Property taxes 207,042 -0- 207,042 Total operating revenues 453,899 -0- 453,899 Operating expenses Salaries and employee benefits 237,607 -0- 237,607 Services and supplies 136,560 -0- 136,560 Depreciation 38,043 -0- 38,043 Total operating expenses 412,210 -0- 412,210 Operating Income 41,689 -0- 41,689 Non-operating revenues (expenses) Interest income 1,594 3,026 4,620 Investment income - net -0- 1,049 1,049 Interest expense (6,560) -0- (6,560) Total non-operating revenues (4,966) 4,075 (891) Net income before capital contributions 36,723 4,075 40,798 Capital contributions -0- 40,105 40,105 Increase in net assets 36,723 44,180 80,903 Total net assets - July 1, 2014 1,035,106 1,006,652 2,041,758 Total net assets - June 30, 2015 $ 1,071,829 $ 1,050,832 2,122,661 $ SEE ACCOMPANYING ACCOUNTANT'S AUDIT REPORT AND NOTES TO FINANCIAL STATEMENTS RIVERVIEW CEMETERY DISTRICT STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 30, 2015 Business Private Type Purpose Acitivity Trust Fund Total Reconciliation of operating income to net cash provided by operating activities: Operating income $ 41,689 $ -0- $ 41,689 Adjustment to reconcile operating income to net cash provided by operating activities: Due from other agencies 22,514 -0- 22,514 Increase in Inventory (306) -0- (306) Depreciation 38,043 -0- 38,043 (Increase) decrease in interest receivable (217) 509 292 Increase (decrease) in accounts payable 30,706 -0- 30,706 Increase (decrease) in accrued payroll 698 -0- 698 Increase (decrease) accrued interest payable (643) -0- (643) Increase (decrease) in accrued compensated absences (4,213) -0- (4,213) Total adjustments 86,582 509 87,091 Net cash provided by operating activities: 128,271 509 128,780 Cash flows from capital and related financing activities: Retirement of debt (31,195) -0- (31,195) Purchase of equipment (51,479) -0- (51,479) Capital contributions -0- 40,105 40,105 Interest paid (6,560) -0- (6,560) Net cash (used in) provided by capital and related financing activities (89,234) 40,105 (49, 129) Cash flows from investing activities: Investment income - net -0- 1,049 1,049 Interest income 1,594 3,026 4,620 Net increase (decrease) in cash and investments 40,631 44,689 85,320 Cash and investments at July 1, 2014 371,096 1,005,760 1,376,856 Cash and investments at June 30, 2015 411,727 1,050,449 $ 1,462,176 SEE ACCOMPANYING ACCOUNTANT'S AUDIT REPORT AND NOTES TO FINANCIAL STATEMENTS Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Riverview Cemetery District (the "District") have been prepared in conformity with generally accepted accounting principles as applied to governmental units. The Governmental Accounting Standards Board is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The more significant of the District's accounting policies are described below. The Reporting Entity The District was formed in 1920, under the Health and Safety Code, Sections 8890 to 9225. The District maintains a developed cemetery site on 38.25 acres of land. It provides burial facilities for all residents of the District. The cemetery site has been subdivided and recorded with the County Recorder's office of the County of Imperial. Each purchaser of a burial plot is issued a Certificate of Burial Rights, which allows the certificate holder to use the said plot for burial purposes in accordance with the District's regulations. Basis of Accounting/Measurement Focus The accounts of the District are organized on the basis of funds each of which is considered to be a separate accounting equity. The operations of each fund is accounted for by providing a separate set of self balancing accounts which comprise its assets, liabilities, fund equity, revenue and expenses. The financial statements are presented using the economic measurement focus, and the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred, regardless of when the related cash flows take place. Private-purpose trust funds account for assets a government holds in a trustee capacity for others when the principal of the trust must be held intact and only the income earned by the principal may be used for the purpose specified in the trust agreement. Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- (Continued) Budget The District adopts an annual budget for the enterprise fund on the basis of cash receipts and disbursements. The Trustees annually, on or before August 1, estimate and certify to the Board of Supervisors and County Auditor of the County of Imperial, the amounts in the budget. Receivables All receivables are due from other governmental entities. Thus, the District believes all receivables to be collectible in full; therefore, no allowance for doubtful accounts is provided. Interest Receivables All interest receivables is due from the County of Imperial. This interest was earned on District funds deposited in the Imperial County Treasurer's pooled investment fund. Inventory Inventory is stated at the lower of cost (first-in, first-out method) or market. Capital Assets Capital assets are carried at cost. The land, building and original improvements owned by the District were recorded at their approximate value, at the time of acquisition, of $ 80,000. During the year ended June 30, 2009, an additional 10.19 acres were purchased for $ 455,000. The approximate value has been prorated between the land, the buildings and improvements. Depreciation of equipment is calculated using the straight-line method over 5-20 years. depending on the asset's estimate useful lives. Maintenance and repairs which neither add to the value of the property nor appreciably prolong its life are charged as expenses when incurred. Use of Estimates In preparing financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates under different assumptions or conditions. Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - (Continued) Compensated Absences Vested or accumulated vacation leave that is expected to be liquidated with expendable financial resources is reported as an expenditure and a fund liability of the governmental fund that will pay it. In accordance with the provisions of the Statement of Financial Accounting Standards, no liability is recorded for non- vesting accumulating rights to receive sick pay benefits. Property Taxes Secured property taxes become a lien on the property as of January 1, and are levied in two equal installments; the first delinquent after December 10; and the second delinquent after April 10. Property taxes on unsecured property becomes a lien on the property as of January 1, and are delinquent after August 31, the County of Imperial is responsible for the assessment, collection and apportionment for all jurisdictions within the County, including the District. Non-operating Revenues & Expenses Non-operating revenues and expenses consist of interest earnings and interest expense. NOTE 2: CASH 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 $ 70,821 and the bank balance was $ 95,742. The bank balance is classified into three categories of credit risk: 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. Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 2: CASH AND INVESTMENTS (CONTINUED) 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 3 Total Deposits $ 70,821 $ 0 $ 70,821 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. ....................................... Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 2: CASH AND INVESTMENTS (CONTINUED) Classification of investments by credit risk: Categories Not Carrying Fair Categorized Amount Value 295,893 $ Government Bonds -0- $ -0- -0- $ 295,893 $ $ 295,893 Corporate Bonds 180,964 -0- -0- -0- 180,964 180,964 Foreign Bonds 44,781 -0- -0- -0- 44,781 44,781 Certificates of Deposit 269,396 -0- -0- -0- 269,396 269,396 Money Market Fund 10,015 -0- -0- -0- 10,015 10,015 $ 2,643,805 -0- -0- 801,049 -0- 801,049 County Investment Pool 590,281 590,281 590,281 $1,391,330 $ 1,391,330 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 financial institution and investment firm. 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. Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 3: CAPITAL ASSETS Balance Balance June 30, 2014 Additions Disposals June 30, 2015 Land $ 533,727 $ -0- $ -0- $ 533,727 Building and Improvements 480,368 27,943 -0- 508,311 Equipment 305,177 23,536 -0- 328,713 Total 785,545 51,479 -0- 837,024 Accumulated Depreciation (509,411) (38,043) -0- (547,454) Total net of depreciation 276,134 (13,436) -0- 289,570 Total capital assets 809,861 $ (13,436) 823,297 $ -0- NOTE 4: VACATION AND SICK LEAVE (COMPENSATED ABSENCES) District employees earn hours of vacation based on years of service. Vacation time accrues as follows: Length of Service Days accrued per Year 1 - 2 years 5 days 3 – 9 years 10 days 10 – 19 years 15 days 20 years or more 20 days Sick leave is also earned by District employees at the rate of 12 days per year regardless of the length of service. If not used, six of those days may be accumulated, as vacation time. Balance Increase Balance June 30, 2014 (Decrease) June 30, 2015 Totals 9,083 $ $ (4,213) $____________________________________ 4,870 Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 5: RESTRICTED NET ASSETS Trust - consists of legally segregated funds which may not be expended by the Cemetery. The earnings of this principal are to be spent for the perpetual care of the Cemetery grounds. Total restricted net assets $ 885,377 NOTE 6: RISK AND COVERAGE: For the period of July 1, 2014 through June 30, 2015; the District secured the insurance coverage outlined below through the Golden State Risk Management Authority (GSRMA). Policy JPA WC 032 - Workers Compensation. Coverage period July 1, 2014 through June 30, 2015. Policy limits match statutory limits on a per occurrence (incident of illness, accident) basis. Employer's liability coverage is included with policy limits of $5,000,000 per occurrence. Policy JPA GLA 031- Property/Liability. Coverage period of July 1, 2014 through June 30, 2015. Policy limits of $ 50,000,000 per occurrence for general liability. Policy is written on an Occurrence Form and includes Automobile liability coverage, officers and Board of Trustees Errors and Omissions and Pollution liability coverage. There is no aggregated limit on this coverage. Property coverage is all risk replacement cost and provides up to $ 600,000,000 maximum payment per covered loss. Coverage includes Automobile Physical Damage, Mobile Equipment and Boiler and Machinery coverage. The District's deductibles are: $ 0 (first dollar) for Workers Compensation and liability coverage. $ 1,000 per direct loss property coverage. (Earthquake and Flood deductibles are determined by the loss) $ 250 comprehensive/$ 500 collision for automobile physical damage loss. The District paid $ 20,898 for the Workers Compensation coverage and Property/Liability coverage. The District has no outstanding indebtedness to GSRMA. There are no assessments owed by, or dividends payable to the District. There are no known claims not covered by insurance. Riverview Cemetery District Notes to the Financial Statements June 30, 2015 NOTE 7: LONG TERM DEBT On June 17, 2008 the District purchased 10.19 acres of vacant land for expansion of cemetery operations for $ 455,000 and entered into a ten year $ 300,000 installment sale agreement at a 4.95% interest rate. The note is payable in semi-annual installments of $ 19,199, due on February 4, and August 4, and matures on August 4, 2018. The note is secured by an assignment of revenues from Cemetery operations. Balance Debt Debt Balance June 30, 2014 Retired Issued June 30, 2015 Totals 153.211 <math>(\$ 31,195)</math> -0- 122,016 Year ended June 30, Principa! Interest Total 2016 $ 32,758 $ 5,639 $ 38,397 2017 34,400 3,998 38,398 2018 36,124 2,273 38,397 2019 18,734 467 19,201 Totals 122,016 12,377 S 134.393 NOTE 8: SUBSEQUENT EVENTS The management of the Riverview Cemetery District have reviewed the results of operations for the period of time from its year end June 30, 2015 through November 19, 2015, the date the 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 RCD 1-16 Riverside County ROE ____ R10E R11E RIZE R13E R14E R15E R16E 13 R17E SERT SHORES MI, TON SEA BEACH O T9S T A O A MHAY BEAC SALTON TIOS S T115 T125 County Diego Sam T15S T16S T17S R17E RIBE ww RISE --- R14E RISE International Border -- Mexico RIIE R10E R9E Riverview Cemetery District local agency formation commission EXHIBIT 17 .