CITY OF RIPON
TRANSPORTATION DEVELOPMENT ACT
AND MEASURE K FUNDS
NON-TRANSIT PURPOSES
AND TRANSIT ENTERPRISE FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
INDEPENDENT AUDITORS’ REPORT, FUND FINANCIAL
STATEMENTS, REQUIRED SUPPLEMENTARY INFORMATION,
AND COMPLIANCE REPORT
CITY OF RIPON
TRANSPORTATON DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES
AND TRANSIT ENTERPRISE FUND
INDEPENDENT AUDITORS’ REPORTS, FUND FINANCIAL STATEMENTS,
REQUIRED SUPPLEMENTARY INFORMATION, AND
COMPLIANCE REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
CITY OF RIPON
TRANSPORTATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES
AND TRANSIT ENTERPRISE FUND
INDEPENDENT AUDITORS’ REPORTS, FUND FINANCIAL STATEMENTS,
REQUIRED SUPPLEMENTARY INFORMATION, AND
COMPLIANCE REPORT
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
TABLE OF CONTENTS
Page
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT .................................................................................................... 1
FUND FINANCIAL STATEMENTS
Balance Sheets – Transportation Development Act and Measure K Funds Non-Transit Purposes .......................................................................................................................... 4 Statements of Revenues, Expenditures, and Changes in Fund Balances – Transportation Development Act and Measure K Funds
Non-Transit Purposes .......................................................................................................................... 5 Statements of Net Position – Transit Enterprise Fund ....................................................................... 6 Statements of Revenues, Expenses, and Changes in Net Position – Transit Enterprise Fund ....................................................................................................................... 7 Statements of Cash Flows – Transit Enterprise Fund ........................................................................ 8 Notes to the Fund Financial Statements.................................................................................................... 9
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule – Transportation Development Act Fund.................................... 15 Budgetary Comparison Schedule – Measure K Fund ...................................................................... 16 Note to Required Supplementary Information .................................................................................... 17
OTHER REPORTS
Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of the Fund Financial Statements Performed in Accordance with Government Auditing Standards and the Transportation Development Act ......................................................................................... 19 Independent Auditors’ Report on State Compliance ........................................................................ 21 INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
San Joaquin Council of Governments
Stockton, California
To the City Council
City of Ripon
Ripon, California
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon, California, as of and for the year ended June 30, 2021, and the related notes to the financial statements, which collectively comprise the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon’s financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon, California, as of June 30, 2021, 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 States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon, California, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
As discussed in Note 2, these financial statements present only the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2021, and the changes in its financial position for the fiscal year then ended, in accordance with accounting principles generally accepted in the United States.
Lance, Soll & Lunghard, LLP 2151 River Plaza Dr., Suite 150 Sacramento ,CA95833 Phone: 916.503.9691 To the Board of Directors To the City Council
San Joaquin Council of Governments City of Ripon
Stockton, California Ripon, California
Responsibilities of Management 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; and for 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.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon’s ability to continue as a going concern for twelve months beyond the date of the financial statements.
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with the GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if, there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit 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 Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon, California’s internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon, California’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
2 To the Board of Directors To the City Council
San Joaquin Council of Governments City of Ripon
Stockton, California Ripon, California
Other Reporting Responsibilities
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison schedules for the Transportation Development Act Fund and the Measure K Fund be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing 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. Our opinion on the basic financial statements is not affected by this missing information.
Report on Summarized Comparative Information
We have previously audited the City’s 2020 financial statements of the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund, and we expressed an unmodified audit opinion on those audited financial statements in our report dated December 31, 2020. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2020, is consistent, in all material respects, with the audited financial statements from which it has been derived.
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated December 30, 2021, on our consideration of the City’s internal control over financial reporting, as it relates to the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund, and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance, as it relates to the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance as it relates to the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund.
Sacramento, California
December 30, 2021
3 Transportation
Development Measure K
Act Fund Fund 2021 2020
Assets:
Cash and investments $ - $ 2,464,889 $ 2,464,889 $ 2,145,612 Due from other agencies 796,032 75,000 871,032 815,000
Due from other funds - - - 438,714
Total Assets $ 796,032 $ 2,539,889 $ 3,335,921 $ 3,399,326 Fund Balances:
Restricted $ 796,032 $ 2,539,889 $ 3,335,921 $ 3,399,326 Total Fund Balances 796,032 2,539,889 3,335,921 3,399,326 Total Liabilities and Fund Balances $ 796,032 $ 2,539,889 $ 3,335,921 $ 3,399,326 Totals
CITY OF RIPON
TRANSPORTATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES
BALANCE SHEET
JUNE 30, 2021, WITH COMPARATIVE TOTALS
The accompanying notes are an integral part of these financial statements. 4 Transportation
Development Measure K
Act Fund Fund 2021 2020
Revenues:
Local Transportation Fund:
Streets and roads $ 777,731 $ - $ 777,731 $ 725,032
Pedestrian and bicycle 18,301 - 18,301 14,968
Measure K Fund:
Local street repair - 300,000 300,000 300,000
Pedestrian and bicycle - - - 438,714
Passenger rail - 73,928 73,928 -
Congestion relief - 20,000 20,000 -
Investment earnings 5,833 19,277 25,110 33,080
Total Revenues 801,865 413,205 1,215,070 1,511,794
Excess of Revenues
Over Expenditures 801,865 413,205 1,215,070 1,511,794
Other Financing Uses:
Intergovernmental transfers (745,833) (93,928) (839,761) (214,051) Total Other Financing Uses (745,833) (93,928) (839,761) (214,051) Net Change in Fund Balances 56,032 319,277 375,309 1,297,743 Fund Balances:
Fund Balances, Beginning of Year 740,000 2,659,326 3,399,326 2,101,583 Restatements - (438,714) (438,714) -
Fund Balances, Beginning of Year, as restated 740,000 2,220,612 2,960,612 - Fund Balances, End of Year $ 796,032 $ 2,539,889 $ 3,335,921 $ 3,399,326 Totals
CITY OF RIPON
TRANSPORTATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND BALANCES FOR THE FISCAL YEAR ENDED JUNE 30, 2021, WITH COMPARATIVE TOTALS The accompanying notes are an integral part of these financial statements. 5 2021 2020
Assets:
Current Assets:
Cash and cash equivalents $ 22,505 $ 30,218
Accounts receivable 334 -
Due from other agencies 12,413 3,777
Total Current Assets 35,252 33,995
Capital assets, net 324,131 405,163
Total Assets $ 359,383 $ 439,158
Liabilities and Net Position:
Liabilities:
Accounts payable $ 1,253 $ -
Total Liabilities 1,253 -
Net Position:
Investment in capital assets 324,131 405,163
Restricted 33,999 33,995
Total Net Position 358,130 439,158
Total Liabilities and Net Position $ 359,383 $ 439,158
CITY OF RIPON
TRANSIT ENTERPRISE FUND
STATEMENT OF NET POSITION
JUNE 30, 2021, WITH COMPARATIVE TOTALS
The accompanying notes are an integral part of these financial statements. 6 2021 2020
Operating Revenues:
Fares $ 1,451 $ 2,021
Total Operating Revenues 1,451 2,021
Operating Expenses:
Operations 22,671 18,841
Vehicle maintenance 13,059 13,015
Administration 13,625 11,880
Depreciation 81,032 125,734
Total Operating Expenses 130,387 169,470
Operating Loss (128,936) (167,449)
Nonoperating Revenues:
State Transit Assistance funds 1,610 1,843
Measure K Passenger Bus funds 46,118 39,459
Interest 553 1,182
Total Nonoperating Revenues 48,281 42,484
Nonoperating Expenses:
Multi-Modal Station 373 8,194
Total Nonoperating Expenses 373 8,194
Change in Net Position (81,028) (133,159)
Net Position, Beginning of Year 439,158 572,317
Net Position, End of Year $ 358,130 $ 439,158
CITY OF RIPON
TRANSIT ENTERPRISE FUND
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION FOR THE FISCAL YEAR ENDED JUNE 30, 2021, WITH COMPARATIVE TOTALS The accompanying notes are an integral part of these financial statements. 7 2021 2020
Cash Flows from Operating Activities:
Cash receipts from customers $ 1,117 $ 2,271
Cash disbursements for administration and operations (35,043) (33,250) Cash disbursements for services and supplies (13,059) (13,015) Net Cash Used by Operating Activities (46,985) (43,994) Cash Flows from Noncapital Financing Activities:
Measure K Passenger Bus funds 37,249 43,527
State Transit Assistance funds 1,843 1,056
Net Cash Provided by Noncapital Financing Activities 39,092 44,583 Cash Flows from Capital and Related Financing Activities:
Multi-modal station engineering time (373) (8,194)
Net Cash Used by Capital and Related Financing
Activities (373) (8,194)
Cash Flows from Investing Activities:
Interest received 553 1,182
Net Cash Provided by Investing Activities 553 1,182
Net Increase (Decrease) in Cash and Cash Equivalents (7,713) (6,423) Cash and Cash Equivalents, Beginning of Year 30,218 36,641 Cash and Cash Equivalents, End of Year $ 22,505 $ 30,218 Reconciliation of Operating Loss to Net Cash Used by
Operating Activities:
Operating loss $ (128,936) $ (167,449)
Adjustments to reconcile operating loss to net cash used by operating activities:
Depreciation 81,032 125,734
Increase (decrease) in receivables (334) 250
Increase (decrease) in accounts payable 1,253 (2,529)
Total Adjustments 81,951 123,455
Net Cash Used for Operating Activities $ (46,985) $ (43,994)
CITY OF RIPON
TRANSIT ENTERPRISE FUND
STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021, WITH COMPARATIVE TOTALS The accompanying notes are an integral part of these financial statements. 8 CITY OF RIPON
TRANSPORATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES AND TRANSIT ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Note 1: Organization
The City of Ripon (City) receives funds under the provisions of the Transportation Development Act (TDA) from the San Joaquin County Local Transportation Fund (LTF) under Article 4, Section 99260 for streets and roads, as the City does not have any unmet transit needs at this time. The City's Article 4 LTF funds can be used for the support of streets and roads as defined in the TDA.
The City receives funds under the provisions of the TDA from the San Joaquin County LTF under Article 8, Section 99400(a) for local streets and roads projects, and Article 3, Section 99234 for pedestrian and bicycle facilities. The funds provided under Article 8 represent amounts available after the determination by the San Joaquin Council of Governments, the transportation planning agency administering TDA funds, of amounts needed for local streets and roads of the City. The funds provided under Article 3, Section 99234 represent amounts set aside to be allocated for pedestrian and bicycle facilities within the jurisdictions of San Joaquin County and represent up to two percent of the available funds countywide. The City TDA Fund is used to account for these funds received by the City for non-transit purposes, which is reflected in these financial statements of the TDA Fund allocated for non-transit purposes.
The City also receives funds from an ordinance (Measure K) passed by San Joaquin County voters resulting in a sales tax increase of one-half of one percent for transportation improvements. The San Joaquin Council of Governments, acting as the Local Transportation Authority, oversees the collection and distribution of the sales tax in accordance with the thirty-year transportation expenditure plan. The plan calls for street repairs, safety and operational improvements on streets and roads, projects to reduce street and highway congestion, and the promotion of passenger rail and bus services as an alternative to travel by automobile. The City's Measure K Fund is used to account for these funds, which is reflected in these financial statements of the Measure K Fund.
The City, as other like-sized cities in the State of California, maintains its accounting records on a cash basis, wherein the total cash available at any time is offset by the then recorded fund balances. This method of accounting does not recognize receivables due to the City, payables due from the City, or investments in property and equipment. However, for purposes of these financial statements of the TDA and Measure K Funds, the modified accrual basis of accounting is used.
Note 2: Summary of Significant Policies
a. Basis of Presentation
The financial statements of the TDA Fund, Measure K Fund, and Transit Enterprise Fund of the City have been prepared in accordance with accounting principles generally accepted in the United States of America as applied to government units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. 9 CITY OF RIPON
TRANSPORATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES AND TRANSIT ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Note 2: Summary of Significant Policies (Continued)
b. Reporting Entity
The financial statements are intended to present the financial position, results of operations, and cash flows of only transactions recorded in the TDA Fund, Measure K Fund, and Transit Enterprise Fund of the City and are not intended to present fairly the financial position of the City and changes in its financial position and its cash flows in accordance with accounting principles generally accepted in the United States of America. c. Fund Accounting
The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
The TDA and Measure K Funds are governmental funds specifically categorized as special revenue funds. Special revenue funds are used to account for the proceeds of specific revenue sources that are legally restricted to expenditures for specified purposes.
The Transit Enterprise Fund is a proprietary fund specifically categorized as an enterprise fund. Enterprise funds are used to account for activities similar to those found in the private sector. The City uses an enterprise fund to account for its transit operations because fees are charged to external users for services provided. d. Measurement Focus and Basis of Accounting
The TDA Fund and the Measure K Fund are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under the modified accrual basis of accounting, revenues are recognized when they become measurable and available and expenditures are recognized when the fund liabilities are incurred. "Measurable" means the amount of the transaction can be determined and "available" means collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City uses an availability period of 60 days. Revenues that are susceptible to accrual include LTF allocations and interest income.
The Transit Enterprise Fund is classified as an enterprise fund using the flow of economic resource management focus and the accrual basis of accounting, whereby revenues are recorded when earned and expenses are recorded at the time liabilities are incurred.
Proprietary funds distinguish operating revenues and expenses from nonoperating items.
Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations.
The principal operating revenues of the Transit Enterprise Fund are passenger fares.
Operating expenses include the cost of vehicle maintenance, administrative expenses, and depreciation on capital assets and equipment. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.
When both restricted and unrestricted resources are available for use, it is the City's policy to use restricted resources first, and then unrestricted resources as they are needed. 10 CITY OF RIPON
TRANSPORATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES AND TRANSIT ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Note 2: Summary of Significant Policies (Continued)
e. Cash and Investments
All City monies are invested in a cash and investment pool, whereby funds can spend cash at any time without prior notice or penalty. Therefore, for purposes of the statement of cash flows, all enterprise fund cash on hand and in the pool is considered cash and cash equivalents.
f. Interfund Transactions
During the course of operations, operating transactions occur between the TDA and Measure K Funds, where revenues are received, and other governmental funds, where expenditures occur. These transactions are classified as "intergovernmental transfers" on the statement of revenues, expenditures, and changes in fund balances. g. Capital Assets
All purchased capital assets are valued at cost where historical cost records are available and at an estimated historical cost where no historical records exist.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Improvements are capitalized and depreciated over the remaining useful lives of the related capital assets, as applicable.
Depreciation of all capital assets in the Transit Enterprise Fund is computed using the straight-line method over their estimated useful lives. Estimated useful lives of vehicles are seven years.
h. Net Position/Fund Balance
The financial statements of the enterprise fund utilize a net position presentation. Net position is categorized as follows:
Investment in Capital Assets - This category groups all capital assets into one component of net position. Accumulated depreciation reduces the balance in this category.
Restricted Net Position - This category presents amounts with external restrictions imposed by creditors, granters, contributors, or laws or regulations of other governments and restrictions imposed by law through constitutional provisions or enabling legislation.
The City follows the provisions of GASB Statement No. 54, Fund Balance Reporting and Governmental Fund Type Definitions. Accordingly, governmental funds report fund balance as nonspendable, restricted, committed, assigned, or unassigned based primarily on the extent to which the City is bound to honor constraints on how specific amounts can be spent. At June 30, 2021, fund balances is categorized as follows:
Restricted Fund Balance - amounts with constraints placed on their use that are either (a) externally imposed by creditors, granters, contributors, or laws or regulations of other governments; or (b) imposed by law through constitutional provisions or enabling legislation.
11 CITY OF RIPON
TRANSPORATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES AND TRANSIT ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Note 2: Summary of Significant Policies (Continued)
i. Grants
Grant revenues and receivables are recorded when eligibility requirements that have been imposed by the provider have been met. Grant sources include Federal Transit Administration (FTA), State Transit Assistance (STA), and LTF. The LTF and STA were created by the State Legislature under the TDA.
j. Use of Estimates
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures/expenses during the reporting period. Actual results could differ from these estimates.
k. Comparative Data
Comparative totals for the prior year have been presented in the accompanying financial statements in order to provide an understanding of changes in financial position and operations of the City's TDA Fund, Measure K Fund, and Transit Enterprise Fund.
Note 3: Cash and Investments
The cash and investment balances for the City's TDA Fund, Measure K Fund, and Transit Enterprise Fund are held in the City's cash and investment pool. The City maintains a cash and investment pool in order to facilitate the management of cash. Interest is allocated to its various funds based upon average cash balances. Investments held in the City's cash management pool are available on demand to the City's TDA Fund, Measure K Fund, and Transit Enterprise Fund and are stated at fair value. Information regarding categorization of investments can be found in the City's financial statements.
Note 4: Capital Assets
Capital assets consisted of the following at June 30, 2021:
Balance
July 1, 2020 Additions Deletions
Balance
June 30, 2021
Transit Vehicles 1,093,563 $ - $ - $ 1,093,563 $
Less: Accumulated Depreciation (688,400) (81,032) - (769,432) $ (81,032) 405,163 $ - $ 324,131 $
Depreciation for the year ended June 30, 2021, was $81,032.
Note 5: Subsequent Events
Subsequent events have been evaluated through December 30, 2021, the date these financial statements were available to be issued. The City did not identify any subsequent events that require disclosure.
12 CITY OF RIPON
TRANSPORATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES AND TRANSIT ENTERPRISE FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Note 6: Restatement of Fund Balance
Beginning fund balance in the Measure K fund was restated by $(438,714). In fiscal year 2019- 20, the City received grant funds related to the Safe Routes to Schools and Doak Boulevard Shared-Use Path projects, however activity was captured outside of the City’s TDA funds.
Revenues were subsequently adjusted and properly reflected in the Measure K fund, however because these funds operate on a reimbursement basis, the related expenditures were erroneously excluded in fiscal year 2019-20.
13 REQUIRED SUPPLEMENTARY INFORMATION
14 Variance with
Original Final Actual Final Budget
Revenues:
Local Transportation Fund:
Streets and roads $ 676,647 $ 676,647 $ 777,731 $ 101,084 Pedestrian and bicycle 15,922 15,922 18,301 2,379
Investment earnings 8,100 8,100 5,833 (2,267)
Total Revenues 700,669 700,669 801,865 101,196
Excess of Revenues
Over Expenditures 700,669 700,669 801,865 101,196
Other Financing Uses:
Intergovernmental transfers - - (745,833) (745,833)
Total Other Financing Uses - - (745,833) (745,833)
Net Change in Fund Balances $ 700,669 $ 700,669 56,032 $ (644,637) Fund Balances, Beginning of Year 740,000
Fund Balances, End of Year $ 796,032
Budgeted Amounts
CITY OF RIPON
TRANSPORTATION DEVELOPMENT ACT FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
15 Variance with
Original Final Actual Final Budget
Revenues:
Measure K Fund:
Local street repair $ 300,000 $ 300,000 $ 300,000 $ -
Passenger rail - - 73,928 73,928
Congestion relief - - 20,000 20,000
Investment earnings 9,000 9,000 19,277 10,277
Total Revenues 309,000 309,000 413,205 104,205
Excess of Revenues
Over Expenditures $ 309,000 $ 309,000 413,205 $ 104,205 Fund Balances, Beginning of Year, as Restated 2,220,612 Fund Balances, End of Year $ 2,539,889
Budgeted Amounts
CITY OF RIPON
MEASURE K FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
16 CITY OF RIPON
TRANSPORATION DEVELOPMENT ACT AND MEASURE K FUNDS
NON-TRANSIT PURPOSES AND TRANSIT ENTERPRISE FUND
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
FOR THE FISCAL YEAR ENDED JUNE 30, 2021
Note 1: Budgetary Information
Annual budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America for the Transportation Development Act and Measure K Funds. All appropriations lapse at year-end. The appropriate budget is prepared by department, function, and fund. The City's Manager may make transfers of appropriations between departments within a fund; however, any revisions that alter the total expenditures of any fund must be approved by the City Council. The legal level of budgetary control is the object level within a fund.
17 OTHER REPORTS
18 INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
San Joaquin Council of Governments
Stockton, California
To the City Council
City of Ripon
Ripon, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, and the Transportation Development Act (TDA), the financial statements of the TDA Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City of Ripon, California (the City), as of and for the year ended June 30, 2021, and the related notes to the financial statements, and have issued our report thereon dated December 30, 2021.
Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over financial reporting (internal control) relating to the TDA Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund, to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control as it relates to the TDA Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Lance, Soll & Lunghard, LLP 2151 River Plaza Dr., Suite 150 Sacramento ,CA95833 Phone: 916.503.9691 To the Board of Directors To the City Council
San Joaquin Council of Governments City of Ripon
Stockton, California Ripon, California
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the TDA Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Our audit was further made to determine that the City’s TDA and Measure K Funds, allocated for non-transit purposes, and the Transit Enterprise Fund received by the City were expended in conformance with applicable statutes, rules, and regulations of the TDA, and the allocation instructions and resolutions of the San Joaquin Council of Governments as required by Sections 6666 and 6667 of Title 21 of the California Code of Regulations. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and the TDA.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance relating to the TDA Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund and the results of that testing, and not to provide an opinion on the effectiveness of the Fund’s internal control or on compliance relating to the TDA Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Fund’s internal control and compliance relating to the TDA Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund. Accordingly, this communication is not suitable for any other purpose.
Sacramento, California
December 30, 2021
20 INDEPENDENT AUDITORS’ REPORT ON STATE COMPLIANCE
To the Board of Directors
San Joaquin Council of Governments
Stockton, California
To the City Council
City of Ripon
Ripon, California
Opinion on Compliance with Transportation Development Act and Measure K Requirements We have audited the City of Ripon, California (the City)’s compliance with the Transportation Development Act (TDA) and Measure K requirements that funds allocated to and received by the City were expended in conformance with applicable statutes, rules, and regulations of the TDA and Measure K; and the allocation instructions and resolutions of the San Joaquin Council of Governments as required by Section 6666 and 6667 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations during the year ended June 30, 2021.
In our opinion, the City, complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on the Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund of the City for the year ended June 30, 2021.
Basis for Opinion
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America (GAAS); the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; the applicable statutes, rules, and regulations of the TDA and Measure K; and the allocation instructions and resolutions of the San Joaquin Council of Governments as required by Section 6666 and 6667 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.
We are required to be independent of the City of Ripon, California, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.
Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of the Transportation Development Act (TDA) and Measure K requirements applicable to the City’s Transportation Development Act Fund and Measure K Fund, allocated for non-transit purposes, and the Transit Enterprise Fund.
Lance, Soll & Lunghard, LLP 2151 River Plaza Dr., Suite 150 Sacramento ,CA95833 Phone: 916.503.9691 To the Board of Directors To the City Council
San Joaquin Council of Governments City of Ripon
Stockton, California Ripon, California
Auditor’s Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS; Government Auditing Standards; the applicable statutes, rules, and regulations of the TDA and Measure K; and the allocation instructions and resolutions of the San Joaquin Council of Governments as required by Section 6666 and 6667 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of the Transportation Development Act (TDA) and Measure K requirements that funds allocated to and received by the City were expended in conformance with applicable statutes, rules, and regulations of the TDA and Measure K; and the allocation instructions and resolutions of the San Joaquin Council of Governments as required by Section 6666 and 6667 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations.
In performing an audit in accordance with GAAS; Government Auditing Standards; the applicable statutes, rules, and regulations of the TDA and Measure K; and the allocation instructions and resolutions of the San Joaquin Council of Governments as required by Section 6666 and 6667 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations, we:
Exercise professional judgment and maintain professional skepticism throughout the audit. Identify and assess the risks of material noncompliance, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances.
Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit procedures that are appropriate in the circumstances and to test and report on internal control over compliance in accordance with the applicable statutes, rules, and regulations of the TDA and Measure K; and the allocation instructions and resolutions of the San Joaquin Council of Governments as required by Section 6666 and 6667 of Title 21, Division 3, Chapter 2, Article 5.5 of the California Code of Regulations, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control over compliance. Accordingly, no such opinion is expressed.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit. 22 To the Board of Directors To the City Council
San Joaquin Council of Governments City of Ripon
Stockton, California Ripon, California
Purpose of this Report
The purpose of this report on compliance is solely to describe the scope of our testing of compliance and the results of that testing. Accordingly, this report is not suitable for any other purpose.
Sacramento, California
December 30, 2021
23