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F
inancial Report
June 30, 2021
City of Santa Clarita, California
Open Space Preservation District
Special Revenue Fund
O
pen Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Table of Contents
June 30, 2021
I
ndependent Auditor’s Report ............................................................................................................................. 1 Financial Statements
Balance Sheet .................................................................................................................................................. 4 Statement of Revenues, Expenditures and Changes in Fund Balance ............................................................... 5 Notes to Financial Statements ......................................................................................................................... 6 Required Supplementary Information
Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual .................................. 9 Note to Required Supplementary Information ................................................................................................10 What inspires you, inspires us. | eidebailly.com
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1 Independent Auditor’s Report
To the Honorable Mayor and Members of the City Council
of the City of Santa Clarita
Santa Clarita, California
Report on the Financial Statements
We have audited the accompanying financial statements of the Open Space Preservation District Special Revenue Fund (Fund) of the City of Santa Clarita, California (City) as of and for the year ended June 30, 2021, and the related notes to the financial statements as listed in the table of contents.
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
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we 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, we 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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
2 Opinion
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund of the City as of June 30, 2021, and the changes in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Emphasis of a Matter
As discussed in Note 1 to the financial statements, the financial statements present only the 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 year then ended, in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the schedule of revenues, expenditures, and changes in fund balance – budget and actual and related note as described in the table of contents 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. 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.
3 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated December 23, 2021, on our consideration of the City’s internal control over financial reporting 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. 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.
Rancho Cucamonga, California
December 23, 2021
See Notes to Financial Statements 4
Open Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Balance Sheet
June 30, 2021
Assets
Pooled cash and investments 6,551,135 $
Receivables
Interest 15,490
Taxes 45,567
Total assets 6,612,192 $
Liabilities and Fund Balance
Liabilities
Accounts payable and accrued liabilities 34,164 $
Fund Balance
Restricted for Open Space Preservation 6,578,028
Total liabilities and fund balance 6,612,192 $
See Notes to Financial Statements 5
Open Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Statement of Revenues, Expenditures and Changes in Fund Balance For the Year Ended June 30, 2021
Revenues
Special assessments 2,881,269 $
Charges for services 72,933
Investment income 17,640
Total revenues 2,971,842
Expenditures
Current
Open Space Preservation 815,696
Capital outlay 378,981
Total expenditures 1,194,677
Excess of revenues over expenditures 1,777,165
Other Financing Sources (Uses)
Transfers to other funds of the City of Santa Clarita (791,563) Net Change in Fund Balance 985,602
Fund Balance, Beginning of Year 5,592,426
Fund Balance, End of Year 6,578,028 $
6 Open Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Notes to Financial Statements
June 30, 2021
Note 1 - Organization and Summary of Significant Accounting Policies
Organization : On July 17, 2007, the City of Santa Clarita (the City) established the Santa Clarita Open Space Preservation District (the District) pursuant to the provisions of the Landscape and Lighting Act of 1972, being Part 2 of Division 15 of the California Street and Highway Code. The purpose of the District is to fund a portion of the City’s open space, park and parkland program consisting of the acquisition, preservation, improvement, servicing, financing and maintenance of open-space land, parks and parkland, and appurtenant equipment and facilities, including the payment of debt service, of benefit to the property within the District. Facilities include, but are not limited to, open-space land, parks, parklands, the Santa Clarita River Watershed, trail systems and wildlife corridors. These are financed by special assessments levied on parcels within the City boundaries. The boundaries of the District are the same as the boundaries of the City. The City established the Open Space Preservation District Special Revenue Fund (Fund) to account for the activities of the District. The City has title of the constructed assets within the boundaries of the District. Any debt issued for activities of the District are issued in the name of the City.
Basis of presentation: The Fund’s statements are prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP). The Fund is presented as a Special Revenue Fund of the City. The Governmental Accounting Standards Board (GASB) is the acknowledged standard-setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States. The financial statements were prepared from only the accounts of the Fund and, therefore, do not present the financial position or results of operations of the City and changes in financial position thereof for the year then ended in conformity with generally accepted accounting principles in the United States of America.
Fund financial statements: Governmental fund financial statements include a balance sheet and a statement of revenues, expenditures, and changes in fund balance.
The Fund is accounted for on a spending or “current financial resources” measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the balance sheet. The statement of revenues, expenditures, and changes in fund balance present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in the fund balance. The primary revenue sources are special assessments and interest revenue. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. Revenues are considered available if they are collected within 90 days of the end of the current fiscal period, except for special assessments, which are within 60 days.
Expenditures are recorded in the accounting period in which the related fund liability is incurred.
Pooled cash and investments: The Fund’s cash and investments balance was pooled with various other City funds for deposit and investment purposes. The City’s treasury is responsible for the cash management of the Fund’s cash balance, which pools available cash for investment purposes. The cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition. Each City fund owns a share of pooled cash and investments, which are separately maintained, and interest income was apportioned based on its average month-end cash balances to the total of the pooled cash and investments.
7 Open Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Notes to Financial Statements
June 30, 2021
Special assessments: Special assessment taxes are attached as enforceable liens on real property on July 1, the beginning of the fiscal year, and are due in two installments on November 1 and February 1; however, no penalties or interest are assessed until December 10 and April 10, respectively. These taxes are determined annually based on property values, subject to limits based on Proposition 13, as of January 1 of the levy year, which is prior to the end of the previous fiscal year. The County of Los Angeles bills and collects these taxes for the District and are remitted on a monthly basis.
Fund Balance: In the Fund’s financial statements, fund balance is classified as follows:
Restricted: Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Expenditures as they are incurred are applied against restricted fund balance.
Use of estimates: The preparation of the financial statements in conformity 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 and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions.
Note 2 - Cash and Investments
The Fund’s pooled cash and investments at June 30, 2021 was $6,551,135.
The deposit and investment disclosures required by GASB Statement No. 40 , Deposit and Investment Risk Disclosures , as they relate to the pooled cash and investments, are reported in the annual report of the City. The pooled cash and investments are unrated, and average maturity is 30 days or less.
The Fund recognizes its position in the City investment pool at fair value based on information provided by the City. Deposits and withdrawals to the pool are made on the basis of $1 and not fair value. Accordingly, the measurement of fair value of the Fund’s investment in the City Investment Pool is based on uncategorized inputs not defined as Level 1, Level 2, or Level 3. Additional information regarding interest rate risk, concentration of credit risk, custodial credit risk and fair value measurements of the City’s pooled cash and investments is presented in the City’s Annual Comprehensive Financial Report.
8 Open Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Notes to Financial Statements
June 30, 2021
Note 3 - Transfers to Other Funds of the City of Santa Clarita
The Fund made transfers to the City’s Public Financing Authority’s capital project fund of $766,406 for current year debt service payments for the Lease Revenue Bond Series 2016B. As of June 30, 2021, $12,430,000 was outstanding. Revenues from the Fund are pledged for repayment of the bonds, but the City is not obligated to require additional amounts from the Fund in event the revenues of the fund are insufficient for bond repayment. Additional information regarding the Lease Revenue Bond Series 2016B is presented in the City’s Annual Comprehensive Financial Report.
The Fund also made transfers totaling $25,157 to the City’s General Fund for the Fund’s share of pension unfunded accrued liability obligation determined by the annual CalPERS actuarial report.
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Required Supplementary Information
June 30, 2021
City of Santa Clarita, California
Open Space Preservation District
Special Revenue Fund
See Note to Required Supplementary Information 9
Open Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Year Ended June 30, 2021
Original
Budget
Final
Budget Actual
Variance with
Final Budget
Positive
(Negative)
Revenues
Special assessments 2,848,291 $ 2,848,291 $ 2,881,269 $ 32,978 $ Charges for services 124,442 124,442 72,933 (51,509) Investment income 103,776 103,776 17,640 (86,136) Total revenues 3,076,509 3,076,509 2,971,842 (104,667) Expenditures
Operating
Personnel 324,460 324,850 314,704 10,146 Operating 423,995 620,913 500,992 119,921 Capital outlay - 1,438,400 304,459 1,133,941 Capital Improvement Projects
Operating 30,000 145,467 74,522 70,945 Total expenditures 778,455 2,529,629 1,194,677 1,334,952 Excess of Revenues Over Expenditures 2,298,054 546,880 1,777,165 1,230,285 Other Financing Uses
Transfer out (791,563) (791,563) (791,563) - Net Change in Fund Balance 1,506,491 $ (244,683) $ 985,602 1,230,285 $ Fund Balance at Beginning of Year 5,592,426
Fund Balance at End of Year 6,578,028 $
10 Open Space Preservation District Fund
(a Special Revenue Fund of the City of Santa Clarita, California) Note to Required Supplementary Information
June 30, 2021
Budgetary Information
Annual budgets are legally adopted on a basis consistent with generally accepted accounting principles in the United States of America for all governmental funds, except that encumbrances are shown in the year incurred for budgetary purposes.
On or before the last day in January of each year, all operational units submit requests for appropriations to the City Manager for budget preparation purposes. The proposed budget is presented to the City Council for review.
The City Council holds public hearings, and a final budget must be adopted no later than June 30.
The appropriated budget is prepared by fund, function, and department at the category level. The City reports the following categories: personnel, operating and capital outlay. Additionally, the City separately prepares a capital improvement projects budget. The budgetary control for the Capital Improvement Program is at the program level.
The City’s Department Heads, with approval of the City Manager, may make transfers of appropriations within certain line-items within a program, but may not exceed the total appropriated amounts for each category. City Manager may approve transfers that do not change the total appropriated amount within the fund. The legal level of budgetary control (i.e., the level at which expenditures may not legally exceed appropriations) is the category level.
Under encumbrance accounting, purchase orders, contracts, and other commitments for expenditures are recorded to reserve that portion of the applicable appropriation. Encumbrance accounting is employed as an extension of formal budgetary accounting. Since encumbrances do not yet constitute expenditures or liabilities, encumbrances outstanding at year-end are classified as restricted fund balance. Unexpended appropriations lapse at year-end.