Internal Audit. Sonoma County. Financial Statement Audit: Sonoma County Public Safety Consortium Annual Report

Transcription

1 Auditor Controller Treasurer Tax Collector Internal Audit Sonoma County Financial Statement Audit: Sonoma County Public Safety Consortium Annual Report For the Fiscal Year Ended June 30, 2014 Audit No: 3502 Report Date: June 24, 2015 Audit Manager: Kanchan K. Charan, CPA CGMA Audit Supervisor: Damian Gonshorowski, CPA CGMA Auditor: Keith Auyang, CPA

2 Annual Report For the Fiscal Year Ended June 30, 2014 Table of Contents Page Auditor-Controller s Report..1-2 Management s Discussion and Analysis Basic Financial Statements: Statement of Net Position... 7 Statement of Revenues, Expenses and Changes in Net Position... 8 Statement of Cash Flows 9 Notes to the Basic Financial Statements Roster of Board Members... 19

3 DAVID E. SUNDSTROM, CPA AUDITOR-CONTROLLER TREASURER -TAX COLLECTOR 585 FISCAL DRIVE, SUITE 100 SANTA ROSA, CA PHONE (707) FAX (707) DONNA DUNK, CPA ASSISTANT AUDITOR-CONTROLLER JONATHAN KADLEC ASSISTANT TREASURER-TAX COLLECTOR The Board of Directors Sonoma County Public Safety Consortium Auditor-Controller s Report Report on the Financial Statements We have audited the accompanying financial statements of the Sonoma County Public Safety Consortium, (the Consortium) and the related notes to the financial statements as of and for the year ended June 30, 2014, which collectively comprise the Sonoma County Public Safety Consortium s basic financial statements as listed in the table of contents. Management s Responsibility for the Financial Statements Consortium 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 controls 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 conducting the audit in accordance with auditing standards generally accepted in the United States of America. Because of the independence impairments described in the Basis for Disclaimer of Opinion paragraph, auditing standards require us to disclaim an opinion on the financial statements. Basis for Disclaimer of Opinion As required by various statutes within the California Government Code, County Auditor- Controllers are mandated to perform certain accounting, auditing and financial reporting functions. In Sonoma County, the Auditor-Controller and Treasurer-Tax Collector (ACTTC) positions are combined. The Agency s cash is pooled with the Sonoma County Treasurer (a division of the ACTTC), who acts as a disbursing agent for the Agency. The Accounting Division within the ACTTC maintains internal controls over the financial accounting management information system, and processes transactions that have been approved by the Agency. The Accounting Division processes County checks for expenditures approved by the Agency, these checks are signed by the Auditor-Controller-Treasurer-Tax Collector. These non-audit activities create management participation threats to auditor independence, as discussed in Interpretation of the American Institute of Certified Public Accounts Code of Professional Conduct, which cannot be mitigated. The audit has been performed by the ACTTC s Internal Audit Division, which has no other responsibility for the accounts and records being audited. The amount that this departure affects the assets, liabilities, net position, deferred outflows of resources, deferred inflows of resources, revenues and expenses of the Agency has not been determined. 1

4 Disclaimer of Opinion Because of the independence impairments described in the Basis for Disclaimer of Opinion paragraph, auditing standards require us to disclaim an opinion on the financial statements. Accordingly, we do not express an opinion on these financial statements. Other Matters Accounting principles generally accepted in the United States of America require that the Management s Discussion and Analysis (MD&A), 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 financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the MD&A 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 MD&A because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Sonoma County Auditor-Controller June 24,

5 Management s Discussion and Analysis As management of the Sonoma County Public Safety Consortium (the Consortium), we offer readers of these financial statements this narrative overview and analysis of the Consortium s financial activities for the fiscal year ended June 30, We encourage readers to consider the information presented here in conjunction with the Consortium s financial statements and the accompanying notes to the basic financial statements. The primary mission of the Consortium is to operate, maintain and improve the public safety communication and data management system comprised of Computer Aided Dispatch (CAD), Records Management System (RMS), and Mobile Data Computing (MDC) among the County, cities, districts and other public entities within Sonoma County. Please refer to the definition of the reporting entity within the notes to the financial statements for additional detail. Financial Highlights The Consortium s assets exceeded its liabilities at the close of the fiscal year ended June 30, 2014 by $4,260,515 of which $1,345,304 represents its investment in capital assets and $2,915,211 representing unrestricted net position. The Consortium s liabilities amounted to $580,989, at the close of the fiscal year ended June 30, 2014 consisting of $331,771 in short term unearned revenues representing residual member contributions for operations and $249,218 in long term unearned revenues for funds collected from Consortium members towards the financing of the MDC equipment replacement. For the fiscal year ended June 30, 2014, the Consortium expended $655,913 to upgrade their Intergraph software and $209,918 for servers with funding from shared replacement. Overview of the Basic Financial Statements This discussion and analysis is intended to serve as an introduction to the Consortium s basic financial statements. The Consortium s basic financial statements are comprised of two components: 1) basic financial statements and 2) notes to the basic financial statements. The Sonoma County Public Safety Consortium is engaged only in business-type activities. The Consortium accounts for its financial activity utilizing fund accounting, specifically enterprise fund accounting, to ensure and demonstrate compliance with finance-related legal requirements. An enterprise fund is a proprietary fund type used to report activities for which a fee is charged to external customers for goods or services provided. The focus of an enterprise fund is the determination of operating income, changes in net assets (or cost recovery), financial position and cash flow. 3

6 All activities are presented in the following three basic financial statements: Statement of Net Position Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows Notes to the basic financial statements: The notes provide additional information that is essential to a full understanding of the data provided in the financial statements. Financial Analysis Net Position. Over time, changes in net position may indicate whether the financial position of the Consortium is improving or deteriorating. Net position increased to $4,260,515 during the fiscal year ended June 30, 2014, a gain of $955 from the fiscal year ended June 30, The following table summarizes the net position for the Consortium: Net Position June 30, June 30, Assets: Current assets $ 3,496,200 $ 3,973,389 Capital assets (net of accumulated depreciation) 1,345, ,416 Total assets 4,841,504 4,599,805 Liabilities: Current liabilities 331,771 91,127 Non-current liabilities 249,218 Total liabilities 580,989 91,127 Net Position: Net investment in capital assets 1,345, ,416 Unrestricted net position 2,915,211 3,633,144 Total net position $ 4,260,515 $ 4,259,560 4

7 Change in Net Position. Total revenues for the fiscal year ended June 30, 2014 were $2,159,155 compared with expenses of $2,158,200. Operating revenues and operating expenses decreased $2,060,406 and $1,910,628 respectively, when compared with the prior fiscal year. The decrease in revenues and expenditures is due to completion of the replacement projects for the members MDCs and CADs workstations in the 2013 fiscal year which increased the operational cost during the prior year. The following table summarizes the changes in net position for the current and prior fiscal years: Changes in Net Position June 30, June 30, Revenues: Operating revenues $ 2,134,974 $ 4,195,380 Investment earnings 24,181 44,881 Total revenues 2,159,155 4,240,261 Expenses: Operating expenses 2,144,250 4,054,878 Non-operating expenses 13,950 Total expenses 2,158,200 4,054,878 Increase in net position ,383 Net position - beginning of the year 4,259,560 4,074,177 Net position - end of the year $ 4,260,515 $ 4,259,560 5

8 Capital Assets The Consortium s investment in capital assets consists of equipment and software utilized to support the public safety communication and data management system in Sonoma County. For the fiscal year ended June 30, 2014, the Consortium capital asset purchases consisted of servers in the amount of $209,918 and a radio software upgrade in the amount of $655,913. The Consortium s net investment in capital assets increased by $718,888 to $1,345,304, as a result of purchases, retirements, depreciation, and amortization. Equipment Intangible Assets Accumulated depreciation and amortization Capital Assets June 30, 2014 $ 1,477,399 2,053,718 (2,185,813) June 30, 2013 $ 1,353,298 1,397,805 (2,124,687) Net investment in capital assets $ 1,345,304 $ 626,416 Economic Outlook The Consortium s budget is driven primarily by the costs of services to operate the communication and data management CAD/RMS/MDC system contracted with the County of Sonoma Information Systems Department (ISD). Per Service Level of Agreement (SLA) and contract, ISD is required to submit an annual budget to the Consortium estimating its costs. For the fiscal year ending June 30, 2015, the cost for ISD s services is estimated to increase $105,000 over the fiscal year ended June 30, Request for Additional Information This financial report is designed to provide a general overview of the Consortiums finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to Sonoma County Public Safety Consortium, 585 Fiscal Dr., Suite 100, Santa Rosa, CA

9 Basic Financial Statements

10 Statement of Net Position June 30, 2014 Assets: Current assets: Cash and investments Due from other governments $ 3,440,801 55,399 Total current assets 3,496,200 Non-current assets: Capital assets (net of accumulated depreciation/amortization): Equipment Intangible Assets 352, ,965 Total capital assets, net 1,345,304 Total assets $ 4,841,504 Liabilities: Current liabilities: Unearned revenue Total current liabilities Noncurrent liabilities: Unearned revenue Total noncurrent liabilities 331, , , ,218 Total liabilities 580,989 Net Position: Net investment in capital assets Unrestricted 1,345,304 2,915,211 Total net position $ 4,260,515 The notes to the basic financial statements are an integral part of this statement. 7

11 Statement of Revenues, Expenses and Changes in Net Position Operating Revenues Charges for services Operations $ 1,798,392 Capital replacement 336,582 Total operating revenues 2,134,974 Operating Expenses Contract services 1,896,816 Depreciation and amortization 132,993 Replacement fund purchases 107,061 Insurance 7,380 Total operating expenses 2,144,250 Operating loss (9,276) Non-operating Revenues Investment earnings 24,181 Total non-operating revenues 24,181 Non-operating Expenses Loss on disposal of assets 13,950 Change in net position 955 Net position, beginning of year 4,259,560 Net position, end of year $ 4,260,515 The notes to the basic financial statements are an integral part of this statement. 8

12 Statement of Cash Flows Cash Flows from Operating Activities Receipts from Consortium members and non-affiliated agencies Payments to suppliers $ 2,625,614 (2,014,857) Net cash provided by operating activities 610,757 Cash Flows from Capital and Related Financing Activities Acquisition and construction of capital assets Net cash used in capital and related financing activities (865,831) (865,831) Cash Flows from Investing Activities Interest received 24,181 Net cash provided by investing activities 24,181 Net decrease in cash and cash equivalents Cash and investments, beginning of year (230,893) 3,671,694 Cash and investments, end of year $ 3,440,801 Reconciliation of operating loss to net cash provided by operating activities: Operating loss Adjustments to reconcile operating loss to net cash provided by operating activities: Depreciation and amortization Decrease in due from other governments Decrease in due to other governments Increase in unearned revenue $ (9,276) 132, ,296 (3,600) 244,344 Net cash provided by operating activities $ 610,757 The notes to the basic financial statements are an integral part of this statement. 9

13 Notes to the Basic Financial Statements I. Summary of Significant Accounting Policies A. Definition of Reporting Entity The Sonoma County Public Safety Consortium (the Consortium) was formed by a Joint Powers Agreement (the Agreement) on July 1, 2008, pursuant to the Joint Exercise of Powers Act, California Government Code, chapter 5, article 1, and section The purpose of the Agreement was to establish a Joint Powers Agency to efficiently and effectively operate, maintain and improve a public safety communication and data management system in Sonoma County. The Consortium members are the cities of Cotati, Petaluma, Rohnert Park, Santa Rosa and Sonoma, the town of Windsor, the Redwood Empire Dispatch Communications Authority (REDCOM), the Sonoma County Junior College District and the Law Enforcement of Sonoma County (Sheriff). In addition to the Consortium members, other public safety entities have limited access to the integrated CAD and RMS as non-affiliated agencies. The Consortium uses the County of Sonoma s Financial Accounting Management Information System and its budgetary recording and accounting control policies to account for all financial transactions. The County of Sonoma, through the Auditor- Controller Treasurer-Tax Collector s Office, tracks billing and collections for member agencies. The responsibility for the financial statements rests with the Consortium s Board of Directors. B. Measurement Focus, Basis of Accounting and Financial Statement Presentation The Consortium uses proprietary (enterprise) funds to account for its activities. Proprietary funds are used to account for operations that are financed and performed in a manner similar to a private business enterprise where the intent of the governing body is that the cost of providing goods and services to individuals outside the governing body, on a continuing basis, be financed or recovered primarily through user charges. The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental units, including the reporting model defined by Governmental Accounting Standards Board (GASB) Statement No. 34 Basic Financial Statements and Management s Discussion and Analysis for State and Local Governments. Financial statements for the Consortium are reported using the economic resources measurement focus and the accrual basis of accounting. All 10

14 Notes to the Basic Financial Statements assets and liabilities associated with the operation of the Consortium are included in the statement of net position. Revenues are recorded when earned and expenses are recorded when the liability is incurred, regardless of the timing of related cash flows. Proprietary funds distinguish operating revenues and expenses from non-operating revenues and expenses. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the proprietary fund s principal ongoing operations. Revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Non-exchange transactions, in which the Consortium gives (or receives) value without directly receiving (or giving) equal value in exchange, include grants and donations. On an accrual basis, revenue from grants and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied. Cash and Cash Equivalents The Consortium participates in a pool of cash and investments with the Sonoma County Auditor-Controller-Treasurer-Tax Collector. Cash and investments are reported at amortized cost, which is not materially different than fair value. All pooled cash and investments are fully insured or collateralized. For purposes of the accompanying statement of cash flows, all highly liquid investments with a maturity of three months or less when purchased are considered to be cash equivalents. Due from Other Governments Transactions representing accrual of revenues at year-end are referred to as due from other governments. Due from other governments include transactions in which the Consortium has either earned or has met all eligibility requirements and is entitled to the revenue. Capital Assets Capital assets include equipment and computer software. The Consortium capitalizes assets with an estimated useful life in excess of one year that meet the capitalization thresholds of $5,000 for equipment and $100,000 for computer software. Capital assets are depreciated or amortized using the straight-line method over the estimated useful life. Estimated useful lives for capital assets are as follows: Equipment Intangible Assets 3-8 years 4-7 years 11

15 Notes to the Basic Financial Statements Net Position Net position is classified into three components net investment in capital assets, restricted and unrestricted. These classifications are defined as follows: Net investment in capital assets - This component of net position consists of capital assets, including restricted capital assets, net of accumulated depreciation and amortization and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted net position (if any) - This component of net position consists of net assets with limits on their use that are imposed by outside parties. Unrestricted net position This component of net position consists of net assets that are not restricted for any project or other purpose. Revenue Operating revenues are recognized in the accounting period in which they are earned. Amounts recorded as charges for services represent payments from the members of the Consortium. Expenses Expenses are recognized in the accounting period in which the related liability is incurred. The Consortium pays the County for the administrator, legal, analyst and fiscal accounting services on a cost reimbursement basis. Budgets The Consortium adopts a preliminary budget no later than February 15th for the following fiscal year, as required by the Agreement. Budgetary revenue estimates represent original estimates modified for any authorized adjustments, contingent upon new or additional revenue sources. Budgetary expenditure amounts represent original appropriations adjusted by budget transfers and authorized appropriation adjustments made during the year. All budgets are adopted on a non-gaap basis. 12

16 Notes to the Basic Financial Statements II. Notes A. Cash and Investments Investment in the Sonoma County Treasurer s Investment Pool The Consortium s cash is pooled with the Sonoma County Treasurer (Treasurer), who acts as a disbursing agent for the Consortium. The amortized cost of the Consortium s investment in this pool is reported in the accompanying financial statements based upon the Consortium s pro-rata share of the fair value provided by the Treasury Pool for the entire Treasury Pool portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on accounting records maintained by the Treasurer, which are recorded on an amortized cost basis. Interest earned on investments pooled with the County is allocated quarterly to the appropriate fund based on its respective average daily balance for that quarter. The Investment Oversight Committee has oversight for all monies deposited into the Treasury Pool. The June 30, 2014 cash balance consists of: Amortized Cost Fair Value Cash with County Treasury $ 3,440,801 $ 3,468,545 The fair value in the Consortium s financial statements of the cash and investments with the Treasurer is $27,744 greater than the amortized cost of those investments. No adjustment was made for the difference between cost and fair value. Investment Guidelines The Consortium s pooled cash and investments are invested pursuant to investment policy guidelines established by the Treasurer and approved by the Board of Supervisors. The objectives of the policy are, in order of priority: safety of capital, liquidity and yield. The policy addresses the soundness of financial institutions in which the County will deposit funds, types of investment instruments as permitted by the California Government Code, and the percentage of the portfolio that may be invested in certain instruments with longer terms to maturity. A copy of the County of Sonoma s investment policy is available upon request from the Sonoma County Treasurer at 585 Fiscal Drive, Suite 100, Santa Rosa, California,

17 Notes to the Basic Financial Statements Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The County of Sonoma manages its exposure to interest rate risk by purchasing a combination of shorter term and longer term investment and by timing cash flows from maturities so that a portion of the portfolio is maturing evenly over time as necessary to provide the cash flow and liquidity for operations, which precludes the County from having to sell investments below original cost. As of June 30, 2014, the weighted average maturity of the investments in the Treasury Pool was 791 days. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. The Treasury Pool does not have a rating provided by a nationally recognized statistical rating organization. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the Treasury Pool s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits and securities lending transactions: The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by depository regulated under State law. The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. The California Government Code limits the total of all securities lending transactions to 20% of the fair value of the investment portfolio. 14

18 Notes to the Basic Financial Statements With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government s indirect investment in securities through the use of mutual funds or government investment pools (such as the Treasury Pool). Concentration of Credit Risk The investment policy of the County contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. For a listing of investments in any one issuer (other than U.S. Treasury securities, mutual funds, or external investment pools) that represent 5% or more of total County investments, refer to the 2014 Sonoma County Comprehensive Annual Financial Report. B. Due from Other Governments The Consortium obtains funding from both its members and non-affiliated agencies. The amount receivable from these sources as of June 30, 2014 is as follows: Replacement Consortium Members: Fund Total City of Cotati $ 2,754 $ 2,754 SRJC REDCOM 52,162 52,162 Total due from other governments $ 55,399 $ 55,399 15

19 Notes to the Basic Financial Statements C. Commitments The Consortium has a commitment as of June 30, 2014 to Intergraph related to a contract for implementation of a system upgrade in the amount of $244,484. D. Capital Assets Capital asset activity for the year ended June 30, 2014 was as follows: Sonoma County Public Safety Consortium Capital Assets Beginning Transfers & Ending Balance Additions Retirements Adjustments Balance Capital assets, being depreciated: Equipment $ 1,353,298 $ 209,918 $ (85,817) $ - $ 1,477,399 Intangibles 1,397, , ,053,718 Total capital assets, being depreciated and amortized 2,751, ,831 (85,817) - 3,531,117 Less accumulated depreciation and amortization for: Equipment (1,127,843) (69,083) 71,867 - (1,125,059) Intangibles (996,844) (63,910) - - (1,060,754) Total accumulated depreciation and amortization: (2,124,687) (132,993) 71,867 - (2,185,813) Total capital assets, being depreciated, net 626, ,838 (13,950) - 1,345,304 Capital assets, net $ 626,416 $ 732,838 $ (13,950) $ - $ 1,345,304 16

20 Notes to the Basic Financial Statements E. Unearned Revenue Unearned Revenues consists of residual contributions of Consortium members for operations in addition to MDC and CAD equipment replacement. Residual contributions for operations will be recognized as revenue in the following fiscal year. Contributions for MDC and CAD equipment are recognized as revenue in the year of replacement. The next round of replacement for MDC and CAD equipment is scheduled to occur in FY Non - Beginning Ending Current Current Balance Additions Reductions Balance Portion Portion Residual Contributions for Operations City of Cotati $ 1,498 $ 2,689 $ - $ 4,187 $ 4,187 $ - City of Petaluma 25,719 6,560-32,279 32,279 - City of Rohnert Park 16,761 12,299-29,060 29,060 - City of Santa Rosa 146,285 15, , ,316 - City of Sonoma 1,835 - (1,179) Sheriff 52,121 43,827-95,948 95,948 - Town of Windsor 1,297 2,658-3,955 3,955 - SRJC 3, ,370 4,370 - REDCOM Contributions for Operations $ 249,118 $ 83,832 $ (1,179) $ 331,771 $ 331,771 $ - Contributions for MDC Equipment Replacement City of Cotati $ - $ - $ - $ - $ - $ - City of Petaluma - 14,852-14,852-14,852 City of Rohnert Park 87,527 - (368) 87,159-87,159 City of Santa Rosa - 37,596-37,596-37,596 City of Sonoma - 4,983-4,983-4,983 County (Sheriff) - 98,956-98,956-98,956 Town of Windsor - 5,672-5,672-5,672 SRJC REDCOM Contributions for MDC Equipment Replacement $ 87,527 $ 162,059 $ (368) $ 249,218 $ - $ 249,218 Total Unearned Revenues $ 336,645 $ 245,891 $ (1,547) $ 580,989 $ 331,771 $ 249,218 17

21 Notes to the Basic Financial Statements F. Contract Services Expenses Contract services include CAD/RMS/MDC operations and replacement, administrative, accounting, auditing and legal services. III. Other Information A. Joint Powers Agreement Pursuant to the Joint Exercise of Powers Act, California Government Code, chapter 5, article 1, section , cities, districts and the County of Sonoma entered into a Joint Powers Agreement (JPA) to establish and govern the Sonoma County Public Safety Consortium (the Consortium), dated July 1, The Consortium was established to operate, maintain and improve a public safety communication and data management system currently comprised of Computer Aided Dispatch (CAD), Records Management System (RMS) and Mobile Data Computing (MDC) technology among the cities of Cotati, Petaluma, Rohnert Park, Santa Rosa, Sonoma, Town of Windsor, Redwood Empire Dispatch Communications Authority (REDCOM), the Sonoma County Junior College District and the Law Enforcement of Sonoma County (Sheriff). The Consortium is governed by a board of directors (the Board) comprised of 9 members which is comprised of the City Manager from each city /town Member agency, the Sonoma County Administrator, an appointed representative from the REDCOM Board of Directors, and the President of the Sonoma County Junior College District. The board members appoint an Oversight Committee to handle operations and ongoing business of the Consortium. Pursuant to the JPA, the board adopts an annual budget thereby fixing the annual assessment against each member. The relative percentage allocation of annual operating expenses is based upon usage and system connections as set by the Board. B. Risk Management The Consortium is exposed to various risks for which liability insurance is carried. Coverage limits are as follows: personal injury that includes bodily injury and property damage in the amount of $5,000,000, auto liability for non-owned and hired automobile liability in the amount of $5,000,000, Public Officials errors and omissions in the amount of $5,000,000 and employment practices liability in the amount of $5,000,

22 Board of Directors The Board of Directors, none of whom are employed by Sonoma County Public Safety Consortium, as of June 30, 2014, is: Veronica Ferguson, Director County Administrator Diane Thompson, Director Acting City Manager, Cotati John C. Brown, Director City Manager, Petaluma Chris Thomas, Director Deputy County Administrator, Sonoma County Representing the Redwood Empire Dispatch Communications Authority (REDCOM) Darrin W. Jenkins, Director City Manager, Rohnert Park Kathy Millison, Director City Manager, Santa Rosa Matthew McCaffrey, Director Chief of Police, Santa Rosa Junior College Carol Giovanatto, Director City Manager, Sonoma Linda Kelly, Director City Manager, Town of Windsor 19