CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS AUDIT REPORT JUNE 30, 2013
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CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS AUDIT REPORT Table of Contents Independent Auditor s Report... 1-2 FINANCIAL STATEMENTS Page Statement of Net Position... 4-5 Statement of Revenues, Expenses and Changes in Net Position... 6-7 Statement of Cash Flows... 8-11 Notes to Financial Statements... 13-20 OTHER REPORTS Independent Auditor s 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... 21-22 Independent Auditor s Report on Compliance Over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with the Statutes, Rules, and Regulations of the California Transportation Development Act and the Allocation Instructions and Resolutions of the Placer County Transportation Planning Agency... 23
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Board of Directors Placer County Transportation Planning Agency Auburn, California City Council City of Roseville Roseville, California Report on the Financial Statements INDEPENDENT AUDITOR S REPORT We have audited the accompanying financial statements of the Transportation Development Act Funds (TDA Funds) allocated to the City of Roseville, as of and for the year ended June 30, 2013, 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 opinions 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 opinions. 1 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com
Board of Directors Placer County Transportation Planning Agency Auburn, California City Council City of Roseville Roseville, California Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the TDA Funds as of June 30, 2013, and the respective changes in financial position and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of a Matter As discussed in Note 1, the financial statements present only the Transportation Development Act Funds of the City of Roseville and do not purport and do not present fairly the financial position of the City of Roseville, as of June 30, 2013, the changes in its financial position, or where applicable, its cash flows for the year ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter. Report on Summarized Comparative Information We have previously audited the TDA Funds 2012 financial statements, and we expressed an unqualified audit opinion on those audited financial statements in our report dated April 15, 2013. In our opinion, the summarized comparative information presented herein as of and for the year ended June 30, 2013 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 March 21, 2014 on our consideration of the TDA Funds 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 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 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 TDA Funds internal control over financial reporting and compliance. Roseville, California March 21, 2014 2
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CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Statement of Net Position June 30, 2013 (With Comparative Totals as of June 30, 2012) Transit Transportation Transit Project CTSA Fund Fund Fund Call Center Assets Current Assets: Pooled cash and investments $ 9,153,656 $ -- $ -- $ 815,909 Accounts receivable 19,499 359 1,674 -- Due from other agencies 1,275,431 452,571 717,799 -- Interest receivable 29,710 -- 1,043 2,314 Due from other TDA related funds 1,330,529 -- -- -- Total Current Assets 11,808,825 452,930 720,516 818,223 Noncurrent Assets: Capital assets, nondepreciable 573,429 1,408,577 42,796 -- Capital assets, depreciable, net 7,028,759 4,914,054 -- 307,427 Total Assets $ 19,411,013 $ 6,775,561 $ 763,312 $ 1,125,650 Liabilities and Net Assets Current Liabilities: Accounts payable $ 34,870 $ 182,931 $ 424,332 $ 20,107 Accrued salaries and benefits 20,515 19,643 -- 1,254 Other accrued liabilities -- 17,369 -- -- Due to other TDA related funds -- 1,116,156 214,373 -- Compensated absences 26,736 28,306 -- 1,467 Unearned revenues 10,385,958 -- -- -- Total Current Liabilities 10,468,079 1,364,405 638,705 22,828 Non-Current Liabilities: Compensated absences 61,250 62,542 -- -- Total Liabilities 10,529,329 1,426,947 638,705 22,828 Net Position: Net investment in capital assets 7,602,188 6,322,631 42,796 307,427 Restricted for Local Transportation -- -- 81,811 795,395 Unrestricted 1,279,496 (974,017) -- -- Total Net Position 8,881,684 5,348,614 124,607 1,102,822 Total Liabilities and Net Position $ 19,411,013 $ 6,775,561 $ 763,312 $ 1,125,650 The accompanying notes are an integral part of these financial statements. 4
Totals 2013 2012 $ 9,969,565 $ 9,926,956 21,532 4,404 2,445,801 2,395,150 33,067 30,163 1,330,529 51,333 13,800,494 12,408,006 2,024,802 1,325,053 12,250,240 12,114,184 $ 28,075,536 $ 25,847,243 $ 662,240 $ 300,017 41,412 42,095 17,369 -- 1,330,529 51,333 56,509 56,773 10,385,958 9,382,589 12,494,017 9,832,807 123,792 121,771 12,617,809 9,954,578 14,275,042 13,439,237 877,206 1,365,842 305,479 1,087,586 15,457,727 15,892,665 $ 28,075,536 $ 25,847,243 The accompanying notes are an integral part of these financial statements. 5
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Statement of Revenues, Expenses and Changes in Net Position For the Year Ended June 30, 2013 (With Comparative Totals for the Year Ended June 30, 2012 Transit Transit Transportation Project CTSA Fund Fund Fund Call Center Operating revenues: Passenger fares $ 972,666 $ -- $ -- $ -- Total Operating Revenues 972,666 -- -- -- Operating expenses: Salaries and benefits 476,833 489,721 -- 39,600 Purchased transportation 3,016,529 -- -- -- Maintenance, materials and supplies 132,645 203,568 1,616,285 294,339 Depreciation 1,473,523 231,107 -- 16,156 Total operating expenses 5,099,530 924,396 1,616,285 350,095 Operating income (loss) (4,126,864) (924,396) (1,616,285) (350,095) Non-operating revenues (expenses): Local Transportation Funds 2,795,658 -- -- 269,449 State Transit Assistance Funds 600,801 -- -- -- Federal Transit Administration 820,790 -- -- -- Other government agency grants -- 575,839 908,246 50,000 Interest revenues 33,883 -- 6,988 12,159 Gain (loss) on sale of capital assets 9,740 -- -- -- Other revenues 477,126 405,379 -- -- Total non-operating revenues (expenses) 4,737,998 981,218 915,234 331,608 Income (Loss) Before Contributions and Transfers 611,134 56,822 (701,051) (18,487) Contributions -- -- 17,933 -- Contributions to the City -- -- -- -- Transfer in from TDA-related funds 369,661 -- -- -- Transfer out to TDA-related funds (56,769) -- -- -- Transfer in from other City funds 37,073 52,390 -- -- Transfer out to other City funds (147,337) (454,970) -- (9,717) Change in Net Position 813,762 (345,758) (683,118) (28,204) Net position, Beginning of Year, Restated 8,067,922 5,694,372 807,725 1,131,026 Net position, End of Year $ 8,881,684 $ 5,348,614 $ 124,607 $ 1,102,822 The accompanying notes are an integral part of these financial statements. 6
Totals 2013 2012 $ 972,666 $ 931,607 972,666 931,607 1,006,154 992,291 3,016,529 2,771,676 2,246,837 1,320,746 1,720,786 1,269,822 7,990,306 6,354,535 (7,017,640) (5,422,928) 3,065,107 8,359,796 600,801 581,661 820,790 1,078,489 1,534,085 271,375 53,030 113,508 9,740 (290,943) 882,505 545,373 6,966,058 10,659,259 (51,582) 5,236,331 17,933 16,448 -- (4,500,000) 369,661 437,475 (56,769) (9,911) 89,463 249,505 (612,024) (1,085,626) (243,318) 344,222 15,701,045 15,548,443 $ 15,457,727 $ 15,892,665 The accompanying notes are an integral part of these financial statements. 7
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Statement of Cash Flows For the Year Ended June 30, 2013 (With Comparative Totals for the Year Ended June 30, 2012) Transit Transportation Transit Project Fund Fund Fund Cash Flows from Operating Activities: Receipts from customers and users $ 953,203 $ -- $ -- Payments to employees (478,967) (487,605) -- Payments to suppliers (3,171,425) (51,154) (1,011,125) Net Cash Provided (Used) by Operating Activities (2,697,189) (538,759) (1,011,125) Cash Flows from Investing Activities: Interest earnings on investments 404,396 -- 7,509 Net Cash Provided by Investing Activities 404,396 -- 7,509 Cash Flows from Non-Capital Financing Activities: Operating grants and other revenues 5,838,895 545,473 908,246 Advances repaid by other City funds -- -- -- New advances received from other City funds -- -- 214,373 Interfund loans and advances received (made) (1,245,313) -- -- Advances repaid from (to) other City funds -- 1,064,823 (521,403) Transfers received for non-capital purposes -- 52,390 -- Transfers paid to other funds (204,106) (454,970) -- Net Cash Provided (Used) by Non-Capital and Related Financing Activities 4,389,476 1,207,716 601,216 Cash Flows from Capital and Related Financing Activities: Capital grants -- -- 17,933 Purchases of capital assets (2,287,285) (686,326) -- Proceeds from sale of capital assets 58,010 17,369 -- Net Cash Provided (Used) by Capital and Related Financing Activities (2,229,275) (668,957) 17,933 Net Increase (Decrease) in Cash and Cash Equivalents (132,592) -- (384,467) Cash and Cash Equivalents, Beginning of Year 9,286,248 -- 384,467 Cash and Cash Equivalents, End of Year $ 9,153,656 $ -- $ -- The accompanying notes are an integral part of these financial statements. 8
CTSA Totals Call Center 2013 2012 $ -- $ 953,203 $ 933,424 (38,508) (1,005,080) (970,111) (296,165) (4,529,869) (4,118,252) (334,673) (4,581,746) (4,154,939) 11,072 422,977 48,658 11,072 422,977 48,658 892,986 8,185,600 7,547,480 -- -- 750,000 -- 214,373 (200,000) -- (1,245,313) 1,364,947 -- 543,420 (2,209,568) -- 52,390 654,766 (9,717) (668,793) (1,095,538) 883,269 7,081,677 6,812,087 -- 17,933 16,448 -- (2,973,611) (1,801,456) -- 75,379 34,765 -- (2,880,299) (1,750,243) 559,668 42,609 955,563 256,241 9,926,956 8,971,393 $ 815,909 $ 9,969,565 $ 9,926,956 The accompanying notes are an integral part of these financial statements. 9 continued
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Statement of Cash Flows (continued) For the Year Ended June 30, 2013 (With Comparative Totals for the Year Ended June 30, 2012) Transit Transportation Transit Project Fund Fund Fund Reconciliation of operating loss to net cash provided (used) by operating activities: Operating loss $ (4,126,864) $ (924,396) $ (1,616,285) Adjustments to reconcile net loss to net cash provided (used) by operating activities: Depreciation 1,473,523 231,107 -- Contribution of capital assets -- 368,750 (Increase) decrease in accounts receivable (19,463) -- 2,524 Increase (decrease) in accounts payable (22,251) 152,414 233,886 Increase (decrease) in accrued salaries (244) (64) -- Increase (decrease) in compensated absences payable (1,890) 2,180 -- Net Cash Provided (Used) by Operating Activities $ (2,697,189) $ (538,759) $ (1,011,125) The accompanying notes are an integral part of these financial statements. 10
CTSA Totals Call Center 2013 2012 $ (350,095) $ (7,017,640) $ (5,422,928) 16,156 1,720,786 1,269,822 -- 368,750 -- -- (16,939) 826 (1,826) 362,223 (24,839) (375) (683) 3,473 1,467 1,757 18,707 $ (334,673) $ (4,581,746) $ (4,154,939) The accompanying notes are an integral part of these financial statements. 11
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CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Notes to Financial Statements June 30, 2013 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Transportation Development Act Funds (Funds) allocated to the City of Roseville have been prepared in conformity with generally accepted accounting principles in the United States of America (GAAP) as applied to government units. The Governmental Accounting Standard Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the Funds accounting policies are described below. A. Description of Reporting Entity The City of Roseville receives allocations from the Placer County Transportation Planning Agency to operate public transit services and to fund street and road infrastructure improvements and pedestrian and bicycle related projects. The financial statements present only the Transportation Development Act Funds allocated to the City of Roseville and do not purport to, and do not, present fairly the financial position of the City of Roseville as of June 30, 2013, and the changes in its financial position and its cash flows, where applicable, for the year then ended in conformity with accounting principles generally accepted in the United States of America. B. Basis of Presentation The City uses funds to report on its financial position and the results of its operations. Fund accounting is designed to demonstrate legal compliance and to aid financial management by segregating transactions related to certain government functions or activities. 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 funds in this report are all classified as enterprise funds of the proprietary fund type category. The enterprise fund type is used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis be financed or recovered primarily through user charges. For the funds in this report, the principal operating revenues are charges to passengers for public transit services. Operating expenses include the cost of transit services, administrative expenses and depreciation on capital assets. All other revenues and expenses are reported as non-operating. Transit Fund: The Transit Fund is used to account for the operation of the City s transit system. Transportation Fund: Transportation Fund accounts for the expenditure of Local Transportation Funds which have been allocated for the purpose of pedestrian and bicycle facility improvements and street and road infrastructure improvements. Transit Project Fund: The Transit Project Fund accounts for Local Transportation Fund and State Transit Assistance Funds which have been allocated for the purpose of transit facility construction and acquisition. 13
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Notes to Financial Statements June 30, 2013 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) B. Basis of Presentation (continued) CTSA Call Center: The CTSA Call Center Fund accounts for Local Transportation Fund which have been allocated for the construction and operation of the Placer County Transportation Call Center. C. Basis of Accounting The accounting and financial reporting treatment applied to a fund is determined by its measurement focus. Nonexchange transactions, in which the Funds give (or receive) value without directly receiving (or giving) equal value in exchange, include grants, entitlements and donations. Revenues from grants, entitlements and donations are recognized in the fiscal year in which all eligibility requirements have been satisfied. The Funds are accounted for on a flow of economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred. D. Cash and Investments The Funds maintain a cash and investment pool with the City of Roseville in order to facilitate the management of cash. Cash in excess of current requirements is invested in various interest-bearing securities. The Funds account balance in the investment pool is reported at amortized cost which approximates fair value. The City of Roseville, through its City Council, exercises oversight responsibilities over the Treasurer s investment policies. The City adopts an investment policy that addresses risks. Required disclosure information regarding categorization of investments and other deposit and investment risk disclosures can be found in the City of Roseville s Comprehensive Annual Financial Report and may be obtained by contacting the Finance Department at 311 Vernon Street, Roseville, California 95678. E. Cash Equivalents For the purposes of the Statement of Cash Flows, all cash and investments with original maturities of three months or less and the pooled cash held with the City s investment pool, are considered to be cash equivalents. F. Capital Assets Capital assets are recorded at historical cost or estimated historical cost if actual cost is not available provided such costs exceed the respective capitalization threshold and the expected useful life of the asset is greater than one year. Contributed capital assets are valued at their estimated fair market value on the date of contribution. Capital assets with limited useful lives are depreciated over their estimated useful lives. Alternatively, the modified approach is used for certain capital assets. Depreciation is not provided under this approach, but all expenditures on these assets are expensed, unless they are additions or improvements. 14
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Notes to Financial Statements June 30, 2013 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Capital Assets (continued) Depreciation is computed using the straight-line method over the estimated useful lives of the assets. The estimate useful lives of the assets and capitalization thresholds are listed below: Useful Lives Capitalization Thresholds Buildings & improvements 20-40 years $10,000 Equipment 3-12 years 5,000 Transit vehicles 5-10 years 5,000 Bike paths 20 years 10,000 Bridges 90 years 10,000 Culverts 75 years 10,000 Sidewalks 20 years 10,000 Drain inlets 50 years 10,000 Storm drains 75 years 10,000 The Funds have acquired certain assets with funding provided by federal and state assistance from various grant programs. The Funds holds title to these assets; however, the federal government retains an interest in those assets for which it has contributed funding should the assets no longer be used for transit purposes. Currently only transit vehicles have been purchased as a capital asset using federal money for transit. G. Compensated Absences It is the City s policy to permit employees to accumulate a limited amount of earned but unused vacation, sick leave and personal leave, which will be paid to employees upon separation from City service. The cost of vacation, sick leave and personal leave is recorded in the period accrued. The changes in compensated absences liability was as follows: Beginning balance $ 178,544 Additions 35,936 Payments (34,179) Ending balance $ 180,301 Current portion $ 56,509 15
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Notes to Financial Statements June 30, 2013 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) H. Net Position Net position is the excess of all the Funds assets over all its liabilities. Net position is divided into three captions. These captions are described below: Net investment in capital assets describes the portion of net position represented by the current net book value of the capital assets, less the outstanding balance of any debt issued to finance these assets. Restricted describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the Funds cannot unilaterally alter. These principally include unspent TDA allocations and other grant funding. Unrestricted describes the portion of net position which is not restricted to use. I. Contingencies The Funds receive grants from various State and Federal Agencies. Each grant is subject to audit by the grantor agency. It is uncertain whether a grant audit could produce deficiencies in costs claimed by the Funds and, therefore, could result in funds being returned to the grantor agencies. J. 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 that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amount of revenue and expenses during the reporting period. Actual results could differ from these estimates. NOTE 2: INTERFUND BALANCES AND TRANSACTIONS Due to and from other TDA related Funds Amounts reported as due to or from other TDA related funds arise in the normal course of business and are expected to be repaid shortly after the end of the fiscal year. At June 30, 2013, these balances were comprised of the following: Due from other funds Due to other funds Amount Transit Fund Transportation Fund $ 1,116,156 Transit Project Fund 214,373 $ 1,330,529 16
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Notes to Financial Statements June 30, 2013 NOTE 3: CAPITAL ASSETS A summary of changes in capital assets during the year ended June 30, 2013, is as follows: Balance at Balance at July 1, 2012 Additions Retirements Transfers June 30, 2013 Capital assets not being depreciated: Land $ 307,745 $ -- $ -- $ -- $ 307,745 Easements 41,599 -- -- -- 41,599 Infrastructure (modified) 51,757 -- -- -- 51,757 Construction in progress 923,952 1,149,783 (450,034) -- 1,623,701 Total capital assets not being depreciated 1,325,053 1,149,783 (450,034) -- 2,024,802 Capital assets being depreciated: Buildings and improvements 1,488,000 -- -- 16,668 1,504,668 Equipment 1,312,277 588,291 -- (16,668) 1,883,900 Vehicles 10,796,393 1,268,553 (208,656) -- 11,856,290 Bike paths 4,078,092 -- -- -- 4,078,092 Bridges 1,702,403 -- -- -- 1,702,403 Culverts 305,329 -- -- -- 305,329 Sidewalks 110,989 -- -- -- 110,989 Drain inlets 24,662 -- -- -- 24,662 Storm drains 38,069 -- -- -- 38,069 Total capital assets being depreciated 19,856,214 1,856,844 (208,656) -- 21,504,402 Less accumulated depreciation for: Buildings and improvements (317,650) (45,916) -- (16,668) (380,234) Equipment (590,584) (174,164) -- 16,668 (748,080) Vehicles (5,719,411) (1,269,599) 208,654 -- (6,780,356) Bike paths (1,016,827) (201,570) -- -- (1,218,397) Bridges (66,205) (18,916) -- -- (85,121) Culverts (17,855) (4,071) -- -- (21,926) Sidewalks (6,487) (5,549) -- -- (12,036) Drain inlets (3,356) (493) -- -- (3,849) Storm drains (3,655) (508) -- -- (4,163) Total accumulated depreciation (7,742,030) (1,720,786) 208,654 -- (9,254,162) Net capital assets being depreciated 12,114,184 136,058 (2) -- 12,250,240 Capital assets, net $ 13,439,237 $ 1,285,841 $ (450,036) $ -- $ 14,275,042 NOTE 4: FARE REVENUE RATIO The City is required under the Transportation Development Act to maintain fare revenue to operating expenses ratio of at least 15%. The calculation of the fare revenue ratio for the year ended June 30, 2013, is as follows: Farebox $ 972,666 Operating expenses $ 5,098,742 Less: Depreciation (1,473,523) Adjusted operating expenses $ 3,625,219 Fare revenue ratio 26.83% 17
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Notes to Financial Statements June 30, 2013 NOTE 5: UNEARNED REVENUE The Local Transportation Fund (LTF) allocates monies to the transit system to support operations. LTF allocations are considered earned when they are properly spent for operations by the transit system. Allocations in excess of this amount are recorded as unearned revenue. The maximum eligibility for LTF Allocations for the year ended June 30, 2013, was determined as follows: Operating expenses $ 5,099,530 Adjustments: Depreciation (1,473,523) Farebox revenues (972,666) State Transit Assistance (600,801) Federal Transit Administration (820,790) Other govermental grants -- Interest revenues (33,883) Other revenues (486,866) Net transfers (202,628) Maximum eligibility for operating $ 508,373 Capital expenditures $ 2,287,285 Maximum eligibility for capital $ 2,287,285 A schedule of changes in unearned revenue for the year ended June 30, 2013, is as follows: Local Transportation Funds Allocated for Transit Operations Advance to Other City Funds Other Total Beginning balance, July 1, 2012 $ 9,066,300 $ - $ 316,289 $ 9,382,589 Allocations/proceeds 4,078,281 - - 4,078,281 Maximum LTF eligibility Operating (508,373) - - (508,373) Capital (2,287,285) - - (2,287,285) Contribution to the City - - - - Earned receipts (289,254) - 10,000 (279,254) Ending balance, June 30, 2013 $ 10,059,669 $ - $ 326,289 $ 10,385,958 18
CITY OF ROSEVILLE TRANSPORTATION DEVELOPMENT ACT FUNDS Notes to Financial Statements June 30, 2013 NOTE 6: RISK MANAGEMENT The City manages risk of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters by participating in the public entity risk pools described below and by retaining certain risks. The City maintains insurance coverage from a commercial carrier for its long-term disability and dental benefit plan. Public entity risk pools are formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, those entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by member municipalities beyond their representation on that board. Obligations and liabilities of these risk pools are not the City s responsibility. Risk Coverage The City is a member of the California Joint Powers Risk Management Authority (CJPRMA) which covers general liability claims up to $25,000,000, property damage up to $300,000,000, and boiler and machinery up to $20,000,000. The City has a self-insured retention or deductible of $500,000, $25,000, and $5,000, respectively per claim. Once the City s self-insured retention for general liability claims is met, CJPRMA becomes responsible for payment of all claims up to the limit. CJPRMA has purchased commercial insurance against property damage and boiler and machinery claims. The City is also a member of the Local Agency Workers Compensation Excess Joint Powers Authority (LAWCX), which covers workers compensation claims up to $1,500,000, and provides additional coverage up to $24,000,000. The City has a self-insured retention of up to $250,000 per claim. The contributions made to each risk pool equal the ratio of their respective payrolls to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. Financial Statements for the risk pools may be obtained from CJPRMA, 2333 San Ramon Valley Blvd., Suite 250, San Ramon, CA 94583 and LAWCX, c/o James P. Marta, CPA, 5921 Landis Avenue, Suite 1, Carmichael, CA 94608. Information regarding the City s risk management programs is available in the City of Roseville s comprehensive annual financial report. NOTE 7: RESTATEMENT OF NET POSITION At June 30, 2012, receivables were overstated by $191,620. As a result, the change in fund balance was overstated for the year ended June 30, 2012. At July 1, 2013, beginning net position of the CTSA Call Center was reduced by the amount of the overstatement. 19
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OTHER REPORTS
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INDEPENDENT AUDITOR S 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 Board of Directors Placer County Transportation Planning Agency Auburn, California City Council City of Roseville Roseville, California We have audited, in accordance with the 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, the financial statements of the Transportation Development Act Funds (TDA Funds) allocated to the City of Roseville, as of and for the year ended June 30, 2013, and the related notes to the financial statements and have issued our report thereon dated March 21, 2014. Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the TDA Fund s internal control over financial reporting (internal control) 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 TDA Fund s internal control. Accordingly, we do not express an opinion on the effectiveness of the TDA Fund 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. Compliance and Other Matters As part of obtaining reasonable assurance about whether the TDA 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. 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. 21 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com
Board of Directors Placer County Transportation Planning Agency Auburn, California City Council City of Roseville Roseville, California Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Roseville, California March 21, 2014 22
INDEPENDENT AUDITOR S REPORT ON COMPLIANCE OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH THE STATUTES, RULES, AND REGULATIONS OF THE CALIFORNIA TRANSPORTATION DEVELOPMENT ACT AND THE ALLOCATION INSTRUCTIONS AND RESOLUTIONS OF THE PLACER COUNTY TRANSPORTATION PLANNING AGENCY Board of Directors Placer County Transportation Planning Agency Auburn, California City Council City of Roseville Roseville, California We have audited the accompanying financial statements of the Transportation Development Act Funds allocated to the City of Roseville (TDA Funds) as of June 30, 2013, and for the year then ended, and have issued our report thereon dated March 21, 2014. 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. As part of obtaining reasonable assurance about whether the TDA Funds financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. Additionally, we performed tests to determine that allocations authorized by the Placer County Transportation Planning Agency were received and expensed in accordance with the allocation instructions and resolutions of the Agency and in conformance with the California Transportation Development Act. Specifically, we performed tasks identified in the California Code of Regulations Section 6666 and 6667 that are applicable to the TDA Funds. In connection with our audit, nothing came to our attention that caused us to believe the TDA Funds failed to comply with the Statutes, Rules, and Regulations of the California Transportation Development Act and the allocation instructions and resolutions of the Agency. 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. This report is intended solely for the information and use of management of the Transportation Development Act Funds allocated to the City of Roseville, the Placer County Transportation Planning Agency, the California Department of Transportation, and the State Controller s Office. Roseville, California March 21, 2014 23 925 Highland Pointe Drive, Suite 450, Roseville, CA 95678-5418 tel: 916.784.7800 fax: 916.784.7850 www.gallina.com