HomeMy WebLinkAboutAGENDA REPORT 2021 0106 CCSA REG ITEM 09CCITY OF MOORPARK, CALIFORNIA
City Council Meeting
of January 6, 2021
ACTION Approved Staff Recommendation
and Received and Filed Report. (Roll Call
Vote: Unanimous).
BY B.Garza.
C. Consider Comprehensive Annual Financial Report (CAFR) and Other Audit
Reports for Fiscal Year Ended (FYE) June 30, 2020. Staff Recommendation:
Accept the Comprehensive Annual Financial Report (CAFR), 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, Independent Accountant’s
Report on Agreed-Upon Procedures Applied to Appropriations Limit Worksheets,
Independent Auditor’s memo regarding significant audit findings and other
matters, and Housing Successor Fund Financial Statements for the FYE June
30, 2020, and receive and file this report. (ROLL CALL VOTE REQUIRED)
(Staff: Kambiz Borhani)
Item: 9.C.
MOORPARK CITY COUNCIL
AGENDA REPORT
TO: Honorable City Council
FROM: Kambiz Borhani, Finance Director
DATE: 01/06/2021 Regular Meeting
SUBJECT: Consider Comprehensive Annual Financial Report (CAFR) and Other
Audit Reports for Fiscal Year Ended (FYE) June 30, 2020
SUMMARY
The Comprehensive Annual Financial Report (CAFR), 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, Independent Accountants’ Report on Agreed-Upon Procedures
Applied to Appropriations Limit Worksheets, Independent Auditors’ memo regarding
significant audit findings and other matters, and Housing Successor Fund Financial
Statements for the Fiscal Year Ended (FYE) June 30, 2020, are hereby submitted for
Council approval.
BACKGROUND
The City is required to conduct an annual independent audit of its financial statements.
The audit firm of Lance, Soll & Lunghard (LSL), Certified Public Accountants conducted
the annual audit and with staff assistance prepared the required financial statements.
For the FYE June 30, 2020, the City received an unmodified opinion. The City currently
has five bond issues for which it is responsible (two Successor Agency bonds and three
assessment district bonds). The bond proceeds from these five issues have been spent
in accordance with the bond documents.
AWARD
The Government Finance Officers Association of the United States and Canada
(GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to
the City for its comprehensive annual financial report for the FYE June 30, 2019. In
order to be awarded a Certificate of Achievement, a government unit must publish an
easily readable and efficiently organized comprehensive annual financial report. This
report must satisfy both generally accepted accounting principles and applicable legal
requirements.
Item: 9.C.
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01/06/2021 Regular Meeting
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A Certificate of Achievement is valid for a period of one year only. We believe that our
current comprehensive annual financial report continues to meet the Certificate of
Achievement Program’s requirements and we have submitted it to the GFOA to
determine its eligibility for another certificate.
DISCUSSION
CAFR
Attached for your approval are the annual financial statements for the year ended
June 30, 2020, for the City of Moorpark. The financial statements are comprehensive
and include all of the fund types in the City.
The City Council engaged an independent certified public accounting firm, LSL, to
perform the annual audit of the City of Moorpark and its component units. The results of
the audit performed are formally published in the CAFR. This report must satisfy both
Generally Accepted Accounting Principles (GAAP) and applicable legal requirements.
Additionally, the CAFR is sent out to numerous government agencies and financial
institutions in order to comply with various reporting, financial and subsequent bond
disclosure requirements. The overall financial picture of the City is presented, in
accordance to the Governmental Accounting Standards Board (GASB)
pronouncements, on a Government-wide basis. This is designed to provide readers
with a broad overview of the City's finances similar to a private-sector business. These
statements show the June 30, 2020, fiscal year balances and overall results of
operations for the period then ended, for all City funds, including the Successor Agency
to the Redevelopment Agency of the City of Moorpark (Successor Agency).
The CAFR statements are as follows:
Management's Discussion and Analysis (MD & A). This discussion and analysis starts
the financial section of the CAFR and serves as an executive summary. GAAP requires
that management provide this narrative introduction, overview and analysis to
accompany the basic financial statements. The letter of transmittal, which precedes the
MD & A in the introductory section, is designed to supplement the MD & A and should
be read in conjunction with it. The MD & A is found immediately following the report
from the independent auditors.
The report from the auditors contains an opinion letter in which an entity can receive
basically four opinions; unqualified, qualified, disclaimer and adverse. An unqualified
opinion indicates that the information presented in a company’s financial report is clean
and the audited financial statements can be presumed to be free from misstatements.
An unqualified opinion from the auditors is the highest given. An opinion rendered in a
qualified audit report is similar to an unqualified opinion; however, the auditing body
cannot express an unqualified opinion for several reasons. One reason could be that
the company did not present its financial records in accordance with generally
acceptable accounting principles (GAAP). Auditors give a disclaimer when they are
unable to express a definite opinion. This can be due to the lack of properly maintained
financial records or the absence or insufficient support from the management. An
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adverse opinion indicates that there has been a gross misstatement and, possibly,
fraud, in the preparation of the company’s financial records. An adverse opinion shows
that the company’s records have not been prepared in accordance with GAAP. For the
FYE June 30, 2020, audit, the City of Moorpark received an unqualified opinion.
The Statement of Net Position presents information on all of the City's assets and
liabilities, with the difference between the two reported as net position. Over time,
increases or decreases in net position (page 19) may serve as a useful indicator of
whether the financial position of the City is improving or deteriorating.
The Statement of Activities presents information showing how the City's net position
changed during the most recent fiscal year. All changes in net position are reported as
soon as the underlying event giving rise to the change occurs, regardless of the timing
of related cash flows. Thus, revenues and expenses are reported in this statement for
some items that will only result in cash flows in future fiscal periods (e.g., earned but
unused annual leave). An increase in net position of $2,184,272 was reported for the
FYE June 30, 2020, (page 21).
The government-wide financial statements distinguish functions of the City that are
principally supported by taxes and intergovernmental revenues (governmental
activities). The governmental activities of the City include general government, public
safety, public services, parks and recreation, streets and roads and interest on long-
term debt.
Following the government-wide statements in the CAFR, the Balance Sheet, and the
Statement of Revenues. Expenditures and Changes in Fund Balances are presented
for all major and non-major governmental funds. A major fund is one of material
significance and is determined through prescribed calculations. The General Fund is
always considered a major fund by definition. Other governmental funds can be
declared major funds by management due to other factors, even if they fail the
qualifications resulting from the calculations. Non-major funds are all combined
together for presentation. Reconciliations between these governmental statements and
the government-wide statements are also presented.
The Statement of Fiduciary Net Position and Statement of Changes in Fiduciary Net
Position are located on pages 29-30. The Successor Agency is a Private Purpose Trust
Fund and is recorded in these statements.
The statements are followed by the Notes to the Financial Statements on pages 33-71.
The Required Supplementary Information begins at page 73 and details the budget to
actual comparisons for all the major funds of the City, beginning with the General Fund.
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Supplementary Information is the next section of the CAFR which provides statements
for each individual non-major governmental fund. The governmental funds are
presented in their various categories: special revenue funds and capital project funds.
Additionally, there is the budget to actual comparisons for each non-major fund.
The Statistical Section of the CAFR contains data about the City of Moorpark. This
section is prepared by staff and not reviewed by the auditors. All of the tables and
schedules present numerous facts about the City, many for the last 10 years. The
statistical facts include population figures, principal taxpayers, and assessed valuations
of taxable property to name a few.
The CAFR is posted on the City’s website: http://www.MoorparkCA.gov
General Fund Financial Status
For FYE June 30, 2020, the General Fund had an excess of revenues over
expenditures by $2,516,806. This excess is the outcome of cost containment measures
that the City implemented as a result of the Coronavirus pandemic. Expenditures were
kept below appropriations and projects were put on hold during this unprecedented time
which began to take earnest in March 2020. The City Council reserve policy requires
the excess to be dispersed by replenishing the fund balances before the remainder can
be transferred to Special Projects Fund. The unassigned fund balance were brought to
$1,133,240, the emergency contingency reserve was increased to $3,827,188, which
equates to 20% of the subsequent year’s adopted operating expenditures budget and
approximately 22% of current year’s operating expenditures. Additionally, transfers in
and out were made in accordance to the adopted budgeted amounts, and $1,552,824
was transferred to Special Projects Fund bringing the net change in fund balance at
year-end to $161,096. Some of the notable areas that experienced savings as a result
of expenditure controls were, improvements other than building by $860,000; employee
education/travel & recreation instructors by $149,000; property maintenance & utilities
by $146,000; collection, print & miscellaneous by $59,000; and fuel & vehicles by
$10,000. Revenues were less than estimates by $64,663.
Successor Agency to the Redevelopment Agency of the City of Moorpark
ABx1 26 was passed and signed by the Governor in the summer of 2011. The
California Supreme Court upheld the validity of ABx1 26 and thereby all redevelopment
agencies in the State, including the Redevelopment Agency of the City of Moorpark
(MRA), were dissolved as of January 31, 2012. The assets, liabilities and net position
(equity) were transferred from the MRA to the Successor Agency on February 1, 2012.
The Successor Agency is shown as a Private Purpose Trust Fund and is NOT a
governmental fund and NOT included in the Statement of Net Position or Statement of
Activities. The Successor Agency is a separate legal entity controlled by the Oversight
Board and the State Department of Finance. It is accounted for completely separate
from the City of Moorpark and shall remain so for the entire term of its existence. The
accounting for the Successor Agency is on pages 29-30 with explanatory notes on
pages 67-70 of the CAFR.
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GASB 68 and the City’s Retirement Plan
GASB 68, Accounting and Financial Reporting for Pensions, was recorded for the FYE
June 30, 2020. This is required to be reported to enhance transparency on public
agencies pension liabilities. The primary objective of GASB 68 is to improve
accounting and financial reporting by state and local governments for pensions. It
improves information about financial support for pensions that is provided by other
entities (CalPERS). With the exception of last year, this is the fifth year the City has
recorded the net pension liability on the Statement of Net Position. These liabilities are
results of actions taken by CalPERS to increase employers’ contributions. One of those
actions was lowering the discount rate from 7.5% to 7.0%, which as it got implemented
caused the City’s Pension Unfunded Accrued Liability (“UAL”) to increase substantially.
To address this growing concern and to maintain fiscal sustainability, it is recommended
that UALs be maintained at an overall minimum of 95% funding.
There are three numbers on page 19 that are pension related: $75,352 Net pension
liability, $2,530,363 Deferred outflows related to pensions, which is defined as
consumption of net assets by the City that is applicable to a future reporting period, and
$1,897,477 Deferred inflows related to pensions, which is defined as acquisition of net
assets by the City that is applicable to a future reporting period. These figures are
broken down and explained in Note 8 (pages 53-59).
Single Audit Report
Previously known as the OMB Circular A-133 audit, is an organization-wide financial
statement and federal grant awards’ audit of a non-federal entity (i.e. local government)
that expends $750,000 or more in federal funds in one year. This audit provides
assurance to the Federal Government that the City has adequate internal controls in
place, and is generally in compliance with program requirements.
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
The independent auditors noted no findings in this report for the FYE June 30, 2020.
Independent Accountants’ Report on Agreed-Upon Procedures Applied to
Appropriations Limit Worksheets
The independent auditors noted no findings for the City’s calculations with regards to
the appropriations limit for the FYE June 30, 2020.
Independent Auditors’ memo regarding significant audit findings and other matters
The independent auditors noted no findings for the audit process for the FYE June 30,
2020.
Housing Successor Fund Financial Statements
Senate Bill 341 (SB 341) requires audited Financial Statements for the Housing
Successor Fund to be filed with the State of California.
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COUNCIL GOAL COMPLIANCE
This action does not support a current strategic directive.
STAFF RECOMMENDATION (ROLL CALL VOTE REQUIRED)
Accept the Comprehensive Annual Financial Report (CAFR), 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, Independent Accountant’s Report on Agreed-Upon
Procedures Applied to Appropriations Limit Worksheets , Independent Auditor’s memo
regarding significant audit findings and other matters, and Housing Successor Fund
Financial Statements for the FYE June 30, 2020, and receive and file this report.
Attachment 1: City of Moorpark CAFR for Fiscal Year Ending June 30, 2020
Attachment 2: 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
Attachment 3: Independent Accountants’ Report on Agreed-Upon Procedures Applied
to Appropriations Limit Worksheets
Attachment 4: Independent Auditors’ memo regarding Significant Audit Findings &
Other Matters
Attachment 5: Housing Successor Fund Financial Statements
356
COMPREHENSIVE ANNUAL
FFINANCIAL REPORT
Fiscal Year Ending June 30, 2020
City of Moorpark
ATTACHMENT 1
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INTRODUCTORY SECTION
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CITY OF MOORPARK
JANICE S. PARVIN
Mayor
CHRIS ENEGREN
Mayor Pro Tem
DAVID POLLOCK
Councilmember
DANIEL GROFF
Councilmember
DR. ANTONIO CASTRO
Councilmember
FINANCE DEPARTMENT | 799 Moorpark Avenue, Moorpark, California 93021
Main City Phone Number (805) 517-6200 | Fax (805) 532-2545 | moorpark@moorparkca.gov
December 18, 2020
Honorable Mayor, Members of the City Council and Citizens of Moorpark:
We are pleased to present this Comprehensive Annual Financial Report (CAFR) of the
City of Moorpark, California (City) for the fiscal year ended June 30, 2020. This report,
which includes basic financial statements, was prepared in conformity with Generally
Accepted Accounting Principles (GAAP) as promulgated by the Governmental
Accounting Standards Board (GASB.)
Management assumes full responsibility for the completeness and reliability of the
information contained in this report, based upon a comprehensive framework of internal
control that it has established for this purpose. Because the cost of internal control
should not exceed anticipated benefits, the objective is to provide reasonable, rather
than absolute, assurance that the financial statements are free of any material
misstatements.
Lance, Soll & Lunghard, a firm of licensed certified public accountants, has audited the
City’s financial statements. The goal of an independent audit was to provide reasonable
assurance the City’s financial statements for the fiscal year ended June 30, 2020 are
free of material misstatement. The independent auditor concluded it was reasonable to
issue an unmodified opinion on the City’s financial statements for the year ended
June 30, 2020. The independent auditor’s report is located at the front of the financial
section of this report.
Management’s discussion and analysis (MD&A) immediately follows the independent
auditor’s report and provides a narrative introduction, overview and analysis of the basic
financial statements. MD&A complements this letter of transmittal and should be read in
conjunction with it.
PROFILE OF THE CITY OF MOORPARK
The City of Moorpark, incorporated in 1983, is located in southeastern part of Ventura
County, approximately 50 miles northwest of Los Angeles. Moorpark is one of the first
cities to run off commercial nuclear power in the entire world. The City is also
recognized for having the lowest number of serious crimes committed in Ventura
County and is among the safest cities of its size in the United States. It currently
occupies 12.80 square miles and serves a population of approximately 36,278
(source: California Department of Finance.)
The City operates under Council-Manager form of government. The Mayor is elected
at-large to serve a two-year term. The four Councilmembers are elected at large to
serve in staggered four-year terms. On April 3, 2019, the City transitioned to a
district-based election system, to be effective beginning for the November 2020
366
ii
election. Districts 2 and 4 held their elections on November 3, 2022, and Districts 1 and
3 elections will be on November 8, 2022. The City Council’s primary responsibilities are
adopting ordinances, adopting the budget, and setting policy for the City. The City
Council appoints the City’s manager, who in turn appoints its department heads.
The City provides a wide
range of municipal
services to its residents
with a total regular
full-time staff of
approximately 50 and
part-time staff of
approximately 38
employees. Major
services such as police
(contracted with Ventura
County Sheriff), attorney,
library, development
engineering and
inspection, building and
safety plan
check/inspection, transit, street sweeping and landscape maintenance are provided
through contractual arrangements. In addition, fire protection is provided by the Ventura
County Fire District. The City provides services such as emergency management,
affordable housing, economic development, planning, code compliance, recreation
programs, vector/animal control, park and facilities maintenance, street maintenance,
city engineering, crossing guard and administrative management services with city
employees.
THE REPORTING ENTITY AND ITS SERVICES
The financial reporting entity includes all the funds of the City as well as all of its
component units. The City is the primary government. The component units are the
Moorpark Public Financing Authority (Authority) and the Moorpark Industrial
Development Authority (IDA).
The City was incorporated in 1983 as a general law city and operates under a
Council-Manager form of government.
The Authority was formed in 1993 as a joint powers authority between the City and the
Redevelopment Agency of the City of Moorpark (Agency). The Agency is now
dissolved, but the Authority still continues to exist. The Authority provides financial
assistance to the City by issuing debt and financing the construction of public facilities.
The IDA of the City was formed in 1985 pursuant to the California Industrial
Development Financing Act (the “Act”). Its purpose is to finance the acquisition and
development of certain industrial activities as permitted by the Act and to issue bonds
for the purpose of enabling industrial firms to finance the cost of such activities.
Council District Map - Effective: 4/3/2019
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SUCCESSOR AGENCY to the REDEVELOPMENT AGENCY of the CITY of
MOORPARK (SUCCESSOR AGENCY)
The Agency was formed in 1987 with the objective of providing long-term financing of
capital improvements designed to eliminate physical and economic blight in the
designated project area. On December 29, 2011, the California Supreme Court upheld
Assembly Bill 1x 26 (“the Bill”) that provides for the dissolution of all redevelopment
agencies in the State of California. The Bill provides that upon dissolution of a
redevelopment agency, the entity that established the redevelopment agency may elect
to serve as the “Successor Agency”. The Successor Agency holds the assets of the
former redevelopment agency until they are distributed to other units of state and local
government after the payment of enforceable obligations that were in effect as of the
signing of the Bill. On January 4, 2012, the City elected to become the Successor
Agency. On February 1, 2012, the Agency was dissolved and the Successor Agency to
the Redevelopment Agency of the City of Moorpark (Successor Agency) was created.
The Successor Agency is included as a fiduciary fund (private purpose trust fund).
BUDGETARY CONTROL
The City prepares an annual budget consistent with Generally Accepted Accounting
Principles (GAAP) for all governmental funds on a modified accrual basis where
revenues are recognized when they become measurable and available to finance
expenditures of the current period. Expenditures are recorded when the goods or
services are received and the liabilities are incurred. The level of budgetary control is at
the overall fund level (i.e. the level at which expenditures cannot legally exceed
appropriated amount).
Department directors are responsible, not only to accomplish his/her particular goals
within each program, but also to monitor budget allocations consistent to the funding
levels adopted by the City Council prior to July 1 of the budget year.
In addition, the City maintains budgetary control through the use of an encumbrance
accounting system. As purchase orders are issued, corresponding amounts are
encumbered for later payments to ensure that budget amounts are not over-spent.
APPROPRIATION LIMIT
Article XIIIB of the California Constitution (Proposition 4), commonly referred to as the
“Gann Initiative” was approved by California voters in 1979, which placed limits on the
amount of proceeds of taxes that State and Local agencies can appropriate and spend
each fiscal year. In addition, voters approved Proposition 111 in 1990 to further
increase the accountability of local government in adopting their limits by requiring the
governing body to annually adopt, by resolution, an appropriation limit for the upcoming
fiscal year. The appropriation limit and the City’s appropriations subject to the limit for
fiscal year 2019-2020 amounted to $40,808,451 and $17,973,809 respectively.
368
iv
$12.1
$14.3
$4.6
$3.5
$67.8
$9.3
$13.5
$1.3
Portfolio (in millions)
June 30, 2020
Money Market
Certificates of Deposit
Corporate Notes
State /Local Govt. Bonds
U.S. Agency Securities
Local Agency Investment
FundVentura County Pool
Demand Deposit
CASH MANAGEMENT
The City Treasurer is responsible for investing cash temporarily idle during the year in
accordance with the State Government Code and the Investment Policy adopted by the
City Council. The City diversified its investment portfolio by utilizing several investment
instruments.
The cash management
system of the City is
designed to monitor
revenues and
expenditures to ensure
the investment of monies
to the fullest extent
possible. The criteria for
selecting investments
and the order of priority
are: (a) safety, (b)
liquidity, and (c) yield.
The underlying objective
of the City’s policy is to
obtain the highest
interest rate yields, and
at the same time, ensure
that money is available when needed and all deposits are insured by the Federal
Deposit Insurance Corporation or collateralized.
OTHER ASSETS (OPEB)
The City participates in the California Employers’ Retiree Benefit Trust (CERBT)
administered by CalPERS to provide post-employment medical insurance to City
retirees. The City accounts for this asset, per GASB 75, Other Post-Employment
Benefits (OPEB). This is the second year the City is implementing GASB 75. The
actuarial valuation was performed on June 30, 2020, and shows the OPEB asset is
144% funded. The City has a “Net OPEB Asset” of $720,648 on the Statement of Net
Position. Please read Note 9 OTHER POST-EMPLOYMENT BENEFITS.
CAPITAL ASSETS
In accordance with GASB Statement No. 34, the City has reported all capital assets
including infrastructure in the Government-Wide Statement of Net Assets. The City
elected to use the basic approach for all infrastructures reporting, whereby depreciation
expense and accumulated depreciation have been recorded. Capital assets for the
fiscal year ending June 30, 2020 have a net ending balance of $260 million.
369
v
LONG-TERM LIABILITIES/BONDED INDEBTEDNESS
At June 30, 2020, the City has no outstanding bonds or other debt but does have long-
term liabilities in the amount of $618,621 comprised of $543,269 for employee
compensated absences (accrued leave) and $75,352 in net pension liability. Please
read Notes 7 EMPLOYEE COMPENSATED ABSENCES and 8 DEFINED BENEFIT
PENSION PLAN for further discussion.
The Successor Agency has the 2014 Tax Allocation Refunding Bonds (2014 Bonds)
and the 2016 Tax Allocation Refunding Bonds (2016 Bonds). The Agency spent the
bond proceeds constructing the Rueben Castro Human Services Building and Walnut
Acres Park. The 2014 Bonds and 2016 Bonds outstanding principal as of June 30,
2020 were $9.8 million and $10.2 million, respectively. In November 2014, the
Successor Agency issued the 2014 Bonds to refund the 1999 Tax Allocation Refunding
Bonds and the 2001 Tax Allocation Bonds. In July 2016, the Successor Agency issued
the 2016 Bonds to refund the 2006 Tax Allocation Bonds. Please read Note 14
SUCCESSOR AGENCY PRIVATE-PURPOSE TRUST FUND TO THE FORMER
REDEVELOPMENT AGENCY OF THE CITY OF MOORPARK (SARA).
RISK MANAGEMENT
The City is a member of the California Joint Powers Insurance Authority (CJPIA)
established under the provisions of California Government Code 6500 et seq.,
consisting of over 100 California public entities. The CJPIA provides risk coverage for
its members through the pooling of losses and purchased insurance. The coverage
extends to general liability and workers’ compensation administered by CJPIA. In
addition, the City also participates in the all-risk property protection offered by CJPIA.
Various control techniques, including safety, ergonomic, harassment and driver
awareness training have been implemented to minimize losses.
LOCAL ECONOMY
The Coronavirus Disease 2019 (COVID-19) pandemic crisis has put an end to the
longest modern economic expansion in history. In the last nine months, state, counties
and cities have taken extraordinary efforts to mitigate the spread of the virus. The
COVID-19 pandemic has devastated global and local economies. United States real
(inflation-adjusted) Gross Domestic Product (GDP) fell at an annualized rate of 4.8%
during the first quarter of calendar year 2020, as the initial impact began to take a toll on
the economy. In the second quarter, the economy contracted by a record annualized
rate of 31.4%, plummeting into a recession after a decade of expansion. This record
contraction came as states nationwide imposed lockdowns to contain the spread of this
disease. The mandated closures led to record job losses of nearly 40 million people in
April, falling 14.7% and setting a new record since 1939. Some of those jobs have
rebounded as businesses have begun to reopen, albeit at lower capacity prior to
pandemic.
370
vi
Most businesses in Moorpark have suffered calamitous setbacks due to health orders
issued. Nearly fifteen long-term businesses permanently closed. Revenues have
declined dramatically this year. Unemployment rate in Ventura County rose to 7.1% in
October from 3.4% a year-ago. Meanwhile, the local real estate market has stayed
relatively strong compared to the broader economy, as low interest rates have helped
buoy home price growth.
The City has several primary General Fund revenue sources that have acutely been
sensitive to COVID-19 economic conditions: sales and use tax, business registration,
film permits, rents and concessions, parks and facility use fees, recreation programs,
fines and forfeitures, and contributions all suffered a combined loss of $1.4 million
compared to prior fiscal year. However, some of the other revenue sources performed
well and helped close the gap between what was budgeted and actually received with a
$65 thousand dollars difference.
The fiscal year 2021 balanced budget is based on conservative revenues and reduced
operating expenditures that reflect economic downturn expectations due to COVID-19
impact on the abovementioned revenues. These projections of revenues and
expenditures do not include the impact of CARES Act grant funding that may be used to
reimburse eligible operating expenses. In fiscal year 2021, the City received $447,929
of CARES Act funds which will be used to support the city’s response to the pandemic
to keep facilities safe, parks clean and staff working from home.
Moorpark is home to over 3,000 businesses with a mix of industries, and no one single
employment sector dominates. The City’s sales tax base is comprised of a number of
companies which include industries such as retail trades, restaurants, fuel and service
stations, autos and transportations, and construction. These sales tax producers
generate 88% of the City’s total annual sales tax revenue. The City also receives
franchise tax from public utility or service such as Southern California Gas Company or
Waste Management. Overall, the City’s fiscal year 2019-20 franchise tax revenue was
$1,556,500.
The City’s tax base is well diversified with total tax revenue representing 74% of the
City’s total General Fund revenues. Property tax revenue (which includes in-lieu of
motor vehicle fees) represents 70% of total tax revenues. Sales tax revenue represents
30% of total tax revenues. Total tax revenue increased 0.15% from fiscal year 2018-19.
On June 26, 2020, the City welcomed its first hotel in nearly a century. Transient
occupancy tax of 10% collected by the hotel operator will be remitted to the City on or
before the last day of the month following the close of each calendar quarter. At June 30,
2020, the transient occupancy tax collected by the hotel operator was $980. This
amount will be recorded in fiscal year 2020-21.
371
vii
LONG-TERM FINANCIAL PLANNING
Every two years the City Council reviews and adopts the City’s strategies, goals and
objectives (SGO.) It evaluates the financial resource capability of the City to achieve
sustained progress toward the City’s mission, which is: “Striving to preserve and
improve the quality of life in Moorpark.” The SGO establishes the foundation and
framework for guiding policy and financial management decisions. This long-term
perspective provides a more strategic pathway for the community and the organization
in understanding the overall direction of the City.
The SGO projects are intended to be consistent with operating budget priorities. This
forecasting mechanism helps to prepare for the upcoming budget year and to identify
long-term financial trends and possible deficit so the budget can be proactively
addressed. The SGO also presents Capital Improvement Project program, the City’s
investment plan for infrastructure, which guides staff in pursuing funding for future
projects.
MAJOR INITIATIVES
The City effectively strives to preserve and improve the quality of life in Moorpark. The
following enhancement and improvement strategies set priorities for City operations.
x Enhance the City’s Economic Development program;
x Improve Mobility through Transportation and Transit Improvements Citywide;
x Enhance Long-Term financial Sustainability;
x Improve Governmental Operations and Internal Services;
x Enhance Quality of Life for Moorpark Residents;
x Continue Environmental Protection and Stewardship Efforts.
FINANCIAL POLICIES
The City is committed to building and maintaining a minimum General Fund reserve
fund balance to promote sound financial management practices. On October 21, 2020,
the City Council adopted few revisions to the City’s existing reserve policy. Some of the
notable changes were: 1) for emergency/contingency reserve, the 20% of expenditures
will be based on the subsequent year’s adopted operating budget; 2) an economic
uncertainty reserve, in the amount of $500 thousand, was also created to help provide
resources to minimize service disruption in the event of fiscal stress such as unexpected
revenue shortfalls or unpredicted one-time expenditures or operating changes that occur
outside of the planned annual budget
At June 30, 2020, the emergency/contingency balance is $3,827,188 or 20% of fiscal
year 2020-21 General Fund adopted operating budget.
372
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CITY OF MOORPARK, CALIFORNIA
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2020
Net (Expenses)
Revenues and
Changes in Net
Position
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs
Primary Government:
Governmental Activities:
General government 2,183,910$ 691,952$ 191,315$ -$ (1,300,643)$
Public safety 9,122,565 468,675 --(8,653,890)
Public services 5,957,380 1,312,533 3,836,051 -(808,796)
Parks and recreation 8,948,075 3,529,892 3,400 -(5,414,783)
Street and roads 3,340,716 12,301 3,350 -(3,325,065)
Total Governmental Activities 29,552,646$ 6,015,353$ 4,034,116$ -$ (19,503,177)
General Revenues:
Taxes:
Property taxes, levied for general purpose 10,318,021
Sales taxes 4,040,141
Franchise taxes 1,556,500
Use of money and property 5,412,223
Other 360,564
Total General Revenues 21,687,449
Change in Net Position 2,184,272
Net Position - Beginning, Originally Reported 384,336,257
Restatement of Net Position 105,301
Net Position - Beginning, as Restated 384,441,558
Net Position at the End of the Year 386,625,830$
Program Revenues
The notes to financial statements are an integral part of this statement.
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CITY OF MOORPARK, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Fines and forfeitures
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safety
Public services
Parks and recreation
Streets and roads
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances (Deficit) - Beginning, Originally Reported
Restatements
Fund Balances (Deficit) - Beginning, as Restated
Fund Balances (Deficit) - Ending
(CONTINUED)
-$ -$ -$ -$
----
----
-5,623 --
2,479 205,596 86 4,207
113,811 ---
-5,702 --
116,290 216,921 86 4,207
9,737 ---
78,758 23,012 --
- 250,120 --
----
----
-50,587 --
88,495 323,719 --
27,795 (106,798)86 4,207
----
----
----
27,795 (106,798)86 4,207
37,796 3,614,414 (27,969)101,018
----
37,796 3,614,414 (27,969)101,018
65,591$ 3,507,616$ (27,883)$ 105,225$
Traffic Safety
City Affordable
Housing
Tierra
Rejada/Spring
Road A.O.C.
Casey/Gabbert
Road A.O.C.
Special Revenue Funds
91 476
CITY OF MOORPARK, CALIFORNIA
COMBINING STATEMENT OF REVENUES,
EXPENDITURES AND CHANGES IN FUND BALANCES
NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2020
Revenues:
Taxes
Licenses and permits
Intergovernmental
Charges for services
Use of money and property
Fines and forfeitures
Miscellaneous
Total Revenues
Expenditures:
Current:
General government
Public safety
Public services
Parks and recreation
Streets and roads
Capital outlay
Total Expenditures
Excess (Deficiency) of Revenues
Over (Under) Expenditures
Other Financing Sources (Uses):
Transfers in
Transfers out
Total Other Financing Sources (Uses)
Net Change in Fund Balances
Fund Balances (Deficit) - Beginning, Originally Reported
Restatements
Fund Balances (Deficit) - Beginning, as Restated
Fund Balances (Deficit) - Ending
-$ -$ -$ -$
----
-- 1,499,567 -
10,134 ---
491,859 704 73,498 190,064
----
----
501,993 704 1,573,065 190,064
----
----
21,276 ---
---51,156
-- 780,316 -
171,055 -10,537 -
192,331 - 790,853 51,156
309,662 704 782,212 138,908
----
-- (154,014)-
-- (154,014)-
309,662 704 628,198 138,908
10,714,159 16,913 1,171,361 4,612,171
----
10,714,159 16,913 1,171,361 4,612,171
11,023,821$ 17,617$ 1,799,559$ 4,751,079$
Special Revenue Funds
State Gas Tax
Art In Public
Places
Los Angeles
A.O.C.
Fremont Storm
Drain A.O.C.
92 477
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506
2011 2012 2013 2014 2015
Governmental activities:
Net investment in capital assets 145,841,042$ 139,795,930$ 262,271,564$ 259,798,991$ 260,051,061$
Restricted 72,654,599 87,274,980 82,125,331 86,007,374 89,502,603
Unrestricted 13,402,969 7,909,301 10,042,168 15,521,233 22,642,705
Total governmental activities net position 231,898,610$ 234,980,211$ 354,439,063$ 361,327,598$ 372,196,369$
The City of Moorpark does not have any business-type activities.
Fiscal Year
CITY OF MOORPARK
Net Position by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
120 507
2016 2017 2018 2019 2020
Governmental activities:
Net investment in capital assets 259,824,449$ 265,474,327$ 262,137,083$ 259,942,720$ 260,143,811$
Restricted 94,421,242 91,919,782 66,958,288 71,335,867 74,141,650
Unrestricted 23,579,979 23,886,449 55,570,929 53,057,670 52,340,369
Total governmental activities net position 377,825,670$ 381,280,558$ 384,666,300$ 384,336,257$ 386,625,830$
Fiscal Year
CITY OF MOORPARK
Net Position by Component
Last Ten Fiscal Years
(Accrual basis of accounting)
121 508
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509
2016 2017 2018 2019 2020
Expenditures:
General government 795,671$ 3,301,931$ 1,980,131$ 3,878,000$2,183,910$
Public safety 7,614,298 9,225,826 10,870,950 9,327,889 9,122,565
Public services 12,162,933 9,613,028 4,771,248 4,714,035 5,957,380
Parks and recreation 7,117,157 6,764,333 8,845,066 8,300,859 8,948,075
Streets and Roads - 274,257 4,556,851 6,477,208 3,340,716
Interest on long-term debt -23,347 21,385 --
Total governmental activities expenses 27,690,059 29,202,722 31,045,631 32,697,991 29,552,646
Program revenues:
Charges for services:
General government 685,537 960,934 1,144,176 634,694 691,952
Public safety 1,970,207 2,623,885 954,599 400,544 468,675
Public services 5,026,698 6,499,441 2,292,214 1,882,043 1,312,533
Parks and recreation 2,378,698 3,810,319 3,908,952 3,404,486 3,529,892
Streets and Roads --1,014,544 117,707 12,301
Total charges for services 10,061,140 13,894,579 9,314,485 6,439,474 6,015,353
Operating contributions and grants 3,943,429 2,209,535 3,463,350 3,708,488 4,034,116
Capital contributions and grants 2,014,302 1,243,383 1,946,022 100,006 -
Total governmental activities
program revenues 16,018,871 17,347,497 14,723,857 10,247,968 10,049,469
Net program revenues (expenses)(11,671,188)(11,855,225)(16,321,774)(22,450,023)(19,503,177)
General revenues and other changes in net assets:
Taxes:
Property tax 7,923,937 9,332,969 9,545,738 10,168,691 10,318,021
Property tax, Redevelopment Agency --
Franchise tax 1,276,932 1,559,634 1,249,789 1,281,901 1,556,500
Sales tax 3,316,402 3,854,408 4,291,309 4,336,676 4,040,141
Sales tax in lieu 730,083 - - --
Motor vehicle in lieu 14,415 - - --
Investment income 2,447,983 347,582 997,189 5,257,540 5,412,223
Contributed Capital -- - --
Other 1,592,693 215,621 401,083 1,075,172 360,564
--- - -
Total governmental activities 17,302,445 15,310,214 16,485,108 22,119,980 21,687,449
Changes in net position -
governmental activities 5,631,257$3,454,989$163,334$(330,043)$2,184,272$
Extraordinary item - Gain on Dissolution
of RDA
CITY OF MOORPARK
Statement of Activities (Condensed)
Last Ten Fiscal Years
(Accrual basis of accounting)
Fiscal Year
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531
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 Honorable Mayor and Members of the City Council
City of Moorpark, 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 governmental
activities, each major fund, and the aggregate remaining fund information of the City of Moorpark, California
(the City), as of and for the year ended June 30, 2020, and the related notes to the financial statements,
which collectively comprise the City’s basic financial statements, and have issued our report thereon dated
December 18, 2020.
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) as a basis for designing 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. 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 City’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 City’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
financial statements. 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.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
ATTACHMENT 2
532
To the Honorable Mayor and Members of the City Council
City of Moorpark, 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 City’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 City’s internal control and compliance. Accordingly,
this communication is not suitable for any other purpose.
Brea, California
December 18, 2020
533
INDEPENDENT ACCOUNTANTS' REPORT ON AGREED-UPON
PROCEDURES APPLIED TO APPROPRIATIONS LIMIT WORKSHEETS
To the Honorable Mayor and Members of the City Council
City of Moorpark, California
We have performed the procedures enumerated below to the accompanying Appropriations Limit
Worksheet No. 6 (or other alternative computation) of the City of Moorpark, California (the “City”), for the
year ended June 30, 2020. These procedures, which were agreed to by the City and the League of
California Cities (as presented in the publication entitled Agreed-Upon Procedures Applied to the
Appropriations Limitation Prescribed by Article XIII-B of the California Constitution), were performed solely
to assist the City in meeting the requirements of Section 1.5 of Article XIII-B of the
California Constitution. The City’s management is responsible for the Appropriations Limit Worksheet
No. 6 (or other alternative computation).
This agreed-upon procedures engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants. The sufficiency of these
procedures is solely the responsibility of those parties specified in this report. Consequently, we make no
representation regarding the sufficiency of the procedures described below either for the purpose for
which this report has been requested or for any other purpose.
The procedures performed and our findings were as follows:
1. We obtained the completed Worksheets No. 1 through No. 7 (or other alternative computations)
and compared the limit and annual adjustment factors included in those worksheets to the limit
and annual adjustment factors that were adopted by resolution of the City Council. We also
compared the population and inflation options included in the aforementioned worksheets to
those that were selected by a recorded vote of the City Council.
Finding: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Worksheet No. 6, we multiplied line A, last year's
limit, by line D, ratio of change, and agreed the resulting amount to line E, this year's limit.
Finding: No exceptions were noted as a result of our procedures.
3. We compared the current year information presented in the accompanying Appropriations Limit
Worksheet No. 6 to the other worksheets described in No. 1 above.
Finding: No exceptions were noted as a result of our procedures.
4. We compared the prior year appropriations limit presented in the accompanying Appropriations
Limit Worksheet No. 6 to the prior year appropriations limit adopted by the City Council for the
prior year.
Finding: No exceptions were noted as a result of our procedures.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
ATTACHMENT 3
534
To the Honorable Mayor and Members of the City Council
City of Moorpark, California
We were not engaged to and did not perform an audit, the objective of which would be the expression of
an opinion on the accompanying Appropriations Limit Worksheet No. 6. Accordingly, we do not express
such an opinion. Had we performed additional procedures, other matters might have come to our
attention that would have been reported to you. No procedures have been performed with respect to the
determination of the appropriations limit for the base year, as defined by the League publication entitled
Article XIIIB Appropriations Limitation Uniform Guidelines.
This report is intended solely for the use of the City of Moorpark, California and should not be used by
those who have not agreed to the procedures and taken responsibility for the sufficiency of the
procedures for their purposes. However, this report is a matter of public record and its distribution is not
limited.
Brea, California
July 6, 2020
535
CITY OF MOORPARK, CALIFORNIA
FISCAL YEAR 2019-2020
APPROPRIATIONS LIMIT CALCULATION
A. 2018-2019 APPROPRIATIONS LIMIT: $ 39,092,292
B. 2019-2020 CHANGE IN PER CAPITA PERSONAL
INCOME: 1.0385
C. 2019-2020 CHANGE IN POPULATION: 1.0052
D. RATIO OF CHANGE (1.0385 X 1.0052): X 1.04390020
E. 2019-2020 APPROPRIATIONS LIMIT: $ 40,808,451
($39,092,292 X 1.04390020)
536
December 18, 2020
To the Honorable Mayor and Members of the City Council
City of Moorpark, California
We have audited the financial statements of the governmental activities , each major fund, and the
aggregate remaining fund information of the City of Moorpark, California (the City) for the year ended
June 30, 2020. Professional standards require that we provide you with information about our
responsibilities under generally accepted auditing standards, Government Auditing Standards and the
Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We
have communicated such information in our letter to you dated May 5, 2020. Professional standards also
require that we communicate to you the following information related to our audit.
Significant Audit Findings
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant
accounting policies used by the City are described in the notes to the financial statements. No new
accounting policies were adopted, and the application of existing policies was not changed during fiscal
year 2019-2020. We noted no transactions entered into by the City during the year for which there is a
lack of authoritative guidance or consensus. All significant transactions have been recognized in the
financial statements in the proper period.
Accounting estimates are an integral part of the financial statements prepared by management and are
based on management’s knowledge and experience about past and current events and assumptions
about future events. Certain accounting estimates are particularly sensitive because of their significance
to the financial statements and because of the possibility that future events affecting them may differ
significantly from those expected. The most sensitive estimates affecting the City’s financial statements
were:
Management’s estimates of its net pension liability and net other post-employment
benefits asset are based on actuarial valuation specialist assumptions. We evaluated the
key factors and assumptions used to develop the net pension liability and net other
post-employment benefits asset in determining that they are reasonable in relation to the
financial statements taken as a whole.
Certain financial statement disclosures are particularly sensitive because of their significance to financial
statement users. The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our
audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the
audit, other than those that are trivial, and communicate them to the appropriate level of management. No
misstatements were found.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022
ATTACHMENT 4
537
To the Honorable Mayor and Members of the City Council
City of Moorpark, California
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or
auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial
statements or the auditor’s report. We are pleased to report that no such disagreements arose during the
course of our audit.
Management Representations
We have requested certain representations from management that are included in the management
representation letter dated December 18, 2020.
Management Consultations with Other Independent Accountants
In some cases, management may decide to consult with other accountants about auditing and accounting
matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application
of an accounting principle to the City’s financial statements or a determination of the type of auditor’s
opinion that may be expressed on those statements, our professional standards require the consulting
accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge,
there were no such consultations with other accountants.
Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing
standards, with management each year prior to retention as the City’s auditors. However, these
discussions occurred in the normal course of our professional relationship and our responses were not a
condition to our retention.
Other Matters
We applied certain limited procedures to the management’s discussion and analysis; the budgetary
comparison schedules for the general fund, the Street and Traffic Safety fund, the Assessment Districts
fund, and the Low-Mod Income Housing Asset fund; the schedule of proportionate share of the net
pension liability (asset); the schedule of changes in the net other post-employment benefits (OPEB) asset
and related ratios; and the schedules of plan contributions which are required supplementary information
(RSI) that supplements the basic financial statements. Our procedures consisted of inquiries of
management regarding 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 sta tements. We did not audit the RSI and
do not express an opinion or provide any assurance on the RSI.
We were engaged to report on the combining and individual fund statements and schedules, which
accompany the financial statements but are not RSI. With respect to this supplementary information, we
made certain inquiries of management and evaluated the form, content, and methods of preparing the
information to determine that the information complies with accounting principles generally accepted in
the United States of America, the method of preparing it has not changed from the prior period, and the
information is appropriate and complete in relation to our audit of the financial statements. We compared
and reconciled the supplementary information to the underlying accounting records used to prepare the
financial statements or to the financial statements themselves.
We were not engaged to report on the introductory and statistical sections, which accompany the financial
statements but are not RSI. Such information has not been subjected to the auditing procedures applied
in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide
any assurance on it.
538
To the Honorable Mayor and Members of the City Council
City of Moorpark, California
New Accounting Standards
The following new Governmental Accounting Standards Board (GASB) pronouncements were effective
for fiscal year 2019-2020 audit:
GASB Statement No. 95, Postponement of Effective Dates of Certain Authoritative Guidance.
GASB Statement No. 88, Certain Disclosure Related to Debt, including Direct Borrowing and
Direct Placements.
The following pronouncements have been postponed as a temporary relieve to governments and other
stakeholders in light of the COVID-19 pandemic and the new effective date are reflected in the following
fiscal years and are effective in the following fiscal year audits and should be reviewed for proper
implementation by management:
Fiscal year 2021
GASB Statement No. 84, Fiduciary Activities.
GASB Statement No. 90, Majority Equity Interests - an Amendment of GASB Statement Nos. 14
and 61.
Fiscal year 2022
GASB Statement No. 87, Leases.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction
Period.
Fiscal year 2023
GASB Statement No. 91, Conduit Debt Obligations.
Restriction on Use
This information is intended solely for the use of the City Council and management of the
City of Moorpark, California, and is not intended to be, and should not be, used by anyone other than
these specified parties.
Very truly yours,
Brea, California
539
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2020 BASIC FINANCIAL STATEMENTS
ATTACHMENT 5
540
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
PREPARED BY: FINANCE DEPARTMENT
541
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2020
TABLE OF CONTENTS
Page
Number
INDEPENDENT AUDITORS’REPORT...............................................................................................1
BASIC FINANCIAL STATEMENTS
Statement of Net Position and Governmental Fund Balance Sheet.............................................4
Statement of Activities and Governmental Statement of
Revenues, Expenditures, and Changes in Fund Balance.............................................................5
Notes to Financial Statements.......................................................................................................6
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Comparison Schedule............................................................................................... 12
SUPPLEMENTARY INFORMATION
Independent Auditors’ Report on Compliance with Applicable
Requirements and on Internal Controls over Compliance ......................................................... 14
Computation of Low- and Moderate-Income Housing Fund
Excess/Surplus........................................................................................................................... 16
542
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
Moorpark Housing Successor
City of Moorpark, California
Report on the Financial Statements
We have audited the accompanying financial statements of the governmental activities and the
Low-Mod Income Housing Asset Fund of the Moorpark Housing Successor, (the Housing Successor),
a Special Revenue Fund of the City of Moorpark, California, as of and for the year ended June 30, 2020,
and the related notes to the financial statements, which collectively comprise the Housing Successor’s
basic 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 City’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 City’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.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 543
To the Honorable Mayor and Members of the City Council
Moorpark Housing Successor
City of Moorpark, California
Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the
respective financial position of the governmental activities and the Low-Mod Income Housing Asset Fund
of the Moorpark Housing Successor, as of June 30, 2020, and the respective changes in financial
position for the year then ended in accordance with accounting principles generally accepted in the
United States of America.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Low-Mod Income Housing Asset Fund
of the City and do not purport to, and do not, present fairly the financial position of the City, as of
June 30, 2020, the changes in 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 budgetary
comparison information 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.
Other Information
We have audited the financial statements of the Housing Successor as of and for the year ended
June 30, 2020 and have issued our report thereon dated December 18, 2020, which contained an
unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an
opinion on the financial statements as a whole. The accompanying report on excess/surplus calculation is
presented for purposes of additional analysis only and is not a required part of the financial statements.
Such information is the responsibility of management and was derived from the financial statements. The
report on excess/surplus calculation has not been subjected to the auditing procedures applied in the
audit of the basic financial statements, and accordingly, we do not express an opinion or provide any
assurance.
2 544
To the Honorable Mayor and Members of the City Council
Moorpark Housing Successor
City of Moorpark, California
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated
December 18, 2020, on our consideration of the Housing Successor’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 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
Housing Successor’s internal control over financial reporting and compliance.
Brea, California
December 18, 2020
3 545
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
STATEMENT OF NET POSITION AND GOVERNMENTAL FUND BALANCE SHEET
JUNE 30, 2020
Low-Mod Reclassifications
Income Housing and Statement of
Asset Fund Eliminations Net Position
Assets:
Cash and investments 120,930$ -$ 120,930$
Receivables:
Accounts 242 -242
Notes and loans 5,233,968 -5,233,968
Accrued interest 681,163 -681,163
Land held for resale 6,316,148 -6,316,148
Total Assets 12,352,451$ -$ 12,352,451$
Liabilities, Deferred Inflows of Resources,
and Fund Balances:
Liabilities:
Accounts payable 15,467$ -15,467
Deposits payable 10,000 -10,000
Total Liabilities 25,467 -25,467
Deferred Inflows of Resources:
Unavailable revenues 4,712,406 (4,712,406)-
Total Deferred Inflows of Resources 4,712,406 (4,712,406)-
Fund Balances/Net Position:
Fund Balances:
Restricted:
Low and moderate housing activities 7,614,578 (7,614,578)-
Total Fund Balances 7,614,578 (7,614,578)-
Total Liabilities, Deferred Inflows
of Resources and Fund Balances 12,352,451$
Net Position:
Restricted:
Low and moderate housing activities 7,614,578 12,326,984
Total Net Position (4,712,406)$ 12,326,984$
The notes to financial statements are an integral part of this statement.
4 546
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
STATEMENT OF ACTIVITIES AND GOVERNMENTAL STATEMENT OF
REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCES
YEAR ENDED JUNE 30, 2020
Low-Mod Reclassifications
Income Housing and Statement of
Asset Fund Eliminations Activities
Revenues:
Intergovernmental
Use of money and property 26,570$ 121,902$ 148,472$
Total Revenues 26,570 121,902 148,472
Expenditures:
Current:
General government 29,893 -29,893
Community development 24,358 -24,358
Total Expenditures 54,251 -54,251
Excess (Deficiency) of Revenues
Over/(Under) Expenditures (27,681)121,902 94,221
Fund Balance/Net Position at the Beginning of the Year 7,642,259 4,590,504 12,232,763
Fund Balance/Net Position at the End of the Year 7,614,578$ 4,712,406$ 12,326,984$
The notes to financial statements are an integral part of this statement.
5 547
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2020
Note 1: Summary of Significant Accounting Policies
a. Financial Reporting Entity
The City of Moorpark’s Low-Mod Housing Asset Fund, the Housing Successor of the
City of Moorpark, (the Housing Successor), a Special Revenue Fund of the
City of Moorpark, California was established February 1, 2012, pursuant to the
California Housing Authority Law codified under State of California Health and Safety
Code, Section 34200 et seq. The fund was transferred into Moorpark’s Housing Authority
(the Authority) and is the only fund that makes up the Authority. The Authority was
established on October 5, 2004, pursuant to the California Housing Authority Law
codified under State of California Health and Safety Code, Section 34200 et seq. The
City Council became the governing board commissioners of the Housing Authority. The
Housing Authority was formed for purposes of construction and management of quality
affordable housing within the City.
The Housing Successor is controlled by the City of Moorpark (the City) and, accordingly,
the accompanying financial statements are included as a special revenue fund of the
basic financial statements prepared by the City.
The Housing Successor accounts for transactions related to affordable housing activities.
Revenues include contributions from the City of Moorpark, loan repayments and interest
income. The financial statements present only the Low-Mod Housing Asset Fund and are
not intended to present fairly the financial position and results of the operations of the
City of Moorpark in conformity with accounting principles generally accepted in the
United States of America. Complete financial statements of the city can be obtained from
the City’s Finance Department.
b. Basis of Presentation
The Housing Successor’s financial statements are prepared in conformity with accounting
principles generally accepted in the United States of America. The Government
Accounting Standards Board is the acknowledged standard setting body for establishing
accounting and financial reporting standards followed by governmental entities in the
United States of America.
The government-wide financial statements (i.e., the statement of net position and the
statement of activities) report information on the activities of the Housing Successor.
Reclassifications and eliminations have been made to convert the financial information
reported in the Low-Mod Income Housing Asset Fund (modified accrual) to a full accrual
basis.
The statement of activities demonstrates the degree to which the direct expenses of a
given function or segments are offset by program revenues. Direct expenses are those
that are clearly identifiable with a specific function or segment. Program revenues
include: 1) charges to customers or applicants who purchase, use, or directly benefit from
goods, services or privileges provided by a given function or segment, and 2) grants and
contributions that are restricted to meeting the operational or capital requirements of a
particular function or segment. Taxes and other items not properly included among
program revenues are reported instead as general revenues.
While separate government-wide and fund financial statements are presented, they are
interrelated.
6 548
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020
Note 1: Summary of Significant Accounting Policies (Continued)
c. Measurement Focus, Basis of Accounting and Financial Statement Presentation
The government-wide financial statements are reported using the economic resources
measurement focus and the accrual basis of accounting. Revenues are recorded when
earned and expenses are recorded when a liability is incurred, regardless of the timing of
related cash flows. Grants and similar items are recognized as revenue as soon as all
eligibility requirements imposed by the provider have been met.
The Low-Mod Housing Asset Fund financial statements are reported using the current
financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available. Revenues
are considered to be available when they are collectible within the current period or soon
enough thereafter to pay liabilities of the current period. For this purpose, the government
considers revenues to be available if they are collected within 60 days of the end of the
current fiscal period. Expenditures generally are recorded when a liability is incurred, as
under accrual accounting.
d. Assets, Liabilities and Net Position or Equity
Cash and Investments
The Housing Successor’s 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. For financial statement presentation
purposes, cash and cash equivalents are shown as both unrestricted and restricted
cash and investments.
Investments are reported at fair value, the value at which a financial instrument could
be exchanged in a current transaction between willing parties, other than a forced
liquidation sale. The City's policy is generally to hold investments until maturity or
until market values equal or exceed cost. The State Treasurer's Investment Pool
operates in accordance with appropriate state laws and regulations. The reported
value of the pool is the same as the fair value of the pool shares.
Land Held for Resale
Land purchased for resale is capitalized as inventory at acquisition costs or net
realizable value, if lower. Land held for resale is offset by a fund balance reserve,
which indicates that it does not constitute "available spendable resources." Other
property held for resale is capitalized as inventory and is recorded at cost.
Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a
separate section for deferred outflows of resources. This separate financial statement
element, deferred outflows of resources, represents a consumption of net position that
applies to a future period(s) and so will not be recognized as an outflow of resources
(expense/expenditure) until then. The Housing Successor does not carry an item that
qualifies for reporting in this category.
7 549
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020
Note 1: Summary of Significant Accounting Policies (Continued)
In addition to liabilities, the statement of financial position will sometimes report a
separate section for deferred inflows of resources. This separate financial statement
element, deferred inflows of resources, represents an acquisition of net position that
applies to a future period(s) and so will not be recognized as an inflow of resources
(revenue) until that time. The government has only one type of item, which arises only
under a modified accrual basis of accounting that qualifies for reporting in this
category. Accordingly, the item, unavailable revenue, is reported only in the
governmental funds balance sheet. The governmental funds report unavailable
revenues from various sources: taxes, long-term loans, and grant monies. These
amounts are deferred and recognized as an inflow of resources in the period that the
amounts become available.
Net Position Flow Assumption
Sometimes the government will fund outlays for a particular purpose from both
restricted (e.g., restricted bond or grant proceeds) and unrestricted resources.
In order to calculate the amounts to report as restricted –net position and
unrestricted –net position in the government-wide and proprietary fund financial
statements, a flow assumption must be made about the order in which the resources
are considered to be applied. It is the government’s policy to consider restricted –net
position to have been depleted before unrestricted –net position is applied.
Fund Balance Flow Assumptions
Sometimes the government will fund outlays for a particular purpose from both
restricted and unrestricted resources (the total of committed, assigned, and
unassigned fund balance). In order to calculate the amounts to report as restricted,
committed, assigned, and unassigned fund balance in the governmental fund financial
statements a flow assumption must be made about the order in which the resources
are considered to be applied. It is the government’s policy to consider restricted fund
balance to have been depleted before using any of the components of unrestricted
fund balance. Further, when the components of unrestricted fund balance can be
used for the same purpose, committed fund balance is depleted first, followed by
assigned fund balance. Unassigned fund balance is applied last.
Fund Equity
In the fund financial statements, government funds report the following fund balance
classification:
Non-spendable include amounts that cannot be spent because they are either
(a) not in spendable form or (b) legally or contractually required to be maintained
intact.
Restricted include amounts that are constrained on the use of resources by either
(a) external creditors, grantors, contributors, or laws of regulations of other
governments or (b) by law through constitutional provisions or enabling legislation.
Committed include amounts that can only be used for specific purposes pursuant to
constraints imposed by formal action of the government’s highest authority, the
City Council. The formal action that is required to be taken to establish, modify, or
rescind a fund balance commitment is a resolution.
8 550
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020
Note 1: Summary of Significant Accounting Policies (Continued)
Assigned include amounts that are constrained by the government’s intent to be used
for specific purposes but are neither restricted nor committed. It is the policy of the
City Council that assignment of fund balances must be approved by the Council prior
to the fiscal year end.
Unassigned include the residual amounts that have not been restricted, committed,
or assigned to specific purposes.
An individual governmental fund could include nonspendable resources and amounts
that are restricted or unrestricted (committed, assigned, or unassigned) or any
combination of those classifications. Restricted amounts are to be considered spent
when an expenditure is incurred for purposes for which both restricted and
unrestricted fund balance is available and committed, assigned, then unassigned
amounts are considered to have been spent when an expenditure is incurred for
purposes for which amounts in any of those unrestricted fund balance classifications
can be used.
Note 2: Cash and Cash Equivalents
As of June 30, 2020, cash and investments were reported in the accompanying financial
statements as follows:
Deposits with financial institutions 120,930$
Total cash and cash equivalents 120,930$
The Housing Successor’s fund is pooled with the City of Moorpark’s cash and investments in
order to generate optimum interest income. The information required by
GASB Statement No. 40 related to authorized investments, credit risk, etc. is available in the
annual report of the City.
Note 3: Notes and Loans Receivable
a. Notes Receivable
Moorpark 20, LP Promissory Notes
On October 29, 2010, the Agency signed the Disposition and Development Agreement
(DDA) with the Area Housing Authority of the County of Ventura (AHA) and
Moorpark 20, Limited Partnership (M20LP), consisting of AHA and Santa Barbara
Housing Assistance Corporation. The DDA provides for the construction of a 20-unit
affordable housing project (Project) on Agency-owned property located at 396, 406 and
496 Charles Street (Site). During the tax credit application, the sale price of Site was
determined to be $1,176,500 to show more local funds into the Project. On the same
date, the Agency executed a $1,176,500 loan agreement with M20LP to purchase the
Site from the Agency. The loan will accrue interest at the rate of 2.5% per annum and
have a term of 55 years. One annual payment will be made to the Agency by M20LP
from residual receipts after the $600,000 has been paid off. This loan is subordinate in
right of payment to First Mortgage Note held by Bank of America, N.A. and is secured by
Deed of Trust and Security Agreement. The principal and accrued interest outstanding on
this note at June 30, 2020 are $1,176,500 and $284,321 respectively for a total of
$1,460,821.
9 551
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
JUNE 30, 2020
Note 3: Notes and Loans Receivable (Continued)
On November 2, 2010 the Agency entered into a $600,000 loan agreement with M20LP
to complete the construction of the Project. As of June 30, 2012, M20LP has drawn
down the entire amount. The term of the loan is 30 years with a fixed interest rate of
2.5%. One annual payment will be made to the Agency by M20LP equal to 75% of
available residual receipts. This note is subordinate in right of payment to the
First Mortgage Loan payable to Bank of America, N.A. and is secured by Deed of Trust
and Security Agreement. The principal and accrued interest outstanding on this note at
June 30, 2020 are $600,000 and $145,000 respectively for a total of $745,000.
The combined amounts of principal and accrued interest outstanding at June 30, 2020
are $1,776,500 and $429,321 respectively. As of June 30, 2020, the balance was:
$2,205,821.
Walnut24, LP Promissory Notes
On March 17, 2017 the City signed the Amendment No. 2 to the Disposition and
Development Agreement with Walnut24, LP (W24LP), a California limited partnership of
Area Housing Authority of the County of Ventura and Many Mansions. The DDA provides
for the construction of a 24-unit affordable housing apartment on Housing Successor
Agency-owned parcel located at 782 Moorpark Avenue, 798 Moorpark Avenue,
81 Charles Street and 765 Walnut Street (Property). On March 22, 2017, the City and
W24LP executed a $3,444,000 loan (Purchase Loan) for the purchase of the Property
and will accrue simple interest at the rate of 2.25% per annum and have a term of
32 years. After the City’s Permanent Loan has been paid in full, W24LP will begin to
make annual payments to the City each year in the amount equal to 50% of the residual
receipts. A balloon payment for the remaining balance and accrued interest will be paid to
the City at the end of the 32-year term. This loan is subordinate in right of payment to the
MUFG Union Bank, N.A., California Community Reinvestment Corporation and
Ventura County Housing Trust Fund; and is secured by Deeds of Trust. The combined
amounts of principal and accrued interest outstanding at June 30, 2020 are $3,444,000
and $251,842, respectively. As of June 30, 2020, the balance was: $3,695,842.
b. Loans Receivable
The Housing Successor Fund operates a rehabilitation loan program for the
renovation of low and moderate income housing. The total balance outstanding at
June 30, 2020, was:13,468
Total Notes and Loans Receivable (including accrued interest):5,915,131$
Note 4: Land Held for Resale
As of June 30, 2020, the Housing Successor has properties for redevelopment purposes for
resale to developers at a capitalized cost of $6,316,148.
10 552
REQUIRED SUPPLEMENTARY INFORMATION
11 553
CITY OF MOORPARK, CALIFORNIA
HOUSING SUCCESSOR FUND
BUDGETARY COMPARISON SCHEDULE
FOR THE YEAR ENDED JUNE 30, 2020
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Budgetary Fund Balance, July 1 7,642,259$ 7,642,259$ 7,642,259$-$
Resources (Inflows):
Use of money and property 23,000 23,000 26,570 3,570
Amounts Available for Appropriations 7,665,259 7,665,259 7,668,829 3,570
Charges to Appropriations (Outflows):
General Government 31,830 31,830 29,893 1,937
Community development 23,724 39,724 24,358 15,366
Total Charges to Appropriations 55,554 71,554 54,251 17,303
Budgetary Fund Balance, June 30 7,609,705$7,593,705$7,614,578$20,873$
12 554
SUPPLEMENTARY INFORMATION
13 555
INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE WITH APPLICABLE
REQUIREMENT AND ON INTERNAL CONTROL OVER COMPLIANCE
To the Honorable Mayor and Members of the City Council
Moorpark Housing Successor
City of Moorpark, California
Report on Compliance for the Housing Successor
We have audited the City of Moorpark Housing Successor’s (the Housing Successor) compliance with the
type of compliance requirements described in the California Health and Safety Code sections applicable
to California Housing Successor Agencies for the year ending June 30, 2020.
Management’s Responsibility
Management is responsible for compliance with the California Health and Safety Code sections
applicable to California Housing Successor Agencies.
Auditor’s Responsibility
Our responsibility is to express an opinion on the Housing Successor’s compliance with the
California Health and Safety Code sections applicable to California Housing Successor Agencies.
We conducted our audit of compliance in accordance with auditing standards generally accepted in the
United States of America; the standards applicable to financial audits contained in the
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
noncompliance with the types of compliance requirements referred above that could have a direct and
material effect on Housing Successor occurred. An audit includes examining, on a test basis, evidence
about the Housing Successor’s compliance with those requirements and performing such other
procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the
Housing Successor. However, our audit does not provide a legal determination of the
Housing Successor’s compliance with those requirements.
Opinion
In our opinion, the Housing Successor complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on its Housing Successor for
the year ending June 30, 2020.
203 N. Brea Blvd., Suite 203 Brea, CA 92821 Lance, Soll & Lunghard, LLP Phone: 714.672.0022 556
To the Honorable Mayor and Members of the City Council
Moorpark Housing Successor
City of Moorpark, California
Report on Internal Control over Compliance
Management of the Housing Successor is responsible for establishing and maintaining effective
internal control over compliance with the type of compliance requirements referred to above. In planning
and performing our audit of compliance, we considered the Housing Successor’s internal control over
compliance with the types of requirements that could have a direct and material effect on the
Housing Successor to determine the auditing procedures that are appropriate in the circumstances for the
purpose of expressing an opinion on compliance and to test and report on internal controls over
compliance, but not for the purpose of expressing an opinion on the effectiveness of internal control over
compliance. Accordingly, we do not express an opinion on the effectiveness of the Housing Successor’s
internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over
compliance does not allow management or employees, in the normal course of performing their assigned
functions, to prevent, or detect and correct, noncompliance with a type of compliance of California Health
and Safety Code sections applicable to California Housing Successor Agencies on a timely basis. A
material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in
internal control over compliance, such that there is a reasonable possibility that a material noncompliance
with a type of compliance requirement of California Health and Safety Code sections applicable to
California Housing Successor Agencies will not be prevented, or detected and corrected on a timely
basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of
deficiencies, in internal control over compliance that is less severe than a material weakness in internal
control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first
paragraph of this section and was not designed to identify all deficiencies in internal control over
compliance that might be material weaknesses or significant deficiencies. We did not identify any
deficiencies in internal control over compliance that we consider to be material weaknesses. However,
material weaknesses may exist that have not been identified.
Report on Excess/Surplus Calculation
We have audited the financial statements of the governmental activities and the Low-Mod Income
Housing Asset Fund of the City of Moorpark, California, as of and for the year ended June 30, 2020, and
have issued our report thereon dated December 18, 2020, which contained an unmodified opinion on
those financial statements. Our audit was conducted for the purpose of forming an opinion on the
financial statements as a whole.The accompanying report on excess/surplus calculation is presented for
purposes of additional analysis only and is not a required part of the financial statements. Such
information is the responsibility of management and was derived from the financial statements. The report
on excess/surplus calculation has not been subjected to the auditing procedures applied in the audit of
the basic financial statements, and accordingly, we do not express an opinion or provide any assurance.
The purpose of this report on internal control over compliance is solely to describe the scope of our
testing of internal control over compliance and the results of that testing based on the requirements of
California Health and Safety Code sections applicable to California Housing Successor Agencies.
Accordingly, this communication is not suitable for any other purpose.
Brea, California
December 18, 2020
15 557
CITY OF MOORPARK HOUSING SUCCESSOR
COMPUTATION OF HOUSING SUCCESSOR
EXCESS/SURPLUS (HSC 34176.1)
Opening Fund Balance 7,642,259$ 7,614,578$
Less Unavailable Amounts:
Land held for resale (6,316,148)$ (6,316,148)$
Loans receivable (1,202,725)(1,202,725)
(7,518,873)(7,518,873)
Available Housing Successor Funds 123,386 95,705
Limitation (greater of $1,000,000 or four years deposits)
Aggregate amount deposited for last four years:
2019 - 2020 N/A 26,570$
2018 - 2019 21,402$ 21,402
2017 - 2018 19,284 19,284
2016 - 2017 24,636 24,636
2015 - 2016 22,477 N/A
Total 87,799$ 91,892$
Base Limitation 1,000,000$ 1,000,000$
Greater amount 1,000,000$ 1,000,000$
Computed Excess/Surplus None None
Low and Moderate
All Project Area
July 1, 2020
Low and Moderate
All Project Area
July 1, 2019
Housing Funds Housing Funds
16 558