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HomeMy WebLinkAboutRDA Agency Audit 2002-06-30 '. TIBURON REDEVELOPMENT AGENCY COMPONENT UNIT FINANCIAL STATEMENTS AND SUPPLEMENT AI" INFORMA nON WITH INDEPENDENT AUDITORS' REPORT * * * * * JUNE 30, 2002 '~. TIBURON REDEVELOPMENT AGENCY COMPONENT UNIT FIN ANCIAL STATEMENTS TUNE 30, 2002 l' ABLE OF CONTENTS Page Independent Auditors' Report....... ...., ........ ...... ............. ...... ......,....,...... .......,.......... ..,.. 1 COMPONENT UNIT FINANCIAL STATEMENTS Combined Balance Sheet - All Fund Types and Account Groups............................ 2 Combined Statements of Revenues, Expenditures and Changes in Fund Equity - All Government Fund Types..........,...............................,...................................... 3 Combined Statements of Revenues, Expenditures and Changes in Fund Equity - Budget and Actual - All Government Fund Types .............,............................. 4 Notes to Component Unit Financial Statements................,.........................,............... 5 SUPPLEMENTAL SCHEDULES (UNAUDITED) LDcal Secured Assessed Value and Tax Increment Revenues 11 Report on Compliance and Internal Control..............,.,...........,.....,......................,... 12 OU'" A ~~c;:~~i~ ,/'" <'loCO. LLP Certified Public Accountants & Consllllants 351CaliforniaStmel,Suilel00Q Telephone: (415) 434-:'1744 SilllFmllcisco,Califomia94104 Facsimile: (415) 786-2260 September 19, 2002 To the Members of the Governing Board of Tiburon Redevelopment Agency INDEPENDENT AUDITORS' REPORT We have audited the accompanying combined financial statements of Tiburon Redevelopment Agency (the Agency) as of June 30, 2002 and for the year then ended, listed in the foregoing table of contents, These financial statements are the responsibility of the management of the Agency. Our responsibility is to express an opinion on these combined financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards as accepted in the United States of America and Governmellll\uditillg Standards, issued by the Comph'oller General of the United States, Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall combined financial statement presentation. We believe that our audit provides a reasonable basis for our opinion, In our opinion, such combined financial statements referred to above present fairly, in all material respects, the financial position of the Agency at June 30, 2002 and the results of its operations for the year then ended in conformity with generally accepted accounting principles as accepted in the United States of America. The supplemental information listed in the foregoing table of contents was not audited by us, and accordingly, we do not express an opinion thereon, Qy{Uk?NZ"ff O/ICi:-IcJCD JIt1U/la.M,~L 1 ~ LL P -1- TIBURON REDEVELOPMENT AGENCY COMBINED BALANCE SHEET ALL FUND TYPES AND ACCOUNT GROUPS JUNE 30, 2002 (with comparative totals at June 30,2001) Governmental Fund Types Housing Totals-Memorandum Only General Set-Aside Combined Fund Fund 2002 2001 Assets Cash and investments $ 314,591 $ 511,502 $ 826,093 $ 1,387,458 Tax increment receivable 251,250 97,971 349,221 365,854 Interest receivable 2,100 3,500 5,600 18,445 Notes receivable (Note 3) 669,544 669,544 669,544 Fixed assets (Note 4) Total assets $ 567,941 $ 1,282,517 $ 1,850,458 $ 2,441,301 Liabilities Accounts payable $ 30,000 $ 11,532 $ 41,532 $ 40,959 Due to PI. Tiburon CFD 379,863 379,863 472,500 T otalliabilities 409,863 11,532 421,395 513,459 Fund equity Investment in fixed assets Fund equities: Reserved-note receivable 669,544 669,544 669,544 Reserved-low & moderate 601,441 601,441 1,191,526 Unreserved and undesignated 158,078 158,078 66,772 Total fund equity 158,078 1,270,985 1,429,063 1,927,842 Total liabilities and equity $ 567,941 $ 1,282,517 $ 1,850,458 $ 2,441,301 The notes to the financial statements are an integral part of this statement. - 2 - TIBURON REDEVELOPMENT AGENCY COMBINED STATEMENT OF REVENUES, EXPENDITURES AND CHANGES IN FUND EQUITY FOR THE FISCAL YEAR ENDED JUNE 30, 2002' (with comparative totals for the fiscal vear ended June 30 2001) General Housing Totals - Memorandum Only Tax Increment Set-Aside Combined Fund Fund 2002 2001 Revenues Property taxes $ 502,500 $ 190,506 $ 693,006 $721,684 I nvestment earnings 6,860 35,485 42,345 63,897 Other revenue (808) (808) 3,755 Total revenues 508,552 225,991 734,543 789,336 Expenditures General government 37,383 16,077 53,460 47,281 Total expenditures 37,383 16,077 53,460 47,281 Excess of revenues over expenditures 471,169 209,914 681,083 742,055 Other financing sources (uses): Fiscal agreement payment to Point Tiburon Community Facilities District (Note 5) (379,863) (379,863) (472,500) Affordable housing subsidy (Note 6) (800,000) (800,000) Sale of property 1,400,000 Total other financing uses (379,863) (800,000) (1,179,863) 927,500 Excess of revenues and other sources over expenditures and other uses 91,306 (590,086) (498,780) 1,669,555 Fund Equity Beginning-July 1 66,772 1,861,071 1,927,843 258,287 Ending-June 30 $ 158,078 $ 1,270,985 $ 1,429,063 $1,927,842 The notes to the financial statements are an integral part of this statement - 3- >- u Z W (!) <( I-- Z W ~ "- o --' W > W Cl W a:: Z o a:: ~ w j:::: >- I-- S o W Cl Z ::> u. 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'" '" E Q) E Q) 10 1;) <JJ :s - o 1:: '" CL ~ Ol Q) ~ " '" Q) ~ "'" <JJ C Q) E Q) 10 1;) ro .13 " '" " -= Q) .c - B <fl Q) o " Q) .c I-- '" T!BURON REDEVELOPMENT AGENCY NOTES TO COMPONENT UNIT FINANCIAL STATEMENTS NOTE 1 - Summary of significant accounting policies: The accounting policies of the Tiburon Redevelopment Agency conform to generally accepted accounting principles as accepted in the United States of America as applicable to governments. The following is a summary of the more significant policies: Description of financial reporting entity The Tiburon Redevelopment Agency (the" Agency") was created under provisions of the Community Redevelopment Law (California Health and Safety Code, commencing with Section 33(0) primarily to assist in the clearance and rehabilitation of areas determined to be in a declining condition in the Town of Tiburon (the "Town"), The Agency will expire when the Town's housing increments, as defined by the State of California, have been met. The Town needs an additional four' units of Jaw-income housing to meet the requirements, The first financial activity of the Agency occurred in July 1983, The result of the activity was the Agency's Redevelopment Plan (the "Plan"), Under the Plan, approved in November 1983, the Agency proposed to assist in the development of Southern Pacific property located in downtown Tiburon. The Agency functions as an independent entity and its policies are determined by the Town Council in their separate capacity as members of the Board of Directors of the Agency. Agency staff work is performed by the officials and staff of the Town, or by consultants to the Agency, The Town's Mayor is the Chairman of the Agency; the Town's Vice Mayor is the Vice-Chairman of the Agency; the Town Manager is the Executive Director of the Agency; and the Town Finance Director is the Treasurer of the Agency, The Agency is an integral part of the Town and the accompanying financial statements are included as a component unit of the general purpose financial statements of the Town, The component unit is reported in the Town's financial statements using the blended method of presentation, in which the component unit's financial data is reported in a manner similar to that used for the Town's balances and transactions. Fund accounting The accounts of the Agency are organized on the basis of funds, each of which is considered a separate entity, The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise the fund's assets, liabilities, fund equity, and revenues and expenditures, Agency resources are allocated to and accounted for in individual funds based on the purposes for which they are to be spent and the means by which spending activities are controlled, The Agency's funds are organized as follows: -5- Governmental funds Redevelopment Agency General Fund. The General Fund is the general operating fund of the Agency, It is used to account for all financial resources except those required to be accounted for in the Agency's Housing Set-Aside Fund. The primary use of the resources of the General found is the annual payment to the Town's Point Tiburon Community Facilities District for debt service of improvement bonds. l~edevelopment Agency Housing Set-Aside Fund. The Housing Set-Aside Fund is used to account for that portion of the Agency's tax increment revenues required by the Agency's Plan to be used solely for the purpose of increasing the amount of low and moderate income housing resources in the community, Account group G{'I/eral Fixed Asset Account Group, This account group is used to account for all fixed assets of the Agency. There were no fixed assets as of June 30, 2002, Basis of accounting Basis of accounting, refers to a basis under which revenues and expenditures are recognized in accounts and reported in the component unit financial statements. The Redevelopment Agency's General Fund and Housing Set-Aside Fund's are accounted for using a current financial resources measurement focus. With this measurement focus only current assets and current liabilities generally are included in the balance sheet. The operating statements of the Agency Funds present increases (Le., revenues and other financing sources) and decreases (i.e., expenditures and other financing uses) in net current assets, Both Agency Funds are accounted for using the modified accrual basis of accounting under which revenues are recognized when received, or accrued when they become measurable and available as current assets, All fixed assets are valued at historical cost or estimated historical cost if actual historical cost is not available, Donated fixed assets are valued at their estimated fair value on the date donated, Fixed assets acquired under lease or purchase agreements are capitalized when the Agency accumulates an ownership equity interest in the assets acquired. Public domain ("infrastructure") general fixed assets, which include roads, bridges, curbs and gutters, streets and sidewalks, and drainage systems and lighting systems, have not been capitalized, No depreciation has been provided for general fixed assets. As noted above, there were no fixed assets as of June 30, 2002, Revenues susceptible to accrual consist primarily of incremental property taxes resulting from a change in the assessed valuation of a property in the Agency project area, Other revenues which are likely to'be accrued include interest earnings and intergovernmental or other Agency revenues, Expenditures are generally recognized when the related fund liability is incurred, except that principal and interest on general long-term obligations are recognized when due, -6- Budgetary principles The Agency Board of Directors adopts the Agency's budget through passage of a resolution, The Board adopts a total plan of revenue and expenditure appropriations for all (i.e" both) Agency Funds, and a total appropriation for all funds by passage of a resolution, Any increase or decrease in the total budget requires approval of the Board, The Board also approves reallocations of existing resources when a program or project is materiallichanged, approves new programs and projects upon notification of unanticipated revenues, and approves reductions in appropriations for programs upon material reductions in estimated revenues. Budget appropriations lapse at the end of the fiscal year, Budget information is presented on the modified accrual basis. Property tax revenues Property taxes are billed and collected by the County of Marin, and apportioned to the Agency as enumerated in the Fiscal Agreement. Property taxes attach as an enforceable lien as of March 1. Property taxes are levied annually on July 1 and are payable in two installments, on December 10 and April 10, All general property taxes are then allocated by the County Auditor's Office to the various taxing entities, per state legislation implementing Proposition 13, The method of allocation used by the County is subject to review by the State of California. Agency property tax revenues are recognized in the fiscal year for which taxes have been levied, provided they become available. Available means due or past due and receivable. within the current period, or expected to be collected soon enough thereafter to be used to pay liabilities of the current period. Totals (Memorandum Only) The columns in the financial statements captioned, "Totals (Memorandum Only)" are presented for purposes of additional analysis and are not a required part of the basic component unit financial statements, This data is not comparable to a consolidation and does not present financial position or results of operations in conformity with generally accepted accounting principles as accepted in the United States of America. Statement calculations and use of estimates Due to rounding, column and row calculations may approximate actual figures, Approximations may result when decimal places are eliminated to present whole numbers, The preparation of financial statements in conformity with generally accepted accounting principles as accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and. the reported amounts of revenues and expenses during the reporting periods, Actual results could differ from those estimates. -7- NOTE 2 - Cash and investments: The Agency participates in the Town's cash and investment pool which is administered by Town management. As a General Law municipality, the Town manages its pooled cash and investments under the prudent investor rule, Under the Town's investment policy, investments are to be made with judgment and care, under the circumstances then prevailing, which investors with prudence, discretion and intelligence would make in consideration of probable income as well as safety of capitaL The Agency has implemented GASB Statement No, 31, "Accounting and Financial Reporting for Certain Investments and External Investment Pools_" Highly liquid market investments with maturities of one year or less at the time of purchase are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available. The Town's investment policy authorizes the Town to invest in the State of California's Local Agency Invesh11ent Fund ("LAIF"), obligations of the United States Treasury and other federal agencies, certificates of deposit, banker's acceptances and repurchase agreements, The Agency's cash and investments are primarily included in the Town's cash and investment pool, which was comprised of the following at June 30, 2002: Local Agency Investment Fund Cash Total cash and investment $821,643 4,450 $ 826,093 NOTE 3 - Note receivable - Cecilia Place Senior Housing Project: At June 30, 2002, the Agency has $669,544 in notes receivable due from Cecilia Place Homes Limited Parb1ership, a California limited partnership (the "Developer"), The notes are secured by a Deed of Trust, bear annual interest as defined and are due on March 31, 2027, The notes consist of the following: Notes receivable from Developer: Bears almual interest at 3% Interest free Interest receivable at June 3D, 2002 (not reported in the accompanying financial statements) $ 439,149 230,395 :Ii 669 ,54~ :Ii 69,164 In fiscal 1997, the Ecumenical Association for Housing completed the Cecilia Place Senior Housing Improvement Project. The Agency's Housing Set-Aside Fund funded a portion of the site and building construction improvements of the project. In addition, the Agency loaned the Developer $339,149 for predevelopment and construction costs (the "Original Loan"), The Original Loan bears simple interest at 3% per annum, commencing on March 31, 1997, and is due thirty years after that date. The Agency -8- later modified the Original Loan, In the First Modification to the Development, Disposition and Loan Agreement ("DDLA"), the Agency increased the Original Loan amount by $412,373 (the "Supplemental Component"), which increased the principal amount of the loan to $751,522. The Supplemental Component was not intended to bear interest. The Second Amendment to the DDLA amended the interest rate provisions to make $100,000 of the Supplemental Component bear interest at 3%, NOTE 4 - Fixed assets: There were no fixed assets as of June 30, 2002 and 2001, NOTE 5 - Contributions to Community Facilities District: On June 19, 1985 the Agency and property owners committed with the Point Tiburon Community Facilities District (the "District") to pay up to $472,500 annually, from available tax increment revenue, for debt service on 1985 improvement bonds of the District. The debt service payments are to be made for a period sufficient to aggregate fifteen limes the annual sum of $472,500, or $7,087,500, This amount was met during fiscal 2002 with a final payment of $379,863, The bonds were issued under the Mello-Roos Community Facilities Act of 1982 and do not constitute a general obligation of the Agency or the Town of Tiburon. The Agency contributed $379,863 in fiscal 2002 as delineated in the Fiscal Agreement of the Agency, The Fiscal Agreement provides that, in any fiscal year, should the allocation of increment to the Agency be such that a full payment to the District is not feasible, the Agency shall contribute at least 90% of total increment received, Fund resources were sufficient to exceed this requirement in fiscal 2002, NOTE 6 - Subsidy: The project on the site known as Ned's Way includes four housing units (of a total 25 units) that are inclusionary (affordable), and therefore involves the use of both Agency and Town Housing Set-Aside and In-Lieu monies to subsidize the affordable housing units. Pursuant to the development and disposition agreement between the Agency and the developer, $200,000 per affordable housing unit (not to exceed an aggregate subsidy of $800,000) of Housing Set-Aside and In-Lieu resources are required to subsidize the four units of inclusionary housing, The Agency paid $800,000 to the developer in fiscal 2002, -9- NOTE 7 - Fund equity: Fund equity consists of reserved and unreserved amounts, The term "reserved" is intended to indicate that a portion of the reported fund balance is: 1) legally restricted to a specific use, or 2) not available for appropriation or expenditure. The Agency has reserved fund balances on June 30, 2002 for low and moderate income and senior housing purposes, In general, all resources of the Housing Set-Aside Fund are reserved for low and moderate housing, Excess of expenditures over appropriations The General Tax Increment Fund incurred expenditures in excess of appropriations of $5,883. Sufficient resources were available to finance these expenditures, primarily in the form of previously accumulated fund equity, NOTE 8 - Tiburon Public Facilities Financing Authority: In 1990, the Town and the Agency established the Tiburon Public Facilities Financing Authority (the" Authority") pursuant to a joint powers agreement. The agreement authorized the Authority to provide financing for public capital improvements for the Town, to acquire such public capital improvements and to acquire underlying obligations issued on behalf of the Town or the Agency, On June 1, 1990 the Authority issued $7,948,000 of Series 1990-A Marks-Roos Bonds under the Marks-Roos Local Bond Pooling Act of 1985. These bonds are not general obligations of the Agency or Town, and are collateralized by the revenues received by the Authority. On September 25, 1996, the Authority issued 1996 Refunding Primary Revenue Bonds in the amount of $4,125,000 for the purpose of advance refunding of the Marks.Roos Bonds. Total principal remaining at June 30,2002 is $1,380,000, -]()- TIEURON REDEVELOPMENT AGENCY SUPPLEMENTAL SCHEDULE LOCAL SECURED ASSESSED VALUE AND TAX INCREMENT REVENUES FOR THE FISCAL YEARS ENDED JUNE 30, 1985 TO 2002 (UNAUDITED) Secured Asset Valuation Tax Increment Revenue Undeveloped Fiscal Year Sou them Previously Total Secured Housing Total Tax Ended Pacific Developed Assessed Set-Aside Incremental Iune 30 Propcities Properties Valuation General Fund Fund Revenue 1985 $ 8,551,305 $ 8,534,872 $ 17,086,177 $ 36,071 $ 9,017 $ 45,088 1986 8,721,000 7,392,209 16,1'13,209 127,173 40,048 167,221 1987 87,357,996 10,477,288 97,835,284 58'] ,234 158,917 740,151 1988 49,531,655 1'1 ,589,362 61,121,017 106,471 28,602 135,073 1989 61,371,382 10,432,891 71,804,273 430,415 138,629 569,044 1990 67,771,354 -12,381,212 80,152,566 484,773 150,510 635,283 1991 69,584,036 10,634,764 80,218,800 508,528 156,305 664,833 1992 73,044,655 11 ,657,217 84,701,872 510,011 159;131 669,142 1993 75,789,362 11,890,350 87,679,712 532,216 165,528 697,744 I 1994 78,268,114 '12,100,567 90,368,681 587,882 184,715 772,597 - 1995 75,551,699 '12;102,330 87,654,029 504,547 157,837 662,384 I 1996 74,847,400 12,399,312 87,246,712 371,786 164,214 536,000 1997 75,864,334 12.442,582 88,306,916 502,500 156,735 659,235 1998 77,331,440 13,611,938 90,943,378 502,500 157,274 659,774 1999 79,185,629 12,179,350 91,364,979 502,500 170,667 673,167 2000 84,362,006 12,664,747 97,026,753 502,500 176,610 679,110 2001 90,309,004 . 13,427,402 103,736,406 502,500 180,000 682,500 2002 96,369,664 15,096,188 111,465,852 502,500 162,000 664,500 Source: Marin County Assessor's Office -11- DUM GDENSEAG ULLAKKO MURANISHI & co. LLP Crntifierj Pu[)lic Accountants & COllsllltonts 351 Calilornia Stroct, Suilc 1000 Telephone: (415)434-3744 Sail Frllllcisco, Cnlifmllia Ll4104 Facsimile: (415) 788-2260 , September 19, 2002 " To the Men'! bers of the Governing Board of Tiburon Redevelopment Agency REPORT ON COMPLIANCE AND ON INTERNAL CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS We have audited the component unit financial statements of the Tiburon Redevelopment Agency (the Agency) as of and for the fiscal year ended June 30, 2002, and have issued our report thereon dated September 19, 2002. We conducted our audit in accordance with generally accepted auditing standards as accepted in the United States of America and the standards applicable to financial audits contained in Government Auditillg Stalldards, issued by the Comptroller General of the United States. COIllDliancc ~ As part of obtaining reasonable assurance about whether lh(~ financial statcrnents of the Agency are free of material misstatements, we performed tests of il') compliance with certain provisions of laws, regulations, contract.. and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounL." Such provisions included those provisions oC laws and regulations identified in the Guidelilles for Campliallce Audits of Califomia Redevelopment Agencies, issued by the State Controller and as interpreted in the Suggested Auditing Procedures for Accomplishhzg Compliance Audits of California Redevelopment Agcllciesl issued by the Governmental Accounting and Auditing Committee of the California Society of Certified Public Accountants. 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 that are required to be reported under Government Auditing StaJ1dard~. Internal Control Over Financial Reportine: In planning and performing our audit, we considered the ^eency's internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose an matters in the internal control over financial reporting that might be material weaknesses. A nlaterial weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively low level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internaL control over financial reporting and its operation that we consider to be material weaknesses. We noted other matters involving internal control over financial reporting that we have reported to management of the Agency in a separate letter dated September 19, 2002. This report is intended solely for the information and use of the governing board, managelnent, others within the organization and Town Council, and is not intended to be and should not be used by anyone other than these specified parties. I ,1 J ,(. c- /. 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