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South Park County Sanitation District Financial Statement

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South Park County Sanitation District Financial Statement South Park County Sanitation District (A Component Unit of the County of Sonoma) Independent Auditor’s Reports, Management’s Discussion and Analysis and Basic Financial Statements For the Fiscal Year Ended June 30, 2019 South Park County Sanitation District For the Fiscal Year Ended June 30, 2019 Table of Contents Page(s) Independent Auditor’s Report ....................................................................................................... 1-2 Management’s Discussion and Analysis (Required Supplementary Information) ................. 3-10 Basic Financial Statements: Statement of Net Position ............................................................................................................ 11 Statement of Revenues, Expenses and Changes in Net Position ................................................. 12 Statement of Cash Flows ............................................................................................................. 13 Notes to the Basic Financial Statements ................................................................................. 14-25 Compliance: 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 ........................ 26-27 3562 Round Barn Circle, Suite 300 Santa Rosa, CA 95403 (707) 542-3343 Office (707) 527-5608 Fax pbllp.com Independent Auditor's Report Board of Directors South Park County Sanitation District Santa Rosa, California Report on the Financial Statements We have audited the accompanying financial statements of the South Park County Sanitation District (the "District"), a component unit of the County of Sonoma, California, as of and for the year ended June 30, 2019, and the related notes to the financial statements, which collectively comprise the District’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 responsibility includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. SANTA ROSA PETALUMA NAPA RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Independent Auditor's Report (continued) Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the District as of June 30, 2019, and the changes in financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters – Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis as listed in the table of contents be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated September 27, 2019, on our consideration of the District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts, grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District's internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District's internal control over financial reporting and compliance. Santa Rosa, California September 27, 2019 Management's Discussion and Analysis South Park County Sanitation District Management’s Discussion and Analysis (Unaudited) For the Fiscal Year Ended June 30, 2019 As management of the South Park County Sanitation District (the District), we offer readers of the District’s financial statements this narrative overview and analysis of the financial activities of the District for the fiscal year ended June 30, 2019. We encourage readers to consider the information presented here in conjunction with the District’s financial statements and the accompanying notes to the financial statements. Reporting Entity The District is managed by Sonoma Water, which provides administration, engineering, operational and maintenance services. The District is governed by a Board of Directors, which is the County of Sonoma Board of Supervisors. The District is considered an integral part of the County of Sonoma's reporting entity, resulting in the District’s financial statements being included in the County's Comprehensive Annual Financial Report. Please refer to the definition of the reporting entity within the notes to the financial statements for additional detail. Financial Highlights Net Position The assets and deferred outflows of resources of the District exceeded its liabilities and deferred inflows of resources at the close of the most recent fiscal year by $25,089,565 (net position). Of this amount, $6,074,788 (unrestricted net position) may be used to meet the District’s ongoing obligations to citizens and creditors. Revenues and Capital Contributions The District recognized total revenues, including capital contributions, of $5,345,402 during the fiscal year ended June 30, 2019. Of this amount, $4,099,347 consists of flat charges, charges for services and other operating revenues, $1,170,475 of non-operating revenue comprised of $326,947 of investment earnings and $843,528 of intergovernmental revenue, and the remaining $75,580 was for connection fees recognized during the fiscal year. Expenses The District incurred expenses totaling $3,734,489 during the fiscal year ended June 30, 2019. Of this amount, $2,886,122 represents operating expenses related to the collection, treatment, disposal, and reclamation of effluent, as well as administrative and general expenses. The remaining non-operating expense of $848,367 consisted of interest expense ($50,303) and contributions to other governments ($798,064). Increase in Net Position The District recognized operating income of $1,213,225 for the fiscal year ended June 30,
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