Report 2018-133 Recommendation 10 Responses

Report 2018-133: Fallen Leaf Lake Community Services District: Its Billing Practices and Small Electorate Jeopardize Its Ability to Provide Services (Release Date: July 2019)

Recommendation #10 To: Fallen Leaf Lake Community Services District

To improve its financial viability and safeguard its ability to continue providing services to the Fallen Leaf Lake community, the district should, by December 31, 2019, monitor the financial risks it may face in the future, forecast their impact on its finances and budget, and plan and implement appropriate changes to its budget as necessary throughout the fiscal year.

1-Year Agency Response

The District agreed in response to the Audit that it "will strengthen its financial viability by incorporating the recommendation as appropriate." The District previously reported that August 31, 2019, the District adopted and began implementation of resolutions which of two Resolutions governing the reimbursement rates for firefighters who participate on strike team assignments under the fire agreement. The District then passed additional resolutions for 2020 on these same issues on July 4, 2020. Copies of these Resolutions are being provided to the State Auditor. Furthermore, the Board had discussions on this topic in creating its fiscal budget for 2020-21 when it reconvened this past summer. The District has provided those budgets to the State Auditor. In the event of a significant budget shortfall, the District is prepared to make cuts to certain line items, such as its paramedic program. Finally, in addition to completion of its internal audit in 2019, the District retained and authorized a third-party financial-consultant to conduct a research study starting in July 2020 to review District's operations and reserves so that the District may forecast economics for the next five fiscal years. That company, called Applied Reserve Analysis, through its principal, Eric Phillipps, RS, PRA, is expected to complete its research, analysis, and findings in Q3 of 2020.

  • Estimated Completion Date: June 2021
  • Response Date: August 2020

California State Auditor's Assessment of 1-Year Status: Pending


6-Month Agency Response

DISTRICT'S RESPONSE TO NUMBER 10: As indicated in the District's response to this Recommendation (contained within the Audit Report), the District "will strengthen its financial viability by incorporating the recommendation as appropriate." To that end, on August 31, 2019, the District adopted and began implementation of resolutions which of two Resolutions governing the reimbursement rates for firefighters who participate on strike team assignments under the fire agreement. The passage of these Resolutions is expected to eliminate all financial risk to the District going forward with respect to strike teams. In addition, on August 31, 2019, the District's Board reviewed and approved Resolution 2019-8 to increase in the Fire Special Tax for the fiscal year 2019-2020 to be levied upon eligible properties in the District in an amount 1.5% above that same Tax assessed in the 2018-2019 fiscal year. The Resolution is attached. Furthermore, most of the District's budget concerns events from May through November of each year, because the District's offices are closed in the winter time due to snow accumulation. The Board anticipates further discussion on this topic when it reconvenes in the Second Quarter of 2020.

  • Completion Date: August 2019
  • Response Date: December 2019

California State Auditor's Assessment of 6-Month Status: Pending

Based on its response above and the "not fully implemented" statuses for recommendations #7, 8, 12, and 13 of our report, we do not yet agree that the district has fully implemented this recommendation. We will assess the district's implementation of this recommendation in early 2020 in conjunction with its implementation of these four recommendations.

  • Auditee did not substantiate its claim of full implementation

All Recommendations in 2018-133

Agency responses received are posted verbatim.