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Home My WebLink About07 San Bernardino Valley College Foundation - 1 of 2 - MusicVISUAL AND PERFORMING ARTS —GRANT APPLICATION FORM City of San Bernardino —Fine Arts Commission I. Applicant / Organization San Bernardino Valley College Foundation 701 South Mt. Vernon Ave. San Bernardino, CA 92410 m (909) 394 -8987 (office) rn Co (951) 212 -5322 (cell) Non - Profit ID No. 23- 7321533 C? www.sbvcfoundation.org -: Number of years in existence: 43 r' CA ..r 11. Contact Person Program: Fiscal Foundation: Professor Margaret Worsley Karen Childers Professor of Music Executive Director, SBVC Foundation (909) 384 -8999 office (909) 384 -8987 office ( ( mworsleyPvalleycollege.edu kchilder @valleycollege.edu III. Program Category Under which Support is Requested: Music IV. Period of Support Requested: From July 1, 2017 through June 30, 2018 Amount of Grant Requested: $45,000 Total Organizational Budget for current fiscal year: $627,500 Percent of total Organizational Budget Requested: 7.2% V. Project Description /Need Statement San Bernardino Valley College Music Department seeks funds to purchase several musical instruments, repertoire, and supplies in an effort to revive its instrumental music program. Most funds will be used to replenish a cache of concert band instruments, including woodwinds, brass, strings, and percussion. Remaining funds will build the Music Department's repertoire of sheet music. The target group for this project is San Bernardino Valley College students, whether they are majoring in music or not. The larger target group is the local community, which will be able to attend performances in the San Bernardino Valley College Auditorium (seating capacity 583) as well as hear the musicians play at outreach and fundraising events. Building the instrumental music program will help alleviate an artistic and cultural need of musical performances in several genres— Concert Band, Pep Band, Jazz Band, Orchestra, and Chamber Music. 1 Many students over the last 15 years have chosen not to attend San Bernardino Valley College because of its lack of an instrumental music program. The requested funds from this grant will offer not just musical resources for students, but will help foster a musical culture that is likely to last for generations in the community. The Music Department of "Valley College" has already taken steps forward by recently hiring full -time instrumental music professor, Margaret Worsley, and by reassessing their goals to be comparable to that of other Southern California community colleges, with thriving instrumental music departments. The Humanities Division at Valley College recognizes the value of a strong Music Department and makes every effort to give support and recognition through the hosting of concerts (presently, mostly voice or guitar), cross - department collaborations (i.e.: sociological commentary at the Black History Month Concert), arts outreach to local high school students (Middle College class offerings, Honor Band, choral festivals, etc.), and fiscal support where available /possible. We have already reached out to local music stores (IB Music and Bertrand's Music) to collaborate for the purchasing of instruments and equipment. Reviving an instrumental music program at Valley College will provide profound benefits to our target groups: both the students at school, as well as to the residents of the San Bernardino community. VI. Realistic number of persons expected to benefit from this program. From participants to audience members, this program is anticipated to affect upwards of thousands, and possibly millions of people. a) Number of persons paid by attendance: 0 -100 audience members during the inaugural year (fall 2017 - spring 2018). b) Number of persons admitted by no fee: all SBVC students enrolled will have free access to these instruments. SBVC students also enjoy-free admission to SBVC concerts. c) Number of classes and /or performances scheduled /length of display: In its early stages we would like to hold formal concert band performances once -a- semester (1 -2 hours in length). For future years, the instrumental music program hopes to host an array of concerts every year —from concert band to orchestra, jazz band, and pep bands for sports events. d) Total attending classes / performances /displays /exhibits: There will be no "cap" on student participation for instrumental music. Every interested SBVC student, music major or otherwise, is welcome to play. Audience size is expected to be small during the inaugural year and grow as the program matures. The first year, faculty estimate 75 students and 100 audience members attending classes and performances. i! VI. Intended Results: Phase 1. Phase II. Phase III. Target Group(s) Music Majors, SBVC Music Majors, SBVC Music Majors, SBVC students, members students, members students, members of the community of the community of the community Time Frame Two years: Two years: Two years: equivalent student) approximately Fall approximately Fall approximately Fall Cost 2017 - Summer 2019 2019 - Summer 2021 2021 - Summer 2023 Number of 2 -7 public 5 -10 public 17 -25 public performances /classes performances performances performances Supplies and including concert including concert including concert equipment band, summer band, band, summer band, band, summer band, and pep band pep band, and jazz pep band, jazz band, Sheet music. Purchases band and orchestra Anticipated maximum Students: 75 Students: 100 Students: 200 audience, participants, Audience: 100 Audience: 500 Audience: 1,000 etc. the condition of VIII. Project Budget Prniert Pxnenses Line Item Expenses Brief Description of Total Budget per Total amount each line item line -item for this requested from project FAC FTES (full -time Cost to provide 75 students @ $0 equivalent student) instruction to SBVC $1,150 for 3 units = Cost students is $4,600 for 1 $86,250 full -time student (12 units Supplies and Instruments such as $125,000 $45,000 equipment those listed on the attached wish list. Sheet music. Purchases will depend on need, student interests, and the condition of donated instruments. Administrative Cost to manage grant $2,250 $0 expenses funds and reporting TOTAL EXPENSES $213,500 $45,000 AND AMOUNT REQUESTED Other sources of funding for this project Name of funding source Amount committed to this project SBVC general fund $88,500 SBVC 90th Anniversary Gala on October 14, 2016 $4,250 TOTAL AMOUNT $92,750 IX. Future Objectives The instrumental music program's future objectives can be described in three distinct phases: I. Establishment, II. Growth, and III. Sustainability. Phase I.— Establishment We in the Music Department at San Bernardino Valley College are in the midst of creating infrastructure to build upon. This includes writing curriculum for local and state approval (submitted); formal fund requests through the College's Program Review (Division has voted as highest priority); fundraising efforts (90th Anniversary Gala, Car Show of Spring 2017, etc.); and supplemental bids through Grants such as the Fine Arts Commission (if FAC is not received, dependency on Program Review and other fundraising efforts will be surrogated), local advertising, and corporate outreach (Little Caesars Pizza, Subway, JoJo's Grill -A -Dog, etc.). We are making recruitment and outreach efforts by performing side -by -side concerts (most recently a performance of Handel's Messiah with San Bernardino High School and Granite Hills High School), by giving clinics at High School campuses (San Bernardino High School and Indian Springs High School), and by hosting an Honor Band for cross - district High School students in May 2017 (featuring guest conductor Patricia Cornett, as well as professional woodwind, brass, and percussion clinicians). Our goal by the end of this phase is to have curriculum and a base accumulation of instruments in place to kick start an instrumental music program at Valley College by the start of fall 2017 classes. Phase II.— Growth During this stage of our development we will be focusing on increasing student capacity, expanding curriculum for future ensembles and classes (Jazz Band, Commercial Music Program /Degree, Chamber Ensembles, etc.), and continue to build upon our cache of instruments and musical repertoire. As our numbers increase, we anticipate some logistical areas of financial need, including instrument lockers, repertoire filing systems, music stands, uniform storage, etc. Our prioritized goal during this phase is expansion, and as such we will be heavily recruiting with events like collaborative concerts with local high schools, visits to feeder schools with side -by -side rehearsals, hosted festival competitions, and participation in conference exhibitions or festivals (SCSBOA, CBDNA, MACCC, etc.). The Music Department is also planning collaborations with extended musical programs, which motivated students may participate in during their summers (programs like Drum 4 Corps International, Aspen Music Festival, Brevard, and others), or upon graduation (Airforce, Army, Marine, and Navy Bands). Representatives from these organizations will be asked to talk to and inspire our students. Our goal by the end of this phase will include the establishment of a thriving musical culture, where opportunities are made for all who are interested —from the music major to the community enthusiast. Phase III.— Sustainability While all of our phases for this project set up pillars of strength, the third phase will require an introspective approach. What is our established role in the community? How are we fostering a culture of music appreciation? What are the hurdles of the future? Are we satisfied with our brand /image? We will focus, during this third phase, on permanent performance series' and long -term programs (like a Guest Artist Concert Series, a Masterclass Series, etc.), and collaborations with other San Bernardino arts institutions (like the San Bernardino Symphony, the Garcia Center for the Arts, the Fullerton Museum of Art, etc.). We will also focus on the establishment of a permanent financial reservoir to ensure we are not just providing programs from one semester to the next, but installing endowments to support these programs for generations to come. Instituting opportunities for bequeathed trust and beneficiary donations will be explored. Specialized bursar accounts will be created to keep stability across all offered instrumental music programs. Scholarships are expected to be provided for instrumental music students, which should include not just monies for classes and books, but also audition fees, summer festival tuition, and other music - related expenses. Our goal for the end of this phase is longevity— actualize a system through which instrumental music is sustained as an integral part of the institution that is San Bernardino Valley College. X. Brief History San Bernardino Valley College once had a thriving instrumental music program with concert bands, jazz bands, percussion ensemble, clarinet and flute choirs, and even a marching band. We also had six full -time, tenure -track professors. When Paul Kardos (director of instrumental music) retired 15 years ago, the district was in dire financial straits, and conjectured to dissolve the instrumental program. All of the musical instruments were sold, the monies raised to buy six Clavinova pianos for vocal coaching; the musical repertoire was given away to local programs, or thrown away; and the instrumental program at Valley College went dormant. There have been devastating consequences of this maneuver, which include a dramatic decrease of music majors (those who inquire are directed to our sister school Crafton Hills, but usually end up attending Riverside City College), a dramatic decrease of offered music classes, and a dramatic decrease of public music performances —a poignant indicator of the "cultural health" of a community. In recent years, with new administrative leadership, the Humanities Department has recognized the need for instrumental ensembles, and reassessed its goal in 5 becoming a "full fledged" music department. The department has already taken steps towards this goal by hiring a full -time, tenure -track professor to lead the instrumental program; they (the Humanities department) have given top priority to requested funds through Program Review votes; and the campus pledges a commitment of support (Valley College President Diana Rodriguez was quoted by the Inland Empire Community News, "I am very proud of our college's growing reputation as an arts hub in the local community and look forward to seeing this program expand over the coming years."'). With this mechanism of support in place, the Music Department at Valley College is moving forward to expand its instrumental music program into a thriving artistic entity, to be enjoyed by all in the San Bernardino community. Established in March 1973, the San Bernardino Valley College Foundation ( "Foundation ") is a nonprofit, 501(c)(3) organization whose purpose is to support San Bernardino Valley College. The Foundation's mission and vision are as follows: Vision: The San Bernardino Valley College Foundation sustains and promotes the legacy of San Bernardino Valley College in our community. Mission: The San Bernardino Valley College Foundation is a fundraising organization committed to the stewardship of assets and the development of relationships to advance the vision of San Bernardino Valley College. The Foundation is governed by a Board of 27 Directors and has assets of approximately $3.7 million. The Foundation has experience managing grant- funded projects from SoCal Gas, Edison International, the San Manuel Band of Mission Indians, the Foundation for California Community Colleges, Walmart, and others. XI. Attach a copy of your last fiscal ey ar report, audited or unaudited. Audited financial statements for the 2015 -2016 fiscal year are attached at the end of this grant application packet. CERTIFICATION: Project Officer: Title: Telephone No: 0 - 0`91-14 Cell Phone No.: Email Address: C? e,.b w a9 `' VC9 Zorl - kV—t 1 Victoria, Anthony. "Worsley to re- establish Instrumental Music Program at Valley College." Inland Empire Community News, 20 July 2016. List Board of Directors and Officers (does not apply to parks and schools). Include names addresses and telephone numbers. Directors and Officers are listed below. Officers consist of the Foundation President, Vice President, Secretary, and Treasurer. NOTE: The majority of SBVC Foundation Directors are alumni of San Bernardino Valley College. Alumni are noted with the names of the Directors below. Mr. Richard (Rich) Beemer (SBVC alumnus) Foundation President Mr. Brian Townsend Foundation Vice - President Mr. Scott Stark Foundation Treasurer VP Administrative Services, SBVC 701 S. Mt. Vernon Ave. San Bernardino, CA 92410 Office: (909) 384 -8958 Ms. Diana Rodriguez Foundation Secretary President, San Bernardino Valley College 701 South Mt. Vernon Avenue San Bernardino, CA 92410 Office: (909) 384 -8298 Mr. Dennis Baxter (SBVC alumnus) Executive Director, SB Habitat for Humanity 25948 Business Center Dr. Redlands, CA 92374 Office:(909) 478 -1176 Ms. Lois J. Carson (SBVC alumna) Mr. Nick DePasquale Fairview Ford 292 North G Street San Bernardino, CA 92410 Office: (888) 720 -3274 Ms. Eloise Gomez Reyes (SBVC alumna) Assemblymember, CA 47 712 N. La Cadena Dr. Colton, CA 92324 Office: (909) 824 -5566 Ms. Gloria Macias Harrison (SBVC alumna) SBCCD Trustee Ms. Patricia Hinojosa (SBVC alumna) Financial Advisor Wells Fargo Advisors 3880 Lemon Street, Suite 510 Riverside, CA 92501 Office: (951) 784 -8700 (800) 543 -3921 Ms. Barbara McGee City Clerk City of Rialto 290 W. Rialto Avenue Rialto, CA 92376 Office: (909) 820 -2519 Sheriff John McMahon (SBVC alumnus) San Bernardino County Sheriff 655 East Third Street San Bernardino, CA 92415 Office: (909) 387 -3636 Mr. Gary Miller (SBVC alumnus) Miller Architecture, Interiors, Planning 1177 Idaho St., Suite 200 Redlands, CA 92374 Office: (909) 335 -7400 The Honorable Phillip Morris (SBVC alumnus) 7 Ms. Faye Pointer Mr. Edward Szumski (SBVC alumnus) Mr. Gary Saenz Mr. Danny Tillman (SBVC alumnus) City Attorney, San Bernardino Office: (909) 384 -5355 Mr. Rod Torres (SBVC alumnus) Dr. Ruth Sandlin (SBVC alumna) Deputy Chief, San Bernardino County Sheriff Professor, CSUSB 655 East Third Street 5500 University Parkway San Bernardino, CA 92415 San Bernardino, CA 92407 Office: (909) 387 -3636 Home: ( Mr. Bruce Baron (Ex Officio) Ms. Lynda K. Savage (SBVC alumna) Chancellor of SBCCD San Bernardino, CA 92408 Office: (909) 382 -4091 Ms. Kristine Scott Mr. Paul Bratulin (Ex- Officio) Public Affairs Manager, SoCal Gas SBVC Director, Marketing & Public Relations 155 South G Street, SC 8074 San Bernardino Valley College San Bernardino, CA 92410 701 South Mt. Vernon Avenue Office: (909) 335 -7941 San Bernardino, CA 92410 Office: (909) 384 -8978 Mr. Paul M. Shimoff Shimoff Law Corporation Ms. Karen Childers (Ex- Officio) 4 West Redlands Blvd., 2nd Floor 701 South Mt. Vernon Avenue P.O. Box 9116 San Bernardino, CA 92410 Redlands, CA 92375 Office: (909) 384 -8987 Office: (909) 792 -8919 Dr. Celia Huston (Ex- Officio) Dr. Donald L. Singer (SBVC alumnus) SBVC Academic Senate President SBCCD Trustee 701 South Mt. Vernon Avenue Attachment for Project Budget (Section VIII) Concert Band Wish List Concert Bass Drum, stand (need 1) • Pearl 32X16 Mahogany drum w /stand $1444.00 Tubas (need 2) • Student Model: Yamaha Ybb -105Wc Series 3 -Valve 3/4 BBb ... $3,687.99 • Professional Model: Jupiter 482 Standard Series 4 -Valve 314 BBb ... $5,899.00 Baritone (need 1) • Student Model: Yamaha Yep -201 ... $1,939.99 • Professional Model: Jupiter JEP1120 ... $3,999.00 Trombones (need 2) • Student Model:Yamaha Ys1354 Student ...-$699.99 • Professional Model: King King Professional ... $2,019.00 Baritone Sax (need 1) • Student Model: Yamaha YBS -52 Intermediate Baritone Saxophone Standard $5,200 • Professional Model: Yamaha Ybs62s ... $9,128.99 Tenor Sax (need 1) • Student Model: Yamaha Yts -26 Student... $1,799.99 • Professional Model: Selmer Reference 54 ... $8,119.00 Alto Saxes (need 2) • Student Model: Conn - Selmer AS711 Prelude Alto Saxophone $819.00 • Professional Model: Buffet 400 Series $2,500.00 F/B -flat French Horns (need 2) • Student Model: Single Horn in F Yamaha Yhr314 Standard F ... $2,249.99 • Professional Model: Double Horn In F/B flat: Holton H379 Intermediate French Horn $3,449.00 B -flat Clarinets (need 4) • Student Model: Yamaha Ycl 450 B flat clarinet $1,300.00 • Professional Model: Buffet R -13 $3,5000.00 E -flat Clarinet (need 1) • Professional Model: Buffet E -11 $1,000.00 Bass Clarinet (need 1) • Student Model: Yamaha Ys 1221 Low E -flat Standard Bass Clarinet $2,200.00 • Professional Model: 4 Flutes 0 • Student Model: Yamaha YFL 221 $530.00 • Professional Model: Pearl 795 Elegante series $2500.00 1 Piccolo Flute • Student Model: Pearl PFP 105E $1,000.00 • Professional Model: Bulgheroni Como Piccolo $3,000.00 Trumpets (need 4) • Student Model: Yamaha YTR 2330 $1200.00 • Professional Model: Bach Stradivarious model 37 $2800.00 Oboe (need 1) • Student Model: Yamaha YOB -241 $2800.00 • Professional Model: Buffet Crampon 4052 $4000.00 Bassoon (need 1) • Student Model: Amati ABN -32 -MS $4000.00 • Professional Model: Fox Renard 240 $9000.00 10 S Ob 0tA CG S SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Financial Statements with Independent Auditors' Deport For the Year Ended June 30, 2016 TABLE OF CONTENTS Independent Auditors' Report Financial Statements Statement of Financial Position Statement of Activities Statement of Functional Expenses Statement of Cash Flows Notes to Financial Statements Page Issie c. F- "'JI. C,UA al"j..) C1 1 111�1I-:[) [111A. ACC( 1 `IAN -15 Independent Auditors' Report To the Board of Directors San Bernardino Valley College Foundation San Bernardino, CA We have audited the accompanying financial statements of San Bernardino Valley College Foundation (a California nonprofit public benefit corporation) (the Foundation), which comprise the statement of financial position as of June 30, 2016, and the related statements of activities, functional expenses and cash flows for the year then ended, and the related notes to the financial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation ofthese 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 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. 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 ofaccounting 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. -I- 4-17 Missouri COLA 0 PU11:11 :I,, CA 92373 F'O. B., 88,47 • Pedlanck, Ca 9)37:5 �ralephcn� JOB) -7�2 -18'2 e � -�� `�OJ- 79:J -2Ulf� Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of San Bernardino Valley College Foundation as of June 30, 2016, and the changes in its net assets and its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Prior Period Adjustment As discussed in Note 7 to the financial statements the prior year financial statements were adjusted to correct certain accounting errors. Our opinion is not modified with respect to the prior period adjustment. November 3, 2016 -2- '/�e'/// 44�w SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Statement of Financial Position ,tune 30, 2016 ASSETS Current Assets Unrestricted cash and cash equivalents Restricted cash and cash equivalents Promise to give Total current assets Noncurrnet Assets Investments - restricted Beneficial interest in assets held at the Foundation for CA Community Colleges Total assets LIABILITIES AND NET ASSETS Liabilities Accounts payable Net assets Unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets The accompanying notes are an integral part of these financial statements. -3- $ 243,322 1,007,189 15,000 1,265,511 2,184,605 328,086 2,512,691 $ 3,778,202 $ 25,719 232,603 1,892,285 1,627,595 3,752,483 $ 3,778,202 SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Statement of Activities For the Year Ended .Tune 30, 2016 Support and revenues Contributions Contributions - San Bernardino Community College Investment income /loss, net Net assets released from restrictions Satisfaction of purpose restrictions Total support and revenues Expenses Program services Management and general Fundraising Total expenses Change in net assets Net assets Balance, beginning of year as previously stated Prior period adjustment Balance, beginning of year as restated Balance, end of year Temporarily Permanently Unrestricted Restricted Restricted Total $ 49,583 $ 455,105 $ 177,000 $ 681,688 105,526 - - 105,526 (31,683) (57,263) - (88,946) 442,419 (442,419) - 565,845 (44,577) 177,000 698,268 399,974 - - 399,974 141,603 - - 141,603 18,786 - - 18,786 560,363 - - 560,363 5,482 (44,577) 177,000 137,905 177,484 1,991,301 1,519,884 3,688,669 49,637 (54,439) (69,289) (74,091) 227,121 1,936,862 1,450,595 3,614,578 $ 232,603 $ 1,892,285 $ 1,627,595 $ 3,752,483 The accompanying notes are an integral part of these f nancial statements. -4- SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Statement of Functional Expenses For the Year Ended June 30, 2016 Program Management Services and General Fundraising Total Scholarships $ 148,866 $ - $ - $ 148,866 Valley Bound books and tuition 235,564 - - 235,564 In. -kind salaries and benefits 10,553 94,973 - 105,526 Supplies for community relations 4,991 - - 4,991 Administrative supplies and expenses - 46,630 - 46,630 Fundraising supplies and event expenses - - 18,786 18,786 Total functional expenses $ 399,974 $ 141,603 $ 18,786 $ 560,363 T {2e accornpanyirag notes are an integral part of these financial statements. -5- SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Statement of Cash Flows For the Year Ended June 30, 2016 Cash flows from operating activities Change in net assets Adjustments to reconcile change in net assets to net cash provided by operating activities: Contributions restricted for long -term purposes Donation of artwork Net realized/unrealized (gain) loss on investments (Increase) decrease in: Increase (decrease) in: Accounts payable Net cash provided by operating activities Cash flows from investing activities Proceeds from sale of investments Purchase of investments Net cash provided by investing activities Cash flows from financing activities Collections of contributions restricted for long -term purposes Net cash provided by (used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents Balance, beginning of year Balance, end of year Supplemental cash flow information Donation of artwork held for investment The accompanying notes are an integral part of these financial statements. IE $ 137,905 (177,000) (50,000) 121,424 (9,514) 22,815 1,507,635 (499,335) 1,008,300 177,000 177,000 1,208,115 42,396 $ 1,250,511 $ 50,000 SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 1. Summary of Significant Accounting Policies Organization San Bernardino Valley College Foundation (the Foundation), located in San Bernardino County, was formed as a California nonprofit public benefit corporation on March 6, 1973. The Foundation supports the San Bernardino Community College District (the District) by fundraising for and administering the payment of student scholarships and support for other educational programs of San Bernardino Valley College (the College). In addition, the Foundation oversees the Valley Bound Commitment program, which serves to remove economic barriers and improve ach ievement for low income students from the San Bernardino Valley area. The Foundation is supported primarily through public donations, grants, and investment income. Basis of Accounting The financial statements of the Foundation have been prepared on the accrual basis of accounting and, accordingly, reflect all significant receivables, payables, and other liabilities. Basis of Presentation The accompanying financial statements are presented in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 958- 210 -50. Under ASC 958- 210 -50, the Foundation is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted. temporarily restricted, and permanently restricted. In addition, the Foundation is required to present a statement of cash flows. Revenues are recognized when earned, and expenses are recognized when incurred in accordance with the accrual basis of accounting. The Foundation and the District are financially interrelated organizations as defined by ASC Topic 958 -605 Transfers ofAssets to a Nonprofit or Charitable Trust that Holds Contributions for Others. The Foundation reflects contributions received for the benefit of the District as revenue in its financial statements. The expenses related to these contributions are accounted for under program and supporting services. Support and Expenses Contributions are measured at their fair value at the date of contribution and are reported as an increase in net assets. The Foundation reports gifts of cash or other assets in the category designated by the donor. The Foundation reports gifts of goods and equipment as unrestricted support unless explicit donor stipulations specify how the donated assets must be used. Absent explicit donor stipulation about where the contributions are to be spent, the Foundation reports these contributions as unrestricted. Cash and Cash Equivalents Cash and cash equivalents for the purposes of the statement of cash flows consist of cash held in checking and money market accounts and certificates of deposit with maturities of less than 90 days, when purchased and available for current operations. -7- SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 1. Summary of Significant Accounting Policies (Continued) Cash and Cash Equivalents (Continued) The Foundation maintains cash balances in financial institutions which are insured up to $250,000. At June 30, 2016, $947,720 of the cash balances was in excess of the FDIC insurance limit. Investments Investments in marketable securities with readily determinable fair values and all investments in debt securities are reported at their fair values in the statement of financial position. Unrealized gains and losses are included in the change in net assets. Investment income and gains restricted by a donor are recorded in the appropriate classification of net assets. Investments are classified as short or long term based upon the Foundation's intent to use for current operations. Contributions and Promises to Give Contributions are recognized when the donor makes a promise to give to the Foundation that is, in substance, unconditional. Contributions that are restricted by the donor are reported as increases in the appropriate classification of net assets as temporarily or permanently restricted. When a restriction expires through either the passage of time or use, the assets are reclassified as assets released from restrictions in the statement of activities. Contributions received are recorded as unrestricted, temporarily restricted, or permanently restricted net assets depending on the existence or nature of any donor restrictions. Donated Services, Goods, and Facilities A substantial number of volunteers have donated their time and experience to the Foundation's program services and fundraising campaigns during the year. However, these donated services are not reflected in the financial statements since there is no readily determined method of valuing the services. The Foundation utilizes certain employees employed by the District and District office space; the cost of the facilities has not been determined and is not reflected in these financial statements. Income Taxes The Foundation is a non - profit public benefit corporation that is exempt from income taxes under Section 501(c)(3) of the Internal Revenue Code (IRC) and classified by the Internal Revenue Service (IRS) as other than a private organization. Contributions received qualify as tax deductible gifts as provided in Section 170(b)(1)(A)(vi). The Foundation is also exempt from California State franchise and income taxes under Section 23701(d) of the California Revenue and "Taxation Code. Accordingly, no provision for income taxes has been reflected in these financial statements. -8- SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 1. Summary of Significant Accounting Policies (Continued) Income Taxes (Continued) The Foundation's federal form 990, Return of OrganLalion Exempt From Income Tax, and State Form 109, California Exempi Organization Business Income Tax Return, are subject to examination by the IRS for three years, and by the State Franchise Tax Board for four years, after they were filed. The Foundation is not aware of any such examinations at this time. The Foundation has adopted FASB ASC Topic 740 that clarifies the accounting for uncertainty in tax positions taken or expected to be taken on a tax return and provides that the tax effects from an uncertain tax position can be recognized in the financial statements only if, based on its merits, the position is more likely than not to be sustained on audit by the taxing authorities. Management believes that all tax positions taken to date are highly certain, and, accordingly, no accounting adjustment has been made to the financial statements. Allocation of Functional Expenses The costs of providing the various programs, fundraising, and other activities have been summarized on a functional basis in the statement of functional expenses. Accordingly, certain costs have been allocated among the program, operating, and fundraising activities benefited. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. 2. Investments Investments are recorded at fair value on the statement of financial position. The following table summarizes the investment returns which are recorded in the statement of activities: Realized gains (losses) on investments $ (33,861) Unrealized gains (losses) on investments (87,563) Interest and dividends 55,195 Total investment income (66,229) Investment expenses (22,717) Total $ (88,946) 1a SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 2. Investments (Continued) Investment Policies Return Objectives and Risk Parameters The Foundation has adopted investment and spending policies for endowment assets that attempt to provide a predictable stream of funding for programs supported by its endowment while seeking to maintain the purchasing power of the endowment assets. In order to meet its needs, the investment strategy of the Foundation is to emphasize total return; that is, the aggregate return fi•om capital appreciation and dividend and interest income. Endowment assets include those assets of donor - restricted funds that the Foundation must hold in perpetuity. Under this policy, as approved by the Board of Directors, the endowment assets are invested to meet or exceed the market index, or blended market index, selected and agreed upon by the Finance Committee that most closely corresponds to the style of investment management. Strategies Employed for Achieving Objectives To satisfy its long -term rate -of- return objectives, the Foundation relies on a total return strategy in which investment return is achieved through both capital appreciation (realized and unrealized) and current yield (interest and dividends). The Foundation targets a diversified asset allocation that places a greater emphasis on equity -based investments to achieve its long -term return objectives within prudent risk constraints. Spending Policy and How the Investment Objectives Relate to Spending Policy The Foundation may not exceed five percent of the average net assets over the past three years ending June 30 of the preceding fiscal year. In establishing this policy, the Foundation considered the long -term expected return on its endowment and the need to maintain some investment income in reserve to plan for the potential of scholarship awards exceeding investment income. 3. Market Value of Financial Assets and Liabilities The Foundation determines the fair market values of certain financial instruments based on the fair value hierarchy established in FASB ASC 820- 10 -50, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value. The following provides a summary of the hierarchical levels used to measure fair value: Level I - Quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level I assets and liabilities may include debt and equity securities that are traded in an active exchange market and that are highly liquid and are actively traded in over -the counter markets. am SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 3. Market Value of Financial Assets and Liabilities (Continued) Level II - Observable inputs other than Level I prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level III - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level III assets include financial instruments whose value is determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. Assets and Liabilities Recorded at Fair Value on a Recurring Basis The following table presents the balances of the assets measured at fair value on a recurring basis as of June 30, 2016. The Foundation did not have any liabilities measured at fair value on a recurring basis as ofJune 30, 2016. Investment Assets Common stock Certificates of deposit Artwork Funds held with the Foundation for CA Community Colleges Total investments Level Level III Total $ 1,972,621 $ - $ 1,972,621 161,984 - 161,984 50,000 50,000 - 328,086 328,086 $ 2,134,605 $ 378,086 $ 2,512,691 The following table summarizes the Foundation's Level III reconciliation as of June 30, 2016: Level III Investments, at Fair Value Balance, at June 30, 2015 $ 328,086 Donation of artwork 50,000 Changes in the value of the investments - Balance, at June 30, 2016 $ 378,086 SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 3. Market Value of Financial Assets and Liabilities (Continued) Assets and Liabilities Recorded at Fair Value on a Recurring Basis (Continued) The Foundation's promise to give in the amount of $15,000 was recorded at fair value on a non - recurring basis on the date received. The Foundation has no liabilities recorded at fair value on a non - recurring basis. 4. Beneficial Interest in Assets Feld by the Foundation for California Community Colleges The Foundation participated in The Foundation for California Community Colleges (The FCCC) Osher Scholarship Challenge. This program challenged community colleges and their related foundations to raise additional contributions to be designated as part of a permanent endowment for The FCCC's Osher Scholarship Endowment. Foundations participating in this challenge campaign are guaranteed scholarship monies for qualifying students of their community college districts. The funds are held by The FCCC and are included as permanently restricted net assets of the Foundation. The Foundation receives no additional interest or dividends on the balance held at The FCCC, and the Foundation does not participate in the investment management of the funds. 5. Net Assets At June 30, 2016, net assets are categorized as follows: Unrestricted net assets: Board designated - operating reserves $ 77,492 Unrestricted 155,111 232,603 Temporarily restricted for: Scholarships 179,717 Programs 279,071 Endowment earnings 1,433,497 1,892,285 Permanently restricted for: Endowments for scholarships 1,299,509 Assets held at Foundation for CA Community Colleges 328,086 1,627,595 Total net assets $ 3,752,483 -12- SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 5. Net Assets (Continued) Permanently Restricted Net Assets The Foundation's permanently restricted net assets consist of individual funds established for a variety of purposes. Its endowment includes donor - restricted endowment funds. As required by GAAP, net assets associated with endowment funds are classified and reported based on the existence or absence of donor- imposed restrictions. Endowment Funds Interpretation of Relevant Law The Board of Directors of the Foundation has interpreted the State Prudent Management of Institutional Funds Act (SPMIFA) as requiring the preservation of the fair value of the original gift as of the gift date of the donor- restricted endowment funds absent explicit donor stipulations to the contrary. As a result of this interpretation, the Foundation classifies as permanently restricted net assets (a) the original value of gifts donated to the permanent endowment, (b) the original value of subsequent gifts to the permanent endowment, and (c) accumulations to the permanent endowment made in accordance with the direction of the applicable donor gift instrument at the time the accumulation is added to the fund. The remaining portion of the donor - restricted endowment fund that is not classified in permanently restricted net assets is classified as temporarily restricted net assets until those amounts are appropriated for expenditure by the organization in a manner consistent with the standard of prudence prescribed by SPMIFA. In accordance with SPMIFA, the organization considers the following factors in making a determination to appropriate or accumulate donor - restricted endowment funds: (1) the duration and preservation of the fund, (2) the purposes of the organization and the donor - restricted endowment fund, (3) general economic conditions, (4) the possible effect of inflation and deflation, (5) the expected total return from income and the appreciation of investments, (6) other resources of the organization and, (7) the investment policies of the organization. The changes in endowment net assets for the year ended June 30, 2016 are as follows: Endowment net assets, beginning of year Contributions Investment return: Investment income (loss) Appropriation of endowment assets for expenditure -13- Temporarily Permanently Restricted Restricted Total $ 1,499,793 $ 1,450,595 $ 2,950,388 177,000 177,000 (57,263) - (57,263) (9,033) - (9,033) $ 1,433,497 $ 1,627,595 $ 3,061,092 SAN BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 5. Net Assets (Continued) Endowment Funds (Continued) The portion ofperpetual endowment funds that is required to be retained permanently either by explicit donor stipulation or by SPMIFA is $1,627,595 as of June 30, 2016. The portion of perpetual endowment funds subject to a time restriction with a purpose under SPMIFA is $1,433,497 as of June 30, 2016. From time to time, the fair value of assets associated with individual donor restricted endowment funds may fall below the level that the donor or SPMIFA requires the Foundation to retain as a fund ofperpetual duration. In accordance with GAAP, deficiencies of this nature are reported in unrestricted net assets, when applicable. 6. Related Party Transactions As discussed in Note 1, the San Bernardino Community College District provides administrative services to the Foundation. These services consist of salaries and benefits for the Executive Director, administrative staff, and other services. For the year ended June 30, 2016, these services were valued at $105,526. 7. Prior Period Adjustment During the year ended June 30, 2016 the Foundation corrected certain errors for prior years as follows: Misclassification of net assets: Temporarily restricted net assets to permanent Temporarily restricted net assets to unrestricted Incorrect accounting treatment for the CCCS Endowment fund Understatement in temporarily restricted funds Overstatement in permanently restricted funds Understatement of stock investment in temporarily restricted funds Promise to give not properly reported during the prior year end Accounts payable not properly reported during the prior year end $ 5,836 49,637 $ 55,473 $ 6,506 (75,115) 14,751 15,000 (35,233) $ (74,091) The effect of the above prior period adjustments was to reduce change in net assets by $20,233 on the statement of activities for the year ended June 30, 2015. -14- SAID BERNARDINO VALLEY COLLEGE FOUNDATION (A California Nonprofit Public Benefit Corporation) Notes to Financial Statements 8. Subsequent Events The Foundation's management has evaluated events or transactions that may occur for potential recognition or disclosure in the financial statements through November 3, 2016 which is the date the financial statements were available to be issued. Management has determined that there were no subsequent events or transactions that would have a material impact on the current year financial statements. -15-