HomeMy WebLinkAboutFin Financial Reports FY2013-14CITY OF
Agenda Item No: 5.a
Meeting Date: November 3, 2014
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: FINANCE
Prepared by: Mark Moses City Manager Approva�
Finance Director
SUBJECT: FISCAL YEAR 2013-2014 ANNUAL FINANCIAL REPORT; SINGLE
AUDIT; GANN APPROPRIATIONS LIMIT; MEMORANDUM ON
INTERNAL CONTROL; AND CHILD DEVELOPMENT PROGRAM
RECOMMENDATIONS:
FINANCIAL REPORT, •
THE GANN APPROPRIATIONSREPORT,
MEMORANDUM ON INTERNAL CONTROL,
CHILD DEVELOPMENT PROGRAM REPORT.
BACKGROUND: As required by local code, State law, bond covenants, and best practices, the
City of San Rafael completes an annual audit of its financial activities. The auditing firm of Maze
and Associates, Accountancy Corporation conducted the audit for fiscal year 2013-2014. Their
work was completed in accordance with generally accepted auditing standards; Government
Auditing Standards, issued by the Comptroller General of the United States; and the provisions
of Office of Management and Budget Circular A-133, Audits of State and Local Government and
Non -Profit Organizations.
The Federal Government requires that any local agency expending $500,000 or more in
combined federal grant funds, either directly or indirectly in a fiscal year, is subject to a separate
audit on those programs and a separate Single Audit Report is issued. This threshold amount did
occur in fiscal year 2013-2014; therefore, this separate audit was required.
The requirements of Section 1.5 of Article XIIIB of the California Constitution are met with an
agreed upon procedure report applied to the Gann Appropriation Limit calculated for the year
ending June 30, 2015. A Memorandum on Internal Control is also prepared by the auditors to
help identify areas that could help improve the City's organization and controls over its financial
activities. These reports are also attached to this staff report.
Finally, as part of the fiscal year-end closing activities, the Finance and Community Services
departments worked with Maze and Associates to complete the annual audit of the City's
FOR CITY CLERK ONLY
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SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
childcare program, as required by the State of California.
These reports were presented to the City Council's Finance Committee on October 23, 2014, at
which time they were reviewed and discussed.
Financial results: City-ivide
The actual results of the City's financial activities are presented in the attached Comprehensive
Annual Financial Report. The report includes Government -wide financial statements with
governmental activities and business -type activities presented separately. Net position is one
indicator of the City's financial position. At the end of the fiscal year, net position of the City
was $240.2 million, an increase of $2.8 million from the prior year. This increase is largely
attributable to positive general fund operating results, coupled with the accumulation of funds for
specific purposes — e.g., traffic and housing mitigation, capital projects, equipment replacement,
building maintenance, gas tax, etc.
A financial summary of revenues and expenditures is shown in the Statement of Activities and
Changes in Net Position. Total governmental revenues and transfers in of $93.5 5 million exceeded
the $90.6 million in expenditures by $2.9 million. Strong sales and property tax performance,
coupled with development -related fees and reimbursements from the Successor Agency on
behalf of the former Redevelopment Agency contributed to this result. Total revenues from
business activities (Parking Fund) of $4,489,000 were exceeded by expenditures and operating
transfers out of $4,576,000 by $87,000.
Supplementary explanatory information is provided in the Management's Discussion and
Analysis (MD&A) section beginning on page three. The MD&A provides key highlights and a
summary view of performance of financial activities for the year.
Financial results: General Fund
The final operating results for the General Fund exceeded the original projections made at the
t:� 01
time the budget was adopted for fiscal year 2013-2014 by approximately $31.8 million. This
variance was driven by positive performance in the areas of property tax, sales tax and transient
occupancy tax, coupled with the new Measure E transactions and use tax, which was in effect for
the final quarter of the year. Most of these additional funds, $2.9 million, were assigned to the
emergency and cash flow reserve, while the portion attributable to Measure E. $0.9 million, was
set aside in a public safety facilities reserve in the General Fund.
Single 4 uclit
The City incurred a total of $1,231,745 in federal expenditures during Ci scal year 2013-2014 that
fell under the parameters of this audit. The auditor identified the following two major programs
to be audited:
U.S Department of Health and Human Services — Medical Assistance Program: $344,510
in funds supplemented the City's paramedic services.
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2. U.S Department of Housing and Urban Development — Community Development Block
Grants/Entitlement Grants: $124,999 in funds supported City-wide curb ramps
construction.
As required under the Single Audit Act, a number of separate reports are contained within the
document. Most of these reports comment on either compliance with Federal assistance
regulations or recommendations regarding the City's accounting practices. With respect to
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compliance, the auditors found no material instances of noncompliance with laws, regulations,
contracts or grants applicable to our programs. There were no findings or recommendations for
fiscal year 2013-2014.
Gann Appropriations Limit
The Agreed -Upon Procedures report for the Gann Appropriations Limit required three steps to be
performed including testing the accuracy of the calculations and comparison of information
presented. No exceptions were noted in the three steps for the fiscal year 2014-2015 calculation.
Memorandum on Internal Control
The auditors are required to communicate to the City Council matters that come to their attention
relating to the audit in a report entitled Memorandum on Internal Control. For this report, there
were no areas that the auditors considered to be material weaknesses for fiscal year 2013-2014,
)-2014,
and no other deficiencies were noted.
The auditors reported a few new pronouncements issued by the Governmental Accounting
Standards Board (GASB) which become effective for the next reporting year (fiscal year 2014-
2015). These new reporting standards include GASB Statement No, 68 - Accounting and
Financial Reporting for Pensions. and GASB Statement No. 71, which establishes certain
transitional provisions associated with the implementation of GASB Statement No. 68.
Childcare Audit
The Childcare Program had positive operating results, with $4.0 million in total revenues and
$3.8 8 million in expenditures for the fiscal year. Some of the residual funds have been
accumulated for capital expenditures (e.g., portable buildings). The audit resulted in no adverse
findings.
FISCAL IMPACT: No fiscal impact occurs by the City Council's acceptance of these reports.
The fiscal year 2013-2014 Comprehensive Annual Financial Report and related reports are
presented as the actual results of the City and related entities' financial activities for the year.
RECOMMENDATION: Staff recommends that City Council accept the reports as presented.
Attachments: Comprehensive Annual Financial Report— Fiscal Year Ending June 30, 2014
Single Audit for the year ended June 30, 2014
Prop 111 (GANN) fiscal year 2014-2015 Appropriations Limit
Memorandum on Internal Control
Child Development Program (Childcare) for the year ended June 3 ) 0. 2014
W: Council Material'Staff Reporis,2014'Civ, YE -Financial -Audit Reports FY13-14.doc
COMPREHENSIVE ANNUAL FINANCIAL REPORT
FOR THE FISCAL YEAR ENDING ,DUNE 30, 2014
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COMPREHENSIVE ANNUAL
FINANCIAL REPORT
For the Fiscal Year Ended
June 30, 2014
City of San Rafael, California
P.O. Box 151560
1400 Fifth Avenue
San Rafael, California 94915-1560
Prepared by the Finance Department of the City of San Rafael
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CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2014
Table of Contents
INTRODUCTORY SECTION
TABLE OF CONTENTS
Letterof Transmittal....................................................................................................................................
v
Mission Statement and Vision Statement....................................................................................................
x
CityCouncil and Staff................................................................................................................................xi
LocationMap.............................................................................................................................................xii
Organizational Chart .................................................................................................................................xiii
FINANCIAL SECTION
IndependentAuditor's Report..................................................................................................................
l
Management's Discussion and Analysis..................................................................................................
5
Basic Financial Statements:
Government -wide Financial Statements:
Statementof Net Position.............................................................................................................23
Statementof Activities..................................................................................................................24
Fund Financial Statements:
Major Governmental Funds:
BalanceSheet............................................................................................................................28
Balance Sheet - Reconciliation of Governmental Fund Balances to
Net Position of Governmental Activities..............................................................................29
Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 30
Reconciliation of the Net Change in Fund Balances - Total Governmental
Funds with the Statement of Activities.................................................................................
31
Proprietary Funds:
Statement of Net Position..........................................................................................................34
Statement of Revenues, Expenses, and Changes in Fund Net Position .................................... 35
Statementof Cash Flows...........................................................................................................36
V
CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2014
Table of Contents
FINANCIAL SECTION (Continued)
Fiduciary Funds:
Statement of Fiduciary Net Position.........................................................................................38
Statement of Changes in Fiduciary Net Position.......................................................................39
Notes to Basic Financial Statements..................................................................................................41
Required Supplementary Information:
Schedules of Revenues, Expenditures and Changes in Fund Balances — Budget and Actual -
Budgetary Basis
GeneralFund............................................................................................................................. 84
Traffic and Housing Mitigation Special Revenue Fund............................................................85
Gas Tax Special Revenue Fund.................................................................................................86
Supplementary Information:
Non -major Governmental Funds:
CombiningBalance Sheets...........................................................................................................92
Combining Statements of Revenues, Expenditures, and Changes
inFund Balance.....................................................................................................................98
Budgeted Non -major Government Funds:
Combining Schedules of Revenues, Expenditures, and Changes
in Fund Balances — Budget and Actual......................................................................104
Internal Service Funds:
Combining Statements of Net Position.......................................................................................114
Combining Statements of Revenues, Expenses and Changes in Fund Net Position ..................116
Combining Statements of Cash Flows........................................................................................118
Agency Funds:
Combining Statements of Changes in Assets and Liabilities .....................................................122
f
CITY OF SAN RAFAEL, CALIFORNIA
COMPREHENSIVE ANNUAL FINANCIAL REPORT
For the Year Ended June 30, 2014
Table of Contents
STATISTICAL SECTION
Financial Trends:
Net Position by Component — Last Ten Fiscal Years.............................................................................
126
Changes in Net Position — Last Ten Fiscal Years....................................................................................128
Fund Balances of Governmental Funds — Last Ten Fiscal Years............................................................132
Changes in Fund Balance of Governmental Funds — Last Ten Fiscal Years .........................................
134
Revenue Capacity:
Assessed and Estimated Actual Value of Taxable Property — Last Ten Fiscal Years., ..........................
136
Property Tax Rates - All Direct and Overlapping Governments— Last Ten Fiscal Years ......................
137
Principal Property Tax Payers - Current Year and Nine Years Ago ......................................................
138
Property Tax Levies and Collections — Last Ten Fiscal Years...............................................................
139
Debt Capacity:
Ratio of Outstanding Debt by Type — Last Ten Fiscal Years.................................................................
140
Computation of Direct and Overlapping Debt........................................................................................
141
Computation of Legal Bonded Debt Margin..........................................................................................
142
Revenue Bond Coverage Parking Facility — Last Ten Fiscal Years .......................................................
143
Demographic and Economic Information:
Demographic and Economic Statistics — Last Ten Fiscal Years............................................................
144
Principal Employers — Last Six Years....................................................................................................
145
Operating Information:
Full -Time Equivalent City Government Employees by Function
— Last Ten Fiscal Years.......................................................................................................................
146
Operating Indicators by Function/Program — Last Ten Fiscal Years .....................................................
148
Capital Asset Statistics by Function/Program - Last Ten Fiscal Years .................................................
150
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September 29, 2014
Honorable Mayor, Members of the City Council and Residents of San Rafael:
The Comprehensive Annual Financial Report (CAFR) of the City of San Rafael for the year ended June 30,
2014, is hereby submitted as required by local ordinances, State statutes and bond covenants. This financial
report has been prepared in conformance with Generally Accepted Accounting Principles as promulgated
by the Governmental Accounting Standards Board (GASB) and includes the report of the independent
certified public accounting firm, Maze and Associates Accountancy Corporation, who has issued an
unqualified ("clean") opinion on the City of San Rafael's financial statements for the fiscal year ended
June 30, 2014.
'Clic independent audit of the financial statements is part of a broader, federally mandated "Single Audit"
designed to meet the needs of federal grantor agencies. The standards governing Single Audit engagements
require the independent auditor to report on the audited agency's internal controls and compliance with
legal requirements, with special emphasis on such controls and requirements involving the administration
of federal awards. These reports will be available in the City's separately issued Single Audit Report.
Responsibility for both the data accuracy, and the completeness and fairness of the presentation, rests with
management. To the best of our knowledge and belief, the data presented is accurate in all material respects
and is reported in a manner that presents fairly the financial position and results of operations of the various
funds and component units of the City of San Rafael. Further, the CAFR is prepared in accordance with
procedures and policies set by the Government Finance Officers Association. The analysis of the financial
condition and the result of operations are in the Management's Discussion and Analysis document in the
financial section. The CAFR is organized into three sections:
1. Introductory section, which is unaudited, includes this letter of transmittal, an organizational chart and a
list of the City of San Rafael's elected and appointed officials.
2. Financial section, includes the general-purpose financial statements, related footnote disclosures, and
the combining and individual fund and account group financial statements and schedules, as well as the
independent auditors' report.
3. Statistical section, which is unaudited, includes selected financial and demographic information,
presented on a multi-year basis. Generally, ten-year data is presented for expenditures, revenues,
assessed valuation for local properties and construction activity.
1900 Firm AvEauL - PO BOX 151.560 SAN RAFAEL, CA 94915-1560
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