Budget and Audit Committee Special Meeting – January 24, 2017

The Budget and Audit Committee of the Sacramento City Council held a special meeting on Tuesday, January 24, 2017, at 4:00 p.m. in the City Hall Council Chamber. The meeting was called to order by Mayor Darrell Steinberg and adjourned at 5:17 p.m. All committee members were present: Angelique Ashby, Jay Schenirer, Rick Jennings, and Mayor Steinberg. The committee reviewed financial reports, adopted a revised debt management policy, selected a 2017 Vice Chair, discussed the FY2015/16 Comprehensive Annual Financial Report (CAFR), the FY2016/17 Midyear Report, and FY2017/18 Budget Development Policies and Guidelines.

Consent Calendar

• Item 1 – Revised Debt Management Policy: The committee reviewed and forwarded a resolution adopting the revised Debt Management Policy and Supplemental Policy on Disclosure to the City Council for approval.
• Item 2 – FY2015/16 Child Development Program Audit: Accepted and forwarded to City Council.
• Item 3 – FY2015/16 Transportation Development Act Fund Audited Financial Statements: Accepted and forwarded to City Council.
• Item 4 – FY2015/16 Measure U Sales Tax Performance Audit: Accepted and forwarded to City Council.
• Item 5 – FY2015/16 Independent Accountants’ Report on Appropriation Limit Calculation: Accepted and forwarded to City Council.

All consent items were approved unanimously (4-0).

Discussion Items

• Item 6 – Selection of 2017 Vice Chair: Councilmember Jay Schenirer was nominated and unanimously elected as Vice Chair of the Budget and Audit Committee for 2017, with duties starting at the next regular meeting.
• Item 7 – FY2015/16 Comprehensive Annual Financial Report (CAFR): Russell Robertson, Accounting Manager, presented the CAFR, noting a clean audit and a $19.6 million positive general fund balance for FY2015/16. The committee voted unanimously (4-0) to forward the CAFR to the City Council for the February 7, 2017 meeting.
• Item 8 – FY2016/17 Midyear Report: Budget Manager Dawn Holm presented the report, highlighting $8.4 million in increased revenues and $28 million in one-time resources. The committee discussed priorities for allocating the remaining $12.7 million after $15.2 million in recommended uses. Mayor Steinberg proposed investments in youth internships ($950,000 matching grant), crisis intervention training ($750,000), and police pay equity discussions. Councilmembers added suggestions for neighborhood services, affordable housing, transportation, and a reserve for economic uncertainty. The committee voted unanimously (4-0) to accept the midyear report with the following directives: allocate $750,000 for crisis intervention training, allocate $950,000 for youth internships (subject to school district matching), direct the city manager to begin police pay equity discussions, remove the asset forfeiture expenditure (including helicopter) for separate discussion on February 7, and direct the city manager to return on February 7 with a report on library maintenance of effort and a plan for remaining FY2015/16 year-end resources. Additional categories for one-time funding were to be discussed further on February 14.
• Item 9 – FY2017/18 Budget Development Policies and Guidelines: The committee deferred action, requesting a red-line version of changes. The item will be brought back to the February 7 meeting for further discussion.

Key Outcomes

• The committee approved forwarding the revised Debt Management Policy, CAFR, and several audit reports to the City Council.
• Jay Schenirer was elected Vice Chair for 2017.
• The FY2016/17 Midyear Report was accepted with specific allocations: $750,000 for CIT training, $950,000 for youth internships (matching grant), and direction to initiate police pay equity negotiations. The asset forfeiture expenditure (including a new helicopter) was pulled for separate consideration on February 7, 2017.
• The city manager was directed to report back on February 7, 2017, regarding library maintenance of effort and the use of the remaining $12.7 million in one-time resources.
• The FY2017/18 Budget Development Policies and Guidelines were deferred to the February 7 meeting for further review.
• No public testimony was received.