Budget and Audit Committee Meeting - January 30, 2018
STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE
Budget and Audit Committee Meeting - January 30, 2018
The Budget and Audit Committee met on January 30, 2018 at 2:03 PM in City Hall Council Chamber. The committee reviewed the Fiscal Year 2016/17 Comprehensive Annual Financial Report (CAFR) and the Fiscal Year 2017/18 Midyear Report. Both were unanimously approved for forwarding to the City Council. The committee also discussed planning for a potential Measure U renewal ballot measure in November 2018 and directed staff to provide a timeline.
Consent Calendar
No consent calendar items were presented.
Public Comments & Testimony
No public comments were made.
Discussion Items
-
Fiscal Year 2016/17 Comprehensive Annual Financial Report (CAFR): Interim Accounting Manager Osvaldo Lopez presented the CAFR, noting the city received a clean (unmodified) audit opinion from independent auditors Babrini Trin and Company. Department operations resulted in a positive variance of $9.1 million, with only Human Resources (unexpected legal costs) and Public Works (fewer parking citations and prevailing wage changes) showing negative variances. The general fund ended with a positive balance of $12.9 million. Key reserves included $2.7 million deposited into the economic uncertainty reserve (bringing it to $49.6 million, or 10.7% of FY 2017/18 budget revenue), $1.4 million for the fire department ambulance service reimbursements, and $5.3 million in pension cost savings deposited into the Other Post-Employment Benefit Trust (increasing assets from $24 million to $29 million, funding status from 6% to 8%). The committee voted unanimously to accept the CAFR and forward it to the City Council.
-
Fiscal Year 2017/18 Midyear Report: Interim Finance Director Dawn Holm presented the midyear report. Revenues were trending higher in property tax, vehicle license fees, utility user tax, and transient occupancy taxes, with a net increase of $5.9 million. Staff recommended adjusting revenues and fund balance projections. The report included setting aside funds for Beacon after-school programs, neighborhood community and economic plans, and a $500,000 cannabis equity program (noting Council had discussed $1 million over two years; the other $500,000 expected in FY 2018/19 budget). Nine new positions were recommended, all fully offset, including six in animal care. Other funds adjustments included a museum registrar for Sacramento History Museum funded by an endowment. The report also covered Measure U: the tax expires March 2019, but with existing resources and minor realignments, services can be funded through June 30, 2019. Ongoing Measure U expenditures exceed revenues due to rising labor costs. The committee discussed the need for a potential Measure U renewal ballot measure in November 2018. Mayor Steinberg noted the city has no discretionary funds beyond $259,000 for the upcoming budget. The committee voted unanimously to accept the report and forward it to the City Council. (Note: The motion was initially overlooked and subsequently taken after committee comments.)
-
Committee Comments and Meeting Reports: Councilmember Ashby requested a timeline from the City Clerk mapping back from a November 2018 ballot deadline to schedule sufficient meetings for robust Measure U discussions. The committee directed the City Clerk to provide a proposed calendar/timeline for review at the next scheduled committee meeting, coordinating with the Measure U commission's March meetings.
Key Outcomes
- Unanimous approval to forward the FY 2016/17 CAFR to the City Council.
- Unanimous approval to forward the FY 2017/18 Midyear Report to the City Council.
- Directed the City Clerk to prepare a calendar/timeline for Measure U ballot measure discussions, to be presented at the next Budget and Audit Committee meeting.
Meeting Transcript
Good afternoon, everyone, and welcome to the City Council's budget and audit committee. Please call the role to establish a quorum. Council Member Ashby. Councilmember Jennings. Council Member Shneer. And Mayor Steinberg. Um the first item is 1617 comprehensive annual financial report, otherwise known as the CAFR. Um Madam uh budget director, please uh proceed. Uh, Mr. Yes, sir. Welcome. Hello. Welcome, welcome. Um good afternoon, Major and members of the committee. My name is Osvaldo Lopez. I am the interim accounting manager for the city, and today I'm going to be sharing some information for the financial results for the fiscal year 1617, as well as presenting uh the comprehensive annual financial report, also known as a CAFRE. The CAFRE present the city's financial conditions and the results of activities for the fiscal year 1617. The city implemented five new accounting standards issued by the governmental accounting standard board uh during the fiscal year 1617 CAFRE. None of this standard had a material impact for the city. The independent audit firm, Babrini Trin, they and company have audit the financial statement as required by the city charter, and we are in the four year of a five-year contract with them. I'm pleased to report that we got a clean opinion from the auditors, which means that we receive an unmodified opinion. I would like to take a few minutes uh to cover the department's operating results as well as the June of Fund results for the fiscal year 1617. As illustrated on the second page. Uh total department operation resulted in a positive variance of 9.1 million, with all but two departments having positive budgetary results. The only exceptions were Department of Human Resources, which had um unexpected legal costs, and Department of Public Works, which basically uh they gave less parking citations than expected due to uh the fact that people were more in compliance with parking meters. In addition to that, there were some contracts um where the state changed the um these changed the prevailing wages requirement, and this caused higher cost than expected. The results for the departments um of 9.1 million are then are then carry forward to the general fund results that you can see on this page. As you can see in this table, general fund um ended with a positive result of 12.9 million. Hey, stop there. End of the meeting. Yeah, and you can see the details for our um for the results in this table. For example, you can see that uh tax revenue was on the positive side by 5.9 million. Um consistent with adopted console policies. We have also reserved um some amounts uh that I want to go over those. Um for example, 2.7 million in on budget revenue from the County of Sacramento Auto Sale Tax Sharing Agreement was a shift, and it will be deposited in the economic uncertainty reserve. This will bring the reserve to 49.6 million, which is equivalent to 10.7 percent of the fiscal year 1718 um budget revenue. 1.4 million uh had been reserved for the fire department, and this is related to the grant emergency medical transportation and intergovernmental transfer revenue for ambulance service reimbursements. Finally, we have 5.3 million in pension cost savings associated with vacancies, and this amount will be deposited in the other post-employment benefit trust. With the addition of this 5.3 million, the assets on the trust will increase from 24 million to 29 million, increasing the funding status from 6% to 8%. The mid-year report will go into additional details related to that 12.9 million in unassigned fund balance. Um and I just want to thanks all my staff for all the hard work that they did during this uh past CAFE season. We had a lot of vacancies, and I just appreciate all the hard work that they did. Um with that, um, I'm available for any questions, and I will ask the committee to pass a motion forward in this report to the city uh council room. All right, thank you very much, Mr. Lopez. Um, is there any public testimony? There is not. Are there questions from members of the committee? Not happy to move the item. We'll move the item.
openpublica.com