Title
Recommendation to Accept the Fiscal Year 2013-14 Audited Financial Statements and Compliance Reports. (City Council/SACIC) (Finance 2410)
Body
To: Honorable Mayor and Members of the City Council
From: John A. Russo, City Manager
Re: Accept the FY13-14 Audited Financial Statements and Compliance Reports (City and City as Successor to the Community Improvement Commission)
BACKGROUND
The Alameda City Charter Article IV, Section 4-2, various financing covenants, and rules associated with restricted funding sources, require the City of Alameda to publish financial statements presented in conformance with Generally Accepted Accounting Principles (GAAP) and to be audited by a firm of licensed certified public accountants. The financial reports noted in the exhibit section of this report below include financial statements and supplemental data that summarize the results and operations of all funds and give the financial position of the City and Successor Agency for FY13-14.
The Comprehensive Annual Financial Report (CAFR) is prepared in accordance with nationally recognized reporting standards established by the Governmental Finance Officers Association (GFOA). The CAFR and the other reports and financial statements are attached as Exhibits 1-7. All of the reports are currently available in the Finance section of the City's website.
DISCUSSION
In the opinion of the independent auditors, Maze and Associates, the financial statements present fairly the financial position of all City funds as of June 30, 2014. The City's CAFR shows that the City continued to hold a sound financial position for FY13-14. The CAFR contains the basic financials of the City, including Alameda Municipal Power (AMP) as a component unit and the Successor Agency to the former Community Improvement Commission (CIC) as a Private Purpose Trust Fund, and also contains the following sections:
Introductory Section: This section contains the City's transmittal letter, which highlights accomplishments and discusses economic conditions and outlook. This section also contains a listing of principal officials, a City-wide organization chart, a map of the area and a copy of an award to the City for excellence in financial reporting from the Governmental Finance Officers Association of the United States. This report represents the twenty-fifth continuous submittal for the GFOA Award.
Financial Section: This section includes the auditor's opinion letter, the Management Discussion and Analysis (MD&A) of the financial statements, and the financial statements for each of the City's funds. Budget to actual comparisons for many of the funds can be found within these statements.
Statistical Section: This section provides information regarding financial trends, revenues and debt capacity, demographic and economic information, as well as information relating to City operations. This section includes graphs of relevant historical data, which can be useful in analyzing the changes of the financial condition of the City over the last several fiscal years.
The General Fund is the chief unrestricted operating fund of the City of Alameda. On June 30, 2014, the City's General Fund had a fund balance of approximately $33 million, which included unrestricted, available funds of approximately $29 million, with the balance reserved for other non-current assets. This was greater than the amount projected as the beginning balance in the adopted budget for FY14-15. The difference was the result of revenues greater than anticipated and less than budgeted expenditures. Available retained earnings (i.e. working capital) in the City's Internal Service Funds totaled approximately $10 million as of June 30, 2014, which was higher than the ending balance in the prior fiscal year, due to an accumulation of reserves for claims outstanding and to meet future OPEB funding as well as equipment and technology replacement needs.
Available retained earnings in the City's Sewer Fund totaled approximately $22 million as of June 30, 2014, which was greater than the ending balance in the prior fiscal year, as a result of operations and repayment of an interfund loan.
Fund balances in the City's other restricted governmental funds (including Base Reuse/ARRA) totaled approximately $64 million as of June 30, 2014. This was higher than the ending balance in the prior fiscal year, due to the collection of impact fees, gas tax subventions, assessment district fees and proceeds from the issuance of debt. These funds are governed by many covenants and restrictions and may only be used on specific projects and programs.
The Memorandum of Internal Controls and Required Communication documents Maze and Associates required review of the City's internal controls and their findings. There were two findings which have been resolved with the implementation of new processes and procedures. The document also reviews new Governmental Accounting Standards Board pronouncements and their implementation and impact on the City. Staff will use this information in preparation for the Fiscal Year 2014-15 audit. There are no negative items communicated in this document.
FINANCIAL IMPACT
Acceptance of this report does not affect the City's budget or its financial condition. The report merely reflects an audit of the City's financial records for all funds at June 30, 2014.
RECOMMENDATION
Accept transmittal of FY13-14 Audited Financial Statements and Compliance Reports (City and City as Successor to the Community Improvement Commission).
Respectfully submitted,
Juelle-Ann Boyer, Interim Finance Director
Exhibits:
1. City of Alameda Comprehensive Annual Financial Report (CAFR)
2. Alameda County Transportation Commission Measure B Program Financial Statements
3. Alameda County Transportation Commission Vehicle Registration Fee (VRF) Measure F Program Financial Statements
4. Transportation Development Act Article III Projects Financial Statements
5. Base Reuse Funds
6. Police and Fire Retirement System Pension Plans 1079 and 1082
7. Memorandum of Internal Controls and Required Communication
cc: City Auditor
City Treasurer
Maze & Associates