HomeMy WebLinkAbout02-07-2012 B1 Comprehensive Annual Financial Reportco un c i l Mee[ing Date
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C I T Y OF S A N L U I S O B I S P O
FROM: Charles Bourbeau, Director of Finance & Information Technology
Prepared By: Debbie Malicoat, Finance Manager
SUBJECT: COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR 2010 -11
RECOMMENDATION
Review and discuss the Comprehensive Annual Financial Report for 2010 -11.
DISCUSSION
The accompanying Comprehensive Annual Financial Report (CAFR) has been prepared as required by
the City's Charter and applicable State laws requiring financial reporting. The CAFR provides a final
and audited representation of the City's financial condition across all funds and audited results of
operations for the fiscal year that ended June 30, 2011.
Financial Results Highlighted in the Report
Within the CAFR the Transmittal Memorandum, and Management's Discussion and Analysis, provide
a comprehensive analysis of the City's financial position as of June 30, 2011, as well as summaries of
significant City fiscal policies, practices and financial results. Key variances from projected ending
balances for 2010 -11 are also highlighted in the Transmittal Memorandum.
As briefed to the Council on December 13, 2011, financial results for the General Fund for the year
were better than estimated; revenues and other sources were under projections by $568,400,
however expenditures were $2.5 million less than anticipated, which resulted in an ending fund
balance that was almost $1.9 million better than final budget estimates.
Changes in
2010 -11
2010 -11
Variance
General Fund Balance
Estimated
Actual
Amount
%
Fund balance, beginning of year
11,119,500
11,114,100
Revenues
$ 50,755,400
$ 50,382,200
$ (373,200)
-1%
Expenditures*
47,214,400
44,713,900
2,500,500
5%
Other sources (uses)
(3,634,400)
(3,874,500)
(240,100)
7%
Excess of revenues and sources
over (under) expenditures & uses
1 (93,400)
1,793,800
1,887,200
Available fund balance
1 $ 11,026,100
1 $ 12,907,900
$ 1,887,200
"Estimated is net of budgeted savings of $1.4 million
While revenues from the General Fund's top ten sources, which account for 90% of total revenues,
were on target with projections as a whole, there were significant variances within the individual
sources as shown below.
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Comprehensive Annual Financial Report for 2010 -11 Page 2
'Top Ten Revenues
2010 -11
Budget
2010 -11
Actual
Variance
%
Sales Tax (1)
General
$ 11,500,000
$ 12,098,600
$ 598,600
5%
Measure Y
5,489,000
5,616,300
127,300
2%
Property Tax
8,800,000
8,441,100
(358,900)
-4%
Transient Occupancy Tax
4,770,000
4,844,200
74,200
2%
Utility Users Tax
4,860,000
4,592,300
(267,700)
-6%
Property tax in lieu of VLF
3,551,000
3,551,100
100
0%
Franchise Fees
2,427,000
2,352,100
(74,900)
-3%
Business Tax
1,786,700
1,797,800
11,100
1%
Development Review Fees (2)
1,777,100
1,668,000
(109,100)
-6%
Recreation Fees
1,289,600
1,300,700
11,100
1%
Total
$ 46,250,400
1 $ 46,262,200
$ 11,800
0.0%
As highlighted in Management's Discussion and Analysis, the City's assets across all funds exceed its
liabilities by $318.7 million, which was an increase in total net assets of $7.1 million from the prior
year. This represents an increase in capital assets (minus depreciation), the paying down of liabilities,
and increases in fund balances.
Independent Audit
As required by the City Charter, the financial statements have been audited by independent certified
public accountants (Glenn, Rurdette, Phillips and Bryson). The objective of a financial audit is to
provide users of the financial reports with reasonable assurance from an independent source that the
reports are reliable. The auditor's letter expressed an unqualified opinion regarding the City's financial
position and is included in the CAFR on page 21.
The auditors also perform extensive tests on the City's internal controls to obtain evidence to support
their opinion on the fair presentation of the City's financial position. While performing these tests,
auditors may become aware of reportable conditions regarding deficiencies in internal controls and
they must notify management of these. Some reportable conditions are more serious than others.
Specifically, reportable conditions that are of such magnitude that they could potentially result in a
material misstatement of the financial statements are defined as material weaknesses.
The auditors are required to communicate all reportable conditions. Reportable conditions are
presented in the farm of the auditor's reports on internal control and compliance that accompany the
Single Audit. This will come to the Council later in the spring. In addition, the auditors are required to
communicate with "those charged with governance" in compliance with Statement on Auditing
Standards No. 114 (SAS 114). In November 2008, the Council designated the Mayor as the Council's
representative in communicating with the City's independent auditors for this purpose.
Report Organization
In accordance with generally accepted accounting principles for state and local governments, the City's
CAFR is organized into three major sections: Introduction, Financial Reports and Statistical Tables.
The following is a brief summary of the contents of each of these sections.
Introduction. The Transmittal Memorandum and other information of general interest are presented in
this section, including: directory of officials, advisory bodies, and organization chart.
Financial Reports. This section includes the City's primary financial statements in five major parts:
is i
Comprehensive Annual Financial Report for 2010 -11
1. Auditors' opinion regarding the financial statements.
Page 3
2. Management's discussion and analysis providing a narrative overview of City -wide finances.
3. The basic financial statements presenting the government -wide results combining the activities of
the major funds (General, Capital Outlay and all Enterprise Funds) into governmental and
business -type categories; the fund financial statements; and the notes to the financial statements.
4. Required supplementary information presenting the General Fund actual results with both the
original and final adjusted budgets.
Other supplemental schedules and financial statements providing financial information for each of
the City's non -major governmental and agency funds. This includes a financial schedule
presenting Measure Y revenues and uses in 2010 -11.
Statistical Tables. This section provides demographic and financial tables showing current and
historical trend information for the City and is organized into six major parts:
1. Statistical overview. General infonnation about the San Luis Obispo community.
2. General financial trends. Ten -year summary information on net assets, governmental revenues
and expenditures and fund balances.
3. Revenue capacity. Ten -year summary information on property and sales tax trends.
4. Debt capacity. Ten -year summary information on debt service requirements.
Economic and demographic trends. Ten -year summaries of taxable sales, building permits and
valuations, housing, population and other demographic trends.
6. Operating information. Ten -year trend information on operating indicators by function.
Recognition for Excellence in Financial Reporting
Beginning in fiscal year 1983 -84, all of the City's CAFRs have been awarded the certificate of
achievement for excellence in financial reporting from the Government Finance Officers Association
of the United States and Canada (GFOA). This is a prestigious national award recognizing the City's
use of the highest standards in preparing our annual financial report. Staff believes the current report
continues to meet these requirements, and is submitting it for another award.
FISCAL IMPACT
There is no fiscal impact associated with review of the financial results for the fiscal year.
AVAILABLE FOR REVIEW IN THE COUNCIL OFFICE
Comprehensive Annual Financial Report for 2010 -11
http://www.slocity.org!/finaiice/d`ownload/cafr/cafrl 1.12d
T: \Council Agenda Reports\2012\2012- 02- 07\Annual Financial Report (Bourbeau- Malicoal) \CAFR 2010 -11 docx
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