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From YouTube: San Bruno City Council Meeting February 23, 2021 6a. Comprehensive Annual Financial Report
Description
San Bruno City Council Meeting February 23, 2021
6a. Comprehensive Annual Financial Report
A
B
C
C
To
introduce
king
yoo
sun,
our
new
finance
director,
so
as
the
counseling
community
knows
that
I've
been
the
interim
finance
director,
but
as
of
yesterday,
our
new
finance
director
started
and
so
shen.
You
son
welcome
to
the
city
of
san
bruno.
She
comes
to
us
having
been
having
been
the
investment
manager
for
the
city
of
san
jose
responsible
for
over
a
six
billion
dollar
portfolio,
and
so
she'll
have
no
problem
managing
our
funds
so
well.
C
C
C
the
agenda
for
this
presentation.
A
brief
slide
on
nuts
and
bolts.
We
will
talk
about
the
results
of
the
audit
and
we'll
let
we
have
the
auditor's
presentation
embedded
within
this
presentation,
and
then
we
will
have
financial
highlights
of
both
the
general
fund
and
our
enterprise
fund.
We'll
talk
about
our
memorandum
of
internal
controls,
we'll
do
a
brief
talk
on
pension
liability
that
we
will
talk
more
about
during
the
budget
process.
A
C
C
B
C
C
Okay,
melissa,
let's
advance
to
the
next
slide,
and
so
I
went
over
the
agenda.
The
next
slide
is
just
the
nuts
and
bolts
of
the
kaffir,
and
so
as
the
for
the
council
and
members
of
the
public,
the
kafir.
You
have
been
provided
with
a
hard
copy,
as
well
as
electronic
copies,
and
there
are
three
individual
reports
attached
to
it.
C
E
Great
thank
you
for
having
me
tonight
good
evening,
mayor
and
members
of
the
city
council.
My
name
is
david
alvey
and
I'm
the
audit
partner
with
mays
and
associates,
and
we
are
the
city's
independent
external
auditor
and
I'm
going
to
give
you
kind
of
a
high
level.
20
000
feet
overview
of
the
audit
process
and
why
it's
important
our
audit,
our
annual
audit.
So
we
have
for
you
the
june
30
2020.
E
E
We
look
at
cash
disbursements,
make
sure
that
they're
being
properly
approved
and
following
your
purchasing
policy,
we
look
at
cash
receipts.
Revenue
coming
in.
We
look
at
payroll,
make
sure
that
pay
rates
are
properly
authorized
and
correct.
And
then
we
look
at
the
internal
control
environment
overall
and
after
we
get
an
understanding
of
how
the
machine
or
the
bones
work
of
the
city,
we
come
back
at
final
and
that's
when
we
test
our
actual
balances.
So
we're
testing
that
cash
balance
to
make
sure
that
the
cash
you
have
in
bank
at
june
30
is
correct.
E
E
So
that's
the
the
real
risk
that
we
want
to
bring
to
your
attention
that
we
need
to
be
really
vigilant
in
getting
a
good
business
plan
for
the
city
net
fund,
and
I
know
the
fiber
to
the
home
is
being
discussed
a
lot,
and
we
would
just
like
that.
That
plan
to
be
looked
at
very
carefully,
preferably
by
an
independent
third
party,
to
see
how
viable
that
is,
and
after
all
this
is
said
and
done.
E
It
really
comes
down
to
the
definition
of
an
enterprise
fund
and
an
enterprise
fund
should
be
able
to
have
operating
car
operating
revenue,
cover
operating
cost
to
act
like
a
business
type
or
you
know
private
business
fund.
That's
that's
the
idea
of
a
general
fund
and
if
it's
truly
not
charging
enough,
the
operating
revenue
was
9.3.
Million
operating
expenses
was
11
million.
So
if
it's
really
not
charging
enough,
then
is
it
true?
Is
it
a
true
business
type
or
enterprise
fund?
E
If
it's
not,
then
it
really
should
be
considered
a
special
revenue
fund
and
rolled
up
under
the
general
fund.
So
that's
that's
an
option,
that's
something
you
can
do
so
we
just
want
to
make
sure
that
you're
aware
of
this,
and
that
we
that's
why
we
have
the
emphasis
of
the
matter
and
the
opinion.
And
then
we
have
the
comment
here.
The
rest
of
the
memorandum
on
internal
controls
is
the
required
communication
piece
and
that's
boilerplate
language.
I'm
pleased
to
say
we
had
no
unusual
items
to
bring
to
your
attention.
No
unusual
transactions.
B
A
F
So
I'm
going
to
go
over
first
general
fund
financial
highlights
and
just
to
recall
the
the
pandemic
started
in
really
started.
Hitting
economic
activity
in
march,
so
more
than
the
entire
last
quarter
of
the
fiscal
year
saw
a
really
tremendous
impact
on
on
revenues,
not
just
in
san
bruno,
but
throughout
the
bay
area.
The
state
and
the
nation,
so
fund
balance
overall
in
the
general
fund
decreased
by
one
million
eight
during
the
year.
F
Business
taxes
came
in
0.7
million
under
budget.
This
was
the
the
sky
park
airport
parking
facility.
They
went
out
of
business
as
I
understand
it,
so
you
no
longer
got
that
lucrative
source
of
funding
and
hotel
tax
tot
transient
occupancy
tax
came
in
almost
a
million
dollars
under
budget,
so
we've
seen
just
anecdotally,
we've
seen
about
a
75
drop
continuing
through
the
mid
year
of
this
year.
F
F
Permit
revenue
came
in
two
and
a
half
million
dollars
under
budget
the
there
were
some
large
development
projects
that
were
scheduled
to
go.
The
city
manager
probably
knows
better
than
I
do
on
this
if
this
was
coveted
related,
but
I
know
that
the
spring
season
when
covet
hit
is
a
large
that's
a
time
for
a
lot
of
construction
typically,
so
that
would
have
affected
that
source
of
revenue
charges
for
service
primarily
was
dropped,
0.8
million
primarily
due
to
the
recreation
department.
F
They
have
a
lot
of
programs
that
were
just
completely
closed.
As
you
know,
on
the
flip
side
they
were
able
to
save
budget
dollars
on
their
expenditures
to
help
make
up
for
that
and
then
last
on
this
page.
This
is
an
accounting
entry
that
doesn't
affect
cash,
but
there
was
an
entry
that
one
of
the
council
members
or
two
asked
about
use
of
money
in
property.
It
was
1.1
million
over
budget
once
a
year
mark
to
market
requirements.
Are
that
cities
book
the
fair
market
value
of
their
investments?
F
F
Overall
expenditures
were
down
2.2
million
dollars,
really
good,
but
good
news,
given
that
the
revenue
is
down
and
as
I
mentioned,
parks
and
recreation
revenue,
I'm
sorry
expenditures
had
savings
of
0.8
million
dollars.
There
were
additional
vacant
positions
throughout
the
city
and
in
public
safety
there
were
also
savings
of
about
eight
hundred
thousand
dollars
as
well.
F
F
F
F
So
that
was
good
news
next
slide.
Please,
overall
changes
in
fund
balance.
So
let's
just
look
at
the
bottom
line
to
make
it
simpler.
The
final
budget
projected
a
reserves
of
29.1
million,
actual
27.4
million,
so
it
was
really
a
million
seven
lists
next
slide.
Please,
and
here
are
the
status
of
your
available
reserves
at
year
end
so
that
accounting
treatment
we
talked
about
is
not
part
of
this.
F
There's
the
general
fund
reserve
at
11.8
million
general
fund
contingency
at
1.3.
I
believe
your
your
policy
targets
are
12
million
for
that
first,
one
and
one
and
a
half
million
for
the
second
for
the
emergency
disaster
reserve
you're
at
1.9
million
for
capital
improvements.
You
set
money
aside,
sometimes
on
recommendation
from
the
city
manager.
The
city
council
will
approve
setting
money
aside
that
are
oftentimes
one-time
revenues
to
use
for
future
capital
improvements
that
end
of
the
year
with
4.6
million.
F
You
also
have
a
practice
of
setting
aside
one-time
revenues
and
an
additional
reserve,
so
it
doesn't
mix
up
with
the
other
reserves
that
are
more
think
about
more
as
ongoing,
and
that
was
1
million
measure
g.
That's
the
half
cent
sales
tax,
it's
actually
a
use
tax
that
was
in
effect.
Was
it
just
the
last
quarter?
I
believe
so
you
you
did
put
money
aside.
There
was
more
revenue
than
there
were
expenditures,
but
that's
a
half
a
million
dollars
and
then
last
the
general
fund
equipment
reserve
at
3.3
million
dollars.
F
So
your
total
general
fund
reserves
are
24.4
million.
Going
back
to
what
mr
alvey
from
maze
was
saying
earlier,
part
of
your
reserves
are
locked
up
in
a
long-term
loan
from
city
net
and,
if
you,
if
you
that's
not
immediately
available
so
your
your
real
cash
reserves
are
just
over
just
under
11
million
dollars.
F
Next
slide,
please
for
the
water
fund,
just
high
level,
you
did
have
a
net
operating
profits.
The
wrong
word
net
contribution
to
your
reserves
of
a
half,
a
million
dollars
and
the
unrestricted
fund
balance
at
the
end
of
the
year.
That's
kind
of
equivalent
to
cash
that
you're
able
to
use
on
capital
improvements,
etc
was
30
million,
and
we
talked
about
this.
I
believe
it
was
the
previous
council
meeting
being
one
reason
why
you're
able
to
hold
off
on
the
next
rate
increase
for
water,
because
there
really
is
a
healthy
balance.
F
There
next
slide,
please
waste
water
fund
similar.
There
was
a
net
operating
gain
of
almost
seven
million
dollars.
Your
unrestricted
net
position
or
your
kind
of
available
cash
balance
was
28.9
million
dollars
at
the
end
of
the
year
and
and
the
same
message
there,
you
were
able
to
forgo
that
last
five
percent
rate
increase
coming
up
because
your
reserves
are
doing
so
well
next
slide.
Please.
F
If
you
notice
the
beginning,
net
position
was
5.9
million
and
it
went
down
to
5.5
million
and
that's
a
little
misleading,
because
net
position
includes
all
the
assets
fixed
assets
in
the
ground.
Your
unrestricted
net
position
or
fund
balance
was
really
closer
to
a
half
million
dollars,
so
that's
been
going
down
as
well,
and
that's
why
city
manager
has
been
discussing
with
you.
The
possibility
of
a
storm
water
fee
increase
for
later
next
slide.
Please.
F
So
we've
already
really
gone
over
that
there's,
really
not
a
lot
left
to
say
other
than
the
general
fund
has
been
backstopping
that
for
a
number
of
years
next
slide,
please,
pensions
pensions
are
a
section
in
the
kafir,
and
it's
it's
really
important
to
consider
that
you
might
also
want
to
have
an
update
on
this
by
itself.
At
some
point,
not
only
are
pension
costs
going
up.
F
F
In
addition,
the
net
liability
has
increased
77
since
2013-14,
so
from
june
2019
to
june
2020.
Overall,
the
net
pension
liability
went
up
6.2
million
dollars.
So
if
you
had
at
the
end
of
june
30th
2020
94
million
in
the
bank
that
you
could
set
aside
and
pay
down
all
your
pension
liabilities,
that's
what
that
means,
and
there's
a
couple
more
slides,
I'd
like
to
kind
of
highlight
this
better.
F
This
shows
the
growth
in
the
unfunded
pers
pension
liability
over
time
from
2012-13
through
this
last
fiscal
year,
and
it's
it's
gone
up
for
a
number
of
reasons.
Demographically
people
are
living
longer,
so
their
retirement
benefits
have
to
last
longer
and
in
addition,
investment
returns
have
not
met
not
kept
up
with
what
the
target
is,
and
the
last
one
just
shows
that
the
employer,
that's
the
city,
is
paying
roughly
50
of
of
total
normal
total
costs
on
an
annual
basis.
F
F
F
C
Thank
you,
jim
and
for
the
council.
We
we're
here
to
answer
any
questions
and
again
the
presentation
reflects
what
happened
last
year,
which
was
a
very
very
challenging
year
for
the
city,
so
that's
fiscal
year,
1920.
and
so
melissa.
If
we
can
stop
screen
share
any
questions
from
the
city
council
on
the
staff
presentation
and
then
we
can
have
a
public
comment
after
that.
A
D
So
it's
it's
more
of
a
comment
than
a
question
part
of
the
the
discussion
about
city
net
and
you
know
presenting
options
on
whether
to
whether
or
not
to
how
to
manage
the
fund,
whether
or
not
to
fold
it
into
the
general
fund.
I
would
recommend
that
we
hold
off
on
any
discussion
of
that
until
we
receive
the
comprehensive
report
on
sitting
in
in
in
late
june,
rather
than
spend
any
effort
on
that.
Now
that
that
that
conversation
in
june
could
you
know,
could.
G
E
With
with
an
enterprise
fund,
like
I
said,
kind
of
with
city
net,
is
you
really
want
it
to
be
operating
where
operating
revenues
will
cover
operating
expenses?
Obviously
you
have
to
have
sometimes
a
little
bit
of
income
to
put
aside
for
capital
projects.
The
future
types
thing
so
yeah
anything
you
can
do
to
get
more
coverage
over
your
operating
expenses
to
either
have
a
very
small
income
or
no
income
is
ideal.
F
F
We
haven't
discussed
with
the
city
auditor,
the
financial
situation
of
the
stormwater
fund,
so,
for
example,
and
david
will
correct
me
if
I'm
wrong
he's
not
aware
of
the
big
backlog
in
capital
improvement
projects.
So
david
one
of
the
things
the
city
is
hoping
to
do.
If,
if
the
council
moves
forward
and
the
voters
approve,
is
to
pay
for
30
million
dollars
of
deferred
capital
projects
over
the
next
15
years,
so
that
fee
would
actually
bring
in
more
than
just
the
operating
cost
every
year.
F
F
C
Linda
the
projection
that
we
provide
provided
council
in
the
budget
packet
show
the
stormwater
fund
going
negative
next
fiscal
year
in
the
2021
fiscal
year,
and
revenues
are
not
covering
expenditures.
They
have
not
for
for
quite
some
time
and
currently
the
average
single
family
home
is
paying
46
a
year
in
stormwater
fees.
C
And
so
that's
one
of
the
reasons
why
the
current
effort
to
for
a
218
process
to
increase
those
annual
stormwater
fees
has
those
charges
going
up
for
the
average
single
family
home
to
approximately
150
a
year
and
that's
to
cover
both
the
operations
and
that
30
million
dollars
of
long-term
capital.
That
jim
still
mentioned.
B
G
G
C
Sure,
let
me
let
me
expound
upon
that
and
then
I'll
turn
it
over
to
jim
steele.
So
what
jim
still
was
mentioning
is
that
we
paid
the
annual
required
contribution
to
calpers
for
our
pension
costs,
and
so
two
things
are
true.
Yes,
we
pay
the
annual
required
amount
and
we
are
paying
our.
Our
plans
are
slightly
more
funded
than
other
cities,
the
way
to
think
about
the
pension
liability
and
why
that's
sharp
melissa,
if
you
can
bring
it
up,
it's
slide.
22
goes
out
to
2043.
C
And
so
for
the
city's
pension
liability,
we
are
budgeting
annually.
The
required
contribution
now
that
required
contribution
is
going
up,
but
as
long
as
we
pay
that
required
contribution,
the
amortization
schedule
similar
to
a
mortgage
has
that
being
paid
off
in
2023,
and
the
annual
required
contribution
actually
has
two
parts
to
it.
It's
one
part
is
a
normal
cost,
so
you're
paying
for
the
benefit
that
employees
accrue
each
year,
but
you're
also
paying
a
portion
for
that
unfunded
liability,
and
so
once
we
get
to
2043,
we
will
only
be
paying
the
normal
cost.
C
C
G
Thank
you
for
the
explanation
and
I'll
have
more
questions,
but
I'll
wait
until
it
comes
back
to
budget,
because
I
understood
that
there's
going
to
be
a
deeper
conversation
around
this
and
then
just
one
one
last
question,
and
maybe
this
is
a
different
meeting.
Just
let
me
know,
but
so
measure
a
and
measure
w
are
both.
They
both
appear
to
be
I'm
guessing
ballot
measures
from
what
I've
seen
is
the
money
that's
spent
there.
F
I
could
take
a
stab
city
manager
if
you'd
like
me
to
start
those
were
both
ballot
measures
they
are
distributed.
I
believe,
based
on
population
and
they're
they're
granted
to
cities,
so
you
don't
need
to
necessarily
apply
for
these
they're
audited.
As
far
as
there's
reports
well,
the
audits
that
are
provided
that
david
alvey
spoke
to
earlier,
but
there's
also
compliance
reports
that
the
finance
staff
file
every
year
with
the
county
and
they
make
sure
that
what
was
spent,
what
fit
the
guidelines
of
what
the
funds
are.
F
A
And
then
council,
member,
just
council,
member
salazar,
is
on
oversight
on
one
of
those.
I
believe
it
is
a
and
on
measure
w.
The
way
it's
stipulated
is
the
monies
that
are
going
to
be
appropriated
in
w
for
the
pavement
management
for
each
community,
whatever
it
is,
unless
a
cpi,
I
believe,
63
64,
is
not
greater
than
that,
it
must
be
utilized
for
that.
A
H
Thank
you,
mr
mayor.
I
just
wanted
to
start
by
welcoming
our
new
finance
director
welcome
aboard
it's
a
great
time
to
start.
You
know
we
get
to
jump
right
into
a
new
budget
soon,
and
so
we're
definitely
happy
happy
to
have
you.
You
got
some
big
shoes
to
fill,
because
keith
did
an
amazing
job
for
us,
but
I
know
you're
going
to
do
an
amazing
job
as
well,
so
welcome
aboard.
H
H
Is
I
think
it
was
mentioned?
It's
a
snapshot
that
this
is
our
annual
report
for
what
happened
last
year
and
it
was.
It
was
kind
of
an
ugly
year
for
us.
There
were
some
huge,
unexpected
shortfalls
in
the
second
half
of
that
year,
and
you
know
somewhere
hidden
in
this
document.
You
know
among
the
charts
and
and
the
graphs
and
and
the
explanations
is
a
story
about
how
we
were
able
to
recover.
I
I
What's
also
good
about
this
audit.
Is
it
identifies
clearly
that
we
have
some
problems
in
our
our
stormwater,
which
is
funding,
which
is
exactly
why
this
council
made
the
difficult
decision
to
to
let
our
voters
decide
on
on
how
they're
going
to
proceed
and
how
we
need
to
work
together
to
get
this
funding,
because
we
we
can't
rely
on
our
general
fund,
so
a
lot
of
work
remains
to
be
done,
so
it
this
is.
I
A
A
A
Most
importantly,
it's
a
trust
but
verify
it
is
to
know
that
we
have
had
more
policies
procedures
in
the
last
couple
years
and
segregation
of
duties
and
strengthen
the
way
implementation
is
done
for
deposits
having
checks
scanned
through
quickly,
so
they
get
deposited
faster.
There
are
a
lot
of
things
that
that
have
been
done
that
nobody
sees,
but
the
team
has
done
so
to
all
of
them.
Thank
you.
A
There's
no
more
comments
from
council
and
no
members
of
the
public
we'll
bring
it
back.
This
is
to
accept
the
city's
comprehension
annual
financial
report,
which
is
measure
a
and
w
funds
and
and
what
we
have
had
presented
to
us.
We
will
be
needing
a
motion
and
a
second
and
a
vote
in
order
to
accept
any
action.