►
Description
San Bruno City Council Meeting January 22, 2013
10b. Accept the City's CAFR
B
Thank
you
and
good
evening
honorable
mayor
members
of
the
City
Council
this
evening,
the
city's
audited
financial
statements
for
the
fiscal
year
ending
june
30
2012
are
presented
for
your
recruit,
review
and
approval.
This
includes
the
consolidated
annual
financial
report,
the
audit
of
measure,
a
funds,
the
transportation
development
at
compliance,
as
well
as
a
single
audit
of
federal
awards.
C
Good
evening,
thank
you
for
having
me
my
name
is
Ahmad
Karev.
It
I
am
the
partner
in
charge
of
the
audit
of
the
city
of
San
Bruno,
and
you
see
a
bunch
of
reports
over
here,
related
to
the
city's
Kaffirs
single
audit
and
so
on
and
so
forth
and
I'm
presenting
to
you.
The
main
report
that
you
see
over
here
is
the
comprehensive
annual
financial
report
with
an
opinion
on
the
financial
statements
included
within
the
comprehensive
ennio
annual
financial
report.
C
Alongside
with
that,
you're
gonna
see
a
measure
a
which
is
also
a
report
that
is
derived
from
the
financial
statements
as
well.
So
all
these
supplemental
reports
that
you
see
in
your
package
over
here
we're
all
derived
from
that
thick
big
report
that
you
see
in
here,
which
is
the
comprehensive
annual
financial
report.
C
C
Alongside
with
that
you'll
see
because
your
government,
we
are
required
to
look
at
the
internal
control,
we
are
required
to
report
to
you
whether
we
know
that
any
deficiencies
in
internal
control
of
material,
non
compliance
with
the
laws
and
regulations
and
open
and
above
that
there
is
a
requirement,
because
the
city
is
sybian
of
the
Transportation
Development
Act.
It's
a
grant
that
you
receive
belief
from
them
MTC
they
are
required
us
to
go
in,
and
two
ought
to
do.
An
audit
on
that
particular
funding
source
that
the
city
received.
C
But
again,
the
main
report
that
you
see
is
that
this
big
report,
which
is
the
comprehensive
annual
financial
report
that
shows
the
financial
health
of
the
city,
it
shows
what
they
have
in
assets,
what
they
have
in
my
abilities-
and
these
are
the
same
financial
information
that
you
receive
from
the
city
and
prior
meetings.
What
we
do
is
we
go
back
in
and
we
make
sure
that
whatever
financial
information
that
is
included
in
the
general
ledger
or
included
in
these
financial
statements
that
has
been
previously
presented
to
you
are
fairly
stated
in
mole
material
respect.
C
So
we
go
out.
We
confirm
the
balances
we
can
confirm
cash,
we
confirm
receivables,
we
vouch
all
these
account
balances
to
what
we
call
an
external
evidence.
Making
sure
that,
whatever
has
been
previously
presented
to
you
and
also
presented
to
you
in
this
report,
is
fairly
stated
in
all
material
respect.
C
We
are
required
by
our
board
of
accountancy
to
issue
a
financial
opinion
or
an
audit
opinion,
and
it
ranges
from
a
clean
opinion
to
an
adverse
opinion
and
we
issued
a
clean
opinion
on
the
financial
statements
and
the
same
is
applicable
as
it
relates
to
these
supplemental
reports.
Again
they
are
derived
from
that
main
report.
C
Over
and
above
you
see
a
federal
compliance
audit
report,
I
don't
want
to
make
this
too
long,
but
again
they
have
very
strict
requirements
as
to
what
the
city
and
how
the
city
is
supposed
to
expand
those
funds.
You
know
this
requirements
are
related
to
davis-bacon,
Act
prepaying,
prevailing
wage
procurement
requirements
and
so
on
and
so
forth.
C
The
way
that
we
do
the
audit
again,
as
I
mentioned
before,
we
verify
the
account
balances
by
vouching
them
to
external
evidence,
because
you're,
a
government
you're
subjected
to
what
we
call
government
auditing
standards.
We
are
required
to
look
at
the
internal
control
and
look
at
the
report
to
you
whether
we
noted
any
non-compliance
with
the
laws
and
regulations
and
with
the
fact
that
we
look
at
the
internal
control.
C
We
like
to
see
segregation
of
functions
in
duties
we
like
to
see
people
holding
the
assets
are
different
than
the
people
that
keeping
records
of
the
assets.
We
look
at
the
design
and
implementation
of
these
internal
controls.
Specifically,
we
look
at
your
cash
receipts.
We
look
at
your
cash
disbursements
and
we
look
at
your
HR
function.
We
look
at
your
accounts
payable
function.
C
We
look
at
your
payroll
function
and
we
like
to
see
those
functions
properly
segregated
and
the
internal
control
over
these
functions
properly,
designed
and
implemented,
and
we
know
that
no
deficiencies
or
findings
related
to
those
items.
The
silly
issues,
what
we
call
a
comprehensive
annual
financial
report,
which
is
one
step
ahead
of
a
basic
financial
statements
and
is
submitted
to
an
association
called
government
finance
officer
Association,
and
they
review
these
financial
statements
to
ensure
that
they
are
in
compliance
with
government
auditing.
C
We
are
because
your
government,
we
are
required
to
tell
you
whether
we
had
any
deficiencies
in
the
internal
control
and
we
noted
no
deficiencies
in
the
internal
control.
We
are
also
required
to
let
you
know
if
we
adjusted
the
financial
statements
from
what
they
have
been
initially
presented
to
you,
and
we
had
no
adjustments
to
the
financial
statements
and
we
encountered
no
difficulties
in
the
performance
of
the
audit.
In
fact,
management
has
been
one
step
forward
in
making
sure
that
we
get
all
the
financial
information
that
we
needed
from
them.
C
Significant
accounting
transactions,
as
you
all
know,
that
the
solution
of
the
city
of
San
Bruno,
you
see
a
brand
new
fund
in
here.
It's
a
trust
fund
because
you've
been
entrusted
with
the
assets
and
the
liabilities
related
to
the
Redevelopment
Agency.
We
moved
all
the
cash
and
all
the
other
assets
related
to
those
redevelopment
agencies
from
the
city,
funds
and
the
city
created.
Another
trust
fund
on
the
final
statements
that
had
our
accumulated
all
these
assets
that
are
to
be
either
liquidated
or
dispersed
back
to
the
county
of
san
mateo.
C
Significant
accounting,
pronounced
pronouncements
are
coming
out.
One
is
impacting
everybody
related
to
pension,
but
it's
a
reporting
requirement
and
a
recording
requirement,
and
it's
not
a
funding
requirement.
You
are
a
participant
of
tension
with
CalPERS
and
CalPERS.
Has
this
gigantic
pension
liability
for
every
participant
in
ER
and
they
calculate
this
pension
liability
and
amortize
it
over
a
30-year
period,
and
they
tell
you
what
your
contribution
requirements
every
single
year
based
on
the
amortization?
C
Now
the
new
accounting
standard
is
requiring
you
to
record
that
liability
on
the
financial
statements
and
that's
going
to
impact
you
sometime
in
2016
fiscal
year,
there's
a
similar
one
coming
out
related
to
health
benefits
and
or
what
they
call
other
post-employment
benefits.
It's
not
yet
a
standard.
So
it's
not
yet
required
to
be
implemented
in
any
given
year.
It's
in
a
draft
format
that
expecting
some
comments
from
the
community
about
it,
and
we
expect
that
this
will
be
a
false
statement
that
will
come
out
sometime
soon
and
again.
C
D
The
chair
Rico-
maybe
it's
to
you,
sir
to
staff
but
I
wanted
to
bring
up.
We
handed
within
the
report
of
the
obe
OPEB.
We
have
a
I'm,
sorry
page,
73
74
is
when
I'm
looking
at
in
large
book
and
on
74.
We
have
a
accrued
liability,
46
million,
where
I
know
it's
only
done
every
two
years
and
so
two
years
ago
was
at
41
million.
So
it's
a
five-million-dollar
increase
I.
D
C
D
Order
and
it's
not
a
direct,
but
what
I
wonder
is
from
two
years
from
now,
when
it
sorry
revisited,
is
there
going
to
be
an
additional
five
million
dollar
increase
to
this?
So
this
grows,
and
so
it
is
a
liability
that
is
outstanding
it
gross
continuously
and
I
know
it's
a
bigger
conversation
needs
to
have
in
regards
to
health
and
welfare,
but
I'm
wondering
in
your
travels.
Do
you
see
this
type
of
scenario
in
other
cities
and
is
that
it's
this
kind
of
amount
that
you
see
here?
Yes,.
C
And
again,
one
of
the
items
that
I
mentioned
is
an
exposure
draft
about
recording
other
post-employment
benefits,
alongside
with
pension
and
in
the
industry,
just
go
just
about
to
any
other
governmental
agency.
Everybody
is
talking
about
that
discount
rate,
because
this
is
a
future
liability,
and
that
number
that
you
see
on
the
financial
statements
is
today's
dollar
amount
or
the
june
30
2012
Dollarama
and
the
new
standards
that
are
coming
out
is
restricting
them
the
manner
that
you
estimate
that
discount
rate
in
order
for
you
to
calculate
that
amount.
C
So
we
see
that
fluctuating
quite
a
bit
and
what
we've
seen
in
the
past
two
or
three
years
is
everybody
was
thinking.
Hey
investments
have
been
making
about
7%
throughout
the
past
30
or
40
years.
But
if
you
look
at
the
past
four
or
five
years,
investment
rate
of
return
on
many
of
these
investments
have
gone
down
to
one
two
and
three
percent.
C
These
are
estimates,
and
these
are
just
future
benefits
that
we're
going
to
be
paying
and
what
we're
doing
here
is
recording
the
estimated
present
value
of
those
future
benefits
with
the
new
gas
be
coming
out
with
the
new
standard
coming
out,
it's
even
restricting
these
investment
discount
rates
even
further
more
but
with
the
city
of
San
Bruno,
and
with
what
we've
noticed
as
to
what
the
actuarial
had
used
in
terms
of
discount
rates.
It's
probably
gonna
line
up,
most
probably
it
will
line
up
with
what
the
new
standards
is
saying.
C
So
the
city
is
using
a
conservative
discount
rate
for
those
viability.
The
reason
that
you
have
a
significant
revision
is
again
a
lot
of
these
actuaries
are
estimating
these
liabilities
they're
saying
maybe
it's
seven
percent
was
too
high,
77
ticket
seven
or
three
quarters
right
now,
and
a
lot
of
them
are
going
back
and
revisiting
that
discount
rate
causing
that
liability
to
go
up.
Thank.
D
C
If
we
underfunded
it,
then
we
record
the
liability,
which
is
typically
not
the
case
now,
when
the
new
standard
comes
out,
we're
going
to
have
to
put
this
on
the
balance
sheet
of
the
city
of
San
Bruno,
but
that's
applicable
to
all
government
nationwide,
and
that's
what's
going
to
happen
with
a
new
standard
when
it
comes
out.
I
appreciate.
D
That
detail
and
I
think
that's
something
that
we
need
to
be
conscientious
and
concerned
about
this.
Coming
up
in
215
costs
for
health
and
welfare,
for
both
current
and
retired
employees
has
a
lot
of
variables
because
of
the
unique
situation
we're
in
and
I
think
that's
something
we
need
to
keep
our
eye
on
as
this
gets
closer.
Thank
you.
Thank
you.
A
Okay,
any
questions
of
audit
audit
of
partners
or
staff
all
right
before
we
introduce
a
resolution.
I
just
want
to
say
thank
you
very
much
to
Kim
and
her
staff,
a
great
job,
great
job,
just
they
are
asking
for
adoption
of
a
resolution.
But
someone
like
to
introduce
that
I'll
introduce
that
the
resolution.