►
Description
San Bruno City Council Meeting February 11, 2014
10b. Accept CAFR for Year Ended June 30, 2013
A
A
B
Vice
mayor
and
members
of
the
council,
the
california
government
code
requires,
at
all
general
lost
cities,
complete
annual
independent
audits
of
their
financial
statements.
Part
of
a
city
council,
members,
governance
and
fiduciary
responsibility
includes
generally
understanding
the
financial
condition
of
the
city.
B
It
is
for
this
reason
that
auditors
communicate
with
the
city
council
at
the
beginning
of
the
audit
to
ascertain
any
issues
or
areas
of
concern
by
the
City
Council.
The
audit
for
the
city
of
San
brew,
the
the
audit
of
the
city
of
San,
Bruno's
financial
statements
for
the
year
ended
june.
30
2013
was
completed
right
at
the
end
of
last
year.
B
It
was
a
deadline
that
permitted
us
to
again
submit
our
kafir
document
for
the
annual
award
that
is
presented
by
the
g
fo
a
so
we
did
complete
it
on
time
at
the
end
of
the
year
to
do
that.
So
the
the
kafir
report
that
you
have
tonight
and
the
other
reports
were
completed
at
that
time.
The
city
council
has
a
resolution
on
the
agenda
tonight.
C
Good
evening
my
name
is
Ahmad
Gorobei.
I
am
the
partner
in
charge
of
the
audit
of
the
city.
You
have
the
comprehend
the
comprehensive
annual
financial
report.
This
is
an
annual
financial
report.
This
is
the
results
of
operations
for
this
city.
As
of
jun
30
2013
thats
prior
fiscal
year,
it
is
used
by
regulators.
It
is
used
by
Grant,
Grand
Tours.
It
is
used
by
creditors.
C
It
is
used
by
many
different
parties
and
I'm
going
to
walk
you
through
the
different
components
and
I
know
it's
about
140,
page
report,
but
a
few
pages
in
there
that
are
important
when
reading
these
financial
statements.
That
will
give
you
a
brief
overview
about
the
financial
health
of
the
city.
I
have
a
an
index
here
as
to
or
a
somehow
a
table
of
content
of
the
division
of
this
financial
statement
of
the
comprehensive
annual
financial
report.
It
includes
a
letter
of
transmittal
included
in
the
introductory
section,
a
financial
section,
a
statistical
section.
C
C
It
kind
of
briefly
describe
significant
transactions
that
the
city
had
entered
into
in
2000
and
13
the
basic
financial
statements,
some
notes
explaining
these
financial
statements.
Statistical
sections
are
interesting
component
of
the
financial
statements
of
the
kafir.
They
give
you
information
about
the
residents
about
income
per
capita
and
so
on
and
so
forth.
C
Just
to
pinpoint
you
I
know
it's
a
big
report,
but
just
so
that
you
would
know
the
financial
condition
of
the
city.
I
want
to
pin
point
you
to
a
page
18
in
the
financial
statements
which
includes
a
consolidation
of
the
city
funds,
all
the
city
funds,
alongside
with
some
what
we
call
converging
entries
to
include
long
term
assets
on
long
term
liabilities
and.
C
We
call
it
a
statement
of
net
position.
It
combines
all
the
governmental
funds,
such
as
your
general
fund
and
all
the
enterprise
funds,
such
as
your
utility
funds
and
the
best
way
to
know
the
financial
condition
of
the
city
is
to
take
a
look
at
the
net
position.
This
is
what
we
call
equity.
This
is
how
much
money
is
left
over
after
using
assets
against
the
liabilities
and
the
equity
shows
for
the
city.
C
Sorry,
the
pension
obligation
bonds
that
the
city
had
issued
and
thereby
increasing
your
non-current
liabilities
from
about
40
million
253
million
other
than
that
the
assets
current
assets,
capital
assets,
I
mean
capital
assets
increased
slightly
because
of
some
construction
projects
netted
against
depreciation.
Current
assets
remain
the
same
you
currently,
but
it
is
almost
remain
the
same.
Your
equity
almost
remains
the
same
I'm
going
to
go
through
that
component
of
the
net
position,
where
we
have
restricted
and
unrestricted.
This
is
the
spendable
amount
of
your
the
various
components
of
funds.
C
C
Now
it's
a
good
thing
that
the
city
did
issue
a
pension
obligation,
bonds
and
recognized
that
liability
in
2015
all
cities
all
governments
are
gana,
are
going
to
recognize
pension
liability,
possibly
after
the
opieop
liabilities,
are
going
to
be
recognized
on
the
financial
statements
right
now,
when
we
talk
about
pension,
when
we
talk
about
oh
pep,
it's
just
a
reporting
requirement.
It
does
not
go
in
those
two
columns.
They
are
reported
in
the
notes
to
the
financial
statements.
There
are
legal
liabilities
for
these
governments,
but
right
now
they
are
not
reported.
C
The
accounting
standards
are
changed
or
are
being
changed
whereby
these
liabilities
will
have
to
be
reported
on
these
statements.
Of
net
position
some
highlights
cash.
Increased
revenues
are
higher
this
year,
because
property
taxes
economy
is
getting
better
investment
in
capital
assets,
which
is
again
capital
assets.
That's
due
to
some
of
the
construction
that
the
city
had
done.
C
Again,
it's
also
noted
on
page
20
I
know
it
looks
really
big
but
here's
the
summary,
a
kind
of
consolidated
into
one
column
where
you
see
revenues,
minus
expenses
equals
change
in
net
position,
and
if
you
see
it,
net
position
did
decrease,
but
mainly
because
of
that
pension
obligation
bond
that
the
city
had
issued.
Otherwise
it
would
be
flat
between
the
two
different
tears.
If
you
look
at
revenues
last
year
there
were
82
million
this
year
there
are
70
million
theres.
C
Some
timing,
differences
and
I
think
that
the
main
reason
as
to
why
revenues
decline
is
you
no
longer
get
the
property
taxes
related
to
the
RDS
as
the
main
reason
as
to
why
these
decline
expenses
are
extremely
comparable
to
the
prior
year?
I
mean
this
is
just
inflation
adjustment.
That's
what's
happening
over
there.
The
special
item
is
the
recognition
of
that
pension
obligation
bond,
which
I
would
go
through
very
quickly.
At
the
end
of
this
presentation,.
C
Again,
revenues
improved
in
areas
in
general,
fund
tax,
increment
sales,
tax
transit,
occupancy
tax
and
card
room
tax.
General
revenues
decreased
as
a
result
of
the
loss
of
RDA
property
tax
revenues,
and
then
expenses
are
almost
comparable
to
prior
year
increased
because
of
inflation,
mainly
because
of
retirement
costs
increases.
C
We
have
a
schedule
of
revenues.
Expenditures
specifically
for
the
general
fund.
General
fund
is
the
main
emphasis
for
the
operation
of
the
city.
It's
the
main
operating
fund
of
the
city,
most
of
the
expenses
operating
expenses,
are
posted
to
that
particular
fund
and
I.
Have
it
summarized
in
this
PowerPoint,
and
you
can
actually
see
that
on
page
79
of
the
audit
report.
C
And
it
shows
what
the
budget
is
original
and
amended,
and
the
variances
between
the
budget
and
the
actual
it's
a
good
budget,
not
significant.
There
are
not
so
many
significant
variances,
actually
they're,
all
small.
The
budgeted
fund
balance
with
that
city
projected
that
the
ending
fund
balance
would
be
about
10
million.
C
Ok,
so
we
as
auditors,
you
see
these
numbers
here
on
the
financial
statements,
the
way
that
we
audit
them.
We
get
a
trial
balance,
we
get
a
download
from
their
accounting
system
and
we
go
out.
We
confirm
these
balances,
we
confirm
your
cash
with
banks.
We
confirm
your
receivables
with
the
state
with
the
county,
with
the
feds
whoever's,
giving
you
the
future
funds.
We
make
sure
that
your
payables
are
fairly
stated.
C
C
Alright,
we
do
two
more
supplemental
audits,
because
you
receive
federal
grants.
You
have
to
adhere
to
federal
requirements,
they
have
stricter
requirements
than
what
the
state
has,
especially
when
you
spend
federal
money,
the
time
certification,
time,
accounting
a
purchasing
requirements,
strict
purchasing
requirement.
We
audit
the
federal
grants
on
a
sample
basis
and
I'm
pleased
to
let
you
know
that
we
had
an
unmodified
opinion
or
a
clean
opinion.
C
We
know
also
that
you
are
required
to
have
an
annual
audit
on
the
sales
tax
that
you
received
from
SamTrans
from
San
Mateo
County,
Transportation
Authority
we
go
in
and
we
take
a
look
at
these
expenses.
We
compare
them
with
the
ballot
language
and
we
make
sure
that
these
expenses
are
in
compliance
with
the
ballot
language.
C
We
are
required
to
let
you
know
if
we
had
any
difficulties
in
the
moments
of
the
audit.
We
can
finish
the
audit,
but
sometimes
if
we
encounter
any
difficulties,
we
are
required
to
communicate
that
to
you
and
I'm
pleased
to
let
you
know
that
we
encountered
no
difficulties
in
the
performance
of
the
art
as
part
of
the
audit.
Also,
we
take
a
look
at
the
internal
control,
we'd
like
to
see
segregation
of
functions
in
duties.
C
Now
governments,
unlike
commercial
entities,
the
government's
adhere
to
what
we
call
Government
Accounting
Standards
Board,
while
commercial
entities
adhere
to
financial
accounting,
stanza
sports
and
little
by
little,
those
two
are
lining
up
with
each
other.
With
governments
the
there
are
certain
liabilities
that
are
reported
in
the
notes
to
the
financial
statements,
as
opposed
to
putting
them
on
the
balance
sheet
and
the
mint
and
the
way
that
the
government
or
Gatsby
requires
these
governments
to
recognize
these
liabilities
is
to
amortize
them
over
10
to
30
years.
A
popular
one
is
open.
C
Another
one
is
the
pension,
the
both
liabilities
they're,
both
for
past
services,
that
the
employees
had
done
for
these
governments,
and
there
are
funds
that
pers
will
collect
from
the
city
once
the
person
retires
and
same
thing
with
open.
Your
Teamsters
are
going
to
collect
on
the
required
funds
in
order
to
pay
for
these
invoices.
C
Now,
with
before
I,
go
very
quickly
in
20
peb,
there
is
a
new
standard
for
pension
now
Oh
peb,
but
they're
almost
basically
the
same
their
their
payments
for
future
services,
gatsby
68
it
came
out
about
a
year
ago.
It
requires
all
governments,
nation
wyd,
to
recognize
that
pension
liability.
Now
a
lot
of
these
governments
are
saying:
well,
the
pension
liability
is
located
with
CalPERS
and
CalPERS
pulls
all
these
employees
all
together
into
one
big
plan.
How
am
I
going
to
calculate
that
liability?
Calpers
will
give
you
that
liability.
C
They
are
in
the
process
of
calculating
that
amount,
and
you
will
have
to
report
it
and
record
it
on
the
financial
statements
similar
to
the
open,
Oh
pip
is
not
operated
by
CalPERS
every
city.
Every
governmental
agency
has
its
own
plan,
so
it
has
the
ability
to
measure
what
that
liability
so
going
back
to
open
again,
you
amortize
it
over
20
to
30
years,
and
you
recognize
that
liability
on
those
two
columns
set
of
financial
statements
that
we
showed
you
at
the
beginning
of
that
presentation.
C
75
and
your
actual
liabilities,
46
million
what
you've
recognized
already
on
the
financial
statements,
is
12
million.
Nevertheless,
your
liability
is
46
million
when
it
comes
to
open,
and
then
you
also
have
another
liability,
just
like
any
other
government
for
pensions,
and
that
also
will
be
calculated
by
CalPERS
and
given
to
you,
and
that
also
will
have
to
be
reported
on
the
financial
statements.
A
A
C
I
believe
our
DA's
word-
and
you
know,
excuse
me
I,
remember
all
the
numbers,
but
I
think
they
were
collecting
about
three
million
dollars
every
year
in
property.
Taxes
3.6
is
what
the
RDA
was
collecting
in
property
taxes.
Now
that
will
funnel
back
to
the
other
governmental
agencies,
including
yourself,
so
I'm
not
sure
what
the
net
came
out
to
be.
After
all,
that
amount
was
funneled
out,
but
it's
not
I
I
doubt
it's
a
big
number.
It's
probably
going
to
be
like
twenty
percent
or
fifteen
percent
I'm,
not
sure
exactly
what
the
amount
is.
C
A
C
What
we
actually
did
is
we
went
to
the
Cree
three
credit
agencies.
We
asked
them
the
question.
You
know
these
pension
liabilities
were
out
there
a
long
time
ago.
It's
not
like
they
were
not
there.
They
were
not
calculated
or
reported
because
of
the
manner
that
these
government's
work.
They
pull
all
these
pension
liabilities
into
one
plan
in
Sacramento
with
CalPERS
and
it's
kind
of
hard
to
know
the
specific
liability
for
each
governmental
agency.
C
We
don't
anticipate
that
there
will
be
an
impact
on
your
credit
rating.
So
that's
a
good.
That's
the
good
news
that
we
know
about
you,
don't
know
what
will
happen
10
or
15
years
down
the
road,
but
in
the
short
term
it
wouldn't
make
sense
for
these
credit
agencies
to
say.
Oh
now,
we
didn't
know
about
that
liability
because
they
didn't
know
about
it
and
they
didn't
know
that
it
existed
back
in
the
days
from
from
an
old
time
other
than
that
it
will
impact.
We
were
reporting
it.
C
Even
if
the
kafir
did
report
these
liabilities,
it
did
report.
The
OPEC
did
report
the
pension
liabilities
in
the
notes
to
the
financial
statements,
and
now
what
Gatsby
wants
you
to
do
is
take
that
from
a
reporting
requirement
into
a
recording
requirement.
It's
not
a
funding
requirement,
it's
just
a
recording
requirement
and
what
the
recording
the
difference
between
reporting
and
recording
is
that
it
impacts
your
equity,
that
net
position
that
we've
had
on
the
slides
over
here,
the
very
bottom
at
the
very
bottom.
You
have
110
million
dollars.
That's
your
equity!
That's
your
assets!
C
Minus
your
liabilities!
Now
it's
significant
component
of
your
SSN.
We
the
way
that
Gatsby
wants
you
to
split
it.
They
know
that
you're
as
a
government,
you
can
sell
your
capital
assets.
So
when
you
present
equity
at
and
you
want
to
adhere
to
Gatsby,
they
tell
you
take
out
the
capital
assets
component
of
equity
and
split
it
into
a
separate
line
item.
So
the
last
two
line
items
are
your
spendable
equity.
That
is
what
you
have
in
money
on
a
consolidated
basis
throughout
the
city.
Add
you're
going
to
subtract
from
that
amount,
the
pension
liability.
C
Now
we
did
because
you
replace
your
pension
liability,
which
was
a
reporting
requirement,
because
the
city
replaced
it
with
a
a
pension
obligation
bond.
It
begins
an
actual
accounting
liability
and
therefore
you
did
recognize
a
significant
component
of
your
pension
liability
in
there,
but
nevertheless,
all
cities
or
governmental
agencies
will
have
to
recognize
a
pension
liability
that
would
reduce
those
last
two
numbers
that
you
see
in
there
on
the
financial
statements.
Now
they
were
reported
these
these
pension
liabilities
were
reported
and
you
can
see
them
on
page.
C
73
as
well
you'll
see
how
much
do
you
have
money
with
CalPERS
and
how
much
is
the
actual
pension
liability
and
how
much
is
the
unfunded,
but
you
do
have
two
plans
with
CalPERS.
You
have
one,
we
call
it
the
miscellaneous
plan.
There
is
another
plan
where
it's
kind
of
hard
to
calculate
it
because
they
pull
all
the
categories
of
employees
together
is
called
the
safety
plan,
the
safety
plan.
We
don't
know
what
that
number
is
CalPERS
will
calculate
it.
C
A
B
Two
additional
comments
not
related
to
the
financial
statements,
so
I
don't
know
if
there's
if,
if
there's
any
other
questions
would
would
be
glad
to
respond,
I
guess,
but
the
two
things
I
would
like
to
comment
on
is
I
think
the
council
is
well
aware
that
I
SAT
here
for
many
years,
taking
all
the
credit
for
work
that
I
actually
never
did,
but
I
would
feel
remiss
if
I
took
any
credit
this
time
around,
especially
the
in
the
middle
of
the
audit.
The
finance
director
left
the
city
and
Darlene
Wong.
B
Our
accounting
manager
picked
up
really
significant
responsibility
for
completing
the
audit
and
getting
it
and
we're
working
with
the
auditor.
Darlene
had
really
not
experienced
that
role
before
and
in
the
time
I've
been
here.
The
six
weeks
I
came
until
the
the
audit
was
completed
I,
I
watched
next
door.
What
Darlene
was
going
through
and
and
so
I
just
wanted
the
council
to
know
that
Darlene
just
made
a
very
significant
effort
in
the
completion
of
this
unqualified
audit.
B
So
I
would
like
to
mention
that
the
other
comment
I
would
have
is
that
the
finance
department
believes
that
the
auditors
significantly
and
rigorously
adhered
to
the
contract
requirements
and
to
let
you
know
that
this
particular
audit
is
the
third
and
final
year
of
the
contract
as
it
currently
exists.
It
was
a
three-year
contract.
B
There
are
probably
competing
interests
in
engaging
in
a
new
contract.
There
could
be
higher
costs,
there's
the
effort
of
going
through
the
bid
process
or
the
or
the
the
the
proposal
process
from
the
finance
perspective,
there's
also
when
there
are
quality
auditors,
that's
a
good
thing.
From
our
perspective,
when
someone
new
comes
in
there
is
the
first
year
is
a
significant
significant
increase
in
the
workload
to
explain
every
transaction
to
the
to
the
new
auditors.
Now
some
people
say
well,
that's
a
good
thing.
You
have
new
new
eyes,
looking
and
so
forth.
B
So
there
is
somewhat
competing
several
times
in
the
past
years
that
I'm
aware
of
a
three-year
contract
has
been
extended
to
five
years
and
it
would
be
the
recommendation
based
on
what
we
think
is
a
quality
service
by
a
quality
firm.
It
would
be
our
recommendation
that
this
would
be
a
time
to
consider
extending
the
contract
for
the
firm
for
two
additional
years.
If
the
council
would
entertain
that
possibility,
finance
would
be
prepared
at
your
next
meeting
to
bring
back
a
an
agreement
amendment
extending
the
work
through
the
year
2015
any.
A
Of
the
questions
council,
any
action,
I
counsel
to
the
chair,
I
thought
you
were
new
I
thought
you
were
a
Kelly
girl
or
something
yeah
anyway.
I
know
I
I
realize
how
complicated
and
then
the
previous,
the
previous
finance
director
learned
everything
she
did
from
you.
I'm
sure
and
and
I
know
that
whole
department
is
very
proficient
and
very
deserves
all
the
all
the
credit
and
all
the
accolades
that
I'm
sure
you're
going
to
receive
the
next.
The
next
award
and
the
recommendation
to
you
know
it's.
A
It
needs
to
come
from
that
department
needs
to
come
from
your
department,
my
in
my
opinion,
working
together
with
with
this
firm
and
if
that's
the
case-
and
you
know
I'd
be
in
favor
of
that.
With
that
do
we
need
a
formal
resolution
and
I'd
like
to
introduce
a
resolution
to
accept
this
audit
girl,
council,
member
I,
birra
hi,
councilmember,
Salazar,
art,
councilmember,
O'connell
I
thanks
bear
modena
high
and
also
mr.
A
Leary
had
asked
if
we
wish
to
have
it
considered
to
be
brought
back
at
the
25th
meeting
in
February
for
an
extension
of
the
agreement.
Is
that
the
council's
desire?
Please
have
that
put
on
the
twenty-fifth
agenda
and
Darlene.
Thank
you.
I'll
be
half
the
council
in
America
for
all
your
working,
your
effort
to
have
this
brought
forward.
You
taken
care
of,
and
thank
you
for.