City of San José Fiscal Year

Size: px

Start display at page:

Download "City of San José Fiscal Year"

Marylou Eaton
5 years ago
Views:

1 Fiscal Year Comprehensive Annual Financial Report Item (d) 5 Single Audit Report Report to Management Item (d) 6 Comprehensive Annual Debt Report Item (d) 7 Public Safety, Finance and Strategic Support Committee December 10, 2015

2 All City Audits and Engagements City of San Jose Comprehensive Annual Financial Report (CAFR) Norman Y. Mineta San Jose International Airport San Jose Retirement Systems Successor Agency for the Redevelopment Agency of the City of San Jose Single Audit (including Airport Compliance) San Jose-Santa Clara Clean Water Financing Authority Financial Audit and Related Fund Compliance Audit Dolce Hayes Mansion Financial Audit and Agreed-Upon Procedures San Jose Convention Center City of San Jose Deferred Compensation Plan Bicycle/Pedestrian Facilities Grant Bond Audits (Parks, Libraries, and Public Safety) Library Parcel Tax Special Revenue Fund City of San Jose s Investment Program Agreed-upon Procedures GANN Appropriation Limitation 18 Engagements 24 Reports These reports are available on the City Auditor s website under Published Work External Financial Audits. FY CAFR Page 2

3 Item (d) 5 Comprehensive Annual Financial Report (CAFR) Fiscal Year

4 Major Sections of the CAFR Introductory Financial Statistical FY CAFR Page 4

5 Independent Auditor s Report Management s Responsibility Auditor s Responsibility Opinion Emphasis of Matters Other Information

6 Impact of New Pension Standards (in millions of $) Impact of New Standards (Post GASB 68) (Pre GASB 68) Assets $ 10,293 $ 10,513 No change Deferred Outflow of Resources An increase of $244 million Liabilities 5,375 3,750 An increase of $1.699 billion (net pension liability) Deferred Inflow of Resources An increase of $276 million (difference between projected and actual earnings on investments) Net Position - Ending 4,890 6,764 A net decrease of $1.874 billion to net position Pension expense A decrease of $67 million FY CAFR Page 6

7 Statement of Net Position As of June 30, 2015 and June 30, 2014 (in millions of $) FY CAFR Page 7

8 Revenues and Expenses As of June 30, 2015 and June 30, 2014 (in millions of $) FY CAFR Page 8

9 General Fund Comparison (in millions of $) % Change Total revenues $ % Total expenditures % Net change in fund balance % GAAP Fund balance - beginning % GAAP Fund balance - ending % Budgetary Fund Balance ** -1.8% Budgetary to GAAP Difference* $ (47) (30) * Budgetary to GAAP differences are primarily attributed to encumbrances. ** Budgetary fund balance includes Emergency Reserve Fund of $3.4M, which is excluded in the Budget Annual Report. FY CAFR Page 9

10 FY GASB Pronouncements GASB 72 - Fair Value Measurement and Application. GASB 76 - The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. FY CAFR Page 10

11 Subsequent Events Tax and revenue anticipation notes for $100 million Airport SARA FY CAFR Page 11

12 Item (d) 6 Single Audit Report Report to Management Fiscal Year

13 Single Audit Reports o Basic Financial Statements Unmodified opinion Internal control over financial reporting o Federal Compliance Unmodified for all 5 major programs Internal control over compliance o Airport Compliance Section Passenger Facility Charges Customer Facility Charges

14 Report to Management Required communications Current year recommendations Status of prior year recommendations

15 Report to Management Current Year Comments Reference Number and Comment Material Weakness Significant Deficiency Control Deficiency Informational Item Risk Assessment of Internal Controls Over the Financial Reporting Process Workers Compensation Claims Control Application of the Availability Criterion for Revenue Recognition Utility Billing System Rates

16 Report to Management Current Year Comments Reference Number and Comment Material Weakness Significant Deficiency Control Deficiency Informational Item Uniform Guidance for Federal Awards New Other Postemployment Benefit Accounting Standards

17 Prior Year Findings Financial Statement Findings: Reference Number and Comment Risk Assessment of Internal Control Over the Financial Reporting Process Status In progress Workers' Compensation Claims Control Not implemented Application of the Availability Criterion for Revenue Recognition Not implemented Schedule of Expenditures of Federal Award Completeness Corrected Federal Award Findings: Highway Planning and Construction Cluster Davis Bacon Act Corrected Community Development Block Grants -Reporting Corrected FY CAFR Page 17

18 Item (d) 7 Comprehensive Annual Debt Report (CADR) Fiscal Year

19 Debt Management Policy Objectives Debt Issuance Debt Administration Debt Management Projects Minimize debt service and issuance costs Maintain access to cost-effective borrowing Achieve highest practical credit rating Full and timely repayment of debt Maintain full and complete financial disclosure and reporting Ensure compliance with Federal and State laws Assess financial impacts of significant City projects FY CAFR Page 19

20 Outstanding Debt Issued by All Agencies Excluding Multifamily Housing Revenue Bonds (i.e., Conduit Debt), and Pension, OPEB, and other City liabilities Balance as of June 30, 2015: $4,622,926,000 ($ in millions) FY CAFR Page 20

21 Debt Issuance FY debt: $320 million Tax revenue anticipation note (retirement prefunding) Airport Revenue Refunding bonds Conduit Multi-family housing revenue obligations FY completed/planned debt: $210 million Tax revenue anticipation note (retirement prefunding) Multi-family housing revenue obligations Commercial paper for water meter replacements Lease-purchase agreement (ESCO/energy conservation equipment) Various refinancing options under review FY CAFR Page 21

22 Debt Service Savings and Variable Rate Renewal Airport Revenue Refunding Bonds Closed October 7, 2014 $125.6 million refunding bonds Series 2014ABC Refunded Series 2001A, 2004C and 2004D Annual savings of $2.2 million, PV savings of $27.5 million Continued management of variable rate program Significant variable rate exposure reduction from a peak of over $1 billion (June 2010) to $404 million (June 2015) Interest rates low since 2008 City s/csjfa s commercial paper program support extended 3-year term agreement through November 2018 Fee rate reduced to 0.52% from 1.30% FY CAFR Page 22

23 Financial Advisory Services Major Projects Financial management and transition of the former Redevelopment Agency Financing and analysis activities for energy conservation and renewable energy programs (ESCO and PACE) Regional Wastewater Facility Capital Improvement Plan Financing development Airport West Property Sale Debt Prepayment (2008F) Debt Policy Update - Disclosure FY CAFR Page 23

24 Credit Ratings City maintains high general obligation credit ratings from all three national rating agencies of Aa1/AA+/AA+ (Moody s/s&p/fitch). Recent Credit Rating Actions General Obligation / Lease Revenue Moody s affirmed its rating of Aa1 on General Obligation bonds and Aa3 on Lease Revenue bonds in July 2015 RDA - non-housing Tax Allocation Bonds Fitch upgraded the bonds credit rating from BBB- to BBB in July 2015 Moody s upgraded the bonds credit rating from Ba2 to Baa1 in August 2015 RDA - Housing Tax Allocation Bonds Moody s upgraded the bonds credit rating from Ba1 to A2 in August 2015 Airport - General Revenue Bonds Fitch upgraded the bonds credit rating from BBB+ to A- in July 2015 FY CAFR Page 24

25 Summary Debt Management program continues to be highly active in the areas of issuance, administration and financial advisory services. Failure to comply with regulatory requirements can result in significant penalties. Maintaining a strong and dedicated program protects the City s financial interests and credit ratings, and ensures cost-effective access to the capital markets for the city s diverse borrowing programs. FY CAFR Page 25

26 Recommendation PSFSS Committee acceptance of FY reports and cross referenced for Council presentation and acceptance on December 15, 2015: Comprehensive Annual Financial Report: Item (d) 5 Single Audit Report: Item (d) 6 Report to Management: Item (d) 6 Comprehensive Annual Debt Report: Item (d) 7 FY CAFR Page 26

Debt Service Obligations

OVERVIEW The City of Santa Cruz debt service obligations include revenue bonds, general obligation bonds, pension obligation bonds, loans, leases, special assessment bonds, and Santa Cruz Redevelopment