The URL can be used to link to this page

Home My WebLink About02/09/2005 B A K E R S F I E L D Mike Maggard, Chair Irma Carson Harold Hanson Staff: John W. Stinson SPECIAL MEETING NOTICE BUDGET AND FINANCE COMMITI'EE of the City Council - City of Bakersfield Wednesday, February 9, 2005 - 3:00 p.m. City Manager's Conference Room, Suite 201 Second Floor - City Hall, 1501 Truxtun Avenue, Bakersfield, CA AGEND.A 1. ~ ROLL CALL 2. ADOPT DECEMBER 17, 2004 AGENDA SUMMARY REPORT 3. PUBLIC STATEMENTS 4. DEFERRED BUSINESS A. Staff report and Committee recommendation regarding City Auditor Rotation Policy- Klimko 5. NEW BUSINESS A. Staff report and Committee ~recommendation on Fiscal Year 2005-06 Community Development Block Grant (CDBG), Home Investment Partnerships (HOME), and Emergency Shelter Grant (ESG) Annual Spending-Plan -Kunz B. Staff report and Committee recommendation regarding Audit Reports for fiscal year-ending June 30, 2004 - Klimko · Comprehensive Annual Financial Report (CAFR) · Independent Auditors Report - Single Audit Report - Schedule of Federal Expenditures for the City of Bakersfield · Independent Auditors Report - Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan · Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield · Independent Auditors Report - Bakersfield Centennial Garden, Convention Center & Ice Sports Center Page I of 2 Pages SPECIAL MEETING NOTICE - Continued BUDGET AND FINANCE COMMI'R'EE Wednesday, February 9, 2005 - 3:00 p.m. 6. COMMITTEE COMMENTS 7. ADJOURNMENT Page 2 of 2 Pages B A K E R S FI E L D DeAFT ~ {~0 ~~ Mike Maggard, Chair Staff: John' W. Stinson Harold Hanson For: Alan Tandy, City Manager AGENDA SUMMARY REPORT SPECIAL MEETING J'~ ~ BUDGET AND FINANCE 'COMMITTEE Friday, December 17, 2004 · 1:00 p.m. City Manager's Conference Room - City Hall 1. ROLL CALL Called to Order at 1:09 p.m. Present:Councilmember Mike Maggard, Chair; Councilmember Harold Hanson Committee Chair Maggard stated for the record that due to the recent retirement of Councilmember Salvaggio and-because Committee appointments will not be made until January 2005, this Committee has only two members present for this meeting. 2. ADOPT SEPTEMBER 20, 2004 AGENDA SUMMARY REPORT Adopted as submitted. 3. PUBLIC STATEMENTS 4. NEW BUSINESS A. Staff report and Committee recommendation regarding Fireworks Fees Finance Director Gregory Klimko provided an overview of the proposed changes and additions to fireworks permit fees. It was noted that only the proposed $40 application fee would apply to all applicants who apply for a fireworks permit. The balance of the fees and cleanup deposit being recommended would be charged to only those who will be receiving a permit. Fire Chief Ron Fraze explained the enforcement fee does not cover the costs for enforcement, but will help to cover the cost for overtime on July 4t~. In addition to AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING D~AFT Friday, December 17, 2004 Page - 2 - Fire Services increased enforcement during fireworks sales, Fire will partner with Police to put 10 two-member enforcement teams out patrolling for the busiest eight hours on the 4th. The following is a comparison of the current and proposed fireworks permit fees: Current Proposed 'Application Fee: $ 00.0 $ 40.00 Permit Fee - 'Processing: Finance, Plan/Build, Risk, Traffic 49.00 90.00 Inspections: Fire '52.00 113.00 Enforcement: Fire and Police 00.0 97.00 Permit Fee: $101.00 $300.00 Electrical Permit: 40.00 40.00 Clean Up "Deposit": 100.00 100.00 Total Fees and Deposits: $ 241.00 $ 480.00 Roger W. Jobe, Phantom Fireworks, stated-he came to the meeting to find out what the proposed new fees were so he could share the information. Staff recommended the above proposed fireworks permit fees and increases be adopted and included in the cost recovery system fee schedule. Committee Member Hanson made a motion to approve staff's recommendation. Committee Chair Maggard voted to approve the motion and to forward to the Council for hearing. B. staff report and Committee recommendation regarding Maintenance Districts City Manager Alan Tandy reported staff has completed a review of the City's maintenance district policies, practices and costs and has formulated a new draft schedule of rates based on costs for FY 2003-04. It was determined maintenance district assessments have not kept up with the costs for providing services as there is no built-in cost of living increases for inflation. For over eight years since passage of Proposition 218, there have been no increases in maintenance district assessments because of the new vote requirement to increase rates. Because assessments have not kept pace with inflationary cost increases, it has necessitated an increase in the General Fund subsidy provided to the consolidated park and landscape maintenance district. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING DRAFT Friday, December 17, 2004 Page - 3 - The City Manager explained since the General Fund has been hit hard by State revenue captures, staff is making the following two recommendations: 1. All new areas added to the conSolidated park and landscape maintenance district be formed using the updated new rates; and 2.Apply an annual cost of living factor to new areas added to the consolidated park and landscape maintenance district. This would ensure assessments for new areas cover costs and keep up with inflationary increases. The above tWo recommendations are relatively straight forward to implement since both involve newly developing areas. At the time the developer signs a petition to be added to the consolidated maintenance district, the developer (one sole vote) would agree to the higher assessment and annual cost of living adjustments. The assessment information would be disclosed to the new homebuyers at the time of the sale. The information has been shared with Brian Todd, Building Industry Association of Kern County, who was unable to attend this meeting. Committee Member Hanson made a motion to approve staff's recommendation for updated rates and annual cost of living increases for new areas when added to the consolidated park and landscape maintenance district. Committee Chair Maggard voted to approve the motion and to forward the recommendation to the City Council in January. City Manager Tandy explained there is a third 'issue regarding current maintenance district assessments, which have not kept up with inflation or the costs for providing services for park and landscaping maintenance. Staff did not make a recommendation but provided the following information to the Committee. The only way to increase assessment rates for the existing consolidated, park and landscape maintenance district to bring them up to current levels and/or provide an annual cost of living adjustment to keep up with inflation is to conduct a Proposition 218 mail ballot. The existing areas still retain the assessments based on 1996 costs, and if not modified, will continue to increase the General Fund subsidy over time. Staff has been conducting research and there are some areas of concern: ·A Proposition 218 election requires a majority approval of those voting within the maintenance district area · It is questionable whether residents within the maintenance district who vote would vote to increase their assessments · Tax and assessment measures have not fared well statewide in recent elections · The City would incur the cost of the election and pursuant to state law, cannot use taxpaYer monies or staff time to support the passage of the measure AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING DRAFT Friday, December 17, 2004 Page - 4 - At this point in .time, the Committee was not interested in going back to areas already developed to raise maintenance district assessments and did not take any action. Another issue the City Manager brought before the Committee was to form a street lighting maintenance district for new areas being developed to cover the costs of operations, maintenance and electricity, and also include an annual inflation factor. The City's cost for street lighting annually is about $2 million, which is paid from the General Fund. As we add more new subdivisions, this will go to $3 or $4 million over time. Public Works staff estimated the costs to be about $80 annually per street 'light. Based on an average of six parcels per street light, the assessment would .be approximately $13 per home. Committee Chair Maggard expressed before-we add anything elSe or form a street lighting maintenance district for new areas, fees that neighborhoods would pay, he was interested in having a more comprehensive discussion regarding neighborhood amenities to assess what would make the biggest impact on the neighborhoods to increase the standard of living, and weigh the costs' involved for the different amenities. Committee Member Hanson felt this should be done all at once and not use a nickel and dime approach to keep going back to the community asking for increases. C. Staff report and Committee recommendation regarding VehiCle License Fee (VLF) Gap-Loan Pro. gram Assistant City Manager John Stinson explained in FY 2003-04 the State "borrowed" a portion of the Vehicle License Fee (VLF) backfill owed to local agencies. This VLF gap loan is scheduled to be repaid by the State to the local agencies in 2006. The amount owed to the City of Bakersfield is about $4.5 million. State law requires this money to be paid back by August 15, 2006; however, the State by further action of the Legislature may be able to defer paying these monies. CSAC and the League of California Cities sUccessfully sponsored recent legislation, which permits local agencies to sell their VLF gap loan receivables to a third party and in essence get the money now, rather than waiting until 2006. California Communities (¢SCDA) plans to issue fixed-rate bonds to purchase VLF receivables from cities and counties (local agencies) for an upfront fixed price currently estimated at 90 to 94 cents on the dollar. The bonds would be taxable or tax-exempt depending on their use. AGENDA SUMMARY REPORT BUDGET AND FINANCE COMMITTEE MEETING Friday, December 17, 2004 Page - 5 - The City would be able to stipulate the minimum return that is expected, and if it does not meet that criteria, not participate. By purchasing the receivables, CSCDA would ibe assuming the risk of the repayment by the State. To make sure. the bond purchasers are paid, CSCDA will be purchasing-bond insurance, in case of default by the State. Staff is checking to assure they will indemnify the City in the .event the State defers payment or does not pay. The funds would be one-time monies. If the City participates, staff recommended the funds be used for capital purposes, street resurfacing and repair, which would be-consistent with Council policy. The Committee requested staff to prepare a list of roads that are most in need of resurfacing or repair so the community will know where the funds are projected to be used. Also, staff was requested to ascertain if membership in the League of California Cities would be necessary to participate. Committee Member Hanson. made a motion the Committee recommend if the information continues to be positive, staff move forward to bring this to the full Council for consideration. Committee Chair Maggard voted to approved the motion. Staff will continue to investigate the details of the VLF Gap Loan Program and will keep the Council informed. 5. COMMrR'EE ~COMMENTS 6. ADJOURNMENT The meeting adjourned at 2:32 p.m. Attendance: Staff: City Manager Alan Tandy; Assistant 'City Manager John W. Stinson; City Attorney Ginny Gennaro; Assistant City Manager Alan Christensen; Finance Director Gregory Klimko; .Fire Chief Ron Fraze; Assistant Recreation and Parks Director Allen Abe; Assistant Finance Director Nelson Smith; Assistant Public Works Director Jack LaRochelle; City Clerk Pam McCarthy; Office Administrator/Public Relations Rhonda Smiley; Deputy Fire Chief Kirk Blair; Deputy Fire Chief Gary Hutton; Fire Prevention Director Ralph Huey; Fire Captain Ed Watts; Recreation and Parks Business Manager Rebecca Jamison; and Parks Construction/Facility Planner Ken Trone Others: Roger W. Jobe, Phantom Fireworks cc: Honorable Mayor and City Council S:\Darnell\04Budget and Finance~bf04dec17summary MEMORANDUM TO: Gregory J. Klimko, Finance Director FROM: Nelson K. Smith, Assistant Finance Director DATE: February 4, 2005 SUBJECT: Draft Policy - Auditor Rotation As you recall, Mike Maggard requested a draft policy be prepared on this subject at a prior Budget and Finance Committee meeting. Attached is a draft policy regarding auditor rotation for your review. File name: nks:p\auditor rotation.doc Council Policy Statement Independent Auditing Services for Annual Financial Audit Background - The Government Finance Officers Association (GFOA) has long recommended that state and local govemmental entities obtain independent audits of their financial statements performed in accordance with the appropriate professional auditing standards. Properly performed audits play a vital role in the public sector by helping to preserve thc integrity of the public finance functions and by maintaining citizens' confidence in their elected leaders. It is the City Council's desire to incorporate the recommendations of GFOA into a Council Policy regarding procurement of annual financial auditing services. Recommendations - The City Council makes the following policy statements recommendations regarding the selection of auditing services: - The scope of the independent audit should encompass not only the fair presentation of the basic financial statements, but also the fair presentation of the financial Statements of individual funds and component units. The cost of extending full audit coverage to the financial statements of individual funds and component units can be justified by the additional degree of assurance provided. - The City of Bakersfield shall require in their audit contracts that the auditors of their financial statements conform to the independence standard promulgated in the General Accounting Office's Government Auditing Standards even for audit engagements that are not otherwise subject to generally accepted government auditing standards. - The City of Bakersfield shall enter into multiyear agreements not to exceed five years in duration when obtaining the services of independent auditors. Such multiyear agreements can take a variety of different forms (e.g., a series of single-year contracts), consistent with applicable legal requirements. SUch agreements allow for greater continuity and help to minimize the potential for disruption in connection with the independent audit. Multiyear agreements can also help to reduce audit costs by allowing auditors to 'recover certain "starmp" costs over several years, rather than over a single year. - The City of Bakersfield shall undertake a full-scale competitive process for the selection of independent auditors at the end of the term of each audit contract, consistent with applicable legal requirements. In order to enhance auditor independence, the City shall require a change in auditors no less than once every five years. The current auditor shall be excluded from the competitive process for the upcoming audit term. S:XNELSON~council policy draft - audit services.doc - The City may desire on occasion to hire an independent auditor to perform certain types of non-audit services for the City. Any non-audit services that require Council approval per Bakersfield Municipal Code section 3.20.105 C (which currently reads "amounts over $25,000) should first be reviewed by 'the budget and finance committee. Furthermore, The City should routinely explore the possibility of aitemative service providers before making a decision to engage their independent auditors to perform significant non-audit Services. - The audit procurement process should be structured so that the principal factor in the selection of an independent auditor is the auditor's ability to perform a quality audit. In no case should price be allowed to serve as the sole criterion for the selection of an independent auditor. -2- S:hNELSON'~council policy draft - audit services.doc BAKERSFIELD Economic and Community Development Department MEMORANDUM TO: Budget and Finance Committee ~,~ ~ ~u,~'l'~ February 4, 2005 FROM: Donna L. Kunz, Economic Development Director SUBJECT: CDBG, HOME, and ESG Action Plan FY 2005/06 As an Entitlement City under the U.S. Department of Housing and Urban Development (HUD), the City receives annual entitlements in order to improve Iow-income neighborhoods in our City. The City's entitlements for FY 2005/06 are: $3,744,782 for Community Development Block Grant funds; $1,687,189 for the HOME Investment Partnership Program; $45,164 for American Dream Downpayment Initiative; and $143,845 for Emergency Shelter Program. Total available funds from HUD to improve Iow-income neighborhoods in the City of Bakersfield are $5,620,980. After reviewing all the proposals and projects totaling over $9 million, staff has prepared a proposed budget with consideration of the City Council priorities of public safety and street improvements. To highlight the proposed budget, of the $1.7 million available for Capital Improvement Projects, $1.2 is proposed for street improvement projects; $500k for the construction of Fire Station #5. In addition, we have again allocated $479k for police and fire, public services equal to the current year funding level. Attached is a summary of the proposed budget for consideration and recommendation to the City Council. S:~BudgetFY05-06\B & F Action Plan 05-06.doc BAKERSFIELD Economic and Community Development Department MEMORANDUM Janua~ 27,2005 TO: Alan Tandy, City Manager Donna L. Kunz, Economic Development Director FROM: George Gonzales~"~n~munity Development Coordinator SUBJECT: Intra City Proposals Received for FY 2005~06 CDBG Assistance The deadline for Submission of proposals for FY 2005~06 was October 29, 2004. We received 11 proposals totaling about $6.2 million. Below are project descriptions, location, and cost estimates. Projects are listed in order of priority as determined by submitting department. Project Description [Department I Eligibility Ward Ranking] FIRE STATION IMPROVEMENTS Fire Station #5 - New Construction Project - Phase II Fire Pdodty 1 Acquisition, design, construction of a fire station located at 102Ward 1 Yes East White Lane. Phase I preliminary acquisition and design is funded in FY 03/04. Estimated total cost is $3.8 million. STREET IMPROVEMENTS Mill Creek Linear Park Construction - Phase I EDCD Priority 1 Hardscape and landscape improvements on the Kem Island Ward 2 Yes Canal between 17th and 21st streets. Estimated total cost $3 million. FY05/06 CDBG $302,000 Chester Avenue Streetscape- Phase III EDCD Priority 2 Install median improvements on Chester Avenue between 24th Ward 2 Yes street and Garces Circle; including landscaping, lighting and other improvements. Estimated total cost $1.6 million. FY 05/06 CDBG $312,200 "P" Street Sewer Improvement Project Public Works Priority 1 Install sewer main & laterals for residential properties on "P" Ward I Yes Street between 1st and 2nd streets. Estimated total cost $211,200. Street Reconstruction Project- Ward 6 Public Works Pdority 1 Street reconstruction in HUD-eligible neighborhoods in Ward 6. Ward 6 Yes Estimated total cost $565,000. S:\GEORGE\CIP funding request 0506.doc Department Eligibility ~ Project Description Ward Ranking Street Reconstruction Project- Wards 2 and 3 Public Works Priodty 2 Street reconstruction in HUD-eligible neighborhoods in Ward 2 Wards 2 and 3 Yes and 3. Estimated total cost $418,000. Street Reconstruction Project- Ward 7 Street reconstruction Ward 7 Priority 3 in HUD-eligible neighborhoods in Ward 7. Estimated total cost Yes $480,000. "P" Street Street Improvement Project Public Works Priority 4 Install street improvement on "P" Street between Brundage Lane Ward 1 Yes and California Avenue; including curb, gutter, sidewalk, retaining wall, etc., Estimated total cost $331,500. RECREATION AND PARKS Jefferson Park Playground Retro-fit Improvements Ward 2 Priority 1 Remove and replace existing playground equipment and ADA Yes rubberized surfacing at neighborhood park located at 801 Bernard Street. Estimated total cost is $232,000. Beale Park Wet Play Area Project Ward 2 Pdodty 2 Construction of an interactive wet play area at a neighborhood Yes park located at 500 Oleander Street. Estimated total cost is $352,000. Planz Park Shelter Project. Ward 7 Priority 3 Install a 1,200 sq. ft. metal frame structure and improvements in Yes an existing neighborhood park located at 1601 Planz Road. Estimated total cost is $48,000 PUBLIC SERVICES East and Southeast Crime Prevention Services Police Priority 1 Operating Costs for4 additional police officers to enhance patrol Wards 1 & 7 Yes and crime prevention service in East and Southeast Bakersfield. Estimated total cost $350,000. FY 05/06 CDBG $227,000. Southeast Bakersfield Fire Protection Services Fire Pdodty 1 Operational costs for 3 additional fire fighters for Fire Station #5 Ward 1 Yes at 700 Planz Road (102 East White Lane) which will provide full strength crew of four persons per shift. Total Cost $252,000 - CDBG FY 05/06 $252,000. Graffiti Removal Program Removal of graffiti within various Public Works Priodty 1 Iow-income areas within the City. Estimated total Cost City-wide Yes $720,000. FY 05/06 CDBG $100,000. Bakersfield Senior Center Services Funds for public services Ward 1 Priority 2 to senior citizens at 530-4t" Street. Total Cost- CDBG FY 05/06 Yes $50,000 S:\GEORGE~,CIP funding request 0506.doc BAKERSFIELD Economic and Community Development Department MEMORANDUM January 27, 2005 TO: Alan Tandy, City Manager Donna Kunz, Economic Development Director FROM: George Gonzale munity Development Coordinator SUBJECT: Non-Profit Appli(~ations submitted for CDBG FY 2005106 Funding. The deadline for the submission of CDBG, HOME, and ESG applications for FY 2005/06 funding was October 29, 2004. This year twelve (12) applications were submitted from non-profit and public entities totaling over $3.6 million. The HUD CDBG/HOME entitlement for FY 05/06 has been posted showing an overall reduction of 6.9% from $6,006,694 to $5,620,980. The City's CDBG allocation for FY 05/06 is $3,744,782 ($188,218 less than FY 04/05). The HOME Investment Partnership Program allocation for next year is $1,687,189 ($240,078 less than FY 04/05). This amount also includes funds for the American Dream Downpayment Initiative. Lastly, the Emergency Shelter Grant funds for FY 05/06 are $143,845 ($2,582) less than FY 04~05. Below are summaries of the applications received from non-profits requesting assistance from the various HUD programs for FY 05/06: ;~,~,~:~¢ ',~.~' '.1~:-~";?~?~,~; ~.' ~;-,;~,):':;~,;-.~'¢~,~.~ ~ ~,-? .:?" ',' .' "" ;" .':"-"-~;. · t '~ ~ '%.;~ ~:?;~b~'~-.-~"~.".-'~.'~ ~'., ?-~;'~' ". ?~b-~.~ Applicant Estimated Cost · . Description & Location City Funds Requested HUD Proposal Name *' Other Sources Eligible Alliance for Non-profit Capacity building for non- $33,000 Total Cost No Development profit agencies serving Iow- income clients Strategic and Fund $25,000City Development Planning $ 8,000 match for Bakersfield Non- profit Agencies Page I of 3 S:\GEORGE~2005-06 funding request.doc ~ AppliCant ', '~ .. '* Estimated Cost i,~: *, ~ * DeScription & Location ~ · "City Funds Requested HUD ii, proposal Name ' ~ Other Sources Eligible Patricia's New Acquisition, construction of 4 $2,615,500 Total Cost Yes Millennium Home homes to house at-risk youth $1.307,750 City $1,307,750 County Kern County Technical Rental assistance, $ 470.582 Total Cost Yes Training Center rehabilitation and equipping a 40,000 sq. ft. market as a College Center Charter vocational charter school for $ 235.582 City School 13-18 year high school $ 150,000 State grant students. $ 85.000 applicant " .;~. !.-~... HOME Program- - .... :' ApPlications - FY 2005/2006 Mildred L. Moore construction of a two story- $ 320,000 Total Cost Yes 3,100 sq. ft., four-plex Moore Residential affordable rental located at Housing Units 2212 "N" Street. $ 290,000 City $ 30,000 applicant Golden Empire Construction of 24- one $2,243,052 Total Cost Yes Affordable Housing, Inc. bedroom rental units to house disabled persons Green Garden located at 2301 South Union $ 400,000 City Apartments New Avenue, $ 200,000 County Construction Project $1,643,052 to be determined Kern Affordable Rehabilitation of an existing $ 342,825 Total Cost Yes Housing, Inc. 20-unit affordable multifamily CHDO apartment complex located qualified Villa San Dimas at 601 36th Street. $ 342,825 City Rehabilitation Project Kern Affordable Rehabilitation of an existing $ 315,578 Total Cost Yes Housing, Inc. 16-unit affordable multifamily CHDO apartment complex located qualified Park Real Rehabilitation at 414 Real Road. $ 315,578 City Project Alliance Against Family Fund the operating cost of $1.38 million annual operating Yes Violence and Sexual the Battered Women's budget Assault Shelter including utilities, insurance, maintenance and Battered Women's wages for a counselor. $ 15,000 Ci~ Shelter City Wide Bethany Se~ices, Inc. Continue to fund operational $1.16 million annual operating Yes cost of the Bakersfield budget Bakersfield Homeless Homeless Center including Center cost of security maintenance and utilities at 1600 E. $ 125,000 City Truxtun Avenue. City wide Page 2 of 3 I S:~.GEORGE~005-06 funding request.doc 'Applicant.','" .i,~. " ' · ~i ,~. ' . "' ,.. Estimated Cqst ?P~Oposal Name. :' :: .i .:' ", . Other sourCes Eligible Bakersfield Rescue Continue to fund operational $1.53 million annual operating Yes Mission cost of the Bakersfield budget Rescue Mission including Homeless Intervention maintenance, utilities, and Services personnel. $ 78.600 City City Wide Page 3 of 3 S:~GEORGE~005-06 funding request.doc $3,744,782 Program Income Projected for 05-06 $50,000 TOTAL RESOURCES $3,794,782 20% Admin. Cap (not to exceed) $758,956 Long term obligations: Debt Svc. Public Fac.- P & I on $4.1 m $328,923 Debt Svc. Public Fac.- P & I on $800,000 $62,050 TOTAL LONG TERM OBLIGATIONS $390,973 PUBLIC SERVICES not to exceed 15% of ent.& 15% pryr P1=$6t2,450) Graffiti Removal - City Program/50% Pub. Svcs. 40,000 Bakersfield Senior Center - Admin. Contribution 50,000 S.E. Police Sub-Station 227,000 Fire Protection Services 252,000 Sub-total $569,000 Housing and Slum and Blight Activities Graffiti Removal - Private Structures 60,000 Home Access 55,000 · Service Delivery for Housing Programs 65,000 Acquisition/Demolition - ED Activities 123,853 Sub-total $303,853 Subtotal Administration, Debt and Programs $2,022,782 tclude project cost and direct delivery: Capital Improvement Projects (Proposed) Public Works "P" Street Sewer Project - (Ward #1 ) 211,000 10,000 2,000 N. Chester Street Improvements (Ward #2) 312,000 10,000 2,000 Street Improvements - (Wards 3, 6 & 7) 700,000 Fire Department Fire Station #5 - Construction - (Ward #1) 500,000 20,000 5,00(3 AMOUNT OVER/UNDER NET RESOURCES AVAILABLE $0 S:CDBGBudgetProposedUseFY0506Draftl ........... i:'Us_ ? -for'Fi aly 00:06 . '~- ~.. _ ~_ ..... ~ , 26-Jan-05 RESOURCES: HOME Entitlement for FY 2004-05 $1,687,189 Program Income Projected 04-05 $200,000 Sub-Total $1,887,189 American Dreams - Downpayment Assistance New Program $45,164 TOTAL RESOURCES (preli__.~_!na_~ estimates HUD) $1;932,353, PROGRAM ADMINISTRATION - 10% $188,719 PROPOSED HOUSING PROGRAMS' .~ ~?~r~ject Cost Direct D____elive_ ry_~ New Construction - Housing 711,281 49,750 Service and Delivery for Housing 50,000 American Dreams - Downpayment Assistance 45,164 Housing Urban Bakersfield - Down Payment Assistance Program 550,000 54,361 CHDO Set Aside 15%: (HUD mandated) 283,078 Tot___al_.Pr..~g..ram~__~_./.._P~rgject Costs + Direct Delivery_ 1,639,523 104,111 Amount over/under net resources available $0 EMERGENCY SHELTER GRANT (ES___G_). ESG Grant Proposed Funding for FY 2005-06 $143,845 5% Administrative Cap $7,095 Agencies Funded: Bakersfield Resuce Mission $60,875 Bethany Homeless Shelter $60,875 Alliance Against Family Violence $15,000 Amount over/under net Resources Available $0 ADMINISTRATIVE REPORT TO: Honorable Mayor and City Council APPROVED FROM: Gregory J. Klimko, Finance Director DEPARTMENT HEAD ,,~,'~ ~Z~,.,~"'~ DATE: December 22, 2004 CITY ATTORNEY · CITY MANAGER SuBjEcT: Audit Reports to be Referred to Budget and Finance Committee: 1. Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2004. 2. Independent Auditors Report - Single Audit Report - Schedule of Federal Expenditures for the City of Bakersfield for the fiscal year ended June 30, 2004. 3. Independent Auditors Report - Compliance with Contractual Requirements relative to the Bakersfield Subregional Wastewater Management Plan for the year ended June 30, 2004: 4. 'Independent Auditors Report on Appropriations Limit Worksheet (GANN Limit) of the City of Bakersfield for the fiscal year ended June 30, 2004. 5. Independent Auditors Report - Bakersfield Centennial Garden, Convention Center & Ice Sports Center for the fiscal .year ended June 30, 2004. RECOMMENDATION: Staff recommends referral to the Budget and Finance Committee. BACKGROUND: 1.. Attached is the City's Comprehensive Annual Financial Report (CAFR), commonly referred to as the City's Annual Audit Report, for the fiscal year ended. June 30, 2004. The CAFR represents the City's financial statements as of June 30, 2004, which are audited by the accOunting firm of Brown, Armstrong, Paulden, McCown, Hill, Starbuck & Keeter. 2. Attached is the City's Single Audit Report for the fiscal year ended June 30, 2004. The Single Audit Report pertains to federal program monies, expended by the City during the specified fiscal year. An Independent Audit is performed annually to review internal control procedures and compliance with federal guidelines in accordance with Office of Management & Budget (OMB) Circular A-133. This annual audit was performed by Brown, Armstrong, Paulden, McCown, Hill, Starbuck & Keeter as part of their contract to provide auditing services to the City of Bakersfield. The current compliance report issued by the outside auditors indicates that the City complied, in all material respects, with federal grogram guidelines. 1 of 2 S:\KimG\Forms & Lables~Admin--Cafr2004.doc December 21, 2004, 4:08PM ADMINISTRATIVE REPORT , 3. Contract requirements contained in City of Bakersfield Agreement 76-153 as amended by Agreements 76-153(5), 76-153(4), 77-44, 85-197 and 92-106 apply to operations of the Bakersfield Subregional Wastewater management Plan. The City's compliance with contract requirements is audited on an annual basis. The current Compliance Report, issued by the outside auditors, indicates that the City was two days late in submitting a tentative budget to the Technical Advisory Committee for their review and approval. There were no other audit findings. ' 4. Attached is a letter from the City's independent auditors Brown, Armstrong, Paulden, McCown, Hill, Starbuck & Keeter indicating they'have completed their annual review of the.Appropriations Limit Worksheet' prepared by the City in accordance with Section 1.5 of Article XIIIB of the California Constitution (GANN Limit). This annual review is performed bY the auditors as part of their contract to provide auditing services to the City of Bakersfield. The agreed upon review procedures are substantially less-in scope than an audit and therefore no audit opinion is expressed regarding the calculation. 5. Attached is the independent audit report for the Bakersfield Centennial Garden, Convention Center & Ice Sports Center, for the fiscal year ended June 30, 2004. This audit report presents the financial statements for this operational unit as of June 30, 2004. The City is under contract with SMG to manage the Bakersfield Centennial Garden, Convention Center & Ice Sports Center facilities. As part of the agreement, SMG is required to submit an independent audit report to the ' City after the end of each fiscal year. This audit report was prepared by the accounting firm of Barbich, Longcrier, Hooper & King. nks 2 of 2 S:\KimG\Forms & Lables~Adrnin--CafY2004.doc December 21, 2004, 4:08PM Peter C. Brown, CPA Burton H. Armstrong, CPA, MST Andrew J. Paulden, CPA TO the Honorable Mayor and HarveyJ. McCown, CPA Members of the City Council City of Bakersfield, California Steven R. Starbuck, CPA Arleen K. Keeter, CPA ChrisM. Thomburgh, CPA In planning and performing our audit of the basic financial statements of the City of Bakersfield, California (City) for the year ended June 30, 2004, we considered its internal control structure in order to determine our auditing procedures for the purpose of ~ctt.~,MS^,CPA expressing our opinion on the basic financial statements and not to provide assurance on the internal control structure. Our consideration of the internal control structure would not LynnR. Krausse, CPA, MST necessarily disclose all matters in the internal control structure that might be material BradleyM. Hankins, CPA weaknesses or reportable conditions under standards established by the American Me~daA. McDa~eb, CPA Institute of Certified Public Accountants. A material weakness is a condition in which the design or operation of one or more of the internal control structure elements does not Sharonlones, CPZ, MST reduce to a relatively Iow level the risk that errors or irregularities in amounts that would ThomasM. Young,CPA be material in relation to the financial statements being audited may occur and not be · detected within a timely period by employees in the normal course of performing their Amanda E. W'flson, cpA assigned functions. However, we noted no matters involving the internal control structure Diana Branthoover, CPA and its operation that we consider to be material weaknesses'as defined above. Rosalva Flores, CPA Reportable conditions involve matters coming to our attention relating to deficiencies in Com~ieM. Perez, CPA the design or operation of the internal control structure that, in our judgment, could MatthewGilligan, CPA adversely affect the organization's ability to record, process, summarize, and report financial data consistent with the assertions of management in the financial statements. However, we noted no matters involving the internal control over financial reporting and its operation that we consider to be reportable conditions: This report is intended solely for the information and use of the Audit Committee, City Council, management, and other authorized regulatory agencies. However, this report is a matter of public record, and its distribution is not limited. ' BROWN ARMSTRONG PAULDEN McCOWN STARBUCK & KEETER ACCOUNTANCY CORPORATION By: Andr~u~~ ' - Bakersfield, California November 4, 2004 1:\-..\7934~Audit04\CAFR~Reportable Conditions Report.doc MEMBER of SEC Practice Section of the American Institute o[ Certi[ied Public Accountants Peter C. Brown, CPA Burton H. Armstrong, CPA, MST AndrewJ. Paulden, CPA REQUIRED COMMUNICATION WITH AUDIT COMMITTEES HarveyI. McCown, CPA IN ACCORDANCE WITH STATEMENT ON AUDITING Steven R. Starbuck, CPA STANDARDS N U M B ER 61 kileen K. Keeter, CPA Chris M. Thomburgh, CPA Eric H. Xin, MBA, CPA To the Budget and Finance Committee Lynn R. Krausse, CPA, MST City of Bakersfield, California Bradley M. Hankins, CPA Melinda A. McDaniels, CPA We have audited the basic financial statements of the City of Bakersfield for the year Sharon Jones, CPA, MST ended June 30, 2004, and have issued our report thereon dated November 4, 2004. Thomas M.¥o~m~,C?^ Professional standards require.that we provide you with the following information related to our audit. Amanda E. W'dson, CPA Diana Branthoover, cpA .Our Responsibility under Generally Accepted Auditin.q Standards RosalvaFlores, cpA As stated in our engagement letter, our responsibility, as described by professional standards, is to plan and perform our audit to obtain reasonable, but not absolute, ConnieM. Perez, cpA assurance that the basic financial statements are free of material misstatement and are MatthewCilli§an, CPA fairly presented in accordance with generally accepted accounting principles,. Because of the concept of reasonable assurance and because we did not perform a detailed examination of all transactions, there is a risk that material errors, fraud, or other illegal acts may exist and not be detected by us. As part of our audit, we considered the internal control of the City of Bakersfield. Such considerations were solely for the purpose of determining our audit procedures and not to provide any assurance concerning such internal control. .Si.qnificant AccountinR Policie, Management has the responsibility for selection and use of appropriate accounting policies. In accordance with the terms of our engagement letter, we will advise management about the appropriateness of accounting policies and their application. The significant accounting policies used by the City of Bakersfield are described in Note 1 to the basic financial statements. There are no new accounting policies were adopted during the fiscal year 2003-2004. We noted no transactions entered into by the City of Bakersfield during the year that were both significant and unusual, and of which, under professional standards, we are required to inform you, or transactions for which there is a lack of authoritative guidance or consensus. M[MB[R of SEC Practice Section of the American Institute of Certified Public Accountants Accounting Estimates Accounting estimates~are an integral part of the general purpose financial statements prepared by management and are based on managemenrs knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the basic financial statements and because of the possibility that future events affecting them may differ significantly from those expected. There were no sensitive estimates, except for accrued claims and judgments payable in the self insurance internal service fund, affecting the financial statements. Siqnificant Audit Adiustment,~ For purposes of this letter, professional standards define a significant audit adjustment as a proposed correction of the basic financial statements that, in our judgment, may not' have been detected except through our auditing procedures. These adjustments may include those proposed by us but not recorded by the City of Bakersfield that could potentially cause future financial statements to be materially misstated, even though we have concluded that such adjustments are not material to the current financial statements. We proposed no audit adjustments that could, in our judgment, either individually or in the aggregate, have a significant effect on the City of Bakersfield's financial reporting process. Disa_~reements with Management For purposes of this letter, professional standards define a disagreement with management as a matter, whether or not resolved to our satisfaction, concerning a financial accounting, reporting, or auditing matter that could be significant to the general purpose financial statements or the auditor's report. We are pleased to report that no such disagreements arose during the course of our audit. Consultations with Other Independent Accountant,~ In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations. If a consultation involves application of an accounting principle to the governmental unit's general purpose financial statements or a determination of the type of auditor's opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants. Issues Discussed Prior to Retention of Independent Auditors We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City of Bakersfield's auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition for our retention. .Difficulties Encountered in Performing the Aud;I. We encountered no significant difficulties in dealing with management in performing our audit. This information is intended solely for the use of the City of Bakersfield and management of the City of Bakersfield and is not intended to be and should not be used by anyone other, than these specified parties. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK & KEETER ACCOUNTANCY CORP~ Bakersfield, California B~ ~ November 4, 2004 1:\...\7934~udit04~PSR\SAS61.doc CITY OF BAKERSFIELD, CALIFORNIA SINGLE AUDIT REPORTS FOR THE YEAR ENDED JUNE 30, 2004 (With Auditor's Reports Thereon) CITY OF BAKERSFIELD, CALIFORNIA SINGLE AUDIT REPORTS FOR THE YEAR ENDED JUNE 30, 2004 TABLE OF CONTENTS PaRe Auditor's Report on Compliance and on Internal Control Over Financial RePorting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ....................................................... 1 Auditor's Report on Compliance with Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 Schedule of Expenditures of Federal Awards .......................... .......................................................... 5 Notes to Schedule of Expenditures of Federal Awards ...................................................................... 6 Schedule of Findings and Questioned Costs ..................................................................................... 9 Peter C. Brown, CPA Burton H. Armstron~ CPA, MST Aad~wJ.?aulde~C?A AUDITOR'S REPORT ON COMPLIANCE AND ON iNTERNAL HarveyJ. McCown, CPA CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE · StevenR. StarbuclgcpA WITH GOVERNMENT AUDITING STANDARDS Arleen K. Keeter, CPA Chris M. Thomburgh, CPA EricH. Yin, MBA, CPA TO the Honorable Mayor and Members of the City Council Lym~ R.K~ausse, CPA, MST City of Bakersfield, California Bradley M. Hankins, CPA Melinda A. McDaniels, CPA We have audited the financial statements of the City of Bakersfield,. California, as of and S~,~ro. Jones, CP^,~,~r for the year ended June 30, 2004, and have issued our report thereon dated October 27, ThomasM. yoUng, CpA 2004. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained AmandaE.~son, CPA in Government Auditing Standards, issued by the Comptroller General of the United , CPA States. Rosalva Roms, CPA Compliance ComieM.?erez, cpA As part of obtaining reasonable assurance, about whether the City of Bakersfield, MatthewGillisan, C?A California's, financial statements are free Of material misstatement, we performed tests of its compliance with certain provisions .of laws, regulations, contracts and grants, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards. Internal Control Over Financial Reporting In planning and performing our audit, we considered the City of Bakersfield, California's, internal control over financial reporting in order to determine our auditing procedures for the purpose of expressing our opinion on the financial statements and not to provide assurance on the internal control over financial reporting. Our consideration of the internal control over financial reporting would not necessarily disclose all matters in the internal control over financial reporting that might be material weaknesses. A material weakness is a condition in which the design or operation of one or more of the internal control components does not reduce to a relatively Iow level the risk that misstatements in amounts that would be material in relation to the financial statements being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal control over financial reporting and its operation that we consider to be i~iaterial weaknesses. SEC Practice Section of the American Institute of Certi[ied Public Accountants This report is intended for the informatiOn of the audit committee, management and federal awarding agencies and pass-through entities. However, this report is a matter of public record and its distribution is not limited. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK & KEETER ACCOUNTANCY CORPORATION Bakersfield, California October 27, 2004 Peter C. Brown, CPA Bu~ton H. Armstrong, CPA, MST And~ewJ. Paulden, cpA AUDITOR'S REPORT ON COMPLIANCE WITH REQUIREMENTS HarveyJ. McCown, cpA APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL Steven R. Starbuck, CPA CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Ailee~ IC Keeter, CPA Ch~ M. ThombulT, h, CPA To the Honorable Mayor and Eric H. Xin, MBA, CPA Members of the City Council LynnR. Krausse, cpA, MST City of Bakersfield, California Bradley M. Hankins, CPA Melinda A. McDaniels, CPA..Compliance We have audited the compliance of the City of Bakersfield, California, with the types of ShamnJones, CPA, MST compliance requirements described in the U. S. Office of Mana.qement and Budget ThomasM. Young, CPA (OMB) Circular'A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2004. The City of Bakersfield's major AmandaE. Wdson, CPA federal, programs are identified in the summary of auditor's results section of the t Branthoover, CPZ accompanying schedule of findings and questioned costs. Compliance with the. aRo,~s, CPA requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the' responsibility of the City of Bakersfield's management. Our ConnieM. Perez, CPA responsibility'is to express an opinion on .the City of Bakersfield's compliance based on Matthew Gilli§an, CPA our aud t. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circula'r A-133, "Audits of States, Local Governments, and Non Profit Or.clanizations." Those standards a'nd OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about Whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federalprogram occurred. An audit includes examining, on a test basis, evidence about the City of Bakersfield, California's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination on the City of Bakersfield's compliance with those requirements. In our opinion, the City' of Bakersfield, California, complied, in all material respects,with the requirements referred to above that are applicable to each of its major federal programs for the year ended ,June 30, 2004. A~[A~B[~R o[ StiC Practice Section of the American Institute o[ Certified Public Accountants Internal Control Over Compliance The management of the City of Bakersfield, California, is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the City of Bakersfield's internal control over compliance with requirements that could have a direct and material effect on a major federal'program in order to determine our auditing procedures for the purpose of expressing Our opinion on compliance and to test and report on internal control over compliance in accordance with OMB Circular A-133. Our consideration of the internal control over compliance would not necessarily disclose all matters in the internal control that might be material weaknesses. A ma{erial weakness is a 'condition in which the design or operation of one or more of the internal control components does not reduce to a relatively Iow level the risk that noncompliance with applicable requirements of laws, regulations, contracts and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. However, we noted no matters involving the internal control over compliance and its operation that we consider to be material weaknesses. Schedule of Expenditures of Federal Awards We have audited the finanCial statements of the City of Bakersfield, California, as of and for the year ended June 30, 2004, and have issued our report thereon dated October 27, 2004. Our audit was performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by OMB Circular A-133 and is not a required part of the financial statements. Such information has been subjected to the auditing procedures applied in the audit of the financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the financial statements taken as a whole. This report is intended for the information of the audit committee, management and federal awarding agencies and pass-through entities. However, this report is a matter of public record and its distribution is not limited. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK & KEETER ACCOUNTANCY CORPORATION Bakersfield, California October 27, 2004 4 CITY OF BAKERS~LD, CALIFORNIA SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30, 2004 Federal Program Accrued Financial Disburse- Accrued CFDA or Award Revenue Assistance Other ments/ Revenue Number Amount Jul)/1,2003 Recognized Revenue Expenditures June 30, 2004 U.S. Department of Housing and Urban Development: Direct Program - Community Development Block Grant · Entitlement 14.218 $ 7,602,072 $ 131,078 $ 4,644,182 $ 2,999,661 $ 5,110,955 $ 865,385 Emergency Shelter Grant 14.231 107,000 102,835 102,835 Home Program 14.239 3,709,031 105,599 296,636 689,101 449,749 49,336 Economic Development Initiative Grant 14.246 856,500 ~820,654 - 820,654 Total Department of Housing and Urban Development ... 12,274,603 236,677 5,864,307 3,688,762 6,484,193 914,721 U.S. Department of Transportation: Passed Through California: Department of Transportation: Surface Transportation Program 20.205 40,816,827 1,258,192 2,789,079 2,789,079 1171094 Transportation Enhancement Act 20.205 2,865 29 29 29 Congestion Mitigation and Air Quality Program 20.205 1,628,038 1,564,620 691,330 691,330 · 56,405 Safe Routes to Schools Program 20.205 182,660 93,482 93,482 96,347 Highway/Bridge Replacement 20.205 58,580 196,629 53,095 53,095 19 Total Department of Transportation 42,686,105 3,022,306 3,627,015 31627,015 269,894 Environmental Protection Agency: Brownfleld Economic Development Initiative Grant 66.818 50,000 51,049 - 51,049 U.S. Department of Justice: Weapons of Mass Destruction Grant 16.006 20,779 20,779 Seized Asset Funds - Federal 16.579 93,920 -. 93,920 Metropolitan Medical Response System _16.610 287,971 287,971 Cops More01 Grant 16.710 447,262 .447,262 Local Law Enforcement Block Grant 16.710 - 201,564 201,564 OCDETF -.Overtime and Authorized Expen. se Program 16.207 2,875 · Total Department of Justice 2,875 1,051,496 1,051,496 Total Grants ' $ 55,010,708 $ 3,261,858 $ 10,593,867 $ 3,688,762 $ 11,213,753 $ 1,184,615 The accompanying notes are an integral part of these financial statements. 5 CITY OF BAKERSFIELD, CALIFORNIA NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS JUNE 30, 2004 NOTE 1 - GENERAL The accompanying Schedule of Federal Financial Assistance presents the activity of all Federal Financial Assistance programs of the City of Bakersfield, California (City). As defined in Note I of the Notes to the City's Financial Statements, those financial statements and the accompanying Schedule of Expenditures of Federal Awards presents the .government and its component units, entities for which the government is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the government's operations and so data'from these units are combined with data of the primary government. Discretely presented component units, on the other hand, are reported in a separate column in the combined financial statements to emphasize that they are legally separate from the Government. Each blended and discretely presented component unit has a June 30 year end. Blended and discretely presented component units are: 1. Discretely Presented Component Unit: The Bakersfield Redevelopment Agency (the Agency) is responsible for the development and financing of projects within (1) the Southeast Bakersfield Project Area, (2) the Old Town Kern-Pioneer Project Area, and (3) the DowntoWn Bakersfield Project Area. The Agency is governed by a board comprised of members appointed by the City Council. The Agency is reported as a Governmental Fund Type. 2. Blended Component Unit: The Bakersfield Public Financing Authority (the Authority) is a joint exercise of powers authority formed on July 7, 1993 by and between the City of Bakersfield, California (the City), and the Bakersfield Redevelopment Agency (the Agency). The Authority was created to assist the City, the Agency and other local public agencies in financing and refinancing, through the issuance of bonds or other instruments of indebtedness, public capital improvements and working capital pursuant to the Marks-Roos Local Bond Pooling Act of 1985. The Authority is authorized to make and enter into Bond Purchase Agreements and to purchase Obligations of any Local Agency. ,, The Authority is governed by a board consisting of the Mayor and the City Council. The Authority is reported as a Governmental Fund Type. Complete financial statements .for each of the individual component units may be obtained at the City's Finance Department. · Federal financial assistance received directly from Federal agencies as well as Federal financial assistance passed through other government agencies are included on the schedule. NOTE 2 - .BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards is presented using the accrual basis of accounting, which is described in Note 1 of the Notes to the. City's Basic Financial Statements. NOTE 3 - OTHER REVENUE Amounts reported as other revenue relate primarily to interest income and reimbursements for the year ended June 30, 2004. NOTE 4 - RELATIONSHIP TO FEDERAL FINANCIAL REPORTR ~unts reported in the accompanying schedule agree with the amounts reported in the related-periodic Federal financial reports. 6 NOTE :)NCILIATION TO GENERAL PURPOSE FINANCIAL STAT NTS The following is a reconciliation of the amounts listed in the Schedule of Financial Assistance to the City's ~eneral purpose financial statements: Federal Grantor/Program Title Department of Housing U.S. * Environmental and Urban Department of Protection Development Transportation Agency U.S. Department of Justice Intermodal Brownfield Weapons c' Metropolitan Community Surface Trans- Economic Mass Medical Local Law Development portation and Development Destruction Seized Response Cops More01 Enforcement Block Grant Efficiency Act initiative Grant Grant Assets System Grant Grant Block Grant Federal Financial Assistance Recognized $ 5,864,307 $ 3,627,015 $ 51,049 $ 20,779 $ 93,920 $ 287,971 $ 447,262 $ 201,564 Other 3,688,762 - Total $ ' 9,553,069 $ 3,627,015 $ 51,049 $ 20,779 $ 93,920 $ 287,971 $ 447,262 $ 201,564 Reimbursable Disbursement/Expenditure $ 6,484,193' $ 3,627,015 $ 51,049 $ 20,7'79 $ 93,920 $ 287,971 $ 447,262 $ 201,564 Total Disbursement/Expenditure $ 6,484,193 .$ 3,627,015 $ 51,049 $ 20,779 $ 93,920 $ 287,971 $ 447,262 - $ 201,564 Accrued Revenue June 30, 2004 $ 914,721 $ 269,894 $ $ $ $ $ . $ Due from Federal Government $ 914,721 $ 269,894 $ $ $ $ $ . $ 7 NOTE CONCILIATION TO'GENERAL PURPOSE FINANCIAL STATEMENTS (Continued) The following is a reconciliation of the variances between Expenditures and Financial Assistance recognized: Federal Grantor/Program Title U.S. Department of Housing U.S. Environmental and Urban Department of Protection Development Transportation Agency U.S. Department of Justice Intermodal Brownfield Weapons of .Metropolitan Community Surface Trans- Economic Mass Medical Local Law Development portation and Development Destruction Seized Response Cops More01 Enforcement Block Grant Efficiency Act Initiative Grant Grant Assets System Grant Grant Block Grant Federal Financial Assistance Recognized $ 5,864,307 $ 3,627,015 $ 51,049 $ 20,779 $ 93,920 $ 287,971 $ 447,262 $ 201,564 Other 3,688,762 Total $ 9,553,069 $ 3,627,015 $ 51,049 $ 20,779 $ 93,920 ..$ 287,971 $ 447,262 $ 201,564 Total Disbursement/Expenditure $ 6,484,193 $ 3,627,015 $ 51,049 $ 20,779 $ 93,920 $ 287,971 $ 447,262 $ 201,564 Variance of Revenues Recognized Over/(Under) Expenditures 3,068,876 . o Surplus of Program Income to Carry Forward (3,068,876) . Total $ . .$ $ $ . $ $ $ $ 8 CITY OF BAKERSFIELD, CALIFORNIA SCHEDULE OF FINDINGS AND QUESTIONED COSTS JUNE 30, 2004 1. Summary of Audit Results 1. The auditor's report expresses an unqualified opinion on the financial statements of the City of Bakersfield, California. 2. No reportable conditions were disclosed during the audit of the financial statements. 3. No instances of non-compliance material to the financial statements of the City of Bakersfield, California were disclosed during the audit. 4. No reportable conditions were disclosed during the audit of the major federal award programs. 5. The auditor's rePort on compliance for the major federal award programs for the City of Bakersfield, California expresses an unqualified oPinion on all major federal programs. 6. The audit discloSed no findings relative to the major federal awards programs. 7. The programs tested as major programs included: (1) U.S. Department of Housing and Urban DevelOpment Community Development Block Grant (CFDA Number 14.218); (2) U.S. Department of Housing and Urban Development Economic Development Initiative Grant (CFDA Number 14.246). 8. The threshold for distinguishing Types A and B programS was $336,413. 9. The City of Bakersfield, California. was determined to be a Iow-risk auditee. 2. Findinqs Relatin.q to Financial Statements Required Under GAGAS. None. 3. Findinqs and Questioned Costs - Maior Federal Award Pro,qrams Audit None. '~ 9 · ~.'~ ' ., "~-~ . ~. ' ': :,.. · '. , ~.~:2:: :':,;.,. ,'. ,.' .~'~..'~:~','~,~? ~ ~ ' - ~ - '' ~', ' ' ' · .-.,%-.,~, .' -:-~.~;: ' '.~:~ ...... ..%,:. -.:, , ~S~ONG~::~,;~- ,- .', . , ,,,~'. '_ ~ ~ m~ -. ..... .. _~,. ...................... .: ~.~.:~. ~.. -. :.~,~ .~-A:...~..~ ~. --. .~ . , Pet~ C. B~, ~A ~o~.~o~A,~ TO ~he Tec~c~l Adviso~ Co~i~ee ~. ~d~A o~ the B~ersfieid Subre~onsl ~e~. ~o~, ~ Management Plan, ~he City o~ Ste~ ~ s~ ~A California, th~ Ke~ Sanitation Authority, ~ K~te~,~A ~d the East NHes Community SedUces ~ have 8ppH~d the procedures enumerated belo~v to dethrone the City o~ ~c~,~A,~ Bske~sfield's eompHanc~ with ce~a~n provisions of con~rsctu81 requirements ~~,~A,~ specified in City o~ Bakersfield A~m~nt 76-1S3, as ~ended by A~reements 76- ~~,~ 1S3(6), 76-1S3(S), 76-1S3(4), 77-44, 8S-~97, ~nd 92-106, re~d~n~ ~h~ ~e~d~c~e~,~A 'Subregional ~stewst~r ~a~emen~ P]~. ~hese procedures, which were ~o by ~e Tec~csl Advisory Committee, ~er~ per~o~d solely to ~ss~st you ~o~~C~A meet~n~ ~he requirements o~ City of B~ersfield A~reemen~ 76-1S3, as 8mended by ~~'~ A~reements 76-1S3(6), 76-~S3(S), 76-1S3(4), 77-44, 8S-197, ~d 92-~06. ~nlon~,~A,~ report is intended for the infomation of the Tec~ical'Advisory Co~i~ee of ~e ~~er,~A B~ersfield Subregional Wastewater M~agement PI~, m~agement, appropriate ,~om,~ regulatory agencies, ~d the City Co~cil of the City of B~ersfield, California. ~hvp,~ This restriction is not intended to limit ~e distribution of this report, which is a ma~er of public record. J~e ~ Au~, ~A Co.eM. Perez,~A We reviewed ~d tested the City of Bakersfield's compli~ce with ce~ain provisions of con,actual requirements as specified in City of B~ersfield Agreement 76-153, as mended by Agreements 76-153(6), 76-153(5), 76-153(4), 77-44, 85-197, ~d 92-106. These procedures resulted in the follo~Sng cu~ent year findings. C~ent Ye~ Finding'- Azreement Number 76-153. Section 12 - Estimation and Pament of Costs The original a~eement states that by March 1 a tentative capital-related and operations ~d maintenance budget must be submiued to the Tec~ical Advisory Commi~ee ~d each User Agency for reviexv ~d approval. H6wever, the budget fdr the ye~ ended June 30, 2005 was not fo~ally reviewed by the Tec~ical AdvisoD' Co~inee ~til M~ch 3, 2004, two days a~er ~e established deadline. Recommendation We recommend compli~ce with ~e budget submission ~d approval dates as specified in Agreement 76-153(4). .,,,. ..... ~-- .~,gIR[R o[ SIC Practice Section of the American Institute of Certified Public Accountants · .'~ ,,~;,=.,=-;:---.~ ~,,, .... ~..~ ~ ..................... ~~ ........... Response In the future, the Technical Advisory Committee will meet each year in February to review the tentative budget. These agreed-upon procedures are substantially less in scope than an audit, the objective of which is the expression of an opinion on the City of Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(6), 76- 153(5), 76-153(4), 77-44, 85-197, and 92-106. Accordingly, we do not express such an opinion. Based on the application of the procedures referred to above, nothing came to our attention that caused us to believe that the City of Bakersfield had not complied with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(6), 76-153(5), 76-153(4), 77-44, 85-197, and 92-106, except as discussed above. Had we performed additional procedures or had we made an audit of the City of Bakersfield's compliance with certain provisions of contractual requirements as specified in City of Bakersfield Agreement 76-153, as amended by Agreements 76-153(6), 76-153(5), 76-153(4), 77-44, 85-197, and 92-106, matters might have come to our attention that would have been reported to you. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK & KEETER ACCOUNTANCY CORPORATION By: An~ Bakersfield, California October 27, 2004 .~ ..~ ~ .- ,~ .~.r..- · ... "" .. ~: ". '¥:'~.'~ ';? ':' ~'-~:~' '~' .... ' ~"" .~' . '~".:. ~,- 8=onH.~n~A,~ To the Honorable Mayor and Members of the City Council ~ ~. ~a~d~, ~ City of Bakersfield, California suv~[S~u~Z We have applied the procedures enumerated below to the accompanying Appropriations m~[~,r,~z Limit Worksheet Six of the City of Bakersfield, California, (the City) for the year ended ~mo~,~z June 30, 2004. These procedures, which were agreed to by the League of California Cities and presented in their A~icle XIIIB Appropriations Limitation uniform Guidelines, were pedormed solely to assist you in meeting the requirements of Section 1.5 of ~icle ~cH.~,~z,~, XIIIB of the California Constitution. This repo~ is intended for the information of management and the City Council. This restriction is not intended to limit the distribution L~[~,~,~ Of this repod, which is a matter of public record. ~[,~daZ. Mc~,~Z The procedures peflormed and our findings were as follows: ~o~o=~ 1. We obtained the City's completed worksheets required to determine that the ~a [ ~., ~ correct annual adjustment factors were adopted by resolution of the City Council. ~.~o.~,~,~ 2. For the accompanying Appropriations Limit Worksheet Six, we added line A, last ~ ~r~mv~r,~ year's limit, to line E, total adjustments, and agreed the resulting amount to line F, Ro~,~z this year's limit. ~bbieA.~pp,~A 3. We agreed the current year information presented in the accompanying ]~.~,~ Appropriations Limit Worksheet Six to the other worksheets described in ~1 above. Co~e M. Pe~, ~A 4. We agreed the prior year appropriations limit presented in the accompanying Appropriations Limit Worksheet Six to the prior year appropriations limit adopted by the City Council during the prior year. These agreed-upon procedures are substantially less in scope than an audit, the objective of which is the expression of an opinion on the accompanying Appropriations Limit Worksheet Six. Accordingly, we do not express such an opinion. Based on the application of the procedures referred to above, nothing came to our attention that caused us to believe that the accompanying Appropriations Limit worksheet six was not computed in accordance with Adicle XIIIB of the California Constitution. Had we pedormed additional procedures or had we made an audit of the accompanying Appropriations Limit worksheet six and the other completed worksheets described in 1. above, matters might have come to our attention that would have been reposed to you. BROWN ARMSTRONG PAULDEN McCOWN STARBUCK & KEETER ACCOUNTANCY CORPO~TION Bakersfield, California y: n October 27, 2004 · ~.~3~R 0[ S{{ Practice Section 0[ the Americen Insfifufe 0f {erfi~ied Public Accountants CITY OF BAKERSFIELD APPROPRIATIONS LIMIT - WORKSHEET SIX FOR THE FISCAL YEAR ENDED JUNE 30, 2004 A. Last year's limit $ 163,438,013 B. Adjustment factors: 1. Population % 103.31% 2. Inflation % 102.31% Total adjustment % 5.69646% C. Annual adjustment 9,310,182 D. Other adjustments BQoking fees 913,787 Property tax administration fees 600,000 E. Total adjustments 10,823,969 F. This years limit $ 174,261,982