Mary Rister, Finance Manager

Angela Doyle, Accountant ll

Kim Sarkovich, ACM/CFO

Rocklin Ordinance No. 465 requires an annual audit of all City financial transactions by an independent auditor and the submission of an audit report to the City Council. The California Constitution Article 13B Section 1.5 requires a review of the annual appropriations limit (Gann) as part of an annual financial audit.  In an effort to maintain full disclosure, it is the practice of the Finance Department to provide to the City Council the audit report (Comprehensive Annual Financial Report -CAFR) as well as the auditor review of the Gann Appropriations Limit Schedule.

The audit was performed by Chavan & Associates LLP, and is the fifth year of audit services under a five-year contract.  The following are City financial highlights for the fiscal year ending June 30, 2019, reported in the CAFR document.

Highlights:

• Chavan & Associates, LLP has issued an unqualified (“clean”) auditor’s opinion. There were no reported material weaknesses or significant deficiencies.
• Chavan & Associates, LLP has reviewed the (GANN) appropriations limit for the fiscal year ended June 30, 2018, per established procedures, and no exceptions were noted.
• Total Assets increased by $8.610 million from $417.994 million in 17/18 to $426.604 in 18/19. This increase is primarily due to $15.007 million in proceeds received from the issuance of special tax bonds by Community Facilities District No. 10 (CFD No. 10) for the purpose of financing public facilities infrastructure.   

• The Government-Wide Net Position may serve over time as an indicator of the City’s financial position. The City’s Total Net Position increased $13.568 million, from $334.673 million in 17/18 to $348.241 million in fiscal year 18/19. This increase is mainly a result of the CFD No. 10 bond proceeds received.

• The City’s Government-Wide General Revenues increased by approximately 8.14% from $54.881 million in 17/18 to $59.350 million in 18/19 due to an overall increase in revenues, most notably from property taxes and sales taxes collected as a result of increased residential and commercial development activity.  

• The City’s Government-wide expenses increased by approximately 4.47% from $75.777 million in the prior year to $79.162 million, This increase was due to a number of factors including the other post employment benefits (OPEB) expense and public safety compensation, which included filling prior year vacant positions.

• The City issued special tax bonds through CFD No. 10 resulting in $15.005 million in proceeds for financing of public infrastructure in the Whitney Ranch area.

• The City acting as the Successor Agency issued 2018 Tax Refunding Bonds totaling $21.283 million to refund the former Redevelopment Agency Bonds.

• The City continues towards its goal of fully funding the City’s Other Post-Employment Benefit (OPEB) obligation by making contributions during the fiscal year to the California Employers’ Retiree Benefit Trust (CERBT). The CERBT is a tax-qualified irrevocable trust established to prefund retiree health benefits. During the fiscal year, the City contributed $4.343 million.

Also, attached to this staff report are the Management Letter and the Communication with those charged with Governance Letter from the auditors, identified as Attachment A and B.