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ATTACHMENT <br />6.1.D. - Page 6 <br />In FY 1999-00, the Council adopted a Finance Committee recommendation to maintain <br />an amount of 20% of estimated revenues. Applying this formula (using FY 2016-17 <br />budgeted revenues) results in an amount of $2.589 million over the $22.645 million <br />threshold. <br />Capital Outlay Fund, Special Revenue Funds, Debt Service Fund, and Capital Project <br />Funds are also included in the CAFR and are highlighted in the MD&A section. <br />Self -Insurance Fund Highlights <br />The self-insurance internal service fund had net cash used by operating activities of <br />$1.4 million as premiums charged to operating departments were not sufficient to cover <br />the increased activity in the self-insurance fund. To offset the beginning deficit balance, <br />pay a litigation settlement, and to maintain funding at a confidence level of 80%, the <br />general fund transferred $4.0 million to the self-insurance fund in FY 2015-16. Despite <br />this transfer, the self-insurance fund ended up with negative equity of $771 thousand as <br />of June 30, 2016. <br />New Accounting Standard <br />Governmental Accounting Standards Board Statement 72 (GASB 72) — Fair Value <br />Measurement and Application was implemented in the FY 2015-16 CAFR. The <br />implementation of GASB 72 resulted in a fair value measurement table being added to <br />the CAFR, in Note 2, page 50. <br />ALTERNATIVES <br />Council could elect not to accept the financial report which would result in additional <br />costs associated with additional field work required to be completed by Badawi & <br />Associates. The additional field work is required to comply with auditing guidelines <br />which require that financial reports be published soon after field work is completed. <br />FISCAL IMPACT <br />The costs associated with not accepting the financial report will range from $2,000 to <br />$3,000 for additional auditing services depending on how much additional field work is <br />required. These amounts are currently not budgeted; a budget amendment would be <br />required. <br />ENVIRONMENTAL REVIEW <br />This activity is not a project under CEQA as defined in CEQA Guidelines, section <br />15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />Starla Jerome -Robinson <br />Acting ACM/Administrative Services <br />Page 4 of 6 <br />