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<br />. 1 'Caponcci & Larson : . .
<br />! Certified PubUc Accounta!1ts
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<br />INDEPENDENT AIIDrrORSJ REPORT...
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<br />, :. TO.tl:le Honorable Mayor and Members ofCityCo~ciI
<br />. . oH:he City of Red.wood City.' . . .. .
<br />::. .::J~edwood City, California. .
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<br />.. ': . We have audited the accompanying financial statements of the governmental"'activities; .the buSiness-type:.
<br />:. . : activities, each major .fund, and :the aggregate remaining fund information of the. City of, Redwood. Oty, .
<br />.' . .California (City), as of and' for the year ended June 3D, 2008, which collectively comprise the 01y's basic
<br />financial statements aslisted..in the table.. of contents. These financial statements:are the responsibility of :
<br />theCity'smallageni.ent Our responsibility-isto.express an opinion on these. financial statements baSed on...
<br />our audit ::, ,,; . . , . .. .
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<br />. We conducted our. audit in accordance with .ge~erariy accepted: auditing stimdards in the United States and
<br />the . standards applicable to financial audits :co~tain~d:.ii1. . Govefn.ment A.uditing Standards, issued by the
<br />. 'Comptroller General of the United States:. Th.ose standards require 'that we plan and: perform. the:audit to
<br />ohtaih reasonable assurance about whether :the financial statements are cfree of mat~ misstatement. An ,
<br />. auditincludes examining, 01'\ a test basiS,: evidence. supporting the amountS and disclosures in the financiat
<br />'statements. An audit aL.,o mclildes assessing the accounting principles used and si~cant estimates made'
<br />:..by management, as well. as evaluatihg the overall basic financial statement presentation., We believe that:
<br />oUr audit;providesa reas9I~ble basis .for om. opinions. :. .. ': ' . . .
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<br />. As .explained in Note..19:to the.:basic,flnaIlck'1lstatements,the:Oty's.investments in the San Mat~ CountY
<br />. Investment. Pool were impaired as a result of tile failure of certain investments held. by the Pool. The
<br />inipairment Qccurredafter .the end.of the fiScafyear and the impact on the::!Oty was approximately:$..
<br />. 1,633,884. ;.. . : '
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<br />: In, . o~ opinio~~' the. ~cial . s'tatements referred to above pr~se~t. fairly) , i~ . :all : material respects,' ~e
<br />respective financialJ:)osition of the governmental acti.vities~ the :busiriess-type actiVitieS, each major fund,
<br />. . . and the a.ggregate remaining fund information of:the City.as of June 30,~2008, and the respective ch~ges in
<br />; .~cia1 position, and.where:applica~le~ :cash floWs thereoffor tl1(~ year th~.. ended in conformitY with
<br />generally accepted accoUI\ting principle~. in the United~tatesi . . . .
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<br />. Subsequent to thebasi~. financial :s~tements : dat~ of J~e.30, 2008 and the year flum. ended, the ,United
<br />.:: :SLates has entered into a Financial :Credit..CrlSis. Although the.United States Federal Govemme1'\t has taken.
<br />. ,actions which, at. least in. part, are .intended to relieve arid correct thiS Financial Credit ~, mvestments.
<br />· are subject tosignificantiinpa.in:i1ent and l~sseS. To' dale,:the City has not beeninformeCt and is not aware
<br />of any investment losses .except for. the San Mateo County mvesto:ient Pool, as .diScUssed iJ:l 'the. third
<br />., pa!agraph~ Accordingly, such investment loss.es, if any, have not b~en re.nected in, the accompanying basic
<br />. financial statements; '. . ..
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<br />loll me Ph: (877) 862.2200 . .
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<br />. ... . . i OllkWld OftlJlp COlm.1:'f
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