AgdaPkt 2021.02.22 Joint SA PFA - Laserfiche WebLink

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6.C. - Page 2 of 196 ANALYSIS On February 8, 2021, the City Council Finance/Audit Sub -Committee met with Grace Zhang of the City's independent audit firm, Maze & Associates, to review the FY 2019-20 CAFR and the results of the City's audit. The Sub -Committee recommends that the City Council accept the City's FY 2019-20 CAFR. General Fund Highlights The General Fund balance increased by $4.5 million from $51.3 million on June 30, 2019 to $55.8 million on June 30, 2020. General Fund revenues increased by $5.4 million this fiscal year due to increases in three categories: sales taxes, use of money and property (investment income), and other revenues (reimbursements and other miscellaneous revenues). All other revenue categories experienced lower revenues in FY 2019-20 than in the prior fiscal year. The increase in sales taxes was solely attributable to the introduction of the half -cent sales tax (Measure RR) that became effective on April 1, 2019. In FY 2019-20 (the first full year of Measure RR revenue), the new tax generated $10.3 million in revenue for the City, compared to $2.4 million in FY 2018-19 (only four months of collections). Use of money and property (investment income) increased by $4.7 million, with a majority of this increase generated by an accounting requirement to record investments at fair value. This increase in fair value is not realized on investments until sold; therefore, it should not be considered income until the City sells the investment and receives the cash. General fund expenditures increased by $19.7 million over the prior fiscal year. The increase primarily resulted from an increase of $9.4 million in the City's contribution to the Section 115 pension trust investment account. The City contributed a total of $11.1 million ($10 million from FY 2018-19 operating balance) to the Section 115 pension trust investment account in FY 2019-20, compared to $1.65 million in FY 2018-19. Another reason for the large increase in general fund expenditures in FY 2019-20 was due to additional payments made directly to the California Public Employee Retirement System (CAPERS) in the amount of $3.8 million ($2.7 million from FY 2018-19 operating balance). These additional payments paid down (or paid off) specific amortization bases calculated by CaIPERS, and will help contain future increases in pension costs. Below is a comparison table of budget vs. actual and prior year vs. current year for General Fund revenues and expenditures, not including transfers in/out. 2019 Actual Revenues $ 159,620,802 Expenditures $ 122,646,404 2020 Actual Change $ 165,041,795 $ 5,420,993 $ 142,378,630 $ 19,732,226 Chani 3.4% 16.1% 2020 2020 Budget Actual Variance % of Budget Revenues $ 154,382,516 $ 165,041,795 $ 10,659,279 106.9% Expenditures $ 153,609,382 $ 142,378,630 $ 11,230,752 92.7% Page 2 of 6 City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore