AgdaPkt 2011-08-22 - Laserfiche WebLink

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6.1. G. - Page 39 FINDINGS Findinq #8 Confusion as to how governments categorized and interpreted what portion of fund balance was available for discretionary spending led to development of a new GASB 54 standard, effective for all financial statements after June 30, 2011, which provides more structure and clarity around constraints placed on fund balances. San Mateo County implemented GASB 54 early, with the new terminology reflected in its FY 2010 CAFR. No cities in San Mateo County implemented early. Response The City agrees with this finding in acknowledging that the new GASB 54 standard is in effect for all financial statements beginning after June 15, 2010. As a first step towards implementation of GASB 54 the City Council recently adopted at its June 27, 2011 Council Meeting the classification of certain amounts as "committed" pursuant to the new reporting requirements of GASB 54, along with delegating authority to the City Manager to "assign" amounts to be used for specific purposes. The City will be implementing GASB 54 with the issuance of the 2010-11 Comprehensive Annual Financial Report (CAFR). Findinq #11 Ten participating cities are not making their full actuarially determined OPEB payments for retiree health care benefits, with three cities (Atherton, Brisbane, Foster City) having paid at /ess than an average of 25 percent for the last two years. Response The City disagrees with this finding as the City began fully funding its actuarially required contribution (ARC) in fiscal year 2009-10 with its payment of the full amount to the California Employer's Retiree Benefits Trust (CERBT). The City continues to make and budget for the full ARC payment in the most recently completed fiscal year 2010-11 and budget year 2011-12. RECOMMENDATIONS Recommendation A.1. The City Council, by July 1, 2012 should either revise the existing or implement a new policy for specific levels of reserves using language consistent with the new GASB Statement 54 hierarchy. a. Establish in the policy the required level of General Fund Balance for classifications that are spendable within the complete control of the government's local decision making authority.