TO:Andrew P. Powers, City Manager
FROM:Jaime Boscarino, Finance Director
DATE:January 16, 2024
SUBJECT: Financial Reports for Fiscal Year Ended June 30, 2023 RECOMMENDATION:
1. Receive and file financial reports.
2. Find that this action is not a project as defined under section 15378(b)(5) of the California Environmental Quality Act Guidelines.
FINANCIAL IMPACT:
No Additional Funding Requested. The financial impact consists of significant staff time to compile, prepare, and review financial reports, and approximately $61,780 in professional services for the City’s independent external auditors, which are included in the Adopted FY 2023-24 General Fund Budget.
BACKGROUND:
Comprehensive financial reporting is a recommended practice and, in some cases, required by federal and/or state law. The Finance Department, with the assistance of other departments, annually prepares several financial reports covering the past fiscal year, which begins on July 1 and ends on June 30. For Fiscal Year ended June 30, 2023, the reports include:
1. City of Thousand Oaks Annual Comprehensive Financial Report (ACFR) and Transmittal Letter (Attachment #1)
2. Conejo Open Space Conservation Agency (COSCA) Annual Financial Report and Transmittal Letter (Attachment #2)
3. Single Audit Report (Attachment #3)
The City’s external auditors, Rogers, Anderson, Malody and Scott, LLP (RAMS), performed both an interim audit in May 2023 and a final audit in October 2023 on the City’s ACFR and COSCA’s Annual Financial Report. City Council also
Financial Reports for Fiscal Year Ended June 30, 2023
January 16, 2024
received the Management Letter and Audit Committee Letter which are prepared by the City’s external auditors (Attachment #4). Also included is the City’s Appropriations Limit Worksheet (Gann Limit Calculation) (Attachment #5).
DISCUSSION/ANALYSIS:
Financial Reports
Finance Department Accounting staff are responsible for accurately and timely accounting for all financial transactions involved in operating the City in accordance with Governmental Accounting Standards Board (GASB) requirements. This includes, but is not limited to, payroll, accounts payable, accounts receivable, capital assets, investments, and debt. For a city of approximately 123,000 residents and a budget around $270 million, this equates to thousands of transactions annually. In order to make sound financial decisions, accurate and timely reporting of these transactions is necessary. The City’s external auditor offers assurance to the reader that the ACFR is fairly presented and complies with GASB requirements.
On December 20, 2023, the Finance Department delivered the financial reports for the Fiscal Year ended June 30, 2023, to City Council. The ACFR Report is also available on the City’s website at www.toaks.org/departments/finance/financial- information.
Finance/Audit Committee
The American Institute of Certified Public Accountant’s Statement on Auditing Standards 114 requires the auditor to communicate certain significant matters related to the audit to those charged with governance. The Finance/Audit Committee (Committee) met with RAMS on January 16, 2024. RAMS presented the Management and Audit Committee Letters, provided a summary of the results of the audit, and answered questions from the Committee.
Implementation of GASB Statements
Annually, GASB provides accounting guidance for governmental agencies with which the City is required to comply. For FY 2022-23, the City implemented GASB Statement No. 96, Subscription-Based Information Technology Arrangements (SBITAs). This Statement provides guidance on the accounting and financial reporting for SBITAs for government end users (governments).
Financial Reports for Fiscal Year Ended June 30, 2023
January 16, 2024
Summary of FY 2022-23 Financial Results
GASB requires governmental agencies to utilize fund basis accounting.
Governmental funds are accounted for utilizing a modified accrual basis of accounting and enterprise funds are accounted for utilizing a full accrual basis of accounting. Greater explanation of the measurement focus, basis of accounting, and financial statement presentation is included in the ACFR on pages 48-49.
General Fund – The General Fund is the City’s major discretionary fund. In FY 2022-23, total revenues, including other financing sources, were $107.8 million, while total expenditures, including other financing uses, were $92.8 million. This equates to an increase in General Fund fund balance of $15.1 million.
The table below compares FY 2022-23 General Fund revenues and other financing sources with the prior year. For more detailed information, including variance explanations, please refer to pages 14-17 of the ACFR.
Comparison of General Fund Revenues and Other Financing Sources Fiscal Year 2022-23 Fiscal Year 2021-22
Variance Over/(Under) Last Year
1 Sales tax 37,775,337$ 38,071,482$ (296,145)$ -0.8% 35.0% 2 Property tax 15,491,431 14,257,024 1,234,407 8.7% 14.4% 3 Property tax - in lieu of VLF 14,748,603 13,952,024 796,579 5.7% 13.7% 4 Charges for services 8,724,801 7,200,339 1,524,462 21.2% 8.1% 5 Franchise tax 7,521,634 7,235,925 285,709 3.9% 7.0%
6 Licenses & permits 6,145,538 5,204,532 941,006 18.1% 5.7% 7 Transient occupancy tax 5,085,194 4,503,872 581,322 12.9% 4.7% 8 Use of money & property 2,632,964 (11,467,575) 14,100,539 -123.0% 2.4% 9 Business tax 2,230,036 2,221,656 8,380 0.4% 2.1%
10Other financing sources 2,215,291 1,175,333 1,039,958 88.5% 2.1% 11Other revenue 1,693,696 1,420,789 272,907 19.2% 1.5%
12Property transfer tax 1,017,343 1,628,975 (611,632) -37.5% 0.9% 13Fines and forfeitures 1,120,553 961,574 158,979 16.5% 1.0% 14Intergovenmental revenue 817,526 8,129,943 (7,312,417) -89.9% 0.8% 15Other tax 612,334 114,355 497,979 435.5% 0.6%
Total Revenues 107,832,281$ 94,610,248$ 13,222,033$ 14.0% 100.0% % of Total
% of Increase/ (Decrease) Over Prior Year
Financial Reports for Fiscal Year Ended June 30, 2023
January 16, 2024
The table below compares FY 2022-23 General Fund expenditures with the prior year. For more detailed information, including variance explanations, please refer to pages 16-17 of the ACFR.
Comparison of General Fund Expenditures and Other Financing Uses FY 2022-23 FY 2021-22
Variance Increase/ (Decrease) from Prior FY
1Public safety $ 32,476,743 $ 30,202,011 2,274,732$ 7.5% 35.0% 2General government 25,025,519 23,478,232 1,547,287 6.6% 27.0% 3Community development 12,263,983 12,220,981 43,002 0.4% 13.2% 4Transportation 11,925,689 10,099,596 1,826,093 18.1% 12.8% 5Other financing uses 6,820,025 3,695,491 3,124,534 84.5% 7.4% 6Capital outlay 2,340,540 10,082,776 (7,742,236) -76.8% 2.5% 7Culture and leisure 1,915,038 1,706,131 208,907 12.2% 2.1% Total Expenditures 92,767,537$ 91,485,218$ 1,282,319$ 1.4% 100.0% % of Total
% of Increase/ (Decrease) from Prior FY
The City also accounts for other major funds, including the Library Fund, State Gas Tax Fund, Capital Improvements Fund, Thousand Oaks Housing Successor Fund, and non-major governmental funds. Highlights for these funds and explanation of variances can be found on pages 17-18 of the ACFR.
Enterprise Funds – Revenues, expenses, transfers out, and changes in net position for each enterprise fund are summarized below.
Fund Revenues Expenses Transfers Out
Changes in Net
Position
1 Water 24,450,651$ 25,392,026$ -$ (941,375)$ 2 Wastewater 22,248,275 21,974,896 - 273,379
3 Golf course 8,278,791 8,176,477 40,622 61,692
4 Transportation 7,793,044 8,033,047 - (240,003)
5 Theatres 5,383,857 4,832,088 - 551,769
6 Solid Waste 2,755,164 1,582,540 200,000 972,624
Highlights for enterprise funds can be found on pages 12-13, page 18, and pages 39-44 of the ACFR.
These annual reports focus on the financial condition of the City, as of June 30, 2023; however, staff continues to closely monitor the economy and City revenues.
Appropriate and timely updates will be provided as necessary. The City is financially strong with continued proactive and prudent financial leadership.
Financial Reports for Fiscal Year Ended June 30, 2023
January 16, 2024
The City has been recognized by the Government Finance Officers Association for the past 35 years for Excellence in Financial Reporting for preparation of its ACFR. The achievement of this award is a testament to the hard work and dedication of the Accounting staff.
COUNCIL GOAL COMPLIANCE:
Meets the following City Council goal:
C. Operate City government in a fiscally and managerially responsible and prudent manner to ensure that the City of Thousand Oaks remains one of California's most desirable places to live, work, visit, recreate, and raise a family.
PREPARED BY: Elisa Q. Magaña, Accounting Manager
Attachments:
Attachment #1 – ACFR Transmittal Letter
Attachment #2 – COSCA Transmittal Letter
Attachment #3 – Single Audit Transmittal Letter
Attachment #4 – City of Thousand Oaks Auditor’s Management Letter and Auditor’s Committee Letter
Attachment #5 – Appropriations Limit Transmittal Letter FIN:330-50\em\H:\COMMON\Council\2024\Accounting\011624 Financial Reports FY 2022-23 staff report.docx