HomeMy WebLinkAbout10.19.2016 SP Minutes @6:30 MINUTES
,stx so, SPECIAL MEETING
MEASURE W CITIZENS'
N �_fiT►�y
OVERSIGHT COMMITTEE
izzio tro OF THE
CITY OF SOUTH SAN FRANCISCO
P.O. Box 711 (City Hall, 400 Grand Avenue)
South San Francisco, California 94083
Meeting to be held at:
CITY HALL CONFERENCE ROOM
400 GRAND AVENUE
SOUTH SAN FRANCISCO, CA
WEDNESDAY, OCTOBER 19, 2016
6:30 p.m.
1. Call to Order. Time: 6:31 p.m.
2. Roll Call. PRESENT: Committee Members Alcalde,
Tzang and Wong, Interim Vice
Chairman Zemke and Interim
Chairman Brosnan.
ABSENT: None.
3. Public Comments—comments are limited to items on the Special Meeting
Agenda.
None.
MATTERS FOR CONSIDERATION
4. Report providing Measure W financial overview and transmitting results for
Fiscal
Year 2015-16. (Richard Lee, Finance Director)
Finance Director Lee presented the staff report, which was provided for informational purposes. He
first relayed background on Measure W. He advised the Committee that Measure W was a half-cent
transactions and use tax that was approved by South San Francisco voters in November
2015. The tax was projected to bring in $7 million annually, and was implemented by the Board of
Equalization on April 1, 2016.
Measure W was passed as a general tax. Accordingly, the funds may be used for any valid
governmental purpose. Through outreach, including community meetings and numerous surveys,
South San Francisco residents identified the following priorities for use of Measure W general funds
inconsistent with the language in Measure W:
• Maintaining public safety and essential services;
• Improving emergency response times, neighborhood patrols, crime prevention
programs, gang suppression programs;
• Providing programs for seniors and disabled residents; and
• Maintaining streets and fixing potholes, including at least$18 million in street
maintenance and pothole repair.
During the last quarter of Fiscal Year(FY) 2015-16, the City received $1.49 million in transactions
and use tax revenue, which reflects advances from the State Board of Equalization for the period of
April through June of 2016. The majority of the $212,000 in expenditure transactions was related
to site analysis,planning, outreach and engineering services related to the Community Civic Campus
project. The net surplus for Measure W in FY 2015-16 was $1.28 million.
Annually, projections for Measure W funds breakdown as follows:
• $7.0M revenues;
• $5.5M appropriations (expenditures):
$3.0M Annual road project;
$1.5M Civic campus project management;
$0.9M Design/site analysis; and
$0.1 M Financial advisor.
5. Report providing Overview of Measure W Citizens' Oversight Committee
Bylaws
and scope. (Lindsay D'Andrea, Assistant City Attorney)
Assistant City Attorney D'Andrea provided background on the Committee's Scope and Bylaws. She
identified the Committee's primary function as periodically reporting to the City Council on the
collection and expenditure of Measure W revenues. In order to perform this function, the Committee
would engage in the following actions:
• Meetings with the auditor to outline issues of particular interest to the Committee and
to be briefed on the auditor's plan/schedule;
• Review of the annual audit and preparation of a written report to the City Council
regarding the auditor's findings regarding Measure W revenues and expenditures; and
• Service in an advisory role to the City Council.
She advised the Committee would have no role in contracting, project management or other aspects
related to the use of Measure W revenue.
Committee Member Alcalde queried the applicability of the Form 700 to the Committee if its
Members had no role in expenditures or contracting.
Attorney D'Andrea responded that the Committee's material role in the evaluation of the public audit
process, including expenditures, warranted applicability of the Form 700.
Committee Member Wong sought confirmation that contracts over a certain dollar threshold would
SPECIAL MEASURE W COC MEETING OCTOBER 19,2016
MINUTES PAGE 2
not come to the Committee for approval.
Attorney D'Andrea confirmed the Committee would have no role in contract or project approvals.
6. Report presenting Independent Auditor's Plan for the Audit Scope and Schedule.
(Presenter Katherine Yuen, Maze and Associates)
Auditor Katherine Yuen of Maze and Associates addressed the Committee. She described the
auditor's responsibility under the United States Generally Accepted Auditing Standards. She stated
the auditors are to express an opinion about whether the financial statements prepared by
management are fairly presented in all material respects, and in conformity with the United States
Generally Accepted Accounting Principles. Further, the auditors are to obtain reasonable, but not
absolute, assurance that the financial statements are free of material misstatement. The audit does not
relieve management or the Committee of its responsibilities. While the auditors will consider the
City's internal controls during the audit process, such considerations are solely for the purpose of
determining audit procedures and not to provide any assurances concerning the internal controls.
Auditor Yuen continued that the auditor is responsible for communicating significant matters related
to the audit that are relevant to the Committee's responsibilities in overseeing the financial reporting
process. However, the auditor is not required to design procedures specifically to identify such
matters.
Regarding materiality, she advised that accounting standards define materiality as the magnitude of an
omission or misstatement of accounting information that, in the light of surrounding circumstances,
makes it probable that the judgment of a reasonable person relying on the information would have
been changed or influenced by the omission or misstatement. In planning and performing the audit,
the auditors apply professional judgment to determine a level of materiality.
Auditor Yuen next advised that the City Council approved the contract in 2016. The contract
incorporated audit approach and timing. The audit scope includes the following subject to adaptation
from a risk assessment process:
• Performance of risk assessment brainstorming and planning;
• Creation of an audit plan tailored to the City and sector;
• Transactions cycles subject to control testing and sampling;
• Transactions cycles testing;
• Transactions and balances tested in total; and
• Evaluation of an overall duty assignment, including information system controls tests
and performance of compliance tests.
Auditor Yuen closed by providing the following audit schedule: Interim fieldwork took place in May
2016 with the final fieldwork being performed in October 2016. The report would be finalized in
December 2016
7. Report regarding bylaw requirement pertaining to Measure W Citizens' Oversight
Committee Members' outline of issues of particular interest at the initiation of the
annual financial audit process. (Richard Lee, Finance Director)
Pursuant to the Bylaws, Committee Members were invited to provide feedback to the auditors on
SPECIAL MEASURE W COC MEETING OCTOBER 19,2016
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issues of particular interest.
Committee Member Wong queried the timeline for the Committee's report to Council.
Director Lee advised that it was his understanding based on the language in the Bylaws that the
Comprehensive Annual Financial Report would be presented to the Committee before being
presented to Council as complete.
Interim Chairman Brosnan sought confirmation that the Committee would be reviewing revenue and
expenditure transactions that had already occurred. In other words, it would not be involved on the
front-end approving any of these processes.
Director Lee so confirmed.
In response to questions from Interim Chairman Brosnan, Director Lee clarified that reporting on
Measure W revenue includes adjustments for actual receipts against true-ups as issued by the State
Board of Equalization. For example, while the projection was that Measure W would raise $7
Million during the current Fiscal Year, actuals would likely be closer to $7.2 Million.
Committee Member Alcalde queried the frequency of reports from the State Board of Equalization.
Director Lee advised the State issues reports on a quarterly basis. Accordingly, the monthly advances
received from the State are estimates subject to true-up at quarter close.
Committee Member Alcalde queried whether the City collected sales tax from vendors such as
Amazon.
Director Lee advised Amazon's sales tax is paid into a countywide pool. The City is allocated 10.1%
of the total county pool. Year-over-year Amazon has experienced 10% growth in taxable sales.
8. Discussion and establishment of regular meeting schedule.
After discussion, the Committee agreed to hold a Special Meeting on December 7, 2016 at 6:30 p.m.
in the Council Chambers at the Municipal Services Building (MSB), subject to its availability on that
date. If the MSB was not available on December 7th, the Committee agreed to hold the meeting at
City Hall. It further determined to consider the following proposed Regular Meeting Schedule at the
December 7th special meeting: Regular Meetings to be held the first Wednesday of every other month
beginning in February 2017 with the meeting to begin at 6:30 p.m. and to be held in the Council
Chambers at the MSB.
Interim Chairman Brosnan requested that the City Clerk confirm with staff and the Facilities Division
that this proposed Regular Meeting Schedule, including the time and location, could be
accommodated.
The City Clerk agreed to seek and confirm the requested information.
SPECIAL MEASURE W COC MEETING OCTOBER 19,2016
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ADJOURNMENT
Being no further business, Interim Chairman Brosnan adjourned the meeting at 7:07 p.m.
likk ubmitted b Approved b
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Krista ' a City la Michael Brosnan, Interim Chairman
City of So San Fran o City of South San Francisco
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