CAFRMEETING DATE: 2/21/2012
ITEM NO: 40
TOWN COUNCIL /TOWN COUNCIL AS SUCCESSOR AGENCY
AGENDA REPORT
DATE: FEBRUARY 9, 2012
TO: MAYOR AND TOWN COUNCIL ✓�.�
FROM: GREG LARSON, TOWN MANAGER —v
SUBJECT: ACCEPT FY 2010/11 COMPREHENSIVE ANNUAL FINANCIAL REPORT
(CAFR)
RECOMMENDATION
Accept the FY 2010/11 Comprehensive Annual Financial Report (CAFR).
BACKGROUND
The attached FY 2010/11 CAFR presents the Town of Los Gatos and Town of Los Gatos
Redevelopment Agency's financial, operational, and current economic conditions for the fiscal
year ending June 30, 2011. The CAFR received an unqualified opinion from C.G. Uhlenberg
LLP, the Town's external auditors. An unqualified opinion indicates the financial data of the
Town is fairly presented according to general accounting principles. New auditing standards
require that any "significant deficiency" or "material' weaknesses" discovered in the audit be
communicated in writing to management. A material weakness is a significant deficiency which
could lead to a material misstatement of the financial statements. The auditor's report found the
Town's internal control structure to have no reportable material weaknesses.
DISCUSSION
C.G. Uhlenberg LLP, the Town's auditors, conducted an audit in accordance with Generally
Accepted Auditing Standards (GAAS) and the standards for financial audits contained in the
Government Audit Standards (1994 Revision), issued by the Comptroller General of the United
States. These standards require that they plan and perform the audits to obtain reasonable
assurance as to whether the financial statements are free of material misstatement.
The CAFR reported that the Town's assets exceeded liabilities by approximately $116 million.
Of the $116 million, $72.6 million are al infrastructure assets, or non -cash assets. The
PREPARED BY : STEPHEN`'' O
Finance and Ad rativ vices Director
SDC:jm
NMINANMCOUNCIMouncil Staff Reports \CAFR \CAFR Accept 2010 -1 l.doex
Reviewed by Assistant Town Manager Town Attorney Finance
PAGE
MAYOR AND TOWN COUNCIL
SUBJECT: ACCEPT THE FY 2010/11 COMPREHENSIVE ANNUAL FINANCIAL
REPORT (CAFR)
February 9, 2012
remaining $43.7 million reflects a comprehensive accounting of working capital and restricted
funds, which ensure responsible fiscal management, and funds designated for specific purposes.
The $43.7 million is classified into 3 reserve categories: Non - Spendable, Restricted, and
Assigned. Non - spendable reserves represent amounts that are not available in spendable form,
such as accounts receivable. Restricted funds represent a mix of restricted reserves that have
been legally appropriated for a specific use. Assigned funds are those that have been dedicated
for specific purposes via Council policy. Examples of assigned reserves include capital and
special projects, land acquisition, and revenue stabilization to preserve basic services to the
community while making incremental organizational adjustments to align services with revenues
over time.
CONCLUSION
As noted in the auditor's opinion, the CAFR fairly presents the fiscal year ending June 30, 2011
financial activity for the Town of Los Gatos and Redevelopment Agency.
ENVIRONMENTAL ASSESSMENT
The recommended action is not a project defined under CEQA, and no further action is required.
Attachments:
Town of Los Gatos & Redevelopment Agency California Comprehensive Annual Financial
Report for the Fiscal Year Ended June 30, 2011