Memorandum
City of Lawrence
Finance Department
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TO: |
Mayor and Lawrence City Commissioners |
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CC: |
Bryan Kidney, Director of Finance |
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FROM: |
Laura Warner, Accountant |
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DATE: |
June 7, 2016 |
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RE: |
Presentation of the City’s 2015 Comprehensive Annual Financial Report (CAFR)
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Background-What is a CAFR
The Comprehensive Annual Financial Report (CAFR) comprises the City of Lawrence’s financial statements and reports the financial activities and related balances at the end of the fiscal year. The CAFR includes:
1. The Introductory Section that includes a transmittal letter from the Finance Department as well as basic background information about the City as a whole.
2. The Financial Section with the Independent Auditor’s Report, Management’s Discussion and Analysis (MDA) and audited financial statements.
3. The Statistical and Financial Trend Section.
4. The Single Audit Section that includes the auditor’s review of information relating to federal financial assistance.
The CAFR complies with the accounting requirements set forth by the Governmental Accounting Standards Board.
Why the CAFR is Important
The CAFR is an integral part in communicating to our stakeholders the financial picture of the City of Lawrence. These stakeholders (bond holders, bond rating services, the city governing body, etc.) can use the CAFR to observe past trends and as an aid in future decision making. In addition, the CAFR provides the citizens of Lawrence important information about the financial position of the city in which they live. Overall, the CAFR aids in the mission of the city to provide excellent city services and to enhance the quality of life for the Lawrence community. It presents a picture of the growing and thriving community that is Lawrence.
Financials & Management’s Discussion and Analysis (MDA)
The financial statements were audited by Mize Houser & Company P.A. who returned an unqualified opinion (good opinion) that the financial statements are accurate and represent the respective financial position of the City’s governmental activities.
The financials section of the CAFR includes various financial statements and corresponding notes as well as the Management’s Discussion and Analysis (MDA) section. For 2015, you may have noticed there is a large restatement of beginning fund balance. Per the discussion in the MDA, starting in 2015 the City is required to recognize its long-term obligation for pension benefits as liabilities on the balance sheet. In addition, you may also notice all major enterprise funds had an increase in net position in 2015. This is outlined on page 8 of the MDA. In general, the MDA provides a better understanding of city management’s representation of the financial status of the City.
Statistical/Financial Trends
To aid in future decision making and long term planning, the statistical section includes tables and charts presenting various financial, economic, social and demographic data about the City of Lawrence over the last ten years. You may notice Lawrence has seen a steady increase in sales tax revenue as well as a steady decrease in the unemployment rate. Consequently the ability for the City to use sales tax to fund capital improvement projects is high. In addition, the ability to issue long term debt is important for the City to maintain existing infrastructure. For the past ten years the City has been well within established debt guidelines with outstanding general obligation debt comprising less than 45% of the mandated threshold. This demonstrates fiscal prudence as well as a significant community investment.
The City has received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for the past 23 years. This achievement is given to governmental entities in recognition of reports that evidence the spirit of transparency and full disclosure. We are confident that the CAFR presented to you will also receive the GFOA award.
Printed copies will be available at the meeting.
Action
No action required. Consideration of acceptance will be on the 6/14 consent agenda.