FISCAL YEAR 2015-16 COMPREHENSIVE ANNUAL FINANCIAL REPORT AND RELATED COMMUNICATION LETTERS FROM THE CITY'S INDEPENDENT AUDITOR

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r MEMORANDUM To: Mayor and City Council Date David Cavazos From: City Manager December 20, 2016 Subject: Fiscal Year 2015-16 Comprehensive Annual Financial Report and related Communication Letters from the Citv's Independent Auditor We are pleased to present the City of Santa Ana's Comprehensive Annual Financial Report (CAFR) for the fiscal year ended June 30, 2016. The CAFR has been audited by the City's Independent Auditor, White Nelson Diehl Evans LLP, and represents the City's financial position at the close of the fiscal year ended June 30, 2016. The positive results disclosed in the CAFR reflect the outstanding leadership and continued support of you, Mayor and City Council, in fostering an environment where both innovation and efficiency along with financial prudence is achieved. Below is summary of financial highlights reflected in the CAFR for the year -ended June 30, 2016: • "Clean" audit opinion (Unmodified) was issued by the City's Independent Auditors. • Total City net position is $755.8 million as of June 30, 2016, which includes $138.2 million of enterprise operations such as Water, Parking, and Sewer Funds. • Cash and Investments increased $9.8 million from the previous fiscal year 2014-15, totaling $309.0 million. • The City continued funding its Public Agencies Post -Employment Benefits Trust Fund (Pension Stability) via contribution of an additional $0.5 million as part of its effort to address pension obligations and future benefit contributions. After the contribution in December 2016 is made the Pension Stability Fund will total $1.0 million. Also included with this correspondence are the following communication letters issued by the City's Independent Auditor: 1) Audit Committee Letter Formal communication from the auditor to the City Council, which discloses information related to the audit, including but not limited to the City's accounting practices and implementation of new accounting rules and estimates. 2) Government Auditing Standards (GAS) Letter Auditor's communication of reportable conditions based on their review of the City's internal controls over financial reporting and on compliance. The results of their review disclosed no instances of noncompliance for the fiscal year 2015-16.