CITY COUNCIL WORKSHOP AGENDA PACKET

CITY OF PLEASANTON, CALIFORNIA 6 | eidebailly.com METHODOLOGY OVERVIEW AND SCOPE OF SERVICES Effective financial management is one of the most critically important success factors for local governments. There are a number of components to effective financial management that relate to an agency’s budget administration, internal controls, procurement practices, long-term financial planning, debt and investment administration, and other areas. Key among these is long-term financial forecasting, as well as financial planning, to identify solutions to any challenges identified in the forecast. In Eide Bailly’s broader financial condition and organizational assessment engagements, we undertake a comprehensive review of financial management practices and employ a framework of document reviews, staff interviews, and analysis of key financial health indicators based on best practices and the latest standards, information, and trends in government financial management. In this case, the City’s request for proposals was focused on a limited review of the City’s financial forecast and related financial management practices, the completion of which was required within a timeframe of approximately two weeks. To address the scope of services and deliver this report in the time required, we modified our typical process to focus exclusively on the financial forecast and related financial management practices and accelerated the process with additional staff resources to achieve the desired timeline. Scope of Services. The scope of services outlined in the City’s request for proposals was further refined through initial conversations with the City’s Finance Director and City Manager to arrive at the following key tasks: • Examine the revenue and expenditure assumptions employed in the City’s financial forecast. • Assess the adequacy of the financial forecast in terms of complexity, scope, and content. • Request and read related documents to facilitate an understanding of the context and background for the City’s financial forecast (See Appendix A for a list of the requested documents). • Interview key stakeholders, including the City Manager, Finance Director, and financial consultants previously utilized by the City, to gain an understanding of the history associated with the financial forecast and the City’s financial condition. • Conduct a limited sensitivity analysis to assess key elements of the financial forecast at a high level and provide stakeholders with an understanding of the impact of changes in the forecast’s assumptions on projected structural deficits in future years. • Prepare a written report and presentation summarizing our observations and recommendations. Methodology. Eide Bailly deployed resources from our Government Advisory Services team with extensive background experience in the financial management of California cities and employed key elements of our organizational assessment process to focus on the City’s financial forecast. This facilitated our comprehensive assessment in the limited timeframe. In addition to the requirements of the scope of services outlined above, Eide Bailly also broadened our approach to include watching videos of relevant City Council meetings and reading additional staff reports related to the forecast and financial management that have been provided to the City Council. This was done to gain a better understanding of the concerns expressed by the community and the City Council about the financial forecast and to enhance our understanding of the context for this engagement. Given the expedited nature of the timeline, our assessment was necessarily broad, yet thorough. We began our engagement with an examination of the Excel financial forecast model and documents provided by the City, as well as additional documents included in our document request. Our analysis of these documents included both qualitative and quantitative components, tailored specifically to effectively work within the limitation of an expedited timeframe. We then engaged with City staff to gather their perspectives and insights and obtained an understanding of the City’s historical financial trajectory and practices, as well as recent changes and current Page 15 of 33