CITY COUNCIL WORKSHOP AGENDA PACKET

Page 1 of 6 Item #2 CITY COUNCIL AGENDA REPORT February 20, 2025 City Manager TITLE: ACCEPT THE REPORT ON INDEPENDENT FINANCIAL ASSESSMENT COMMISSIONED BY THE CITY COUNCIL SUMMARY At a February 20, 2025 workshop, staff will present the results of the independent financial assessment commissioned by the City Council. A representative from Eide Bailly, the firm selected to conduct the assessment, will discuss details of the assessment findings and recommendations. The independent assessment report concluded the City’s financial forecast employs an appropriate and standard methodology common in California local governments. The report also noted the City’s existing short-term property tax and sales tax forecasts are prepared by the most widely recognized consultants providing these services in California and, absent any additional information not previously considered by the consultants, Eide Bailly did not observe any reason to deviate from its recommendations relative to property tax and sales tax growth rates. Eide Bailly recommends incorporating the infrastructure funding plan and any other funding plans into the forecast as those are completed, to build a comprehensive financial forecast for the City. Eide Bailly notes that the additional work to be completed in the near-term will only further illustrate that the City’s resources are constrained and that its long- term funding needs are significant. RECOMMENDATION Accept the report on independent financial assessment commissioned by the City Council. BACKGROUND At its January 9, 2025 meeting, the City Council directed staff to engage a consultant to assess the City’s financial health and evaluate the financial forecast assumptions. The City issues a Request for Proposals (RFP) for an independent financial condition assessment and review of the City’s forecast model assumptions. The RFP was sent directly to nine highly qualified firms and published on the City’s website so other interested firms could submit. The City received proposals from five qualified firms, which were reviewed and ranked based on understanding the City’s needs, experience providing similar services for comparable cities, resources available, references from similar engagements, and fees. Based on these criteria, the selected firm was Eide Bailly, a full-service CPA firm providing traditional CPA firm services of attest (audits, reviews, compilations) and tax, as well as management advisory services for private sector and government clients. Eide Bailly is ranked as one of the nation's top 20 accounting and advisory services firms, serving over 1,200 government clients nationwide, including numerous cities in California. The Eide Bailly team that led the assessment was comprised of five members, including CPAs, former finance directors, and finance and accounting professionals with extensive experience serving California cities. Page 3 of 33