- Governmental Structure
- City Profile
- Facts & Figures
- City Government
- City Elections
- City Services
- City Statistics
- Budget Development
- Development Process
- Definition & Purpose
- Principles, Goals & Objectives
- Control, Adoption & Responsibility
- Budget Highlights
- Revenue Sources
- City Departments
- Finance & Other Information
- Cash Management
- Risk Management
- Independent Audit
The City of Millbrae (the “City”) was founded in 1856, incorporated in 1948 and operates as a General Law City serving a population of over 20,000. The City is located on the California Peninsula, 15 miles south of San Francisco. The boundaries of the City extend roughly from the Bayshore Freeway on the east to Skyline Boulevard on the west. This distance is approximately 1.7 miles. The distance between the north and south City limit line is approximately 2.05 miles.
Adjacent to the San Francisco International Airport and located in the heart of San Mateo County, Millbrae is gently cradled in the sun-warmed hills that separate the Pacific Ocean from the San Francisco Bay. Major freeways border both its eastern and western boundaries, making Millbrae easily accessible from all parts of the Bay Area. Many hillside homes enjoy beautiful bay views. Well-cared for middle-class neighborhoods, fourteen local parks and the Green Hills Country Club add to the charm of the residential community.
Millbrae's economic community is a vital mix of retail, shopping, restaurants, service businesses, hotels and public services. With the Bay Area Rapid Transit (BART) / San Francisco (SFO) Extension, the City has adopted the Millbrae Station Area Specific Plan in order to attract hotel, office, retail and housing development to the area around the Millbrae BART station. The Millbrae BART Station provides the only Intermodal rail connection west of the Mississippi, the first regional rail system in the Bay Area. This unique station, which is connected to and is adjacent to the San Francisco International Airport, allows BART, CalTrain and SamTrans to connect under one roof, thereby maximizing regional travel options for passengers in the Bay Area.
The City acknowledges the importance of and continually strives towards preserving, enhancing, and managing open spaces, trees, and wetlands. The City continues to implement sustainable programs that will improve the health of the community and environment, and will ensure future generations may live healthy, productive, and comfortable lives.
Facts and Figures
- San Mateo County Seat Established: 1856
- Incorporated: January 14, 1948
- Land Area: 3.2 Square Miles
- Elevation High Point: 800 Feet
- Elevation Low Point: 25 Feet
- Average Temperature High: 71º September
- Average Temperature Low: 42º January
- Population: 21,714
- Population Density: 6,473 per square mile
- Number of Households: 8,372-Units (2010 Census)
Millbrae operates as a General Law City, provides for a Council-City Manager form of government, which clearly distinguishes the legislative powers of the City Council from the Administrative powers of the City Manager.
The City Council, composed of five members, are the only officials elected directly by the residents of Millbrae. The Council members serve a four-year term, and annually choose a mayor, and vice mayor from among their members. As the legislative branch of the government, the City Council makes final decisions on all major City matters.
The City Council adopts ordinances and resolutions necessary for efficient governmental operations, approves the budget, and acts as a board of appeals. The City Manager, City Attorney and members of the City’s boards and commissions are appointed by the City Council. The City Manager administers the daily affairs of the City, carries out City Council policies, and appoints and dismisses all Department Heads.
General Municipal Elections are held on the first Tuesday after the first Monday in November of odd-numbered years.
The City provides a full range of services including Police, and Fire protection; the construction and maintenance of highways, streets, and other infrastructure; Community Development planning and inspections; and Redevelopment. In addition, the City also manages recreational activities and cultural events; and provides water, and sewer utility services.
- Building: Activity each month has seen a decline over prior years due to the current economic climate. Permits issued and inspections are steady but also reflect the current economic climate.
- Parks: Maintains 8,500 trees and 14 parks totaling 104 acres, including open space areas.
- Planning: Commission review of applications for new development has seen a slight decrease over prior years. The requests range from new homes and home additions to commercial development and large mixed-use projects.
- Public Safety: Fire responds to approximately 2,567 emergency calls per year and conducts 327 fire inspections. Police responds to approximately 19,554 calls for service, and issues approximately 10,420 traffic and parking violations.
- Public Works: Responsibilities include the Wastewater Treatment Plant, maintenance of 110 lane miles of streets, 70 miles of water distribution pipes serving approximately 6,459 customers, 56 miles of sewer lines, 21 miles of storm drains, and 3 miles of open creeks and ditches.
- Recreation: Serves registrants that include preschool, elementary, teen, adult, and seniors. Program areas include contract classes; elementary and adult sports; summer youth and teen programs; senior classes, trips, and tours; special events, and facility rentals.
Normally every two years, the City Council would approve a Bi-Annual Budget that would that would serve as a work plan as well as a financial plan. Due to the current economic climate and continued downturn, the City Council has requested only an Annual Budget presentation.
The Annual Budgets are developed utilizing the City Council's goals and objectives of promoting public health and safety; fostering economic prosperity; ensuring the physical, cultural, and social well-being of the City; and maintaining and operating the City's public facilities and infrastructure, in order to serve and support the public and private sectors within the city.
Definition and Purpose of a Budget
The Budget process is the formal method through which the City establishes its goals, program priorities, and identifies the resources required to achieve the desired service levels for the upcoming fiscal period. Essentially, it is a process through which policy is made, programs are articulated, and resources are identified in order to put them into effect.
One of the widely accepted definitions of a Budget is utilized by the Municipal Finance Officers Association on Governmental Accounting states:
"A Budget is a plan of financial operation embodying an estimate of proposed expenditures for a given period and the proposed means of financing them."
The Biannual Budget is one of the most important management tools available to City policymakers and management personnel. It serves as the City's fiscal plan and identifies how services will be financed. The Biannual Budget also provides the City Council with an opportunity to review the costs and benefits of various programs.
From a practical point of view, the Biannual Budget process is intended to:
- Provide the City Council with information regarding the City's total fiscal plan for all Funds;
- Allow the City Council to comprehensively review the City's public services and identify what has been and will be accomplished by each program;
- Comparatively evaluate different programs and objectives in relationship to one another and in relation to associated costs;
- Provide an opportunity to reconsider and reevaluate services provided;
- Provide a link between the City and the community. The City develops the budget utilizing citizen input regarding the types of public services that will be offered and services that should continue to be provided;
- Serve as an instrument for carrying out public policy, legally, honestly, and efficiently. In this regard, the budget provides the legal basis for revenue, expenditures; allows for a systematic reevaluation of internal operations from the perspective of efficiency, effectiveness, and economy; and provides the framework for accounting and fiscal accountability.
The adopted Biannual Budget provides a clear and precise document of the services that will be provided, along with identifiable program measures, and a comprehensive outline of related personnel, supplies, and capital outlay expenditures.
Budget Principles, Goals and Objectives
The following principles, goals and objectives are the underlying foundation for Budget Development:
- The Budget must be balanced; overall estimated revenues equal appropriations;
- Wherever possible, the Budget should be balanced with ongoing and known revenue sources equaling ongoing and reasonably expected expenditures;
- Onetime money should not be used for ongoing operations;
- Service levels should be maintained at the highest level, within funding constraints;
- Reduce expenditures and maximize revenues through organizational consolidation of functions and/or streamlining City operations;
- Prudent Contingencies and Reserves should be maintained to guard against future uncertainties (10% and 15% of overall City appropriations respectively);
- Accuracy and accountability should be used in estimating and monitoring both revenues and expenditures throughout the fiscal year.
Budget Control, Adoption and Responsibility
The City maintains extensive budgetary controls. The objective of these controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund, Special Revenue Funds, Debt Service Funds and Capital Projects are included in the annual appropriated budget. The level of budgetary control (i.e., the level at which expenditures cannot legally exceed the appropriated amount) is at the Fund and Department level. The City also maintains an encumbrance accounting system as one method of maintaining budgetary control. Encumbered amounts lapse at year-end, however, outstanding encumbrances generally are re-appropriated, with City Council approval, as part of the following year's budget.
It is the primary responsibility of each Department Director to maintain their departmental expenditure levels within the approved budget, and to collect the full amount of revenues that have been estimated/budgeted.
Total Budgeted Revenue and Expenditures By Fund for Fiscal Year 2011-2012
| General Fund
Budget / Projected Revenues
Budget / Projected Expenditures
|All Other Funds
Budget / Projected Revenues
Budget / Projected Expenditures
| Total All Funds Combined
Budget / Projected Revenues
Budget / Projected Expenditures
Property Tax is the City’s largest source of revenue in the General Fund. Property tax is imposed on the assessed value of real property (land and permanently attached improvements) and tangible personal property (movable property) as of January 1 annually.
Property Tax Distribution
San Mateo County distributes property tax proceeds to a number of local governments, school districts, and special districts within the County. The distribution is based on Assembly Bill (AB) 8 (Chapter 282, Statutes of 1979), which provides for the distribution of the proceeds generated by the 1% property tax. AB 8 allocates property tax in proportion to the share of property taxes received by a local entity prior to Proposition 13. In FY 1992/93, the State began imposing property tax shifts on local governments (discussed below).
Proposition 13, passed by voters in 1979, limits the real property tax rate to one percent of assessed value, plus any rates imposed to fund indebtedness approved by the voters. Proposition 13 also allows increases to the value of real property at the rate of the Consumer Price Index, not to exceed two percent per year based on the 1979 value, unless the property is improved or sold at which time the property is reassessed at market value. Since the property tax is guaranteed by placing a lien on the real property, properties are classified as secured or unsecured:
- Secured Property includes real and personal property located upon the property of the same owner. Secured roll property taxes are paid in two installments, due on December 10 and April 10.
- Unsecured Property is property for which the value of the lien is not sufficient to assure payment of the tax. Unsecured roll taxes are due on August 31.
For every $100.00 paid in General Property Tax to the County of San Mateo, the City of Millbrae receives $15.80.
Education Revenue Augmentation Fund (ERAF)
In FY 1992/93, the State took action to reduce its obligation for school funding, as mandated by Proposition 98, by shifting local property tax revenues to school districts via the Education Revenue Augmentation Fund (ERAF I). This was followed by two subsequent shifts in property taxes in 1993/94 (ERAF II) and FY 2004/05 (ERAF III). FY 2005/06 represented the second and last year of ERAF III where the Cities were obligated to shift funds to the State as part of the State’s budget solution in FY 2004/05.
The “triple-flip” was created to balance the FY 2004/05 State Budget. It was devised to reduce the State Budget’s General Fund (and thus its constitutional commitment to schools via Proposition 98), maintain local governments’ revenue base, and commit sales tax revenues to the Economic Recovery bonds that eliminated a large portion of the State operating deficit. The two components affecting City revenues:
- Swapping equal amounts of sales tax revenues for property tax revenues, and
- Swapping equal amounts of Vehicle License Fee (VLF) backfill revenues for property taxes revenues.
On a positive note, the passage of Proposition 1A in November 2004 provided protection, albeit limited, via a “revenue-fence” against future raids on local government property tax dollars.
Other Taxes include Sales Tax, Property Transfer Tax, Property Tax-“Triple Flip”, Parking Tax and Measure A.
Sales Tax is collected at the point of sale, and forwarded to the State Board of Equalization. Sales tax revenue is influenced by a variety of factors; the number of retail outlets in the City; business-to-business sales in the City; disposable income among area residents; consumer confidence; and the local rate of inflation. .The City receives sales tax revenue based on a monthly estimate with quarterly adjustments for actual receipts.
For every taxable $100.00 purchase made within Millbrae, the City receives $0.75 of the $8.25 paid in total sales tax.
Property Transfer Tax
Property Transfer Tax is imposed on real estate sold over $100 in value, and the tax is levied at the rate of 55 cents per $500 or fraction of $500 of value. That equates to $1.10 for every thousand dollars of value. This tax is shared with San Mateo County.
Property Tax “Triple Flip”
The Vehicle License Fee (VLF) for each vehicle is calculated at a percentage of the vehicle’s market value, as adjusted for depreciation. These fees are paid annually to the State Department of Motor Vehicles at registration and renewal. The fee is imposed by the State “in lieu” of local property taxes on the vehicle. The FY 2004-05 State budget included the second leg of the “triple flip” by swapping VLF for property tax. The State eliminated $4.1 billion in VLF backfill and took the VLF rate from 2% to 0.65%. Cities instead receive an equivalent amount of property taxes.
Transient Occupancy Tax (TOT) is imposed on the daily rental price of a room in a lodging facility when used by visitors staying in the City of Millbrae for less than 30 days. The tax is collected and remitted by hotel operators. The TOT for the City is 12% of gross room receipts and is allocated directly to General Fund functions.
Private utility companies pay franchise fees to the City of Millbrae in exchange for the use of the City’s rights-of-way. Franchise fees are set through Franchise Agreements negotiated between the City and individual utility companies. The City of Millbrae currently has a franchise agreements with Pacific Gas & Electric, Comcast Cable Company and receives franchise fees from South San Francisco Scavenger Company.
Nearly every city in California levies a Business License Tax (BLT) for the privilege of operating a business within their city. In the City of Millbrae, the BLT is charged annually, and is applied either to gross receipts or payroll, depending on the type of business.
Permits, Engineer & Planning Fees
This category reflects the fees that are paid by developers to offset costs of providing construction inspection and plan review services.
Fines / Forfeitures
The California Vehicle and Penal Codes impose fines and penalties for traffic violations and vehicular parking.
Use of Money and Property
The City earns interest income by investing funds not immediately required for disbursements. The City’s goal is to achieve a market average rate of return throughout budgetary and economic cycles while maintaining the required liquidity to meet cash flow needs, and protecting the safety of those funds. The City’s investment portfolio is managed within the parameters stated in the City’s Investment Policy. Interest income is distributed to all funds based on their proportionate cash balances.
Public Safety Services
Revenue in this category reflects reimbursement for joint Fire Training, Police POST training, alarm monitoring, and other services administered by both the Police and Fire Departments.
Federal, State, and County
Funds are received from Federal, State and County Agencies, and are generally for a specific purpose and may require some percentage of matching funds.
Other Financing Sources
Each year revenues are contributed between funds to offset staffing, equipment, and capital improvement projects. For example, the Recreation Fund receives revenue that is contributed from the General Fund to offset the cost of Recreation programs and personnel.
Water and Sanitation Service
Enterprise Funds are used to account for self-supporting activities that provide services on a user-charge basis. For example, the City provides water treatment, water distribution, sewer collection, and solid waste services to their residents. Users of these services pay utility fees, which the City deposits into an enterprise fund.
Personnel Costs include salaries and benefits. Salaries are costs associated with compensation paid to employees of the City. These costs include any cost-of-living adjustments (as provided under memoranda of understanding (MOU) between the City and employee bargaining units), overtime, part-time, and pay differentials. Benefits are costs associated with the provision of employee benefits, such as the City’s contributions for retirement, group insurance, and uniform allowance.
This category reflects services performed by outside contractors, consulting firms; or individuals and includes legal and audit services, utilities such as telephone, electric, natural gas and infrastructure and equipment maintenance.
Supply costs include material used in the operations of City departments, typically having a unit cost of less than $5,000 and are consumed during the course of the fiscal year. Such items include fuel, parts and tires, small tools, and office supplies.
Other Operating Expenditures
This category reflects Debt Service payments for principal and interest due during the fiscal year on debt issued by the City of Millbrae, and lease purchase agreements for equipment.
Capital includes expenditures which result in acquisitions of or addition to fixed assets—including furniture, vehicles, machinery and equipment—and the costs necessary to place the capital outlay item into service. A capital outlay expenditure must comprise the following elements: an estimated useful life of one year or more; a unit cost of more than $5,000; and represent a betterment or improvement.
ERAF & Property Tax Pass Through
This category reflects property tax increments passed through to San Mateo County, San Mateo High School District, San Mateo Community College, San Mateo County Office of Education, and Millbrae Elementary School District per tax sharing agreements with the Redevelopment Agency.
Each year revenues are contributed to funds to offset staffing, equipment, and CIP projects. Such transactions are considered to be a transfer out in the fund contributing the revenue. This item also includes indirect cost charges that are charged to various funds for General Fund operations.
- To provide effective governance and administration so that the needs of residents, businesses and visitors for municipal services are well met.
- City Council: The City Council is the five-member, elected legislative body of the City. It is responsible for providing municipal services that will sustain a high quality of life for residents.
- City Attorney: Provides legal advice on policy and administrative matters pending before the City. In addition, the Attorney prosecutes violations of municipal laws.
- Administration: Responsible to the City Council for oversight of all City departments (Finance, Police, Fire, Recreation, Community Development & Parks, and Public Works). Provides policy making advice and assistance to the City Council; maintains central records.
- City Clerk: Responsible to keep the public informed regarding City business and ensure opportunities for public participation; to create and preserve permanent, accessible record of the City's legislative and business history, conduct municipal elections, and ensure that the legal reporting requirements for the City's elected and appointed officials are met. Effectively manage the City's cable television franchise agreements and activities, including the City's operations and grant agreements with Millbrae Community Television (MCTV) in order to ensure public access to cable and public television programming.
- Human Resources: Improve City services through the selection of the best-qualified employees available, enhancement of skill levels of employees through training and development, and retention of talented employees through administration of an equitable and competitive compensation system. Improve the services of the City by negotiating employee labor contracts, managing these contracts through equitable and prudent daily administration of labor contracts which includes responses to employee complaints and grievances, and provide advice to the City Manager and the City Council for modification of labor practices.
- To maintain the City’s high standard of financial excellence by providing Citizens, City Council, City Manager, and City Departments with quality and sound financial management, and professional, effective, responsive and courteous customer service. We accomplish this through the implementation of industry best practices that have been proven successful. We approach our work with confidence, competence, dedication and commitment.
- Financial Management: Prudently manages the City and Redevelopment Agency’s assets, provides comprehensive financial system management, support, and issues reports per Generally Accepted Accounting Principals (GAAP) and the Governmental Accounting Standards Board (GASB) in a timely manner.
- Utility Billing: Provides customer service support to residents and businesses within the City of Millbrae and assists the Public Works Department in managing shutoffs, meter readings, and provides information to manage the Water and Sanitation Enterprise Funds.
- Treasury: Prudent management of all short-term and medium-term investments for all City funds while maintaining the highest safety, liquidity, and yield in accordance with the City’s investment policy and State laws.
- Information Technology: Responsible for maintaining computing hardware, software, security, and technologies.
- Risk Management: Manage and ensure there is adequate insurance coverage and provide risk reduction training and services for all municipal activities.
- The mission of the Community Development Department is to ensure the safe, aesthetically pleasing, economically viable, and environmentally sustainable development of the community through the preparation of sound long-range plans, the enforcement of codes and standards. and the thoughtful review of and responsive granting of land use entitlements and development permits. This unit is also tasked with enhancing the physical, cultural, and social well-being of the community by providing programs and services.
- Planning: The mission of the Planning Division is to promote the physical, social, and cultural well being of the City of Millbrae by developing sound land use plans and policies for the City; to provide timely service to the public in the processing of applications for land use entitlements; To evaluate proposed uses of property for consistency with laws and regulations; to evaluate the effect of projects on the environment; to facilitate public participation in the policy formulation and development process; and to implement state requirements for local plans and ordinances.
- Building: The mission of the Building Division is to ensure the physical, social and cultural well-being of the City through the safe construction, use and habitability of all buildings and to ensure conformance with City and State Building Codes through timely processing of permits, plan reviews and inspections.
- Code Enforcement Division: The mission of the Code Enforcement Division is to maintain the health, safety and prosperity of the community by enforcing the codes of the City of Millbrae in a fair, effective, and consistent manner in accordance with the Code Enforcement Policies and Procedures and the Community Preservation Ordinance.
- Redevelopment Division: The mission of the Redevelopment Division is to enhance the physical well-being of the community in accordance with the State's Community Redevelopment Act and the Project Area Plan. This will be accomplished by the funding of programs in the areas indicated below.
- To enhance the quality of life for all residents regardless of age, interest or ability level, by promoting active and passive leisure experiences, wellness and fitness programs, enrichment classes, and special events to facilitate life long learning, sustain one’s positive sense of well being and strengthen cultural awareness through services that unify the community.
The Recreation Department is responsible for the development, implementation and evaluation of all recreation activities and human service programs.
- Recreation Programs: There are ten program areas: preschool, elementary sports, Taylor sports, summer youth, summer teen, special events, teens, contract classes, adult sports and facility rentals. Each of these areas includes fee based programs, with both revenue and expenditure accounts.
- Senior Citizen Programs: Program and services include: senior contract classes, senior trips and tours, senior transportation, senior special events and senior social services.
- The mission of the Parks Division is to maintain and continuously improve the City's parks, athletic fields, public grounds, and open spaces and make these open space assets fully accessable, useable, and enjoyable to the citizens of Millbrae.
- Public Grounds: The Division provides maintenance for and improvement of the City's trees, medians, hedges, creek beds, trails, and landscaping at public facilities.
- Parks and Athletic Fields: The Division provides maintenance for and improvement of the City's thirteen parks, including Central Park, and the Spur Trail. These services include inspection and maintenance of playground equipment, development and installation of new play equipment, maintenance and improvment of turf, drainage, irrigation, outdoor furniture, tennis courts, restrooms, and plant materials. The Division provides maintenance for and improvment of the City's athletic fields under an agreement with the Millbrae School District.
- Weed Abatement: The Division implements a citywide weed abatement program through judicious spraying of chemicals by licensed operators, flail mowing, and hand weed control
- Forest Management: The Division provides advice to citizens regarding trees and enforces the City's Tree Ordinance issuing tree timming and removal permits as appropriate to sustain and improve the urban forest.
- Commercial Zones: The Division keeps the commercial areas of the City, especially the Downtown, clean and litter free, working with the Police and Code Enforcement to remove graffiti as soon as it is identified.
- The Millbrae Police Department provides law enforcement services to promote safety, protect life and property, and ensure a high quality-of-life to the community. The Millbrae Police Department incorporates professional, community-oriented, and responsive service and programs to address community needs.
- Operations Division: The Operations Division is responsible for providing front line law enforcement services to the community including directed patrol, criminal investigations, and traffic and parking enforcement. This division operates based on a community policing philosophy and provides the highest quality of services possible.
- Support Services Division: The Support Services Division is responsible for communications and record keeping, technology, training, youth services (School Resource Officer), and the volunteer program.
- The Millbrae Fire Department maintains the public health and safety by protecting the lives, property, and possessions of all persons in the community. The department performs a continuous analysis of hazards throughout the City in an effort to maintain a prosperous and sustainable community.
- Operations: The Operation Division responsible for emergency response though the use of properly trained personnel and effective use of equipment. This includes the Fire and Emergency Response, Emergency Medical Services (EMS), and Facilities and Equipment programs. These services are provided to the community 24 hours a day, 365 days a year.
- Prevention: Fire Prevention is responsible for enforcing current national, state, and municipal codes as they pertain to fire protection and safety. Programs included are Fire Prevention, Public Education, and Emergency Preparedness.
PUBLIC WORKS DEPARTMENT
- Protect public health, safety, and environment. Plan, design, construct, operate and maintain the City’s infrastructure. Protect the environment maintaining strict compliance with National Pollutant Discharge Elimination System (NPDES) permits for waste water and storm water. Provide utility services, street sweeping, pavement management, and street lighting as well as environmental conservation. Provide and maintain City’s automotive, rolling stock and backup generators. Provide engineering and inspection services for private and public development. Provide traffic-engineering services and manage the City’s Traffic Congestion Management, Transportation Demand Management, Congestion Relief, and Transportation Systems Management Programs. Interact with outside agencies such as the California Department of Transportation (CalTrans), Metropolitan Transportation Commission (MTC), and City/County Association of Governments (C/CAG). Maintain City's buildings and facilities. Manage City's Ten Year Capital Improvement Programs infrastructure plans.
- Engineering: Provides overall department policy, direction and services, including engineering, water conservation, integrated waste management, management of enterprise funds, vehicle garage fund, Measure A, gas tax funds, and internal fund management, Congestion Management and Relief Program, Transportation Demand and Transportation Systems Management, and capital improvement and sustainability planning and programs.
- Utilities and Operations: Provides infrastructure maintenance, repair and operation of the City’s streets, street hardscape, streetlights, and street sweeping, water distribution and storage, sanitary sewer collection, storm drains, City's vehicle fleet except for Police vehicles, and public buildings and facilities.
- Water Pollution Control Plant: Operates and maintains the City's wastewater treatment plant, manages pre-treatment and monitoring programs, and manages the stormwater illicit discharge program.
Management of the City is responsible for establishing and maintaining an internal control structure designed to ensure the assets of the City are protected from loss, theft or misuse and to ensure that adequate accounting data is compiled to allow for the preparation of financial statements in conformity with Generally Accepted Accounting Principles (GAAP). The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.
As a recipient of Federal, State and local financial assistance, the City is responsible for ensuring an adequate internal control structure is in place and document compliance with applicable laws and regulations related to these programs. This internal control structure is subject to periodic evaluation by management and the internal audit staff of the government.
Cash Management Policies and Practices
During the year, temporarily idle cash is invested in the Local Agency Investment Fund (LAIF), the San Mateo County Investment Pool, or Certificates of Deposits.
The City’s investment policy is to minimize credit and market risks while maintaining a competitive yield on its portfolio. Accordingly, the majority of deposits are either insured by Federal Depository Insurance or collateralized. Nearly all investments held by the City at June 30, 2009, are classified in the category of lowest custodial credit risk as defined by the Government Accounting Standards Board (GASB).
The basic objectives of Millbrae’s investment program are, in order of priority:
- Liquidity, and
The Investment Policy is reviewed annually to ensure consistency with respect to the overall objectives of safety, liquidity and yield, and relevance to current laws and financial trends. Proposed amendments to the Policy are prepared by the Finance Department and reviewed and approved by the City Treasurer, City Manager and the City Council.
The City participates in Association of Bay Area Governments (ABAG) Plan Corporation, a nonprofit benefit corporation established to provide liability insurance coverage, claims and risk management, and legal defense to its participating members. The ABAG Plan provides $10 million of general liability coverage per occurrence and is responsible for paying claims in excess of the City’s $100,000 deductible. The City has also purchased excess coverage insurance for worker’s compensation claims from CSAC EIA with a $300,000 deductible. In addition, various risk control techniques, including annual safety audits and employee accident prevention training, have been implemented to minimize losses.
State statutes require an annual audit by independent certified public accountants. The firm of Maze and Associates was awarded the auditing contract by the City Council. In addition to meeting the requirements set forth in state statutes, the audit was also designed to meet the requirements of the Federal Single Audit Act Amendments of 1996 and the related U.S. Office of Management and Budget's Circular A-133. Generally accepted auditing standards and the standards set forth in the General Accounting Office's Government Auditing Standards were used by the auditors in conducting the engagement. The auditor's report on the basic financial statements and supplemental information is included in the financial section of Comprehensive Annual Financial Reports (CAFR) available on the website.
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Millbrae for its Comprehensive Annual Financial Report (CAFR) for 17 consecutive years. The Certificate of Achievement, is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government financial reports. In order to be award a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized CAFR whose contents conform to program standards. The CAFR must satisfy both generally accepted accounting principles and applicable legal requirements.