HomeMy WebLinkAbout _ 4.1(a)--Adopt Resolutions for Audit Committee and Financial Advisory Committee GI �" Y C� F
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REPORT TO THE CITY COUNCIL
MEETING DATE: February 3, 2026 FROM: Kari Kibler, Interim City
ITEM NO. 4.1(a) Manager/Personnel Director
***APPROVED BY***
kkibler�a�cityofredding.gov
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kkibler@cityofredding.gov
SUBJECT: 4.1(a)--Adopt Resol�utions for Audit Committee and Financial Advisory
Committee
Recommendation
Authorize and approve the following:
(1) Adopt Resolution establishing the City of Redding Audit Committee to provide structured
oversight of internal and external audit activities; and
(2) Adopt Resolution establishing the City of Redding Financial Advisory Committee to provide
community-informed advisory input on budget development, financial priorities, and long-
term sustainability.
Fiscal Impact
There is no direct fiscal impact associated with adoption of the attached resolutions. Committee
members serve without compensation and meetings will be supported by existing staff resources
within the City Manager's Office and Finance Department.
AZteNnative Action
Council could provide alternative direction regarding one or both of the associated resolutions.
Background/Analysis
On December 2, 2025, during item 9.1(e) Council directed staff to prepar� resolutions
formalizing the Audit Committee and ensuring all activities are clearly defined and a new
Financial Advisory Committee established. The goal of the committees was to strengthen the
City's financial governance framework, improving transparency, and enhancing long-term fiscal
planning and accountability.
On January 20, 2026, during item 9.1(c) Council discussed draft resolutions and provided
elari�ying language and feedbaek to staff regarding the committees, structure, eomposition, how
Council and community members are appointed. The attached r�solutions reflect the discussion
Report to Redding City Council January 29,2026
Re: 4.1(a)--Adopt Resolutions forAudit Committee and Financial Advisory Committee Page 2
and changes. Below is an overview of each committee from the prior staff report.
Audit Committee Resolution
The City has maintained an Audit Committee since 2015 as a Brown Act committee; prior to
2015, the committee did not operate under Brown Act requirements. Currently, the Audit
Committee meets annually, at a minimum, to review and discuss the results of the City's annual
external audit. In addition, Council Policy 425 delegates responsibility for internal audits to the
City's Finance Department and requires that the results of those audits be presented to the Audit
Committee.
The proposed Audit Committee resolution formalizes a focused, Council led advisory body
dedicated to audit and accountability functions. It provides a mechanism to initiate and review
internal audits with a dedicated reporting mechanism. Key elements include:
� Clear Authority and Role: The Audit Cormnittee serves in an advisory capacity to the
City Council, providing structured oversight of internal audit activities, external audit
services, and audit findings, without directing staff or assuming operational authority.
• Council Leaders'p with Limited Membership: The Committee is composed of the
Mayor and Vice Mayor as voting members, ensuring direct Council involvement and
accountability. The resolution also allows for the optional inclusion of up to two
nonvoting community members to provide additional expertise and continuity.
• Continuity and Expertise: Staggered appointments and defined qualification criteria for
community members are designed to preserve institutional knowledge and bring relevant
audit, financial, or governance experience to the Committee's work.
• Regular, Transparent Meetings: Publicly noticed and open to public comment,provide
a predictable forum for reviewing internal audit priorities and findings, external audit
findings and performance, external audit contract considerations, and opportunities for
process improvement.
� Alignment with Best Practices: The Audit Committee structure reflects best practices in
municipal governance by separating audit oversight from operational management while
enhancing transparency and accountability
Financial Advisory Committee
The proposed Financial Advisory Committee (FAC) resolution establishes a broader,
community-facing advisory body focused on fiscal policy, budget priorities, and economic
trends. Key elements include:
• Advisory Role to Council: The FAC provides non-binding recommendations and
perspectives to the City Council on budget development, financial priorities, and long-
term sustainability, without decision-making authority or staff direction.
• Balanced Composition: The Committee includes two Council Members appointed
through the Mayor's committee assignment process and five community members
appointed by Council vote. This strueture balances elected-official oversight with diverse
community and industry perspectives.
� Industry-Based Expertise and Community Insight: Community member criteria
emphasizes representation from major employers, local industries, and professions that
understand spending patterns, economic conditions, and the social and emotional pulse of
the community. Restrictions on confliets of interest and Council relationships preserve
independence and credibility.
Report to Redding City Council January 29,2026
Re: 4.1(a)--Adopt Resolutions forAudit Committee and Financial Advisory Committee Page 3
• Term Alignment and Continuity: Four-year staggered terms aligned with Council
1Vlember terms ensure continuity while maintaining accountability and periodic renewal
of inembership.
• Flexible, Budget-Aligned Meeting Cadence: The FAC is designed to meet strategically,
often a limited number of times, to review materials staff intends to present to the
Council, evaluate priorities, and provide feedback during budget development. Meeting
frequency may increase during biennial budget cycles, with the FAC authorized to
recommend cadence adjustments annually.
• Sunset and Evaluation: A two-year sunset review requires the Council to evaluate the
FAC's effectiveness using data and outcomes, ensuring the FAC remains purposeful and
aligned with Council priorities.
Envir�onmental Review
This is not a project defined under the California Environmental Quality Act, and no fiirther
action is required.
Council Priority/City Manager Goals
• Budget and Financial Management — "Achieve balanced and stable 10-year Financial
Plans for all funds."
• Communication and Transparency — "Improve the quality of communication with the
public and City employees to enhance knowledge and increase transparency to improve
public trust."
• Government of the 21st Century — `Be relevant and proactive to the opportunities and
challenges of today's residents and workforce. Anticipate the future to make better
decisions today."
Attachments
^Resolution A�udit Committee
^Resolution Financial Advisory Committee
RESOLUTION NO. 2026-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
ESTABLISI3ING AN AUDIT COMMITTEE
WHEREAS, the City Council desires to strengthen financial oversight, transparency, accountability,
and risk inanagelnent through the establishment of an Audit Committee; and
WHEREAS, an Audit Coinmittee provides a forum to review internal and external audit activities,
recommend improvements, and ensure appropriate follow-up on findings;
NOW, THEREFORE, BE IT RESOLVED by the City Council that an Audit Committee is hereby
established with the following authority, purpose, composition, and operating provisions:
1. Authority
The Audit Committee is established by and derives its authority from the City CounciL The Committee
serves in an advisory capacity to the City Council and has no independent decision-making authority
unless expressly delegated by Council action. The Committee may request information,presentations,
and reports from City management, internal audit staff, and external auditors as necessary to fulfill its
responsibilities.
2. Purpose
The purposes of the Audit Committee are to (1) enhance the integrity, transparency, and effectiveness
of the City's financial reporting, internal controls, and audit processes, (2) provide direction and
guidance regarding internal audit function topic considerations, review findings, and when necessary
review and discuss process improvements, (3)review external audit service contracts,including scope,
vendor selection, performance, and results, (4) facilitate communication among the City Council,
management, internal auditors, and external auditors; and (5) promote best practices in governance,
risk management, and financial accountability.
3. Composition and Membership
The Audit Committee shall consist of two (2)voting members, one alternate voting member, and up to
two (2) non-voting members. The voting members shall be the Mayor and Vice, who shall serve ex
o�cio. The alternate member shall be the mayor pro tempore, who shall also serve ex officio.
In addition to the Mayor and Vice Mayor, up to two (2) advisory, non-voting members may be
appointed to the committee by the Council. Non-voting members will be selected from the public and
provide for continuity and institutional knowledge. The Mayor and Council will,to the extent practical,
appoint members who poss�ss (1) experience or education in accounting, auditing, finance, public
administration, risk management, or a related field, (2) an understanding of governmental or public-
sector financial practices, (3) the ability to analyze complex financial and audit information, and(4) a
commitment to ethical standards, objectivity, and the public interest.
Non-voting members shall serve staggered two (2) year terms. All non-voting members must be
nominated by the Mayor and appointed by vote of the Council, except that in 2026, one (1) of the two
(2) non-voting members shall be nominated by the Vice Mayor to serve a one (1) year term, in order
to allow for proper staggering.
Non-voting members shall comply with applicable ethics laws, conflict-of-interest requirements, and
disclosure obligations and may be required to complete ethics, audit, or governance-related training as
determined by the City. In addition to complying with al1 applicable conflict of interest 1aws,members
shall not have any financial or business relationship with the City that would iinpair independence.
4. Staffing
The City Manager and Director of Finance, or their designees, shall attend Committee meetings and
ensure staff availability to support Committee work to provide information regarding audit results and
financial infonnation. The Committee, however, sha11 not have authority to direct staff, and any
Committee requests that may require the use of City resources shall be referred to the City Council.
5. Reporting
The Audit Committee shall report its observations,recommendations,and activities to the City Council
on a regular basis,or as otherwise requested by the Council,and recommend to City Council acceptance
of Annual Comprehensive Financial Report(ACFR) and external audit results.
I HEREBY CERTIFY that the foregoing resolution was introduced and adopted at a regular meeting of
the City Council of the City of Redding on the 3rd day of February, 2026,by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIlY: COUNCIL MEMBERS:
MIKE LITTAU,Mayor
ATTEST: FORM APPROVED:
SHAIZLENE TIPTON,City Clerk CHRTSTIAN lYI. CURTIS, City Attorney
RESOLUTION NO. 2026-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF REDDING
ESTABLISHING A FINANCIAL ADVISORY COMMITTEE
WHEREAS, The City Council desires to enhance fiscal transparency, community engagement,
and long-term financial sustainability; and
WHEREAS,a Financial Advisory Committee provides informed, community-based perspectives
on economic trends, budget priorities, and financial policy considerations;
NOW, THEREFORE, BE IT RESOLVED by the City Council that a Financial Advisory
Committee is hereby established with the following authority,purpose,composition,and operating
provisions:
1. Authority
The Financial Advisory Committee(FAC)is established by and derives its authority from the City
Council. The FAC serves solely in an advisory capacity and sha11 provide recommendations and
observations to the City Council. The FAC shall have no independent decision-making authority
and sha11 not direct City staff. The City Manager and Finance Director sha11 support the Committee
by providing relevant financial information, analysis, and staff presentations.
2. Purpose
The purpose of the Financial Advisory Committee is to (1) provide advisory input to the City
Council on budget development,�inancial priorities, and long-term fiscal sustainability, (2)review
majar financial assumptions, economic conditions, and community trends that may impact City
revenues and expenditures, (3) offer community-informed perspectives on spending priorities in
relation to adopted Council goals and community needs, (4) review staff-prepared materials
intended for City Council consideration and provide non-binding feedback, and (5) strengthen
transparency and public trust in the City's financial decision-making process.
3. Composition and Membership
The Financial Advisory Committee shall consist of seven (7) members, and all decisions shall be
made by a vote of a majority of the filled positions. Two (2) members of the Committee shall be
members of the Redding City Council, who shall be nominated by the 1Vlayor and appointed by
vote of the Council. To provide for continuity,the Council Members on the Committee shall serve
staggered two (2)year terms. The remaining five (5)members shall be appointed members of the
public appointed by the Couneil. Following an open public application proeess, each Council
Member shall suggest one person to the committee, and all appointments shall be made by vote of
the full Council.
To the extent practicable, members of the committee shall reflect a broad cross-section of the local
economy and community perspective. In selecting members of the committee, the Council shall
endeavor to prioritize candidates in roles providing insight into purchasing behavior, spending
trends, and the social and economic pulse of the community, such as major employers or key local
industries, such as healthcare, retail, hospitality, construction, insurance, or financial services.
Candidates should also be considered for their fmancial background and expertise, such as CPAs,
CFOs, CEOs, or senior financial professionals.
Community members appointed to the committee must comply with applicable ethics laws,
conflict-of-interest requirements, and disclosure obligations and shall not have any financial or
business relationship with the City that would impair independence. All members must be able to
evaluate financial matters objectively and in the public interest.
Community members on the Committee shall serve four (4) year terms, staggered to align with
Council Member terms for continuity and institutional knowledge. Terms of each appointed
member will end one year after the end of the term of each Council Member. Nothing sha11
prohibit a community from being reappointed following expiration of their terms, if approved by
Council.
Should either of the two (2) Council Members appointed to the Committee vacate the office of
City Council Member, they shall immediately and automatically vacate their seat on the
Committee. Community Members on the Committee shall serve at the pleasure of the Council
and may be removed by a vote thereof.
4. Staffing
The City Manager and Director of Finance, or their designees, shall attend Committee meetings
and ensure staff availability to support Committee work to provide information regarding audit
results and financial information. The Committee,however,shall not have authority to direct staff,
and any Committee requests that may require the use of City resources shall be referred to the City
Council.
5. Meeting Schedule
The Financial Advisory Committee shall adopt a regular meeting schedule sufficient to meet the
purposes and functions for which it is formed. Meetings may include review of materials and
presentations staff intends to bring forward to the City Council. The Committee shall review
budget priorities, community conditions, and adopted Council goals to inform advisory
recommendations regarding the budget. 1Vleeting sch�dule should account for increased frequency
during biennial budget development years, ineluding additional meetings aligned with the budget
preparation process. A11 meetings shall be publicly noticed, open to the public, and include an
opportunity�or public comment in accordanee with applieable open meeting laws.
6. Sunset Clause
The need for, structure, and functions of the Financial Advisory Coinmittee shall be reviewed by
the City Council after two (2) years of operation. The review shall consider data, outcomes, and
overall effectiveness in meeting the Committee's purpose. Following review, the City Council
may continue, modify, or dissolve the Committee by Council action.
I HEREBY CERTIFY that the foregoing resolution was introduced and adopted at a regular meeting
of the City Council of the City of Redding on the 3rd day of February, 2026,by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAIN: COUNCIL MEMBERS:
MIKE LITTAU,Mayor
ATTEST: FORM APPROVED:
SHARLENE TIPTON,City Clerk CHRISTIAN M. CURTIS,City Attorney