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Home My WebLink About _ 9.1(g)--Update regarding the Financial Advisory Committee and Audit Committee GI �" Y C� F � � �- ' � ° � � i � CITY OF REDDING �� REPORT TO THE CITY COUNCIL MEETING DATE: June 16,2026 FROM: William S Tarbox, City ITEM NO. 9.1(g} Manager ***APPROVED BY*** wtarbox@cityofredding.gov r� z:� �� ,� � �� ~� �� .� .�� -� w �,fi ww,. �r�1ra1�� ar�itix,,C"x��anag€;r f,f9t�t2�}2f� wtarbox@cityofredding.gov SUBJECT: 9.1(g)--Update to provide information regarding the City of Redding Financial Advisory Committee and Cit of Redding Audit Committee. Recommendation Receive an informational report regarding the implementation, next steps, and proposed meeting schedules for the City of Redding (City) Financial Advisory Committee and the City's A�udit Committee, each established on February 3, 2026, by adoption of City Council Resolution Nos. 2026-009 and 2026-010. Fiscal Impact The proposed meeting cadence can be accommodated within existing departmental budgets and staffing resources. Costs associated with meeting administration, agenda preparation, and public noticing are expected to be minimal and absorbed within existing appropriations. Alterna�ive Action Council could provide alternative direction to staff regarding the proposed meeting cadence for either committee. Background/Analysis The City Council previous]y approved Resolution Nos. 2026-009 and 2026-010 on February 3, 2026, establishing both a Financial Advisory Committee and an Audit Committee to enhance transparency, fiscal oversight, and public engagement in the City of Redding's (City) financial operations. The Finaneial Advisory Committee was established to provide a forum for review and diseussion of significant fiscal matters, including long-term financial planning, budget development, reserves, revenues, expenditures, and other issues affeeting the City's fiscal sustainability. Report to Redding City Council June 10,2026 Re: 9.1(g)--Update regarding the Financial Advisory Committee and Audit Committee Page 2 The Audit Committee was established to provide oversight and review of the City's external audit process, Annual Comprehensive Financial Report (ACFR), and internal audit activities and recommendations. This report provides an overview of the committees' composition, authority, and proposed meeting cadence for Fiscal Year 2026-27. Financial Advisory Committee As established by Council Resolution No. 2026-010, the Financial Advisory Committee is composed of: • Two members of the City Council; and • Five public members appointed by the City Council. All members of the committee possess voting rights. The committee serves in an advisory capacity only. It does not possess independent legislative or budgetary authority, and a11 recommendations are forwarded to the full City Council for consideration and action. The adopted Resolution No. 2026-010 did not specifically discuss the General Fund but much of the discussion in founding the committee centered on the City's General Fund. Consistent with that intent, the General Fund will remain a focus of the committee's discussion. However, staff recommends acknowledging that major enterprise fund matters, such as utility rate adjustments, capital financing decisions, debt issuances, major operational changes, or other enterprise-related fiscal issues with substantial Citywide impact, may also be brought before the committee for discussion and informational review when appropriate. Proposed Meetin�Schedule Month �Meeting Type Late July 2026 Kickoff Meeting August 2026 Scheduled Meeting November 2026 Scheduled Meeting January 2027 Tentative Budget Development Meeting February 2027 �Scheduled Meeting March 2027 �Tentative Budget Development Meeting April 2027 �Tentative Budget Development Meeting May 2027 Scheduled Meeting Audit Committee As established by Council Resolution No. 2026-009, the Audit Committee is composed of: • Two members of the City Council; and • Two public members appointed by the City Council—no voting rights. The committee serves in an advisory and oversight capacity. It does not direct staff or auditors independently, and any recommendations are provided to the full City Council for consideration. Report to Redding City Council June 10,2026 Re: 9.1(g)--Update regarding the Financial Advisory Committee and Audit Committee Page 3 The committee's primary responsibilities include review of: • The City's Annual Comprehensive Financial Report; • External audit results and auditor communications; • Internal audit findings and recommendations; and • Financial reporting, internal controls, and audit-related best practices Proposed Meetin�Schedule Staff proposes the Audit Committee operate with two standing meetings per fiscal year. 1. August 2026—Kickoff/ Overview Meeting o Introduction of committee members and responsibilities; o Overview of the City's audit environment and financial reporting timeline; o Status update on ongoing and planned policy and procedures updates; and o Preview of upcoming Annual Comprehensive Financial Report and external audit activities. 2. January 2027—External A�udit & Annual Comprehensive Financial Report o Presentation of completed external audit; o Annual Comprehensive Financial Report discussion and financial results overview; and o Update on any Policy and Procedure updates as necessary. EnviNonmental Review This is not a project defined under the California Environmental Quality Act and no further action is required. Council Pr�iority/City Manager Goals • Budget and Financial Management—"Achieve balance 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." Attachments Reso. 2026-009 - Establishing an Audit Committee Reso. 2026-010 - Establishing a Financial Advisory Committee R�SOLUTIQN IYO. 2026-009 A RESQLUTICIN ()F THE CITY�C1UN+CIL OF THE CITY OF REDDING ESTABLISHING AN AUIDIT COMNii'I'TEE WHEREAS, the City Council desires to strengthen financial oversight, transparency, accountability, and risk management through the establishrnent of an�udit Committee; and WHEREAS, an Audit Cornmittee provides a forum to review internal and external audit activities; recommend itnprov��ure appropriate follovv-up �n findings; j 1 i y,w , , i•;s t NQW, THE�� , SE IT ��YED by the City Council that an Audit Cc�mmittee is hereby established��ie folldvving authort��,��rpose, composition, and operating pravisions: , ., , � , ; 1. :r��rity j t 5 1 1 � i � The Auc��mmittee is established b�at��derives its authority from the City Council. The Committee ser�es in��,�dvisory capacity to the City Council and has no independent decisiQn-making authority uriless ex��delegated by Councii action. The Camrnittee may request inforrnation, presentations, and reports ��m��ent, lnte��'��taff, and external auditors as necessary ta fulfill its responsibilities � ' ��' ' t , }} ' � s , } ', r �3 t t �. pUl'�IOS� ' >� �' t: The purposes af the Audit Cor��ee are to (1) enh, �the integrity, transparency, and effectiveness of the City's financial report�r�� ternal contr��'��d audi �'��cesses, (2) provide dir�ction and uidanc� re ardin internal aud1�� , '� �'� g g g ' ��an to�a.��derat��w findings, and when necessary review and dis�uss p�t�cess��rnprov��w e j '�'��' � '��contracts,includir�g scape, vendor selection, performance, and res��;'�4) facil��`��mmunica�� among the City Council; man�gernent, internal auditors, and external aud�t �;��'�� (5) promote ��practices in governance, risk management, and financial accountability. ; �� 3 3. C'ampositian and Membership � �; �t � _ � � � � � �� The Audit Cornrnittee shall consist of twa ��voting mer'��'��>>��"ternate vc��inember, and up to two (2) non-vt�ting mernbers. The voting rnerr�bers shall be the Mayor and ��'; who sha11 serve ex af�cio: The alternate member sha�l be the mayc�r pro tempore, who shall al��ve ex of�� °.,, , , , � � t t tiY ,.u�. .. In addition to the Mayor and Vice Mayar, up to two (2) advisory, r��c�� ,.��iers may be appointed to the committee by the CounciL Non-voting me��rs wi111��j�rom the public and pro�ide for continuity and institutional knowledge. The Ma�� ;��r '�i�l,to the extent practical, appflint rnembers who possess (l) experience ox edu�ation 'i� �"��,�iiting, auditing, finance, public administration, risk management; or a related fi�ld, (2) an understanding of gavernmental or public- sectar financial practices, (3) the ability ta analyze complex financial and audit informatic�t�, and (4} a commitment to ethical standards, objectivity, and the public interest. Non-voting members sha�� serve staggered two (2} year terms. All non-v�ting rnernbers must be nominated by the Mayor and appointed by vote of the Council, except that in 2{726, one {1)of the twc� (2) non-voting members shall be naminated by the Vice Mayor to serve a one (1) year term, in order to allow for proper staggering. Non-voting mernbers shall comply with applicable ethics laws, conflict-of-interest requirements, and disclosure obligations and may be required to compl�te ethics, audit, or gavernance-related training as determined by the City. In addition to complying with all applicable conflict ofinterest laws,rnernbers shall not have any financial ar business relationship with the �ity that would impair independence. 4, Staffng � The City Mana��f�� ,��ance, or their designees, shall attend Committee meetings and ; ensure staff��i�y to supp�rt��`��ittee wc►rk to provide information regarding audit results and �nancial 1r��"��ion. The Commlf��iowever, shall not have authority to direct staff, and any Committ��ests that may require t��,��e of City resources shall be referred to the Cit�Council. , t}� � i 5. ��rtin� � ; � ,� � , The Auc��}��mrnittee shall report its observations,recommendations,and activities to the City Gouncil on a regu��rs,or as otherwise requested by the Council,and recommend to City Council acceptance of Annual +��l��a�nsiv��'��ncial Re��'R)and externai audit results. a`¢' 3 S S } S jyl ,,,,„, ,+ �} t I HEREBY+CERTIFI'that the��ing resolutlon��,}ultroduc�d and adopted at a regular meeting of the Ciry Council ofthe City ofI��,��ng on the�rd day'��'ebruary, 2026,by the following vote: , �� /�� AYES: COUNCIL MElY�„��,5 AiTDET��,��AIVUI��'��TNNS,RE�NER,�ND 1L��I1�11'�S ,;, � NOES. +COTJNCII.ME s �� ,�� ' , j�� ' , � ABSENT; CQUNCIL MEMBER��,.;�� ''� r� ABSTAIN. COUNCIL Ii'� ERS: —NC?NE /'t ,'/%l�il�'.+�'l�,1 : � � �� s � �£�,� ��',�, � ,�. �� y�r t t. ,� � r �, �� ATTEST: Ft�RM AFPROVEI) �_ "" , `` , , i s„ y i s y i 'r} � } ,.� � V"a,, HARLENE TIPTON,�ity Clerk C STIAN M. CURTIS,City Attorney SOLUTIC�N NCI; 2026-010 A RESOLUTIQN OF THE CITY Ct)UNCIL OF THE CITY QrF REllDING EST LI�HING A I'INAN+CIAL ADVISt}RY CCIMMITTEE WHE EI�EAS, The City Council desires to enhance fiscal transparency; community engagement, and long-term fin��,��lnability; and i ti� ' � , , � WHERE,�� t��riancial Ad��ommittee provides informed, cornrnunity-based perspectives on eca��r�nds,budget prio��'��,��an� financial palicy cansiderations; �; f�. ,. NC►�� HEREFORE BE IT ��DLVED b the Cit Council that a Financial Advisor , � � Y Y Y Cor��tee is hereby established v��t�e following authority,purpose,composition,and oper�ting p��,�ns: ,�. L� � - l. � ;��thority 1 r y 1 41 The FlnarY��`�� `��mmi��,��blished by and derives its authority from the City Council. The�''�1`� ��ves sol��f��i adVlsa��iacity and shall prt�vide reeommendations and observatians to the City Ca��`The FAC sha��ve no independent decisic�n�making authority and shaii not direct City st��' "��ie City Manager��'znance Director shall support the Comtnittee by providing relevant fina�� informatian, an��, and staff presentations. , �jl 4 § �. pll!"�}(lSE'. " � �, ::;.� s � rt f �� } ' '' �i� � �.,,, �, „ The purpose �f the Financial A��°�ommitt�� ,�"(1) pro��advisory input to the City �,� s Council on budget development,financial prlor��id long-term��1 sustainability,{2}review major financial assurr�ptions, ecanc�rnic �c�n '�� , t c�� ;�and comrnunit��'�ds that may irnpact City revenues and e�penditures, �3) off�r co � ��nf�r�ned perspe�`�� on s��nding �riorities in relation tc� ado�ted �auncil goals ar�'��n�i��ty needs, {4� ��,°��u sta��ared materials inte�ded �ar City Council conside�� .nd pr�� non ��;� 'feedba�� .�d {5) strengthen transparency and publie trust in the ��s financl��i,�;��ing proc��*�}� 3. Cornpositiort and Membership �f S S'4i t !„ t } t The Financial Ad�isary Garnmittee shall consist of seVen (7) memb��ri,�;,�� ns shall be ,, made by a vote of a majority of the filled positic�ns. Twt�{2) meml��'��Qrnmittee shall be members of the Redding City Cauncil, who shall be r��,�� s�� ayor and appointed by � �,,,� vote ofthe Council. To provide for continuity,the Counc�i�y�� :..��'s on the Con�mittee shall serve staggered two (2} year terms: The retnaining five (5) members shall be appointed rnembers of the public appainted by the Cauncil. Following an apen public applicatian process, each Council Mernber shall suggest one person to the committee, and all appointments shall be made by vote af the full Council, Ta the extentpracticable,mernbers of the committee shall reflect a broad cross-section af the local economy and community perspective. In selecting members of the committee, the Gauncil shall endeavor to prioritize candidates in roles providing insight into purchasing behavior, spending trends,and the social and econornic pulse of the community, such as major employers c�r ke�local industries, such as healthcare, retail, hospitality, constructian, in��rance, or financial services. Candidates should also be considered for their financial backgr+�und and expertise, such as CPAs, CFOsy CEOs, or seniar financial prof�ssionals. � Community �� to the cammittee must compl� with applicable ethics laws, conflict ��'requlrem��,�� ?d disclosure obligatians and shall not have any financial or buslne��onship with the Ci��t would impair independence. All members must be able tc� evalu,��iancial matters objectiv'��nd in the public interest, � Co��,�nrty members on the Ca � ` ��ee shall serve four {4) year terrns, staggered ta align with Coi�� 1Vlernber terms for contt��y and institutional knc�wledge. Terms af each appointed mer�� will end one year after the end of the term of each Council Member. Nothing shall proh��,�flmn�unity frt�m being reappointed following expiration of their terms, if approved by Ctiunc�� , s ; , �s� } � Should either t��`�� ct�ci 2 ��'°1�Iern��;.��polnted to the Committee vacate the office of � )� City Council Member, th��' ��11 itnmediat�� nd automatically vacate their seat on the , Committee. Community ��ers on the Ca '�j �e shall serve at the pleasure of the Council and may be rem�ved by a��theret�f. � } ,� f � , � 4. �taffing ` _, , � �� ,� �,>�, � The City Manager and Director fl�`"��; c�r th�,��`nees, s��,ttend Committee meetings %�� and ensure staff availability to support Comm��'� �cirk to provid��'ormatian regarding audit . �� s� results and financial infarmatian. The Cc�mm�; ��owever, shall no�}�,��e authority to direct staff, and an C�mmittee re uests�that ma re �'�'�'�� _ , ; � � Y q Y q�,��se a�City�resoux��hall l��eferred to the City . , �(7U11C11. � �� } S 1 4 J. �C8�1i1��.'r?G�1�t�Ule ; � ,} „��.,. ' ',� The Financial Advisory Committee shall ad�pt a regular meeting schec�� sufficient t��the � purpases and functions for which it is formed. Meetings may inclu,�u��view,;��s'and presentations staff intends to bring farward ta the City Council. �� c��`��`��iall review budget priorities, communit� conditions, �nd adopt�i Counci� � �� inform advisory z recomrnendations regarding the budget. Meeting sched��c��`or increased frequency ��, during b�ennial budget development years, including ad��,��etings aligned with the budget preparation process. All meetings shall be publicly noticed, open to the public, ancl include an opportunity for public�amment in accordance with applieable open meeting laws. 6. Sunset Clause The need for, structure, and functions of the Financial AdVisory Committee shall be reviewed by the City Council after two (2) years of operation. The rev�ew shall consider data, autcomes, and ov�rall effectiveness in meeting the Committee's purpose. Fnllo�vving reviewr the City Council may continue, rnodify, or dissolve the Committee by �auncil action. � I�REBY��''�:��,�'��{��egoing resolution was introduced and adapted at a regular meeting ofthe Cit�;��'�f the Cit��` ding an the 3rd day of February, 2026y by the fallowing vote: , t } } 3 {'t LiI.L'}�`�w s� li�lJVl\Cal�.lYil�, L' � 4�''�U1JL'.11L'y��ViJ.11HylYlV1V1\47g...1\L'�11�L'1l.j�L111A�V� NO�� COUIY�CII� ��,'NONE AB; �' Ct?UNCII,li�IE ��:-NONE AB�` CC?UNCIL ME ERS: -NONE , � f,.� } ' � /f�� ,�� ,;^�. , ��j > , � �-- ` � : ��. . .:.. l.a*` >;, ..,��„. v,, 5 �1�+ �I�'T�U'�:��'CIY' , ,. , t'° ;s ; , 1�Z'�'��T: f ; r Fd p`��D� � i �� 3 . µ5� . .. }. 3 .,:..�+��'"'.li . ....,. �+�'l 4` J i :..�n," � 5 .�,.••.c ,�. � 1� �,„ „ �` ✓�s.v,.,}, �.. , ir,) � 1 [ � A ENE TIFTC}N,Clty Cl@t`k, ,��'�CHRISTIAN 1��URTIS,Clty AttOrIley , , �4 ...,,,'�� .. -: t t �., ,� ��'�� 't '��:. .,,,.r,......,�'�� :>:, ,�,,., .. „, :. /l ....s.��13''� •d5 3 y a t 5 } 1 1 S 4 } 1 i, 1 1 i't ) } } ?5° i