2011 Audit

1. 2011 Audit Presentation from Brown Armstrong Accountancy Corporation To The City of Pasadena, California January 9, 2012

2. Agenda • The Audit Process • Audit and Other Reports Issued • Current Status • Snapshot of the City’s Position and Results • Questions

3. The Audit Process • Audit and Other Reports Issued • Independent Auditors Report (opinion) on financial statements – unqualified (“clean”) opinion • Emphasis of a matter on PCDC – Supreme Court Ruling • All other opinions with the exception of PCAC are unqualified • Independent Auditor’s Report on internal control over financial reporting and on compliance and other matters based on an audit of financial statements performed in accordance with Government Auditing Standards • Required Communication to the Audit Committee in accordance with professional standards – SAS 114 • SAS 115 report to management

4. The Audit Process (continued) • Audit and Other Reports Issued (continued) • Elements of the auditors’ reports on the basic financial statements • Our responsibility under generally accepted auditing standards and Government Auditing Standards • Our Opinion • Other information contained in the comprehensive annual financial report • Management's discussion and analysis (MD&A) • Other Required Supplementary Information other than the MD&A • Other Supplementary Information

5. Current Status • Nearly All Financial Deliverables in the Contract delivered • Open items – both 95% done • City Single Audit • Pasadena Community Access Corporation • Issued reports include: • CAFR • PCDC Financial and Compliance Report • Pasadena Water & Power Annual Report • AQMD Compliance Audit • Deferred Compensation agreed-upon procedures report • Appropriations Limit agreed-upon procedures report • Internal control letter • PCOC and RBOC reports

6. Snapshot of the City’s Position and Results – Net Position Trend Excludes PCOC, RBOC

7. Snapshot of the City’s Position and Results – Change in Net Position Excludes PCOC, RBOC

8. Snapshot of the City’s Net Position and Results – Major Financial Items • Redevelopment Supreme Court Decision • Net Position continues to be positive despite fiscal adversity facing all governments • General Fund has a $46.6 million fund balance of which • $39.3 million is committed • $8.7 million is assigned • ($1.4 million unassigned deficit) • General Fund revenues and transfers in were $222.5 million • General Fund expenditures and transfers out were $229.1 million • Net decrease in fund balance of $6.6 million

9. Quick View of the City’s Component Unit Entities

10. Conclusion • The City’s finances are cautiously positive • Large expenditures are forthcoming • Pensions and Other Post Employment Benefits • Debt service is growing • Infrastructure age and IT • Uncertain revenues as evidenced by RDA Supreme Court decision, federal and state budgetary woes

11. To the right are our offices in Pasadena, California. Please feel free to visit us at the corner of Colorado and Hudson, on the Rose Parade route which is also historical US Route 66. 790 East Colorado Boulevard, Suite 908B Pasadena, California, 91101 Tel: 626-240-0920 (Eric) Tel: 626-240-0898 (Connie) Fax: 626-240-0922 Mobile: 626-375-3600 (Eric) Mobile: 661-619-6776 (Connie) QUESTIONS