Report 2020-804 Recommendation 4 Responses
Report 2020-804: City of Lindsay: It Must Take Substantial Action to Address Its Financial Problems and Its Inadequate Management Practices (Release Date: August 2021)
Recommendation #4 To: Lindsay, City of
To ensure that it maintains adequate balances in its enterprise funds for significant purchases or capital expenditures, Lindsay should develop and implement a plan by June 2022 to build and maintain these balances.
1-Year Agency Response
On June 28, 2022, the Lindsay City Council approved the City of Lindsay Adopting a Fiscal Sustainability and Financial Improvement Plan for the Water, Sewer, and Wellness Center Enterprise Funds through Resolution 22-41. The Plan represents an outline for a collaborative process that considers future scenarios and will help the City navigate fiscal challenges and on-going operations from a purely financial standpoint. The Plan will require policy creation, spending discipline, renewed cost-sharing negotiations, and careful prioritization of City programs. It will also be useful for decision makers and help to mitigate future fiscal challenges, encourage a long-term approach and direction, and be a useful tool for communications with internal and external stakeholders.
- Completion Date: June 2022
- Response Date: June 2022
California State Auditor's Assessment of 1-Year Status: Fully Implemented
6-Month Agency Response
On October 13, 2020, the Lindsay City Council approved the task order "Financial Analysis of Water and Sewer Rates and Reports" (Exhibit B) to perform a financial analysis of the water and sewer utility rates. The study underway is being conducted in a manner adhering to generally accepted rate design criteria including all requirements of Proposition 218 in the case where there is subsequent action taken to pursue public utility rate changes as a result of the study.
On July 27, 2021, in accordance with Proposition 218, the Lindsay City Council approved a rate increase for solid waste refuse services (Resolution 21-38), and the levy and collection of annual sewer charges (Resolution 21-35), annual solid waste refuse charges (Resolution 21-36), and delinquent sewer, refuse, and water fees and charges for the period ending June 30, 2021 (Resolution 21-37) on property tax rolls for the fiscal year 2021-2022. These changes were in large part motivated by the City's need to address the financial instability of its enterprise funds.
On October 12, 2021, the Lindsay City Council approved the City of Lindsay Reserve Policy (Exhibit C). The reserve policy formalizes on-going practices of staff to build reserves and directly addresses the reserve levels of the General Fund and Water and Sewer Enterprise Funds by establishing reserve categories and hierarchical reserve levels for each. This policy will be reviewed every three years at a minimum by the City Manager and Finance Director, or sooner, if warranted by internal or external changes.
- Estimated Completion Date: June 2022
- Response Date: February 2022
California State Auditor's Assessment of 6-Month Status: Partially Implemented
60-Day Agency Response
On October 13, 2020, the Lindsay City Council approved a financial analysis of its water and sewer utility rates. The study is being conducted in a manner adhering to generally accepted rate design criteria including all requirements of Proposition 218.
On July 27, 2021, in accordance with Proposition 218, the Lindsay City Council approved a rate increase for solid waste refuse services (Resolution 21-38), and the levy and collection of annual sewer charges (Resolution 21-35), annual solid waste refuse charges (Resolution 21-36), and delinquent sewer, refuse, and water fees and charges for the period ending June 30, 2021 (Resolution 21-37) on property tax rolls for the fiscal year 2021-2022. These changes were in large part motivated by the City's need to address the financial instability of its enterprise funds.
On October 12, 2021, the Lindsay City Council approved the City of Lindsay Reserve Policy. The reserve policy formalizes on-going practices of staff to build reserves and directly addresses the reserve levels of the General Fund and Water and Sewer Enterprise Funds by establishing reserve categories and hierarchical reserve levels for each. This policy will be reviewed every three years at a minimum by the City Manager and Finance Director, or sooner, if warranted by internal or external changes.
- Estimated Completion Date: June 2022
- Response Date: November 2021
California State Auditor's Assessment of 60-Day Status: Pending
All Recommendations in 2020-804
Agency responses received are posted verbatim.