To: Honorable Mayor and Members of City Council
From: Donna Lee, Finance Director
Prepared By: Seth Anderson, Budget Officer
TITLE:
Title
Fiscal Year 2024/25 End of Year Report Update and Annual Comprehensive Financial Report and Other Audit Reports for Fiscal Year Ending June 30, 2025
LABEL
RECOMMENDED ACTION:
Recommendation
1. Receive the End of Year Financial update on the City's General Fund and the Proprietary Funds for the Fiscal Year Ending June 30, 2025.
2. Accept and file the City’s Annual Comprehensive Financial Report for the fiscal year ending June 30, 2025.
Body
DISCUSSION:
End of Year Financial Update
Attachment 1 is the City's End of Year Report for Fiscal Year 2024/25 which provides an overview of the full fiscal year and focuses on changes made during the latter half of the fiscal year (January 1 through June 30, 2025). The report includes a financial section which provides audited information on General Fund and proprietary fund revenue and expenditures through the end of the fiscal year. The report compares revenue sources and department expenditures to the budgeted amounts for each category, as well as to the prior year's revenue and expenditure trends for the same period. An analysis of each of the three major revenues categories (property tax, sales tax, and transient occupancy tax) is provided.
Different from prior years, the numbers in this report are based on audited numbers rather than preliminary numbers with the Finance Department closing the fiscal year by the end of calendar year 2025. The audited numbers indicate that the City will have approximately $8.9 million in available General Fund balance for the fiscal year. City staff recommends using this funding for Harvest Recreational Site demolition and preliminary project planning, a contribution to the 115 Trust to mitigate the CalPERS Unfunded Accrued Liability (UAL), and to true up City General Fund reserves per fiscal policy.
All General Fund Reserves are at their designated funding levels.
Annual Comprehensive Financial Report
The following reports are included with this communication:
• Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2025 including PowerPoint presentation
• Auditors’ Communication Letter (AU-C260)
• Independent Accountants’ Report on Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit for the year ended June 30, 2025 (GANN Limit)
The City Charter requires that the City Council engage an independent certified public accounting firm to conduct an annual financial audit of the City. Lance, Soll and Lunghard (LSL), LLP, a certified public accounting firm, conducted the audit of the City’s financial statements for the fiscal year ended June 30, 2025. The City received an unmodified (clean) opinion on the ACFR. The ACFR conforms to generally accepted accounting principles and the latest applicable Governmental Accounting Standards Board (GASB) Statements. This report continues to reflect the financial stability and proper accounting practices of the City. In addition, the 2024 ACFR received the Government Finance Officers Association's (GFOA) Certificate of Achievement for Excellence in Financial Reporting. GFOA awarded this certificate to the City for the 11th consecutive year, and it is included in the 2024 ACFR.
The California State Constitution Article XIII-B Appropriations Limit places limits on the growth of expenditures for publicly funded programs. The Independent Accountant’s Report on Applying Agreed-Upon Procedures Related to the Article XIII-B Appropriations Limit for the year ended June 30, 2025 was performed to assist the City in meeting the requirements of Section 1.5 of the Article XIII-B which requires the annual calculation of the appropriations limit to be reviewed as part of an annual financial audit. There were no findings included in this year's GANN Limit report.
FINANCIAL IMPACTS:
There is no fiscal impact associated with this action. The attached report is for informational purposes and is intended to provide an update only. Staff will return with recommendations when the audit is completed.
CEQA:
The Finance Director has determined that the recommended actions described in this agenda report are not subject to CEQA, pursuant to CEQA Guidelines Section 15060(c).
DOCUMENTS ATTACHED:
ATCH 1 - FY24-25 End-of-Year Report Update
ATCH 2 - FY24-25 Annual Comprehensive Financial Report (ACFR)
ATCH 3 - FY24-25 AU-C260 Letter
ATCH 4 - FY24-25 End of Year and ACFR PowerPoint
ATCH 5 - FY24-25 GANN Limit AUP
NOTIFICATION:
None.