Loma Linda reports $372K operational loss amid ongoing financial challenges

The City of Loma Linda City Council convened on December 10, 2024, to discuss various financial matters impacting the city’s operations and future planning. The meeting primarily focused on the city’s annual Comprehensive Annual Financial Report (ACFR) and the financial status of several key funds.

The council began by addressing the net position of business-type activities, which reported a negative change of $372,000. This figure was influenced by positive changes in the water enterprise fund and sewer capital, contrasted with losses from the water acquisition fund and the Loma Linda Connected Communities initiative. The latter, described as an internet service, has been operating at a loss annually. Council members noted that the service is tied to redevelopment agency funding, complicating efforts to discontinue it. Despite attempts to sell or give away the service, the city remains obligated to manage it until a viable solution is found.

The discussion highlighted the ongoing financial challenges, particularly the water acquisition fund, which faced a significant negative position of $6.5 million due to the costs associated with constructing a new reservoir. The council acknowledged the complexities involved in managing these funds, especially in light of state mandates that have affected local funding sources.

Further discussions revealed that the Loma Linda Connected Communities initiative's financial struggles are largely due to accruing interest on loans owed to the successor agency, amounting to approximately $500,000 annually. This situation has been exacerbated by pension expenses not covered by operating revenues.

On a more positive note, the water enterprise fund reported a positive change in net position of $5.8 million, attributed to capital transfers from the water acquisition fund. Additionally, the sewer capital fund experienced a surplus of $673,000, indicating a healthy revenue stream compared to expenditures.

The meeting concluded with a report on the successor agency's financial position, which improved by $4.6 million due to a decrease in liabilities from debt service payments. The agency received $4.9 million in property taxes for the fiscal year, which will help offset general administrative expenses and interest on debt.

The ACFR, which includes not only financial data but also significant accomplishments and statistical information from all city departments, is set to be posted on the city’s website shortly. The council expressed gratitude to all departments involved in preparing the report, emphasizing the importance of transparency and accountability in the city’s financial management.