Victoria auditors issue clean opinion on 2024 financials; city ends year with higher reserves

Assistant City Manager Tricia Pollock introduced the independent audit for the year ended Dec. 31, 2024, and invited the city’s auditor to present the results.

The audit, presented by Jackie Higa, partner at LB Carlson, concluded that the city’s basic financial statements are fairly presented and issued an unmodified — or “clean” — opinion. "As we go through the presentation, you're gonna see it's all very positive, results," Higa told the council.

The nut graf: The audit showed the city ended 2024 with increased governmental and enterprise net positions, a larger-than-budgeted general fund balance and no findings in either the financial-statement audit or the Minnesota legal-compliance audit — outcomes the auditor described as favorable and uncommon.

Higa summarized key financial results for council members: governmental funds saw a total increase in fund balance of about $235,000, with committed fund balance rising approximately $880,000 (driven largely by revenue stabilization). The general fund cash balance ended 2024 near $4.9 million, an increase of roughly $685,000 from the prior year; the unassigned general fund balance was about 31% of the following year’s budgeted expenditures, consistent with the city’s 30% policy.

On revenues and expenditures, general fund revenues totaled about $9.4 million and ended roughly $1.3 million over budget, led by stronger-than-expected license and permit and charges-for-service receipts tied to increased building activity. General fund expenditures were just under $6.4 million, about $285,000 under budget; spending increases year over year reflected added personnel and equipment in public safety and general government. The city transferred just over $1 million more than budgeted to capital projects and equipment in line with fund-balance policy.

Enterprise funds also finished positively. Net position for enterprise (utility) funds rose about $2.1 million overall. The water fund reported strong operations despite lower consumption in 2024; the sewer fund’s operating revenues increased after an approved rate rise but showed higher disposal costs; the stormwater fund experienced a small net decrease driven by higher personnel and maintenance costs. On the government-wide statements, the city’s net position increased about $5.6 million for the year, with much of the change tied to capital investment and positive enterprise results.

Council members asked for perspective on the audit. Higa said she sees the city’s finance staff reconciling and tying out accounts early — a practice that supports clean audits and timely presentations. "You are the very first audit being presented," she noted, and commended staff for readiness and for receiving no audit findings. Council members praised city finance staff for continuing education and stewardship.

The council voted to accept the audit report by voice vote. The motion carried with the council responding "aye."