The Gonzales City Council accepted the city’s audited financial statements for the fiscal year ended June 30, 2024, after staff presented a clean (unqualified) auditor’s opinion and a review of key fund balances.

"In our opinion, the financial statements ... present fairly in all material respects ... in accordance with accounting principles generally accepted in The United States Of America," Finance Director Mark said when reading the auditors’ opinion. Staff characterized that wording as a clean opinion, meaning the financial statements are presented fairly.

The finance director told the council the general fund balance stood at $779,000 at June 30, 2024, which is $221,000 below the $1 million reserve the council has required. Staff identified two main drivers of the shortfall: revenues that came in about $95,000 below expectations, and an unbudgeted emergency pool-heater repair of about $80,000 that the council had approved during the year.

Business-type (enterprise) funds — water, sewer, garbage and an energy fund — were described as operating within required limits, though staff warned the sewer fund’s debt-service coverage will be tight as the industrial wastewater plant and associated SRF financing move forward. The report also flagged a continuing deficit in the combined park-assessment fund (assessment districts such as California Breeze and Canyon Creek); staff said that fund ran a $59,000 deficit for the 2023–24 fiscal year.

Council members discussed service levels and community programs, and staff said they are pursuing grants and community partnerships to reduce budget pressure. The council voted to accept the audited financial statements by motion; the vote was unanimous.

Why it matters: a clean audit confirms the city’s fiscal reporting is reliable, but the audit also confirmed a declining general fund reserve and identified specific operating pressures staff said the council must address during the current budget cycle.

Next steps: staff reported they will continue budget reviews, pursue external funding and return with recommendations during budget deliberations.