City finance director presents FY2024 comprehensive financial report; auditors issue unmodified opinion

Sheila White, the city's director of finance, presented highlights from the Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2024. The city's external auditors, CLA, issued an unmodified opinion on the financial statements, the highest level of assurance an audit firm can give.

White said total net position for the primary government was $1,783,300,000 on June 30, 2024, an increase of $206,600,000 from the prior fiscal year. Total assets were $4,377,900,000, and total liabilities were $2,810,800,000. The general fund ended FY2024 with a fund balance of $268,600,000. Property and other local taxes accounted for $738,200,000, or 73.4% of total general fund revenues.

Why it matters: Council members asked detailed questions about midyear budget amendments, large variances in the nondepartmental line, and how the CAFR figures map to the budget documents they use in the current budget process. Several members asked for public documentation showing budget amendments so they can reconcile adopted and amended figures during the FY26 budget process.

Audit findings and major fiscal points - Unmodified audit opinion: Sean Walker, principal at CLA, said the audit team issued an unmodified opinion on the FY2024 financial statements. The firm cleared two prior-year findings and reported one current-year finding related to a complex accounting issue around a debt issued to fund the pension liability. - Single audit: the city's single audit showed no findings for federal program compliance, Walker said. - Fund highlights: General fund revenues and other financing sources totaled $1,014,500,000, an increase of $92,000,000 from the prior year. Actual general fund revenues exceeded the original budget by $62,600,000 and the amended budget by $42,800,000; the report attributed part of the increase to stronger property tax collections and higher collections for meals and bank franchise taxes.

Council follow-ups requested Multiple council members asked for supporting documentation and clarification: which budget amendments explain a $103 million amendment noted in the CAFR narrative, the detailed composition of a $206.1 million "nondepartmental" actual expenditure figure, and a clear way to reconcile the CAFR to the budget documents council uses during the FY26 process. Director White and Interim CAO Sabrina Joy Hogg said staff will provide the list of budget amendments and monthly financial reports that show year-to-date collections and amended-budget figures.

Other topics covered - Debt and ratings: White highlighted the city's progress on creditworthiness, noting Fitch upgraded the city to AAA in May 2024; Moody's and S&P issued AA1 and AA ratings, respectively. - Capital investment: The Department of Public Utilities invested heavily in capital projects during FY2024; the ACFR shows significant water, wastewater and stormwater expenditures and ongoing CIP work.

Ending: City finance staff agreed to provide council members with the detailed schedule of midyear budget amendments and a walkthrough of the CAFR pages members flagged, and to place a fuller discussion on the finance committee agenda so the council can reconcile CAFR figures, amendments, and year-to-date revenue collections.