City reports $22 million projected fund balance; auditor issues clean opinion on annual report

City staff told the Galveston City Council on March 27 that preliminary first-quarter financial projections for the fiscal year that includes October–December 2024 show an expected $22 million ending fund balance and conservative sales- and property-tax forecasts.

“We're continuing to project a $22,000,000 ending fund balance in the general fund which represents about 99 days of reserves,” the city manager said during the presentation. City staff reported that revenue projections were about $2 million below the original systemwide budget but that expenditures were also projected to come in under budget, helping maintain planned fund balances.

The council also received the FY2024 annual comprehensive financial report. The city’s new auditor, Weaver, issued an unmodified opinion on the financial statements and unmodified compliance opinions for the audited major federal and state programs, the auditor told the council.

Auditor John DeBurrow said, “we issued an unmodified opinion,” and reported “no findings, no significant deficiencies, no material weaknesses, and no instances of any material noncompliance.” He listed the airport improvement program and ARPA (Coronavirus State and Local Fiscal Recovery Funds) as federal major programs audited this year and said the city complied in all material respects.

Why it matters: A clean audit and a multi-week reserve provide the council and public a snapshot of the city’s near-term fiscal health. The city manager cautioned that first-quarter projections are based on limited trends and said the second-quarter report will provide more detail on sales-tax trends and adjustments.

Details from presentations - General fund: Staff reported the $22 million projected ending fund balance represents about 99 days of reserves. The council’s amended October budget and lower-than-budgeted spending both contributed to the projection. - Special revenue funds: Staff reported a larger gap between budgeted and projected expenditures because not all special revenues have been allocated to projects; those funds are expected to carry forward into the next fiscal year. - Enterprise funds: Projected ending balances in enterprise funds were generally in line with budgeted amounts, with drainage funds noted as an area to watch. - Audit results: Weaver issued a clean (unmodified) opinion on the city’s financial statements, and the single-audit compliance work for two federal major programs and one state major program also resulted in unmodified opinions. The auditor reported no significant audit adjustments or evidence of fraud or illegal acts.

Next steps and oversight City staff said the second-quarter report will present additional sales-tax information and trend data. Council members thanked the finance team, and the auditor said he would be available to answer questions as the council reviews the final report.

All remarks and figures above are drawn from council presentations and auditor comments at the March 27, 2025 council meeting.