Hanford releases first Annual Comprehensive Financial Report; staff warns of ongoing budget pressures despite Measure H

Hanford City officials presented the city’s first Annual Comprehensive Financial Report (ACFAR) and a two‑year budget outlook during a study session, describing steady recovery in reserves but significant ongoing capital and operating pressures.

Finance Director Chris Tavares told the City Council that the ACFAR provides expanded narrative and statistics beyond the standard financial statements required by the state. He said the city’s general fund reserve — a key measure of fiscal health — stood a little above 28 percent at the time of audit and that the city is working toward a policy goal of 35 percent.

The nut graf: The presentation framed the city’s finances as improving from prior years but still constrained: the city is repaying a multi‑year settlement, faces large capital needs across utility and transportation funds, and must balance service expectations against conservative revenue assumptions.

Tavares said the city has maintained four consecutive balanced budgets, and noted that one‑time savings and revenue drove recent increases in the general fund. He also briefed council on fund‑level trends: an “accumulated capital outlay” reserve has declined as capital projects are delivered; water and wastewater enterprise funds saw increases in fund balance but face large capital needs, including a water meter replacement program estimated at $15 million; and the refuse fund is operating at a deficit and faces rising disposal and state‑mandated costs.

Veronica and Scott, managers with the auditing firm Rogers, Anderson, Melody & Scott (Rams), presented with staff. Councilmembers pressed staff on comparative rankings and on how long the Helena settlement obligation will continue; Tavares said the settlement payment remains for roughly two more years at about $1.25 million per year.

Staff emphasized that Measure H — the local revenue measure recently approved by voters — creates a new dedicated revenue stream for public safety, parks, streets and code enforcement but that most Measure H proceeds are already committed to identified priorities. Tavares and council members noted that year‑one budget projections will remain tight: staff has modeled a potential roughly $2 million gap in year one of the two‑year budget cycle even after Measure H revenues begin to accrue, and recommended continued cost containment, grant seeking, and careful use of reserves.

Council members asked staff to emphasize public communication about the difference between Measure H proceeds (which are restricted to particular uses) and general fund balance; staff agreed that transparency will be important.

The presentation was informational and required no council action. Council members thanked staff and auditors for the report and asked for follow‑up briefings on capital project requests and possible rate studies for enterprise funds.

Ending: Staff said it will return with capital budget requests and more detailed assessments of the water, wastewater, storm drain and refuse funds and that council will see the draft two‑year budget and midcycle capital requests in coming months.